1. Tata Motors drives to profitability in India on CV sales

Tata Motors drives to profitability in India on CV sales

The company managed to grow its volumes in the M&HCV space by 27% during the last quarter and in FY16 the volumes gain stood at 23%. The company also focused on exports of trucks to some of the international markets like the Gulf countries, Asean countries and the ones in the Indian subcontinent

By: | Mumbai | Updated: June 3, 2016 7:43 AM
Tata Group, Tata global beverages, net profit growth companies, tata net profit, Tata company growth Since 2013, the commercial vehicle business of the company has been going through a rough patch as volumes nosedived as a result of economic slowdown. (Reuters)

The January-March quarter of FY16 saw the domestic business of Tata Motors bounce to profitability on the back of strong performance of the commercial vehicles business, especially the medium and heavy vehicles.

Since 2013, the commercial vehicle business of the company has been going through a rough patch as volumes nosedived as a result of economic slowdown. However, since December 2014, the fortunes started to turn as the heavy and medium trucks sales started to recover and it helped Tata Motors to register operating profit a couple of quarters ago.

The company managed to grow its volumes in the M&HCV space by 27% during the quarter and in FY16 the volumes gain stood at 23%. The company also focused on exports of trucks in some of the international markets like the Gulf countries, Asean countries and the ones in the Indian subcontinent. The company also launched its Prima range of premium trucks which are instrumental in driving the export revenues of the company during the fiscal.

The export of commercial vehicles during the quarter grew by 26.7% and depreciating rupee also helped increase the margins.

“We enjoy 56% market share during the year, in a market where there are seven players or eight players, and as I said, this is not the end of the story, we definitely believe we will at least be able to gain back to 60% and above,” Ravindra Pishrody, executive director, commercial vehicles, Tata Motors, said.

In the light commercial vehicles (LCV) space, Tata Motors saw it volumes recover from October, albeit on very low base. According to the company, the volumes have increased by 11.8% y-o-y during the last quarter of FY 16.

Though, in the LCV segment the company has lost market share to Mahindra and Mahindra (M&M) during the last financial year.

“There has been a shift from the smaller commercial vehicles towards pickups that obviously had some impact on the market share if you add SUV and pickups together. But as I said the market is evolving in a way that our twelve-month step-shot is not good enough, we have to see it over a longer period of time.,” added Pisharody.

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