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Lost decade for Tata Motors

May 07, 2014 12:18 IST

Lost decade for Tata Motors

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Sharmistha Mukherjee and Surajeet Das Gupta in New Delhi

It has been a lost decade for Tata Motors.

The 138,455 cars the company sold in India in 2013-14 are close to the number it clocked in 2003-04, even as the car market almost tripled during the period, from 902,096 to 2.5 million units.

While car industry sales have grown, although slowly of late, Tata Motors’ market share has fallen from a peak of 16.9 per cent in 2004-05 to 5.5 per cent in the past financial year.

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Image: A visitor speaks on his mobile phone in front of Tata Motors' Kestrel, an armoured personnel carrier, at a defence exhibition in New Delhi.
Photographs: Anindito Mukherjee/Reuters

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Lost decade for Tata Motors

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Tata Motors sold fewer cars in 2013-14 than what the country’s largest automobile maker, Maruti Suzuki, sells in two months, and slightly more than what Hyundai does in four.

And, the trend has not reversed in the new financial year. If Tata Motors’ sales in April 2014, at 7,441, are annualised, the company will sell as many cars as it did in 2001-02.

Tata Motors expects sales to climb with the launch of two new cars in 2014-15 and says volumes are down because it had no new products in the past few years.

“The automobile industry continues to remain challenged.

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Image: Tata Motors logos are pictured outside their flagship showroom in Mumbai.
Photographs: Vivek Prakash/Reuters

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Lost decade for Tata Motors

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“Besides high interest rates and fuel prices, (sales) volumes have been largely flat or negative, with growth coming primarily from new launches.

“As such, this has undoubtedly impacted our sales.

“However, with the new launches coming up in the latter half of this year, we expect to see a positive impact on sales,” a spokesperson for Tata Motors said.

Tata Motors will have to raise sales by 7.6 per cent in the next 11 months if it must reach the industry expectation of four per cent sales growth in 2014-15.

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Image: Nano Twist.
Photographs: Courtesy, Tata Motors

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Lost decade for Tata Motors

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In April, Tata Motors’ sales plummeted a staggering 35.6 per cent from the same month last year.

To maintain last year’s level, Tata Motors’ sales must grow at 3.2 per cent for the next 11 months.

A key reason for this showing has been the Nano’s failure to create a mass market for small cars.

Launched in 2009, Nano sales between 2010-11 and 2012-13 constituted 23-24 per cent of Tata Motors’ total sales.

But Nano sales declined dramatically after peaking to 74,527 in 2011-12.

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Image: Actress Priyanka Chopra poses with Jaguar Land Rover's Range Rover LWB during its launch at the Indian Auto Expo in Greater Noida, on the outskirts of New Delhi February 5, 2014.
Photographs: Adnan Abidi/Reuters

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Lost decade for Tata Motors

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The numbers came down by more than 70 per cent in two years to 21,129 in 2013-14. Tata Motors has set up a facility at Sanand in Gujarat to make 250,000 Nanos a year.

To revive its ageing product portfolio, Tata Motors is looking at launching its new sedan Zest, powered by a Revotron petrol engine in the second half of this year.

The entry-level sedan, which will sell alongside the Indigo CS, will also be available with diesel engines.

The Zest and the premium hatchback Bolt, unveiled at this year’s auto show, are expected to buttress Tata Motors’ sales.

A Tata Motors spokesperson said while the company did not provide future growth projections, “we are confident about the two new launches later this year.

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Image: A Tata Motors factory.
Photographs: Reuters

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Lost decade for Tata Motors

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“With our brand new petrol engine series, Revotron, we are bringing in some category firsts and expect to benefit from the growing consumer preference for petrol vehicles in view of the changing price ratio between diesel and petrol.”

The company added it would “continue to offer a strong diesel alternative for our new vehicles, including features such as AMT in the diesel version, to ensure a great driving experience”.

Commenting on the performance of the Nano, the spokesperson said: “We have seen positive movement for the highly reviewed Nano Twist and the new versions of Aria have also received good feedback.

“We should expect a significantly improved performance in 2014-15 from our new cars as well as refreshes.”

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Image: Tata Aria.
Photographs: Courtesy, tataaria.com

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