Tata sees CNG sales rising in LCV, SCV portfolio

The company’s marketshare performance has been broad based across all segments as a result of several initiatives including a wider service and sales network and value-added measures.

By Shahkar Abidi calendar 06 May 2022 Views icon13197 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Tata sees CNG sales rising in LCV, SCV portfolio

Tata Motors has seen a notable increase in CNG sales for its intermediate, LCV and SCV vehicle portfolios in fiscal 2022 as compared to fiscal 2021, says executive director, Tata Motors, Girish Wagh.

In an e-mail interview to Autocar Professional, Wagh said the trends suggest a shift in CV buying as far as fuel mix preference goes from diesel to CNG-powered vehicles. He attributed this to a trio of factors. Firstly, the increasing diesel prices have increased the total cost of operations for fleet owners thereby impacting overall profitability compared to CNG-powered vehicles. Secondly, the initial price difference between similar diesel-powered and CNG-powered vehicles has reduced after the transition to BS6 emission norms. Lastly, CNG is now more widely available in metros, tier 2 and tier 3 cities thus taking away the range anxiety to a large extent and boosting demand. Besides the savings on operational costs, CNG vehicles have also resulted in cost benefits, with exemptions on green tax/cess in numerous states and cities across the country, Wagh emphasised.  With a strong portfolio of CNG vehicles in the SCV, I&LCV and the bus range, the company has been able to leverage this.

On other fronts, Wagh said commodity price increase, especially that of steel and precious metals, has been a challenge and stress on profitability. The main cause has been the current geopolitical tensions emerging out of the Ukraine-Russia war and consequent supply chain snarls that have impacted vehicle production across the auto sector. As he puts it, "as a company, we continue to strive to minimise the increase in vehicle price for our customers, by driving cost reduction measures in direct material and at various stages of manufacturing. Simultaneously, we are also pursuing consistent efforts to deliver the lowest total cost of ownership for our customers."

Russia currently accounts for around 40 percent global production share of rare earth metal, palladium, which is an important element in the manufacturing of semiconductors. In addition, Ukraine is also amongst the largest producers of neon gas which is another important ingredient in the making of semiconductors. As a result, the impact of supply chain disruptions of these two constituents continues to have a cascading effect on the automotive and other sectors. 

Wagh said, "We are cautiously optimistic about overall demand and keeping a close watch on geopolitical events, oil price inflation and semiconductor shortage." He said he hoped that demand would be sustained further on the back of increased economic activities and spending by Central and State governments.

India’s 2022 union budget has set an ambitious target of expanding the national highway network by 25,000 km during FY23. Also, other infrastructure measures include increasing the penetration har ghar jal yojna- a scheme for providing drinking water to every home, the PM GatiShakti Masterplan plan for Expressways amongst others are expected to boost demand for CVs.

Tata Motors recorded a 33 percent growth during last fiscal which works out to a marketshare gain of 2.5 percent in comparison to previous year as gradual economic recovery post-pandemic has led to uptick in demand. The company's market share currently stands at 44.9 percent. 

Wagh said the improvement in market share has been consistent across all the categories, attributing it to slew of measures undertaken by the company such as aggressive new launches, widening sales and service network, superior product performance of the BS 6 range and a slew of value-added services.

Tata Motors introduced more than 80 new models and variants in FY22 including simultaneous launch of 21 models in October 2021. "The market share performance has been broad based and well spread across all product segments and geographies in the country," said Wagh.

In its M&HCV segment, Tata said the Signa 3118.T, with 12.5-tonne lift axle, has seen “a heartening response from the customers owing to its versatility and unique offerings”. The newly-introduced REPTO range of RMC trucks have been appreciated by customers for its lower operating costs. Other higher selling models include Signa 2825.K, Signa 4835.TK, and Signa 5525.S. Among CNG offerings, models such as the 407g and the 709g in the intermediate and LCV segment have been in demand for the operating cost advantage they offer, the company said. Other models that are doing well include LPT 1512 and LPT 1109g.

In the bus segment, ICV offerings with a GVW of 13.5 tonnes, have been gaining traction and moving volumes from MCV buses, and have been appreciated by the customers for its TCO advantage and lower turnaround time, Tata Motors said. The Tata Magna, India’s first 13.5 metre single-axle bus, has been one of the bestsellers along with the Starbus Ultra and the Winger family.

India’s overall CV industry in fiscal 2022 grew by 27 percent over the previous fiscal with M&HCV and I&LCV clocking 50 percent and 40 percent respectively as compared to the previous year, on the back of increased activity in road construction, mining and improved infrastructure spending. The revival in CV segment should be seen in context of its slowdown which began even before the emergence of Covid19 when new axle load norms, transition to new emission norms in addition to spike in fuel and pandemic related restrictions and supply chain disruptions provided the headwinds, leading to almost double digit increase in prices of the vehicles with demand falling by over 30 in comparison to previous peak of FY19.  The CV volume had fallen sharply by around 29 percent and 21 percent in fiscal 2020 and 2021, respectively. 

Also read
Tata unveils the electric Ace
Tata Motors narrows its consolidated losses in Q4FY22
 

RELATED ARTICLES
Hyundai Motor India begins exporting Exter SUV to South Africa

auther Autocar Pro News Desk calendar23 Sep 2024

The Exter is the eighth made-in-India Hyundai model to be exported to South Africa.

Continental eyes growing demand for safer tyres in India

auther Autocar Pro News Desk calendar21 Sep 2024

With increasing sales of SUVs and luxury cars as well as enhanced consumer awareness about safer vehicles, the German ty...

Honda Activa sales cross 10 million units in South India, last 5 million in 7 years

auther Autocar Pro News Desk calendar17 Sep 2024

While the first five million Activa scooter sales in the southern states and Union territories took 16 years, the next f...