Tata Motors seeing pressure on profit margins
The Hindu: Tata Motors (NYSE: TTM) is finally feeling the heat on the margin front. It is having difficulty in maintaining past performance and profitability. Tata Motors today said that global competition, hardening interest rates, rising fuel and input costs would adversely affect sales in the industry, besides the company’s profitability.
The main reason for this margin pressure is the hike in commodities prices particularly steel, non-ferrous metal, rubber and industrial plastics which are the major raw material for this company.
Tata Motors is concentrating more on small size passenger cars where there is double digit growth both in domestic and export front.
However, with GDP growing @ 8-9%, the recent golden triangle highway plan, 8% reduction of excise duty on small cars, better roads and living conditions will lead to more people to have their own cars.