Tata Nano‘s prolonged bad run is hitting the feasibility of Tata’s modern plant at Sanand in Gujarat. The plant is capable of putting together one Nano in a minute, but due to the downhill spiral of Nano’s sales numbers, it’s functioning at one-shift-per-day for 3-4 days a week.
Pundits at Tata Motors HQ have started ruffling their feathers, it’s the serious under-utilization of capacity at their Sanand plant that’s giving them goosebumps. To ensure that the auto major makes full use of the tax incentives provided by Gujarat government, the plant has to be kept running at about 75-80% of full capacity.
A rejig of production duties is in the offing across the whole Tata Motors model portfolio. The production of the Vista has been shifted to the Joint-Venture plant at Ranjangaon, and a shift of Sumo to their Pantnagar factory is expected. In this backdrop, there seem to be plans of bolting together another compact car “XO” at the Sanand plant.
The Sanand plant is one of their most advanced plants, and hence it will be imperative to churn out the most of it. The new compact could be based on the Tata Motors bread-and-butter model, the Indica or Vista (preferably). The compact “XO” is reportedly under development, and it may hit the shelves in some time and not many details are available at this time.
However, it seems that there’s still some time before Sanand’s capacity utilization will improve from the current measly 20%. Isn’t there anything else the salt-to-cars-to-tea conglomerate Tata can do in the meantime, other than twiddling their thumbs in the boardroom? Well, they could take a leaf out of Bajaj’s book. They could use their traditional lair of Pimpri-Chinchwad as a testing and R&D base, and hoist the production duties over to the modern and efficient plants like Sanand.
Meanwhile, Tata is also working on a car in the the magical compact SUV segment which is slated to make way next year (More Details). Tata is also taking this time to work on the quality of their products and keep a better quality check mechanism to shed that ‘bad-quality’ tag off.
Source: Economic Times