Telco sales fall 40

MUMBAI, February 15: Demand contraction has hit the country8217;s largest commercial vehicle manufacturer, Telco with sales and production falling as much as 40 per cent for the month of December and January. The inventory levels worth over 250 crore has piled up with the company and its dealers with no recovery in sight, say officials. For the month of December 1997, production at Telco plants fell to 3,588 from 10,246 units produced in the same month of 1996. The company managed to sell only 2,974 units in December 1997 whereas it sold over 9007 units in December 1996.

With sales falling almost every month, Telco has decided to curtail production for the last quarter of the fiscal 1997-98, say sources. One of the worst hit, dealers say, is the recently introduced Pajero-clone quot;Safariquot; which has been launched in a recession-hit auto market. quot;There are very few buyers for Safari. Enquiries at the dealers are not resulting in any sales,quot; a Mumbai-based dealer said.

For the nine-month month period betweenApril-December 1997, Telco sales crashed by 40 per cent to 46,372 units as compared to 76,663 sold in the same period of calender 1996. Besides the recession in the economy outdated HCV models coupled with zero product innovation are the other reasons cited by the auto analysts for the sales crash. Telco8217;s lone competitor, Ashok Leyland also saw a dip in its fortunes with sales falling from 27,877 units to 19,645 units.

Analysts say that Indian HCV/MCV manufacturers must tighten their belts as competition from international players like Volvo has already reached India. quot;If Telco and Ashok Leyland do not take some drastic step, their market shares will crash substantially,quot; analysts say.