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Foraying into the growing mid-size SUV segment with Curvv, Tata Motors is anticipating to increase its market share. Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, spoke to businessline on the company’s plan with Curvv and tapping into global markets.
With the launch of Curvv, what growth are you targeting in the mid-size SUV segment?
Traditionally in the SUV segment, we have a legacy of coming up with disruptive products and we have been seeing significant growth in the mid-SUV segment. The company has Tiago in the sub-compact SUV space, Nexon in the compact SUV, and Safari and Harrier in the higher segment. We wanted to come up with a clutter-breaking product in the segment and saw global trends and the popularity of coupe style in premium SUVs. We wanted to democratise the segment, the consumers in the segment want something exclusive. Consumers are looking for versatile vehicles, which means that they can do intercity travel. Since the charging infrastructure is still sub-optimal, one needs to have a higher-range car. Therefore, Curvv has to overcome two barriers; range anxiety in a period where charging infrastructure is sub-optimal, at the same time, it should achieve price parity with automatics in the ICE world. I believe in the segment, consumers who are thinking of purchasing an ICE automatic can now consider electric vehicles (EVs) for the first time.
Tata Motors has called out the decrease in sales of EVs during the quarter. Do you see the impact going ahead in H2?
It is a short-term disruption due to industry trends, FAME 2 getting expired, there was a pre-buy effect and now there is a postponement of purchase waiting for FAME 3. This is why the fleet was impacted. Further, the retail trend was down and was impacted in May and June. So, it is a combination of all the short-term factors. The industry should come back during the festive segment and we see tailwinds.
Do you plan to take Curvv global? Are you looking to tap into the international market?
We have selected markets for electric and ICE vehicles identified the geographies and have to wait for approvals from the board. In the coming years, we will be going international.
Tata Motors has an inventory of 30-35 days. What steps are you taking to reduce the vehicle inventory and when are you expecting normalcy?
The festive season will release the inventory. I see a good demand during the festive season, the indicators including the inquiry levels are stable, and there are no alarming macro indicators. The monsoon is good, while the rural economy is growing. The GDP outlook is good, inflation is in control, and interest rates have not changed.
Is there any pick-up in the demand of the entry-level vehicle segment?
The pressure continues on the entry-level segment as the demand is being triggered through discounts. The segment is in a structural shift because of the competition from the used car industry which sells bigger cars at similar price points and in good condition. Increased organised used car sales are coming up. Further, the demand is shifting from hatchbacks to sub-compact SUVs like Punch. At an industry level, the hatchback demand is decreasing, and is now 25 per cent, which was around 45 per cent three-four years ago. While the hatchbacks declined 17 per cent last year, for us we grew in double-digits because of our multiple power-train strategy, but we are witnessing a shift towards the sub-compact SUV.
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