Mumbai: The country’s largest automaker, Tata Motors Ltd, is preparing to introduce an upmarket variant of its Ace Magic seven-seater passenger vehicle, attempting to bolster its market share in the segment.
The higher-end version will be positioned in the so-called multi-purpose vehicle, or MPV, segment, which comprises Maruti Suzuki India Ltd’s Omni and Versa models besides Tata Motors’ own Magic and Winger, said vendors associated with the project who asked not to be named citing reasons of confidentiality.
The proposed new version of the Magic will be based on the same platform as Tata Motors’ one tonne mini-truck Ace, said a vendor for the company, on condition of anonymity.
Anil Kapur, the New Delhi-based regional manager for Tata Motors’ commercial vehicle unit (northern region), confirmed the project. “We don’t really announce our product plans beforehand. I can only confirm we are going to launch it,” he said in a telephone interview.
The Magic, launched along with the Winger in June last year, comes in a four-to-seven-seat version and carries an ex-showroom (Pune) price tag of Rs2.60 lakh.
Figures from the Society of Indian Automobile Manufacturers show that Tata Motors had sold 2,290 units of the Magic and Winger in August, an increase of 143% over August last year.
Overall sales in the segment in August were little changed, with 0.01 % growth over a year ago.
The segment is becoming increasingly important for manufacturers and likely to clock healthy growth, said Sachin Mathur, head of research at Crisil Research & Information Services Ltd, a unit of Standard and Poor’s.
“It has lot of unexploited potential as there is a gap between the three-wheelers and larger commercial vehicles on the passenger side,” Mathur said.
“We see the market for light commercial vehicle segment in the passenger side replicating the success story of four-wheeled goods carrier segment,” he added.
While the three-wheeled goods carrier segment saw a volume decline of 21.7% year- on-year in April-July 2008, light commercial vehicles posted 12.2% growth, said a research report from Mumbai-based brokerage firm IDFC-SSKI Securities.
“Moreover, with three-wheelers facing stiff competition from their four-wheeled counterparts which offer greater stability, it’s a logical extension for the manufacturers to offer products in the segment,” Mathur said.
While vendors said the new offering, likely at the beginning of the next fiscal, would roll out of the Pantnagar factory in Uttarakhand, with 1,500 units daily, Kapur refused to give details. “It could be either from the Pantnagar or the Pune facility. I cannot give the numbers but we have huge plans,” he said.
According to Tata Motors’ annual report for fiscal 2008, the company’s market share in the light commercial vehicle segment shrank 1.1 percentage points to 64.3%, despite it selling a combined 100,000 units of the Ace Magic, the Winger and the Ace truck.
Tata Motors shares closed Friday at Rs422.85 on the Bombay Stock Exchange, down 1.94% from its earlier close of Rs429.