Telco to focus on design and sales

By Our Staff Correspondent

MUMBAI, JULY 25. The workforce of Tata Engineering and Locomotive Company is set to come down by around 7,000 at the end of the current year (2000-01). Speaking at the company's annual general meeting (AGM) here today, Mr. Ratan Tata, chairman, said this would be achieved through the voluntary retirement scheme (VRS) which 3,000 employees have opted for. In addition, by this year end, 4,000 employees will be transferred to hived off companies.

He said Indica sales in the current year would be around 70,000. The break-even level is 90,000 units on an annualised basis and at the end of the current year, the company would have broken even. In June, the company sold 3,400 units of Indica and till date, it has sold more than 54,000 cars constituting a 21 per cent market share in its category.

Regarding new products, Mr. Tata said the company's mid-size, 3- box car, `Magna' was almost ready. Telco is also planning to introduce an air-conditioned truck in the market in the current year.

The company has announced a net loss of Rs. 74 crores for the first quarter of 2000-01 against a loss of Rs. 33 crores in the corresponding period last year. Net sales were up at Rs. 1,802 crores against Rs. 1,580 crores. Other income amounted to Rs. 28 crores.

Commenting on the first quarter results, Mr. Tata said they had not been so good. ``Commercial vehicles sales have been impacted by sales tax increase and general sluggishness in the economy. The coming year would be difficult to predict. Interest rates have gone up. The cash reserve ratio (CRR) has gone up and this will result in a further slowdown of the economy.'' he said.

Mr. Tata said in the emerging environment in the passenger car segment, the company had plans to introduce several new products, but these might still not be adequate to enable the company to compete with the global majors. ``It would therefore, be essential for Telco to establish a partnership or an alliance with one or more global carmakers. This would enable the company to offer a wider product range to its customers and better address the domestic market. We would supplement our range by buying models from others or selling other models under our name. There are 2-3 variants of the Indica which are under development and would enter the market in the next 24 months.''

Global Tele net zooms

Global Tele-Systems (GTL) has announced a net profit of Rs. 162.37 crores for the quarter ended June 30, 2000 against Rs. 13 crores in the corresponding period of the previous year. The net profit, however, includes extraordinary income of Rs. 131.9 crores.

Net sales and services were Rs. 103.85 crores against Rs. 77.78 crores. The operating profit has improved to Rs. 40.97 crores from Rs. 29.4 crores. Export turnover stood at Rs. 48.23 crores (nil).

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