Leading commercial vehicle player Tata Motors does not want to go after market share by offering steep discounts. The holding arm of Tata Motors, Tata Sons, had recently claimed that the auto major’s market share in commercial vehicles hit an all-time low of around 40 per cent under former chairman Cyrus Mistry.
R Pisharody, executive director for commercial vehicles at the Mumbai-headquartered company says running after market involves the risk of losing sight of the ‘bigger picture’. “When you are such a strong leader and companies
are coming out with new products, discounts play a major role. We have a responsibility. If we start looking at market share at any cost and aim to get back to over 60 per cent share anyhow, that will drive the whole industry down,” he told Business Standard in a recent interaction.
Tata Motors has lost market share to rivals like Ashok Leyland, M&M and Force Motors in the medium and heavy commercial vehicle (M&HCV) and light commercial vehicle (LCV) segments in the past two-three years. Volume-wise, its leadership is now restricted only to the goods carrier in the M&HCV segment. In the passenger carrier segment of M&HCVs, Ashok Leyland has emerged the leader. In the LCV goods and passenger space, M&M and Force Motors dominate volumes.
Pisharody said one needs to look at market share in each segment. “Where it suits somebody, they are aggregating products and are projecting certain volumes in total LCV market. We still hold 55 per cent market share in M&HCVs, and in the past 18 month we have not lost any market share. Yes, we had lost some share earlier,” he said.
According to Pisharody, the company has intentionally decided to play a ‘more balanced game’ in last 18 months and has stayed away from discounting beyond a point. He added that discounts hit a new high during the first month of demonetisation (November 2016). “We have a past experience that shows discounts do not get you anywhere”.
In LCV space, he said there has been change of segments. “There are products such as pick up (by competition) whose price has been brought down closer to an Ace (Tata’s best selling LCV). When you get a pick up at Rs 4.5 lakh, it becomes difficult for a customer to go for an Ace. With our launch of Ace Mega, we are gaining market share. Xenon Yodha was launched in the traditional pick up format in January.”
The company is working on a combination of products and marketing to ensure that our share increases. To strengthen the brand, the company has recently signed bollywood actor Akshay Kumar as a brand ambassador for CV business.
Following the exit of Mistry in October, Tata Sons had highlighted the decline in market share of passenger vehicles to five per cent from 13 per cent in FY13 under the former chairman. The firm said loss of market in CVs is a greater concern, stating the market share which in March 2013 stood at 60 per cent, came down to 40 per cent (approximately), the lowest in the company’s history as the market leader.