Tata Motors headed to Russia, again

Tata Motors Ltd, India’s largest vehicle-maker, is set to enter Russia again, with both the Tata and Daewoo brands of trucks and buses.

“We are readying our plans to launch in Russia.

“We are starting with medium range trucks and Daewoo is launching the Novus (range of trucks),” said Ravi Pisharody, Executive Director and Head-Commercial Vehicles Business Unit.

Over time, the company will sell the full range of trucks.

He told Business Line recently that distributors have been signed up and the vehicles shipped. The company had entered Russia in 2008-09, but the plans did not take off because of the global financial crisis.

“In a way, it’s almost a fresh launch,” Pisharody said.

Tata Motors will also set up facilities in Nigeria and Kenya to assemble its commercial vehicles for the African market.

This is because of the changes in duties in Africa. These units are expected to be ready in the second half of 2014-15, according to Pisharody.

Tata Motors already has a subsidiary in South Africa.

The company has started a subsidiary in Indonesia, where it plans to launch both passenger and commercial vehicles. It also sells the Xenon pick-ups in Australia.

Tata Motors’ increased thrust on the global markets comes at a time when the domestic automobile market, especially the commercial vehicles segment, has been going through a prolonged slump.

In April-January this financial year, total passenger vehicle sales were down 6 per cent at 2,047,895 units, while commercial vehicles fell nearly 19 per cent to 520,655 units. In the first nine months of this fiscal, Tata Motors’ total vehicles sales (passenger, commercial vehicles and exports) were down nearly 30 per cent at 4.36 lakh units over the corresponding period last year.

Its commercial vehicle sales dropped 24 per cent to 2.94 lakh units.

“It’s a long recession,” Pisharody said on the overall commercial vehicle segment, with sales falling for the last 24 months.

February and March were among the better months of the year in terms of sales and he was waiting to see if there was an improvement this year.

“If we see some bounce-back in February-March, then we can say some recovery can be expected. The fleet at some point has to be renewed.”

Truck sales were down because of a slowing economy, increasing diesel prices and rising interest rates. Besides, the ban on mining activity and the slowdown in infrastructure and manufacturing had hurt sales. Overall sentiment was affected and replacing ageing vehicles was not happening.

What was Tata Motors doing in this situation?

“Our focus on product continues. We have tried to give out the message that while performance has always been something we focussed on, design is now something we are focussing on.

“We are seeing our product is extremely smart without adding too much cost to it,” said Pisharody. The cabins were getting more comfortable from a driver standpoint.

The company was also looking at alternative fuels.

The Iris electric bus was one such and was ideal for city usage, as it could go up to 60-70 km on a single charge.

“Our investments in products will continue,” Pisharody said.

Simultaneously, the company also constantly kept an eye on inventory control.

At the company level, Tata Motors ensured that the inventory never exceeded 15 days, while the dealers’ stocks were maintained at 30-40 days.