Unless the government starts investing in infrastructure projects and mines start operating at their previous levels,Tata Motors feels that the subdued domestic demand for medium/heavy commercial vehicles (MCV/HCV) would continue.
At Friday’s inauguration of Rajeev Associates heat treatment plant at the Adityapur industrial area,FE asked what the current demand situation of commercial vehicles is and how the first quarter has been so far for the company.
Tata Motors local plant head A B Lall said,The volumes are not there,we are working at around 50%-55% level. Up until the first quarter of FY14,there has been nothing very positive. Unless the government steps in to invest in infrastructure projects and the mines start operating,commercial vehicles demand would remain affected.
If mining activity picked up in the country,demand for commercial vehicles would pick up,he added.
Lall said the local plant which couple of years ago had seen production of around 12,000 medium & heavy commercial vehicles a month was currently turning out around 8,000-8,500 chassis a month. The companys MCV/HCV plant here had achieved the rare distinction of turning out more than one lakh commercial vehicles in a year in 2010-11.
The local plants production target for June 2014 has been kept between 8,000 and 8,500 units,which,Lall said,was similar to that it had achieved in May. The plant head said despite the first quarter being not so good volume-wise,the auto major had yet maintained its leadership in terms of market share of 65% in the commercial vehicles segment.
Tata Motors produces its full range of MCVs/HCVs at its plant here on a large scale with the overall annual plant capacity being 1.50 lakh units,including 55,000 units of its Prima range of world trucks.
Its only other MCV/HCV unit is at Lucknow,and has a capacity to produce around 4,000-5,000 HCVs (mainly bus chassis) a month,the annual capacity being around 70,000 units – stretchable to one lakh units with some additional balancing investment.
As to how he saw the coming quarter (July-September),Lall said,Nothing is visible,we are looking forward to it showing improvement.
According to the plant head,lowering of interest rates by RBI and in turn by banks would definitely help see the demand go up.
He,however,added,Im sure the government has its own compulsions.
Asked whether customers were preferring the companys low-priced old HCVs compared to its new generation Prima range models which had a substantially higher price tag,Lall said,Different customers need different products,it depends on the application for which one is buying. There are people who want Prima for deep mining operations,there are people who are happy with earlier models,The operator buys whatever makes (economic) sense to him.