Sluggish Tata Nano sales add to supplier’s woes
According to a local report it has been revealed that as a result of Nano’s poor sales in the markets and its low expectations in the future sales the Pune based Kinectic engineer who supplies gears for the car is now actually looking forward to contracts from the other firms such as Mahindra and Piaggio.
The Firodia family-controlled Kinetic Engineering, which supplies power train and transmission systems is said to have invested INR 2.6bn on a gear and power train components manufacturing facility in order to supply to the Tata’s. However, its been three years since the investment but the deal is yet to receive the outcomes expected.
Even Tata Motors plant in Sanand is facing similar problem. Hardly 30 percent of the installed capacity i.e. 250,000 units are being actually produced every year. Losses for five consecutive quarters continuously have also been reported by Kinetic. According to the calculations the annual loss of the company comes down at INR 1.1bn. It intends to approach RBI for the extension of the date of conversion redeeming of its US$18m (INR 936m) foreign currency convertible bonds by nearly a year of so.
Vice chairperson of Kinetic Engineering boasts the performance of the company would increase with the orders and tips they acquire from other firms. They will be supplying gears for the yet to come products such as Mahindra Navistar’s light weight commercial automobile and Piaggio’s car.
She really hopes that the fixed top line would start varying to INR 1.2bn from INR 970m and hopes it to elevate to INR 2bn during the 2013-14 period.
They have no plans to change the facilities that have been already installed as of now. The new version of Nano would pick up the sales with time she feels.
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