Tata Motors announces Investment of Rs 1,500 Crore for CV Division
Published On Sep 15, 2017
Contrary to the popular belief of GST discounts resulting in a turnaround in sales, Tata Motors' business head, Girish Wagh, has given the credit to the company's product range.
Tata Motors Ltd. announced an investment of Rs 1,500 crore towards its Commercial Vehicle (CV) business on Monday to regain stable footing in the market, after seeing a topsy-turvy ride recently due to the implementation of BS-IV emission norms followed by GST. Surprisingly, though, the company has already made up some ground over the last couple of months.
What is more surprising, however, is that Girish Wagh, Business Head, Tata Motors Ltd., gives the credit for the turnaround in sales figures to the varied product portfolio of the company rather than GST discounts. The newly appointed head of the CV division has also given due credit for the same to greater engagement with dealers and customers.
Wagh’s statements come in after the company recorded a growth of 24 per cent in the Jul-Aug period, registering a sale of 59,378 units, up from 47,750 sold in the same period last year. In the June quarter, however, sales for Tata Motors had declined by 17 per cent, while rival Mahindra & Mahindra had seen sales rise by 17 per cent.
However, if we look at the bigger picture, Tata Motors’ market share has dropped from 60 per cent in 2011-12 to 44 per cent over the last five years. The fall in market share and gaps in the product portfolio has prompted the company to devise a turnaround strategy. In accordance with the same, not only will the company invest Rs 1,500 crore in the CV business, but also focus on introducing new products, managing costs and improving quality.
In his annual letter to shareholders, chairman N Chandrasekaran had pointed out the lack of proactive responsiveness to the competition and an unsustainable cost structure as the main reasons behind decline in market share. The company seems to be addressing the same with the turnaround plan. Moreover, with four launches in the Medium and Heavy Commercial Vehicle segment, and five launches in the Intermediate and Light Commercial Vehicles segment for FY18 lined up, there’s a silver lining for Tata Motors Ltd.
