Tata Motors on cost-cutting drive

As part of its turnaround strategy, Tata Motors is trying to revive its bread-and-butter commercial vehicle (CV) business, which has been suffering in recent years owing to increased competition.

“We started a cost reduction programme for material costs and other expenses. We are looking at an almost four-digit reduction this fiscal,” said Girish Wagh, Head, Commercial Vehicle Business Unit, Tata Motors.

Tata Motors, which has lost nearly 14 per cent market share over the past five years in the CV segment, gained 3.3 per cent in the segment in August 2017, as compared to August 2016, the company said.

Wagh said Tata Motors is now building modules that can be used across different product lines in order to reduce cost, improve time-to-market and lead to easy containerisation and logistics.

About 99 parts/assemblies have been clubbed into just 32 modules and these modules are standardised and divided into 12 zones.

The company has built a common interface for module assemblies.

The company is closely analysing competition by tearing down their products to understand the possible areas where Tata Motors can improve its own products and also reduce costs, said Wagh. Dedicated product line-wise teams have been formed across plants to drive cost reduction.

Apart from cost reduction, Wagh said the company is also working hard to improve customer satisfaction and overall cost of ownership of vehicles. To that effect, it has put in place nearly 500 mobile workshops and container workshops in remote areas across the country, promising to repair vehicles within 48 hours of breakdown.

Tata Motors is also building a team of ‘Dronas’, who are expert technicians and drivers, to help customers understand how to get the maximum mileage out of their trucks. Forty such Dronas have been trained so far.

Further, with the new BS IV vehicles hitting the market, the company said it has trained about 12,000 mechanics across the country to repair BS IV vehicles.

Wagh said the company is not only trying to regain lost market share in the domestic market but is also targeting a ramp-up in international sales.

The contribution from international sales should touch 20 per cent of the company’s revenues in the coming years, he added.

Currently, exports contribute 13-14 per cent of Tata Motors’ CV revenues.