Tata Motors Expects Turnaround In Commercial Vehicle Sales By Second Half Of FY21
A pedestrian walks past a Tata Motors Ltd. showroom in the Ambattur district of Chennai, India. (Photographer: Dhiraj Singh/Bloomberg)

Tata Motors Expects Turnaround In Commercial Vehicle Sales By Second Half Of FY21

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Tata Motors Ltd. expects its commercial vehicle business to remain subdued for the next few months, with a turnaround seen only in the second half of 2020-21.

"My read is that the first half of the next fiscal, particularly in the commercial vehicle segment, is unpredictable," Guenter Butschek, chief executive officer and managing director at Tata Motors, told Press Trust of India.

The company thus aims to go slow in introducing trucks and buses compliant with Bharat Stage-VI emission norms.

"For passenger vehicles, the transition is going to happen in the next few weeks. In the commercial vehicle segment, the situation is slightly different—not because we are running late but due to a different market situation," Butschek said.

The company is "not actively" going to switch to BS-VI in this segment before April 1, 2020, he added. "Our read of the market is there will not be too much of a demand ..our BS-VI play starts on April 1, prior to that it is BS-IV products.”

But Butschek remains positive on the long-term outlook for commercial vehicles as growth in that segment is related to the country's economy, he said. "The government has launched various initiatives. All these factors are going to give us a positive outlook in the second half of the next fiscal.”

According to data from industry body Society of Indian Automobile Manufacturers, commercial vehicle sales fell 14.98 percent year-on-year to 61,907 units in November.

During April-November, commercial vehicle sales declined 22.12 percent to 5,04,080 units as against 6,47,278 units in same period of 2018-19.

In the domestic market, Tata Motors reported 29 percent fall in commercial vehicle sales to 2,17,130 units in April-November 2019-20 compared with 3,05,395 units in the year-ago period.

Butschek said the company has embarked upon a "mission zero" to see that no BS-IV vehicle is left after April 1, 2020.

"By the end of this fiscal, Tata Motors is going to have not one BS-IV vehicle left, neither any material which was initially ordered to manufacture BS-IV vehicles,” he said.

On Tuesday, Tata Motors shares rose 2.94 percent to Rs 180.10 apiece on the NSE while the benchmark Nifty 50 gained 0.92 percent to end the day at 12,165.00 points.

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