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