Tata Motors said on Sunday that it expects the commercial vehicle (CV) industry’s sales growth to be in double digits this fiscal despite a hike in interest rates on auto loans.
In the first quarter of 2022-23, domestic commercial vehicle sales grew 112% to 2,24,512 units as against 1,05,800 units in the year-ago period, according to the Society of Indian Automobile Manufacturers, news agency PTI reported.
In 2021-22, the domestic sales grew by 26% at 7,16,566 units as compared to 5,68,559 units in 2020-21.
Girish Wagh, the executive director of Tata Motors, said that favourable factors such as the Centre’s investment in infrastructure, gradually increasing consumption, globally increasing consumption in India and robust growth in end-use sectors like e-commerce outweigh headwinds such as high inflation and increased interest rates.
“The actual demand is going to be a net factor of the headwinds and tailwinds, within which the inflation, interest rates remain kind of headwinds,” Wagh told PTI.
He added that rising freight rates and fleet utilisation were continuously increasing the transporter confidence index.
“It does appear that the tailwinds and headwinds together should lead to good double-digit growth in the industry this year. We should expect double-digit growth in the CV industry during this year,” the top executive added.
On being asked how much impact the increase in interest rates on vehicle loans had on demand, Girish Waghe said on Sunday that interest rates did have “a fair bit of impact” on the easy monthly installment (EMI) of a vehicle.
“Of late with the interest rates increasing no doubt, the EMIs will go up.”
However, he said that the commercial vehicle industry has worked with financial institutions to provide financial solutions so there was not much of an increase in the EMI.
(With PTI inputs)