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Tata Motors vendors deny payment issues

February 06, 2009 13:01 IST

Tata Motors vendors said they were not facing any payment issues. Surinder Kapur, president of the company's 'vendor council' and chairman of the Sona group, said the council has about a dozen representatives from Tata Motors and an equal number from the vendors.

"We supply for about 4-5 per cent of our revenues to Tata Motors and we do not have payment issues," said Kapur.

Lumax, which supplies almost half of the lighting solutions for Tata Motors worth about Rs 60 crore (Rs 600 million) a year, said the company had not experienced any payment issues. "We absolutely have no problems with Tata Motors," said D K Jain, chairman of Lumax Technologies, which derives about 15 per cent of its turnover from supplying to Tata Motors.

Vendors to other companies also said they did not face any payment problems. "The delays in payments are not more than five to nine days. In fact if there's a cash flow problem, some have helped us with advance payments," says Sanjay Labroo of Ashai Glass.

Another Chennai-based component supplier to the commercial vehicle industry said when payment defaults took place in the past, OEMs have been accommodating in providing alternative funding to help settle the dues to vendors.

Suppliers to the two-wheeler industry, especially motorcycles that has faced a demand slowdown of about 9 per cent due to the high cost of financing last year, said there had been no payment defaults from major two-wheeler majors.

"We give a credit window of about 45-60 days and of about 30-60 days to all our clients in the two wheeler industry. So far, we have not faced a payment delay," says J K Jain, CMD of the Rs 215 crore (Rs 21.5 billion) Fiem Industries, which derives about 80 per cent of its revenues from domestic sales.

Fiem is a key supplier of mirrors to two wheeler companies like Suzuki Motorcycles and TVS Motors.
Danny Goodman, P B Jayakumar in New Delhi/Mumbai
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