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Tata Motors ups capex for truck and bus business, bags more orders for electric buses

Tata Motors, the country largest commercial vehicle manufacturer, will increase its capital expenditure (capex) by as much as 20 percent for the truck and bus division over the next two years.

The company’s total capex for the commercial vehicle division will rise to Rs 1,800-2,200 crore a year by the end of FY20, from the current Rs 1,500 crore per year.

“The overall capex of the company is Rs 3000 crore, and for the  commercial vehicle is half of that at Rs 1500 crore. This will address the needs of R&D, manufacturing process and productionisation of new products. In addition to that due to BSVI our capex is going to inch up over the next two years. It will go up by 10-20 percent,” Girish Wagh, Head – Commercial Vehicle Business Unit, told Moneycontrol.

Tata Motors is among a clutch of companies that are bending their backs to meet the soon-to-come Bharat Stage VI emission norms, which will be implemented at the start of FY21.

The Mumbai-based automobile manufacturer said it has increased its market share significantly during the quarter gone by.

“We have gained market share of 5 percent in overall CV segment in the June quarter as against the June quarter of last year,” Wagh said.

Tata Motors’ commercial vehicles sales grew 75 percent on year to 105,610 units during the April-June quarter, much higher than the industry’s growth of 52 percent.

This led to an increase in the company’s market share in the segment to 46 percent, 6 percentage points higher than at the end of the same quarter last year, according to the Society of Indian Automobile Manufacturers.

Furthermore, the company declared that it had bagged additional orders for supply of fully-electric buses from municipal corporations across the country.

After the initial order of 200 buses from six corporations, the company bagged another order for 90 electric buses a few months ago. This makes it the recipient of the most number of orders for these buses.

“We had won tenders for 6 areas where the initial order was for supplying 200 and some municipal corporations increased the order to 290. Deliveries should begin in the second half of this year,” Wagh said.

The CV business head also said that tackling the new axle-load norms announced by the government will be a challenge as vehicles will have to be re-engineered and re-certified to be declared fit for sale by the Automotive Research Association of India (ARAI).

“We have started with reengineering of our vehicles to comply with new norms. At the same time we have been engaging with the government as a body and requesting for whether we can defer and decide a date for the implementation. If anything has to be changed then it has to recertified as per CMVR norms,” Wagh said.

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