Tata Motors has had a very good year in 2010-11, particularly in the commercial vehicle segment. In the domestic market, the company’s commercial vehicles sales increased by 22.7 per cent year-on-year to 458,828 units, with its market share in it of 61.8 per cent.
Growth in the MHCV segment has been accompanied by a structural alignment and shift in favor of higher tonnage trucks. Tata Motors has witnessed growth of 31 per cent in the M&HCV; segment, of which the tractor trailer segment grew by 59 per cent, multi-axle segment by 35 per cent, tippers by 24 per cent and the 2-axle trucks by around 11 per cent.
Tata Motors commands a 61 per cent marketshare in the overall commercial vehicle segment, but it is going to become increasingly difficult for the company to preserve the marketshare because of competition. From just three CV manufacturers a decade ago, today there are nearly a dozen manufacturers in India, and more are waiting in their wings to enter the fray.
As a market leader, the company is fully aware of this fact and is gearing up in all possible manner to tackle competition. Mr. Vinod Sahay, Head of Sales and Marketing (M&HCV;), Tata Motors, spoke in detail on the product and customer support initiatives of the company that help it remain on top.
Starting with the products, Mr. Sahay said: “Earlier we had just one or two products at every GVW, like the 16, 25 or 40 tonne segment. Today we already have minimum two and in many cases more than four products at every GVW, price and performance point across all segments – rigids, tippers and TT. Going forward, we will have a basic product, a mid-range product and at the top end we will have Prima. For instance, in the 40-tonne TT, we have two offerings, one is a mass market product and the other high-end Prima”.
Multi-axle 8X2 segment
One of the biggest success stories for Tata Motors in recent years in the truck segment has been the 3118, 8X2 4 axle truck. Initially the haulage market moved from the 4X2 to the 6X2 multi-axle truck, and this has now moved to the 8X2 segment.
He said: “Within the multi-axle segment, we are seeing an increasing trend towards the 4-axle from the 3-axle truck. We expect the multi-axle truck markets to move to 8X2. Our 3118 8X2 model is the largest selling model in its segment. Till the first half of 2010-11, the 25-tonner multi-axle truck used to be the largest selling truck in the M&HCV; segment. But from the second half of last year and in the current year, we see the 3118 doing very well”.
The 8X2 makes business sense for the operator as it offers better operating economics. You get 6 tonnes of additional payload. Tata Motors is offering its 8X2 truck with lift axle, which reduces the tyre life and fuel consumption during empty return trips, resulting in better operating economics.
Today the 8X2 truck has become a well-accepted model for all applications, including market loads, tankers, transportation of cement bags and others. The industry size for 8X2 trucks is around 4,500 vehicles, of which Tata Motors sells around 3,500 vehicles every month.
Mr. Sahay further observed: “In addition to the 3118 8X2 model, we will be launching a couple of more vehicles in the 8X2 platform with better power-to-weight ratio, better cabins, more powerful engines and higher gear options. We have introduced some variants within the existing model with different wheel base. We initially offered a 5200mm, then we introduced 5600mm last year, and this year we are introducing 6200 wheel base. We will launch an 8X2 truck in the Prima range in the current year”.
Tippers
After seeing a fall in 2008-09 and 2009-10, the tipper segment has started picking up again with expanding activities in mining as well as construction. As per expert estimates, in 2010-11 around 43,000 tippers were sold in the domestic market.
Till a few years ago Tata Motors offered just a single model in multi-axle tipper segment, the 2516 tipper with 14 cum capacity. Today it offers a complete range of tippers, starting from the 2518, 14 cum which is its base product. And then it offers a 2518 HD which comes with a bogie suspension instead of normal suspension. The 3rd on the same platform is a 2518 HD with 9-speed gear box for deep mining application. Then it has a 2523 which comes with a 230 hp engine. The company has recently launched a 2528 tipper, with 280 hp from the Prima range.
The tipper segment witnessed moderate growth in 2009-10 and 2010-11. Due to the recession during the previous year, customers had postponed their buying for a later date. Tippers normally have a shorter life of three-four years during which it is fully utilised.
According to Mr. Sahay, “tipper replacement demand didn’t happen during 2010-11, and hence we expect the growth rate in the tipper segment to be much higher than the cargo segment this year, and we also expect the current year to be good for the tipper segment”.
Tractor trailer segment
Tata Motors witnessed the highest growth of nearly 59 per cent in the tractor trailer (TT) segment. The growth could be better but for the shortage in supply of components. The TT segment is now considered the sunshine industry and is expected to do well in the coming years.
