Companies

Commercial vehicle exports set to grow as markets open up after the pandemic

G Balachandar Chennai | Updated on July 02, 2021

Domestic demand remains muted

After two-wheelers and tractors, commercial vehicle exports have started to show a sharp increase and manufacturers are gearing up to accelerate shipments with renewed plans as many geographies open up after Covid-19 restrictions.

Exports of two-wheelers and tractors have been steady in the past few months amid disruption caused by the pandemic on the domestic demand. Now, the commercial vehicle sector is witnessing month-on-month growth in exports.

Strategic clusters

“We have appointed 6-7 large distributors in strategic clusters of Africa and the Middle East in the past 15 months. But due to Covid-19 we couldn’t ship products. Now, we are ready to go. With a wide range of products, we hope to grow in those markets,” Vipin Sondhi, Managing Director & CEO of Ashok Leyland, told BusinessLine.

The distributors are strong big houses in the respective geographies. They are distributors of automobiles or diversified companies. They will have a separate team to sell Ashok Leyland’s products.

The company is better-equipped from an international perspective now as it has a good range of right as well as left hand side drive products.

Overall numbers

In FY21, overall CV exports from India fell 17 per cent at 50,334 units. Only VE Commercial Vehicles and Isuzu Motors reported positive growth at 10 per cent (at 5,025 units) and 186 per cent (3,750 units) respectively. However, Ashok Leyland’s medium and heavy truck exports grew 46 per cent at 2,932 units. It sold 1591 units in Q4FY21 alone.

Tata Motors reported a decline of 32 per cent at 20,000 plus units mainly due to Covid-19 related restrictions impacting economic growth and business sentiment on the demand side, and supply chain challenges impacting the company's ability to fulfil demand.

“Despite a shrinking industry, Tata Motors was actually able to grow market share in key international markets like Bangladesh, Nepal, Middle East, East Africa, Vietnam and Tunisia in FY21. H2 of FY21 saw strong momentum with a growth of 11 per cent above H2 of FY20. In the current fiscal, exports have grown over a similar period in FY21, what’s more noteworthy is that they are also 50 per cent higher than a similar period in FY20,” Girish Wagh, President, Commercial Vehicle Business Unit, Tata Motors, told this newspaper.

“We plan to build upon the encouraging landscape that we see in Africa and ASEAN markets with strategic introduction of new products and entry into new segments. International business continues to remain an important pillar in the overall Tata Motors CV strategy, and we are committed to expanding our footprint globally,” he added.

Positive growth

With positive growth in FY21, VECV has moved up to No.2 position in CV exports in the 5-40-tonne trucks segment. The company says its exports are gaining momentum. During Q1 of this fiscal, VECV exported 1,670 units of trucks and buses as compared to 577 units in the year-ago period. While it supplies India-built products to many markets, it has also initiated pilot supplies to new markets in Africa and Latin America.

Published on July 02, 2021

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