Tatra turns corner and seeks expansion on civil trucks market
Vehicle producer Tatra is an iconic name in the Czech Republic and indeed in the world of car and truck production. The Czech company claims to be the second oldest car manufacturer in the world with its first model, the Präsident, being rolled out in 1897. The first truck followed a year later at the plant in Kopřivnice, in the far east of the country in the Moravia-Silesia region.
But Tatra seems to have turned the corner with production and sales up and expected to climb even higher this year. I asked general manager Radek Strouhal, who took over in the new post in January after previously being economic manager, what the latest targets are.
“I think that last year was quite successful for us, we made 1,326 vehicles in total which is a great increase compared with 2015. I think it’s an increase of around 35 percent. We are quite satisfied with this growth. Our target for this year is to grow further and we would like to achieve at least 1,700 trucks. I hope that we will meet the target. Although these figures might look small compared with foreign manufacturers of trucks, but we are not a mass producer. We are focussed on some limited series or even single vehicles which are customised for very special customers in mining, forestry and construction industries. We also supply fire brigades and the armed forces. It’s also important to look to the military sector because we have to defend, of course.
“If you want to export, you have to be strong in your home market or field.”
“The vehicles have a quite high added value because they are customised, tailor-made you might say. The unique Tatra concept helps us to offer the highest endurance for off-road capacities on the market.”
Could I ask you a bit about the markets you have. During the Communist times one of the major markets was the Soviet Union and the allied states, where are your main markets now and where do you expect to expand?
“Now it’s quite different to the times you are talking about. Now the biggest market is the former Czechoslovakia for us. If you want to export, you have to be strong in your home market or field. You know, generally we are talking about customers that are quite diversified regionally and commercially. We deliver more than 330 trucks to India. Over 100 vehicles were delivered to Egypt and Jordan, 70 to Brazil. So we are really worldwide. We are focussing on other markets, Australia, Germany, the Netherlands, of course, keeping some share in Russia. But the new market that looks quite promising for us is Norway, for example.”
“We can use there our experience from Russia, from Siberia. We have trucks that are very well prepared for the weather conditions there. In Northern Norway they need trucks that are moving off-road and are fully powered. That’s the advantage of Tatra of course.”
Looking at the growth, you had that growth last year and you expect quite considerable growth this year, how difficult is it keeping that momentum and finding the workers and training them? Apparently in some areas of production you are now looking to employ women because they cannot find men to do the work…
“Yes, the truth is that we have the advantage that we are a traditional Czech company and we are the third oldest car maker in the world. It is a big advantage that the Tatra brand is attractive for young people and also those that are experienced workers. We are still looking for skilled and clever workers that can work in technical departments. The rate of unemployment in the Czech Republic is now very low so it is even difficult to find people for us, but I think we are quite successful. In the last year we have been able to hire 350 new workers here in Tatra, which is some kind of proof that the Tatra brand is quite strong on the HR market. And, as you said, we are also looking for women because some idea that the automotive producers only have to hire men is gone already. We know that the women are very skilled as well and that there is no need to make any difference between men and women.”
“In Northern Norway they need trucks that are moving off-road and are fully powered.”
And how about increased sub-contracting, is that something you have looked at? If you can’t do the work yourself is that an option or do you prefer to keep most of the work in house because in that way you can be sure of the quality and what’s happening?
“Sub-contracting is an option, but it is an option that it is very difficult to use. The problem is not only the quality but also the price because we are starting to be highly productive and our internal prices are lower than the prices of companies around us. We have invested a lot in machinery and so on and that equipment has helped us to be highly productive.”
And the divide between civil and military sales, how is that looking now and how do you expect that to develop?
“In my opinion, military sales are already high, we are at around 60 percent military sales. We would like to lower that, but not as regards the total amount but the proportion by growing the civil market. We are now focusing on developing our dealer network and expanding on new markets like Germany, Poland, and Norway.”
“It takes a lot of time to persuade foreign governments to buy your trucks but we have a big advantage that the unique capacities of Tatra are well known and the military sector is able to pay for this because they really need a solid truck for off-road conditions and that’s the advantage of Tatra. We are quite skilled in the military field and we know how to handle military orders. That’s our advantage. It is difficult, but I think we are doing our best here. But we are looking at more focus on the civil market because I think the Tatra Phoenix is a great product for the civil sector and we want to grow more here than the military sector.”
More generally, you have mentioned your strength in off-road vehicles but the world is getting more developed and inter-connected and maybe some of those countries that are less developed or underdeveloped, however you like to put it, or developed and have roads and other transport. Is that working against you or is there a still market for off-road trucks? You mentioned Norway, of course, but maybe looking a bit broader…
"We are looking at more focus on the civil market."
“Yes, this is quite difficult to answer. I think that the market or the development in the world is slightly against us. On the other hand, we are working quite hard on our product and looking for higher and higher profitability and not only in the rough terrain and off-road trucks but also in mixed terrain. For example, forestry is a typical customer of ours. If you are active in the forest you may have to go off-road for a few kilometres but then back on the road to some mill or something like that. These customers are, let’s say, very satisfied with our product because they have the first examples of the Tatra Phoenix and see that the economy is very good and those trucks are quite profitable for them.”
Turning to your promotion and the Dakar rally and you are always associated with that. How important is that as a showcase for your trucks?
“First of all, it is important for us from a marketing point of view. Everyone can see our trucks. This year we were able to win the first part of Dakar but then came some technical problems but next year I think we will be back even stronger. But what is even more important for us as a company is that we can test there, it is a testing ground for us. If we have some new innovations we are testing them on the Dakar trucks. If they are able to survive in Dakar then we know they will be able to survive under commercial conditions.”
“I am afraid that Tatra will not change its core business which is now in trucks. Serial production of cars is a little bit a non sense for us. Also in the past Tatra cars were very technologically advanced and it was a very beautiful car. We are proud of our tradition but we want to move forward and trucks are now our core business. We are not looking at personal or passenger cars. But in the long term you can never say never.”
I was thinking not of mass production, that’s out of the question, but one off models for customers who say can you remake this model from the past. That’s not really possible?
“The renovation of old cars is possible. It’s something we have in our mind, but restarting production of new cars is a closed chapter. “
