Tata Motors reclaims top slot in LCV segment from M&M for two-month period

Tata Motors, which lost its pole position in the light commercial vehicle segment to Mahindra & Mahindra (M&M) in the first eight months of the fiscal year, has reclaimed its place over the past two months. The company sold more LCVs than its nearest competitor in December 2015 and January 2016.

On a cumulative basis, however, M&M remains the segment leader for the April-January period of the ongoing financial year, data from the Society of Indian Automobile Manufacturers (Siam) shows.

Tata Motors has been a leader in the LCV segment for years. Its LCV segment is led by Tata Ace, popularly known as chhota hathi (baby elephant). Launched in 2005, Tata Motors has sold about 1.5 million units of the Ace so far.“You have to look at longer periods of growth or decline in this segment. Somebody was stronger in pick-up vehicles. Our Ace had seen a drop and that was hurting us. Now it has started recovering. Ace Mega is counted as a pick-up and doing well. I am confident that this will only get better," Ravindra Pisharody, executive director (commercial vehicles) at Tata Motors told Business Standard.

Tata had sold almost 14,000 more LCVs than M&M in FY15 and about 50,000 more units in FY14. A decline in demand due to slowing economy and defaults in financed vehicles had impacted LCV demand. M&M, which launched products like Jeeto, a mini truck in June last year and Supro Maxitruck passenger LCV in October, succeeded in expanding share even as the market was declining. Tata Motors was not ready with a product line up and M&M managed to take away the share. However, Tata launched the Ace Mega, a small pick-up with rated payload of 1 tonne in August last year and has seen the Ace portfolio grow since then.

M&M had sold 14,325 units in November last year against Tata’s 11,865 units. However, in December M&M’s sale of 11,876 units was lower to Tata’s 13,108 units. Similarly, the January sale of 13,711 units was marginally lower to Tata’s 13,718 units. During the April-January period, however, M&M leads by a significant gap. It sold 130,128 units against Tata’s 116,875 units. Pravin Shah, President & Chief Executive (Automotive) at M&M said recently the company will continue to launch new products and upgrade the existing offering as per customer’s evolving needs. “A boom in e-commerce, retail and increase in urbanisation coupled with easy finance options will improve the demand for LCVs," he had told Business Standard.

The LCV market is significant with a size of 382,206 units in FY15. These small trucks are used for intra-city transport of goods. By comparison, the medium and heavy commercial vehicles find use in inter-city movement of goods. The fight for a greater share in the LCV space which has just started growing after a long phase of decline is set to pick up. LCV is a highly price sensitive segment since buyers, mostly individuals, need to make a business out of it. Bulk of sales happen through financing and financing activity had declined owing to a number of defaults in recent times due to a subdued economy. A boom in e-commerce, retail and increase in urbanisation coupled with easy finance options will improve the demand for LCVs.