Tata Motors looks to newer markets to drive commercial vehicle sales

23 Jul 2015


Tata Motors is looking at newer markets for its commercial vehicles, with increased thrust on West African and Asean markets, amidst continuing slowdown in the domestic market.

The company has set a target of more than trebling annual shipments to 1.5 lakh units before 2020.

Tata Motors, the country's largest manufacturer of buses and trucks, has seen its domestic sales decline continuously, both for passenger and commercial vehicles, since the 2011-12 peak, due mainly to a subdued economy and rising competition.

For the first quarter of the current financial year ended 30 June 2015, Tata Motors exported 12,891 units, posting a volume growth of 38 per cent in commercial vehicle exports from the year-ago period, while domestic sales fell 1 per cent to about 66,000 units.

The company had shipped close to 45,000 units of trucks and buses in the year to March 2015, which it wants to more than treble over the next three-four years.

"We have seen good traction in our exports, driven by the Prima and Ultra trucks and the premium pick-up Zenon. We had shipped out nearly 45,000 units last fiscal year.

"We want to take this to 1.5 lakh by the next three-four years," the company's executive director, commercial vehicles, Ravi Pisharody said.

While Tata Motors shipped 29 per cent more units in April, its May shipments jumped by a whopping 50 per cent and in June, it rose 35 per cent, he said.

The focus will be Southeast Asia, Middle East and Africa to counter slow sales growth in India, he said.

Tata Motors has started exporting its medium and heavy commercial vehicles to countries like Indonesia, Malaysia, Vietnam and the Philippines, besides pickups in Australia.

The company has opened an assembly plant in Tunisia to cater to countries like Kenya, Tanzania and Nigeria as fully-built units attract high import duties there. The company also has an assembly facility in Nigeria, which has been set up as a joint venture.

Pisharody said Tata Motors is looking to export the super Ace Mint – a small commercial vehicle - to Thailand, and a refresh of Xenon is also expected to be in line for the same destination.

''With products like Ultra and Prima coming in, we do not need to export the traditional products from India. So, our dependence on traditional markets in SAARC like Sri Lanka and Bangladesh is going to reduce gradually. We have received repeat orders from Saudi Arabia and other Middle-East countries,'' added Pisharody.

The company is also looking at Australia as a market to consolidate its position in the pickup segment. Tata Motors is looking to develop automatic transmission in pickups to increase volumes in Australia. According to the company, exports constitute 10-12 per cent of the total revenues of Tata Motors.

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