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New Delhi: Amidst the growth trend of India’s passenger vehicle (PV) industry, Tata Motors sees the business to invest in products, platforms, electrical and electronic architectures, and vehicle software to remain competitive.
According to the company’s Chairman N Chandrasekaran, India is well on track to exceed the 5-million passenger vehicle sales mark over the next few years from the 4.1 million units clocked last year and Tata Motors is well placed to strengthen its market position and tap into this growth opportunity.
His confidence comes from the opportunity that despite being the second largest market in the world, India is well behind China which is 6X our market size. India’s vehicle penetration at about 30 vehicles per 1,000 people, is well below global norms and is expected to continue to increase.
“The business will also focus on significantly improving customer experience and enhancing product quality. The EV business will focus on driving up penetration through multiple product launches, focus on market development, charging network enhancements and continuing to introduce aspirational product features,” the Chairman wrote in a letter to the shareholders in the company’s 79th annual report.
Talking about the outlook for FY25, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility, said he expects the Indian PV industry to moderate towards a long-term secular growth rate after three consecutive years of strong growth.
“Trends seen in FY24 are expected to accentuate with rising customer preference for safer, smarter and greener vehicles powered by CNG and batteries. SUVs will continue to dominate the landscape with more options for customers to choose from,” he said.
Going forward, Tata’s e-PV products will be built on its new ‘acti.ev’ pure EV architecture, which is a modular and scalable grounds-up platform developed to be ready for global standards.
For commercial vehicles, apart from the sales, the automaker aims to focus on vehicle parts-linked businesses like spares, digital and smart mobility solutions which will help reduce the volatility of the vehicle sales business. “This should help drive consistent value accretive growth in the coming years.”
Last year, the company received FAME and PLI certifications for Ace EV and 12m e-bus models. Girish Wagh, Executive Director, Tata Motors said FY24 was a tale of two halves for the Indian Commercial Vehicle (CV) industry while it transitioned to BS-VI Phase-II emission norms on April 1, 2023. “H1 began on a promising note with sales volumes increasing across most segments. However, the combined effects of a high base, state elections and the upcoming general elections moderated growth in H2.”
Looking ahead, Wagh expects FY25 to be another exciting year for the CV industry, given the favorable macroeconomic context, especially in the domestic market.
The India automotive business of Tata Motors is now debt-free, and the company said it is on track to make its UK-based subsidiary Jaguar Land Rover (JLR) debt‑free in FY25.
Tata Motors aims to achieve net zero GHG emissions for its PVs and CVs businesses by 2040 and 2045 respectively. For JLR, the aim is to become carbon net zero across its supply chain, products and operations by 2039.
The company’s Board has proposed its demerger into two separate listed companies housing– the CVs business and its related investments in one entity and the PVs businesses including PV, EV, JLR and its related investments in another entity. “This will also help secure considerable synergies across PV, EV and JLR particularly in the areas of EVs, autonomous vehicles, and vehicle software.”
JLR product launches
Over the next phase, the company is confident that JLR will continue to double down on its journey to become a premium luxury OEM, deliver strong financials and continue to invest in products and technologies.
“There is an exciting range of products lined up to be launched over the next 3 years that needs to be delivered successfully. The first electric Range Rover launches later this year, and there are further EVs lined up in the coming years including the all-electric Jaguar.”
Challenges
According to Chandrasekaran, the structural shifts that were called out last year are continuing to evolve. This includes the irreversible move to green mobility, rebalancing of supply chains to achieve resiliency, and digital acceleration with artificial intelligence and machine learning becoming mainstream.
“The global geo-political scenario continues to be tense with continuing military conflicts. These have created immense hardships for the affected people and also resulted in supply chain disruptions. As the year draws to a close, the economic scenario is stabilising with global growth estimated to be around 3% during the next couple of years. The coordinated actions by the central banks have also helped bring down inflation,” he said.
