Tata Motors ED foresees tough run for auto sector

The automobile industry will face a tough year ahead, V Sumantran, executive director, Tata Motors, said Tuesday.

"There are clouds on the horizon. These are with respect to steel prices and rise in input cost, crude oil price rise, and the whole country migrating from BS-II (Bharat Stage-II) to BS-III (emission) norms," he said.

He did not comment on the possibility or quantum of a vehicle price hike in view of the rising input costs.

Sumantran was speaking to reporters at the unveiling of a bio-diesel pilot project, launched in association with Indian Oil Corp. The project entails usage of 10 per cent blended bio-diesel fuel for its 43 staff buses.

Bio-diesel can be used only in the blended form. Developed countries have achieved up to 20 per cent blending of bio-diesel.

According to B.M. Bansal, director-research & development, IOC, development of bio-diesel in the country would not only generate rural employment, but also save import of about two million tones of diesel per annum.

Bansal said they have asked the government for concessions and subsidies to make blending a viable option. At present, the price of blended bio-diesel will be higher than that of petro-diesel as bio-diesel itself is very expensive.

Bio-diesel costs about Rs 45-55 per litre against about Rs 30 for the petro-diesel.

IOC has identified two plant varieties "" Jatropha and Karanjia "" for extraction of vegetable oil for blending with diesel.

Bansal said Jatropha is more suitable because it is hardy, requiring very little care, and can easily be grown in arid regions.

Bansal said bio-diesel meets all emission norms.

Sumantran said no major engine modification was done and through this pilot project, the company would be able to study the long-term impact of the fuel on sensitive components such as fuel nozzle.

On Tata Motor's plans for the Malaysian market, Sumantran said, "Tata Motors has a small car CKD (complete knocked down kit) unit there. We are looking at the LCV (light commercial vehicle) market there. However, there are no definite plans as of now," he said.

Tata Motors shares today closed at Rs 407.90 on the National Stock Exchange, down 2.4 per cent from Monday's close.