Cargo Motors Pvt. Ltd., a household brand name in the Indian automobile industry and the largest retailer for Tata Motors in the country, has affirmed that its next growth destination will be the capital of India. Incorporated in 1959, Cargo Motors is a leading dealership for the entire range of Tata Motors vehicles in Gujarat, Punjab and Rajasthan, with an impressive and consistent performance record spanning over half a century. The five-decade-old firm, established under the dynamic vision of the late Yash Pal Nanda, has further expanded under the able guidance of his son, Mr. Jayant Nanda. The business legacy is being further supported by the ambitious third generation entrepreneurs of the promoter family.
Founded in 1959 in Gandhidham, near Kandla Port in the remote region of Kutch in Gujarat, the company has expanded over the years into other territories and now has facilities in Ahmedabad, Gandhinagar, Baroda, Panchmahal, Dahod, Sabarkantha, Mehsana, Patan, Banasknatha and Jamnagar districts. Punjab came next in 1983, with the company being awarded the dealership for Jalandhar, Kapurthala, Amritsar, Nawasahar and Gurdaspur districts. This was followed by Rajasthan in 2004 (Ajmer, Chitorgarh and Bhilwara districts) and finally Delhi.
From a humble beginning with the sale of just 25 vehicles in the first year of operation, the company now boasts of more than 100 outlets and a stellar annual sales performance of 18,000 vehicles. The company has relied on market penetration and product diversification to expand its presence in the Western and Northern markets of India.
In 2013 Tata Motors awarded the commercial vehicle dealership in Delhi to Cargo Motors based upon the long and successful mutual business synergy over the years. Leveraging upon the existing strengths and the strong brand image among customers, Cargo Motors has made a grand foray into the automobile market in Delhi.
In an exclusive interaction with MOTORINDIA, Ms. Devki Nanda, Director, Cargo Motors, stated: “We have been associated with Tata Motors for more than five decades. We commenced operations by selling commercial vehicles in the Kutch region of Gujarat when our Founding Chairman was awarded the dealership in 1959. Since then, we have expanded our base to cover Gujarat, Punjab and Rajasthan. We are the largest selling dealer for Tata Motors’ commercial vehicles in the country. To grow our operations, we have also diversified into the passenger and the luxury cars segment. Cargo Motors employs close to 4,000 people to carry out the company’s day-to-day operations. In order to further widen our footprint in the northern part of India, we have set up a chain of outlets in Delhi.”
Talking about Delhi as one of the key growth drivers for Cargo Motors, Ms. Nanda observed: “Delhi is a very important automobile market, and I believe that the business opportunities in the State could be further enhanced with a good line of products, quality service and the extensive experience of Cargo Motors. We are currently running a flagship 3S facility at GT Karnal Road, a 3S facility at Mundka and a sales outlet at Dilshad Garden in Delhi. We look forward to setting up outlets in Okhla, Kapashera, Dwarka and Central Delhi in the coming months to further expand our market in Delhi. We have adopted SOPs and systems to improve and streamline our business operations and are anticipating sales of around 500 units per month from this region in the near future.”
She also disclosed that Cargo Motors is making rapid strides in streamlining its service offerings by stating: “We have two workshops in Delhi. The workshop at GT Karnal Road has 15 bays, of which eight are for SCVs and seven for LCVs and ICVs. The workshop in Mundka has seven for SCVs. We might also consider setting up a service outlet in Okhla. Currently we have employed roughly 50 people at the GT Karnal Road service station and around 25 people in Mundka.”
Despite stiff competition, Cargo Motors won’t switch to any other existing or upcoming brand. Ms. Nanda affirmed: “We have grown along with Tata Motors over the last 55 years and look forward to strengthening our mutual relationship in the years to come.”
It is to be mentioned here that Cargo Motors is retailing the entire fleet of Tata Motors’ vehicles in Gujarat and Punjab M&HCVs in Rajasthan, apart from selling SCVs, LCVs and ICVs in Delhi. “The SCV segment, which gives us the maximum volume, has huge potential in Delhi.”
Ms. Devki Nanda joined the business in October 2013 after working as an investment banker in London for three years. On her transition from working for a bulge bracket investment bank to spearheading the family business, she said: “The primary motivation was to continue the legacy that my grandfather had started 55 years ago from Kutch and to take the business to new heights with my brothers, Mr. Aditya Nanda, the late Dhruv Batra and my father. I always knew that I would be back and join the family business in India. The time that I had spent abroad was invaluable for my growth as a businesswoman. Over time, I would like to scale up my company to greater heights and would like to bring a fresh perspective to our existing business.”
