CV industry can make a big comeback in 2017: Tata Motors

Malini BhuptaMoneycontrolThe year 2016 may have ended on a bad note for the commercial vehicle industry, but the New Year may not be that bad. Tata Motors believes there are multiple triggers in place for commercial vehicle sales to pick up. In fact, early signs of this trend were visible in the last few days of December itself. Said Ravi Pisharody, Executive Director, Commercial Vehicles, Tata Motors, “Last year was not great for commercial vehicles; so the base is low and there is a strong reason for CV sales to come back in 2017.”Falling interest rates could prove to be a trigger, too. After the initial shock of demonetisation, Tata Motors said that lenders are also coming back with their willingness to lend. However, along with lower interest rates, lower down-payment would also help.Between June and September, commercial vehicle sales slowed surprisingly and the reason for that was the expectation that it would be advantageous to buy after GST was rolled out as the rate was expected to be 18 percent. But buyers are now coming back to buy as GST rollout is unlikely to result in a major benefit.  Given that the postponement is not happening any longer, Tata Motors also expects the demand to rebound for its light commercial vehicles (including pick-ups), medium and heavy commercial vehicles and buses.In December, commercial vehicle sales for Tata Motors fell by 9 percent year-on-year to 24,998 units. The worst hit was the sale of long-haul cargo segment while tippers and buses posted growth as mining and construction activity has picked up.Another trigger that automakers like Tata Motors are banking on is the enforcement of BS IV norms from April 2017, which will lead to higher replacement demand. Analysts believe that January and February are crucial months for the industry as it will determine the pace of recovery in sales, following November 8 move of the government to invalidate currency notes of high denomination.Tata Motors is prepared for a tough fight across segments in the commercial vehicle space, as competitive intensity remains very high. The company introduced the Tata Zenon Yodha range of pick-ups on Tuesday and has appointed actor Akshay Kumar as the brand ambassador for the CV segment. The pick-up is optimised for higher payload and weighs 1250 kg. The pick-up comes in several variants including BS III and BS IV, which would be priced  at Rs 6,05,000 and Rs 6,19,000, respectively.