31 July, 2015, The Hindu Business Line
‘Small is beautiful’ is an oft repeated cliché but could not be more appropriate for the Tata Ace.
Launched in 2005, this mini-truck from Tata Motors ended up creating a revolution of sorts in the cargo space which till then was synonymous with dull, unattractive products. The Ace made carrying goods look stylish fashionable statement and has been growing from strength to strength since then.
Strength to strength
Tata Motors recently celebrated its 10th anniversary which has thus far seen Ace sales exceeding 1.5 million units. Of these, six lakh (35 per cent) units were sold in the southern region which explained why the momentous occasion was celebrated in Hyderabad with first Ace customer felicitated.
The north and east accounted for four lakh and three lakh units each with the western region coming in last with two lakh units. The Ace has also been shipped out to nearly 30 countries in South Asia, South Africa and the ASEAN region.
“The focus from now is to consolidate the business and come out with more innovative products on the Ace platform. This will include electric variants too,” says R Ramakrishnan, Senior Vice President, Commercial Vehicles Business Unit, Tata Motors.
As part of this vision, the Ace family will offer solutions based on the three core vectors of DesignNext, PerformanceNext and FuelNext. These will meet the “evolving needs of customers” while showcasing how the vehicle has been innovatively used for a host of applications.
The company’s facilities in Pune, Pantnagar (Uttarakhand) and Dharwad produce nearly 12 variants of the Ace. Apart from haulage of goods, it has been customised in different parts of the country to double up as a water tanker, tipper and a mobile food hub. Beyond the cargo space, the Ace has more than done its bit in the personal vehicle category with products such as Magic HT/CNG and Magic Iris.
As cities struggle to cope with the growing needs of public transport, these vehicles have helped ferry people from one end to another in their capacity as private taxis. Such mobility solutions will increasingly gain ground in the coming years with growing levels of urbanisation.
Ramakrishnan says that for every single large truck sold, there is potential for nearly five smaller ones. This is because big trucks are not allowed in large cities making a case for compact alternatives such as the Ace. Likewise, passenger solutions like the Magic have immense potential.
The small cargo segment is expected to grow at a compounded annual growth rate of about 10-12 per cent over the next five years.
According to Ramakrishnan, the milestone of five lakh units was achieved in five years (in 2010) while the next five lakh came in just two years. The last (and still continuing) five lakh mark came three years later in 2015. This relatively longer timeframe was possibly the result of the slowdown in the commercial vehicle segment. With growth now gradually back on track, the pace of generating volumes will also increase.
Imitation is the best form of flattery and it was only inevitable that competitors would enter this segment. Piaggio and Mahindra & Mahindra have already thrown their hats into the ring while a handful of others are in the queue. By the end of the day, this small vehicle is the best bet for last mile transport of both goods and people.
Ramakrishnan is not deterred by the prospects of competitive pressure. “We welcome competition and there is space for all. We continue to hold a big share of 85 per cent thanks to the value proposition the Ace range offers,” he says.
Tata Motors also showcased its commercial, Chota Haathi, at the event to drive home the Ace’s potential for haulage. Its runaway success has now become a case study at the IIMs and Harvard Business School as well as other management institutions.