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As Tata Motors gears up for the launch of its new SUV Harrier, the company’s comeback story in the passenger vehicle segment includes its success in reviving sales in the rural markets.
“Our customer profiles are changing rapidly and we are witnessing a spurt in demand for our products in rural and semi-urban markets. This can largely be attributed to the rural sales camps that we organise from time to time across the country,” Mayank Pareek, President – Passenger Vehicles Business Unit, Tata Motors, told BusinessLine.
Upbeat on rural
The company organised 800-900 rural sales camps in the past nine months, which have led to an incremental sales of more than 10,000 units. These camps are held at places where there is a sizeable potential for offering motorised transportation, and areas where the company currently does not have an outlet.
“We will now continue to stage over 100 rural camps in a month nationwide. Rural demand has been supported by fairly good monsoon rains in 2018 and the Union government’s decision to increase the minimum support price for farm commodities. Rural markets already account for a third of our sales,” he said.
Market share erodes
Tata Motors was the third largest player in the domestic passenger vehicle market with a share of more than 14 per cent six years ago.
However, its PV business saw a steady erosion in its market share to about five per cent in FY2016 due to lack of new products in line with changing customer preferences in compact SUV and petrol vehicle segments.
But the PV business regained its traction with the launch of its compact car Tiago, UV Hexa, compact sedan Tigor and the compact SUV Nexon in the past two years. New launches led to an improvement in the company’s PV market share to 6.4 per cent in FY2018, and further to seven per cent now.
Though Tata Motors bucked the trend in the recent quarters, it had also felt the effects of the subdued market sentiments, liquidity crunch, higher interest rates and stress on retail finance in the last few months.
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