Tata Motors expects CV industry growth to be in double digits this fiscal
Home-grown automaker Tata Motors expects the commercial vehicle industry sales to grow in double digits this year despite hike in interest rates on auto loans, the company's Executive Director Girish Wagh told PTI. This seems possible thanks to factors such as government's investment in infrastructure, gradually increasing consumption in the country as well as robust growth in end-use sectors like e-commerce outweigh headwinds such as high inflation and increased interest rates.
On the other hand, the government's investment in infrastructure and number of projects, the gradually increasing consumption in the country as well as the end-use sectors such as e-commerce are showing robust growth. Wagh also added that the rising freight rates and fleet utilisation are continuously increasing the transporter confidence index. "The actual demand is going to be a net factor of the headwinds and tailwinds, within which the inflation, interest rates remain kind of headwinds," he added.
As per the Society of Indian Automobile Manufacturers (SIAM), in the first quarter of 2022-23, domestic sales of commercial vehicles grew 112 per cent at 2,24,512 units as against 1,05,800 units in the year-ago period. In 2021-22, this grew by 26 per cent at 7,16,566 units as compared to 5,68,559 units in 2020-21.
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As for the impact of interest rates on vehicle loans, Wagh said that interest rates do have a fair bit of impact on the EMIs of a vehicle. “Of late with the interest rates increasing no doubt, the EMIs will go up," he added. He also said that the industry has worked with financial institutions to provide such financing solutions that there is not much increase in the EMIs.
As for the outlook of Tata Motors, Wagh said that the company's focus would remain on profitable growth, although it sees demand picking up in the second half of the fiscal.