Tata Motors Nano skids

Tata Motors is in the red, opening weaker and then slipping down around 2% and it is currently at Rs.429, its intra day low point.

The stock is streaked red today morning on news that the company has shut down its Sanand plant in Gujarat for 30-40 days where it manufactures the Nano. Low demand and pile up of inventory has forced the company to shut down. The company is also taking this opportunity to retool the plant, getting it ready to make the new version of the Nano for the festive season. The company is planning to launch a hatchback and compact sedan, known as Kite,  to compete with Celerio of Maruti. This is expected to hit the streets by 2015.

The pile up of Nano, where even models of 2013 are not yet sold remains a cause for worry. As such the Sanand plant was working just 2-3 days a week, making 2000 to 2400 cars/month. Its inventory pile up of Nano is stated to be somewhere around 9000 to 10,000 cars.

As such, over the past year and more, it is global sales of JLR which is driving its sales thus this poor domestic performance does not come as a surprise as sales in India have consistently been on a decline.