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