The pick-up trucks segment has reported a positive growth for the second consecutive quarter, supported by e-commerce, improved consumption and a buoyant rural economy.
Pick-ups (Ashok Leyland Bada Dost, Tata’s Super Ace and Intra and Mahindra Bolero) with a gross vehicle weight (GVW) of 2-3.5 tonnes and mini-trucks (Tata Ace) with GVW up to 2 tonnes are termed as small commercial vehicles, which make up about 90 per cent of the light commercial vehicle (LCV) volumes. Pick-up trucks are a lifeline for small businesses and are an integral part of the hub-and-spoke model in the transportation segment
Key factors for growth
While mini-trucks are still in decline phase, pick-ups have recovered with a single-digit positive growth in September quarter. “Two factors have added to the robust growth in small and light commercial vehicles. Revenge shopping in festival season leading to higher demand of vehicles from e-commerce & white goods plus a 2 X vehicle demand coming under the Swachh Bharat Mission,” said Nitin Seth, Chief Operating Officer, Ashok Leyland Ltd.
With new launches and improved momentum, the December 2020 quarter saw pick-ups register a double-digit growth of 17 per cent at 76,598 units as compared to 65,484 units in the year-ago quarter. In September 2020 quarter, pick-ups grew 6 per cent. Mini-truck sales fell 9 per cent at 51,671 units in December 2020 quarter.
“The small commercial cargo segment has recovered significantly on a sequential basis growing at 30 per cent in Q3 FY21 vs Q2 FY21. Growth in e-commerce and enhanced rural demand were the primary drivers that contributed to industry growth,” said Vinay Pathak, Vice-President, Product Line, SCV & PU, Tata Motors.
As Tata Motors is the only player to achieve a positive growth during the nine-month period of this fiscal, its market share jumped significantly. Total pick up volumes for April-December 2020 period fell 18 per cent at 1,55,916 units, Tata’s pick-up volumes grew 9 per cent at 31,947 units, driven by, according to the company, successful launch of BS-VI pick-ups Intra and Yodha.
Tata is now the second big player in pick-ups after Mahindra, which reported a 25 per cent drop in its pick-up truck sales at 94,125 units during the nine-month period of this fiscal.
“We at Tata Motors used the BS-VI migration, as an opportunity to upgrade and holistically re-imagine our entire product portfolio and not just comply with emission standards to significantly improve customers’ business case,” said Pathak.
Market share
With improved sales, Tata’s market share improved by 4.7 per cent to 20.5 per cent while Mahindra’s dropped to 60 per cent from 64 per cent year-on-year. Ashok Leyland has maintained its share at about 19 per cent, but has been gaining after the recent launch of its Bada Dost with host of new features.
“Apart from the e-commerce sector, even for traditional businesses as supply and demand became uncertain, usage of small goods carriers for their operations was a method of optimising logistics capacity. New launches always help create a certain buzz, but now that more economic activities are being resumed and the vaccination process has also started, the SCV segment should be able to sustain the momentum,” said Suraj Ghosh, Principal Analyst — South Asia Powertrain Forecasts, IHS Markit.