India's largest automaker by revenues and a heavyweight in CVs with market share historically in the 60-65% range, Tata Motors' dominance has steadily eroded over the last year with market share falling below the 50% mark for the first time in October last year to 49.4%. For April-December FY14, Tata Motors' total CV volumes are down 25.5%, while market share has slipped by almost 5 percentage points to 51.70%.
In four-wheeled LCVs, a segment pioneered by the Tata Ace in 2005, the company has seen rival products like Mahindra's Maxximo, Ashok Leyland's Dost and the Piaggio Porter gain significant ground in the last two years. While Tata Motors' market share in LCVs fell over 7 percentage points to 49.95% in April-December FY14, Mahindra's market share went up by almost 5 percentage points to 33.46% and Ashok Leyland maintained its market share at just over 6%. In fact, rivals saw gains even as the overall LCV segment volumes fell 14% to 3.25 lakh units and total CV sales for the industry, including medium & heavy trucks, were down 18% to 4.70 lakh units in April-December FY14.
Tata Motors' LCV market share has eroded quite substantially over the last five or six quarters. For a few years the Ace largely had the market to itself. But in a competitive market there are always gaps that exist, like in pricing or features, which the competition seeks to exploit," said Mahantesh Sabarad, deputy head for research at SBICAP Securities.
Auto watchers point out that Tata Motors had largely enjoyed a monopoly in LCVs, so it was bound to lose some share to the competition. "What may have worked against Tata is the fact that their discounts are lower than rivals, one analyst observed.
In The LCV market, we are following a restrained financing policy given the tighter finance market situation and this is reflected in the LCV volumes. In commercial vehicles, too, much cannot be read in one months market share, a Tata Motors spokesperson said.
Tata Motor's medium & heavy CV sales were also down 22% in December and 26% lower for April-December FY14, though the company maintained its market share at around 55% (April-December) in the segment because rivals fared worse.
With the road transport sector in a slump, heavy truck sales are yet to emerge out of a two-year-long slump, though industry analysts say the drop in truck sales may have bottomed out and a pick-up could happen by mid-2014.
Tata Motors shares at the BSE closed 1.34% up at Rs 374.60 each on Monday.