Single-digit growth optimistic in FY14

Written by Roudra Bhattacharya | New Delhi | Updated: Jan 29 2013, 08:39am hrs
Carmakers are predicting tough times ahead. In a recent announcement, market leader Maruti Suzuki said growth next fiscal will remain below double-digits. Rival Tata Motors also feels even a single-digit growth in passenger vehicle (PV) sales will be optimistic.

Speaking to FE, Ranjit Yadav, Tata Motors recently appointed president of PV division, said that subdued consumer demand is likely to push sales over the next few quarters as well. The next few quarters will be challenging and single-digit growth is optimistic in FY14 given the market conditions. The industry is under stress, I think we can all see that, but utility vehicles have been an exception. We believe we will come out stronger than what we went in with, he said.

The modest outlook comes after the Mumbai-based automaker saw flat PV volume growth in April-December FY13 at 2.48 lakh units while the PV market rose 8.37% to 1.95 million units in the same period. Rising fuel prices, high interest rates and slowing economic growth has led car sales to fall below industry projections for most of the year resulting in inventory pile-ups (mostly petrol cars) and prompting production cuts.

Recently, in an interview Maruti chairman RC Bhargava had said that the company is likely to grow at around 6-8% in FY14, similar to the growth projections for the industry. The growth next fiscal is expected to come from increased diesel car capacity and an expected rise in demand for petrol cars as diesel prices progressively go up.

Tata Motors, which went through a major restructuring of its top management last year, in a bid to improve products and pick-up sales, plans to rapidly revise its car and utility vehicle portfolio this year.

While the Safari SUV will be phased out by mid-2013, and be replaced by the new Safari Storme model, over five more launches are also expected in 2013, Yadav said.

On Monday, Tata Motors also expanded its Vista hatchback range with a more powerful (90 PS over 75 PS of the base Vista) D90 diesel model. Priced at R5.99 lakh, the Vista D90 is closer to entry-level sedans with premium features such as a touchscreen multimedia system with GPS, automatic climate control and a driver information system.

Some technology has been brought down from the Manza sedan. There is a new transmission and a performance engine. I think it offers great value and should boost our 13-14% market share in PVs, Yadav said. Currently, Tata sells around 4,000 units of the Vista very month.