Tata motors to inject 4,000cr investment as a part of turnaround strategy

 

Tata Motors is India’s largest automaker by revenue and ranks 5th in both, the list of largest Commercial Vehicle manufacturer globally and largest Passenger Vehicle manufacturer in terms of domestic sales. The automaker is not satisfied with its ranking and has officially stated that it aims to grab the 3rd place in both those above mentioned lists by 2019.
In a recent investor presentation, the carmaker announced its turnaround year for this fiscal year. The company plans to inject a total investment of 4,000cr which would be divided into 1,500cr for the development of new commercial vehicles and 2,500 for the launch of new passenger vehicles. The company also intents to save additional 1,500cr through different cost optimization techniques, which would be added to the profits of the domestic business. It also plans to set some of its plants into “temporary hibernation” till they derive ways to make optimum use of all the plants.

As an effort to introduce new brand promise the company revealed its new tagline: “CONNECTING ASPIRATIONS”. The managing director, Guenter Butschek, gave the information that the automaker had began implementing steps according to a turnaround scheme that held the next 8-9 months of crucial importance. The focus of this programme would be to increase its share in the domestic commercial vehicle business to 5% of the market and to launch new models at a quicker rate in the market.

Vide range if passenger and commercial vehicles offered by TATA motors
COMMERCIAL VEHICLE BUSINESS:
The carmaker has earmarked 1,500cr to be invested in the commercial vehicle business. It will work on new product launches in this segment, frontline customer services and expansion of network.
“During this financial year, at Tata Motors we will invest in new product development capabilities, developing work for BS VI products, new products, new variants and upgrades of existing ones to cover our requirements for the Indian market and our Export business” said Ravi Pisharody, Executive Director, Commercial Vehicles, Tata Motors.
Under the programme, the carmaker will launch 6 new products in the Medium and Heavy Commercial Vehicles (MHCV), 4 new models in the Light Commercial Vehicle range (LCV) and another 4 in the Small Commercial Vehicle space(SCV).
Along with these development of new products, the company would Increase it’s focus on enhancing its frontline sale techniques to increase its market share and for better utilization of capacity. It would also look to increase its exports as exports hold almost 20% to its gross revenue.
The carmaker also wants to emphasise on the sale of its hybrid and electric vehicles in this space. . “Our Hybrid buses will be commercialised in this Quarter. Our 9 mtr and 12 mtr full Electrical buses are also undergoing trials, and demonstration in different parts of the country with State Transport Undertakings and at Government events in Himachal Pradesh, Delhi and Nagpur,” Prisody explained.
The organisation also schemes to increase the number of its sales outlets and service stations. It has over 1400 sales and 1800 service outlets which it plans to increase to 1572 and 1969 of those respectively, by the end of this financial year.

PASSENGER VEHICLES:
An investment to the tune of 2500 would be introduced in the passenger vehicle segment. The company introduced 3 new models last year, namely, Tiago hatchback, Sub-4 metre sedan Tigor and Hexa SUV, which have scored well on the reports by contributing to 41% of the total monthly sales.
The company would Introduce its ace card in the form of th compact SUV Tata Nexon just in time before the festive season.

Tata-Nexon-Geneva-Edition
“We plan to deliver more number of products, for greater market coverage, with lesser platforms. Going forward, we will work with a next generation advanced modular platform for all our future vehicles enabling a faster time to market approach. We will reduce our current 6 platforms to 2 platforms. The idea is to roll out more nameplates per platform and reduce complexities. The strategy is to deliver 7-8 product variants from two platforms, for greater coverage and sizable economies of scale. Our investments have been channelized towards the new wave of transformation in our business” said spokesperson of Tata Motors Passenger Vehicle Division.

The company is also looking to optimise its manufacturing processes. Gunter informed that some com social vehicle plants worked only to the 40% of their capacity, while in the passenger vehicle segment the utilization of capacity was as low as 10%. “We need to take a look at how best to utilise our plants,” he said informing that some lines of few plants would be sent on “temporary hibernation” and would be brought back into work when the demand return. However, the details about which lines in what plant would be put to on a halt is still under discussion.

 

Tata motors is also putting it’s hopes on its subbrand, TAMO, which be used as the company’s laboratory developing new innovative solutions, business models and collaborations to be set ready with future mobility technologies.
“With innovation labs set up globally, TAMO’s focus will be to scout for new technologies and explore opportunities to work with start-ups in new spaces. For the rapidly changing automotive environment, TAMO will transform the experience of interfacing and interact with its customers and the wider community. It will work towards creating a digital eco-system, which will further be leveraged by Tata Motors to support its mainstream business in the future” added the spokesperson of Tata Motors, Passenger Vehicle segment.”

 

 

 

 

 

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