Tata Hispano to stop production in Spain in October

Mumbai, September 24, 2013: Tata Hispano Motors Carrocera plans to stop production at its Zaragoza facility in Spain following a declining bus market and accumulated losses. It has accordingly informed the Workers’ Committee and invited their representatives to discussions to formally arrive at a plan that will concern the future of the 287 employees. The stoppage is expected from next month.

It may be recalled that Tata Motors chairman, Cyrus Mistry, had said at the AGM in August that it was looking at ‘strategic options’ for the company that is experiencing tough market conditions. The bus market in Europe has seen a fall of 40 percent in terms of registrations, the company said in a statement. Over the last five years, its operating losses are over 60 million euros (Rs 508 crore).

Production activity is expected to stop after the company meets its commitments to deliver current orders. It also said it has received an offer from the Benseny Group. This proposal, which is not a purchase offer, is being pursued to explore the possibility of achieving continuity of Zaragoza factory, the press statement said.

Founded in 1939, the plant’s activities include design development, production and marketing of chassis for buses and coaches for urban, suburban, and middle and long distance on different chassis of international brands. In 2005, Tata Motors invested in a 21 percent stake in the company to become a minority stake holder and subsequently, in November 2009, Hispano Carrocera SA was renamed Tata Hispano Motors Carrocera SA after Tata Motors bought it in an attempt to remedy losses.

The plant has been affected by 2008 global economic crisis and shrinking demand. It closed 2012 with a losses of over 14 million euro.