Tata to rev up small cargo space

Even as its medium and heavy duty trucks are facing competitive pressure, Tata Motors is doing better in its small commercial vehicle (SCV) business.

The market share of Tata in 2-3.5 tonne pickup space grew to 20 per cent in the first quarter of this fiscal from 18 per cent a year ago. While Mahindra & Mahindra is the clear leader here, Tata Motors has emerged its closest rival.

The launch of its new Ace XL range is now expected to see the SCV momentum grow. “As the BS IV production ramp up of the new Ace XL range happened in May and June, the volumes have seen a strong upswing subsequently and as a result the SCV and pickups category for us has actually grown by 10 per cent in June,” says Girish Wagh, Head of Commercial Vehicles Business.

According to him, the new Ace XL range has received a great response with the company expecting strong growth in volumes in Q2 and the rest of the year. The three new Ace XL products have been launched to meet the emerging needs of customers in this segment.They come with a longer body of 8.2 feet (from seven feet) and are intended for those seeking larger carrying capacity and power steering.

Likewise, the new Xenon Yodha range of pickups have been doing well. “We have also lined up the introduction of a further set of variants of the Xenon Yodha to complement the existing range in Q2, which will further enhance our offering for our customers,” says Wagh.

Industry analysts are more hopeful about the SCV segment even while the outlook for medium and heavy trucks remains bleak. Sunny Manjani, Consultant – Automotive and Transportation, Frost & Sullivan says there has been an inverse correlation between the two over the last 3-4 years with LCV sales going strong and expected to continue in the coming quarters.

Meanwhile, there has been a shift in customer preference for higher payload vehicles (to pickups from mini-trucks). “Although the sub-one tonne segment is declining with reference to pickups, it is still the most preferred option in Tier 2 and Tier 3 cities as well as three-wheeler customers who want to switch,” says Manjani.

However, the bigger task for Tata Motors is to put the mojo back into its medium and heavy commercial vehicle business. Ashok Leyland has been on overdrive in this space and has grabbed a sizable market share. And even while it is still a No 2, the gap has narrowed down. As a result, Tatas is giving top priority to reviving its prospects here even while it will have to deal with the additional challenges of BS VI and the reality of a pricier regime.

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