Chinese lockdowns to tackle a surge in coronavirus cases
also represent an emerging risk to the carmaker, P B Balaji told reporters
after Tata Motors reported a fourth quarter loss.
"The two big worries are inflation and semiconductors.
It is going to be a challenging few months," Balaji said, adding that the
Ukraine crisis has exacerbated the situation.
Tata Motors will nevertheless meet its profit and cashflow
targets for the year, Balaji said, adding that the combination of a chip
shortage and strong demand has resulted in pending orders of around 168,000 vehicles
at JLR.
Carmakers across the globe have resorted to gradually hiking
prices in a bid to deal with steep raw material and shipping costs, which are
squeezing profit margins at companies looking to recover from the pandemic.
Tata Motors has hiked prices at least four times in its 2022
fiscal year and Balaji said the carmaker was "at the absolute edge in
terms of our ability to increase prices".
Banks raising interest rates to contain inflation could also
damage demand, he added.
Tata Motors reported a consolidated net loss of 10.33
billion rupees ($133 million), compared with a loss of 76.05 billion rupees a
year earlier. Its total revenue from operations for the quarter fell by 11.5%
to 784.39 billion rupees.
Its passenger vehicle business made a turnaround in the
fourth quarter and demand remained strong, Tata Motors said.
Meanwhile its electric vehicle business is expected to
deliver strong margins and profit in the current fiscal year, Balaji said,
adding that electrification plans for Tata Motors and JLR will require
investments in batteries and cells.
Balaji said Tata Motors expects up to 60 billion rupees of
capital expenditure in the current year.
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