Tata Motors says there's no payment problem
MUMBAI: Tata Motors on Thursday said three-quarters of its purchases from vendors have been paid immediately through an arrangement with banks.
Under a tripartite agreement between the company, banks and vendors, known as the Bill Marketing Scheme, the bank pays the vendor for purchases by Tata Motors and the company pays the banks after some time, said the companys managing director Ravi Kant.
For the remaining 25%, there could have been some delays, said Mr Kant, adding that the company was in constant dialogue with the vendors. There could be delay in payments. It is a difficult situation. The whole industry is facing problems, Mr Kant said at a media briefing in Mumbai.
The Tata Motors MD said the Indian commercial vehicle market was experiencing a recovery after a rough patch between October and December 2008. We have seen improvement in sales in January. It is expected that February will be better than January and first indications are that March will be even better. As sales begin to increase, vendor purchases will also improve and a positive cycle will once again get created. Our credit period for vendors is between 30 and 60 days, Mr Kant said. Mr Kant, however, declined to disclose the amount of outstanding and the time period over which the company would clear its dues to the vendors.
Whatever happened in the October to December quarter was the bottom of the cycle, and the company is cautiously optimistic about the future, he said.
Tata Motors has collected Rs 610 crore through fixed deposits till date and the company has adequate working capital, he added.
Mr Kant said that a story in The Economic Times on Wednesday on Tata Motors alleged vendor payment problems painted what he described as a wholly unrealistic picture and is sensationalising the matter beyond all proportions. We do not agree with it. Tata Motors is conducting its business properly, adequately, and in full partnership with all its vendors.
A few months ago, the company had created a vendor council headed by Surinder Kapur, the promoter of Sona Steering. So far, the council has met once and discussed long-term and immediate problems, he said. We understand the vendors problem, they understand ours. It is a partnership approach, he explained.
In a letter to ET, Vishu Mathur, executive director of ACMA, the component makers lobby, said the component makers were closely operating with all automobile companies, including Tata Motors, to overcome the industry downturn.
The industry has full confidence that this phase would get over shortly, Mr Mathur wrote. Mr Mathur said that ACMA had not compiled any data or statistics on payment due to vendors and the figure of Rs 450 crore mentioned in the story could not be attributed to ACMA.
Source : Economic Times (2/6/2009)
Tata Motors sees no serious payment issue
There could be some delay in payments to 25 per cent of Tata Motors vendors who are not under its bill marketing scheme, a tripartite arrangement under which bills are paid through banks, Mr Ravi Kant, Managing Director, Tata Motors, said on Thursday.
Nearly three-fourth of the payments to vendors have been made through the bill-marketing scheme under which the vendor gets paid from banks and we pay to those banks, Mr Kant said, suggesting that there are no serious problems regarding the companys payment to vendors.
Reacting to media reports about huge outstanding dues to vendors, Mr Kant said, There is no doubt that we are passing through difficult times. There is a liquidity problem, but we are not sitting on anyones payment. Mr Kant, however, refused to reveal the actual outstanding to the vendors.
Various issues regarding our business with the suppliers have been discussed at the vendor council and mutually satisfactory solutions have been brought forth, he said.
A cross-section of vendors felt that Tata Motors can comfortably deal with the payment problem. I think many vendors have not taken advantage of the bill-marketing scheme offered by the company. As a supplier, we have no major outstanding from the company, said Dr Surinder Kapur, Chairman, Sona Group, who is the president of Tata Motors vendor council.
manageable numbers
Mr Harish Sheth, Managing Director, Setco Automotives, a major supplier of clutch systems, also said that his company is not facing any problem in its business with Tata Motors. Tata Motors is a company with an annual turnover of about Rs 30,000 crore. Of this, 60-65 per cent is spent on purchase of raw materials and components. This means they are roughly spending Rs 1,300-1,600 crore a month on component purchase. Given this, the figures quoted in the media (Rs 1,200 crore) as unpaid dues are quite manageable for them, he said.
Tata Motors spent Rs 12,337 crore on purchase of raw materials and components in the nine months ended December 2008.
There are no issues. We dont have any major outstanding from the company, said Mr V.K. Vishwanathan, Managing Director, Bosch India. Bosch is one of the major vendors which supplies diesel systems, starters and motors.
Tata Motors reported a 30 per cent drop in total vehicle sales at 35,704 in January. The company posted a net loss of Rs 263 crore for the third quarter of the financial year. Tata Motors share price fell 2.8 per cent to Rs 131.50 on BSE on Thursday.
