Diversified product portfolio driving growth
At the start of FY19, Tata Motors had embarked on an aggressive Turnaround 2.0 strategy that included a mission that read ‘Win Decisively in CVs’. With the CV market witnessing unprecedented growth in the current fiscal, the market leader has had its own share of growth drivers and strong points, registering impressive numbers in the first quarter. To know more on how the company plans to maintain its growth momentum and execute its action-plan, we spoke to Mr. R.T. Wasan, Vice President, Sales and Marketing – CVBU, Tata Motors, who is confident that the company, with its diversified product portfolio and holistic set of offerings for customers, is at the helm of affairs to ‘Win Decisively in CVs’.
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The overall commercial vehicle segment has grown in the April to June period. Even, Tata Motors has reported very good numbers. Do you attribute the company’s growth to BS-IV technology or Tata Motors’ Turnaround 2.0 strategy? What are the factors that would determine continued growth momentum for the next couple of years?
The first quarter of FY19 witnessed a robust growth in our sales performance, crossing the 1 lakh sales mark with 71% growth for our CV domestic Sales. M&HCV grew by 116% over last year with Government’s focus on infrastructure development, road construction, building irrigation facilities and affordable housing projects across the country.
ILCV segment grew by 77% during Q1FY19 while SCV and Pickup segment grew by 59% over last year. Our passenger segment witnessed a growth of 29% over last year. There have been a number of factors contributing to this robust growth including the product performance of our BS-IV vehicles. We are working towards enhancing value proposition and total cost of ownership for customers, while bolstering revenue potential. Turnaround culture has become part of company’s DNA. With FY19, the company has embarked on a Turnaround 2.0 journey, with a clear objective to ‘Win Decisively in CVs’
We see the road construction segment booming due to the impetus provided in the budgetary allocations for roads & infrastructure projects. The road construction push includes the Bharatmala Pariyojana with a Rs. 5.35 trillion investment to construct 34,800 km of roads. In addition, Rs. 1.57 trillion will be spent on the construction of 48,877 km of roads by the State-run National Highway Authority of India (NHAI) and the ministry of road transport and highways. Requirement of tippers for this industry comes from primarily two applications – 1) Aggregate Mining, 2) Surface Transport. Both these applications will see unprecedented demand in the coming 2 years.
Tata Motors displayed fine example of ‘experiential marketing’ while displaying the complete range of ILCV segment. Can we expect similar approach towards other segments like the SCV and M&HCV? Is it the best way to introduce products?
The experiential marketing for Ultra Platform helped us in creating the product effectively that adds tremendous value to our customers. With the kind of competitive performance attributes, the Ultra Range offers, Tata Motors would explore adoption of such marketing processes and many more innovative ones onto other segments as well M&HCV has been engaging in experimental marketing. We have been regularly conducting customer clinics, tipper Mahotsavs and truck melas apart from participation in larger exhibitions like Excon and Auto Expos to enable customers to touch and feel our new products.
To capture their emotional sentiments as well as other feedbacks, we regularly have initiatives like Bandhan where we meet the key account customers across India. Also customers are invited to our plant time to time to share their ideas and feedback. Also new vehicles are given on trial basis so that the customers can understand the performance in real life scenario in their applications and terrains. All this helps to build the affinity towards the brand and connects the customer better with us.
We have also been hosting various other experiential marketing events like the Fully Built Vehicles Expo, XL series launch events, SCV Expos which allow our customers to experience our products and share their feedback to help improvise on our products.
How is the SCV segment shaping up for Tata Motors, given you have almost 8 variants of Ace and is the most appreciated brand in its category? Has the hub & spoke model helped its growth?
The SCV Cargo and Pickup segment reported a significant growth of 53% in June this year on the account of growth in e-Commerce sector and increasing demand for last mile connectivity. We have crossed the 20 lakh sales milestone for the much-loved ACE trucks, taking the legacy of the cult brand of Ace as an ‘ever-young and fulfilling brand’. Our recent additions in the SCV space – the XL range of Ace Mega, Ace HT and the Zip have all gained acceptance and is contributing to the increased volumes and MS for the company.
Successful launches of Yodha pick-up have garnered an undisputed ‘positive word of mouth’. In addition, our newly launched Tata Ace Gold has been well received by the customers leading to a strong surge in its sales.
Can we expect any more new products/variants in the cargo CV segment from Tata Motors this year?
Tata Motors has always been working towards providing the best possible solutions for our customers. We have also been working towards providing a wide range of portfolio across segment to cater to the needs of our customers. There have been a host of products that we have been working on some of which have been showcased this year at the Auto Expo – PRIMA Lx 4930.S, PRIMA Lx 3718, Signa 4323.T amongst the M&HCV segment. We have also upgraded our normal LPK Cabins with better features like fuel efficiency switches and introduced more vehicles with the luxurious SIGNA cabin. There have been product introductions for RMC segment where we have launched product with a stronger bogie suspension. To increase the fuel efficiency in the 16T segment, company has launched LPT1618 with the all new New Gen 5 L Turbotronn. There have been introductions for the surface transport segment where we have launched SIGNA 3718.TK 10X2 Tippers.
