Robust demand to drive PV industry growth
New Delhi: Tata Motors expects domestic passenger vehicles industry to grow in double digits in 2021-22 on the back of continued robust demand momentum driven by shift towards personal mobility in the aftermath of Covid-19 pandemic, coupled with a low base effect, according to a top company official.
Despite uncertainties over increasing commodity prices and supply of semiconductors, Tata Motors expects its growth in the upcoming fiscal to be better than that of the industry. "There is a momentum which continues on the demand side because of the shift towards personal mobility. That will remain till everybody gets vaccinated. We don't know when everyone will get vaccinated," Tata Motors President – Passenger Vehicle Business Unit Shailesh Chandra told PTI. Still people will be cautious and therefore there is this gravity towards personal mobility, he said adding "there might be some permanent shift that has happened in favour of personal mobility".
When asked about the company's outlook on the growth of domestic passenger vehicle sales, he said it would be in at least double digit. As for Tata Motors, he said, "We would expect growth to be much better than the industry." Elaborating further on the company's bullish growth outlook, Chandra said, "As we are getting closer to the end of this quarter, possibly we, the industry will end the quarter with very low levels of inventory." "A low inventory situation, unserviced demand of many customers across the industry and booking momentum remaining the same with a shift towards personal mobility, I think all these are very favourable factors for growth," he added. While the industry has to replenish the whole system with inventory, he further said the demand momentum should continue going forward. Chandra, however, said that "Supply side has always been an uncertain thing. We will have to see how it pans out for everyone. The whole semiconductor issue, how the steel (prices) will peak, with those kinds of uncertainties and riders, I think otherwise from a demand side perspective there are opportunities which are very clear." Specific to the semiconductor issue, he said it continues to be a concern which needs to be dealt with almost on a daily basis unlike in the past when the company had a "visibility of at least two to three months" of supplies.
On the current challenges for the auto industry, he said it has been the cost increases due to various factors, but the manufacturers have not been able to fully pass it on to the market as it is still yet to fully recover from the impact of the pandemic. "The BS-VI transition itself was a big cost increase.