Tata Motors is optimistic about FY24 CV demand.

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Updated On: 16-Jun-2023 08:58 AM

Tata Motors will continue to drive a demand-pull strategy and meet customer choices through innovation, service quality, and thematic brand activation.

Tata Motors will continue to drive a demand-pull strategy and meet customer choices through innovation, service quality, and thematic brand activation.

Tata Motors, the country's largest commercial vehicle (CV) maker, is hopeful about robust overall CV demand in the fiscal year 2024 (FY24). Despite short-term challenges like increasing interest rates, fuel costs, and inflation, the brand is optimistic about the demand.

Tata Motors stated in an investor presentation that it expects the government's sustained emphasis on infrastructure development to support CV demand in FY24. However, the company acknowledged that it is aware of near-term concerns, such as the advance purchase in Q4 FY23 in expectation of price increases following the BS VI Phase II, which would have a short-term impact on demand.

Bharat Stage VI Phase II (BS6.2) rules, commonly known as Real Driving Emissions (RDE) norms, went into effect on April 1, 2023, raising vehicle pricing. To meet the more rigorous pollution standards, automakers must add hardware to automobiles and SUVs.

Tata Motors will continue to drive a demand-pull strategy and meet customer choices through innovation, service quality, and thematic brand activation. The firm strives for higher realisations and costs savings to secure double-digit EBITDA margins in fiscal years 2023-24.

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In his presentation, Girish Wagh, Executive Director, Tata Motors, stated that FY23 was a year of development for the Indian CV sector, as it totally emerged from the shadows of two consecutive years of low volumes in FY 2019-20 and FY 2020-21.

The company introduced approximately 40 products and 150+ versions for passenger vehicles and cargo transportation in fiscal 2023. Among the prominent ones is the introduction of CNG vehicles in the MHCV (medium heavy and commercial vehicle) category, as well as the Yodha 2.0, Intra V20 bi-fuel, Intra V50, and ACE EV.

Wagh went on to say that Tata Motors' entrance into mobility as a service broke new ground, producing a viable revenue stream from the start. Revenues in the after-sales business increased by 33%, while revenues in the digital business increased by 2.8X on a lower basis.

CNG demands fell in FY 2022-23 because of a persistent rise in CNG pricing and a shrinking disparity with diesel prices. The recent Cabinet decision on revised pricing criteria for CNG went into effect in April of this year, resulting in a 7-9% decrease in CNG costs. This is likely to boost market demand for CNG-powered vehicles in FY 2023-24, according to Wagh.