CHANDIGARH : Country's largest automobile company Tata Motors on Thursday said industry would grow at modest pace only in the second quarter of this fiscal owing to rising lending rates and fuel costs.
"We think overall automobile industry's growth will again remain in single digit in the second quarter of this fiscal as it was in the first quarter of this fiscal," Tata Motors Head, Car Product Group, Nitin Seth told reporters here.
In the first fiscal of 2008-09, the automobile growth remained 7-8 per cent, a sharp fall from 17 per cent in the corresponding period of last fiscal.
"Indian auto industry declined from 26 per cent in the first quarter of 2006-07 to 17 per cent in the same period in 2007-08 and now it has gone down to 7-8 per cent on account of increasing lending rates and fuel cost," he said.
Tata Motors registered -5 per cent growth in the first quarter of this fiscal, he said.
"There is no doubt that current conditions have impacted the industry's growth," he asserted. Describing the ongoing phase for the auto industry as tough, he said, "People are postponing their purchases as the cost of buying has shot up considerably during last couple of months due to steps taken by the government to rein in the inflation."
Seth said banks have raised their lending rates by at least 3 per cent in the last few months which has compelled buyers to delay their purchases.
"Only those people, who are in urgent need of a car, are buying it. As a result, the growth is affected," he said.
He said that Society of Indian Automobile Manufacturers (SIAM,)an organization of automobile companies, would hold a meet on September 4 to urge the government not to further allow any increase in lending rates.
Tata Motors further said that it would start exporting Indica Vista, which was launched on new generation platform. "We expect to commence the export of this version within eight months to one year primarily to South Africa, Italy, Spain and Sri Lanka," he informed.
Tata Motors have sold 11 lakh cars of its earlier platform since their launch and out of which it sold 8.75 lakh of Indica model cars. "Out of 9.85 lakh Indica, we exported 70,000-80,000 cars to other countries," he said.
The company would also launch other new models on new generation platform, on which it has invested Rs. 1700 crore, within next one or two years.
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