Tata Motors eyes small town boost to grow SCV sales
Tata Motors plans to boost its small truck sales by expanding to more states and tapping small towns with populations less than 50,000.
The second largest company in the SCV (small commercial vehicle) space aims to protect its market share amid fierce competition from segment leader Mahindra & Mahindra (M&M) and emerging player Ashok Leyland.
The SCV category, which makes up a significant portion of the LCV goods segment, is presently affected by a lack of cargo and a constrained lending environment amid rising delinquencies. SCV include pick-ups and mini trucks of less than 3.5 tonne GVW (gross vehicle weight).
Amid the subdued market conditions, every player is attempting to increase sales through roll-out of new products or expansion of market coverage.
M & M has managed to achieve positive growth in the mini-truck segment (Tata Ace catgory) with its new product Jeeto. However, Tata continues to be the leader in this category with a market share of about 72%, followed by M & M (23%).
In the pick-up segment, M & M is the leader with about 70% share followed by Ashok Leyland (15%) and Tata Motors (13%). During the first quarter, Ashok Leyland had overtaken Tata Motors in pick-up sales.
Apart from new product introductions, Tata Motors is also looking at tapping the potential in small towns. Backed by strong campaigns and expansion of its network, the automaker aims to double the sales contribution from small towns over the next 3-5 years.
R.Ramakrishnan, Senior Vice President – Commercial Vehicle Business Unit Tata Motors said that “About 20% of the total retail sales come from these locations for us. It has huge potential for growth and, therefore, we are strongly focused on these areas.”