IANS

Mumbai, May 29: Auto major Tata motors Friday said its net profit for 2008-09 plummetted 50.7 percent because of "demand contraction".

The company in a statement said its annual profit stood at Rs.1,001.26 crore, down from Rs.2,028.92 crore reported in 2007-08.

Overall sales volume was down 13.5 percent last fiscal at 506,421 units (including exports) as against 585,469 units sold in 2007-08.

"The demand contraction was triggered by high interest rates and unavailability of finance throughout the year, particularly in the October-December quarter post the global financial market upheavals," Tata said.

"The impact on heavy commercial vehicles was more severe, abetted by reduction in freight movement in different segments and customer concerns," it added.

Tata's commercial vehicle sales fell 15.2 percent during the year.

The sales turnover in 2008-09 was down almost 14 percent at Rs.28,292.56 crore as against Rs.32,885.03 crore the year before.

"The fall in volumes combined with peak input prices and high interest rates brought margins under pressure," the statement said.

The company board has recommended a dividend of Rs.6 per ordinary share and Rs.6.50 per 'A' ordinary share of Rs.10 each for 2008-09.