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How Butschek plans to take Tata Motors from No.5 to top 3

Tata Motors is set to continue its product offensive that also now includes a slew of electric vehicles. It has already launched two new cars - the Altroz premium hatchback and the Nexon EV, this calendar year

twitter-logoSumant Banerji | February 10, 2020 | Updated 17:19 IST
How Butschek plans to take Tata Motors from No.5 to top 3
Tata Motors CEO Guenter Butschek believes the transition to BS-VI is an opportunity for the company

Buoyed by the response it has received for the products showcased at the biennial Auto Expo currently underway at Greater Noida, homegrown auto major Tata Motors has said it has set its sight firmly at the number three slot, a long-cherished position, by the end of the financial year 2022.

Tata's stall, one of the largest at the Expo, houses a sum total of 26 vehicles - 14 commercial and 12 passenger vehicles, including four global unveils. In the re-imagination of the classic Tata Sierra, this time with an electric powertrain it has also given the exhibition its showstopper.

The company would hope some of the excitement will rub off on its performance in the domestic market as well. Tata lost its number three position in the domestic passenger vehicle market to Mahindra and Mahindra back in 2012-13 and has been trying to regain the spot ever since. Led by a product offensive with launches such as Tiago hatchback and Nexon compact SUV, it came close to pipping Mahindra in 2018-19 with a share of 6.8 per cent to Mahindra's 7.5 per cent.

Also Read: Tata Motors MD draws twice the salary of Mahindra and Mahindra MD in FY19

The slowdown in the market has, however, robbed the momentum from the Mumbai-based carmaker. It has suffered a 37.5 per cent decline in sales this fiscal so far, compared to a 14 per cent drop in sales for Mahindra. The overall market has declined by 15.4 per cent between April 2019 and January 2020. Tata's share has come down to 5 per cent while Mahindra stands at 7.25 per cent. Even worse, the entry of Kia Motors last August has relegated Tata to the fifth position over the last five months.

"Number five is not necessarily the most comfortable starting point. I would say fiscal 2021 is most probably very challenging because of the fact that the first half of the year is unpredictable. Some of the products you have seen we have just launched need to get their feet on the ground. I am strongly convinced the moment the market is going to fire, we have the opportunity to actually outpace and outperform the market," says Guenter Butschek, managing director and CEO, Tata Motors.

"Lot of people miss the point that till a year ago we had been for 36 consecutive months, consistently outperforming the market which was growing at 6-8 per cent CAGR. We were consistently getting close to the podium by growing at 13-15 per cent," he adds.

"We were that close to the podium. Then all of the sudden we found ourselves in the crisis and because of a variety of factors including rising Brent crude prices, customers either postponed their purchase decision or they wanted to go for more safer buys.  I don't know. I still haven't understood the psyche of some of the market," Butschek further enunciates.

He believes the transition to BS-VI is an opportunity for the company. Not only has it been one of the first to move to BS-VI production, but it has also completely reworked its portfolio adding new features to each of the car at a time when consumers would anyway need to spend more to buy a car from April onwards.

Also Read:Tata Motors posts Rs 1,738 crore profit in Dec quarter, revenue down 7%

"We have taken the opportunity to not only upgrade our cars like Tiago, Tigor and Nexon to BS-VI but also add features like the next-generation connectivity options in them. We need to create a talking point for a customer so that he pays more for perceived value addition because the customer doesn't feel the difference between a BSIV and a BSVI vehicle otherwise," he says.

The company is set to continue its product offensive that also now includes a slew of electric vehicles. It has already launched two new cars - the Altroz premium hatchback and the Nexon EV, this calendar year. Going forward, it will be launching the seven-seater Gravitas SUV and the electric version of the Altroz. An entry level model to compete with Renault Kwid and Maruti S-Presso based on the HBX concept showcased at the Expo should follow soon as well.

"That makes me pretty positive on the way forward. We are well-positioned to take off. If I don't have an inspiration for FY22 then we lose the game even before we get to the podium. The podium is our target and needs to be reached otherwise there is no motivation," Butschek adds.

Also Read: Auto Expo 2020: Tata Motors unveils HBX, Sierra Concept

Also Read: Tata Motors to launch 4 new products in 18-24 months, says N Chandrasekaran

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