Tata Motors faces increase in input costs

In the company's latest annual report, Ratan Tata said, the year ahead would be a year of major challenges.
 
"Higher fuel prices will negatively impact both commercial vehicles and passenger car sales. There will be an enormous and unprecedented increase in material costs in steel, tyres, and the like,  and there will be the impact of tighter money supply with higher interest rates," he said.

Two other challenges that also happen to be its ambitious plans are the completion of the Singur plant and introduction of the Nano in the market as also the cost of JLR acquisition and its integration.

Industry experts expect the high input costs to put pressure on the margins for the low cost car, Nano.

The company's new plant for Nano in Singur, West Bengal, is expected to go into operation in the last quarter of this calendar year.

The facilities would be expanded to meet the demand in domestic and international markets in the future. Merits mention, the capacity of the first phase of the Singur plant would be 2.5 lakh units.

"New variants of the Nano are also currently under development to meet the new environmental and and fuel price challenges, as also the market requirement of several international markets," said Tata.

Tata expects that the high volumes of the Nano would dramatically change Tata Motors' market position, reach and visibility.

"Internationally the Jaguar and Land Rover brands will add global scale, profits and visibility to Tata Motors, enabling it to take its place in the global auto industry as a credible international automobile company," said Tata.