Tata Motors targets double-digit growth in CV exports

Despite facing headwinds in the domestic market, the Indian commercial vehicle sector has recorded handsome gains in the exports, crossing the 100,000 unit mark for the second year in a row. The CV industry shipped a total of 108,271 units in 2016-17, a year-on-year growth of 4.99 percent (2015-16: 103,124).

Domestic market leader Tata Motors is also the No. 1 exporter with 59,819 units (+11%). Buoyed by the growth in its exports, the company is now targeting growth of at least 15 percent in 2017-18 – to around 70,000-odd CVs. It also expects to export at least half of its BS III inventory stock, which it can no longer sell in the domestic market.

Speaking to PTI, Ravi Pisharody, executive director, commercial vehicle division, Tata Motors said, "We expect our exports to grow 15 percent this year over last year when we grew over 11 percent and for the first time crossed the 60,000-mark. This will be partly because we expect to ship at least 8,000 of the banned 15,000 BS-III trucks and buses in the SAARC markets, primarily Nepal, Sri Lanka and Bangladesh where we already have a good presence, and also in the West Asian and African markets."

Following the March 28 Supreme Court ban on sale, Tata Motors was saddled with around 15,000 trucks and buses while its dealers are left with around 3,000 units. Of this lot, it expects to ship at least 8,000 units beginning this month to the SAARC markets, where it already sells over 500 units each every month, Pisharody said, adding this was worth around Rs 4,000 crore.

Pisharody had said the portion of the unsold BS-III units would be converted (to BS IV) at a minimal cost and the remaining would be cannibalised for parts. Parts like gears, steering, seats and tyres could be used in BS-IV models, he added. The company began the new fiscal year on a high note in April by bagging an order for 500 buses from the Ivory Coast.

BUS SALES SEE UPTICK IN INDIA AND ABROAD
Gaining substantially in the heavy buses segment, Tata Motors has, after several years, beaten Ashok Leyland in the M&HCV bus segment in the domestic market. In FY2017 it surpassed Ashok Leyland by a handsome margin when its buses grew 22 percent to 18,198 units from 14,917 units; in comparison, Ashok Leyland M&HCV bus sales fell 9.5 percent to 17,725 units. Tata Motors now has a strong 38.5 percent share of the bus market, which went up by nearly 5 percentage points from fiscal 2016.

On the M&HCV bus export front, Tata Motors has seen 9.9 percent growth at 5,650 units in FY2017 (FY2016: 5,142 units). In comparison, Ashok Leyland’s bus exports declined by over 20 percent to 4,877 units in FY2017 (FY2016: 6,135 units).

In FY2017, the total M&HCV bus market grew by 7.6 percent with total sales of 47,262 units (FY2016: 43,909 units).

FY2018 OUTLOOK
As regards its domestic market outlook for FY2018, Tata Motors expects sales to grow by 10-15 percent led by LCVs and buses as a result of the IMD’s near-normal monsoon season forecast and implementation of GST later in the year. In FY2017, Tata Motors’ posted flat growth in CVs.

Industry body SIAM has forecast 4-6 per cent growth in FY2018 for the CV segment. Tata Motors’ share in the medium and heavy (goods carrier segment) has fallen to 51.2 percent in FY2017 from 54.9 percent in FY2016. In LCV goods carrier, its market share growth was flat. In the overall M&HCV segment, Tata Motors’ market share has declined to 49.2 percent in FY2017 (FY2016: 51.2%).