Slowdown-hit Tata Motors to offer VRS to some employees
23 Jan 2014 10:57 PM GMT
The company, which on Wednesday announced a truck racing series for the first time in India to be held in March, also said it is investing Rs 3,000 crore on product development in FY14.
‘The industry as well as India is going through a rather protracted downturn. Therefore, there are lots of things out there to enable us, ensure our structure is suitable. Voluntary retirement scheme allows those people to move on with our support,’ Tata Motors managing director Karl Slym told reporters here.
Asked how many employees would be offered the VRS, he said it would be a ‘very minor’ number.
In December, domestic car sales declined 4.52 per cent from a year earlier to 1,32,561 units. Tata Motors' sales fell about 42 per cent to 6,537 units last month.
Total sales of commercial vehicles were down 25.53 per cent to 46,757 units. The company's commercial vehicle sales dropped 45.83 per cent to 25,738 units.
Hit by a prolonged slump in sales, Hinduja flagship firm Ashok Leyand had offered a VRS for its executives during the third quarter. It spent Rs 43.58 crore on settlements for those who accepted the offer up to 31 December.
On plans for product development, Slym said the company is spending Rs 3,000 crore in FY14. This is a part of the company's Plan 20-20 and will span commercial vehicles and passenger vehicles, he added.
Stating that the company plans to make newer technologies available, he said the T1 Prima Truck Racing Championship will serve as a ‘laboratory’ for developing new products.
‘We have worked on this for eight months...we want to use this platform, not only for us but also for our partners to use the platform to develop new technologies for our trucking business,’ he said. The race will be held between 22-23 March at the Buddh International Circuit at Greater Noida.
Slym said a revival in the commercial vehicles market is unlikely in the next 12 months.
The CV market is 50 per cent of what it was two years ago and this is the longest downturn the industry has witnessed, he added.
With rising inflation, fuel cost and pessimistic mood among consumers, auto sector has been hit hard. In 2013, annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59 per cent dip. According to the Society of Indian Automobile Industry (SIAM), domestic car sales last year fell to 18,07,011 units from 19,98,703 units in the previous year. Tata Motors has been particularly hit hard amongst the passenger car segment due to myriad reasons.
Japanese car maker Honda posted a 29.27 per cent increase to 5,484 units as against 4,242 units.
Market leader Maruti Suzuki India posted a 6.4 per cent increase in domestic sales at 73,155 units as against 68,729 units in the same month of the previous year. Hyundai Motor India sales were also up 6.2 per cent at 28,320 units compared to 26,651 units in the year-ago month.
Utility vehicle major Mahindra & Mahindra saw its sales drop by 26.93 per cent to 15,881 units from 21,735 Total two-wheeler sales in December 2013 grew by 2.32 per cent to 11,63,465 units from 11,37,081 units in the same period of 2012.
‘The industry as well as India is going through a rather protracted downturn. Therefore, there are lots of things out there to enable us, ensure our structure is suitable. Voluntary retirement scheme allows those people to move on with our support,’ Tata Motors managing director Karl Slym told reporters here.
Asked how many employees would be offered the VRS, he said it would be a ‘very minor’ number.
In December, domestic car sales declined 4.52 per cent from a year earlier to 1,32,561 units. Tata Motors' sales fell about 42 per cent to 6,537 units last month.
Total sales of commercial vehicles were down 25.53 per cent to 46,757 units. The company's commercial vehicle sales dropped 45.83 per cent to 25,738 units.
Hit by a prolonged slump in sales, Hinduja flagship firm Ashok Leyand had offered a VRS for its executives during the third quarter. It spent Rs 43.58 crore on settlements for those who accepted the offer up to 31 December.
On plans for product development, Slym said the company is spending Rs 3,000 crore in FY14. This is a part of the company's Plan 20-20 and will span commercial vehicles and passenger vehicles, he added.
Stating that the company plans to make newer technologies available, he said the T1 Prima Truck Racing Championship will serve as a ‘laboratory’ for developing new products.
‘We have worked on this for eight months...we want to use this platform, not only for us but also for our partners to use the platform to develop new technologies for our trucking business,’ he said. The race will be held between 22-23 March at the Buddh International Circuit at Greater Noida.
Slym said a revival in the commercial vehicles market is unlikely in the next 12 months.
The CV market is 50 per cent of what it was two years ago and this is the longest downturn the industry has witnessed, he added.
With rising inflation, fuel cost and pessimistic mood among consumers, auto sector has been hit hard. In 2013, annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59 per cent dip. According to the Society of Indian Automobile Industry (SIAM), domestic car sales last year fell to 18,07,011 units from 19,98,703 units in the previous year. Tata Motors has been particularly hit hard amongst the passenger car segment due to myriad reasons.
Japanese car maker Honda posted a 29.27 per cent increase to 5,484 units as against 4,242 units.
Market leader Maruti Suzuki India posted a 6.4 per cent increase in domestic sales at 73,155 units as against 68,729 units in the same month of the previous year. Hyundai Motor India sales were also up 6.2 per cent at 28,320 units compared to 26,651 units in the year-ago month.
Utility vehicle major Mahindra & Mahindra saw its sales drop by 26.93 per cent to 15,881 units from 21,735 Total two-wheeler sales in December 2013 grew by 2.32 per cent to 11,63,465 units from 11,37,081 units in the same period of 2012.
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