Tata Motors Chief Executive Girisha Vaga said that the Indian auto industry will post double-digit production growth this fiscal year, driven by favorable demand conditions amid picking up economic activity, despite high fuel prices and rising car loan interest rates.
The commercial vehicle segment, which peaked in 2018-2019 with production in excess of 10,000 units, experienced a decline in the next two fiscal years, but has already begun to gain momentum compared to the last fiscal year.
While it may take longer to reach the highest volumes again, in terms of payload, the industry could reach the previous peak earlier amid rising demand for commercial vehicles (CV) with higher payloads.
“I think the economy started growing again last year and we saw the commercial vehicle market grow by about 26%. We (Tata Motors) grew by 33%. We have achieved more than other companies in the industry,” Wag said.
When asked what the growth rate could be, he said: "We should also see double-digit growth this year."
Regarding Tata Motors, he said the goal is to do better than the industry as a whole, as it did last year.
Commenting on the impact of rising commodity prices, Wag said it was unprecedented.
“The increase in steel prices as it happened is staggering. In commercial vehicles, the impact of steel price increases is quite large because almost 45% of our cost structure is directly dependent on steel. So the impact was quite strong,” said a top manager at Tata Motors.
The company is trying to reflect rising costs by raising the price of its vehicles, he said, adding: "Last year we raised prices almost every quarter, but it wasn't enough to offset the remaining impact."
