TATA MOTORS: SERVING AN 'ACE'
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On August 29, 2006, Bajaj Auto Limited (Bajaj Auto), a leading manufacturer of two wheelers and three wheelers in India, announced that it was planning to set up a new manufacturing facility near Pune, Maharashtra, to manufacture both three wheeler and four wheeler Light Commercial Vehicles (LCVs).
Rahul Bajaj, Chairman, Bajaj Auto, said, “Three-wheelers and light four-wheelers occupy an important and growing segment of the automobile industry in India and in many foreign markets.”1 The total investment envisaged for the project was Rs 20 billion. The plant was expected to be operational by 2009 and have an annual capacity of 0.5 million units.
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Analysts opined that the four wheeler LCV that Bajaj Auto proposed to roll out would be in direct competition to 'Tata Ace' (Ace), a mini truck produced and marketed by Tata Motors Limited (Tata Motors), India's largest automobile company, and part of the Tata Group.
Ace was India's first indigenously developed sub-one ton mini-truck, launched in May 2005. Ace was conceived of by Tata Motors after a study it conducted found that customers wanted a last mile distribution vehicle2 that had less maintenance costs, higher driver safety, and better driving comfort.
In line with these customer requirements, Tata Motors developed and launched Ace, which became a success in the market. It was quickly sold out with demand exceeding supply, and created a brand new segment – the small commercial vehicle (SCV) segment- an area earlier dominated by three-wheel carriers.
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Tata Motors said that Ace fitted into the hub-and-spoke distribution system as a last mile distribution vehicle by providing a transport link into the interiors and rural areas where roads might not be wide enough to accommodate larger commercial vehicles. Ravi Kant (Kant), Managing Director, Tata Motors said, “Development of road infrastructure has led to an increase in the distribution of goods across the country, based on the hub-and-spoke model.
Recognizing the growth trend and anticipating the need for a last-mile distribution vehicle, we had developed Tata 207DI, a pick-up vehicle designed to carry larger and heavier payloads in the sub-two ton category. |
Continued » »
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1] “Bajaj to set up Rs 2000-cr unit,” http://timesofindia.indiatimes.com, August 29, 2006.
2] Last mile distribution vehicle refers to a vehicle that travels a short distance, usually between 60-100 kilometers, and is used to transport goods from the outskirts of a city to its center.
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