Tata Motors’ Jamshedpur plant rolls out its 2 millionth truck amidst tough times

Jamshedpur, February 20, 2013: Tata Motors’ Jamshedpur plant, which manufactures the company’s entire range of medium and heavy commercial vehicles, both for civilian and defence applications, rolled out its two millionth truck, a Prima 2528 K, yesterday. Commenting on the milestone achievement, Karl Slym, managing director, Tata Motors, said: “We are proud that the mother plant of the company, from where our operations started, has released its two millionth truck. We have modernised the plant through the years, which today produces our most technologically rich and high-performing civilian and defence products, catering to customers across the world.”

The Jamshedpur plant manufactures over 200 truck variants, ranging from multi-axle trucks, tractor-trailers, tippers, mixers and special application vehicles. Besides India, these vehicles are also sold in South Africa, Russia, Myanmar, the SAARC region and the Middle East. The Jamshedpur facility was Tata Motors’ first plant, set up in 1945, to manufacture steam locomotives. It led the company’s foray into commercial vehicles in 1954. It has been modernised through the decades, particularly in the last 10 years. The plant today houses a Design and Engineering Centre which is responsible for the conceptualisation and integration of Tata Motors’ current and future truck range.

Tackling tough times The two-millionth truck rollout though comes in the midst of tough times for the CV industry and the company. The ongoing market slowdown has hit CV manufacturers hard. Sales have fallen for the 11th month in a row, with OEMs facing the brunt of low demand and delayed purchase of new vehicles due to high interest rates and weak demand for freight transportation. Closure of the mining industry in key states has also badly affected sales of models catering specifically to that sector. Tata Motors, which currently has a 56 percent overall CV market share, saw its January 2013 overall sales grow six percent to 42,571 units. But that growth is essentially due to robust sales of LCVs, up 24 percent, led by the Ace range (January 2013: 33,849) a 55 percent increase over the 21,831 units sold in January 2012. Tata’s M&HCV sales, however, suffered a steep 52 percent drop in January 2013, selling 8,722 units (Janauray 2012: 18,338 units). Its cumulative CV sales in the domestic market for the current fiscal are 432,941 (LCVs: 315,041/ M&HCVs: 117,900), up 15.26 percent (April 2011-January 2012: 375,632). But the 117,900 M&HCV sales are a sharp 29 percent decline YoY.

This slackening demand for its M&HCVs has led to the company cutting down on production substantially and also reviewing its expansion plans. “We are currently utilising 50-70 percent of the production capacity in the Jamshedpur and Lucknow plants together,” managing director Karl Slym told Autocar Professional yesterday. These two plants have a combined capacity of 234,000 units per annum (Jamshedpur: 144,000/Lucknow: 90,000).

Speaking to Autocar Professional, Ravi Pisharody, head of the CV business unit, said: “The current downturn is longer than the one in 2008. No green shoots are visible in the economy.” Speaking at the media meet, Karl Slymn, managing director, Tata Motors, said the government needs to be seized of the huge decline in sales of M&HCVs, which are the real growth driver of the Indian economy. If economic growth is to revive, the government needs to get its act together on its infrastructure spend and the mining sector.

Meanwhile, the company is investing effort and monies in R&D and its new product development programme. Slym said, “A little over half of the Rs 3,000 crore R&D budget for 2012-13 has been earmarked for the CV business,” a remark that is clearly reflective of the importance the CV segment has for the company.

SUMANTRA BAROOAH

Photographs: Tata Motors’ Karl Slym, with Ravi Pisharody, executive director, CVBU at the roll-out ceremony of the 2 millionth vehicle from the Jamshedpur plant, and the Jamshedpur assembly line in the 1950s.