Tata Motors: How India’s largest commercial vehicle maker is conquering Africa

Tata Motors has been India’s largest commercial vehicle manufacturer since its inception. The Indian automaker also has a great presence internationally and has been on the path to conquering the African market since 1964.

Tata Motors: How India’s largest commercial vehicle maker is conquering Africa
Image: Tata Motors

Tata Motors is India’s largest commercial vehicle manufacturer. Founded in 1945, the brand stepped foot in the commercial vehicle business in 1954 and has dominated the market since. However, the Indian automaker has also made its presence felt in international territories as well. One of the significant moves by Tata Motors was when it entered the African market. Since then, its presence in the continent has expanded exponentially.

The Tata Motors journey in Africa started back in 1964, with exports to Sudan. In the following decade, the company set up its first operations in Zambia. Since then, it has sold over 1,50,000 vehicles across the continent, establishing a strong, far-reaching network, with a direct presence in Kenya, Uganda, Tanzania and Malawi in East Africa; South Africa and Mozambique in Southern Africa; Nigeria, Ghana, Cote De I’voire and Senegal in West Africa; and Tunisia, Ethiopia, Sudan and Djibouti in North Africa.

Tata Motors commercial vehicles (CV) are globally recognised for their reliability and efficient performance. They bring to the market a winning combination of power-packed performance and lower lifecycle cost of ownership.  This is in addition to the reliability and ruggedness that are necessary for operating in local weather conditions and terrains. The wide range of offerings allows Tata Motors to provide its customers with the best-fit vehicle. The local tie-ups through distributors and dealers give the company, the ability to provide its customers with a superior overall localised service experience.

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An Expansion Strategy tailored for the African Subcontinent

Market expansion has consistently been one of the key pillars of strategy for the company within the continent. Its current network consists of a diverse range of setups, comprising 60 3S (sales, service and spare parts) setups, and 70+ 2S (service and spare parts) setups. Keeping in mind the limitations brought forth by the COVID-19 pandemic, the company has undertaken a cautious approach for calibrated expansion, keeping in mind the viability of the business and best customer experience.

Tata Motors’ commercial vehicle business plan has remained cognizant of varied customer needs within Africa – it has focused more on the demand for trucks and buses within Sub-Saharan Africa, and SCVs and pick-up trucks in North Africa, retaining a broader focus on greater than 6-tonne category of CVs to consolidate growth. In many of the Sub-Saharan markets, particularly Tanzania, Uganda, and Senegal, Tata Motors has climbed up to be amongst the top 3 CV brands within the greater than 6-tonne segment. The company’s diverse product portfolio catalogues best-in-class vehicles that have been adapted to suit African duty cycles and operations, providing superior efficiency with minimum operating costs.

In addition to the wide product portfolio, Tata Motors also ensures a best-in-class after-sales experience for its customers. Towards providing complete peace of mind to the customers, we offer Tata Motors Protect programme including comprehensive warranty coverage and a slew of other aftermarket services, through our extensive service network across the African continent. The easy availability and low cost of spare parts further reduce the total cost of vehicle ownership and adds to the customer delight.  With its strong dealer network, Tata Genuine Parts, wide product portfolio and financing solutions, Tata Motors is casting a profitable and sustainable roadmap for Africa’s commercial vehicle transport economy, with benefits shaping up in better forms for the customer, industry at large and community.

Overcoming challenges with a  focused approach

Except for South Africa and some other organised markets in North Africa, financing remains a key challenge within the Sub-Saharan market. In order to grow business, effectively facilitating the availability of finances is imperative. Consequently, Tata Motors is taking the assistance of its channel partners to provide captive financing options which in turn will help its customers to expand their business quickly.

The import of second-hand vehicles is a prevailing practice within Africa, with nearly 48 countries out of its total of 54, permitting such import. Besides following its strategic expansion plan, the company has also established a strong manufacturing footprint within Africa to tackle this challenge. In alignment with its push to ‘make local’ while going global, Tata Motors has now established a total of 6 assembly operations in the continent, with a joint-venture with Tata Africa in South Africa, and third-party operations in Kenya, Nigeria, Senegal, Tunisia, and Ethiopia. Further, Sub-Saharan Africa can also be expected to play a pivotal role in conducting export operations as the company renews its focus on expanding its exports business. Tata Motors assembly operations in Africa, are fully capable of assembling vehicles, imported in the form of CKD and SKD kits from its home country, India. This helps in bringing the overall cost of manufacturing down, thereby offering the best price to the customers and promoting local employment. It also exports Completely Built Units (CBU), catering to different applications in Africa such as – public bus transport, municipal vehicles, cement and construction tippers, to name a few.

Paving the way for the future

Despite the COVID-19 pandemic, Africa came out least impacted in FY21 and focused efforts on demand-creation helped its business in South and East Africa grow marginally in FY21 over FY20. As markets open up further, Tata Motors plans to build upon the encouraging landscape in Africa with the strategic introduction of new products for entry into new segments and additional customer-centric value-added services in the coming months. It continues to play an active role in the commercial vehicles industry in Africa, working closely with customers to develop and offer value-creating commercial products and solutions. With a steady commitment to serve varied needs, the company will seek to further expand its presence, consistently bringing new, future-ready products to the table, stimulate growth, expand employment opportunities, increase possibilities within manufacturing and fulfilling its central motto of connecting aspirations of its customers.

Author: Asif Shamim, Senior General Manager, International Business, Commercial Vehicle Business Unit, Tata Motors

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First published on: 16-07-2021 at 15:01 IST