Mumbai: Tata Motors Ltd. said on Monday 9 July that high interest rates and commodity prices, and greater competition may dent demand for commercial vehicles.
Chairman Ratan Tata told shareholders that India’s top bus and truck maker was trying to offset the domestic slowdown by focusing more on exports, and it was concerned about other low-cost manufacturers setting up operations in the country.
“We’re seeing a stagnation in the auto sector globally,” Tata said. “We may see a temporary dip in commercial vehicles sector because of high interest cost and high prices of commodities, and increased competition,” he said.
“Our greatest concern is when Chinese manufacturers come to India. Most European and US manufacturers are here already.
Tata Motors, also India’s third-biggest car maker, is scheduled to launch a small car priced at under $2,500, the world’s cheapest, in 2008. Tata said while there had been some delays, the car should be launched by the middle of next year. Tata told shareholders the company would spend Rs120 billion ($3 billion) over three years in capital expenditure.
International business contributes 18% of Tata Motors’ revenues, and it has been planning to expand business in southeast Asia, Latin America and South Africa.
The company is partnering Italy’s Fiat on passenger vehicles, engines and trucks.
Tata Motors said it has also lined up new launches, including a new Indica hatchback, a next-generation Indigo sedan, a crossover vehicle and a new-generation truck.
TAL Manufacturing Solutions, a fully-owned subsidiary of Tata Motors, is looking to make large supplies of aerospace equipment for Boeing.