‘Tata Motors’ performance is sustainable, will only get better’
NEW DELHI: When India’s largest auto maker Tat a Motors Ltd hired Guenter Butschek as its chief executive and managing director in 2016 after a two-year hunt, hopes were high that the move would stop the drift in sales that began with the retirement of former managing director Ravi Kant in 2009.
On Wednesday, the company got a pat on the back from Tata Sons chairman N Chandra seka ran after it posted a near 11- fold increase in net profit due to a surprise turnaround in its India business.
Chandrasekaran reaffirmed his faith ins the company and said its performance will only get better .“Tat a Motors’ performance is sustainable,” he said in response to a query.
Chandrasekaran, however, declined to comment on the performance of certain products, including the Na no .“It is going to get better from here. Tat a Motors is committed to future mobility with significant investments being made in the electric, passenger and commercial vehicle segments,” he said.
The Tata group holding company’ s chairman unveiled H 5 X, a sports utility vehicle (SUV) jointly developed by Tat a Motors and Jaguar Land Rover Plc, at the Delhi Auto Expo.
Butschek, hired by former Tata Sons chairman Cyrus Mistry, was under the scanner over his performance and the changes he was trying to make at Tata Motors. The Economic Times in August reported that Chandra seka ran had reversed many of Butschek’s turnaround initiatives, raising concerns that the company’s fortunes would take longer to revive.
“Forget all the rumours that
Overview of Tata Motors in terms of product portfolio, capacity utilisation, base line profitability, was not entirely wrong. GUENTER BUTSCHEK, Tata Sons CEO and MD
were flowing around nine months ago as far as my destiny is concerned. I will complete two years on February 15,” Butschek told Mint.
Net profit at Tata Motors, including those of its units, rose to ₹1,214.6 crore for the three months ended December from ₹111.57 cr ore in the same period a year earlier, the biggest jump in seven quarters. A Bloomberg poll of 19 analysts had pegged quarterly profit at ₹Rs2,349.1 crore.
The key reason for the lowerthan-expected profit was the weak performance by J LR. Sales in that unit rose just 3.45% from a year ago to 154,447 units. While sales in the US and Europe declined, sales growth in China slowed to 14.6%. JLR’ s sales were weighed down by few launches and model refreshes during the year.
Butschekh as, in fact, acknowledged some of the problems, taking the first step to fix them. In August 2016, he admitted Tata Motors is not on the top of potential customers’ consideration list in passenger vehicles, and pointed to problems such asa si lo approach, lack of accountability and no clear definition of excellence.
He reiterated that on Wednesday .“Overview of Tat a Motors in terms of product portfolio, ca pa cityu ti lisa ti on, baseline profitability, was not entirely wrong ,” Butschek said.
“We wanted to make sure that there is an ownership on the executive committee, dedicated project teams, which would go beyond developing concepts, focus on execution and improving baseline,” he added.