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Home-grown commercial vehicle makers Tata Motors and Ashok Leyland (AL) are gaining strong sales momentum in Asian and African markets.
Cost-conscious markets in Asia and Africa favour low-budget vehicles as they focus on basic reliability than features. Also, emission norms in these markets are equivalent of BS-III or earlier. These factors suit Indian companies, which are aggressively ramping up their presence. Binaifer F Jehani, Director, Industry & Customised Research, Crisil Research, pointed out that such features make a perfect fit for Indian companies’ to target such markets using the expertise they gain in the domestic market.
Growing volumesIn the last two years, CV exports have been clocking more than one lakh units per annum. The interesting feature is the growing share of big trucks and buses (medium and heavy duty).
Three years ago, export volume of medium and heavy duty vehicles was little less than a third of overall CV exports. But, its share grew to 40 per cent in total CV exports in 2016-17.
In 2016-17, Tata Motors exported close to 60,000 units, its highest ever number. Light vehicles accounted for about 60 per cent, while the remaining were medium and heavy vehicles. The company sells its trucks and buses in about 45 countries. Its targeting a CAGR of 15 per cent in exports over the next four years.
Hinduja flagship Ashok Leyland grew medium and heavy truck volumes to 6,102 units from 4,816 units in 2015-16. It also exported 4,877 buses during the last fiscal.
Anuj Kathuria, President – Global Trucks, Ashok Leyland, said that the company saw huge growth opportunities in East Asia, West Asiast and African markets. AL aims to sell one vehicle outside India for every two vehicles it sells in the domestic market. Now, about 12-14 per cent of the total sales are outside the country.
Both Tata and AL are setting up assembly units as well as distribution infrastructure in some countries. Also, both companies are likely to resort to exports of the unsold BS-III inventory which can no longer be sold in India after the Supreme Court’s ban on registration of BS-III vehicles from April 1 in India.
“Strong presence in the export markets are expected to save the Indian companies from incurring additional costs in refurbishing the BS-III vehicles into BS-IV,” felt Jehani.
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