Tata Motors to gain from new bus code

The government's desire for greater safety in its buses will spell good fortune for Tata Motors. Already an established supplier of buses to government utilities, the company says the new bus body code will boost revenues from this business significantly. Buses like these, which roll out of Tata Motors’ plants across the country, make up half of the 8,000-10,000 buses ordered every year by various central and state government authorities. The company is gearing up for a bigger slice of the pie.Traditionally, Tata Motors has supplied chassis for buses, as state governments opt for bus bodies from cheaper sources. But with the new bus body code demanding that bodies come from accredited manufacturers, many smaller players could soon be sidelined, leaving Tata Motors to sweep in for bigger orders.Vernon Noronha, VP - Defence and Government Business, Tata Motors says: “The market share will improve because people will now be forced to go for better bodies, newer bodies, meeting better standards of safety. So we would gain market share primarily because we have, apart from Marcopolo, we also have ACGL Automotive Corporation in Goa as one of our authorised body builders.”However, Noronha says the size of the market is not likely to get bigger. Though more orders for fully-built buses would mean higher revenues.Noronha adds: “We are surely confident that we will get more share in the business. Apart from more share in numbers, revenue share will increase because we'll sell much more fully built vehicles rather than chassis.”To further increase revenue inflows, the company is looking beyond shoring up its own capacity. It is working with bus-body makers affiliated with it to improve their safety standards and conform to the new code.