Indian automaker Tata Motors announced on Thursday a price hike of up to 2% for its commercial vehicles, effective April 1, 2024. This decision aims to offset the lingering impact of past increases in input costs. This price adjustment comes on the heels of a previous hike of up to 3% implemented in January for the same vehicle segment.
The announcement coincides with Tata Motors' recent decision to split into two separate listed companies, one focusing on commercial vehicles (CVs) and the other on passenger vehicles. This strategic move is expected to generate significant earnings and cash flow for the CV entity, enabling it to comfortably manage its debt obligations, as per a statement by ratings agency Moody's on Wednesday.
In summary, Tata Motors is raising commercial vehicle prices to address past cost increases while simultaneously undergoing a corporate restructuring to enhance its financial standing. This move is likely to impact the overall cost structure of the commercial vehicle industry in India.
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