Tata Motors may phase out small diesel cars, stock falls 4%

Tata Motors stock price tanked over 8 percent intraday on Monday after news that the company phase out small diesel cars from its portfolio as demand is expected to slow down due to upcoming BS-VI emission norms that would make such vehicles expensive, according to a senior company official.

Tata Motors currently sells its entry-level hatchback Tiago with 1-litre diesel engine, compact sedan Tigor with 1.05-litre powertrain and older models like the Bolt and the Zest with a 1.3-litre diesel engine.

“We feel that low demand for entry- and mid-size diesel models will not justify the high costs involved in developing a new small capacity engine,” Tata Motors president passenger vehicles business unit Mayank Pareek said. “The industry has recorded de-growth for the tenth consecutive month. Weak consumer sentiments are reflected in this demand de-growth and we have also been impacted,” he added.

Tata Motors on May 2 reported a 20 percent decline in total sales during April at 42,577 units as compared with 53,511 units in the same month last year. The company’s passenger vehicle sales in the domestic market declined by 26 per cent to 12,694 units last month as compared with 17,235 units in April 2018.

At 11:52 hrs Tata Motors was quoting at Rs 201.05, down Rs 8.45, or 4.03 percent. It has touched an intraday high of Rs 205.00 and an intraday low of Rs 199.00.