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Offsetting India slowdown: Tata Motors aims to increase truck exports to West Asia, Southeast Asia

23 July, 2015, First Post

Tata Motors Ltd, India’s biggest automaker by revenue, plans to triple exports of its trucks and buses to countries in Asia and beyond to counter slow sales growth in India, it said on Wednesday.

Despite a range of economic reforms by the government, industrial growth in India remains weak, hurting demand for large trucks and forcing companies like Tata Motors to look overseas for profit.

“This (exports) is something we are stressing heavily,” said Ravi Pisharody, executive director of Tata’s commercial vehicles business, who plans to grow exports to 150,000 vehicles in 3 to 4 years from 45,000 vehicles in the year that ended on March 31.

The company, which mainly exports to neighbouring nations Sri Lanka, Bangladesh and Nepal, will look at increasing shipments to countries in the Middle East and Southeast Asia.

“In many markets, there is no local commercial vehicle company. It is the Europeans we are competing with and… our products’ appearance and specifications are comparable and we have a 10 percent price advantage,” said Pisharody, adding that exports will go some way in offsetting slow domestic sales.

Tata Motors’ exports of trucks and buses grew 39 percent in the April-June quarter to nearly 13,000 vehicles from a year ago, while domestic sales fell 1 percent over the same period to about 66,000 vehicles, industry data showed.

Growth in sales of large trucks in India is largely linked to the economy and reflects a pick-up in industrial activities like mining and construction.

While sales of medium and heavy commercial vehicles at Tata Motors grew 15 percent to more than 127,000 units in the fiscal year ended March 31, according to industry data, Pisharody said this was largely due to replacement of an ageing fleet of trucks by owners.

“I think there is some legs for replacement purchase for another 6 to 12 months at least. But beyond 2016-17, we all hope that the economic recovery starts,” he said.

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