Hit by slowdown blues, Toyota Kirloskar Motor (TKM) has informed the employees of the company that it would observe non-production days for four days at its two plants located at Bidadi in Karnataka. In a notice to the employees, a copy of which is in possession of FE, TKM said the company will not produce on four days — October 3, 4, 5 and 9 — owing to low market demand of its vehicles. TKM notice appealed to the employees that the business condition is becoming critical day by day and signs of recovery are not visible. Pointing out that the future of TKM is very challenging and difficult, the notice requested the staff to understand the criticality of the business situation.
“For survival of the company, in future, many activities will be initiated. We request the team members to understand and co-operate with such activities during these difficult times,” the notice said. When contacted on the announcement of non-production days, TKM responded to FE in an official statement pointing out that there has been pipeline correction in the last 3 to 4 months.
“We, at Toyota, always strive to support our dealers through any business challenges, we have consciously lowered the volume of vehicles sold to dealers ensuring minimum burden on our dealer partners amidst weak buying sentiments. Our operations follow a ‘pull system’ which is driven by market demand-customer drives sales and sales in turn-drives production. TKM demand and supply operations aim at delivering right car to the right customer at the right time/place, consistently with lean inventory & highest quality,” the statement said.
The statement further said it follows a norm to ensure that dealers do not have more than 15 days plus transit stock. “We modify the time to make a vehicle under the Toyota Flexible Production System to manage the plant output. Usually, takt time is adjusted as per market demand. The production days have been lowered owing to the festive holidays and also the inventory corrections that have to be made for the upcoming BS VI transition,” the statement said.
TKM has two plants at Bidadi, employing around 6,500 and has an installed total production capacity of 3.1 lakh units per annum. The company on Tuesday reported a 17% decline in total sales at 10,911 units in September 2019 as against 13,078 in September 2018.
Sales in the domestic market stood at 10,203 units last month as compared to 12,512 units in September 2018, a decline of 18%.
Exports in September were at 708 units as against 566 units in the year-ago month, clocking a growth of 25%. Commenting on the sales performance, N Raja, deputy managing director, Toyota Kirloskar Motor, said in a statement, “The consumer sentiment continued to be subdued in September which has reflected in the sales slowdown in the industry. Thanks to the Navratri and Diwali festive sparkle around, we expect the consumer demand will see the much needed revival resulting in better retails.”