We have recently launched a complete range of Ultra products in the ILCV segment addressing the customer expectations comprehensively while simultaneously catering to the numerous application specific fully built products. Having said this, we continuously work towards innovative technology and introducing new products to provide our customers a wide range of products to choose from.
What is the status on the Tata Signa 43.23 six-axle rigid truck? When can we see it ready for sale?
Tata Motors has been the pioneer in bringing industry-first products and Tata Signa 43.23 is India’s first highest tonnage six axle rigid vehicle that was showcased in February this year at the Auto Expo. We believe this product in the truest sense will be a revolutionary ‘Revenue Augmenter’ for the Indian trucking industry. We will be launching the Tata Signa 43.23 six axle rigid truck during this fiscal year.
Do we see a 41-tonne multi axle rigid truck from Tata Motors stable any time soon, as the market migrates towards higher tonnage vehicles, particularly migrating from 37 tonne?
India is now moving towards rated load regime. This means that more trucks are required to carry similar loads. Manufacturers of commodities like steel, coal, cement have been stressing on lower freight rates. All this will lead to the migration from low tonnage points to higher tonnage point vehicles. Market is shifting to higher tonnage due to superior operating economics. Tata Motors have been pioneered in introducing products in 31T and above. We are offering 31Ton, 37Ton, 40Ton and 49Ton range of fuel efficient products to our customers
In future, huge shift will be seen in the surface movement application of aggregates with many road projects getting a go ahead. Also, there has been good demand on account of building of smart cities, SEZ projects, and other infrastructure projects across country.
What is the future for the Prime Movers, the like of Prima 49 tonne, with the growth of multi-axle rigid trucks?
Operating economics drives the choice of vehicles. Higher tonnage reduces operating cost, however, some applications like car carriers, 40 ft containers, light goods where 40 ft length Is desired will continue to use prime movers. When the axle load limits change is applied, the focus will be on tractor trailer also. There would be some migration that is bound to happen, however both segments will coexist.
Please give us an insight into your presence and growth in the bus segment, especially the school buses and staff transportation segment.
It has been a continuous endeavor by Tata Motors to launch new and suitable variants in every segment. Tata motors is by far the market leader in both LCV and ICV buses which are predominantly sold under the school and staff applications. The bus industry has seen a substantial growth in Q1 over same period last year and in I&LCV segment. Tata motors has recorded a growth in market share this Q1 over last year Q1. Our passenger growth segment grew by 29% in volumes in Q1FY19. M,H&ICV passenger vehicle grew by 27% in volumes with a market share increase of 1.4% over last year, while our LCV passenger segment grew by 37% in volumes with a market share increase of 1.5% over last year.
How is the synergy with Marcopolo in bringing platforms like Magna? What can we expect from the partnership in the coming years?
Tata Marcopolo has been a strategic move right from the beginning where Tata motors won the prestigious DTC order for fully build low floor buses under a global tender. The journey has continued and Magna which is offered in both 180hp and 230hp option is another example of collaborative working. The synergies have helped Tata Motors to develop modern and forward-looking options like the Articulated bus and world class coach range including the multi axle coach which would be introduced soon.
How are the Starbus Ultra and CityRide performing? Please take us through their growth and acceptance in the city public transport.
Both brands are doing extremely well in the market and the same is reflected in our leadership in the I&LCV segment. On the back of these brands, Tata Motors commands a leadership and sold more than 85% volumes as fully built buses.
Can you give us an update on the trials and delivery of the Tata Starbus Electric?
Tata Motors has always been at the forefront of developing sustainable propulsion technologies. We showcased the 12m Electric bus, the Magic EV and the Iris EV at the Auto Expo 2018; all of which demonstrates our capability in promoting smart and safe public transportation.
Tata Motors signed a contract for the single largest order for Hybrid Electric vehicle technology, with the Mumbai Metropolitan Region Development Authority (MMRDA) and delivered 25 nos. of the Starbus Hybrid Electric Bus. With Full Low floor configuration, these buses ply on Bandra Kurla Complex (BKC) route.
The Department of Heavy Industries has sanctioned funds for purchase of Electric buses and charging infrastructure to 11 cities – Delhi, Kolkatta, Bengaluru, Hyderabad, Mumbai, Ahmedabad, Jaipur, Indore, Lucknow, Jammu and Guwahati. Total 390 buses have been sanctioned for these 11 cities. Out of these 11 cities, Tata Motors has won order for 6 cities with a total of 255 electric bus which makes to 62% of the total buses order.