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Last Updated : Jan 31, 2018 06:47 PM IST | Source:

EXCLUSIVE: Tata Motors bags Rs 600 crore truck supply order

At the overall level, Tata Motors ended December with a market share of 44.5 percent in the commercial vehicle market, while Ashok Leyland commanded a share of 20 percent.

Swaraj Baggonkar @swarajsb
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Tata Motors, India's largest commercial vehicle maker, has bagged an order for supply of 3,000 trucks worth Rs 600 crore from logistics company Rivigo.

"The order is for 3 axel truck which we bagged recently," said Girish Wagh, head, commercial vehicle business unit, Tata Motors, in an interaction with Moneycontrol.

The announcement comes a week after rival Ashok Leyland said it had bagged an order for supplying 1,200 trucks for Rs 350 crore to one of the biggest transport and logistics companies in the country -- VRL. VRL is one of the oldest patrons of Ashok Leyland trucks and buses.

Wagh also said that the company is working towards de-bottlenecking manufacturing operations at its three plants - Pune, Jamshedpur, and Lucknow - where it is running at 100 percent capacity utilisation.

The last time the company witnessed full capacity utilisation was in March last year, which is when it scaled up production of Bharat Stage 3 products before the onset of Bharat Stage 4 norm from April 1, 2017.

"We have witnessed some supply related constraints for our medium and heavy commercial vehicles (MHCV) because of which we saw a decline of 2.3 percent in market share in that segment by end of December. But we have started the process of de-bottlenecking manufacturing processes which will help us in increasing production," added Wagh.

At the overall level, Tata Motors ended December with a market share of 44.5 percent in the commercial vehicle market, while Ashok Leyland commanded a share of 20 percent by end of December.

In the MHCV segment, Tata Motors enjoys a share if 51.7 percent. Till the end of last quarter, the company had completed launches of more than 35 products. By the end of the current quarter, a further 20 products will be launched.

Tata Motors has been under fire from investors for the past several quarters for losing its iron-clad grip over the commercial vehicle market. Rivals such as Ashok Leyland, VE Commercial Vehicles, Mahindra & Mahindra and Daimler India have snatched market share from the company following numerous launches and aggressive marketing techniques.

But Tata Motors has vowed to regain the share before end of next financial year and bring it back to the 50 percent plus range, which it had operated at historically.

The company will end the year with Rs 1,500 crore spent on product development. According to Wagh, investments will rise further in the next two years, which is when it will have to incur Bharat Stage 6-related product development expenses.

Through a strict cost reduction programme, Tata Motors will end the year with a saving of more than Rs 1,000 crore, which will help it witness an overall improvement in margins at the standalone level, despite a steady rise in commodity costs.

The savings come on the back of discounts given on trucks and buses, which have surprisingly remained rigidly high and become a regular feature in business operations, Wagh said.

Two new engines, both of which are Bharat Stage 6 compliant, will be showcased by the company at the Auto Expo. Tata Motors has developed both these engines in-house, having spent around Rs 300 crore on the development.
First Published on Jan 31, 2018 03:08 pm
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