Chennai: No sooner had India taken its first step towards electric mobility, Tata Motors was first to bag a tender to provide 10,000 electric vehicles to government officials across India.
After Finance Minister Nirmala Sitharaman announced further sops to kick-start the electric mobility momentum in the nation during her budget speech, the industry has started to sit up and take notice.
The Finance Minister announced that Rs 1.5 lakh additional income tax deduction will be made on loan taken to purchase electric vehicles (EV).
In this context, Tata group chairman N Chandrasekaran said the firm is committed to leading the transition towards electric mobility in the country and it looks to closely work with other group entities to create a viable environment for such vehicles.
Chandrasekaran in the Tata Motors’ Annual Report for 2018-19 said electric vehicles are necessary for India.
“Your company is committed to take the lead in this transition and work with other companies in the Tata ecosystem to help create a viable environment to drive adoption of electric vehicles,” he said in his message to shareholders, the PTI reported.
He, however, cautioned that this transition has to be well planned with the government and industry working together to ensure that ecosystem is developed, incentives are provided to stimulate demand and sustainability goals are achieved by implementing emission norms across the value chain.
Elaborating on the overall challenges before the auto major going ahead, Chandrasekaran said the next few years are going to be decisive for Tata Motors.
“We have to focus on strong operational excellence to deliver positive cashflows while making the right investments to be prepared for the future,” he added.
The company needs to transform itself to be relevant in the world of future mobility, Chandrasekaran said.
“This will require us to form partnerships, develop mobility solutions and optimise our investment in the process,” he added.
In the commercial vehicle segment, where Tata Motors remains industry leader, Chandrasekaran said the company needs to grow and secure sustainable cashflow from the business and ensure smooth transition to BS VI emission norms. The growth in the commercial vehicle market is likely to pick-up driven by increased infrastructure spending, growth of new-age industries like e-commerce and further progress in the hub and spoke model of distribution, said the group chairman.
“In the passenger vehicle segment, your company needs to enhance its sales and service offering which is a key to growth in volumes and execute its plan to achieve profitability at PBT level,” he stated.
Chandrasekaran added that Indian auto market is expected to emerge as the world’s third largest passenger vehicle market by 2021, driven by the underlying economic growth, increasing consumption demand and mass urbanisation.
“However, in the short to medium term, the sector faces some challenges due to the ongoing credit crunch, low consumer spending and the transition from BS IV to BS VI emission norms by 1 April, 2020,” he added.
|Commenting on Jaguar Land Rover (JLR), Chandrasekaran said the company is taking steps to cut costs while taking a calibrated approach towards future investment in the product portfolio.
The company, which is facing slowdown in sales across regions, is actively looking at partnerships and prioritising its investments while ensuring that it is not compromising its future, he noted. “These are critical interventions and JLR is committed to deliver cost and cash improvements,” Chandrasekaran said.