We have all seen lorries with ‘Tata’ badging on them. It isn’t a surprise that Tata Motors is the country’s largest commercial vehicle (CV) manufacturer. That fact is reflected in their 55% stake in the aforementioned CV segment, despite having rivals such as Ashok Leyland, Mahindra, Eicher etc. The market for commercial vehicles, also called heavy vehicles, has been through a significant dip in sales after 2011. Sales of CVs topped out at 9 lakh units during the period between 2010-11, but, that figure will drop to just 7 lakh units between 2014-15. That’s quite a drop in the number of units, thanks to the slowdown in the CV market.
Tata Motors recently rolled-out the 100,000th Ace Zip, the company’s smallest commercial vehicle. The light commercial vehicle (LCV) sales will also pick up, after some less than stellar performance in the past three years. Ravi Pisharody, executive director at Tata Motors, saw the recovery in the medium and heavy CV segment in the past nine months and forecasts the same for the LCV market. Despite the slump in the LCV segment, Tata Motors has held its own. The company plans to introduce petrol versions of its passenger carriers for the export market. If it becomes commercially viable, Tata will also introduce petrol versions in the goods carrier segment. Though cheaper to procure, the petrol ones would lose out to their diesel counterparts on the front of fuel economy. But, in India, at least, the conversion to LPG fuel is easier for vehicles powered by petrol. Tata Motors holds a prominent 45% stake in the bus market, and with the introduction of its new premium bus, the Magna range, Tata is gearing up to hold on to their stake in this segment.
Pisharody said, “The M&HCV segments (trucks in 16 tonne and above category) have been a lead indicator for the economy. With the two segments combined posting a strong growth, we expect the LCV segment to return to the growth path in 2014-15. The CV industry that has witnessed a 45% dip since the peak in 2011 should return to the peak sales level by 2016-17. Unlike passenger car growth that is driven by the services industry and to an extent agriculture, the CV segment is dependent on manufacturing and mining.”
Tata Motors also predicts the bus segment, which hasn’t shown much signs of growth in recent times, to pick up gradually. The company’s confidence is attributed to the uniform Bus Body-building Code which will take effect in April of this year. Currently, the bus segment is mostly swallowed up by a largely unorganised sector, who will have to scamper off, once this uniform Bus Body-building code comes into force.
Source – ET