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How M&M plans to counter worst sales slump in truck market

October 15, 2019 14:54 IST

Mahindra is the latest among a clutch of other manufacturers that have been using services, fuel efficiency and packages as unique selling proposition.

Sales of Mahindra’s heavy trucks dropped to 3,427 units in the eight months from April to September.

Even though discounts have become inevitable in India’s slow truck market, amid one of the worst sales slumps in recent times, truck makers are now turning to mileage, features and services as the popular selling pitch in a desperate bid to push sales.

Despite steep discounts, truck sales in India have been declining for four months as transporters have shelved purchases, owing to the economic slowdown.

 

On Monday, Mahindra Trucks & Buses, the three-year-old entrant into the heavy duty truck segment, claimed that its Blazo range of trucks has successfully been established as the most fuel efficient truck model in the heavy duty segment.

It also claimed that it now commands a pricing premium over market leaders Tata Motors and Ashok Leyland.

Mahindra is the latest among a clutch of other manufacturers that have been using services, fuel efficiency and packages as unique selling proposition.

“Over the last three years, our Blazo trucks have clearly been established as a leader in terms of mileage,” said Vinod Sahay, chief executive officer (CEO) at Mahindra Trucks & Buses.

He added that depending on the tonnage, the Blazo offers a 5 to 13 per cent higher fuel efficiency as compared to a Tata Motors or an Ashok Leyland truck.

He also said the Blazo, which used to be cheaper than both the brands, now commands a pricing premium over them.

In a response to Mahindra’s claims, a Tata Motors spokesperson said, with a 52.5 per cent market share, the Tata firm is the market leader by a huge margin.

Also, he claimed the company is further gaining market share.

He added that in addition “to the superior product range,” Tata Motors also provides a complete package, including annual maintenance contracts, insurance, instant alert for breakdown services and a superior connectivity.

“As a result, we continue to command a premium in the market with our products and services,” the spokesperson added.

A spokesperson at Ashok Leyland wasn’t available for comment.

The claim of superiority comes at a time when sales of medium and heavy commercial trucks have been going down due to the economic slowdown.

It fell 39.06 per cent to 104,267 units in the first eight months of the current financial year, according to the Society of Indian Automobile Manufacturers (SIAM).

SP Singh, senior fellow at Indian Foundation of Transport Research & Training (IFTRT) said, “While Mahindra is capable of making high quality products, it still has a long way to go with regard to having a mass, pan-Indian presence.”

Such claims can’t be made when one is selling such small volumes.

Moreover, what matters to a transporter is the overall cost of ownership and not just fuel efficiency or initial cost of acquisition, he said.

Sales of Mahindra’s heavy trucks dropped to 3,427 units in the eight months from April to September this year against 6,245 units in the same period of the previous year.

Tata Motors, which is way ahead of Mahindra and others in the pecking order, saw its sales fall to 53,970 units against 90,731 units in the same period a year ago.

Mahindra’s Sahay said he doesn’t expect any pre-buying ahead of the changeover to BSVI owing to the weak economic fundamentals.

With 30-40 per cent of the fleet idling, transporters are struggling to pay their equated monthly installments.

So, buying a new truck is least of their priorities.

Photograph: Mahindra & Mahindra

Shally Seth Mohile in Mumbai
Source: source
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