At a time when the external environment is extremely cloudy, the Union Budget can look at consumption-boosting measures to push demand and drive domestic growth, Tata Motors Group CFO PB Balaji said on Wednesday. After a good festive season, demand has been weak due to a combination of factors, including tight liquidity and “not so great” market conditions although not a crisis situation, Balaji told reporters in an earnings call.
Stating that there is an expectation of a gradual improvement in demand going forward with the fourth quarter being usually strong and due to the impact of infrastructure investments by the government, he said, “If, on top of it, there are consumption (boosting) measures (in the Budget), then that will help also navigate some of the not so great external situations that all of us face”.
“If there are a fair bit of clouds in their external horizon, what better place than to look at our internal consumption to drive it (growth) forward?” Balaji noted.
Spelling out expectations from the upcoming budget, he said anything that can be done to address the stress and “turbocharge” growth will be welcome as India’s “investment-led story is definitely playing out”.
At a time, when the external environment is extremely cloudy and there could be shocks, he said, “Why not bolster ourselves in terms of ammunition to keep driving domestic growth…as the GDP grows it benefits everybody”.
In the third quarter, Tata Motors reported a 22% fall in consolidated net profit to INR 5,578 crore, impacted by a decline in revenue from its passenger and commercial vehicles divisions. It posted a consolidated net profit of INR 7,145 crore in the same quarter last fiscal.
The company’s consolidated total revenue from operations stood at INR 1,13,575 crore against INR 1,10,577 crore in the year-ago period, it added.
When asked about the possible impact of US President Donald Trump’s tariff threat on electric vehicles (EVs) exported to the US from Europe, Balaji said, “Currently, we need to wait for clarity to emerge on that. As far as the UK is concerned, the balance of payment with the US is actually the other way around.”
“…the US exports more to the UK…and therefore we need to watch and see how that plays out.”
Tata Motors’ arm JLR is based out of the UK and produces EVs from the Castle Bromwich manufacturing plant, although it has a plant in Slovakia where it produces SUVs Land Rover Discovery and Land Rover Defender.
Nevertheless, Balaji said the company will have to continue to ensure that it pulls all the levers both on the demand side and the cost side to navigate whatever comes up.
Asserting that JLR products are “extremely well received” in the US, he said that ultimately customers will decide as long as the company gives “them the right value and the right aspirational quotient”.
