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Tata Motors to restructure local dealership network

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In a bid to boost sagging sales of passenger vehicles, Tata Motors has firmed up plans to restructure its local dealership network in the course of this financial year.

“There are few corrections that need to be done in this area,” said R Ramakrishnan, vice-president (commercial) passenger vehicles, Tata Motors. “What we are trying to do is that we are moving from full-range dealerships to product-specific dealerships.”

 

 

The company plans to set up 300 dealerships specifically for its small car, Nano, and another 100 outlets for its utility vehicles (UVs), including Aria and Safari, by the end of March 2012, according to Ramakrishnan. It had 250 full-range dealerships in April.

After the dealership network restructuring exercise, the company would have three kinds of sales outlets to cater to customers for the Nano, UVs and passenger cars. Some dealers would continue to offer the complete range of its products.

Passenger car dealerships would be opened this financial year, but the number of such outlets to be established has not been decided.

Ramakrishnan said, “In the course of this fiscal, we will transform some UV-specific dealerships and full-scale dealerships to passenger car sales outlets. No numbers have been finalised.”

Tata Motors reported a fall of over 38 per cent in sales of passenger vehicles in July at 17,192 units. It had sold 27,865 units in the same period last year. Sales volume dropped across categories, with sales of Nano declining by 64 per cent to 3,260 units. The company, however, posted a 14.30 per cent rise in commercial vehicle sales at 40,798 units in the domestic market.

Regarding poor sales of the Nano, Ramakrishnan said: “We are still at the early stages of understanding the market. We are going through a learning curve and are trying a lot of different things in marketing activities, like selling the car through Big Bazaar outlets. The company has so far received good response from such initiatives and will continue to take many such steps.”

The company is also looking at establishing overseas operations to assemble the Nano. Prakash Telang, managing director (India operations), Tata Motors, said, “There are many important markets for the Nano, like the Saarc countries, Asean nations and Latin American region. Looking at the potential, we can think of the CBU (completely built units) route at first and later, we may think of CKD (completely knocked down) operations.”

Tata Motors started exporting the Nano in April this year, with the shipment of 498 units to Sri Lanka at a price of 9.25 lakh Sri Lankan rupees.