Besides altering the brake, steering and suspension, for some application, it may also have to make changes to the engine and driveline, which will necessitate tweaking the noise, vibration, and harshness (NVH) levels
Tata Motors is recalibrating its strategy for its medium and commercial vehicle business in the wake of the regulation on axle load. Besides re-engineering the current new BS-VI compliant models, the maker of the Prima and Ultra range of trucks is also reconfiguring the prototypes it has been running for the BS-VI models, Girish Wagh, president-commercial vehicles told Business Standard.
The regulation, which was notified on July 17, requires the load carrying capacities of heavy vehicles, including trucks with a gross vehicle weight of 16 tonnes to 49 tonnes to be increased by 20-25 per cent at par with global standards. It will require 16-tonne vehicles to carry 19 tonnes, 25- tonne vehicles to carry 28.5 tonnes while 37-tonne vehicles to carry 42 tonnes load.
Depending on the engine type, the regulation requires major to minor changes to be made to the entire range and will have cost implications. “We will have to reconfigure our strategies on cost reductions and new products in the light of the new norms,” said Wagh, adding that Tata Motors has moved fast with the changes that are required. “While doing that we are keeping the cost picture in mind for us as well as for the customers,” he said.
The truck market leader will be passing on the cost increase to its end customers. Wagh said even as the demand for commercial vehicles remains robust due to strong fundamentals, the regulation had led to a delay in buying by the fleet operators. This, in turn, will have an impact on sales. Automakers in India count dispatches to dealers as sales. “There is a good amount of work involved,” said Wagh referring to changes that are required.
Besides altering the brake, steering and suspension, for some application, it may also have to make changes to the engine and driveline, which will necessitate tweaking the noise, vibration, and harshness (NVH) levels. Truckmakers were still awaiting clarity on the regulation - whether it was only applicable to new vehicles or the existing ones, he said.
Notwithstanding the ‘disruption’, Wagh is confident of being able to protect its margins. It reported an operating margin of 11.5 per cent in the June quarter. The ongoing costs saving measures, new model launches and customer-centric approach that has helped in improving realisation per vehicle, will allow the company to sustain and improve the margins from the current levels. It will also give the company the pricing power needed in a competitive market. Tata Motors’ nearest rival, Ashok Leyland, turned in a margin of 10 per cent in the June quarter.
The Tata group flagship has been riding high on a robust demand of heavy-duty trucks and a significant market share gains on the back of a pick-up in road infrastructure projects and construction activities. In the quarter ended in June, Tata Motors share in the medium- and heavy-duty segment jumped to 55.96 per cent from 49.82 per cent a year-ago period, according to Society of Indian Automobile Manufacturer. Sales in the same period increased to 44,018 from 19,864 units.
Tata Motors will have its eyes firmly set both on margins as well as on market share. “One has to constantly work towards achieving both. We are clearly committed on sustaining the margins, when the new equilibrium after the changes triggered by the regulation, sets in,” Wagh added.