At Tata Motors, Saarc stays a driving force

The traditional markets of Saarc remain a strong anchor for Tata Motors, which is seeing a slowdown in the domestic business.

Last year it grew 21.5% in the region. However, the mid-term duty change in Sri Lanka and the liquidity crisis in Nepal impacted the growth momentum, it said in its annual report.

Tata Motors, in an attempt to regain its lost ground, has been working on a turnaround plan and wants to be among the top three automobile companies in the country by 2019.

For this, the company restructured its managerial staff and brought in a number of products with plans to launch more.

It has also upped its efforts in the exporting business, according to the insiders.

The company exported 64,221 vehicles (fiscal 2016: 58,058 vehicles) comprising 60,184 units of commercial vehicles (CV) and 4,037 units of passenger vehicles (PV) in the last fiscal. CV export of grew by 11.3% in fiscal 2017 year on year, crossing 60,000 shipments for the first time and the highest ever till date. Sales in Sri Lanka declined considerably due to increase in import duties and tightening of retail financing. However, this was compensated by the improved sales in Nepal and South Africa with a growth of 120% and 30%, respectively.

"The reconstruction and the easing up of pent-up demand led to record shipments to Nepal in fiscal 2017. Low crude oil prices, Middle East geopolitical situation, currency devaluations and political strife cast a big shadow over the company's strong markets of the Middle East and Africa this year, with the exception of the newly opened market of Tunisia, which grew more than 100%. The company was able to grow market shares in the key markets of Nepal and Bangladesh." Tata Motors said.

However, while the exports and international business of JLR are seeing a steady incline, the domestic market has turned into a cause of concern for the company.

N Chandrasekaran, Tata Group chairman, in his preface to the report, said the domestic segment has been a major concern as the CV segment has witnessed a continued decline in market share and the passenger car performance has been muted. In the domestic market, the market shares in both CVs and PVs have declined significantly.

The CV share has fallen to 44.4% from a high of 59.4% in fiscal 2012, while market share for PV declined to 5.2% from 13.1% in the same period. "Overall, delays in new product launches as well as lack of adequate responsiveness to the competitive environment and an unsustainable cost structure have contributed to this performance," Chandrasekaran said.