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Chinese smart phones flourish in small towns too! It takes two to tango Eyes strong growth in 2016-17 E.I.D Parry (India) Ltd: another sweet year Michelin to double Chennai capacity PSU non-life firms seek to protect share CAPITAL NOTES Solar installations exceed 2015 capacity in five months AL wins Deming prize again AL introduces Guru & Partner New India Assurance posts impressive show Back in growth mode L&T profit up by 11 per cent Yamaha unveils scooter boutique TI Cycles plans retail expansion to drive sales for premium bicycles Nissan exit shouldn’t affect ALL Shriram Life clocks more than Rs.1000 crore premium in 2015-16 Gamesa to set up a plant in Nellore Tata Motors joins compact SUV bandwagon with Nexon Consolidating leadership position in smartphones L&T bags the Mumbai Trans-harbour link order LVB posts 31 per cent growth in Q1 net profit Singur minus Nano – victory or folly? Hyundai to focus on SUVs and AMT variants The gainers and the losers Right to privacy – now it’s fundamental! Maruti – for young buyers Sivasankaran enters taxi space to take on Uber and Ola ITC chairman calls for policy impetus to transform agriculture V-Guard launches app-enabled water heater system PPP model for infrastructure development Ponni Sugars (Erode) Ltd: not so sweet 2012-13 29 per cent jump in TCS revenues Wabco launches safety system Kone India eyes further growth in elevator market Sundram Fasteners rejigs international Last stages Hyundai India achieves 7 mn production at Chennai factory Tata Steel, ThyssenKrupp sign MoU to merge European units A welcome initiative-even critics are recognised Daimler’s truck exports from Chennai cross 5000 units Smooth sailing of SAIL The unexpected exit RoC in the dock... Land wars Smartphone onslaught by Chinese brands Record two-wheeler sales Titan Company – sales recovery to kick in When small is not so beautiful… A niche in FMCG business... Carnival Films acquiring 3000 screens pan India L & T’s floating dock for navy Bajaj Finserv – Q1: fare well Is this a generation gap? Tata gets 4-star rating for Zest Aurobindo Pharmacy: good turnaround Tata Motors charts investments in PV and CV businesses Forging industry worried over lower supply of steel and its price TN government keen on revival of operations at Nokia complex Increasing market share Dish TV – subscriber additions encouraging TVS Automobile invests Rs.75 crore in start-up firms M & M unveils driverless technology for tractors Tata Motors bets on new launches Vellayan is back, after 150 days IOB on turnaround path Preparing for the next growth curve Rane targets Rs.5500 crore topline by 2018-19 He excels in the nuts and bolts of entrepreneurship Hindalco – re-rating From the toughest to the best year Emami – a new growth mantra ITC – steep excise hike Toyota and Suzuki to introduce EVs in India by 2020 TVS Srichakra plans capacity expansion Are they really independent? Welcome focus to improve rural India... AL secures orders for 3600 buses Ode to Ratan Tata HPCL plans Rs.61,000 crore capex over 5-years Mercedes-Benz sales continue to zoom L & T set bigger ambitions in defence business Tata Motors aims to be among the Top 3 global CV & PV firm Housing demand revival Daimler grows sales and share in India
 
When small is not so beautiful…

Over the last four years, the sale of passenger cars by Tata Motors has fallen by more than half from around 3.7 lakh to 1.5 lakh. The great enthusiasm with which Ratan Tata expanded the car business seems to have waned. In his tenure as Chairman, Tatas acquired the British Land Rover and the Daewoo truck businesses. In quick succession, Tata Motors launched the Indica and the Tata Magic which were well received. For a few years, the sales of the Indica zoomed; it became quite popular among taxi operators. The Nano, launched with great expectations, as the Small Wonder  (borrowed from the famous VW Beetle) did not fare well. Impressed by the passion and imagination with which the Nano was launched at the Auto Expo, I ordered for two, each costing on the road around Rs. 2.15 lakh. Air conditioning was effective as also were the power windows limited to the front seats. But the absence of power steering made one feel like  driving a truck. Repair costs were high; combined with poor resale value, Nano lost its popular appeal.

Renault’s Carlos Ghosn built his Kwid on Ratan Tata’s Nano experience. The care bestowed in designing it through the combined efforts of Europe, South Korea and India, the focus on very high indigenisation (98 per cent even at the launch), tight costing and the electrifying launch contributed to the quick success of the Kwid.  This small car received a good response, with an estimated 100,000 cars booked during the first year.


Legacy issues...

Guenter Butschek, who has taken charge as MD and CEO of Tata Motors, pointed to legacy issues as among the reasons for the steep decline in interest in Tata cars. Butschek brings with him rich experience, having worked earlier with the German giant Daimler.  He headed the company’s operations in China and also worked for Airbus Industrie. His experience in contributing to the spectacular growth of the Chinese auto industry should help Tata Motors arrest its decline and revert to its earlier era of high growth in the passenger car segment.  Competition is acute from global auto leaders, notably Maruti-Suzuki, Hyundai, Toyota and Renault-Nissan. Add to these the technological prowess of Volkswagen, Ford and GM and the going would indeed be tough.

Looking back, Tata Motors could have acquired Daewoo’s Matiz facility in Noida that had better design and performance. The company could also have focused on an electric car that would help it leapfrog technology. Competing on traditional lines in the highly evolved passenger car segment is not going to be easy.  In our previous edition, we referred to the Tata Group under Cyrus Mistry re-looking at its different businesses, as did Ratan Tata in the early 1990s and deciding which sectors to focus on and excel in. Will these include passenger cars?

 

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