Tatas expect truck demand to be robust for next 2 years

Tata Motors expects demand for trucks to remain strong for the next two years on the back of the improving performance of core sectors, a pick up in infrastructure projects and implementation of BSVI emission norms in 2020, said Girish Wagh, head of truck and business. Truck sales in India — a proxy for economic activity, has been on a rise in eight out of nine months of this fiscal.

Tata Motors’ heavy-duty truck factories in Jamshedpur, Pune and Lucknow, which are nearing its peak capacity, are set to hit the optimum level by March end, said Wagh, pointing out that while it is normal for truck plants to run at peak capacity in the last quarter of the fiscal, it’s unusual for the second and third quarter to be so busy. Tata Motors is in the process of de-bottlenecking its plants to step up production at the existing units.

To be able to ride the strong demand, the truck market leader plans to unveil 15 new commercial vehicles at the upcoming Delhi Auto Expo. This will include an electric bus and small and heavy duty trucks based on a completely new platform.

“We see lot of green shoots at the ground level,” said Wagh, referring to recent statistics on core sectors that include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity, and the purchasing manager’s index.

“Growth in all these sectors will fuel demand for heavy-duty trucks. The commercial vehicle industry, despite a poor first quarter, has advanced by 16 per cent in the first nine months over the year-ago period. Within that, the growth in the medium and heavy commercial vehicle (MHCV) segment grew 18 per cent,” Wagh said.

He expects the upswing to continue for the next two years. Tata Motors’ truck segment, however, has not been able to fully capitalise on the positive macro-economic parameters owing to supply related constraints.