Business

Coronavirus threat: Tata Motors eyes alternative supply chain

To mitigate possible impact of situation arising out of nCov

Even as Tata Motors does not expect any immediate disruption in production due to the closure of a large number of factories in China following the outbreak of coronavirus, the home-grown automaker is looking for alternative supply chains to mitigate any possible impact of the situation, a senior company official said.

“Currently, our teams are working on actually mapping of the supply chains, right up to the raw material. And more often than not, you’ll find that supply chains of different parts, at times, cross through China... there are a few parts which are dependent on that. But people are now focussing on trying to get alternative supply streams activated, so that the impact is minimised,” Girish Wagh, president, Commercial Vehicles Business Unit, Tata Motors, told The Hindu.

To a query on revival in the commercial vehicle segment, Mr. Wagh said it may happen in the second half of the coming financial year (2020-21). “We have to keep a close track of some of the fundamental demand drivers, but we are expecting that in the second half of next financial year, most of these demand drivers will start getting into green. And, therefore, we should see year-on-year growth probably happening somewhere in H2 of next fiscal because then the base effect will also come into play.”

Mr. Wagh added that commercial vehicle purchase was always dependent on actual business demand. Hence, the recovery depends more on fundamentals in the economy than just the consumption power, which is important in case of car sales. “So it could be at what rate of infrastructure projects are being executed, how is the industrial index of production doing, how are some of the end-use industry such as steel, cement and mining doing.”

On the commercial vehicle product roadmap, Mr. Wagh said the company would continue to work on internal combustion engines, electric vehicles and CNG-powered vehicles. “We've also made some LNG vehicles which are running on trial purpose. So we know that this fuel also has some potential going ahead. So therefore, we will continue to work on alternate fuel.”

On adoption of electric vehicles in commercial vehicle segment, he said it has been good in buses, wherein Tata Motors has delivered 215 electric buses to five cities in the country -- Jammu, Lucknow, Kolkata, Guwahati and Indore, which have clocked over 2.5 million kilometres cumulatively.

Mr Wagh believes that after the mass passenger transportation segment, the next segment that is likely to see a good pull for electric will be last mile distribution goods. “In goods transportation, good interest being shown by companies in e-commerce and retail space...Some of the MNCs are doing it for their global sustainability targets and they have been talking to us, they’ve been looking at some of the vehicles.”

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Printable version | Feb 24, 2020 10:32:35 PM | https://www.thehindu.com/business/coronavirus-threat-tata-motors-eyes-alternative-supply-chain/article30803501.ece

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