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Tata Motors Forecasts Revival in Truck Sales Once GST Rolls Out

Tata Motors’ commercial vehicle sales rose 1 percent to 385,373 units in FY17.

Tata Motors Forecasts Revival in Truck Sales Once GST Rolls Out
A Tata Motors Ltd. truck makes its way through traffic on a road in Bangalore, India. (Photographer: Namas Bhojani/Bloomberg)

(Bloomberg) -- Tata Motors Ltd., owner of Jaguar Land Rover, expects a strong revival in truck sales in India after the start of a nationwide tax in July spurs buyers to return to showrooms.

Mumbai-based Tata Motors’ commercial vehicle sales rose 1 percent to 385,373 units in the year ended March, and deliveries in the first three months of the year that began April 1 are expected to be subdued, as customers hold off purchases until the rates for the goods and services tax are announced, Executive Director Ravindra Pisharody said.

“We assume that the governmental actions would have been completed by July and hence expect a strong second half for commercial vehicles,” Pisharody said in a phone interview. “We’re expecting a 10 to 15 percent growth for smaller commercial vehicles.”

The goods and services tax will replace more than a dozen levies that divide the world’s fastest-growing big economy, uniting India for the first time in a common market with more than 1 billion consumers. It adds to the appeal of a nation that Goldman Sachs Group Inc. last year called “one of the world’s most compelling” consumer stories for the next two decades.

Tata Motors plans to export about half of its truck inventory idled by the Supreme Court’s recent ban on vehicles that don’t meet emission norms, Pisharody said. The remainder will be converted to meet the new standards.

To contact the reporter on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net.

To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Arijit Ghosh, Ravil Shirodkar

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