Tata Motors expects PV retail sales to sustain growth momentum in Q3

Tata Motors is expecting passenger vehicle (PV) retail sales to maintain growth momentum in the ongoing quarter driven by year-end demand, according to a top company executive.

As per FADA data, festive demand helped PV retail sales rise 32 per cent year-on-year (YoY) to 4,83,159 units in October.

The segment reported a 7 per cent YoY increase to 6,03,009 units during the 42-day festival period this year.

In September, PV retail sales had seen a dip of 19 per cent to 275,681 units.

The Mumbai-based auto major saw its PV volumes decline 6 per cent YoY to 1,30,500 units in the July-September period hit by tepid demand.

"In quarter three, we expect retail to be strong, driven by festivities and the year-end demand. Industry wholesale may be lower than retail, so as to reduce the channel inventory ahead of the new calendar year. That is for the industry," Tata Motors Passenger Vehicles MD Shailesh Chandra said in an analyst call.

The automaker, on its part, will focus on driving significant growth in retail on the back of new model launches, which would also be backed by marketing campaigns, he said.

Tata Motors is planning to drive in various models, including Harrier EV and Sierra EV, and other model upgrades over the next two years.

"In the next two financial years, we should start reaching a penetration level of about 70 per cent. And we have said 80 per cent by FY30 is what we have committed. It will, of course, include a few white space products, but that is not something we can share at this stage," Chandra said.

In terms of sales network, he noted that the automaker has taken sharp cuts in dispatches to dealers.

Strong retail sales in October, has allowed the automaker to significantly bring down the inventory levels for the majority of its dealers to less than 30 days, Chandra said.

With reduced inventory, finance cost would have significantly gone down for the dealers, he added.

Chandra stated that the company will continue with its effort regarding mainstreaming of EVs with focused market development and ecosystem actions.

"We will continue to intensify the cost reduction efforts to maintain profitability in the intensifying competition environment," Chandra said.

Elaborating on the commercial vehicle business, Tata Motors Executive Director Girish Wagh said the automaker expects a gradual increase in infrastructure spending to boost the consumption and improve the demand going ahead.

"October has been a fairly good month with a marginal increase on a YoY basis. Within trucks and buses, we will continue to introduce new variants, drive our value selling agenda, of course by improving the value propositions being delivered to the customer," he stated.

On small commercial vehicles where the automaker is challenged on the volumes, it is working on a three-pronged agenda, Wagh said.