Tata Motors starts Q2 on strong note, riding on passenger vehicles sales

After touching a historical low in FY2020, passenger vehicle sales at are marching ahead. The maker of Tiago and Nexon models saw its dispatches zoom to a two-year high in August.

During the month, the Tata group flagship sold 18,580 units as compared to 7,316 units a year ago. Its previous high was in March 2018 when it sold 20,266 units. During the month, it saw its market share jump 500 basis points to 8 per cent year-on-year.

The company’s innings in the competitive passenger vehicle market has been nothing short of a roller-coaster ride. “That’s set to change now,” said Shailesh Chandra, president, passenger vehicle business unit.

Chandra is confident the sales momentum that has kicked in since the last few months will be sustainable this time around as unlike the yesteryears, the growth is being led not by one but all models, across India. It also helps that four out of five models are in segments (SUV and hatchback ) that have remained relatively resilient to the current market conditions.

“All the models launched in January have been accepted really well in the market,” he said alluding to the new calendar year models of Nexon, Tiago, Harrier and Tigor and the addition of completely new hatchback, Altroz, in the line-up.

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Sales of Harrier and Nexon have increased by 40 and 43 per cent respectively in August, compared to the monthly average sales of last year, he pointed out.

Meanwhile, urban buyers, who were not willing to consider the Tata branded cars and till a few years ago, are now lapping them up. The company has seen their contribution in its overall sales mix go up.

“While our sales, in both rural and urban markets, are growing, the ratio of urban to rural has shifted by an additional 3 per cent in favour of urban markets due to an even higher acceptance of our ‘New Forever’ range in the top 50 cities,” he said. Urban sales accounted for close to 65-70 per cent in the pre-Covid-19 months.

The trend for is in sharp contrast to other that have seen rural sales making for higher volumes. “Top safety ratings, coupled with a contemporary design, have really clicked with urban buyers,” he added.

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Puneet Gupta, associate director, I.H.S Markit says what has worked in favour of is a strong portfolio in the sub Rs 10 lakh segment. “All the models are attractively priced and offer a great value proposition,” said Gupta. A relatively lesser competition in the hatchback segment has also helped.

Chandra expects the launch of two new additional models – the Gravitas (a seven-seater) and Hornbill (sub-compact SUV) over the next few months, to further complement sales.

Updating on the plans to hive off the PV business, he said the process of subsidiarisation is expected to be completed by the beginning of next fiscal after all the clearances. All the assets that are unique to PVs will be transferred, while some that offer cost and synergy benefits will remain unchanged.

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