Tata Motors working on smaller Ace variant

Tata Motors working on smaller Ace variant

Mumbai: In a move that may straddle the market for cargo carriers with three wheels, country’s largest commercial vehicle maker by market share, Tata Motors Ltd, is working on a smaller variant of its offering in the light commercial vehicle segment, Ace, said a supplier who is part of the project.

The four-wheeled offering on the Ace platform, with a payload capacity of 0.5 tonnes is expected to be launched by September 2009 and will be called Penguin, he said. The payload capacity of its existing variant of the Ace is 0.7 tonne.

In an email response, Tata Motors spokesperson said, “Tata at any given point of time, is working on several innovations and the company does not have any comments to make."

Indeed, since the launch of the Ace in May 2005, Tata Motors has said it would use the Ace platform for various kinds of models that can cater to the passenger and goods carrier segment. In fiscal 2008, it launched the Magic and the Winger, both passenger carriers, off the same platform. On 22 September, Mint had reported on company’s plans to launch a higher-end variant of the Magic.

In September, Tata Motors’ light commercial vehicle sales posted a 23% growth over the same month last year, while sales in the medium and heavy commercial vehicle segment declined by 10%.

The Penguin will be produced at the company’s Pantnagar facility in Uttarakhand, where it also manufactures the Ace trucks. There are plans to make 40,000 units of the new offering, said vendors.

“The owners of this category of vehicles are essentially looking at something that can offer manoeuvrability and frugal economy. I don’t know if the product would be able to deliver all that, " said Mahantesh Sabarad, an analyst with Centrum Broking Pvt Ltd. Moreover, it’s the half and plus half tonne vehicles that are actually growing, he added, citing the example of Mahindra & Mahindra Ltd, whose commercial vehicle portfolio has seen a 26% jump in sales in the first six months of the fiscal, thanks to its Alfa and Champion three-wheelers.

The new offering from Tata Motors, which is likely to be positioned below the Ace, and other players such as Force Motors Ltd’s M4 and Ape Truk from Piaggio Vehicles India Pvt. Ltd, will likely be priced on par with M&M’s Alfa and Champion at Rs125,000- 130,000, says Sabarad.

Speaking earlier to Mint, R.C. Maheshwari, chief executive officer of Bajaj Auto Ltd’s commercial vehicle business had said that the market for three-wheel cargo vehicles have declined by 28% over the last year.

Though the fall is primarily attributable to a host of macro economic factors, such as rising fuel costs and higher cost of borrowing to buy vehicles, four-wheeled mini trucks such as the Ace have also taken market share, he said.

Sabarad expects the three-wheeler cargo market to grow by 15% in the next two years aided by need for last mile transport offerings, rapid urbanization and the retail format of doing business.