Govt intervention slowing down demand: Tata Motors

NEW DELHI: Tata Motors, the country's biggest automobile firm by market value, on Thursday said the auto industry is going through a difficult year as 'conscious intervention' by the government slowed down demand of vehicles.
   
"The state of the market is a tough one for the industry, including Tata Motors. When the SIAM data (for September) is officially released you'll notice that the growth is down to single digits," Tata Motors President Passenger Vehicles Rajiv Dube told here.
   
He said it has been a difficult year for almost all players, more so with government's moves to curb demand.
   
"There has been a conscious intervention by the government to slow down demand, especially in the auto and real estate segment," he said.
   
The government has taken measures to cool down rapidly growing sectors to prevent overheating in the economy which is expanding at the second fastest pace worldwide. Central bank RBI has tightened monetary policy by increasing interest rates and other measures to curb excess liquidity in the financial system. This has forced banks to raise interest rates on auto loans, leading to a fall in demand for cars and two-wheelers.
   
Dube said whatever growth the auto industry had witnessed in the fiscal was driven by new products. "If you take away the numbers coming from new launches, the industry will actually be witnessing a decline," he added.
   
The company, which today launched a new version of sports utility vehicle Safari with price range starting at Rs 7.33 lakh (ex-showroom Delhi), is pinning hopes on the vehicle to boost sales.

"So far in the first six months, Safari has managed a growth of 21 per cent," Dube said, adding Tata Motors was bullish that this year it would surpass last year's peak sales of over 16,000 units.

Dube said with the new generation Indica expected to hit market next year, some features of existing models could be phased out.

"The new Indica will come in the higher end segment (of compact cars). Although it will co-exist with the old Indica, some of the existing trims could be done away as is the practice in the industry," he added.
    
He also said Tata Motors was planning to re-enter the UK car market.

"We are looking at re-introducing our products in the UK but nothing has been finalised yet," he said, adding if the company were to re-enter it would have to set up its own distribution network.
   
Tata Motors had supplied Indica to MG Rover, which was sold under the City Rover badge. It was stopped when the British company went bust.