Tata Motors, India’s largest vehicles maker, sees rising commodity prices to hit margins in the future, but expects to offset it through price hikes and cost cutting, a senior executive said.
The firm’s margins did come under pressure in the December quarter as prices of raw materials such as steel, aluminium and copper rose during the latter part of the year.
We are undertaking cost reduction initiatives…we usually intensify it during such times…to some extent we have to pass on these cost increases, which benefit the margins, said Ravi Pisharody, head of Tata Motors’ commercial vehicles business.
A rise in truck prices is also imminent on migration costs from April to comply with new emission norms, he said.
Trucks in India’s 13 major cities will migrate to become Euro IV-compliant, while in the rest of the country will switch to Euro-III emission norms.
Tata Motors, which also makes passenger vehicles such as the Indica hatchback, ultra-low cost Nano and owns the luxury Jaguar Land Rover brands, has a dominant 60-plus percent share of the commercial vehicles segment in India, the world’s fourth largest truck and bus market.