Financial Daily from THE HINDU group of publications
Thursday, Nov 06, 2003
Tatas' pick-up on the growth track
Mumbai , Nov. 5
IN just over a year since its first launch, the 207 DI from Tata Motors has notched up a market share of 42.5 per cent in the fast growing pick-up segment.
But for those hoping to see a true blue pick-up on the lines of models abroad, the wait may be longer. Tata Motors says the 207 DI's success hasn't strengthened the case yet for a domestic debut by the Telcoline.
A longstanding pick-up from Tata for its export market, the Telcoline has just been relaunched in face-lifted version with a turbo-charged IDI engine. According to company officials, even as the spot-on design of the 207 DI led to a significant rise in segment sales, the category is far from being comparable with markets abroad.
In foreign markets, the SUV and the pick-up are close cousins, but attract disparate customer profiles. The SUV owner, as one Tata official put it, is an urbanite imagining he might camp out by weekend, while the pick-up owner is already a regular in the outdoors.
Given their periodic escape from city life to outdoor or sporting holidays, urbanites abroad also have a clear idea on what to do with the luggage space that comes with a pick-up.
Within this broad customer profile, the pick-up segment is classifiable into three sections - light pick-ups, heavy-duty picks-ups and leisure/lifestyle pick-ups.
In developed foreign markets like the US, action is almost in the last category. The second category has been growing in those markets as well as in India's neighbourhood in South East Asia. According to officials, the Toyota Hilux, Mitsubishi L200 and Nissan 510 have been active at the high end in markets like South East Asia and South Africa.
The domestic market for the present, is in the first category - products such as the 207 DI and others from Mahindra & Mahindra (M&M) and Bajaj Tempo doing duty as light pick-ups.
But it is the 207 DI that invigorated the segment here, driving industry volume from a sleepy 13,000 units to 24,000 units by close of fiscal 2003. As of first half of fiscal 2004, the segment had clocked 16,000 units in sales. Tata Motors sold 1,700 units in September alone. In July 2002, prior to launching the 207 DI, the company's market share in the pick-up segment was 3.9 per cent, officials recalled.
It is just six months since completing the vehicle's national launch. The 207 DI was founded on an in-depth market study that probed even customer preference on the vehicle's styling, cabin ergonomics and safety. With a DI engine, new suspension and the GBS 76 gear box (same as in the Tata Safari), the 207 DI was totally different from the earlier but somewhat similar looking Tatamobile.
Market positioning for the 207 DI revolves around product reliability, lowest cost of operation, wide distribution network and the merit of having an engine known to the commercial vehicles establishment for a long time. Sales is currently had from semi-urban to rural markets, but given the structural shift happening in the transport sector with growing prospect for lower payload vehicles, company officials think 207 DI sales will eventually spread to urban markets.
The competition is sitting up and taking note. At an analysts meet last week, Mahindra & Mahindra Ltd (M&M), market leader by a big margin in pre-207 DI days, said it is launching a new pick-up with bigger cargo box under its Maxx series. The company sold 18,000 pick-ups in fiscal 2003 and touched 9,500 units by first half of 2004. Further, at the top end of the market, much was read recently into Ford's decision to roll out the Endeavour SUV here, the vehicle's platform being linked to the Ranger pick-up model.
Pity then, the Telcoline is still a domestic dream. On the peppier side, the 207 DI's 3-litre engine, which was tweaked down to 65 bhp to maintain mileage, may receive turbo-charging once leisure application starts to surface or stricter emission norms fall in place.
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