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Pratim Ranjan Bose

Tata Motors, Leyland cut back on tyre orders

Kolkata June 5 Demand for heavy and medium commercial vehicles (H&MCV) may soften further in June and July.

Having reported a downtrend in production and sales in April-May, Tata Motors and Ashok Leyland — controlling over 90 per cent of the market — have substantially lowered their June order for tyres to be fitted onto new vehicles (OE-original equipment) and also indicated a continuation of the trend in July.

"There is seemingly a dormant trend of demand for vehicles. The trend is likely to continue till July," says a Tata Motors communication to a tyre manufacturer.

Sources at tyre manufacturing companies said both the automakers have reduced their OE offtake by 20-25 per cent in April-May and projected a further drop in June. Tyre makers, however, will not be immediately affected, as OE sales for H&MCV constitute roughly 30 per cent of the total.

According to a tyre manufacturer, Tata Motors reduced its offtake by 25 per cent in April-May and has revised it further by almost 40 per cent for June. Ashok Leyland has reduced its offtake by 20 per cent in April-May from the same manufacturer .

Sources at Apollo Tyres — a major player in the truck tyre segment — confirmed a "substantial dip" in OE offtake of truck tyres in June and July. A similar trend was confirmed by sources at Birla Tyres.

When contacted, Ashok Leyland and Tata Motors declined to comment on the market trend in the coming months.

Leyland reported 2 per cent rise in total domestic sales in May but sales of heavy and medium goods vehicles was down by 18 per cent compared to May 2006.

Tata Motors reported 16 per cent drop in heavy and medium commercial vehicles during the first two months of this fiscal.

Meanwhile, tyre dealer sources confirmed pressure on replacement sales too. Indian Foundation for Transport Research and Training (IFTRT), a Delhi-based organisation, reported 6-10 per cent drop in truck rentals on trunk routes during May due to lower cargo offering from manufacturing as well as agriculture sector. Rentals dropped by 5 per cent in April.

Related Stories:
Tata Motors' commercial vehicle sales dip in April

More Stories on : HCV/LCV/Tractors | Outlook | Tyres | Tata Motors Ltd

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