The Hixen, a new urban midsize truck unveiled by Tata Daewoo Mobility at its headquarters in Gunsan, North Jeolla Province, in April. [Tata Daewoo Mobility]
The Hixen, a new urban midsize truck unveiled by Tata Daewoo Mobility at its headquarters in Gunsan, North Jeolla Province, in April. [Tata Daewoo Mobility]

Tata Daewoo Mobility swung to a loss for the first time in a year as a slowdown in the commercial vehicle market weighed on earnings. Even so, the company continued investing in production equipment and software while preparing a comeback centered on its new urban midsize truck, the Hixen.

Tata Daewoo Mobility disclosed Tuesday that consolidated sales for fiscal year 2025 (April 2025 through March 2026) fell 9.1 percent to 828.2 billion won ($541 million), down from 911.1 billion won the previous year. Operating profit of 7.7 billion won turned to an operating loss of 5.2 billion won over the same period. Net profit of 6.1 billion won also reversed to a net loss of 1.4 billion won.

The deterioration has been building for two years. Sales climbed from 549.3 billion won in fiscal 2020 to 880.7 billion won in fiscal 2021, then rose further to 937.6 billion won in fiscal 2022 and 1 trillion won in fiscal 2023. They have since declined for two consecutive years, falling to 911.1 billion won in fiscal 2024 and 828.2 billion won last year.

Profitability followed the same arc. After posting an operating loss of 8.1 billion won in fiscal 2020, Tata Daewoo recorded operating profits of 29.2 billion won, 30.4 billion won and 33.9 billion won in fiscal years 2021, 2022 and 2023, respectively, sustaining a recovery.

Operating profit then collapsed to 7.7 billion won in fiscal 2024 before turning to a 5.2 billion won operating loss last year. Net profit had stayed positive from fiscal 2021 through fiscal 2024 after a net loss of 20.4 billion won in fiscal 2020, but slipped back to a net loss of 1.4 billion won last year.

The broader slump in the commercial vehicle market has been the primary drag on results. Weakening construction activity, shrinking logistics demand and prolonged high interest rates have combined to dampen demand for medium and heavy trucks. Tata Daewoo Mobility has been broadening its lineup beyond its traditional focus on heavy trucks to include midsize and light-midsize models, but the market recovery has been slow to materialize.

Cash flow also deteriorated. Operating cash flow swung from an inflow of 46.1 billion won the previous year to an outflow of 20.8 billion won this year. Cash and cash equivalents shrank from 79.8 billion won to 34.5 billion won. Inventories rose from 227.6 billion won to 258.4 billion won, reflecting a growing stockpile as sales slowed.

Tata Daewoo Mobility has nonetheless chosen to prioritize product competitiveness over cutting investment. The company spent 10.9 billion won acquiring machinery, 3.1 billion won on software and 5.4 billion won on production-readiness assets such as molds and jigs needed for new vehicle manufacturing. The book value of tangible assets edged up slightly from 194.6 billion won to 195.4 billion won, signaling continued investment in new model preparation and production efficiency even as the company defends its bottom line.

Tata Daewoo Mobility changed its name from Tata Daewoo Commercial Vehicle in November 2024, signaling an ambition to expand beyond traditional truck manufacturing into a broader mobility company encompassing customer operations and services.

The Hixen, an urban midsize truck, is the centerpiece of the company's rebound strategy this year. Tata Daewoo Mobility has been ramping up its push into the midsize truck segment with the Hixen since April. The plan pairs it with the existing light-midsize truck Gixen to widen the lineup and capture demand from urban logistics and freight operators.

"It is true that industry conditions have been difficult for the past several years, but Tata Daewoo Mobility has been stepping up its market push since April with the urban midsize truck Hixen at the center," a company official said. "We are working to expand our presence in the commercial vehicle market through new models including the Hixen and Gixen, while also strengthening service quality and putting customer satisfaction first."

"Going forward, we will continue creating changes that customers can feel in both our products and services," the official added.


kwater@heraldcorp.com