Passenger Vehicles
The domestic PV Industry grew by 2.8% during FY 2018-19 registering a volume of 3.35 million vehicles. Barring the first quarter, industry de-grew consecutively for three quarters. Overall, the Industry performance was affected by delay in availability of retail finance, higher interest rate, higher acquisition price because of requirement of buying three year insurance at the time of purchase, negative sentiment in market and postponement of purchase decisions. As a result, the retail sales was far below expectations. This led to higher stock at dealerships and dealers faced the challenge of the working capital rotation.
The festival seasons during the year did not give the expected impetus. The beginning of the festive season was washed out due to unprecedented floods in Kerala. During Navaratri and Diwali, the market was expected to bounce back and infuse positive energy into the system. But just before this festive season the liquidity was severely impacted because of NBFC crisis. The festive season reported a 14% de-growth, one of the worst festive sales performance in the recent past.
Whilst market situation remained challenging throughout the year, Tata Motors PV business outperformed the market. The Company registered a 13.9% overall growth in FY 2018-19 with a total volume of 2,10,500 units. The market share for the year was 6.3%, an improvement of 60 basis points from FY 2017-18. The growth rate 13.9% for the Company is ahead of the industry. This is the highest unit sales and market share over the last 5 years.
Tiago registered a growth of 17% in its 3rd year of market presence with 2,00,000 + customers. Nexon was awarded with 5 star safety rating by GNCAP, the only car in India with 5 star safety rating, and established itself as the second most selling SUV with annual sales of over 55,000 units.
To counter the market slowdown, the Company did four critical product interventions within 51 days in festival season, namely, Tiago NRG, Nexon KRAZ, Tigor Refresh and Tiago/Tigor JTP range of products. These interventions helped to attract additional set of customers and continue the market buzz. On January 23, 2019, the Tata Harrier was launched and the initial response from customers is overwhelming.
Customer satisfaction remained as the centre of business. The Company ranked a clear 2nd in JD Power customer satisfaction survey. In FY 2017-18, the Company shared the 2nd rank with Maruti Suzuki. Non-vehicular business revenue improved 15% over last financial year. The Net Promoter Score of PV business significantly improved from a negative score of 13 in FY 2014-15 to a positive score of 18 in FY 2018-19 signifying improvement in brand perception. This helped the Company to gain pricing power across models and exercise pricing leadership.
Exports
The Company exported 53,140 vehicles (FY 2017-18: 52,404 vehicles).
Export of CV marginally increased by 2% in FY 2018-19 with 51,119 units compared to 50,106 units in FY 2017-18. New regulations and political uncertainty in Sri Lanka, and slump in Middle East, impacted industry volumes in these markets. However, our market share in both these markets improved for commercial vehicles. Market share in most of the focused markets, either improved or have been strong and the Company successfully bagged several prestigious orders.
Export of PV stood at 2,021 units compared to 2,298 units in FY 2017-18. Two large markets remain non-operational - Sri Lanka due to high import duties, tight retail financing and South Africa due to the closure of the distribution channel. Launch of new models in Nepal and Bangladesh helped the Company to achieve rank No. 4 and No. 3 in the respective markets.
JLR
Retail sales were 5,78,915 vehicles in FY 2018-19, down 5.8% year on year, primarily reflecting weaker market conditions in China which was partially offset by strong growth in the UK and North America
The introduction of new and refreshed models led by the Jaguar E-PACE, award winning I-PACE, Range Rover Velar and the refreshed Range Rover and Range Rover Sport were offset by lower sales of more established models, mainly in China, and the run-out of the first generation Range Rover Evoque in the third quarter with sales of the new Evoque beginning to ramp up through the fourth quarter. By region, sales were up strongly in the UK by 8.4% and in North America by 8.1% and retails were also higher in Overseas markets by 2.4%. Retails sales in Europe declined 4.5% year on year on account of continuing diesel uncertainty, Brexit and the change to more stringent World Harmonised Light Vehicle Testing Procedure ('WLTP') emissions testing regime. Retail sales in China (including sales from the joint venture) were down 34.1% year on year due to trade tensions with the US, slowing economic growth and uncertainty driven by import duty changes effective from July 2018, inventory reduction and corrective actions in China.
The total wholesale volumes (excluding sales from the China Joint Venture) at 5,07,895 units were down 6.9% as compared to the 5,45,298 units in FY 2017-18, generally reflecting the trends seen in the retail sales above.
