Tata Motors Aims To ‘Win Decisively’ In CV Segment

In Q1 FY ‘19 the vehicle wholesales (including exports) of Tata Motors grew 59 percent to 176,868 units with broad-based growth across the entire portfolio on a low base. In the domestic market M&HCV trucks grew 111 percent, ILCV trucks 73 percent, SCV & Pick-Ups 57 percent and CV Passenger 31 percent and passenger vehicles 50 percent.
The growth of the commercial vehicles was triggered by the launch of new products and higher economic activities due to the improved industrial activity, robust demand in private consumption and government spending on infrastructure. In the passenger vehicle segment Nexon, Tiago and Tigor continued to deliver strong growth.
In the quarter, revenue increased 83 percent to Rs 16,803 crore, pre-tax profit was at Rs 1,464 crore (against pre-tax loss of Rs 463 crore in Q1 FY 18). Pre-tax profit for the quarter includes dividend income of Rs 1,310 crore (against dividend income of Rs 557 crore in Q1 FY18). Profit after tax for the quarter was Rs 1188 crore.
In FY18, with its Turnaround 2.0 plan, Tata Motors focused on the domestic commercial vehicle segment and regained market share mainly by de-bottlenecking the supply chain. Now, the company is implementing this turnaround plan for passenger vehicle business to be self-funding and profitable.
Natarajan Chandrasekaran, Chairman, Tata Sons said, “I am delighted with the progress made by the domestic business with the ‘Turnaround 2.0’ strategy. We continue to gain market share while strongly improving profitability in both commercial vehicles and passenger vehicles. Our drive for increased transparency continues with separate segmental results for CV and PV businesses from this quarter. I believe that with our focused efforts we are well positioned to ‘Win Decisively’ in CV and ‘Win Sustainably’ in PV.”
“With regards to JLR, we faced multiple challenges including temporary issues like China duty impact as well as market issues like diesel concerns in the UK and Europe. Despite these challenges, we remain committed to deliver the planned margins we outlined earlier this year and appreciate the urgency to address our challenges with speed. Towards this, we will step up all-round execution. We will leverage our product portfolio to grow faster and drive down costs to improve operating leverage of the business. We will also calibrate our capital spends to minimise cash outflow. With these focused efforts, I am confident that Tata Motors Group will deliver Competitive, Consistent and Cash Accretive Growth in the medium to long term.”
According to Guenter Butschek, CEO and MD, Tata Motors, “FY18 was a turnaround year for us with significant improvement in operational and financial performance. We continued this momentum in Q1 FY19 as well with the launch of Turnaround 2.0 strategy to Win Decisively in CV, Win Sustainably in PV and further strengthen our execution capabilities. I am happy to see that we are now delivering on this strategy with strong month-on-month sales growth, with both CV and PV Businesses witnessing further increase in market share. The Q1FY19 net revenues is the highest in the history of Tata Motors and the operational profit for Q1FY19 is the highest since Q1FY13. In line with our new organisation structure our reporting segments are changed to commercial vehicles and passenger vehicles from this quarter. As I look ahead, there could be a few challenges in the short-term particularly in commercial vehicles as the new regulations on axle loads come into effect but remain positive on the long-term potential of the Indian market and I am confident that Tata Motors is taking the right steps to drive Competitive, Consistent, Cash Accretive Growth.”

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