New products developed, South market penetrated
Tata International DLT (Tata DLT) has been the leader in the country’s organized trailer market with its innovative products and customer-centric approach. In an exclusive interaction, we spoke to Mr. Rajeev Batra, CEO, Tata DLT, to get to know the changing demands of the market, his views on the trailer code, GST, multi-axle rigid trucks and his company’s vision ahead.
Edited excerpts of the interaction:
How has been the fiscal year 2017-18 for Tata DLT. Did you meet or surpass your internal targets of selling around 3,000 trailers annually?
Fiscal year 2017-18 was full of ups and downs, especially quarter-1 which saw the transformation from BS-III to BS-IV. The industry struggled a bit due to non-availability of prime movers. LPG tanker tenders in Q1 had some positive impact on the business. Usually, LPG tanker demand comes every three years, that too for a limited quantity. However, due to Government’s initiative of the ‘Ujwala’ project, last year demand was on a higher side and huge number of tankers was produced. Tata DLT subjugated in supply of running gears for tanker application in quarter-1 and got a market share of almost 75 per cent with it.
There was improvement in availability of BS-IV prime movers in quarter 2, but because of the GST implementation there was a slight lull in the market. In quarter 3 and 4 we managed to recover from the shortfalls of quarters 1 and 2. Overall 2017-18 was very good for commercial vehicle business and its applications. We sold 5,323 trailer units mustering a turnover of Rs. 347 crores, which is a record sale in the last 12 years.
What were the implications of the Trailer Code on the overall demands in the industry and on the performance of Tata DLT?
Implementation of the Trailer Code in States like Rajasthan and Maharashtra and southern States of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh, fully / partially, is a good sign for the industry and society as far as safety is concerned. At the same time, the Central Government is also serious about the implementation of the trailer code pan-India. Some of the States are still not aware of or reluctant in implementing the trailer code. Tata DLT, being a responsible organization, is now working with State Governments and RTOs for providing awareness and sharing advantages of implementation of the trailer code.
How has GST helped the trailer industry?
Implementation of GST is a great initiative taken by the Government for boosting the economy. It has not only helped the trailer industry but also helped business to grow in many other sectors. Being a trailer manufacturer, we were facing problems for transporting our trailers from one State to another because of tax differences. But post GST, India became one market for everyone. The transport industry benefitted, and we are witnessing an overall market at peak in quarter-3. GST has to be credited for the same.
On the product front, what have been the developments for the car-carrier, tractor carrier and the tip-trailer like?
In the last four years, Tata DLT has developed many different products like car carrier, tractor carrier and tip trailer with high tensile steel. Last year, we have focused on further optimisation of designed products according to the market demand.
We also have developed a lightest trailer (less by 500 kg than normal trailer) for providing maximum pay load to the end-customer. Because of overloading restriction every single kg payload is important for the transporter. The market is switching from lower tonnage to higher tonnage tractors. Accordingly, 49 tonner demand increased. Tata DLT design team developed most suitable product for 4,923 tractors, which is 32 feet x 4 feet specifications and running successfully in the markets like Rajasthan, UP, etc.
How are you meeting the different demands from States like Maharashtra, Gujarat and Rajasthan? Is there a standardisation achieved in terms of products required in these States or do you have customised products to meet the different requirements? Please elaborate with examples.
State Governments restricting overloading has not only helped to maintain infrastructure but is also good for safety and business prospects. Some States like Rajasthan, Maharashtra and Gujarat have always been a big market for the trailer industry, and it was same the previous year also. Our manufacturing facilities in Rajasthan and Maharashtra are helping us to increase market share, we have captured 18 per cent market, which is a big jump compared to 2016-17.
In the last six months, Uttar Pradesh came up as a big market and started various infrastructure projects. In the last four months of the previous year, demand of 40 tonner and 49 tonner tractors increased in UP by almost 200 per cent. Tata DLT captured more than 60% of the market share through dealers as well as OEMs.
We have also penetrated in the southern market in a big way. Especially in quarter-1, we have supplied almost 500 running gears in the Namakkal market, which was earlier known as an unorganised industry. We have sold around 200 standard trailers in that market and in the coming years are expecting a huge potential from the southern market.
Your take on launch of multi-axle rigid trucks by OEMs in India, how would you promote benefits of tractor-trailers against the rigid trucks?
Initially we were under the impression that multi-axle may be a threat for the trailer industry. But now after discussions with many of the users of multi-axles and trucks, we understood that both the products, multi-axles and tractor trailers, have different applications and have their own pros and cons. Drivers feel ease to drive tractor trailers rather than long multi-axle rigid trucks. As far as mileage is concerned, both are similar, but getting more load on trailers. The price difference between the 37 tonner in comparison to the 31 tonner is much higher than the advantage of pay load, which is only 4 tonnes. The tyre life also is better in tractor trailers. Overall multi-axle rigid trucks may affect tractor trailer demand but not very significantly.
What is the level of utilisation at your four plants?
Tata DLT has four plants in India. Two plants in Pune, one in Ajmer and one in Jamshedpur, with a capacity of 550 trailers per month. From the last 4 months, we are running plants with 120 per cent capacity and produced 650 trailers per month.
What are your plans for the current FY, and given the recent positive developments, what is your vision for 2020?
Tata DLT is working aggressively and making strategies to reach a Rs. 1,000-crore turnover by FY 2023. We have split out project in two phases, and by 2021, we are targeting Rs. 750 crores. We are also focusing on capacity enhancement of the existing plants and foot print of Tata DLT in other regions like South, Uttar Pradesh, etc. At the same time, we are focusing and working on different segments like Defence and global markets. In FY 2018-19, we are targeting sale of over 7,000 trailers with a 35 per cent growth.
Presently demand from OEM for fully built vehicles, dealers and fleet owners is much higher than our existing capacity. We are working hard to ramp up our capacity of the existing plants, especially in Ajmer (capacity enhancement already done) and Unit 4 of Pune to achieve 800 trailers per month in the next two months.
Last but not the least, Tata DLT is committed to serve customers with best quality product, on-time delivery and aftersales service. Aftersales service is one of our USPs. The inherent culture of ‘Customer Centric Approach’ is key to the success of Tata DLT. We will continue with this culture and give our best services to each and every customer.