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