The Hindu Business Line : Rate hikes slowed down auto industry: Tata Motors

Tata Motors said that it was a conscious attempt by the Government to raise interest rates that has led to the slowdown of the automobile industry. And even with the festive season around the corner, car makers would not be able to meet the same kind of growth numbers that the industry witnessed last year.

“There was a conscious effort by the Government to intervene to curb inflation by raising the interest rates, which has affected the automobile and the real estate industry the most,” said Mr Rajiv Dube, President, Passenger Vehicles Business, Tata Motors on Thursday.

“Last year, we had seen a phenomenal growth in the festive season. It will be difficult for all companies to meet similar growth numbers and I would not single out any player in this regard,” added Mr Dube, at the launch of the new version of sports utility vehicle Tata Safari.

Decline

Mr Dube said that excluding new launches that took place in the first six months, the industry had actually declined.

Mr S.G. Saksena, Head, Product Group, Utilities Vehicles and Passenger Car Business Unit, said that the company would offer the kind of discounts it has been offering so far in the festive season to sustain the momentum without elaborating on the details of the offers.

“Most manufacturers are offering discounts in the range of Rs 20,000-30,000. We have made offers in the same range in the last few months. So it should continue,” he said.

The company launched Tata Safari with a direct injection common rail engine 2.2 VTT range at a price of Rs 7.33 lakh. Tata Safari sold 16,000 units in 2006-07 and in the first six months sales grew at 21 per cent. Mr Dube said that he expected similar growth with this new launch.

Meanwhile, the company is gearing up to launch Fiat’s Grande Punto and Linea next year.