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Cyrus Mistry's inaugural address to the shareholders of Tata Motors at the 68th Annual General Meeting highlighted government-dependent underlying opportunities in sectors such as infrastructure and robust performance by subsidiary Jaguar Land Rover but did not speak about the troubled car business which one of the shareholders called as 'a sick unit'.
Several shareholders raised the issue of the company not doing enough to arrest the decline in market share and also in sales in the car and utility vehicle business even as challengers Mahindra & Mahindra remain the third largest passenger vehicle maker in India.
Mumbai-based Tata Motors, which depends almost entirely on profit-making Jaguar Land Rover, reported an operating loss of nearly Rs 400 crore in the first quarter of this year at the stand-alone level. Ebitda margin slumped to 2.3 % during the last quarter as against 7.3 % reported in the same quarter last year.
Cyrus Mistry, Chairman, Tata Motors, said, "The Indian operations was impacted heavily by the slowdown in the domestic auto sector high interest rates and stagnation of industrial growth in sectors such as mining and infrastructure".
One of the shareholders raised question of what dividend would the company would have paid if JLR was never part of the company.
"Our passenger vehicle business is desecrated. Other companies have gone ahead of us. This business unit should be declared as a sick unit", said a shareholder.
Mistry laid emphasis on meeting government-backed schemes which would help reverse the economic downturn
"There is an intensive engagement between the government and the Indian industry over the last few months which has resulted in measures in the economic climate. These are Efforts to fast track long gestation, large investment infrastructure projects, measures to attract foreign direct investment across sectors. The JNNURM under which the government has approved the funding of procurement of 10,000 buses and ancillary infrastructure for urban transportation" added Mistry.
The challenges for India and govt will be the implementation of these progressive policies. While the impact will,only be felt after a time lag i am optimistic that this momentum of exchange between the government and the industry will,continue", Mistry further added.
Mistry also put forward the opportunities for Tata Motors in area of a dialogue for jointly forming strategies for transportation in India along with the government.
"With respect,to the auto,sector Tata Motors will be eager to engage in a constructive dialogue with the government for the overall transportation strategy which will also incentivise and stimulate the use of more fuel efficient combustion engines hybrids and other technologies which will have positive impact on both the environment and the economy", added Mistry.
Tata Motors is one of the largest bus makers in the world and the second largest bus maker in India.
"The road ahead for Tata moto continues challenging yet full,of opportunities. Tata Motors is committed to improve its customer centricity better understand customer needs", Mistry said.
