Ratan Tata set to evaluate Tata Motors’ revamp plan
NEW DELHI: Tata Motors will take approval of its new organisation structure from Ratan Tata, company sources said.
The new structure, which has been in the works for some time, will make Tata Motors more nimble and agile. The automaker will see more variants and lesser new launches, with an aim to clock more sales, manage quality and reduce costs. The sales and services function, one of the main reasons why buyers moved away from the brand, will “evolve through adoption of a customercentric approach”, according to an internal note, a copy of which is available with HT.
According to insiders at Bombay House, the Tata Group’s headquarters, the change will be visible in the upcoming quarterly results of Tata Motors.
When asked about its new plans, a Tata Motors spokesperson said the company is already undergoing a restructuring.
Tata Motors has been on the forefront of the Tata-Mistry war. “There has been a perilous drop in market share in passenger cars and commercial vehicle over the past three years,” Tata Sons said in a statement on Thursday.
The company’s share in the passenger vehicle segment fell to 5% in March 2016, compared to 13% in March 2013. Market share in the commercial vehicle segment fell to 40% from 60%.
Cyrus Mistry took over as chairman in December 2012.
According to the statement issued by Tata Sons on Thursday, Tata Motors failed to sell the Zest and the Bolt – the turnaround models for the company – under Mistry. The number of both vehicles sold were almost the same as the company’s 15-year-old models, including Indica and Indigo.
“Tata Motors does not have one problem. It will have to transform products, sales and services network, and cut down on legacies. So far, it has been surviving on Jaguar Land Rover (JLR) money,” said Amit Kaushik, India head of Detriot-based auto consultancy Urban Science.
JLR was acquired and turned into a profit-making unit under Ratan Tata’s chairmanship.
But the Tata Group seems to be worried most about its new car, Tiago’s future. “The launch of Tiago has been well received in the market, but its sustained steady state volumes are yet to be determined,” Tata Sons said in the statement.