Tata Motors anticipates the domestic passenger vehicle industry to surpass the peak sales number of 34 lakh units achieved in financial year (FY) 2019 this year on the back of strong demand and fewer Covid-related disruptions that were seen in the last two years.
The company envisions a better business environment this FY, even as chip shortages continue to make it challenging to cater to the improved demand. The auto major also listed an upsurge in commodity costs as a significant factor that could have a bearing on its profitability in the ongoing FY. Tata Motors Managing Director Passenger Vehicle and Electric Vehicles Shailesh Chandra told the media that the company has seen various agencies, which are estimating volume towards a possibility of the industry exceeding the peak that has been witnessed in FY19 of 3.4 million units. So as far as Tata Motors is concerned, certain electronic components will remain a challenge, but several actions are taken to mitigate this threat in terms of developing alternatives, additional resources, close coordination with semiconductor suppliers, and at times the open market cost, he said. Chandra said that the firm is also taking significant measures to decrease cost structures across the organisation. The company will continue to innovate and concentrate on value engineering, and nine levers have been identified to enhance profitability in the next financial year. Chandra said that demand for electric vehicles (EVs) and compressed natural gas (CNG) models are growing in the domestic market due to a rise in fuel prices. Chandra said the automaker is also going for certain capacity debottlenecking steps to unlock the next phase of development planned for this fiscal year. With demand for EVs remaining very robust, the firm is fast ramping up the supplies. The firm has already increased our supplies by about 3.5 times in the last six months. The company plans to roll out 10 EVs over the next five years, Chandra said. Image Source
