Tata Motors, the largest commercial vehicle manufacturer in the country, expects the recent buoyancy in demand in the segment to continue for some more time. It anticipates double-digit growth in sales in 2010-11.
Addressing a press conference at the Auto Expo here on Wednesday, Mr Ravi Pisharody, President – Commercial Vehicles Business Unit, said that “clearly we had a very robust period in the last few months”. Apart from strong economic fundamentals, the demand had been helped by the availability of finance.
He said finance was available from February-March and the light commercial vehicle segment responded almost immediately. There was a pending demand for the LCVs, but being driven by entrepreneurs, the segment was waiting for liquidity to return to the market.
The medium and heavy commercial vehicles took a little longer to pick up, but this was more because of macro-economic factors; the manufacturing and infrastructure sectors were yet to pick up.
Mr Pisharody said the manufacturing sector picked up in July-August and investments started flowing into the infrastructure sector, because of which sales in the medium and heavy truck segment were also picking up. “We see that continuing and we expect the commercial vehicle business to be strong over the next 12 months,” said Mr Pisharody.
He expected a bit of an upside in March, with operators buying vehicles just before the new emission norms come into effect from April 1, and sales to slump a little for the next two-three months. However, he was confident that sales would once again pick up in August-September, when the market would be robust again.
Infrastructure projects, the key To a question, Mr Pisharody said the Centre's stimulus package definitely helped as excise duty had come down to eight per cent. “The fundamentals to drive demand are also very strong.” Even if the stimulus were to be withdrawn, there might be a temporary response to that depending on the extent of withdrawal. He did not expect the excise duty to go back to the original levels in one shot.
Mr R. Ramakrishnan, Vice-President – Sales & Marketing (Commercial Vehicles), said the sales growth in medium and heavy commercial vehicles was driven primarily by the movement of cement and steel for the construction sector. Once investments in infrastructure projects picked up, demand for tippers would also increase.
Exports, which declined over the last 12 months, were yet to pick up although there was some growth recently.
Mr Pisharody said Tata Motors had increased vehicle prices by about one per cent effective January in response to the commodity price increase. This increase was not across the board but in specific segments.
Both Mr Pisharody and Mr Ramakrishnan were confident that the company was ready for competition in the CV business, what with the spate of new entrants and new vehicle launches. Tata Motors was working on a range of light trucks, on a new platform, which would be launched in the next year.
The company would continue launching new products or variants. On an average it introduced 15 new vehicles every year and this would continue next year also.
Mr Pisharody said there were no plans to increase capacity at the Pant Nagar plant, from where Tata Motors produced its best-selling small commercial vehicle, Ace, and its passenger variants. The Magic Iris, a four-seater public transportation vehicle, would also be produced at Pant Nagar and the company would look at a cargo version of that at a later date. Once the capacity at Pant Nagar got fully used up, the company would look at an expansion.
Source : http://www.thehindubusinessline.com/2010/01/07/stories/2010010752940200.htm
Addressing a press conference at the Auto Expo here on Wednesday, Mr Ravi Pisharody, President – Commercial Vehicles Business Unit, said that “clearly we had a very robust period in the last few months”. Apart from strong economic fundamentals, the demand had been helped by the availability of finance.
He said finance was available from February-March and the light commercial vehicle segment responded almost immediately. There was a pending demand for the LCVs, but being driven by entrepreneurs, the segment was waiting for liquidity to return to the market.
The medium and heavy commercial vehicles took a little longer to pick up, but this was more because of macro-economic factors; the manufacturing and infrastructure sectors were yet to pick up.
Mr Pisharody said the manufacturing sector picked up in July-August and investments started flowing into the infrastructure sector, because of which sales in the medium and heavy truck segment were also picking up. “We see that continuing and we expect the commercial vehicle business to be strong over the next 12 months,” said Mr Pisharody.
He expected a bit of an upside in March, with operators buying vehicles just before the new emission norms come into effect from April 1, and sales to slump a little for the next two-three months. However, he was confident that sales would once again pick up in August-September, when the market would be robust again.
Infrastructure projects, the key To a question, Mr Pisharody said the Centre's stimulus package definitely helped as excise duty had come down to eight per cent. “The fundamentals to drive demand are also very strong.” Even if the stimulus were to be withdrawn, there might be a temporary response to that depending on the extent of withdrawal. He did not expect the excise duty to go back to the original levels in one shot.
Mr R. Ramakrishnan, Vice-President – Sales & Marketing (Commercial Vehicles), said the sales growth in medium and heavy commercial vehicles was driven primarily by the movement of cement and steel for the construction sector. Once investments in infrastructure projects picked up, demand for tippers would also increase.
Exports, which declined over the last 12 months, were yet to pick up although there was some growth recently.
Mr Pisharody said Tata Motors had increased vehicle prices by about one per cent effective January in response to the commodity price increase. This increase was not across the board but in specific segments.
Both Mr Pisharody and Mr Ramakrishnan were confident that the company was ready for competition in the CV business, what with the spate of new entrants and new vehicle launches. Tata Motors was working on a range of light trucks, on a new platform, which would be launched in the next year.
The company would continue launching new products or variants. On an average it introduced 15 new vehicles every year and this would continue next year also.
Mr Pisharody said there were no plans to increase capacity at the Pant Nagar plant, from where Tata Motors produced its best-selling small commercial vehicle, Ace, and its passenger variants. The Magic Iris, a four-seater public transportation vehicle, would also be produced at Pant Nagar and the company would look at a cargo version of that at a later date. Once the capacity at Pant Nagar got fully used up, the company would look at an expansion.
Source : http://www.thehindubusinessline.com/2010/01/07/stories/2010010752940200.htm
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