Rajesh Kaul, Head, Sales and Marketing, Medium and Heavy Commercial Vehicles (MHCV), Tata Motors, shares with BusinessLine the prospects of Tata Motors, the sector and the trends in the commercial vehicle industry as the Central government announces a road construction push — Bharatmala Pariyojana with a ₹5,35,000-crore investment to construct 34,800 km of roads — opening up avenues for the MHCV sector. Excerpts:

What is the scenario in the MHCV sector post-demonetisation and GST rollout?

The impact of demonetisation was huge for the entire industry including Tata Motors. The effect started easing out in the early part of the year and we saw some clear signs of recovery, bringing in positivity during the fourth quarter of last fiscal.

Since July this year, the MHCV segment has bounced back strongly and has witnessed month-on-month growth. In November, the sector grew 88 per cent over last year due to increasing customer acceptance of BS IV vehicles with Selective Catalytic Reduction (SCR) technology, infrastructure development led by government funding and a move towards higher tonnage vehicles leading to an increased demand.

The Centre recently made some announcements on infrastructure, especially roads and port connectivity. What is your view on them?

With a strong demand from road construction and mining sectors, the company has done exceptionally well in the tipper segment with almost a 50 per cent market share. There is a visible shift towards rated load regime, indicating that more vehicles are required to carry similar loads. Manufacturers of commodities such as steel, coal and cement have been stressing on lower freight rates. All this is expected to lead to the migration from low tonnage points to higher tonnage vehicles.

What are the strengths of Tata Motors in the MHCV sector?

For over six decades, Tata Motors has led the transformation in the Indian commercial vehicles space, winning customer appreciation for bringing in products and services.

We have also strengthened our relationship with the customers, increased our engagement with the stakeholder and integrated our efforts towards the supply side to ensure ramp-up. The company has 1,500 sales touch points and 1,800 service touch points in India with 235 dealer entities.

What is Tata Motors’ strategy in broadening the MHCV sector?

To broaden the sector, the company has many initiatives — such as improving fuel efficiency, working internally as well as with Cummins and other driveline partners, for providing best-in-class fuel economy. We have also adopted the SCR emission-control technology for vehicles deploying engines of 150HP and above, in-line with the global trends, which gives better environmental compliance along with longer engine life.

The company continues to invest in products and networks, and in 6-12 months, plan to appoint more dealerships across the country for our commercial vehicles . Tata Motors is also looking at equipping more number of dealers to offer mobile workshop services. At present, the company has more than 100 fully loaded mobile workshops.

The company launched six products at Excon 2017 (construction equipment and technology trade fair held in Bengaluru). Post-launch, which sectors do you see opportunity in?

At Excon 2017, our focus was mainly on the mining and the road construction industries. This is due to the positive movement in the macro-economic indicators in these segments. We showcased products with globally renowned Cummins SCR technology, heavy-duty suspension system, factory-fitted comfortable cabins and light-weight but stronger tipper bodies. All these vehicles will be powered by our range of powerful 180-300HP SCR technology engines.

What is the outlook for the MHCV sector?

The commercial sector has bounced back strongly after the initial disruption in the market due to demonetisation and the BS IV transition that largely affected the transport industry last year. Also, consumption-driven sectors have shown an upswing in sales since July, and continue even after the festival season. The increase in demand for vehicles across segments and production ramp-up of new range of BS IV vehicles have given a strong boost to the overall sales growth. With this, we estimate the growth to continue unhindered in the coming years.

Related Topics