Tata Motors rolled out its 100,000th Ace Zip micro truck, the second highest selling variant of the Ace family, at its Dharwad plant this week. On the occasion of the rollout, Ravi Pisharody, Executive Director, Commercial Vehicles, spoke about the challenges ahead.

Do you see an upswing in the growth of commercial vehicles?

Most people have now accepted that the medium and heavy segment, with the cargo category in particular, is a lead indicator for the economy. The decline began in January 2012 on a year-on-year basis but the market has recovered since. We are actually witnessing a good revival now and commercial vehicles will start getting back on track. With the mining sector coming back again, growth will begin happening in 2015-16.

What kind of growth do you then expect?

We have been looking at all types of forecasts which range between 10 and 15 per cent. However, on a conservative estimate, we are looking at 10 per cent growth for the next fiscal across categories.

The Centre has set for itself a target of 7.4 per cent GDP growth but where would this come from?

GDP is published with a lag. India went through a very strong (GDP) period when it touched nine per cent from 2003-04 to FY ‘12. It has now fallen to below five per cent. The Government is talking of a new base but even if one takes into consideration the traditional method, it will be around six per cent. GDP has basically three components: services now at over 50 per cent along with agriculture and manufacturing at 25 per cent each. Two years ago, manufacturing was negative and this year it is about two per cent which means we should see some recovery. Mining is an important component for the CV segment and states like Goa have started giving leases. However, there is a lead time for about six months here.

Do you expect the Centre to start spending?

The Government has a lot of ideas and is serious about them. There is a lot of urgency but obviously the fiscal position also needs to be considered. I will be very surprised if the Government does not start spending on building infrastructure in 2015-16.

Would you then be well placed to make the most of the opportunity?

Yes, we are well placed and things are already looking good with our truck growth in Q3 at 42 per cent. One unique feature of Tata Motors is that we are present across all segments. We have a Prima range along with the multi-axle option as well. The new Ace range has a passenger car like engine capacity of 1.4 litres and speeds of up to 90 km. We have a plethora of products.

Recently, the company spoke of a rights issue where part of the Rs 7,500 crore will go towards at least 100 new products by 2017-18. Could you elaborate?

The money raised from the rights issue will go towards several things. I must also remind you that if one looks at variants etc, we launch 100 products every year. On Ace Zip itself, we have four to five products. Take the JNNURM scheme where, in order to make 4,000 units, we have to make 25 new products. We will, however, invest more on platforms and expect to have 10 to 15 new ones next fiscal. We also expect to spend between 1,200 crore and Rs 1,300 crore on the CV business during that period.

What is the capacity utilisation rate at your plants? Aren’t you also a bit late in entering the luxury segment?

We are working at 50 per cent of capacity right now and in plants like Jamshedpur, it is about 60 per cent. As for the luxury segment it is not a big market in the first place and more a glamour kind of thing. However, we are going to be there soon, say by end-2016.

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