Tata Motors sees 24% surge in MHCV wholesales in Q2FY24
The company is expanding its electric bus production to meet growing demand.
Mumbai-based automotive giant Tata Motors reported a significant 24% increase in wholesale of medium- and heavy commercial vehicles (MHCV) during the second quarter of fiscal year 2023. The surge in sales can be attributed to a robust infrastructure push by the government, replacement demand, growth in core sectors, and a sustained spike in the e-commerce industry.
Moreover, Tata Motors has strategically expanded its manufacturing capacity for electric buses to cater to orders from various state transport units (STUs) participating in CESL's Grand Challenge. This move comes after the company, along with its major peers, cautiously approached bidding for government tenders on electric buses due to concerns regarding the financial viability of the STUs' failure to fulfil their payment obligations.
To address this issue, the Indian government revealed plans to establish a Rs 3100 crore payment security mechanism (PSM) aimed at supporting the introduction of 20,000 electric buses within the next 12–24 months. The implementation of this mechanism seeks to offer reassurance to electric bus original equipment manufacturers (OEMs) and meet the requirements of the upcoming wave of green mobility. Successful implementation of this initiative will undoubtedly accelerate OEMs' penetration into mass markets, particularly in Tier 2 and Tier 3 cities where state-run buses serve as the primary mode of daily transportation.
Girish Wagh, Executive Director of Tata Motors, expressed optimism about the future, citing the government's continued infrastructure push and improving consumption trends as positive indicators for the commercial vehicle (CV) industry.
"Looking ahead, continuing infrastructure thrust by the government and improving consumption auger well for the CV industry, while rural demand remains to be a key monitorable, as monsoon has been below average," Wagh said. He further attributed this growth to the company's upgraded BS6 phase II product range, which continues to garner traction due to its lower total cost of ownership, efficient powertrains, and enhanced value additions.
Overall, Tata Motors' domestic sales of commercial vehicles in the second quarter of FY24 reached 99,178 units, representing a 6% increase compared to the same period in FY23.
For the month of September 2023, the company's domestic sales of MH&ICV were 18,577 units versus 14,062 units in September 2022. In Q2 FY24, it was 45,174 units, compared to 38,143 units in Q2 FY23.
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