Rising Input cost to affect margins, Tata Motors

Tata Motors, India's largest car manufacturers is expecting that the ongoing rise in the commodity prices will affect its margins in coming months. Though the company is saying that it will try to offset this by hiking the price and cost cutting. As the the prices of row materials including steel, aluminum and copper have seen a considerable rise in recent past, auto makers finding it hard to sell their vehicles at same pricing. Besides this government of India has hiked the excise duty by 2 percent which has added additional pressure on car makers to increase the price of their vehicles.

Ravi Pisharody, head, commercial vehicles business, Tata Motors, said, We are undertaking cost reduction initiatives...we usually intensify it during such times...to some extent we have to pass on these cost increases, which benefit the margins, The input cost hike not only affected the passenger car market but also the commercial vehicle market also. Besides this the new emission norms are going to be implemented from April this year and to make their vehicles compatible to new emission norms automakers also have to bear the migration cost.