P.M. Telang, newly-promoted Executive Director (Commercial Vehicles) of Tata Motors, was responsible for the biggest hit in many years to come out of the auto maker's stable-the Tata Ace. The sub-1 tonne capacity commercial vehicle has sold in excess of 100,000 units already despite having been on the market for under two years. The success of the Ace, which Telang credits to the company finding a niche and filling it, has already begun to impact the sales of cargo three-wheelers; sales dipped 9 per cent in the first two months of the year and Tata Motors increased its share in the Light Commercial Vehicle (LCV) goods category market to 71.2 per cent.
Telang feels that the development of roads under the Pradhan Mantri Gram Sadak Yojana has played a part in Ace sales and will be instrumental in the success of the company's two latest 'light' vehicles, the Magic and the Winger. "The Magic and the Winger also fill a niche, providing reliable transport options for people in far-flung areas where there is little or no access to transport. Where there are vehicles they are unsafe and these four-wheelers will make travelling far safer," Telang says, believing that rural areas and not large urban markets will provide the bulk of these 'small' vehicle sales, a philosophy that Tata Motors management seems to share for the 'Rs 1-lakh car'.
As for the slowdown in sales in medium and heavy commercial vehicles, Telang blames the rate hikes by the government. "Sales, for the past two years, have generally exceeded our expectations, and this slowdown is a minor one, and largely due to people putting off purchases thanks to the increase in interest rates. However, with the continued progress on highways and the steady growth in the economy, I think sales will perk up again post-monsoon."