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


Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236