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Excess Car Capacity

Discussion in 'Fiat India News' started by Raj_pol, Aug 3, 2015.

  1. Raj_pol

    Raj_pol Superiore

    Punto Evo 1.3
  2. bibin

    bibin Regolare

    tata bolt and zest are the major culprits her
    as per the market conditions no body expected Fiat to do more than 1k level but Tata expected Bolt and Zest around 10k but currently they are selling around 2k levels only.
    prabhjot likes this.
  3. nkrishnap

    nkrishnap Staff Member Janitor

    Linea 1.3
    Something doesn't add up. 5.2% of installed capacity of 200,000 is 10,400. On an average, Fiat itself is selling around 700 cars a month which adds up to 8,400 per year and add a few as export, it may come up to 9,000 odd. No way, the remaining the 1400 is of Zest and Bolt per year. That would be hardly 100 cars a month combined.

    My gut feel is that the utilization may be around 25%.

    Has Tata shifted all the zest and bolt production to Pimpri plant?
    prabhjot likes this.
  4. KKAUL

    KKAUL Amatore

    Grande Punto 1.3

    Might be the case that they are producing it at pimpri coz they have a very big capacity there if I remember correctly the target for each shift in INDICA plant was 800 per 8 hour shift though half of it was hardly met.Since Indica is a shut case for now they might have to utilize it.
    The report is correct I have myself seen huge stock yard filled with inventory and shifts being reduced to 3 to 1 and eventually 3 days a week to some time layoff for 15 days.They are building capacity but for god know where is the buyer.
    The whole INdian Economy is being shown bloated the picture is much bleak at manufacturing points and lets keep our finger crossed because what they have foretasted for next 6 months is worst india is yet to see.
    --- Double Post Merged, Aug 3, 2015, Original Post Date: Aug 3, 2015 ---
    This is what is happening see the cartoon part forget the caption
    prabhjot likes this.
  5. prabhjot

    prabhjot Esperto

    delhi ncr

    That is what happens when 2-3 firms have 70-80% marketshare, and RISING, although this 5.x % capacity utilization figure is badly wrong, surely. More like 30%? Who knows.

    The criticality, essentiality of exports for the continued viability of all the other-than-dominant-oligopoly firms' manufacturing investments is the NEW NORMAL for the Indian automotive industry.

    VW exports 4 times the number of Vento-s as it sells in India, Nissan with the Sunny and Micra are even more export-dependent. etc

    This is mostly why GM is shutting down its Gujarat plant, and will commit new investment for the planned all-new models by 2020 only on the understanding that India, rather than Korea, China or Indonesia/Thailand will be THE international supply-base for certain 'emerging market' car models. ETC.

    The Ranajangan facility, though, is i think a bit different to most others in that there is a huge amount of in-sourcing manufacture of components that goes on there, and not just engines. A lot of exports of engines and components happens as it is, then, aside from engine supplies to Maruti?

    @KKAUL is very right. There is a huge crisis of over capacity in sector after sector, caused by a lack of aggregate demand, even declining exports, and increasingly cut-throat competition from imports.
    Also erroneous/mistaken (etc) tax and budgetary policies by the new government.

    Whether there'll be a big shakeout (plant and dealer closures, layoffs etc) in the Indian car industry is not clear: that hinges mostly on whether exports can enable survival here for local manufacturing, imo.

    It's not for nothing that ALL firms except Maruti S, HY and Mahindra, as well as the Tata-Fiat JV, are in very huge losses as far as their domestic manufacturing and sales operations are concerned. In some cases, there are gargantuan losses despite good sales (e.g., Honda), in others huge ongoing losses DESPITE big exports (eg., Ford and also VW, if am not wrong).

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