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Tata Motors expects revival in demand for heavy trucks

By BS Reporter
September 04, 2012 10:13 IST
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Tata Motors' commercial vehicles segment, which contributes more than half of the company's stand-alone profits and is the biggest truck maker in the country, on Monday said it has seen a slight revival in demand for heavy trucks and hopes for the trend to continue in the festive period.

In June, Tata Motors was forced to shut down its manufacturing unit for heavy trucks in Jamshedpur for three days due to lack of demand.

"We are witnessing a down cycle now in the MHCV (medium and heavy commercial vehicles segment), since we had growth for 4-5 years, we are seeing some correction now. We are seeing slight improvement on the truck side," said Ravindra Pisharody, executive director (commercial vehicles), Tata Motors.

"The worst period was in April when there was an increase in excise duty. We are entering the peak season now which is fromĀ  September to November".

The company saw MHCV sales slide by 20 per cent in the April-August period at 62,410 units compared to the same period last year. However, sales of light commercial vehicles which includes the Ace, grew by 18 per cent to 140,417

units during the same period.

"The LCV segment is quite strong. The challenging environment is affecting all segments but still marketing initiatives, financing tie-ups and exchange schemes the small commercial vehicle segment has improved by 15-20 per cent. Once we launch the pick-ups then it will go higher", Pisharody added.

The company is planning more variants using existing product platforms in the coming period in an effort to augment its portfolio and serve a wider customer audience. These will include LCV, MHCV and pick-ups.

Tata Motors on Monday launched two variants of the Xenon pick-up at Rs 5.44 lakh and Rs 6.34 lakh, respectively, (ex-showroom, Thane). The vehicle is a modified version of the Xenon XT launched earlier. The XT is positioned as a personal vehicle while the Xenon launched on Monday is a commercial vehicle.

Tata Motors had closed production of the Jamshedpur plant where it makes trucks and trucks parts for three days in June to align production with demand and to bring down inventory levels. While disclosing first quarter results, the company said it will carry out more plant shut downs if required.

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BS Reporter in Mumbai
Source: source