Tata Motors' Spanish arm to shut shop as losses mount

In the past five years, Tata Hispano Motors Carrocera operating losses accumulated to over euro 60 mn

Spanish bus chassis producer Tata Hispano Motors Carrocera, a wholly-owned subsidiary of Tata Motors, on Tuesday announced it would cease production at the Zaragoza factory due to mounting loses and falling demand.

“The decision to cease activity at Tata Hispano Motors Carrocera has been compelled by economic and business factors, as despite strong investments, there was no positive result to reverse the challenging business situation and losses for the plant,” said a company release.

The company has invited workers’ representatives to discussions so that a social plan for the 287 employees working at the factory could be agreed upon. “The company has expressed its willingness to reach an agreement. The company continues to have tremendous respect for the workers of Tata Hispano Motors Carrocera and remains committed to an ongoing dialogue that may help achieve a more satisfactory agreement for both parties, with the best possible accompanying social plan to help minimise the effects of the measure,” the company said.

In the past five years, the company’s operating losses rose to about euro 60 million (about Rs 507 crore, according to Tuesday’s exchange rate); also, production has constantly declined. In recent years, sales have fallen primarily due to the worst decline in the bus market (38 per cent fall in the number of registrations). At the end of 2012, the company’s loss stood at about euro 14 million (about Rs 117 crore).

In the bus segment, the market has been shrinking year after year.