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Tatra Trucks Exceeds 2014 Sales Target


kscarbel2
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Radio Prague / August 20, 2014

Tatra Trucks rise from the ashes following its predecessor’s bankruptcy seems to be continuing at a steady pace. The company announced at the beginning of August that it had sold more vehicles in the first half of the year than expected and raised its profits estimate for the full year to US$142.5 million.

Tatra Trucks also says it has almost sold all this year’s planned production of 745 vehicles and expects to be capable of overshooting its 2014 target by an extra 30 to 50 vehicles.

In its latest form, Tatra Trucks is a newcomer founded after its predecessor Tatra a.s. filed for insolvency last year. Owned by Czech businessmen Jaroslav Strnad and René Matera since April 2013, the truckmaker nevertheless sees itself as the follower of a brand whose history spans more than one hundred years. And it now seems to be slowly recovering from years of financial uncertainty caused by complicated ownership and the impact of the financial crisis.

Soon after the takeover, a strategy of cautious and targeted production was chosen by the company’s new management, which aims to exploit gaps in the market and focus on producing what Tatra does best – manufacturing heavy off road trucks. The plan, which also saw over 100 workers being laid off to increase output efficiency, seems to be working. The company last year hit its highest vehicle production volume since 2008 and has succeeded in regaining the confidence of suppliers.

Tatra’s main customer base continues to be the military, construction and mining sectors. Two thirds of the company’s trucks are delivered to global customers outside of the Czech Republic.

One of the company’s sales successes since its restructuring is a deal with the Saudi Arabian army worth US$213.7 million. Tatra’s will supply the trucks in SKD form (semi-knocked down) and final assembly will take place at a newly opened assembly plant in Saudi Arabia. Tatra is seeing a growing trend of trucks being assembled from SKD or CKD (completely knocked down) kits in the country of their destination.

In spite of the upbeat tone, the market for all-terrain trucks has shrunk in the past decades. Current world production is around 10 000 units, which is actually close to the number that the Tatra plant alone was producing back in 1989. One of the main reasons behind this is improved infrastructure and better roads in many parts of the world, which has led to a lesser need for such vehicles. However, there is still considerable potential for Tatra in the construction and mining industry as well as military contracts.

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