M&M overtakes Tata Motors in LCV market

Mahindra's market share in LCV four-wheeler (up to 3.5 tonnes) in April-October 2015 rises up to 60% Vs 52% in same period last year

Amid a slowing market for light commercial vehicles (LCVs), Mahindra & Mahindra (M&M) has managed to go past Tata Motors and take the top position. While the domestic LCV market has shrunk over five per cent this year, M&M has been able to gain market share. Tata Motors, earlier the market leader, has taken deep cuts, especially in the goods carrier LCV segment.

"Mahindra has increased its market share in 2015-16 and consolidated its lead. The 'Jeeto' launch has helped us gain market share," said Pravin Shah, the company's president & chief executive (automotive). Giving a break-up, Shah said M&M's market share in the LCV four-wheeler (up to 3.5 tonnes) in April-October this year rose up to 60 per cent, compared with 52 per cent in the same period last year. In the under-two-tonne LCV segment, Mahindra's market share went up to 25 per cent during the period, against 12 per cent a year ago. The company had launched the Jeeto in June, and Supro Maxitruck last month.

The LCV market, with a size of 382,206 units in 2014-15, is significant for automobile manufacturers. These small trucks are used for intra-city transport of goods. By comparison, the medium and heavy commercial vehicles are used in inter-city movement of goods. Tata Motors, with products like the Tata Ace, popularly known as 'chhota hathi' (baby elephant), had been a leader in the LCV segment for long. Launched in 2005, some 1.5 million units of the Ace have been sold by the company so far.

To queries from Business Standard, a spokesperson for Tata Motors said: "This (decline) needs to be seen over a longer period of time. Peak sales of the very successful Tata Ace family in 2012-13 and the first half of 2013-14 were followed by very severe recession, which led to a lot of idle capacity in the market.

There also was the impact of new vehicles coming in the segment. This situation is easing. Our overall share will also move up as the segment starts recovering."

Tata's market share in LCVs has come down from 48 per cent in 2013-14 to below 37 per cent in April-October period this year. Even as the company has managed to marginally grow its volume in the passenger LCV segment, its goods LCV volume in the April-October period has come down by 22 per cent on a year-on-year basis.

"We saw new segments being created. That impacted the market dynamics as we did not have products in those new segments. However, we have now begun to see a good response to our newer products addressing these segments," the Tata spokesperson added. Towards the end of August, Tata Motors had launched the Ace Mega, a small pick-up with rated payload of one tonne. "This is one of our key interventions in the market and we have seen our market share increasing by five per cent in the first month. Also, we recently launched a new Ultra range of modern LCVs. On the public transport side, we will soon launch the Magic Mantra. With the strong Ace brand equity and our plans to continue to invest into new products in these segments, we expect to regain our leading momentum," the spokesperson said.

Mahindra is not going to slow down, either. Shah said: "We will continue to launch new products and upgrade our existing offerings according to the customer's evolving needs. A boom in e-commerce, retail and increase in urbanisation, coupled with the easy finance options, will improve the demand for LCVs."