In the current financial year, Tata Motors has managed to increase its volumes in the heavy and medium commercial vehicles (M&HCV) segment significantly on the back of increasing activity in the manufacturing and infrastructure sector
In the current financial year, Tata Motors has managed to increase its volumes in the heavy and medium commercial vehicles (M&HCV) segment significantly on the back of increasing activity in the manufacturing and infrastructure sector. R Ramakrishnan, senior vice-president commercial, commercial vehicles, Tata Motors, in an interview with FE’s Malyaban Ghosh, said the company will manage to achieve a 55% market share in the next two years from the current 51% as it comes out with a range of new products to cater to a larger pool of customers. Excerpts:
How do plan to position your Prima, Signa and Ultra range of trucks?
In the high-end heavy vehicle segment, there are customers who are willing to pay a very high premium for vehicles and expect very high performance. We are catering to these customers with the Prima range of trucks. These trucks are armed with high power engine, fully air-conditioned cabins and advanced technology. When it comes to an average fleet owner who wants to upgrade to the luxury end, for them we have the Signa range. Then there are customers who want high performance, but do not want to pay high price for the vehicle. We offer the Prima LX series of trucks to them which comes with an air-condition and non-air-condition options. In the medium segment, we also have the Ultra range of trucks. We have the conventional range of trucks which is for the customers in the price sensitive segment and gives good return on investment. Ultra is placed higher and is available in AC and non-AC option with two sets of power trains. This is how we cater to different customers.
In the M&HCV segment, when do you expect to achieve volume growth like 2011-12?
As far as the heavy trucks are concerned, they are still in demand and during this period, discounting has been very high as every manufacturer have excess capacity. As demand is picking up, level of discounts has stabilised, if not moderated. I think in a couple of years, we will manage to achieve a market share of more than 55%. Compared to 2011, we now have more products and are catering to more customers. There were gaps in our range five years ago, whereas we have much fewer gaps today.
Apart from the replacement demand, do you think there is fresh demand for new vehicles?
So far, it has been largely replacement demand. Now infrastructure-led growth is beginning to happen and the tipper sales have grown as a result of increase in road construction. There has been some uptick in activity in the mining sector, especially coal. It is still early days and I won’t start celebrating now. But things have definitely started to move in the right direction so far. Tippers segment was in the negative territory in the first half of the year, but in the second half, we have seen double-digit growth.
So, can we expect the monthly volumes in the M&HCV segment to continue to grow by 30%?
We may not be able to hold on to the same level of growth, but are definitely expecting healthy double-digit growth. Tata Motors does not have a policy of giving projection on sales volumes. According to me, two factors — vehicle scrappage norms and the restriction on overloading of vehicles — can make significant difference. The places in which overloading of vehicles are rampant will need more vehicles once these norms come into effect. Then we can see fresh demand for vehicles over and above the current replacement demand.
How do you plan to address the loss of market share in the LCV segment in the recent past?
Let’s split it into two segments — passenger and goods. In the passenger segment, we have 93-95% market share which is better than last year and there is very little that we can do there. In the goods segment, we used to enjoy 75% market share and with introduction of Jeeto and Supro, the competition has gained some market share. Over the last couple of months, we have seen some stabilisation and have started to gain market share. Our market share fell to the late fifties and now it has increased in the middle of sixties.
When do we see the LCV segment grow in the next fiscal year?
I am still keeping my fingers crossed. Compared to larger trucks, the owners of LCVs are mostly first-time buyers and the financier’s willingness to take risk will play a huge role. It will still take some time for the smaller commercial vehicles to make a strong comeback. We are still cautious on the small commercial vehicles.
What about the introduction of Indian drivers in Prima truck racing?
We have shortlisted 132 Indian truck drivers and then after four layers of screening, we are now on the verge of selecting the final 12 drivers for the final race.