Tata Motors on Monday said it will invest Rs 4,000 crore in the current fiscal to bring new passenger and commercial vehicles to the market as part of its turnaround strategy.
Tata Motors on Monday said it will invest Rs 4,000 crore in the current fiscal to bring new passenger and commercial vehicles to the market as part of its turnaround strategy. Of this, Rs 1,500 crore has been earmarked for the commercial vehicle business and Rs 2,500 crore for the passenger vehicle platform. Tata Motors managing director Guenter Butschek said the company has embarked on a turnaround programme with the next 6-9 months being critical against an earlier planned business transition, to be achieved in the next 2-3 years. The domestic commercial vehicles business is the backboneof the company and the focus of the turnaround is on getting higher market share of 5% in this segment and launching new products faster in the market, he told reporters.
“For the CV segment, we have earmarked Rs 1,500 crore for FY18,” Butschek said, adding that 10 new products have been lined up. Of these, six will be in medium and heavy CV segments, while four products are in the intermediate CV category, he said. When asked about the passenger vehicle segment, he said the investment would be of Rs 2,500 crore but did not share product launch details. The company’s market share in the CV space dropped to 44.4% in FY17 from a high of 59.4% in FY12. Tata Motors has over the years lost significant market share to Ashok Leyland in the medium and heavy commercial vehicle segment, and to Mahindra & Mahindra (M&M) in the light commercial vehicle space.
“There was a market slowdown in the first quarter, but the loss in market share has been mainly due to the lack of supply of BS IV (Bharat Stage IV) parts from our end,” he said. In the first quarter of the fiscal, the company’s CV business witnessed a de-growth of 15.6%, while the industry growth fell by 8.4%. On a standalone basis, Tata Motors posted a loss of Rs 467.05 crore during the April-June quarter. It had registered a profit of Rs 25.75 crore a year ago.
Butschek also said the company’s plans to come up with sports car RACEMO has been temporarily put on hold with the focus on commercial vehicles to lead the overall turnaround taking priority. “As part of the internal agenda for crafting the turnaround, we also very carefully looked around in our capital expenditures, we had to re-prioritise some of the projects on the initial list,” he said.