Tata Motors hopes to outpace truck market growth

Tata Motors, the market leader in commercial vehicles (CVs), would have exited 2017-18 with higher volumes and market share save for the capacity constrains it faced in the medium and commercial vehicle segment, Guenter Butschek, chief executive officer and managing director, said on Wednesday.

He said the company had been enhancing capacities for varied model mix across its plants and working closely with suppliers to iron out glitches. On Wednesday, the firm launched the next generation platform of intermediate and light commercial vehicles (ILCV) under the Ultra brand. While visiting the firm’s factory in Pimpri, near Pune, Butschek said they had been working towards de-bottlenecking capacity-related issues and hoped to resolve it by the second quarter of 2018-19.

The new range of ILCVs and the resolution of the supply chain-related glitches will help the firm outpace all segments of the CV industry. Most of the constraints, Butschek said, were at suppliers’ end. “We have learnt our lessons and become a lot more stringent in our processes,” he said, pointing out the company had formed cross-functional teams that visit suppliers regularly and monitor their ability to produce parts and aggregates at the desired rate.

Macro-economic headwinds and regulatory changes including the Supreme Court’s March 28, 2017, order, which banned sales of the more polluting BSIII vehicles from April 1, 2017, had caught Tata Motors, among other manufacturers, off guard leaving them with unsold piles of BSIII trucks. The choice of the more superior and complex SCR (selective catalytic reduction) technology to meet the BSIV norms as against the cheaper but inferior EGR (exhaust gas recirculation) added to the disruption, said Butschek.

Riding the strong revival in the bus and truck market, Tata Motors' overall commercial vehicles sales rose to 376,456 units in the year ended March 2018, against 305,620 units a year ago. Its market share in the same period also rose to 44 per cent against 42.80 per cent last year. However, its market share in the MHCV trucks marginally dropped because of supply chain issues coming down to 50.77 per cent from 51.20 per cent a year earlier, according to Society of Indian Automobile Manufacturers (Siam).