Tata Motors, the Indian automaker, has announced that it will raise the prices of its commercial vehicles by up to 3% starting from October 1. This is the third price hike this year for Tata Motors as it aims to offset the residual impact of post-input costs. The previous price increases were 1.2% in January and 5% in March to ensure compliance with new emission norms.
The implementation of stricter emission norms through phase II of Bharat Stage 6 has led to increased costs for automakers in India. These new norms include real-time driving emissions testing. As a result, Tata Motors and other automakers are facing rising ownership costs and the need to adjust their pricing accordingly.
The ratings agency Fitch has predicted that India’s commercial vehicle sales volume will slow down due to these rising ownership costs. Fitch also stated that the implementation of the latest emission norms will lead to a further 5% increase in the prices of commercial vehicles by April 2023.
Meanwhile, Tata Motors is focusing on strengthening its position in the electric vehicle market. The company plans to establish specialized dealerships in India specifically designed for electric vehicles. Additionally, Tata Motors is finalizing its international strategy, which may involve exporting electric cars.
Tata Motors aims to invest around $2 billion in the development of battery-powered models by 2027. Sales of its electric passenger vehicles have already shown significant growth, with a 65% increase compared to the previous year. The company is also constructing a battery factory in Gujarat with a projected production capacity of 20-gigawatt hours to reinforce its domestic electric vehicle supply chain.
Overall, Tata Motors’ decision to increase prices is a strategic move to offset the impact of rising input costs and comply with emission norms. The company is actively investing in the electric vehicle market to capitalize on its growth potential.
Definitions:
– Commercial vehicles: Vehicles used for transportation of goods or passengers for commercial purposes.
– Emission norms: Regulations that define the acceptable levels of exhaust emissions from vehicles to minimize their impact on air pollution.
– Automakers: Companies that manufacture and sell automobiles.
Sources:
– Reuters
– Fitch