Tata Motors Announces Price Hike for Commercial Vehicles, effective on April 1, 2024.

Key Highlights:
•    Tata Motors will increase commercial vehicle prices by up to 2% from April 1, 2024.
•    This is the second hike in CY2024.
•    The company is planning to demerge into two two separate listed companies.

Tata Motors, India’s largest commercial vehicle manufacturer, has announced a price hike for its commercial vehicles. The price of commercial vehicles will be raised by 2 per cent. This will be effective from April 1, 2024. This step is taken to mitigate the effects of material price inflation experienced in the past.

In a press release, the automaker stated, "The price increase is to offset the residual impact of the past input costs. While the price increase will vary per individual model and variant, it will be applicable across the entire range of commercial vehicles."

This will be the second hike in CY2024. In a previous announcement on December 11, 2023, Tata Motors had raised prices by up to 3 per cent effective from January 1, 2024. At that time too, the company stated same reasons related to previous input cost constraints.

Tata Motors sales report for April 2022-December 2023

Despite challenges, Tata Motors continues to maintains market flexibility. According to data from the Society of Indian Automobile Manufacturers (SIAM), Tata Motors sold total of 264,733 commercial vehicles domestically in the first nine months of the current fiscal year. This represents a 4.37% YoY decline (April 2022-December 2023). 

In January 2024, Tata Motors sold 30,643 commercial vehicles, a 2% decrease over the same period the previous year. In February 2024, Tata Motors sold 33,567 commercial vehicles, a 4% decrease in sales from February 2023.

Also Read: Tata Motors Unveils Strategy to Split Businesses into Two Publicly Traded Companies

Tata Motors plans to demerge the company

To unlock more value for its businesses, Tata Motors recently announced plans to demerge the company into two separate listed companies. 

This restructuring initiative involves creating different entities for the commercial and passenger vehicle businesses, including electric vehicles and Jaguar Land Rover. By separating the two segments, Tata Motors wants to enhance focus, agility, and growth prospects for both commercial and passenger vehicle operations. 

The demerger will be implemented through an NCLT scheme. This will make sure that all shareholders of TML maintain identical shareholding in both listed entities.

Tata Motors' decision to raise prices in response to material price inflation highlights the company's commitment to navigating market challenges while providing high-quality vehicles to its customers.

CMV360 Says

Tata Motors will raise prices of the commercial vehicles starting from 1st April, 2024. This is to cover higher input costs from the past. The price hike applies to all their commercial vehicles, but the exact increase will vary depending on the model and version. 

Mainly, this is a move to keep the company profitable amid economic challenges. This decision of the company may affect the whole commercial vehicle industry.