Tata Motors acquires 26% stake in freight start-up TruckEasy
Tata Motors aims to use TruckEasy’s data analytics better customize its products and solutions
Mumbai: In a development that signals the movement of the traditional transport and logistics business to more technology-based solutions, India’s largest commercial vehicle maker, Tata Motors Ltd, on Tuesday bought a 26% stake in TruckEasy, a tech-based freight aggregator owned by Loginomics Technologies Solutions Pvt. Ltd, a Bengaluru-based logistics start-up.
The investment, for an undisclosed amount, is being made through Tata Motors Finance Holdings, a wholly-owned subsidiary of Tata Motors, the home-grown auto conglomerate said.
TruckEasy, which provides intra-city logistics solutions only in Bengaluru at present, was incorporated in May 2015 by Nikhil Thomas, Vikram Kodgi and Avinash Achar. Thomas and Kodgi have previously worked at Tata Motors in the logistics domain, apart from other areas within the company and other multinational firms.
Through over TruckEasy’s 8,000 customers serviced by more than 3,000 driver partners, Tata Motors aims to gain a foothold in mobility services to be “future ready”, said a company spokesperson in response to e-mailed Mint queries.
The “strategic” investment would provide Tata Motors with an insight into the “rapidly-growing, technology-driven transformation” in the freight logistics domain and obtain “an understanding of the market dynamics in intra-city freight movement”, the company said.
Tata Motors aims to utilize data analytics (on small commercial vehicle (SCV) usage) provided by TruckEasy to better customize products and solutions according to market requirements, as the maker of the Ace mini-truck will “be closer to the final customer”.
TruckEasy will gain access to Tata Motors’ “wide network to grow the supply side” and “expand to multiple locations countrywide”, said Girish Wagh, president of the commercial vehicles unit.
Tata Motors, with its Ace and Super Ace models, is one of the top two players along with Mahindra and Mahindra Ltd in the SCV segment, which is defined as having a gross vehicle weight of less than 3.5 tonnes.
After personal transportation was disrupted by tech start-ups such as Ola (ANI Technologies Pvt. Ltd) and Uber Technolgies Inc., the commercial vehicle landscape has been redefined by young transportation companies such as Rivigo Services Pvt. Ltd, who rely heavily on technology and new business models such as Rivigo’s driver relay model.
Even traditional companies such as DHL International GmbH, the world’s largest logistics provider, are reinventing themselves in India, with DHL launching SmarTrucking, a technology-enabled logistics solution, in early June.
Analysts welcome the development, citing “the coming of age” of the trucking and fleet industry in India.
“It makes tremendous sense for OEMs like Tata (to invest in freight start-ups) as establishing direct communication with large and small fleet operators will improve profitability,” said Anil Sharma, associate director at MarketsandMarkets, a market research firm.
More such applications will be seen in the trucking and fleet operation industry as the “mobility as a service” concept will gain traction in the market, with OEMs seeing more transactions in this domain, he said.
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