Tata Motors appoints CEO & MD after 2 years

Tata Motors, India’s biggest automotive company, has appointed Guenter Butschek as chief executive and managing director of all its operations in the country and international markets.

Butschek, formerly with Airbus, the world’s second largest aircraft manufacturer, will succeed Karl Slym at Tata Motors, who passed away in January 2014.

Butschek was chief operating officer at Airbus before he quit in December 2014, spending 30 months in that position. Butschek is expected to join Tata Motors on February 15, the company stated. A two-year search culminated in the appointment of Butschek for a new chief executive at Tata Motors, whose domestic passenger vehicle business is battling for survival. A corporate steering committee headed by chairman Cyrus Mistry was formed less than a month after Slym’s death to oversee strategy execution.

Mistry said, “Tata Motors is going through an exciting yet challenging phase and Butschek’s appointment comes at an opportune moment. He brings with him rich global experience of growing organisations and developing new markets. I am confident that Butschek’s ability to lead high performing teams will enable our company to achieve sustainable, profitable growth.”

Butschek is the third foreigner (preceded by Carl-Peter Foster and Karl Slym) to head operations at Tata Motors, even as 90 per cent of the company’s consolidated revenues comes from outside the country. British brands Jaguar and Land Rover are the prime margin driver for the company, even as its domestic business faces stiff competition from Maruti Suzuki Hyundai and Mahindra & Mahindra, to name a few.

Prior to Airbus, Butschek worked at Daimler AG for around 25 years in international automotive management, leading functions such as production, industrialisation and procurement. The last role he held in Daimler was of president and chief executive of Beijing Benz Automotive Co, a joint venture between Daimler AG and Beijing Automotive Industrial Holding in Beijing, China.

Butschek, who has a diploma in business administration and economics from the University of Cooperative Education in Stuttgart, Germany, joins Tata Motors at a time when the company is trying to reinvent itself, plugging several product gaps through new launches and revamping dealer and service network.

Tata Motors is gearing up to launch a new hatchback, Zica, next month, which it hopes will bring the much-needed volumes, especially after the lukewarm response to its two predecessors, Zest and Bolt.

While the domestic passenger vehicle sector grew by nine per cent during the April-December 2015 period at 2.06 million units, Tata Motors posted a two per cent fall in sales at 112,000 units during the same period, according to data provided by the Society of Indian Automobile Manufacturers.

Its poor performance saw it slip two ranks having now settled at the fifth spot after Maruti Suzuki, Hyundai, Mahindra & Mahindra and Honda, in that order.

On Monday, Tata Motors also announced the buy back of unsecured non-convertible debentures aggregating Rs 450 crore as part of its debt restructuring programme.