Tata Motors (India) Sales Update: Post March'18

Back in December'17, I had reported about Tata Motors gaining it's Momentum back, based on the Sales numbers till November'17. That was just the beginning of the company's Sales recovery & strengthening of market share across segments. The last 5 months have been nothing short of stellar for the company. No doubt that the entire Industry is growing at a healthy pace, but Tata Motors is growing faster than competition in most segments, which is helping it gain back the market share it had lost in the previous couple of years.

March'18 has proved to be the best month for Tata Motors in terms of Sales, both in Passenger Vehicles as well as Commercial Vehicles, in a long long time. Tata Motors (India) Wholesales stood at 69,440 units in the Domestic market, a 35% Y-o-Y growth, and 6713 units for Export, a growth of 15% Y-o-Y. For the month of March'18, the M&HCV segment reported a growth of 20%, the LCV segment posted 48% growth, the UV segment grew 223% and only the Car segment posted a de-growth of 5%. The M&HCV number of 24,321 units and the LCV segment's number of 31,296, are probably the highest the company has ever recorded in it's long history. The Tata Nexon & Tata Hexa powered the company's UV numbers to 7,908 units, again a highest ever figure. It's only the Car segment numbers for Tata Motors, which have seen better days when the Indica & Indigo CS models were in their prime.

Tata Motors (India) ended the year FY'18 with M&HCV numbers of 190,367 units, a growth of almost 9%. Remember that this growth has been achieved despite a terrible Q1 for the company, when the SC ruling disallowed sales of BS-III vehicles across India from April'17. Tata Motors had reported 33% drop in M&HCV sales during that Quarter. This was followed by a small jerk due to GST implementation in July'17. Tata Motors' LCV sales have certainly done much better than expected. The FY'18 number has climbed to 259,072 units, a growth of over 23% Y-o-Y. This growth is mainly because of the success of new products launched about 6 months ago. Before that the company was losing market share to aggressive competition from M&M, Ashok Leyland and others. With the success of the new products in both M&HCV and LCV segments, Tata Motors has not just arrested the fall in market share, it is also clawing back some share gradually.

At the start of FY'18, Tata Motors took a conscious decision to stop pushing sales of it's older car models like the Indica, Indigo eCS and the Nano, and let them die. Together these models were generating nearly 5,000 units on a monthly basis. The chart alongside clearly shows that Tata Motors has managed to limit volume losses in the Car segment, due to the stoppage of the above models, to a very small percentage. The company managed to increase production of it's Tiago and Tigor models to around 10,000 to 11,000 units every month. But the bigger story for Tata Motors' Passenger Vehicles business is the super success of the Tata Nexon. This model is single-handedly brought a lot of excitement in the Tata Motors showrooms and also on the sales charts. The rising blue bars in the neighbouring chart is giving enough evidence of the same. The Cars + UVs business did volumes of about 1,57,300 units in FY'17. The same has now jumped to about 1,89,700 units in FY'18, a growth of about 20%. This growth has helped Tata Motors grab the No.4 position in the Indian passenger car business, jumping over Toyoto and Honda in the last 12 months. After taming the 2 Japanese giants, Tata Motors is now aiming for the No.3 spot, which is currently held by another Indian UV giant Mahindra & Mahindra. For doing so, Tata Motors might need more than just the numbers from the Nexon and the Tiago. Can Tata Motors launch another strong model in FY'19, to help it climb the ladder further? Let's wait & watch.

Tata Motors Ltd. - December'17 Sales update.

About a month ago, I wrote a report on Tata Motors Ltd., saying it's gaining it's momentum back. (Click here for that report). And the company has managed to post a stellar set of Despatch numbers for the last month of the 2017 calendar, which is normally a slow month for vehicle sales as buyers prefer to purchase a new-year model. Tata Motors despatched a total of 60,820 units during December'17, commercial vehicles & passenger vehicles combined, both Domestic & Exports put together. This is probably the first time the company has crossed the 60,000 units mark in the last few years!! The 12-months average number till November'17 was 47,135.

The star performing segments for Tata Motors are Commercial Vehicles (both M&HCV and LCV) and the Utility Vehicles segment, all recording numbers even higher than March'16 & March'17 numbers. The Cars segment was the only one showing the year-end fatigue, reporting a 16% de-growth Y-o-Y. But Tata Motors will be more than happy with the other 3 key segments firing on all cylinders. Another positive is that even the Export numbers have perked up after a long time. The 12-months average Export number for Tata Motors till November'17 was 4185 units per month. The company exported 6293 units during December'17, which is the highest number since October'16. A pickup is Export numbers, if sustained over the coming few months, will give even more support to the company turnaround efforts.

Coming to the Trailing-Twelve-Months Sales numbers for the different segments, please have a look at the following charts:

The 12-months M&HCV sales number is now just over 1,81,000 units, which is the highest level achieved during this year and is about 3.3% higher than the number at January'17. The 12-months LCV sales number of 2,32,529 is also the highest for the year and is about 9.3% higher than the number at January'17. A good momentum of sales from these segments reflects not just good times for the company's business turnover & profits, but also for the country's economy in general. The Q4 of any fiscal is generally the strongest for CV sales. Hence it will be important to see how the numbers progress for Tata Motors during the next 3 months, especially after a stellar last couple of months.

The sales of Tata Motors' passenger cars reported some de-growth during December'17. Hence we can see the 12-months number dip slightly M-o-M. But have a look at the strong jump in 12-months UV sales numbers, powered by strong demand for both Nexon & Hexa. The number, which is currently at 39,149, should cross the 60,000 mark over the next 4 to 5 months. Remember that the Average Selling Price for a UV is higher than that for a Car. Hence a small dip in Car numbers, coupled with strong growth in UV numbers, will result in stronger position for Tata Motors' Passenger Vehicles division. The combined 12-months volumes for Passenger Vehicles division in January'17 was just under 1,50,000 units. It has now risen to 1,72,000 units and should cross the 2,00,000 units mark in the next 6 to 8 months time. The passenger vehicles division of Tata Motors has been loss making for the company for the last few years, mainly due to dismal capacity utilisation. As the volumes increase, the capacity utilisation improves and will help the company achieve operating break-even soon.