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Tata Motors reverses decline in CV market share

10/04/2018 | Author: Autoguide | 0 Comments Back To Home   < Previous News   |   Next news >

Tata Motors

Tata Motors, the country’s biggest commercial vehicle manufacturer, reversed its declining market share in the CV segment with increased share in light commercial vehicles (LCV) and maintaining the share in medium and heavy commercial vehicles (M&HCV) or trucks. The new momentum has helped the company turn its domestic business profitable during the October-December quarter after five successive loss-making quarters.
Tata Motors reported a standalone profit of Rs 1.83 billion in third quarter of FY18 against losses of Rs 10.46 billion in the corresponding quarter of the previous year. Standalone revenues (domestic business) for the quarter rose 59 per cent to Rs 161 billion. The Ebitda (earnings before interest, depreciation, taxation, and amortisation) of the standalone business margin improved 750 basis points to nine per cent during the quarter.
Commenting on it, Mr Girish Wagh, President, Commercial Vehicle Business Unit, Tata Motors, said, “The CV business was a key contributor to the turnaround. There were tailwinds in the market and that certainly helped. But we have undertaken a very aggressive cost reduction programme. That has also started giving us dividends. We had estimated a four-digit reduction in costs (at least Rs 10 billion) during the year and a significant portion of the gains have come.”
The company’s M&HCV segment clocked a growth of 55 per cent in domestic sales to 45,895 units in the third quarter, according to SIAM. The LCV segment (for goods) has also expanded by 42 per cent to 51,094 units in the domestic market. CV business accounts for over three-fourths of the domestic revenue of the company.
But this business had been losing market share in the last three-four years. For instance, the share in M&HCVs came down to 51 per cent in FY17 from over 58 per cent in FY14. The share in light commercial vehicle (goods) came down from 49 to 39 per cent in the same period. In the LCV (passenger) segment too, the share shrunk from 39 per cent to 30 per cent. 
The company’s market share in FY 17-18, however, has been stable while seeing an improvement in the LCV segment. Against a share of 51.2 per cent in M&HCV during FY17, the April-December share of FY18 has been 51.75 per cent. Similarly, the share of LCV (Goods) has improved from 39.20 per cent to 41 per cent.
Mr Wagh further said, “The decline has been arrested to some extent. But we could have done better had we not faced some supply constraints. There have been shortages in supply of engines and sheet material, as our production is continuously increasing. New products have come in and we have filled the white spaces,” he added. 

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