New Delhi: Tata Motors plans to boost its small truck sales by expanding its presence in pickups and alternative fuel segments.
The second largest company in the SCV (small commercial vehicle) space is making this move to protect its market share amid fierce competition from segment leader Mahindra & Mahindra (M&M) and emerging player Ashok Leyland. SCV segment include pickups and mini trucks of less than 3.5 tonne GVW (gross vehicle weight).
The top two market players in this segment, M&M and Tata Motors, witnessed a neck and neck contest with 40.3% and 39% market share in FY22, as per SIAM data.
According to Tata Motors Executive Director Girish Wagh, the current size of the SCV market stands at 40,000 – 45,000 vehicles a month (about 4.8 lakh -5.4 lakh annually). “Increasing consumption, booming e-commerce and rise of hub-and-spoke models are propelling the growth in the SCV segment. This will continue to grow from higher single digit to lower double digit in the coming years,” Wagh told ETAuto.
The current SCV portfolio of Tata Motors addresses the requirements in the first and last-mile transportation segment through a wide range of about 10-15 products from three families Ace, Intra and Yodha. On its part, the company is planning to achieve upto 45% market share in SCVs in the short term with over 25% of this pie share coming from alternate fuel.
Amid high demand from e-commerce businesses and need for affordable last-mile cargo and logistic solutions, each player is attempting to increase sales through roll-out of new products or expansion of market coverage.
Tata Motors on Monday launched India’s first bi-fuel pickup vehicle Intra V2.0 with a 1-ton payload, alongside launching two other products in the small commercial vehicle (SCV) segment.
“CNG penetration in our small trucks had crossed 25% six months ago when the CNG and diesel price arbitrage was almost 40%-50%. With the gradual increase in CNG price, it has come down to 15%-17%. I think the transition to net zero emission will happen via alternative fuels which also ensure improved fuel economy as compared to conventional fuels. With our recent introduction of CNG in the Intra range we do see a regaining 20% market share in small trucks,” Wagh added.
Pickup makes an impact
In India, the SCV market is majorly propelled by the 2tonne – 3.5 tonne segment, known as pickup trucks in industry parlance, accounting for a market share of 60%, in volume terms, in FY22. With an average monthly sales of about 28,000 – 30,000 units, the prime factor determining the growth of the segment is its ability to carry heavier loads for longer distances.
With products like Super Ace and Intra, Tata Motors sold 60,057 units in the fiscal for a market share of about 24%. M&M is the clear leader with 55% market share in the category, thanks to its popular Bolero range of pickups. The average monthly sales for the pickup were 10,000-12,000 units a month and a total of 138,643 units during FY22.
As per Vinay Pathak, Vice President, Product Line – SCV & PU, Tata Motors, customers such as operators, businessmen and traders, now seek extra space in cargo and payload and therefore the company is further expanding this category with multiple product offerings.
Unlike other segments, pickups are extensively used in agriculture and ferrying agricultural produce in rural and semi-urban areas and these have not been affected much by pandemic induced slowdown. Each of our latest pickups offer the lowest total cost of ownership in their category to enable our customers to earn maximum profits. This segment has huge potential for growth and, therefore, we are strongly focused in this space,” he added.
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