Tata Sons chairman Natarajan Chandrasekaran. (Photographer: Dhiraj Singh/Bloomberg)

Tata Motors To Lead Electric Vehicle Drive In India, Says Chairman N Chandrasekaran

Tata Motors Ltd. is committed to lead the transition towards electric mobility in India and is looking to work closely with Tata Group companies to create a viable environment for electric vehicles, says Tata Sons Ltd. chairman N Chandrasekaran.

Chandrasekaran in the Tata Motors' Annual Report for 2018-19 said that electric vehicles are necessary for India.

"Your company is committed to take the lead in this transition and work with other companies in the Tata ecosystem to help create a viable environment to drive adoption of electric vehicles," he said in his message to shareholders.

The Tata Sons chairman, however, cautioned that this transition has to be well-planned—with the government and industry working together to ensure that an ecosystem is developed, incentives are provided to stimulate demand and sustainability goals are achieved by implementing emission norms across the value chain.

In order to promote electric mobility, Finance Minister Nirmala Sitharaman announced various measures in Budget 2019 Friday, including Rs 1.5 lakh additional income tax deduction on loan taken to purchase electric vehicles.

Talking of challenges facing Tata Motors going ahead, Chandrasekaran said the next few years are going to be decisive for the automaker. "We have to focus on strong operational excellence to deliver positive cashflows while making the right investments to be prepared for the future.”

The company needs to transform itself to be relevant in the world of future mobility, Chandrasekaran said. "This will require us to form partnerships, develop mobility solutions and optimise our investment in the process,”

In the commercial vehicle segment, where Tata Motors remains the industry leader, Chandrasekaran said the company needs to grow and secure sustainable cashflow from the business and ensure smooth transition to Bharat Stage VI emission norms.

The growth in the commercial vehicle market is likely to pick-up driven by increased infrastructure spending, growth of new-age industries like e-commerce and further progress in the hub-and-spoke model of distribution, said Chandrasekaran.

"In the passenger vehicle segment, your company needs to enhance its sales and service offering which is a key to growth in volumes and execute its plan to achieve profitability at profit before tax level."

According to Chandrasekaran, the Indian auto market is expected to emerge as the world's third largest passenger vehicle market by 2021, driven by the underlying economic growth, increasing consumption demand and mass urbanisation.

"However, in the short to medium term, the sector faces some challenges due to the ongoing credit crunch, low consumer spending and the transition from BS IV to BS VI emission norms by April 1, 2020," he added.

Commenting on Jaguar Land Rover Plc, Chandrasekaran said the company is taking steps to cut costs while taking a calibrated approach towards future investment in the product portfolio.

JLR, which is facing slowdown in sales across regions, is actively looking at partnerships and prioritising its investments while ensuring that it is not compromising its future. "These are critical interventions and JLR is committed to deliver cost and cash improvements," Chandrasekaran said.

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