As commercial vehicles crawl, Tata Motors mkt share dips below 50%

A DUBIOUS FIRST From 62% in 2010-11 to 49.7% in 2014-15, slide set off by foreign players such as Volvo, Daimler

NEW DELHI: Battling a protracted slowdown in the domestic commercial vehicle sector, segment leader Tata Motors saw its market share drop to less than 50% for the first time ever in 2014-15.

The steady decline in its share, from 62% in 2010-11 to 49.7% in 2014-15, including a near 5 percentage point drop in the last fiscal alone, has come at the hands of new foreign players, including Daimler Commercial Vehicles and Scania, and new entrants such as Mahindra and Force Motors making their presence felt in an intensely competitive and price-sensitive Indian market. According to credit rating and research firm ICRA, VECV (a joint venture between Volvo & Eicher), Bharat Benz (the Indian unit of Daimler) and M&M together account for 17% of heavy commercial vehicles in the country.

“The composite market share of commercial vehicles is relevant to a company like us as we are the only player present across all segments, while other competitors are focussing on one or few segments,” said Ravi Pisharody, executive director, Tata Motors. “In major segments like heavy trucks, we continue to have a market share in excess of 55%, with over 80% in the next big segment of small commercial vehicles.”

“We are keen to remain market leaders and with many new products lined up in the next few months, we will be able to grow or maintain our strong market share in all segments,” he added.

The commercial vehicle indus- try registered a 2% decline in sales in 2014-15. However, green shoots in the form of double-digit growth in sales of heavy trucks and buses have begun to sprout.

“The medium and heavy truck segment is likely to register a growth of 12-14% in 2015-16, driven by a continuing trend towards replacement of ageing fleet and expectations of pick-up in demand from infrastructure and industrial sectors,” ICRA said. “Light commercial vehicle segment will grow at 4-6% in 2015-16 as the segment’s prospects continue to be influenced by overcapacity issues and constrained financing environment.”

“After nearly two years of decline, we have seen some growth signs in sales of medium and heavy commercial vehicles on what is a very low base,” Pisharody said. “Other segments are yet to show signs of recovery.”