India's leading vehicle company Tata Motors announced on Oct. 31 second-quarter net profit plunged by 34%, hit by rising input costs, high interest rates and lack of financing.
Net profit fell to 3.46 billion rupees (US$70 million) for the quarter ending September from 5.26 billion rupees a year ago. Revenues rose 11.3% to 75.01 billion rupees for the three months. Sales volumes declined by 1.1% to 135,037 vehicles.
"The automobile industry remains severely impacted with continued lack of financing and high interest rates," Tata Motors said."The quarter was also impacted by high input costs."
Tata Motors is set to launch its Nano small car, billed as the world's cheapest car, later in the financial year to March 2009. The company said "pre-construction activity" had begun at Sanand in western Gujurat state for the Nano plant.
The company introduced several trucks and passenger cars in the second quarter.
Tata Motors said it made strong strong gains in volume and market share in the entry mid-size sedan segment. The company has a 12.8% share in the passenger vehicles segment.
The company aims to boost its car financing operations in a tough business environment to attract more customers "to ensure sales do not suffer," Tata Motors managing director Ravi Kant told reporters. It has become increasingly difficult for car buyers to get bank loans to buy cars with lending becoming increasingly tight so vehicle companies are seeking to offer financing to consumers.
Copyright Agence France-Presse, 2008