Tata Sales: Commercial Vehicles Lead the Way as Small Car Sales Stumble
April 03, 2008

By Nick Kurczewski

MUMBAI, India — Numbers never lie, but they can sometimes bend the truth. Fresh from the media frenzy created by its introduction of the $2,500 Nano and its purchase of Jaguar and Land Rover from Ford Motor Co., Tata Motors reported a 5.9 percent jump in March sales compared with the same month the previous year.   

Seems like the end of the story, and "job well done, Tata Motors." However, once you peel apart the numbers, this optimistic announcement becomes a mixed bag of good and bad news for the Indian automobile manufacturer.

The bump in overall sales comes solely from Tata’s booming commercial-vehicle business. The company's domestic sales of commercial vehicles in March 2008 totaled 35,993 units, a significant increase of 17 percent over the 30,720 vehicles sold in March last year. 

One reason for this success is Tata has kept its commercial-vehicle operations fresh and up to date. Last year marked the introduction of two new models, the Magic and Winger. The Magic is the passenger version of the Tata Ace van, and the Winger is a modified version of the Renault Traffic panel van.

Tata’s revamped range of multi-axle trucks, heavy-duty trucks, and tractor-trailers also contributed to the company’s overall surge in commercial-vehicles sales.

Passenger-car sales drop
Continued strong performance by Tata’s commercial-vehicle business is masking the company’s slumping passenger-car sales. At a glance, overall sales figures look impressive. Tata Motors’ total vehicle sales for March stood at 66,495 units, compared with 62,779 vehicles in March of last year.

But take the commercial vehicles out of the equation and the performance of Tata’s small-car lineup looks particularly underwhelming. Total monthly passenger-car sales were reported at 24,737 for March 2008, a decline of 4 percent from the 25,760 vehicles sold in March 2007.

Tata’s best-selling vehicle, the Indica hatchback, saw March sales drop 14.7 percent to 13,042 units, compared with the same month the previous year. Strangely, the larger Indigo hit a sales peak of 5,135 units, its highest ever monthly sales figure and an increase of 18 percent over March 2007.

Exports were also down, to 5,765 vehicles in March 2008 compared with 6,299 vehicles sold in the same month last year.

Fiscal Year Results, Excise Levies, and the Tata Nano
Tata Motors reported that during its fiscal year (April to March, 2007-08) overall sales increased to 582,401 units, up from 578,862 sold in fiscal 2006-07. Again, these numbers hide Tata Motors’ troubles in its domestic-market passenger-vehicle segment. 

The company reported 214,758 passenger-vehicles sales in India for fiscal 2007-08, a decline of 5 percent from the previous year. Total exports during the last fiscal year stood at 54,272, a slight increase of 3 percent over the 52,796 vehicles sold in 2006-07.

Tata Motors marked an important milestone this year, when the millionth passenger car built on the Indica platform rolled off the assembly line — nine years after the model was launched in January 1999.  But the biggest news this year will undoubtedly be the highly anticipated arrival of the $2,500 Tata Nano. The super-cheap city car goes on sale in India in October. 

Tata Motors might stage a rebound within the next few months, when sales could be given a boost by economic measures carried out by the Indian government. As of April 1, the excise levy on small cars, two-wheelers and three-wheelers will have been cut to 12 percent from its current 16 percent. High excise levies have been blamed for weak sales of small cars, and plummeting motorcycle and scooter sales.•

Nick Kurczewski is a Paris-based correspondent working for AutoObserver.

Photos
1 — Tata Magic (photo by Tata)
2 — Tata Indica (photo by Nick Kurczewski)
3 — Tata Nano (photo by Tata)

Posted by Michelle Krebs at 8:33 AM under Analysis , Business , Companies | Comments (0) | digg this | Seed Newsvine