Expressing optimism on growth of the Indian automobile industry, Ms. Nanda observed: “The automobile industry has been passing through a recession over the last few years with declining consumer confidence. But now, a stable government and its policy reforms for setting the economy on a high-growth trajectory seem to have bolstered the market sentiment. We hope that the next few years are positive for the industry and expect it to grow at 10% CAGR. We will also make our growth plans accordingly.”
Currently, the group turnover from automobile business is clocking a topline of Rs. 2,500 crores and approximately 75 per cent of the topline is derived from the CV business that is spread across Delhi, Rajasthan, Punjab and Gujarat. “CV business contribution will probably be scaled up further. We hope to achieve a topline of Rs. 5,000 crores by 2020, and our vision is to be the No.1 dealer for Tata Motors in each and every market that we operate in,” concluded Ms. Nanda.
Cargo Motors upbeat about new dealership facilities
Cargo Motors Pvt. Ltd. (CMPL) has been associated with Tata Motors for the last 50 years. It commenced operations selling commercial vehicles in the Kutch region of Gujarat after its Founding Chairman, Mr. Y.P. Nanda, was awarded the dealership in 1959. Since then, CMPL has expanded its territories into Punjab and Rajasthan, besides having State-wide presence in Gujarat. The company is the largest selling dealer for Tata commercial vehicles and has also diversified into passenger cars and construction equipment. MOTORINDIA caught up with Mr. Ravi Suri, President, CMPL, to know more about the firm and its recently opened new dealership facilities.
Please tell us about your stints in the automotive and your association with Tata Motors.
I was associated with TELCO, now Tata Motors, for a really long time looking after their CV operations in Delhi. Thereafter I joined the Nanda family (with Cargo Motors) in 1987 when they were associated with Maruti Udhyog Ltd. (now Maruti Suzuki), looking after the dealership operations in Gujarat. Currently, I am looking after the entire commercial vehicle dealership operations in Delhi and Gujarat.
We have recently opened two world-class dealership facilities in Delhi to expand our footprint here. Our new outlet at GT Karnal Road is a flagship facility which offers 3S Facilities (Sales, Service and Spares) and is close to Sanjay Gandhi Transport Nagar. Our Mundka facility is a platinum dealership close to Bahadurgarh where there is a concentration of small commercial vehicle owners. So these are the two strategically located dealerships are catchment areas for us. I must clarify that we are only focussing on the CV segment in Delhi, NCR. Our objective is being close to the customers, understand their requirements and fully meet them. We are also offering tailor-made financing solutions to our customers.
What are the reasons behind your being pretty optimistic about future sales growth?
As you can see, there has been an uptick in our consumers’ sentiments. With the new government giving a massive thrust to the infrastructure sector, vehicle sales should also pick up. That will ultimately help us enhance our sales in the LCV, ICV and MCV segments. We are yet not focussing on the HCV segment. After Gujarat, we are now sharpening our focus on the capital city of India which is incidentally the hub of our country’s transport operations.
Will you be extending your portfolio with the HCV segment by retailing Prima trucks?
Yes, we have given a feel to Tata Motors that we have the wherewithal to sell those premium products. Once we are given the mandate to sell the Prima range of products, we will be able to deliver more volumes. We are very excited to be involved in such high-end vehicles in our future course of action.
Does competition from new entrants cause any concern in your business projections?
Not at all. The biggest advantage Tata Motors has over its peers is its world-class manufacturing facilities and robust aftersales network. Their R&D centre is also world class. We (on behalf of Tata Motors) are well entrenched in the market. You go to any remote location and get a genuine spare part of their products. Tata Motors is in this business for the last six decades and its key strengths are serviceability and resale value of its product lines. Moreover the products are very competitively priced and well accepted in the market. Their value-for-money models are developed keeping the customer requirements in view. For new manufacturers, it will take quite a bit of time to be successful in the Indian market. So we will be banking on the trustworthy credentials that Tata Motors has. To summarise my views, Tata Motors is a well-entrenched company that is tough to emulate.
What kind of numbers are you doing in Delhi and what about your future projections?
We are doing roughly around 250 units per month from both the outlets and will look forward to clocking 4,000 units per annum in the long term with new outlets and revival of the market.