FDI reform to offset diesel price hike, says Tata Motors

India's largest commercial vehicles maker Tata Motors welcomed the government's recently announced economic reforms, saying they will help mitigate the impact of the R5 a litre hike in diesel prices.

The automaker could face subdued demand in the immediate wake of increased fuel prices, executive director (commercial vehicles) Ravi Pisharody told reporters at a launch of six new trucks in Mumbai.

"Initially costs will increase for truckers. But the big question is whether truckers can pass it on to customers," Pisharody said.

However, the government's measures to stimulate economic growth — including clearing foreign investment in retail — could help improve infrastructure and strengthen demand in the long run, as more goods will need transporting, he added.

Tata Motors, facing increased competition in the heavy vehicle industry, unveiled six new trucks on Monday, including a series of new vehicles for its Prima range, which was launched in 2009. Germany's Daimler, the world's largest truckmaker by revenue, in March launched its BharatBenz series for the Indian market, intensifying competition for Tata Motors.

Tata Motors said on Monday it sold a total of 97,225 vehicles around the world in August, up 13% from a year earlier. The figures include JLR, which also clocked a 13% rise in August sales.

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