Tata Motors CFO PB Balaji Advocates for Budget Measures to Enhance Domestic Demand Amid External Challenges

Tata Motors Group CFO PB Balaji recently highlighted the need for the Union Budget to focus on boosting consumption to stimulate demand and support domestic growth. He noted that while the festive season was positive, demand has since weakened due to factors like tight liquidity and challenging market conditions. However, he clarified that these are not crisis-level issues.

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Balaji expressed optimism about a gradual improvement in demand, especially in the fourth quarter, which is typically strong. He attributed this potential growth to government infrastructure investments. "If, on top of it, there are consumption boosting measures in the Budget, then that will help also navigate some of the not so great external situations that all of us face," he stated.

Focus on Domestic Growth Amid External Challenges

Balaji emphasised the importance of focusing on internal consumption to drive growth amid uncertain external conditions. He suggested that addressing stress and accelerating growth would be beneficial as India's investment-led story unfolds. "Why not bolster ourselves in terms of ammunition to keep driving domestic growth...as the GDP grows it benefits everybody," he remarked.

In the third quarter, Tata Motors reported a 22% decline in consolidated net profit, amounting to Rs 5,578 crore. This was due to reduced revenue from its passenger and commercial vehicles divisions. In comparison, the company had posted a consolidated net profit of Rs 7,145 crore in the same period last year.

Impact of Global Trade Policies

When questioned about US President Donald Trump's tariff threat on electric vehicles (EVs) exported from Europe to the US, Balaji said they are awaiting further clarity. He noted that the balance of payment between the UK and US is currently favourable for the UK. "...the US exports more to the UK...and therefore we need to watch and see how that plays out," he added.

Tata Motors' subsidiary JLR operates from the UK and manufactures EVs at its Castle Bromwich plant. It also has a facility in Slovakia producing SUVs like Land Rover Discovery and Land Rover Defender. Despite potential challenges, Balaji stressed the importance of managing both demand and costs effectively.

Ensuring Customer Satisfaction

Balaji asserted that JLR products are well-received in the US market. He believes customer satisfaction hinges on providing value and meeting aspirational desires. "Ultimately customers will decide as long as the company gives them the right value and the right aspirational quotient," he concluded.

The focus remains on navigating external uncertainties while leveraging internal consumption for sustained growth. The upcoming budget could play a crucial role in addressing these challenges and supporting India's economic trajectory.