Tata Motors may up Rs1 lakh tag
The Times of India — September 6, 2007

High input cost may spoil the party for those who are waiting for Rs1-lakh car. Tata Motors on Wednesday indicated that it may be forced to hike the price of its Rs1 lakh car as higher input cost is making it tough to maintain the price at that level.

"High input cost and fuel cost have made it more challenging to maintain the price at Rs1 lakh. To know weather we will offer the car at a higher level or not, we need to wait. The actual price of the car will be evident only closer to the launch," Tata Motors managing director Ravi Kant told reporters.

He, however, said there will no delay in the launch of the car. "The Rs1-lakh car would be launched as per the schedule, in the middle of the next year," he said.

The homegrown auto major said rising interest rates and strong rupee are the two main reasons for low demand. "It's a double whammy for us. On one hand, the rising interest rates are making vehicle loans costlier, pulling down domestic demand. On the other, because of the rupee appreciation, Indian goods have become expensive. As a result, sales in the overseas market is declining," said Kant.

Expressing his concern, Kant said, "The interest rates need to be stabilised to provide stability to auto mobile industry. Unless the rates ease, there will be no certainty."

Tata Motors is planning to introduce upgraded variants of Indica and Indigo set of vehicles. With JVs in Thailand and Latin America, may consider operations in other countries as a way of countering exchange-rate changes.