Tata Motors Target Priority Areas to Take Advantage of Commercial Vehicle Demand Recovery

News Date 11 Aug 2021

Tata Motors Target Priority Areas to Take Advantage of Commercial Vehicle Demand Recovery

The country’s top CV maker Tata Motors said it has worked out principal priority areas this fiscal to take benefit of the recovery in demand amid continuing significant challenges such as commodity price hikes and semiconductor shortage.

The company said it has been observing a far more positive sign when compared with the prior post-lockdown phase.

“We are surely seeing an improving economic scenario and recovery of positive business sentiments. Freight availability is also getting greater. Trucking industry says there is freight to carry now. The continued government spending on infra and resumption of construction projects will drive calls for trucks. Growth of core sectors such as steel and cement will also augur well for the industry,” Rajesh Kaul, Vice-President, Sales & Marketing, CVBU, Tata Motors, told BusinessLine.

Key Growth Drivers

Scrappage policy is assumed to give an impetus to the commercial vehicle industry. At the same time, the growth in e-commerce, driven by improvement in online shopping due to social distancing and other limitations, has fuelled last-mile transport, thereby causing a solid requirement for cargo trucks across small and medium commercial vehicle segments.

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So, this time, recovery in the commercial vehicle industry will be extremely stronger than last year despite apprehensions on the possible resurgence of a third wave,” said Kaul.

While the commercial vehicle industry volumes have been growing month-on-month, they are still lower than 2019 levels, as cargo availability is yet to meet H2FY21 levels. Meanwhile, prices of trucks have gone up 15-20% from the BS6 introduction period last year to now.

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So, Tata Motors has classified some priorities for this fiscal because of changes in customer expectations and common challenges. “Our immediate preference is to work with our buyers, provide them assistance and help to assure business continuity. This will include focus on vehicle assistance and after-sales will also engage with buyers to understand their demands. Also, we will make certain interventions to assure that there are minimal business interruptions in channel partners and our plants,” said Kaul.

More Than Emission Evolution

The company is expecting to maintain the sales momentum helped by its BS-VI vehicles, which, according to Kaul, comply with new engine norms and offer real value in terms of low-cost services and greater fuel efficiency to assure best-in-class total cost of ownership for customers.

We actually watched the BS6 transition more than only emission evolution. We upgraded the complete product portfolio to bring benefits to the customers. As a result, we see great acceptance of our outcomes. Also, we came out including a new range of products for particular applications that are bringing incremental volumes,” he added.

The Indian commercial vehicle industry recorded a 21.7% decline in FY 2020-21 compared to a 30% fall in FY 2019-20 due to the Covid-19, lower freight utilisation, limitations in obtaining financing and some hesitation in purchasing new trucks due to higher values of BS-VI vehicles.

 

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