Czech manufacturer Tatra is exiting a rough patch, during which neither it nor observers were sure where the future was. In recent years, Tatra has signed several high-potential agreements, with either large clients or high-potential partners. With an incursion into the world of off-road mobility, the Czech manufacturer now covers all segments of the market.
DAF, the cornerstone of re-generation
The Czech manufacturer Tatra, a producer of specialized chassis for all-terrain vehicles and commercial trucks, is reaching leadership on its market and opening up promising perspectives for itself. After years of sluggish business, the 2010 decade was marked with three major partnerships which guarantee it a steady supply of orders for coming years, and also enable it to address all sub-markets within its reach. The first of those partnerships was signed with truck-maker DAF, so as to latch on to the steady increase of land logistics demand in Europe – a trend that has been ongoing for nearly 30 years. President Harrie Schippers then stated: “DAF has been consistently gaining market share in Europe and our class leading reputation for driver comfort, engine development and after sales support services has contributed significantly to that growth. We are delighted that we are able to contribute to TATRA’s new, state-of-the-art truck, which also offers a great opportunity for our DAF dealers, as it expands their current product portfolio with an all-wheel drive, high mobility commercial truck.” The partnership, according to which DAF owns a small share of its subcontractor (thus securing the mother company’s loyalty), aims at having a reliable sub-supplier in charge of designing and producing chassis, as DAF truck models continuously evolve to address the rapidly changing market and environment. This leaves DAF to focus on maintaining its own success story: placed in administration in the early 1990s, DAF is currently one of the market leaders, worth near 2 billion dollars – a position which will pull Tatra in its wake.
Addressing the military market
Realizing that many military vehicles shared civilian truck technology, Tatra has recently addressed the military market. Today, Tatra fields vehicles in service within the Indian army and signed, in 2015, a memorandum entrusting the Czech firm with all spare parts supplying, via the State-owned firm BEML. With over 2 million military personnel, the Indian army is one of the largest forces in the world – alone, it guarantees a safe future for Tatra. Headquarters issued the statement, after inking the deal, according to which “The Indian Army is historically one of the world’s largest users of Tatra chassis, which makes India a strategically very important market. You would count around 8,000 Tatra units in the army and only in the period from 2003 to 2012 up to 3,925 assembly sets were delivered there, assembled by the Indians themselves, who then mounted their own superstructures on them based on their needs. On average, it was less than one third of the truck maker’s production; in 2010 even 56% of total annual production went to India.” Even by supplying minority vehicles to the Indian Army, the agreement was a giant leap for the truck-builder – and there are many other types of vehicle markets within this field, which Tatra plans to address.
The French move
When the Indian deal made obvious that Tatra could greatly contribute to, and benefit from, re-armament programs and military upgrades, the Koprivnice firm turned to the European market, to identify new growth sectors. European defense has always been a tricky field as it had always been marked with severe fragmentation, resulting in loss of commercial power at the continental level and loss of competitive edge at the firm level. Tatra was among the first to identify the ongoing market shift: the entire European market is currently solidifying into one rationalized military-industrial block, where France and Germany will keep leadership on strategy and draw industrial potential wherever it is in Europe (everywhere, including in Tatra’s Czech factories). By detecting early on that the German military industry was about to encounter systemic problems (which it has, since), Tatra was able to choose the right partner by signing an agreement with French firm Nexter. As a result, the French turned to the Czechs to build the chassis for their new-generation Infantry Fighting Vehicle, the Titus – one of the most advanced military vehicles ever produced in Europe. Defense minister Lubomir Metnar announced: “Acquiring the Titus vehicle has been one of the military’s priorities for several years. Soldiers need this technology, and it is my objective to complete this project successfully and quickly.” Previously, Tatra had already been called upon for the chassis of Nexter’s truck-mounted artillery system, the Caesar. Tatra will benefit the Nexter agreement twofold: organic orders by Nexter for France, the most militarily active country on the continent, and also through the many military deals which the Franco-German duo leadership will encompass, in coming years. Whichever country in Europe needs to upgrade or re-arm in the future, Tatra will be a part of it through its Franco-Czech agreement.
The 1990s were rough on Tatra, as they were rough on just about any industrial company in Central and Eastern Europe, in those times. Quickly realizing that producing high-quality chassis for trucks was simply not going to be enough to keep its head above water, the firm consented to leave its comfort zone and go on a hunt for new growth fields. Barely 10 years and a few strategic decisions later, Tatra is on the track to becoming a European market leader, with sales firmly hooked into any market evolution, civilian or military.