Source : Business Line (Online Edition) (2/6/2009)
MUMBAI: Tata Motors on Thursday said three-quarters of its purchases from vendors have been paid immediately through an arrangement with banks.
Under a tripartite agreement between the company, banks and vendors, known as the Bill Marketing Scheme, the bank pays the vendor for purchases by Tata Motors and the company pays the banks after some time, said the companys managing director Ravi Kant.
For the remaining 25%, there could have been some delays, said Mr Kant, adding that the company was in constant dialogue with the vendors. There could be delay in payments. It is a difficult situation. The whole industry is facing problems, Mr Kant said at a media briefing in Mumbai.
The Tata Motors MD said the Indian commercial vehicle market was experiencing a recovery after a rough patch between October and December 2008. We have seen improvement in sales in January. It is expected that February will be better than January and first indications are that March will be even better. As sales begin to increase, vendor purchases will also improve and a positive cycle will once again get created. Our credit period for vendors is between 30 and 60 days, Mr Kant said. Mr Kant, however, declined to disclose the amount of outstanding and the time period over which the company would clear its dues to the vendors.
Whatever happened in the October to December quarter was the bottom of the cycle, and the company is cautiously optimistic about the future, he said.
Tata Motors has collected Rs 610 crore through fixed deposits till date and the company has adequate working capital, he added.
Mr Kant said that a story in The Economic Times on Wednesday on Tata Motors alleged vendor payment problems painted what he described as a wholly unrealistic picture and is sensationalising the matter beyond all proportions. We do not agree with it. Tata Motors is conducting its business properly, adequately, and in full partnership with all its vendors.
A few months ago, the company had created a vendor council headed by Surinder Kapur, the promoter of Sona Steering. So far, the council has met once and discussed long-term and immediate problems, he said. We understand the vendors problem, they understand ours. It is a partnership approach, he explained.
In a letter to ET, Vishu Mathur, executive director of ACMA, the component makers lobby, said the component makers were closely operating with all automobile companies, including Tata Motors, to overcome the industry downturn.
The industry has full confidence that this phase would get over shortly, Mr Mathur wrote. Mr Mathur said that ACMA had not compiled any data or statistics on payment due to vendors and the figure of Rs 450 crore mentioned in the story could not be attributed to ACMA.
Source : Economic Times (2/6/2009)
Tata Motors sees no serious payment issue
There could be some delay in payments to 25 per cent of Tata Motors vendors who are not under its bill marketing scheme, a tripartite arrangement under which bills are paid through banks, Mr Ravi Kant, Managing Director, Tata Motors, said on Thursday.
Nearly three-fourth of the payments to vendors have been made through the bill-marketing scheme under which the vendor gets paid from banks and we pay to those banks, Mr Kant said, suggesting that there are no serious problems regarding the companys payment to vendors.
Reacting to media reports about huge outstanding dues to vendors, Mr Kant said, There is no doubt that we are passing through difficult times. There is a liquidity problem, but we are not sitting on anyones payment. Mr Kant, however, refused to reveal the actual outstanding to the vendors.
Various issues regarding our business with the suppliers have been discussed at the vendor council and mutually satisfactory solutions have been brought forth, he said.
A cross-section of vendors felt that Tata Motors can comfortably deal with the payment problem. I think many vendors have not taken advantage of the bill-marketing scheme offered by the company. As a supplier, we have no major outstanding from the company, said Dr Surinder Kapur, Chairman, Sona Group, who is the president of Tata Motors vendor council.
manageable numbers
Mr Harish Sheth, Managing Director, Setco Automotives, a major supplier of clutch systems, also said that his company is not facing any problem in its business with Tata Motors. Tata Motors is a company with an annual turnover of about Rs 30,000 crore. Of this, 60-65 per cent is spent on purchase of raw materials and components. This means they are roughly spending Rs 1,300-1,600 crore a month on component purchase. Given this, the figures quoted in the media (Rs 1,200 crore) as unpaid dues are quite manageable for them, he said.
Tata Motors spent Rs 12,337 crore on purchase of raw materials and components in the nine months ended December 2008.
There are no issues. We dont have any major outstanding from the company, said Mr V.K. Vishwanathan, Managing Director, Bosch India. Bosch is one of the major vendors which supplies diesel systems, starters and motors.
Tata Motors reported a 30 per cent drop in total vehicle sales at 35,704 in January. The company posted a net loss of Rs 263 crore for the third quarter of the financial year. Tata Motors share price fell 2.8 per cent to Rs 131.50 on BSE on Thursday.
Source : Business Line (Online Edition) (2/6/2009)
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