Commercial vehicle market leader Tata Motors is bullish on demand returning to the CV sector in the second half of this fiscal. With the Covid-19 pandemic ebbing, 100 crore citizens vaccinated and nearly all sectors opening up and key CV industry growth drivers like infrastructure and mining and e-commerce among others showing strong demand, things are only set to get better.
According to Girish Wagh, Executive Director, Tata Motors, the CV industry is likely to see strong revival for in the second half of FY2022 (October 2021-March 2022). His confidence stems from the improved results India CV Inc has recorded in the first half of FY2022.
In the April-September 2021 period, 272,051 CVs were sold in the domestic market, up 65% YoY (H1 FY2020: 165,169) albeit this was on a low year-ago Covid-impacted sales. M&HCVs, which are the high-margin products for OEMs, sold a total of 82,637 units, up 185% (H1 FY2020: 28,962), with demand for passenger-transporting buses growing 89% to 63,223 units, and 24% for good carriers (32,198 units).
Thanks to the boom in e-commerce and last-mile transportation, there is also growing demand for small CVs. In H1 FY2022, the LCV segment clocked total sales of 189,414 units, up 39% YoY (H1 FY2020: 136,207 units). Of this, an overwhelming 95% – 179,929 units – comprised cargo carriers. Passenger carrying LCV sales were 9,485 units, up 105%, which indicates people movement is back in the country.
21 for 2021 and beyond
In line with this optimistic forecast and to benefit from demand revival, the company today unveiled and launched 21 new commercial vehicles and variants. In the Medium & Heavy Commercial Vehicles (M&HCV) category, Tata Motors rolled out seven new vehicles. Likewise, five new vehicles in intermediate and light commercial vehicles (ILCV & LCV) have been unveiled for e-commerce servicing and are designed for better manoeuverability and faster turnaround, the company said. “We have been talking to customers about electrification of last-mile connectivity vehicles. It is happening across the range,” said Wagh during the virtual launch of the vehicles. Thirdly, in the small commercial vehicle and pickup segment, it rolled out four new vehicles and five passenger-carrying commercial vehicles, including one for luxurious inter-city travelling.
Tata Motors is also exploring export market demand for these new CVs, which have a number of new features and attributes. “It is being done in a modular manner,” said Wagh.
Commenting on the current on-ground market situation, Wagh said mobility is still some way away from achieving pre-Covid-19 levels; bus travel and in turn demand was the worst hit. With inter-city travel picking up, Tata Motors has launched India's first 13.5m bus for luxurious inter-city travel. As regards demand from the school bus segment, Wagh hinted at getting inquiries in recent months, as school and educational institutes are readying to return to off-line teaching mode. Also, M&HCV replacement demand is likely to revive as many truck owners had earlier postponed their purchase decisions in view of weak economic scenarios and even due to a wait-and-watch strategy with regard to BS VI transition.
Tata's competition too revs up
With the CV market leader kicking off a strong new product assault, expect the competition to also have taken cognisance of the return of demand. In fact, that’s already happening.
On October 11, Ashok Leyland launched the upgraded Ecomet Star ICV, which will cater to the 11- to 16-tonne GVW segment. The Ecomet platform supports multiple applications such as e-commerce, parcel and courier, agri-perishables, poultry, white goods, FMCG, auto parts and reefer, amongst others. End-August saw Ashok Leyland launch the torquey AVTR 4825 tipper for construction, mining duties. Likewise, in September, Volvo Trucks India, now a division of VE Commercial Vehicles (VECV), launched six heavy-duty trucks under the FM and FMX range in India. And a month earlier, Volvo Buses India launched a 13.5-metre 4x2 coach..
Clearly, with the India on the move and the wheels of the economy turning faster than they did in the past 18-odd months, the CV industry has much to look forward to.