Automotive major Tata Motors is upbeat on the company’s commercial vehicles business unit, where it expects to consolidate its market share up from 43 per cent now.
“Putting behind concerns which had resulted in a slowdown in the CV business due to demonetisation, the transition from BS III to BS IV norms, and the GST regime, we have registered strong growth in July and August and hope to grow more than the industry performance during the current fiscal,” said Girish Wagh, Head, Commercial Vehicles Business Unit.
Outpacing the sector
During an interaction with BusinessLine here, Wagh said there are reports that point to a double-digit growth in the sector, whereas others indicate high single-digit growth.
“Either way, we are confident of growing faster than the industry. August was witness to a growth of over 34 per cent over the same period last year,” he explained.
“We had indicated that we would invest about ₹1,500 crore per annum in this business, and are on course to doing so. The investment would go in to develop and roll out new products and cover some segments that have cropped up,” he said.
The commercial vehicle industry is in itself passing through a phase where new segments have come up. The GST regime is also seen to impact the warehouse and logistics industry.
This calls for vehicles with different capacities to meet the hub-and-spoke model, he said.
“Last year, we had closed with overall volumes of over 3.25 lakh, including about 60,000 units for exports. We see both these numbers going up as we expect to gain market share,” he said.
“Apart from growing the domestic market, we are also exploring new markets for exports. The potential is huge as there are some markets where we could make a foray,” he said.
Referring to electric vehicles and hybrids, Wagh said the company is working on a number of vehicles and options in this space. Already some 25 buses have been supplied in Mumbai.
“We expect more exciting activity in this space,” he said.
A number of States, including Uttar Pradesh, Rajasthan and Madhya Pradesh, have come down heavily on overloading of vehicles.
This has forced transport service providers to shift to higher capacity vehicles, which is driving market growth.
“The economy is poised for growth, the agriculture sector is doing well due to decent monsoon, the infrastructure sector is poised for growth. All these would augur well for commercial vehicles sales,” he said.
Mentioning the different segments in the commercial vehicles business, including the small commercial vehicles, intermediate and light commercial vehicles, and medium and heavy vehicles, Wagh said there could be some corrections in one segment in favour of another.