Telco Accumulates Rs 1400cr Dues On Unsecured Sales

Automobiles major Telco has piled up outstanding dues worth about Rs 1,400 crore for 1996-97 after selling almost 37,000 vehicles on unsecured credit to its dealers. The company resorted to large-scale consignment sales in the last quarter of 1996-97 to meet its sales target for the year.

The company sold 2,15,280 vehicles in 1996-97, up 19 per cent from the previous years 1,81,200 vehicles.

However, Telcos overall sales would have stagnated if it had not taken its unprecedented step of transferring 37,000 vehicles on credit.

``This growth is entirely due to the consignment sales that the company resorted to. The stocks are being stored in secured stockyards all over the country at the expense of the dealers and the dealers bottom lines are likely to be hit as a result, a source pointed out. The company did not respond to queries by Business Standard.

 

The company had reported a turnover of Rs 7,909.67 crore and a net profit of Rs 530 crore last year. Telcos outstanding dues will be reflected in a higher debtors position in the companys 1996-97 balance sheet.

The auto major produced 2,18,393 vehicles in 1996-97, of which 2,15,280 vehicles were sold, including export of 15,000 vehicles. Telco thus had an inventory level of a little over 3,113 vehicles.

In 1996-97, Telco produced 1,11,699 medium\heavy commercial vehicles, 99,281 light commercial vehicles and 7,413 passenger cars.

The sales for the various segments amounted to 1,08,844, 99,117 and 7,315 respectively.

The domestic auto industry went through a slump for most of 1996-97, with LCV sales declining by 5.5 per cent. However, sales in the passenger car and the HCV segment witnessed modest growth.

Passenger car sales rose by 18.8 per cent during the period while the medium/heavy commercial vehicles segment registered an increase of 18.9 per cent.