Tata Motors plans to boost its small truck sales by expanding to more states and tapping small towns with populations less than 50,000. The second largest company in the SCV (small commercial vehicle) space aims to protect its market share amid fierce competition from segment leader Mahindra & Mahindra (M&M) and emerging player Ashok Leyland.
The SCV category, which makes up a significant portion of the LCV goods segment, is presently affected by a lack of cargo and a constrained lending environment amid rising delinquencies. SCVs include pick-ups and mini trucks of less than 3.5 tonne GVW (gross vehicle weight).
Amid the subdued market conditions, every player is attempting to increase sales through roll-out of new products or expansion of market coverage. M & M has managed to achieve positive growth in the mini-truck segment (Tata Ace catgory) with its new product Jeeto. However, Tata continues to be the leader in this category with a market share of about 72 per cent, followed by M & M (23 per cent).
In the pick-up segment, M & M is the leader with about 70 per cent share followed by Ashok Leyland (15 per cent) and Tata Motors (13 per cent). During the first quarter, Ashok Leyland had overtaken Tata Motors in pick-up sales.
To counter the increasing competition, Tata Motors has been attempting to regain share in the pick up segment. It rolled out new variants of Tata Ace in the recent months. The move seems to be paying dividends as the company has seen an increase in volumes in the past two months.
Apart from new product introductions, Tata Motors is also looking at tapping the potential in small towns. Backed by strong campaigns and expansion of its network, the automaker aims to double the sales contribution from small towns over the next 3-5 years. “About 20 per cent of the total retail sales come from these locations for us. It has huge potential for growth and, therefore, we are strongly focused on these areas,” R.Ramakrishnan, Senior Vice President – Commercial Vehicle Business Unit Tata Motors, told The Hindu.
