Tata Motors has targeted sales of around 4,000 units of its recently unveiled World Truck range this fiscal, according to industry sources.

Scheduled for launch in July-September, the trucks will have capacities ranging from 10 to 75 tonnes. They will be priced at a premium to the existing Tata Motors' truck range, which means an upper band of even Rs. 5 million (US$ 106,383) for heavy trucks.

"We are not chasing numbers this year but focusing on pre-sale activity. We are doing pilot studies with customers right now," Mr Ravi Pisharody, vice-president, commercial vehicles said.

Mr R. Ramakrishnan, Head of Sales, said: "We are not trying to generate numbers quickly. A whole lot of things like driver training, infrastructure and financing will have to fall in place. The marketing of the World Truck is not a quick fix thing but a long-term project."

Operating Lease

Tata Motors also plans to introduce new financing options for buyers of these trucks. "We would be looking at initiatives like operating leasing, which is not there in the market right now. We are in talks with a number of operating leasing companies and details have to be worked out," he said.

The company believes operating leasing will do the trick as far as attracting customers is concerned.

Here, the financier leases the asset (vehicle) to a customer and recovers only a part of its value through lease rentals. The asset remains on the books of the financier. Unlike financial leasing, at the end of the lease period the customer is not obligated to buying the vehicle from the leasing company.

Besides operating leasing, Tata Motors plans to initiate talks with vehicle financiers on offering loans with a longer tenure for World Truck buyers.

"Generally, the tenure of truck loans is three to five years, depending on the lifetime of the vehicle. However, the World Truck range is more durable and we do not see a problem with lenders offering longer tenure loans of even seven years plus. We are yet to start talks with banks though," said Mr Pisharody.

The Competition

It will be interesting to see how World Truck stands up to offerings from Volvo and Mercedes Benz. Swedish truck maker Scania and MAN of Germany (through an alliance with Force Motors) also have big plans for India.

Tata Motors will hope that the comparative advantage in terms of acquisition cost and operating expenditure will help its products get the lead in market share. "Low lifecycle cost will be our USP. Fuel accounts for about 60 per cent of the operating cost of a truck. Interest and acquisition costs are the other factors. We have an advantage on all fronts," added Mr Ramakrishnan.