The year 2008-09 was really tough and the TT segment was the worst affected by the recession. But with the revival in economy, markets in Rajasthan, Gujarat and Maharastra, which are the strong TT markets, expanded fast. Towards the second half of last year, 2010-11, port applications, particularly container movement, started picking up. This is normally the last segment to come out of the recession as it is primarily dependant on exports.
Mr. Sahay said: “Tata Motors has 66 per cent marketshare in the TT segment selling nearly 19,000 out of a marketsize of 29,000 units. In the conventional range, we offer 35, 40 and 49-tonner tractors and in the Prima range we offer 40 and 49-tonne for high-speed cargo movement and for ODC transportation”.
Prima
Referring to Prima, he remarked: “With Prima we are trying to transform the Indian transport industry. Very clearly in the long term, Prima is what will run on Indian roads. We are happy with the way we have progressed with Prima. We have launched two models so far and hope to add another 7 to 8 more models during the current year”.
Tata Motors has so far launched TT models in the 40 and 49 tonnes as part of the Prima range. The company recently launched 2528 and 3128 tippers on the Prima platform. With new products and variants in the Prima platform, numbers are also expected to increase.
The company recently bagged a contract to supply 56 Prima trucks to Toll India, a wholly-owned subsidiary of Toll Holdings Ltd., Australia. It will supply the trucks by September this year. The company has also won an order for supplying around 250 Prima trucks to Linfox Logistics.
In India, according to Mr. Sahay, the tonnage transformation has happened in the last 20 years, from 16 to 49 tonnes. The only way to increase further efficiency in transportation is by increasing the distance covered. Today a Prima does 800 to 900 km a day compared to a conventional truck which does around 300 to 400 km a day. It is offering a minimum of 35-40 per cent increased productivity to every customer.
Customer focus
Moving away from products, Mr. Sahay also spoke on the various customer-focused initiatives taken by the company in recent times. “Going forward, we believe it will be difficult to sustain our market share purely by focusing on products. Increasingly, in any developed economy, product differentiation between manufacturers will be very minimal. The key differentiating factor will be our after-sales support in terms of service, availability of spares and customer focused initiatives”.
Tata Motors also recently launched Tata Delight, a customer loyalty programme for owners of its commercial vehicles. At the launch of Tata Delight, Mr. Ravi Pisharody, President – Commercial Vehicle Business Unit, Tata Motors, said: “We thank our esteemed customers for their long-standing support to the Tata brand. To create an even deeper customer connect, and take our relationship with customers to the next level, we have launched the Tata Delight programme. We believe this initiative will further strengthen our bond with customers.”
Tata Delight is a loyalty programme for all Tata Motors commercial vehicle customers, both existing and new. It offers customers a host of distinctive facilities across all Tata Motors dealerships, sales outlets, and Tata Motors authorised service stations.
Customers can earn bonus points on purchase of a new commercial vehicle. They can also earn or redeem points on vehicle servicing or repairs, new spares, across all Tata Motors dealerships, sales outlets, and service stations. Members can call on a 24X7 toll free helpline 1800 209 7979 for queries and on-road and highway assistance service.
Other membership privileges include educational scholarships for children, a chance to win a Tata Nano every quarter through a lucky draw and invitations to special events and movies with family. A customer can avail of all these benefits for only Rs. 100 (without insurance) and Rs. 500 (including insurance).
If enrolled for the programme with insurance, a vehicle driver will receive a 3-year insurance policy which offers an accidental insurance of Rs. 1 lakh, personal disability insurance of Rs. 1 lakh and an accidental hospitalisation cover of Rs. 25,000 per year.
Once enrolled in the programme, the member will receive a Tata Delight Owners Card and as many Tata Delight Chassis Cards as the number of vehicles a customer owns and wants to enroll for. While the Tata Delight Owners Card can be used to earn and redeem points, Tata Delight Chassis Card will only accumulate points earned against spends on the vehicle registered in the programme.
Key account portal
Tata Motors has also introduced a key account portal for all its key customers. Customers who have access to this site can have complete data of the fleet online. The operator can access the site anytime to know complete operational details of the truck – the distance covered, servicing details, etc. It can also help customer search for spares and also the nearest Tata outlet where it can be purchased. It also has a dealer and workshop locator.
Mr. Sahay also said: “We started this initiative during the last financial year and the effective deployment has happened during the current year. The experience has been very good, customers are demanding more features out of this. An important requirement for the customer, which we are now working on, is the ability to settle the bills online. For instance a Delhi customer has his vehicle undergoing repair in Chennai, he can get make the payment through an online payment gateway”.
Tata Motors is clearly the undisputed leader in the Indian commercial vehicle industry. It is leaving no stone unturned to sustain its market leadership. Be it products or customer focused initiatives, the company is doing everything possible to remain on top.
