Tata Motors needs to do more in its passenger car business than what is being done so far, according to its new President, Mayank Pareek. He was meeting the press for the first time on Monday since he took charge barely a couple of months ago.
A Maruti Suzuki veteran, Pareek is no stranger to the country’s fiercely competitive car market. “While at Maruti, my challenge was to widen the gap (with competition), out here at Tatas, it is to bridge it,” he quipped.
Despite the company’s low market share of 5.2 per cent in cars, things are beginning to look up with a gradual arrest in the growth slide. Where it was down 24 per cent in the first quarter, Q2 was relatively better with a 10 per cent fall. “We are very bullish and the early results on customer experience have been encouraging,” he said.
Pareek’s top priority would be to increase the dealer network, especially in rural parts of the country, while ensuring high quality service. For the moment, Tata Motors’ rural business accounts for 16 per cent of its business whereas it is twice as much for rival carmakers.
Hence, it is only natural for the company to penetrate deeper into the country and conceive new formats of selling while assuring top quality standards in products and service.
In this endeavour, it is likely that there could be synergies with light commercial vehicles in rural areas, so long as it means getting close to the customer. “We need to work on the basics and also have a distinct product segmentation strategy,” Pareek said.
According to him, dealers are buoyant and believe it is possible to bounce back. In small centres, the Tata brand is still strong and people want it to succeed because of a certain Indian-ness within.
“Brands are not cast in stone and all it takes is one successful product to make the difference. I believe Tata Motors has the inherent strength to do well and we are poised for significant growth,” Pareek said.
From the company’s point of view, the key is to sustain the momentum of launching new products, which will be two vehicles each year till 2020. There are some concerns, though, with demand for the recently launched Zest compact sedan outpacing supply. While the waiting list for the petrol version is nearly four months, it is six months in the case of the AMT (automated manual transmission option.
With the Bolt premium hatchback due to be launched soon, Pareek said a key takeaway from the Zest was to forecast things better and do away with niggles like a waiting list. According to him, the fiscal has not been good for carmakers with growth of the industry not expected to exceed five per cent. Demand for diesel and petrol cars are pretty even in sharp contrast to the time when diesel accounted for 62 per cent of overall car sales in November 2012.