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Last Updated : Sep 02, 2015 01:51 PM IST | Source: CNBC-TV18

Weak monsoon won't hit MHCV, GDP growth a worry:Tata Motors

Speaking at the sidelines of 55th Annual Siam Convention, that kicked off in New Delhi today, Ravindra Pisharody, ED of Commercial Vehicles at Tata Motors gives a roadmap to future and explains why there is no fear of growth slowing down in MHCV segment.

Tata Motors’ sales growth remained flat at 40,680 units in August compared to 40,883 vehicles in the same month last year.

Domestic sales of Tata Motors’ commercial and passenger vehicles declined by 3 per cent at 35,478 units during the month as against 36,403 units sold in August, 2014. So
what is the road ahead?

Speaking at the sidelines of 55th annual SIAM convention, that kicked off in New Delhi today, Ravindra Pisharody, ED of Commercial Vehicles at Tata Motors gives a roadmap to future and explains why there is no fear of growth slowing down in MHCV segment.

Below is the transcript of Ravindra Pisharody’s interview with Farah Bookwala on CNBC-TV18.

Q: My first question is, with the monsoon turning out to be a deficit monsoon this year, there is real concern now that sentiments in rural India are on a downhill. So, are you afraid that it could offset all the growth that has taken place in the medium to heavy commercial vehicles (MHCV) segment over the past six months?

A: Not really. Two things. One is, the MHCV growth is not so much dependant on agriculture. The MHCV recovery is based on expectation that manufacturing and mining is on the way up and the overall economy also. The other thing is the monsoon has not been a disaster. Unlike a few years ago where the monsoon has been low, it has been fairly good in half the country, not too good in the rest of the country. So, for that to impact MHCV, it will need two or three successive years of failure. So, I do not see the trend of the last five quarters slowing down as far as MHCV is concerned because there are other factors at work.

Q: But with the gross domestic product (GDP) coming in lower than what was expected coming in at about seven percent which is lower than the 7.5 percent expectation, once again, because this has direct linkages with how MHCV sales grow, are you afraid that this could further dampen the spirit?

A: The lack of GDP growth has been a concern for some time. I think a year ago, we were probably projecting a much bigger growth. So, the lack of the growth is definitely a concern. The MHCV growth is dependent on the fact that fleet replacement which got postponed considerably for two to three years is coming back. There are regulations kicking in which means there is a bit of pre-buying sentiment. So, at least for the next two to three quarters that will continue though recovery of the GDP and the underlying economy, particularly manufacturing and mining will put the growth on a stronger track.

Q: Society of Indian Automobile Manufactures (SIAM) is of the particular opinion that leap-frogging directly to Bharat-V and VII norms could lead to safety compromises on behalf of auto manufacturers and perhaps a more considerable way or considerate way to go about would be to first implement Bharat-IV in a full-form and then go on to that. Does that view resonate with your own personal view?

A: I actually personally participated in a meeting with the minister of every industry on behalf of SIAM and we were then asked to put in as a commercial vehicle leader, the impact. Clearly we have suggested that is not the way to go. You must go through the routine of Bharat Emission Stage (BS) IV to BS V o BS VI. Even a most developed market like Europe has gone through that routine. There are a lot of things which could get compromised, safety is one of them but even quality and reliability. But, by and large, I believe the government is falling in line with what we have been trying to explain.

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First Published on Sep 2, 2015 10:34 am
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