The auto industry does not see a pick-up in sales before the festive season in August-September even if the central bank cuts interest rates next week.
R Ramakrishnan, vice-president, commercial - PCBU, Tata Motors, said, “It took 13 steps to move the rates up to the current level. People will wait for three or four stages before they start purchasing. So we are expecting the first six months to be somewhat moderate and then the beginning of the festival season should start providing the positive move.”
In line with the industry, Tata Motors has reported flat sales in the fiscal so far.
“The revival in the sales and the accrual of growth should happen in the second half of the next fiscal,” he said, adding that the slowdown was because of hike in fuel prices, particularly petrol, and rates hikes.
“The sales did not grow as expected in the current year. The government and RBI might take measures to once again propel growth. But it cannot happen suddenly,” he said.
On a query on missing the target to sell 18,000 units of Nano car a month, Ramakrishnan said, “If you look at the A3 segment cars, there is growth. In A2 there is a fall and in A1 there is a smaller fall. Nano is in the A1 segment. Considering all this, whatever sales we have registered are very healthy. While others are struggling to keep their sales up, Nano has done well,” he said.
Also, the company has been working on repositioning the Nano.
“The customers are a little scared to go to a full-fledged car showroom. They are worried whether the people at the outlet would show them the product properly. This has given rise to the idea of setting up smaller dealership for Nano to take it closer to the buyers. For Nano, we are opening a lot of outlets in Tier III and IV locations,” he said.
The auto major is also upbeat about the revival of sales in semi-urban and rural markets, particularly with roads getting better and the boost in agriculture income.
“Many are projecting large growth in the Indian market. Quite a large part of this growth is happening in semi-urban and rural areas. In the cities, there is a growing demand for utility vehicles,” he said. The high-end products in the utility vehicle segment are seen contributing about 20% to volumes, he said.
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