New models, Messi fail to put Tata Motors on track
In the last two years, Tata Motors Ltd has revamped its product portfolio, contracted football superstar Lionel Messi as its brand ambassador, improved dealer relations and worked relentlessly on improving customer service.
Despite that, only five of every 100 Indian car buyers choose a Tata Motors product, a harsh reality for the Indian company led by CEO Gunter Butsheck, who was previously chief operating officer at Airbus Group SA and a Daimler AG veteran.
According to data provided by Society of Indian Automobile Manufacturers or Siam, market share of the company during April-October period stood at 5.12%, an increase of 11 basis points over the year ago period. During the period, Tata Motors sold just 15,930 units of Tigor as against the segment leader Maruti Suzuki’s Dzire that sold 107,515 units; and 8,055 units of Hexa as against the segment leader Toyota’s Innova that sold 41,410 units. The newly introduced compact utility vehicle Nexon has not had an enthusiastic start. Launched just before the festival season, it sold 5,871 units in September and October.
The outlier, of course, has been the hatchback Tiago.
When Tata Motors launched Tiago in 2016, it was expected to be the product that would kick start the turnaround of the company’s ailing passenger vehicle business unit. It was a runaway success and still continues to sell more than 6,000 units every month.
So, is the company headed into the direction where it will largely be a one car wonder on the lines of its peers such as Ford India Pvt Ltd, which has a hot-seller in EcoSport and Renault India Pvt Ltd that sells Kwid.
To be sure, Tata commanded 14% market share in 2010-11 and was the country’s second-largest car maker after Maruti Suzuki India Ltd.
According to Abdul Majeed, partner and national auto practice leader at PwC, Tata Motors needs to do “something much more than introducing new products”. The onus is now on the quality of customer service and after-sales service, he added. “It may not happen overnight and we also cannot expect most of the models to do well.”
A Tata Motors spokesperson did not respond to queries mailed to him on Wednesday.
Sure, the company may still be grappling with the legacy issues and two years could be too short a timeframe to solve all its problems. Anil Sharma, principal analyst, IHS Markit says the company has recovered some ground, even as that does not get reflected in numbers. “Earlier Tata Motor vehicles never used to make it to the list of 4-5 cars that a potential buyer compiles before making a purchase. Now buyers have started to consider Tata products. This is a positive development.”
In an analyst call after the company’s September quarter earnings, the company said that its efforts to turnaround business on a standalone basis would be built on three pillars: filling of product gaps, cost reduction and supplychain consolidation.