Tata Motors to revamp light trucks platform

Tata Motors to revamp light trucks platform
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First Published: Wed, Oct 13 2010. 10 52 PM IST
Updated: Wed, Oct 13 2010. 10 52 PM IST
Mumbai: Tata Motors Ltd is looking to launch several new light trucks on an entirely new platform as traffic of goods within cities increases and more transporters move to the so-called hub-and-spoke model of transporting goods.
Three executives at three different parts suppliers to Tata Motors who are aware of the auto maker’s plans said the launches of the light commercial vehicles (LCVs) by the first half of 2011-12 would transform the perception of the company’s offerings in the segment, apart from increasing sales.
None of the executives wished to be identified, given the nature of the relationship between their respective companies and Tata Motors.
LCVs are typically light trucks in the 3.5-7.5 tonnes range; the weight refers to the gross vehicle weight or the maximum permissible weight of the vehicle including its cargo. The light truck range is being developed at Tata Motors’ Pune facility. Code-named Y1, the platform is “being designed keeping in mind driver comfort”, said one of the executives.
Debasis Ray, spokesperson for Tata Motors, India’s largest automotive firm by revenue, confirmed that the company has developed a light commercial vehicle platform, which can spawn vehicles for both goods and people transportation. He added that the launch of any product based on the platform is some time away. Ray said in an email response that Tata Motors had showcased the possibilities of this platform in the form of a bus at the New Delhi Auto Expo earlier this year.
According to Mahantesh Sabarad, an analyst at Fortune Equity Brokers Ltd, Tata Motors’ range of light trucks account for around a fourth of its revenue with much of it coming from the popular Ace series. The company ended the year to 31 March with revenue of Rs35,593 crore.
Competition has been building up in the segment, though. Tata saw its market share in light trucks in the six months to September fall to 68% from 70.5% for the same period last year, according to data from the Society of Indian Automobile Manufacturers.
Mahindra and Mahindra Ltd’s share rose from 10% to 15% in the period. Mahindra has a joint venture for commercial vehicles upwards of 3.5 tonnes with Navistar Inc. Nalin Mehta, chief executive at Mahindra Navistar Automotives Ltd, said the company has achieved higher volumes in the segment on the back of trucks used as load carriers in the mining and construction industries. Ashok Leyland Ltd, the second largest truck maker in India by sales, which has so far been absent from the light truck segment, is going ahead with plans to enter it by the middle of 2011 through its joint venture with Nissan Motor Co.
Tata’s new launches will be timely, said one analyst. “Its current range of vehicles above 3.5 tonnes is dated and nothing has changed over the last 20 years,” said Vineet Hetamsaria, analyst at Pincmoney, a brokerage and subsidiary of Pioneer Investcorp.
At a time when the retail sector is getting more organized, driving demand for such vehicles, it makes sense for the company to refresh its portfolio of light trucks, he added.
Another analyst predicts that sales of light trucks and mini trucks (less than one tonne) will grow by 25-26% in the current fiscal.
Manoj Mohta, head of research at Crisil Ltd, said that with the growing popularity of the hub-and-spoke model of distribution, demand for vehicles with gross vehicle weight higher than three tonnes and used for movement of goods within the city would only increase. Already, in the six months to September, sales of such trucks have risen 26% to 161,644 from the same period last year, according to the Society of Indian Automobiles Manufacturers.
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First Published: Wed, Oct 13 2010. 10 52 PM IST