Hardships at home force commercial vehicles to go on a foreign trip

Officials say domestic revival in this segment more difficult, as it doesn't have to do with consumer sentiment

Commercial vehicle (CV) makers Tata Motors, Mahindra & Mahindra (M&M) and VE Commercial Vehicles (VECV) are looking at expanding footprints abroad.

While Tata Motors is looking at trebling sales abroad over four years, M&M and VECV are exploring newer geographies to scale businesses in the mid term.

Ravi Pisharody, president (commercial vehicle business units), Tata Motors, said, "It is very difficult to say when the domestic market will turn. We have an assembly facility in Thailand and have recently entered Indonesia. We are going to focus largely on Southeast Asia to treble sales abroad over three-four years." Tata Motors registers sales of 50,000 units in global markets.

In the domestic market, the sales have declined 25.5 per cent to 243,160 units between April and December this financial year. Sectoral sales have dropped 18.4 per cent to 470,668 units.

"Revival in the segment is more difficult, as it does not have to do with consumer sentiments. The rationale for purchases is related to the movement of freight, subdued. It will take four to six months from the opening of projects in the infrastructure and mining sectors to see any kind of a turn," said Pawan Goenka, president (automotive division), M&M.

Business abroad accounts for five-seven per cent of overall sales of commercial vehicles. "Over the next few years, we are looking at entering markets in South America and Southeast Asia. International business is expected to grow to account for 20 per cent of our business."

Vinod Aggarwal, chief executive, VECV, said with the sales of trucks in the light and medium duty segment dropping 45 per cent over two to three years, it has become increasingly important to step up exports.

VECV is working with Volvo to double exports to 15 per cent of overall sales from seven per cent registered in 2013.

"The Eicher Pro range has been developed keeping the global markets in mind. We are working with Volvo to figure out our international plans. In five to seven years, we want to be in emerging markets, in South Asia, Africa, West Asia and Southeast Asia." The company is aiming at having a market share of 15-20 per cent in each new market.