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SUV, premium hatchback and more: Tata Motors lines up new models to take on rivals

 

Guenter Butschek, CEO & MD, Tata Motors

Guenter Butschek, CEO & MD, Tata Motors

 

  Targetting to become the third-biggest passenger vehicle maker in India by 2019-20 after Maruti Suzuki and Hyundai, homegrown auto major Tata Motors is lining up a slew of new products, including a compact SUV, premium hatchback and an executive sedan.

 

At the 5th position in volume terms at present, the company is looking to fill in gaps in its product portfolio as its current models cover only 60 percent of the passenger vehicles segment.

The Mumbai-based auto major also plans to have lesser number of platforms going ahead to cut cost and complexities in product development.

"We have finalised our product plan for the next five years. Today, Tata Motors covers less than 60 per cent of the total market and one of the things which we focused during the product strategy is to increase our footprint in the 100 per cent of the market," said Tata Motors President, Passenger Vehicles Business Unit, Mayank Pareek .
 

The move would naturally help the company consolidate its position, he added.

"It brings in new customers, it also helps us keeping customers in our fold. This is one big transition," Pareek said.

When asked which of the verticals the company would like to enter, he said: "The 40 per cent space that we are not in constitutes some of the very obvious segments. We are not there, for example, in the premium hatchback segment. So that's one obvious wide space for us. Similarly, in the executive sedan segment and compact SUVs we are not there." With the launch of Hexa SUV next January, the company would like to cement its position in one of the various fast growing segments, Pareek said.

"Our vision is to be number three by 2019-20," he added.

Many of the upcoming models are in various stages of development, Pareek said.

"Plans are underway and many of these are in advance stages of getting developed. For some we are already planning capacities. We have already invested a lot of money," Pareek said.

The company has earmarked Rs 3,500 crore to Rs 4,000 crore, divided equally between passenger vehicles and commercial vehicle segments, for research and development purposes this fiscal. Tata Motors invests in the same range on R&D purposes every year.

"We have redrafted our product plan to reflect future and one of the big decisions in that is we will have less number of platforms but more number of cars. This helps us in reducing complexities, helps us in managing the change much better. It improves cost structure," he added.

At Auto Expo held earlier this year, Tata Motors had unveiled a concept compact sports utility vehicle Nexon along with another compact sedan Kite.

When asked if Tata Motors would consider phasing out some of the older models as part of the new product strategy, Pareek said: "Naturally, it's very natural concept for example already we have phased out Vista and Manza and it's like new comes and old goes."

Market would determine which model goes and which stays, he added.

He said the company has also re-crafted its design philosophy and its teams based out from Pune, Coventry (UK), and Turin (Italy) have collaborated on the design aspects, which is international in nature.

"We did lot of internal thinking and came out with a concept of impact design. To us impact design is something which creates an impact on first sight," Pareek said.

Besides, the company is also trying to optimise its organisational structure in order to speed up introduction of new products.

"One of things for us in the past was that we delayed in launches. It's what we are trying to correct," Pareek said.

The company's all around efforts have started to yield results.

"We used to be around seventh in overall sales. In the first half of this fiscal we are now on fifth position, a little bit extra and we would have been on number four. This is a good sign for us. We have just begun, we have road to travel, distance to cover," Pareek said.

He said the company is also working to improve the way its dealer network functions to breakaway from the baggage of past.

"You can't just wish it away. You correct the situation by performing. We are working overtime on improving quality of products," Pareek said.

While the firm is yet to detail its strategy to deal with Brosnan's demand to drop his images from their advertisement, it has said that the former James Bond star knew the product he was endorsing. The contract, which is at the heart of the dispute between the actor and the firm, has not been made public by the company so far.