Despite slump, Tatas to keep date with commercial vehicle launches

Despite the grim economic scenario hurting businesses of several auto-makers, Tata Motors has decided to go ahead with its planned launches of commercial vehicles.

The Tata group company, which is India’s largest vehicle-maker, has lined up a series of launches in the light, medium and heavy commercial vehicle (CV) segment over the next six months. The company will launch 12-15 new CVs by March.

“There will be no change in our plans or any slowdown in launch of our CVs despite the slowdown. We are optimistic about the segment. There will be fluctuations in demand but the overall outlook will remain positive,” said Prakash M Telang, executive director (commercial vehicles), Tata Motors.

The CV segment comprising 12 players, including the Tata group company, Ashok Leyland, Mahindra & Mahindra and Volvo, in the first half of this financial year recorded a marginal growth of 3.79 per cent. According to the figures provided by the Industry body Society of Indian Automobile Manufacturers, Tata was the market leader with a share of 59 per cent, followed by Ashok Leyland with 14.6 per cent share.

However, the medium and heavy commercial vehicle (MHCV) segment fell by 2 per cent, selling 95,523 units during the April-September period. Vehicles in this segment are used extensively in the construction, mining and engineering sector. A slowdown in this sector directly impacts the demand for MHCVs.

“We have seen a decline of 30 per cent in sales of tractor trailers of late. However, we are confident that the Golden Quadrilateral project (the largest express highway project in India, which aims to connect New Delhi, Mumbai, Kolkata and Chennai) will have a positive impact on the demand in the long term. In addition, we have seen growth of 25 per cent in sales of tippers,” Telang added.

Company officials at Tata Motors say that the market for LCV buses is buoyant at least for the next six months with the segment already recording good growth. The company is expecting a spurt in demand for intra- and inter-city buses from private players.

He expressed concern over soaring raw material prices. “There has been no let-off in prices of auto grade steel and other commodities. In addition to that, high diesel prices and overloading if trucks — which is still practiced — have been a cause of concern,” the Tata Motors executive said.

The other aspects which is hurting CV auto-makers are the lack of availability of finance options and spiralling interest rates.

“Clearly, finance availability and high interest rates have been hurting the market. This is especially alarming when more than 90 per cent of our buyers fund purchases through banks’ finance. Banks have become more cautious now. Some experts have said that recent steps taken by RBI to ease liquidity were not enough and more needs to be done,” Telang said..