Some of the key highlights of FY 2018-19 were:
TDCV
During FY 2018-19 sold 6,672 commercial vehicles, lower by 24.8% over FY 2017-18, mainly due to decrease in sales in domestic sales. TDCV sold 4,371 commercial vehicles in the domestic market lower by 36.3% as compared to sales in FY 2017-18, primarily due to lower industry volumes and aggressive discounting and marketing strategies primarily driven by the imported brands. The market share for both HCV and MCV segments put together was 21.1% as compared to 26.5% in FY 2017-18. However, TDCV could increase its export sales to 2,301 commercial vehicles, 14.4% higher compared to 2,011 commercial vehicles in FY 2017-18.
TMFHL
It is the vehicle financing arm under the brand “TMF Holdings Limited”. TMFHL’s disbursements (including refinance) increased by 42.8% at Rs.21,993 crores in FY 2018-19 as compared to Rs.15,406 crores in FY 2017-18. New Vehicle disbursements are done through its subsidiary Tata Motors Finance Ltd ('TMFL'). TMFL financed 2,16,015 vehicles reflecting an increase of 23.3% over 1,75,128 vehicles financed in FY 2017-18. Disbursements for CV increased by 39.6% and were at Rs.15,978 crores (142,187 units) as compared to Rs.11,448 crores (115,689 units) in FY 2017-18 mainly due to gain in market share (28.3% in FY 2018-19 vs. 26.1% in FY 2017-18). Disbursements of PV increased by 28.5% to Rs.3,013 crores (46,500 units) from a level of Rs.2,345 crores (42,619 units). Used Vehicle disbursements done through Tata Motors Finance Solutions Limited ('TMFSL'), a 100% Subsidiary of TMFHL were at Rs.3,002 crores (27,328 vehicles) as compared to Rs.1,614 crores (16,820 vehicles) during FY 2017-18.
Tata Motors (Thailand) Limited ('TMTL')
TMTL wholesales in FY 2018-19 was 633 units as compared to 682 units in FY 2017-18. The Thai Commercial Automobile Industry has witnessed a growth of 22% in FY 2018-19 compared to 14% growth in the year before, however as part of ongoing review, TMTL have undertaken a reassessment of its business model in Thailand to ensure it is sustainable over the long term. As a part of the restructuring, the Company has ceased the current manufacturing operations in the financial year and are in the process of scaling down the operations including reduction of manpower. The Company shall address the Thailand market with a revamped product portfolio, suitable to local market needs, delivered through a CBU distribution model. TMTL bagged a prestigious order from Royal Thai Army to supply 614 units of the 1.25 ton Tata Truck.
Finance
During the year, the free cash flows for Tata Motors Group were negative Rs.16,346 crores (FY 2017-18: negative Rs.11,191 crores), post spend on capex, design and development of Rs.35,236 crores. Tata Motors Group’s borrowing as at March 31, 2019 stood at Rs.106,175 crores (as at March 31, 2018: Rs.88,951 crores). Cash and bank balances and investments in mutual funds stood at Rs.42,086 crores (as at March 31, 2018: Rs.48,974 crores). The consolidated net automotive debt to equity ratio stood at 0.47 as at March 31, 2019, as compared to 0.15 as at March 31, 2018.
Free cash flows were Rs.1,539 crores (FY 2017-18: Rs.1,339 crores) standalone basis with joint operations of the Company. Spend on capex, design and development were Rs.4,753 crores (net). The borrowings of the Company as on March 31, 2019 stood at Rs.18,640 crores (as at March 31, 2018: Rs.18,464 crores). Cash and bank balances including mutual funds stood at Rs.2,981 crores (as at March 31, 2018: Rs.2,312 crores). Additionally, the Company has undrawn committed lines of Rs.1,500 crores.
During FY 2018-19, the Company raised unsecured term loans amounting to Rs.1,500 crores from Banks for general corporate purpose
The Company successfully completed liability management exercise by part refinancing of US$ 500 million notes due for repayment on April 30, 2020. The Company raised ECB of US$ 237.468 million maturing in June 2025 which was used to repay the bonds through the tendering process.
Deposits: The Company has not accepted any public deposits during FY 2018-19. There were no over dues on account of principal or interest on public deposits other than the unclaimed deposits as at the end of FY 2018-19 which is Rs.7.30 crores (Previous year Rs.10.80 crores).
At JLR post spend on capital expenditure, design and development of GB£3,373 million (Rs.30,325 crores) [FY 2017-18: GB£4,186 million (Rs.35,776 crores)] the free cash flows were negative GB£1,267 million (Rs.9,962 crores) for FY 2018-19. The borrowings of JLR as on March 31, 2019, stood at GB£4,511 million (Rs.40,829 crores) [as at March 31, 2018: GB£3,731 million (Rs.34,238 crores)]. Cash and financial deposits stood at GB£3,775 million (Rs.34,168 crores) [as at March 31, 2018: GB£4,657 million (Rs.42,977 crores)]. Additionally, JLR has undrawn committed long term bank lines of GB£1,935 million (JLR data as per IFRS).