Tata Engineering & Locomotive Ltd.'s (TELCO) utilitu vehicle (UV) market share has increased dramatically from 18% in August 1999 to 29% in September. This was reported by a leading financial daily.
TELCO is India's largest medium/heavy commercial vehicles (M/HCV) (65% market share in September 1999) and light commercial vehicles (LCV) (63% market share) manufacturer. It also manufactures utility vehicles (28% market share) and passenger cars (7% market share).
The company has attributed the dramatic surge in market share to the success of the stripped down version of the Sumo. It is planning to launch a number of other Sumo variants. Buoyed by the success of the Sumo variants, it plans to target niche markets in the UV segment. Of particular interest to the company is the potential of the rural market. Its bullish view on the rural segment was reinforced by the success of the stripped down Sumo. It now plans to beef up its rural network considerably.
Earlier TELCO forfeited market share in the UV segment as its flagship products - Sumo and Safari, were perceived as premium brands. Consequently, the company took a hit in the crucial economy segment. Mahindra & Mahindra (M&M), main rival and market leader, posted higher volumes with its economy models.
With the success of the stripped down Sumo and a string of Sumo variants planned in future, TELCO seems to be on the right track to claim more market share. But M&M is unlikely to take this lying down and will launch its own counter-offensive with other variants, with added focus on its marketing netowrk.
Analysts have flagged a 'LONG TERM BUY' on the company due to its disappointing 2QFY2000 results. Improved CV and UV performance has been offset by the Indica, which continues to post losses.
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