Tata Motors has expressed concerns about subdued demand in international markets for the current fiscal year but remains optimistic about a gradual recovery in the domestic market, driven by new product launches and the upcoming festive season.
Earlier this month, Tata Motors reported a consolidated net profit of ₹5,566 crore and a total income of ₹1,09,623 crore for the June quarter. However, the company’s Global CFO, P.B. Balaji, noted that global demand is expected to remain weak in the near term.
“On the global front, demand is likely to stay muted as it has been. We don’t foresee any immediate changes,” Balaji stated during an analyst call. In contrast, the domestic market shows more promise. Tata Motors anticipates a gradual improvement in demand for the remainder of the year, supported by government infrastructure investments, favorable economic conditions, healthy monsoons, and new vehicle launches coinciding with the festive period.
“There is reason to be optimistic about the domestic market’s demand buildup, though the pace of this recovery remains to be seen,” Balaji added. Despite the cautious outlook, Balaji expressed confidence in the company’s financial stability, noting that commodity prices are expected to remain stable, which would help sustain Tata Motors’ strong performance throughout the year. “Financially, we’re in a strong position and expect to maintain this through the coming quarters and the full year,” he said.
Tata Motors’ domestic passenger vehicle segment has faced challenges, with retail sales declining for two consecutive months in May and June. Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles, pointed to high channel inventory as a key issue.
“We’re dealing with record-high channel inventory, which increased further in the first quarter, adding stress to wholesales. Additionally, there’s been a slowdown in demand for electric vehicles (EVs) in the fleet segment due to the upcoming expiry of the FAME II subsidy in March 2024,” Chandra explained.
To address these challenges, Tata Motors is focusing on boosting retail sales through targeted marketing campaigns, micro-market strategies, and upcoming product launches aimed at attracting customers and increasing showroom traffic.
“We’re also committed to rigorous cost control and ongoing efforts to reduce structural costs within the organization,” Chandra added. As Tata Motors navigates the complex landscape of fluctuating global demand and domestic recovery, the company remains focused on strategic initiatives to maintain its financial health and market position.
