Tata Motors expects the second half of current financial year to be strong for growth of commercial vehicles (CV) especially after the roll out of Goods and Services Tax in July. “We believe period after October 2017 to be better period for commercial vehicle manufacturers, once the GST is rolled out and there are no border checks,” Ravi Pisharody, executive director, commercial vehicles at Tata Motors said while announcing the readiness of company’s BS IV vehicles with fuel emission technologies like Engine Gas Re-circulation (EGR) and Selective Catalytic Reduction (SCR).
It is expected, the roll-out of GST from July 1 will reduce the tax burden on companies and also bring down the cost of vehicles leading to higher sales.
Although the additional technologies – EGR and SCR – would increase the cost of vehicles between 5-10% over BS III vehicles, we expect the owner of vehicles to recover the cost over next two-and half years due to fuel economy that would be brought by the two technologies, besides reducing the maintenance cost.
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The two technologies will help fight the nitrogen oxide and particulate matter from the exhaust chambers. SCR can be further scaled to meet the stringent BS VI standards, that the company will have to meet by 2020.
The company also plans to sell the majority of its 15,000 unsold BSIII vehicles as it believes the cost of conversion to BS-IV would be much higher. “We plan to export around 8,000 unsold BS-III vehicles to countries in South Asia and East Africa, and sell the spare parts of the remainder 7,000 vehicles as there is strong market for those parts in some of the countries in Asia and Africa,” Pisharody said.
Going ahead the company plans to increase revenue contribution from exports to 25% from the current 17-18%, he said.