Tata Motors MD & CEO Girish Wagh said on Thursday that the West Asia crisis, which led to higher diesel prices, will impact domestic commercial vehicle (CV) demand in the short term, but India’s strong macroeconomy will support recovery over the long term. Wagh expects India’s CV industry to clock single digit growth this financial year (FY7) after posting its highest ever wholesales in FY26 with 10.80 lakh units, up 12.6% year-on-year.
"We do have short-term headwinds. The Middle East crisis, the resultant increase in oil prices, and the final resultant but reduced intensity increase in diesel prices -- it is a headwind," said Wagh. He added that a rise in commodity prices is also a headwind.
However, he is bullish on the long term outlook. "The GDP growth, industrial index of production, the way it has been growing, the growth in manufacturing, growth in consumption, growth infrastructure investments, we believe these are structural tailwinds…From that perspective, in the longer term, the tailwinds will have their effect more than headwinds and therefore, in the longer term, the industry will grow," said Wagh.
Following the bullish remark, shares of Tata Motors (commercial vehicle unit) rallied nearly 6% to Rs 435 apiece on the NSE on Thursday. The stock eventually closed at R 431.90 on the NSE, up 5%.
Wagh said that the West Asia war, which began on February 28, impacted the company's international business and supply chain. The Middle East contributed to about 20% of Tata Motors’ total international business (monthly volumes) and in the first two months of the war, the monthly volume in the region came to zero as there were no shipments.
"This month we will be shipping vehicles to the Middle East. So the business is getting back on track, and I think the underlying demand is still there in the Middle East," he said.
On the supply chain impact, he said as a lot of materials came through the West Asia region, there was not only reduced material availability for some time mostly for commodities but also there was increased prices of commodities such as aluminum. Tata Motors recently announced that it would hike prices of CVs by up to 2.5% across its range from July 1 to partially offset the impact of rising commodity prices and other input costs.
