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In response to Union Minister Nitin Gadkari's recent proposal to impose an additional 10 percent Goods and Services Tax (GST) on diesel engines and vehicles, Tata Motors' Managing Director for Passenger Vehicles and Electric Vehicle Mobility, Shailesh Chandra, has affirmed the company's commitment to manufacturing diesel cars as long as there is demand in the market.
Chandra acknowledged the potential challenges in justifying the cost of diesel engines, especially with the impending enforcement of Bharat Stage VII (BSVII) emissions standards, which could further impact diesel vehicle sales. However, he emphasized that the company remains responsive to market demand.
Union Minister Gadkari clarified that the proposed GST hike on diesel engines is not currently actively under consideration by the government.
Chandra highlighted the automotive industry's positive momentum, particularly during the festive season, with robust month-on-month growth. Tata Motors' flagship models, the Nexon and Punch, have played a pivotal role in driving growth within the TAMO portfolio, contributing to the industry's consistent performance.
While the industry has already surpassed the 2 million unit milestone, Chandra expressed confidence that it is well on its way to achieving an impressive 4 million unit target. However, Tata Motors has noticed a decline in diesel sales, ranging between 12 percent to 15 percent. This decrease can be attributed to the cost implications associated with adapting to evolving regulations, which have necessitated changes in diesel engines.
Chandra underscored Tata Motors' commitment to aligning its diesel emissions with the latest BSVI Phase II standards, emphasizing the industry's dedication to reducing emissions. He also noted Minister Gadkari's vocal support for transitioning toward zero-emission technology, highlighting that this decade will witness a mix of powertrain technologies, ultimately aiming for zero emissions.
Despite these transformations and the push for electric mobility, Tata Motors has made a clear statement: they will continue manufacturing diesel vehicles for as long as there is demand in the market.
Furthermore, Chandra urged the government to consider extending incentives under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme to private electric vehicle buyers. Notably, he revealed that approximately 90 percent of electric car sales currently cater to private customers, signaling a growing interest in electric mobility among individuals.
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