Dow Jones Newswires (New Delhi) - Auto parts suppliers to Tata Motors Ltd. (TTM) have been informed that the company has cut production of most of its car models, including the Nano minicar, in September due to sluggish demand.
India's largest auto maker by sales will likely make about 12,000 cars this month, executives at two auto parts suppliers told Dow Jones Newswires this week. The September production figure will be 33% lower than the 17,821 cars it produced a year earlier.
Tata Motors produced an average of 18,700 cars a month during April-August 2011, showed data issued by the Society of Indian Automobile Manufacturers, an industry body.
"Auto part supplies to Tata Motors have been down since the beginning of this [financial] year. September offtake will be much lower than August," said one of the executives, who didn't wish to be named.
The possible production cut in September follows a similar move by Tata Motors in August. Sales of cars in India are waning this year as customers defer purchases due to higher loan rates and increasing fuel prices.
for instance, Maruti Suzuki India Ltd., the country's largest car maker by sales, produced 5% fewer Alto small cars in August.
Local car sales fell 10% in August and 16% in July, which was the biggest fall since November 2008 and the first decline since January 2009.
Debasis Ray, spokesman for Mumbai-based Tata Motors, declined to comment on the production cut but said the company is producing "at the correct rate at any given point of time."
Tata Motors' car output fell 41% from a year earlier in August to 13,854 units mainly due to lower output of the Nano. The company last month shut for a fortnight a plant in the western state of Gujarat where it makes the Nano for regular maintenance and to trim inventory.
The company made 1,143 Nano cars in August, a sharp decline from 7,739 units in August 2010 and 3,534 in July this year.
"Nano production has been the worst-affected. The company plans to make about 2,000 units [in September], compared with an average of more than 6,000 units a month [this year]," said the second executive, who also declined to be named.
Monthly car production at Tata Motors was lower in four of the first five months of this financial year though March 2012.
Tata Motors, which owns U.K.-based Jaguar and Land Rover, produces the Indica and Indica Vista hatchbacks and the Indigo range of sedans.
It also makes utility vehicles Aria, Sumo Victa and Grande and the Safari sport-utility vehicle.
