Tata DLT has been a clear market leader in the Indian trailer market with its clinical approach of manufacturing quality products, staying close to customers, ensuring prompt delivery and providing efficient after-sales support. Following a mixed 2016, the company looks ahead for a better and more eventful 2017 as it looks to maintain its market leadership intact. We find out more in an exclusive interaction with Mr. Rajeev Batra, COO, Tata International DLT.
Excerpts:
2016 review
The year 2016 was full of ups and downs. Q1 was very good for us as well as for the M&HCV market. Q2 was down for the industry as usual and while we expected good business in Q3 and Q4, after the demonetization move in November, the market crashed drastically. It recovered in January and we hope it would continue until the end of March.
The major highlights for Tata DLT in 2016 were the approval from ARAI for our all products, i.e., Flat Bed, Skeletal, Side Wall, Running Gear, Tip Trailers, etc., making us India’s first and only ARAI AIS-113 approved trailer manufacturer. We have also received TS 16949 certification for design and manufacture.
In August 2016, Tata DLT became an authorised car carrier manufacturer of Maruti Suzuki. We have started a dedicated plant at Pune for car carrier manufacturing and have developed a new product – Tractor Carrier, required for the agriculture industry, for which we won the Apollo CV Application Award.
In the current financial year FY17, we will sell around 3,000 trailers, which is below our target, but almost 20% higher than last fiscal.
Impact of Trailer Code and GST
The Implementation of Trailer Code is one of the major initiatives by the Road Transport Ministry, which will be implemented from April 2017. Presently, the trailer manufacturing industry can be divided into organized and unorganized sector with 50 to 60 per cent of the market being dominated by the latter. The Trailer Code will definitely give a positive impact to produce standard trailers as per guidelines which will be safer for drivers, fellow commuters and the society.
The GST is going to make a revolutionary change in commercial vehicle and transportation industry, while also making business easy for transporters and manufacturers. It is going to save lot of time by eliminating unnecessary halts at toll booths, documentation required for inter-State crossing, etc.
As far as Tata DLT is concerned, it is going to give a positive impact on our business because we are selling products all over India and facing lot of issues in transportation of trailers from one state to another. We have plants in three States – Maharashtra, Rajasthan and Jharkhand and so GST will also make it easy for inter-plant movement of our products.
Expectations from the Government
We expect the Government to boost its infrastructure projects as it will enhance the requirements of steel and cement and will definitely improve the business of automobile and HCV industry. The Government should maintain the fuel prices stable to improve the operating margin of transporters. Three years back, the crude oil price was $108 per barrel; from then till today, the fuel price in our country has not changed much though today the crude oil price is $52 per barrel.
Major plans for current year
In FY17 Tata DLT developed three major new products i.e. Car Carrier, Tractor Carrier and Tip Trailer for the Rajasthan market. In FY18, our major focus will be to stabilize the production of the above products. We will come up with some more new products by FY19.
As far as our plant capacities are concerned, Tata DLT is presently having four units. One at Ajmer with a capacity of 150 trailers per month, another at Jamshedpur with 100 trailers per month capacity and two units at Pune with 450 trailers per month capacity. So all together we have a capacity of producing around 700 trailers per month which would suffice for the next two years.
In FY19, we will explore the possibility of business expansion in South India.
Key factors for company’s success
We consider three major reasons as factors for our success:
* Quality product and competitive price: Tata DLT has done a lot of value engineering to make our products more efficient and reliable for Cement, Steel and Container applications and at the same time, we have controlled our cost and tried to make it competitive in the market.
* Pan-India footprint and prompt delivery: As mentioned earlier, we have four plants across the country – two plants in Pune covering the Western Region, Ajmer plant for Rajasthan and Northern States and Jamshedpur plant for the Eastern market. We are using the latest technologies for making components, surface treatment, etc. which provide very high productivity. We ensure delivery of trailers in bulk quantity in quick time.
* Pan-India service network: Tata DLT has own service stations, service engineers and technicians across the country. We are committed to being at our customers’ site within 24 hours of any complaint. Our service team also conducts camps at customers’ end and corrects faults, if any proactively. We have a tie-up with our suppliers York and WABCO for back-to-back warranty as well as service.
Sales targets
In FY17, we will sell around 3,000 trailers and are targeting around 4,000 trailers in FY18.