The year 2018 proved to be a largely successful year for Tata Motors’ passenger vehicle (PV) business. The company had an array of launches, including four new products, during the festival season, which helped grow its volumes during what was a rather a sluggish period for the entire auto industry.
Mayank Pareek, President – Passenger Vehicles Business Unit, Tata Motors, discusses the growth and performance of the company. Excerpts:
How would you describe 2018 for the Passenger Vehicle industry in India and for Tata Motors’ PV business?
While during the first half of the year the industry had bullish sentiments, the second half of the year witnessed a dull response from car buyers due to high interest rates, fuel prices and upfront insurance costs.
But our PV business continued to outperform the industry. In addition to an array of new-product launches, we also witnessed the roll-out of the Turnaround 2.0 strategy, which laid its focus on ‘winning sustainably’ in the PV business and has showcased some great results.
Has Tata Motors got the basics right to “win sustainably” in the PV segment?
The Turnaround 2.0 strategy is based on three strong pillars — sales enhancement, cost reduction and operational efficiencies. We are elated that our efforts have resulted in enabling our PV business to break even as part of our journey of transforming this segment into a self-sustainable business.
Could you highlight the transformational changes at the dealerships?
Tata Motors has currently activated 27 new dealerships in its top 20 serviceable markets with another 17 more under activation.
In Kerala and Maharashtra alone, seven new dealerships each were added. Additionally, the company also added six new dealerships in Rajasthan in a day.
Overall, Tata Motors has appointed an additional 59 dealerships and 142 Emerging Market Operations (EMOs) in 2018. All these helped the company to expand its presence to an additional 90 cities this year.
What will be the next focus areas in the PV business as part of the ‘Turnaround 2.0’ strategy?
Immediate actions to be taken under Turnaround 2.0 are: two new architectures key to the PV turnaround, a new dual-architecture strategy, which will deliver 7-8 products/variants; faster introduction of products to the market, in turn filling up white spaces; sales enhancements; structural cost reduction; affordable and efficient capex, step up capacity utilisation, improved vehicle quality — 64 per cent warranty reduction over three years and increase our addressable market to 90 per cent by 2020.
In 2019, we will bolster our efforts towards the above and gain significant market share.