Rising fuel prices remain a key concern for the auto industry, with rates having increased four times in the last 10 days, making it difficult to assess the eventual impact on consumer sentiment and demand, he said during a media roundtable held on the sidelines of the launch of the Next Gen Tiago.
“Even fuel prices are evolving. Right now in the last 10 days, there are four increases. So, you do not know where this is going to end. That’s the first layer of what can impact and be a headwind to the industry,” said Chandra.
The effect, he said, could vary across segments, being ‘more pronounced’ in some.
He further cautioned that higher diesel prices could have a multiplier effect on inflation, which may influence consumer sentiment and spending patterns.
Pointing to a slowdown in the used car market as a sign of weakening consumer sentiment, he noted that people may begin cutting back on spending to save cash amid inflation concerns, a mindset that could deepen if price pressures rise further.
Earlier this month, Chandra, in the earnings conference, had said he was confident that growth can be over 10 per cent in FY2027 for the industry unless there is a significant geopolitical impact on petrol and diesel prices.Despite concerns over rising fuel prices and inflationary pressures, Chandra said the company continues to remain optimistic about its growth prospects, aided by a strong product pipeline.
“Given a very strong product cycle for us in the last six months, which will get a full year this year, and multiple launches that we are going to do this year, there is no doubt that we will have industry-meeting growth. High double-digit growth is definitely on the cards for us,” he said.
However, he said it was too early to assess whether the evolving fuel price situation would materially impact demand.
“I can’t say anything because today I don’t see a significant change in my demand pattern,” Chandra added.
TMPV on Thursday launched The Next Gen Tiago, across Petrol, iCNG, and Electric powertrains, strengthening its position in the affordable hatchback segment.
The new petrol variant starts at Rs 4.69 lakh (ex-showroom) , Rs 5.79 lakh (ex-showroom) for CNG and EV starts from Rs 6.99 lakh.
Replying to another query, over the demand for EVs, Chandra said it has shown strong momentum, with bookings rising sharply in recent months.
“If I am seeing for the last two months, I was just comparing the monthly bookings that we get in electric vehicles prior to February. And what we are getting today, it is 2-2.5 times more,” he said.
According to Chandra, EV demand had already begun gaining traction even before the recent fuel price hikes, possibly in anticipation of higher running costs.
“Already, even before these fuel price increases, it had started gaining traction, possibly in anticipation,” he said, adding it has a “very compelling proposition” and should continue to grow in multiples, not in few double digit per cent.
Over increasing the capacity for EV, he said the in-house capacity is fungible between power trains for the same model.
“So if there are power train shifts, then it is easy to manage internally. Because I can shift the capacity of say petrol to EV and so on. But EV, therefore, internally we do not have a problem of enhancing the production,” he said.
However, on the supplier side, Chandra said the company would need to work with suppliers on agreed supply schedules ranging from three months to a year, depending on requirements.
In several cases, suppliers may already have spare capacity and only need clarity on production scheduling to begin supplies, while in some instances, additional investments in production lines may be required.
“So broadly speaking, in the next three to four months, we should be able to enhance capacity, say at least 50 per cent more than what we are today. Right now, we are averaging around 10,000 a month for EVs,” Chandra said, adding, “10,000 a month is expected to go to 50,000. That is what we would try to target. I think we are working out the details.”
When asked about the current scenario, whether he sees hatchback EVs or ICE (internal combustion engine ) getting rekindled, Chandra said it’s “very difficult to predict right now but we have seen that in general, hatchback which had been seeing significant decline from a share perspective, share of total industry volume of the country in the last two years has stabilised at about 21-22 per cent.”