The slowdown in the economy, proved by the GDP for Q1FY14 coming in lower than estimated, has impacted consumer spending, thereby hitting auto sales directly.
Auto industry especially the heavy commercial vehicle industry always goes down every four years, it is always like a V or an U but this time it is just there, it never seems to go away.
The August auto sales numbers that were released earlier this month spelled what was feared, yet again- a prolonged sectoral slowdown. The sales have been slumping for nine straight months, plagued by high interest and fuel costs.
“I don’t know the previous facts, or how bad it was earlier, but it is one of the worst (slowdown) that I have seen. Not worse from the fact that there is sudden decline, but the fact that it is lasting this long. Auto industry especially the heavy commercial vehicle industry always goes down every four years, it is always like a V or an U but this time it is just there, it never seems to go away,” says Vinod K Dasari, managing director, Ashok Leyland .
But not all hope is lost yet!
While most would assume that auto makers are now apprehensive of launching new products, the top brass is happily contradicting the myth.
“There are always things to be hopeful about because they are in the automobile business, this is a passionate business and things like this don't deter us. These actually energise us to think about new products, new initiatives to take to the market," says Karl Slym, managing director, Tata Motors who is now pinning hopes on new launches.
Adding to this optimism is Dasari who is aiming at empowering customers to be more profitable through their better technology and efficient products.
“In a way you should look at this as a blessing in disguise. Over the years if economies are going good, everybody’s main focus is only how do I produce more, how do I sell more. Firstly, even though the market is down, we cannot do anything about it, at best we can protect our market share. So the market share is protected,” explains Dasari who plans on launching one new product every month.
Tata Motors stock price
On May 27, 2015, Tata Motors closed at Rs 471.65, down Rs 25.45, or 5.12 percent. The 52-week high of the share was Rs 612.05 and the 52-week low was Rs 402.74.
The latest book value of the company is Rs 78.55 per share. At current value, the price-to-book value of the company was 6.00.
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