Tatra Trucks production leaps 56% year-on-year

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Tatra Trucks Press Release  /  January 6, 2017

In 2016, the Tatra Trucks produced a total of 1,326 vehicles, with all manufactured vehicles already sold.

As a result, it's the first time since 2008 that Tatra exceeded the symbolic production milestone of 1,000 vehicles and managed to increase production by more than 50 percent on a year-on-year basis. “We have proved to customers around the world that we are able to meet their demand for our unique Tatra vehicles and chassis,” says company CEO Martin Bednarz. The production in Tatra ran until the last working day of the year; the last score of vehicles were assembled in the week between Christmas and New Year.

Both owners of the truckmaker highly appreciate the company’s results in 2016: Jaroslav Strnad and René Matera. Majority shareholder of Tatra Trucks Jaroslav Strnad says: “A big thanks from me and Rene Matera go not only to the entire management team of Tatra Trucks, but above all to the employees for all their efforts, especially in recent weeks and months.”

The production and sales goals of Tatra Trucks for 2017 is 1,700 vehicles. From a long-term point of view, the company considers it realistic to supply the world market with about 2,000 vehicles a year in the segment of specialty trucks and chassis for various superstructures with the requirement for high durability and go-anywhere ability off-road.

A substantial annual increase in company sales will correspond to the growth in production. “Our EBITDA will rise as well, it will approach the level of half a billion CZK in 2016,” said Finance Director Radek Strouhal.

Chairman Petr Rusek’s comments on expectations for 2017: “Due to the expected development of the European economy, our growth in 2017 will be much more demanding than in the last two years. However, thanks to a specific product and the major diversification of markets, Tatra has good prerequisites for this.”

Production increase, human resources and innovations in 2016

The organization of production operations, where such excellent results have been achieved, was conducted under the direction of operations manager Pavel Jurečka. An increase in the number of vehicles produced by more than half would not be possible without the intensive work with subcontractors done by purchasing director Martin Šustek. However, the final number of 1,326 Tatra trucks particularly demonstrates the high commitment and motivation of hundreds of production workers, especially in recent months and weeks of the year.

Chairman Petr Rusek says: “Purchasing director Martin Šustek deserves the lion’s share for the fact that in 2016 TATRA managed to deliver on its business success through sophisticated procurement and production support. His department underwent full-scale restructuring in 2017 and his team managed to coordinate all contractors so that TATRA TRUCKS had enough parts and material to produce all our trucks. Such a favourable situation in the supply of material has been absolutely unprecedented in the past five years.”

This production increase occurred under extremely difficult staffing conditions. During the year, Tatra Trucks hired more than 350 new employees, mostly in technical professions. “It was a difficult task, as we do not run any mass production series, rather we produce unique vehicles. Even a line operator must be a qualified specialist,” says HR Director Katerina Nogolová. The number of company employees thus reached 1,350 persons, out of which 650 count for production workers.

More than ten new talented designers, all recent graduates, have been hired. Fresh “reinforcements” are necessary because, from the design point of view, special non-series production requires day-to-day development and innovation. Engineering Director Radomir Smolka lists some of them: “In 2016, we began to offer our customers vehicles equipped with disc brakes, having also modernized the original TATRA cab for TATRA FORCE vehicles.”

Investment, projects and development

During 2016, the company made investments worth CZK 400 million, mostly directed towards production. These investments included milling machines, machine tools, paint shop equipment and assembly lines. However, Tatra invests not only in the production, but also in development and testing; over CZK 100 million, all of it from its own funds and subsidies, have been directed towards these two areas in the last three years. While the number of employees should not significantly rise in 2017, hundreds of millions of investment in machinery and equipment will continue. Managing Director Martin Bednarz comments this way: “Tatra’s staffing capacity is now sufficient for the production of about 2,000 vehicles in a two-shift operation, assuming investments into manufacturing technology will be made, including the partial robotization of certain production parts.”

The overall reconstruction of the middle tract of the factory is planned, covering the final assembly line and other key operations, where no investments have been made to a greater extent since the 1980s. As a result, the Tatra factory would also be visually transformed into a modern industrial enterprise. The project implementation depends on the decision to grant co-financing from European funds, which should happen in the upcoming months.

Another major project, whose implementation should start in 2017, is the construction of the new Tatra Museum in the historically valuable building of the former foundry, which requires major reconstruction. CFO Radek Strouhal, overseeing the project management on behalf of Tatra, says: “In cooperation with the Moravian-Silesian Region as a strategic partner, with the Town of Koprivnice and the National Technical Museum, we want to open a new museum on a global scale in 2019 in Koprivnice, which will become a popular destination, together with the existing museum, for tourists and automobile connoisseurs.”

Tatra’s business achievements in 2016

Tatra Trucks is not only increasing the production of vehicles, but they have also managed to expand their portfolio of customers. At the moment it can be said without exaggeration that Tatra Trucks supplies vehicles to all inhabited continents and all climatic zones. The important fact is that the Tatra Trucks business strategy is widely diversified, not only geographically, where smaller series or even individually unique special trucks are supplied to dozens of countries, but also in terms of segments - from bulk mining lorries and agricultural special units to e.g. fire engines. As regards the proportion of production between the military and civilian sector, this ratio is about 68:32.

The most significant market is still the domestic Czech-Slovak territory with more than 435 vehicles, with India coming in second with the sale of 334 vehicles. Third place is jointly shared by two new markets - Egypt and Jordan, where 130 Tatra vehicles were exported this year to each of these countries. An interesting volume of vehicles, 76 units, was delivered to Brazil. “Egypt and Jordan are new and attractive markets which we have entered this year. Currently the supply of our production there is going to the defence segment, but in the future we would like to supply vehicles for the civilian sector as well,” says Sales Director David Pipal.

The growth in sales of the civilian series, where our flagship Tatra Phoenix model has grown by 65 percent, looks very promising. This model series features mostly Euro 6 compliant engines and is designed especially for developed western markets. With this model, Tatra has successfully established itself not only in domestic markets but has also expanded to Austria, Germany, Norway and the Netherlands. Regarding production for the defence segment, Tatra Trucks usually supplies chassis for which the buyer selects a superstructure according to their needs.

OEM projects are also very interesting with the truckmaker supplying so-called CKD sets to the market, i.e. vehicles are disassembled into subassemblies transportable via containers, which are then assembled at the customer’s. The most significant Tatra OEM project is in India, where the assembly operations take place in the state-owned BEML enterprise. David Pipal says: “We have achieved the first goal - to demonstrate to our partners and customers that Tatra is flourishing again. Now we are showing our customers that with Tatra and its unique utility qualities, they can increase their own prosperity. Tatra will take you farther.”

Tatra Trucks is also continuing its traditional cooperation with the Czech Army, which mainly concerns the supply of medium-sized Tatra Tactic trucks (formerly the T810). David Pipal, the sales director of Tatra Trucks, says: “The Czech Army is our traditional and reference customer, something which we highly appreciate.”

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