Tata Motors anticipates 15 percent growth in CV Exports
Published On May 08, 2017
Buoyed by the 11 percent growth last fiscal, the leading commercial vehicle manufacturer Tata Motors now anticipates to export at least 15 percent more CVs in current fiscal. Majority of the export numbers would be coming from the unsold BS-III inventory piling up after the Supreme Court verdict. The firm also anticipates strong growth of 10-15 percent in the domestic market with the sales of light commercial vehicles and buses, supported by constructive GST rate and the favourable monsoon.
Ravi Pisharody, Executive Director for commercial vehicles unit, Tata Motors, said that the company is expecting 15 percent growth as against last year when the firm witnessed 11 percent growth and crossed the 60,000 milestone for the first time. The growth prediction is on the back of about 8,000 of the 15,000 banned BS-III commercial vehicles which will be exported to SAARC countries including Nepal, Bangladesh and Sri Lanka where company already has strong foothold.
The Apex court ban on the sales and registration of BS3 vehicles starting April 1st left the company stranded with around 15,000 CVs out of which 3,000 units are still with the dealers and about 8,000 units it plans to export to SAARC markets starting this month. It would be quite easy for the company to achieve this target as it already sells 500 units per month in these markets. Pisharody also said that a portion of this inventory would be converted to BS-IV at a nominal cost while the remaining shall be cannibalised for making different parts such as steering, gears, tyres, seats, etc.
The jolly Tata Motors is especially betting on the bus segment where in recent past it has gained momentum in growth. The company kicked off the new fiscal year on a high note by grabbing 500 buses order from Ivory Coast. For the first time in so many years, Tata Motors took over Ashok Leyland in terms of bus sales with the former grew by 22 percent registering 18,198 units from 14,917 units in FY17, latter down by 10 percent recording 17,725 units in FY17. During the FY17, company’s bus exports grew marginally from 5,142 units to 5,650 units, while that of Ashok Leyland's, the fall was massive from 6,135 units to 4,877 units.
With the steep growth, Tata Motors now dominates the 40 percent of the bus market, adding 7 percent share in the last fiscal alone. The LCV segment too showed incredible growth rate that was double the entire growth rate of the industry. The company hopes to continue this streak in FY18 as well by gaining another 10-15 percent share in the domestic market. In fiscal year 2017, Tata Motors recorded cumulative sales of 542,561 units as against 511,705 units in FY16, up by 6 percent.
During the same year, its bus market grew by 8 percent to 47,262 units. However, company’s share in terms of medium and heavy CV market dropped to 49.2 percent from 52 percent while in LCV department, it marginally went down to 38 percent.
This is way beyond 4-6 percent growth what SIAM predicted for the fiscal year 2018. Whether Tata Motors will be able to achieve this target or not, time will tell. Stay tuned for more updates.