Tata Motors Passenger Vehicles weighs further price hikes amid cost pressure

MUMBAI: Tata Motors is keeping its price pedal within reach, with elevated commodity costs pushing its passenger vehicle business to consider another round of price increases. Tata Motors Passenger Vehicles managing director Shailesh Chandra said the company is currently absorbing a substantial portion of the increase in commodity costs while stepping up efforts to reduce expenses, PTI reported.

The company reviews pricing every month to assess when another increase may be introduced, Chandra said. Any further revision is expected to come in smaller increments rather than as a sharp one-time increase, with the aim of limiting the impact on demand.

Tata Motors Passenger Vehicles has already raised prices in September, although Chandra said it was too early to indicate when the next revision could happen.

The pricing pressure comes as commodity costs have risen faster than the pace at which automakers have been able to pass those increases on to customers. Chandra said this has made cost reduction an important part of the company’s efforts to protect margins.

According to the report, automakers have so far increased prices by less than 5 per cent since the implementation of GST. At the same time, discounts have reduced following the tax changes, while vehicle supply remains slightly below demand.

Commodity prices remain another variable for the company, although Chandra said there was currently no major alert on the supply or production side.

Tata Motors has also made a separate pricing move in its commercial vehicle business. Earlier this month, the company announced an increase of up to 1 per cent across its commercial vehicle segments, effective October 1.

The comments on passenger vehicle pricing came as Tata Motors Passenger Vehicles launched the Tata Aeris, a compact sedan aimed exclusively at personal car buyers. The petrol version starts at Rs 5.29 lakh ex-showroom, while the iCNG variant starts at Rs 6.29 lakh.

Chandra said the compact sedan category has been losing share within the wider sedan market, although volumes have continued to grow. The segment expanded by around 25-26 per cent over the past year, with GST also influencing the category.

Meanwhile, Tata Motors Passenger Vehicles has adopted Tata.Cars as its new customer-facing identity. The branding is being rolled out across dealerships, showrooms and marketing initiatives, while Tata Motors Passenger Vehicles remains the company’s legal corporate entity.

The rebrand covers the passenger vehicle business across both internal combustion engine and electric vehicles, even as the business weighs how much of its rising input costs can ultimately be passed on to customers.