Getting the zest back at Tata Motors

It is finally official. The Tata Zest will be launched on Tuesday and could hopefully do the trick in putting the company’s car business back on track.

“It is an important time for us at Tata Motors. We looked at design, handling, fuel economy and lots of other details like space, seating positions and road conditions. Customer feedback was an integral part of the exercise,” says Tim Leverton, Head of Advanced and Product Engineering.

The Zest will have a host of features one of which is an automated manual transmission of the kind already on offer in Maruti Suzuki's Celerio compact. Tata Motors realised that customers want an easy drive without shifting gears all the time. “We believe AMT is good for India since it is affordable and gives high fuel efficiency,” adds Leverton.

For a company which has been losing market share in its car business, the Zest is clearly a do-or-die product. Tremendous work has gone into its design and engineering which is equally true for the Bolt hatchback expected to follow shortly. In addition, dealerships have been spruced up with a lot of attention being paid to training personnel in the retail effort.

Tata Motors has also decided that its car strategy will go beyond India and focus on other regions which have the potential for growth. These could typically include South Africa, Brazil and ASEAN where the company is putting a script in place with Indonesia as the key lever.

“We will measure ourselves against global standards and not just the domestic market. There are many opportunities outside of India and this really is the way forward for Tata Motors,” Leverton says. This explains why the company will now focus on extensive testing across the world for its cars keeping in mind that needs are specific to each region.

The Zest will be part of a rapidly growing user segment that includes worthy rivals like the Maruti Dzire, Honda Amaze and Hyundai Xcent. It is only logical to expect an aggressive price tag of ₹ 5.5-7 lakh from a manufacturer keen on staging a comeback. The response to the Zest will also reflect customer sentiment to the Tata brand which has taken quite a beating in the car space.

Going by the response to models from other manufacturers, it is clear that the Indian customer is reasonably open to the idea of trying out a new product. This is despite the fact that a company could have got things wrong in the past.

Clearly, the last few years have seen a change in mindset with younger buyers entering the market and ready to spend a little more so long as they get what they are looking for. And this is where the Zest has the potential to get the numbers going if it has the right ingredients in place.

Tata Motors has not been able to capitalise on the goodwill it generated when it first announced its intent to make passenger cars. It was in the mid-1990s when Ratan Tata made known that the company was working on a vehicle with the space of the Ambassador, dimensions of the Maruti Zen and the price of the 800.

Thus was born the Indica and its unveiling at the 1998 Auto Expo drove the crowds into a tizzy. Its launch in December saw market leader, Maruti, slash prices of some of its models to keep pace with the country’s first diesel compact car. Customers made a beeline for the Tata car and, yet, it did not do the kind of numbers that it could have comfortably clocked.

As the Indica gradually began making its way into the taxi segment, an undeterred Ratan Tata was already working on his next pet project which would stun the world. It was the Nano’s Rs 1-lakh price tag that caused the likes of Carlos Ghosn, the CEO of Renault-Nissan, to sit up and take notice.

Like the Indica, the Nano had no shortage of goodwill in the market. Even while the sceptics sneered at the price tag, there were supporters like Ghosn who knew that ‘frugal engineering’ would be the mantra for all global carmakers. The Nano, however, hit a huge hurdle in the location of its factory in West Bengal and the subsequent shift to Gujarat which caused precious loss of time. The cheap car brand association hardly helped its cause either and the Nano just lost its way subsequently.

A distinctly unhappy Ratan Tata told shareholders at his last annual general meeting as Chairman that he felt saddened and shamed that Mahindra & Mahindra had surged ahead of Tata Motors. And even while he had ‘great respect’ for M&M’s efforts, it was important to introspect why Tata Motors had allowed this to happen.

“So I hope the spirit of this company will ensure that we undertake every step to get back to the prominent position and not let a competitor do better than us, by being first in everything we do,” Tata said.

Will the Zest deliver on the hopes of its former Chairman whose passion for cars is only too well known? The answer will be known in the coming months.