Tata Motors restructuring production strategy

Tata Motors has been seeing its sales decline over the past two years. As a result its factories have not been functioning at their full capacities. The company has decided to improve its margins and plant viability for which it has begun restructuring its production across its six factories. This will include shifting production between plants, shutting down assembly lines and adding products at factories previously dedicated to other models.

One of Tata Motors' plans is to roll out a new small car in 2015 to replace the decade-old Indica eV2. It will be based on the company's X0 platform and will be manufactured at the Sanand facility. This plant had been set up specifically for the Nano. However, Tata Motors could not sell the Nano in the numbers it had expected. As a result the Sanand plant rolls out 1,000-2,000 cars a month even though it has the capacity to produce 20,000. This step is expected to improve the plant's viability.

Tata Motors produces the Vista hatchback at the Tata-Fiat factory in Ranjangaon. However, the company’s new strategy will see the production of the upcoming Bolt, which is the Vista's replacement, take place at Tata's own plant at Pune. The Zest compact sedan is likely to be produced at Ranjangaon unit.

Coming to commercial vehicles, Tata Motors is shifting production of trucks from its Luncknow plant to its Pantnagar facility to avail of tax benefits. The Pantnagar plant was originally dedicated to the Ace LCV. Additionally, the company is continuing with block closures at its factories in Jamshedpur and Pantnagar to keep a control on inventory levels. Production cuts have seen a significant number of workers and executives lose their jobs.

Source: Financial Express