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Tata Motors eyes top 3 slot in 3 years

06 December, 2016

Article courtesy: The Times Of India

KOLKATA: Tata Motors has set its sights on the no. 3 position in commercial vehicles sales globally and in passengers cars in India within three years. "Our vision is to be among the top three automakers in the respective markets by 2019," Tata Motors managing director & CEO Guenter Butschek said.

Setting aside the ongoing controversy over deposed Tata Sons chairman Cyrus Mistry views that interim chairman Ratan Tata's dream car Nano was a drain on the company's resources, Butschek said the company had embarked on a transformation journey. The top management has stressed on three things: focus on processes, cost efficiencies and organizational effectiveness to enhance productivity and align business goals across the company.

"Tata Motors will deliver exciting innovations and grow not just volumes and the top line but the bottom line as well. Our future outlook focuses not only on revamping our product portfolio, but also on adopting Customer-centric processes," the MD & CEO told TOI.
Sustainability is at the core of its innovation programme with special focus on alternate fuels. The company has developed hydrogen fuel cell technology that can power both passenger and commercial vehicles to reduce dependency on fossil fuels.

"Our product strategy blueprint is now in place to define our next Gen products and address relevant white spaces in the market. We are watching the market shift in the commercial space very closely, and refining our portfolio to address this changing trend," said Butschek.
Tata Motors was among the top three players in the Indian passenger car market before it slipped and lost significant marketshare as it failed to attract buyers in the absence of new products for several years. In 2015-16, it sold 1.27 lakh cars in India, 6% less than 2014-15.

The tide appears to be turning with the launch of Tiago. Over the next 12-18 months, three new launches are lined up: luxury SUV Hexa, compact SUV Nexon and compact sedan Kite5. The company has promised two new cars every year.

Following the strong demand for Tiago, Tata Motors finished fourth in October 2016, overtaking Honda. The company had ended 2015-16 at no.5 behind Maruti, Hyundai, Mahindra and Honda. Riding on the popularity of Tiago and Bolt, the company's hatchback sales doubled in the first quarter of 2016-17. In the second quarter, too, Tata Motors clocked a growth of around 24% while the industry growth was pegged at 12%.

While the new Impact design philosophy along with a vastly improved engineering and finish first visible in Tiago and soon be seen in luxury SUV Hexa has struck a chord with prospective customers, the contrast between the new portfolio post Zest and the cars prior to it is so stark and jarring that shedding the old image will be a challenge. The company has till now discontinued the Manza and Vista but persists with the Indica, Indigo CS, Arya and Safari Storme.

Butschek says the company has a clear roadmap to align the existing product offerings to the change in the market environment and customer needs. "We shall be taking appropriate calls on individual sub brands. We will continue to deliver products in response to demand from our commercial and personal users respectively. Our future strategy for the passenger vehicles emphasizes more number of products from lesser platforms in order to cater to relevant segments. By this approach, we would be able to create a higher degree of leverage and commonality and economies of scale," he said.

On the commercial vehicle front, Tata Motors' ambitious drive to become the third largest medium and heavy truck maker in the world hinges on plans to set up local manufacturing units in markets like Thailand, Vietnam, Bangladesh as well as counties in Africa and West Asia.

"We hope to double commercial vehicles sales in international markets in two years. Exports continue to be a focus area and we are involved in extensive product development for specific markets on specific products. Keeping pace with last year's exports of 54,000 units, our current exports contribute 14% off the total company business. We intend to grow this to 25% over the next three years," he said. Tata rules the domestic commercial vehicles space with 48%-50% marketshare.


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