How has been the drive so far, especially on the EV front?
We are standing for technology and safety. Those two factors have been very well-received by our customers. As we look at our next chapter, we realise there are a couple of trends that are shaping the country. One, luxury brands across categories are actually moving at a very fast pace. Secondly, the penetration of new energy vehicles in the luxury segment is much higher than it is in mass brands.
That also presents an opportunity as that segment has not really been disrupted yet. It's been headed by a couple of OEMs all along. We believe that much like in the mass segment, we have been able to create some level of disruption in the luxury space in such a short time.
So, what are your plans for the luxe space?
The first one is the Cyberster (launched on July 25 at Rs 75 lakh apiece), which is a roadster and is a sports car. The second is the M9, our first luxury MPV and it’s the longest and the widest in the segment. Both these cars are going to stay true to our brand promise. These two vehicles will have technologies that you have never seen before and are going to have safety features that you have never seen before. And it is going to create experiences that you have never experienced before.
You have seen a runaway success with the Windsor, primarily because of its pricing. Why the switch to luxury now?
The overall luxe car space is about 50,000 units per annum. We are playing in a fairly niche segment, and that is the segment we want to disrupt.
Given your relationship/partnership with the Chinese firm Saic Motor, how good or bad is your rare earth materials position?
We are as impacted or not impacted as anybody else. It impacts not just EVs, but ICE products as well. And it is very important to ensure that as an industry, we work alongside the government and our national body SIAM to have this addressed. Our production is unlikely to be impacted in the immediate future, but we are watching the situation very carefully. Because at this point of time, we have a longer lead time of three-four months of cycle.
What about your partnership with Saic? Is it not an advantage?
I don't think it is a question of advantage or disadvantage. For one, it is a very serious issue. Because it impacts many components, both in ICE and EVs. If someone thinks this is only impacting EVs that is not true. Very importantly the SIAM is working very closely with the government to ensure that this issue does not impact production of all vehicles.
“With inflation likely to remain below the 4% target (June printed in at a 77-month low of 2.1% and July is set for an under-2% reading), despite any currency weakness, we continue to expect 25 bps cuts each in October and December to a terminal rate of 5%, with risks skewed towards further cuts. We believe the probability of a cut in August has risen to 35% (from 10%) pre-tariffs,” they said.
SBI chief economic advisor Soumyakanti Ghosh also sees another repo cut to the tune of 25 bps on Wednesday.
“We expect RBI to continue frontloading with a 25-bps cut in the August policy, saying we are living in a frontloaded world with tariff uncertainty frontloaded, better GDP growth frontloaded, and inflation numbers to continue to be frontloaded with even a sub-4% number with new CPI series. Even the festive season is front loaded. And no point in backloading/committing a type II error for now.
Elara Securities also in a note said, with risks to growth elevated and inflation risks remaining benign, it expects growth-supportive stance of the RBI to stay. “As risks to growth compound after the higher tariffs, the likelihood of a 25 bps repo cut in August has increased,” it said in a note.
However, Kaushik Das, the chief economist at Deutsche Bank India, does not see the RBI going for another rate cut or the need for one now having already front-loaded 100 bps.
How good is your stock of rare earths?
In the immediate future, it is not something that is impacting our production. But we have to watch the situation very carefully. Since we have a longer lead time, which is a three months or four months of cycle, we are safe for now. So, our production has not hit yet.
The parts that we are getting from China today are three-month cycle parts. Which means the orders were placed in April, they are now coming to us now. So, we have to very cautiously watch what happens in the next coming months for us.
You had announced plans to get into local production of batteries. How has that progressed so far?
We are already assembling batteries with Chinese cells. As and when JSW’s plans rectify, it will be made available to us too. But at this point of time, I think localisation is a bit way off. Having said so, let me admit that we have embarked very aggressively on the localization journey.