“The commercial vehicle industry has seen strong growth”

Give us the outlook and trend analysis of commercial vehicle in Indian CV industry

The commercial vehicle industry has seen strong growth having rebounded from the impact of the BS3 to BS4 transition, the initial uncertainty around the GST implementation during the first quarter of 17-18. Since then, the Industry has been growing across all CV including MHCV, ILCV and SCV/pickup segments. GDP growth at around 7.5% supported by various macro-economic factors such as heightened industrial activities, infrastructure development and increased demand in private consumption-led sectors are all contributing to the growing volumes.

At Tata Motors, we have continued to grow strongly and gain MS across all segments in H1FY19. Our CV market share stood at 46%, a gain of 150bps over same period last year. In MHCVs, our market share expanded to a two-year high of 56.6 per cent. The cumulative market share for SCV Cargo & Passenger Utility segment stood at 40.9% up by 2.7%. 

“At Tata Motors, we have continued to grow strongly and gain MS across all segments in H1FY19. Our CV market share stood at 46%, a gain of 150bps over same period last year. In MHCVs, our market share expanded to a two-year high of 56.6 per cent. The cumulative market share for SCV Cargo & Passenger Utility segment stood at 40.9% up by 2.7%”

A brief on product line of Tata Motors Commercial Vehicle segment?

Tata Motors has always worked towards offering a strong mix of products, new variants, technological upgrades and innovative customer service offerings. In FY 17-18, TML CV has launched 50+ new products (with over 200 variants).

• MHCV:
  • At Auto Expo 2018, we have unveiled the Country’s First Six AXLE Truck offering the best operating economics in the segment
  • We recently also unveiled the country’s first tipper with the Ultimaax suspension system, jointly developed Tata Motors Ltd., and Hendrickson Inc, a world leader in suspension systems for commercial vehicles.
  • We are also working on various aggregates like engines, axles and suspension systems to reduce maintenance costs and provide a long-lasting trouble-free operation.
• ILCV:
  • Very recently, we launched an extensive range of new generation trucks under the ULTRA brand of utility vehicles; unveiled 11 powerful and robust tucks across Ultra T.7, Ultra 1014, Ultra 1412 and Ultra 1518. The ULTRA offers superior fuel efficiency along with versatility, power, speed, carrying capacity and deck lengths to suit all applications. With stylish, futuristic and smart utility features, the Tata ULTRA, has been designed to fast track the consumer’s business growth and deliver a reliable, safe, comfortable, vehicle with superior performance.
• SCV:
  • In February 2018 at the Auto Expo, Tata Motors showcased its new SCV platform, which reveals the company’s intent to expand its SCV product portfolio.
  • Tata Intra – is the first product that boasts of ‘Premium Tough’, a new design philosophy specially aimed for Commercial Vehicles that combines rising levels of visual richness and sophistication with robustness and reliability. With premium features such as a powerful engine, improved ergonomics, a walk through cabin, highest loading capacity and air-conditioning, we have taken a significant leap in the SCV segment in terms of vehicle comfort, payload and operating economics, while retaining all our winning unique attributes and mainstream pricing. The Intra is built on a new modular platform that will enable us to deliver many more offerings in the SCV segment going forward.

In addition to all of the above, we will bring in custom built application across our segments. We will continue to introduce new vehicles in the market, designed to offer maximum vehicle uptime and enhanced driver comfort at a lowest cost of ownership.

The growth in the commercial vehicle industry in India has reached its highest sales peak after 5 years. What are the growth drivers?

• The CV industry which is so strongly linked to the GDP growth rate, has seen a strong resurgence and a number of factors have contributed to the increased demand for CV across various sectors.
• Transporters have started to see the benefit of ITC (Input Tax Credit) on all purchases as they are adopting RCM (Reverse Charge Mechanism) and therefore bring down the overall costs. It augurs well for the industry as there are a number of positive sentiments around the economic rebound and the strong CV industry growth.
• The M&HCV segment growth in India currently is aided by higher budgetary allocation towards infrastructure and rural sectors, potential implementation of vehicle scrappage program and stricter implementation of regulatory norms.
• Farm loan waivers and Minimum Support Price (MSP) hikes is continuing to support rural sentiments and the economy. Private Final Consumption Expenditure (PFCE) has also been a lead indicator of the ILCV demand.
• Resumption of mining activities in select states also has led to increase in demand for tippers, a segment which has outperformed the industry during the current fiscal.
• The SCV and pickups growth is driven by growth in e-commerce sector, the Swachh Bharat initiative and the continued evolution of the hub-spoke model and the growing rural consumption have also led to small vehicles demand for last mile connectivity.
• E-commerce, 3rd Party logistics providers are driving demand for Containers & Reefers across the Light, Intermediate and Medium commercial vehicles and this segment is seeing a strong growth month-on-month.
• The strict implementation of overloading is driving the demand for vehicles with higher payload and as a result the 15 ton segment has seen a tremendous surge in this year. Simultaneously, the FMCG, Agriculture based sectors and the construction segment have all contributed to the sustained growth in demand as this segment continues to grow at upwards of 30% this year.