Tata Motors refreshes its passenger car mantra

With eight new offerings, Tata Motors lays out its ambitious Horizonext strategy even as it beefs up the customer and service experience. Will this gambit take off in a cut-throat market? Brian de Souza reports on the new initiative.

On June 19, Tata Motors launched eight new offerings (including four refreshes) at its Pimpri, Pune plant as the company re-focuses its strategy to regain market share and charts out a path for the future till 2020. Managing director Karl Slym said the company’s strategy is premised on four pillars which include product, quality, sales experience and service experience. While the Pune launch aims at showcasing what the company has to offer in terms of products, the key highlights were the launch of the new CNG range which includes green fuel variants for the Indica, Indigo and perhaps, the most important, the Nano. The CNG range has been launched under the e-max moniker and, for the first time, Tata Motors has launched a comprehensive CNG product line-up. The last major ‘green' line-up was that by Maruti Suzuki in 2010 when it launched five of its existing models with a CNG variant. Apart from a CNG-powered Nano (first displayed at the Auto Expo 2012), Tata Motors is repositioning the Nano and trying to appeal to a car buyer, rather the two-wheeler buyer that was the target segment. Slym added that the Nano, however, retains its special attributes. It remains to be seen how it works for Tata Motors but CNG offerings could give the company a leg up in the urban markets of Delhi and Mumbai. The new Nano range begins at Rs 150,000 (ex-showroom Delhi), so Tata Motors has upped prices just a bit over the previous range hoping buyers will pay for new features such as a new dashboard , refreshed interiors and a four-speaker music system with Bluetooth connectivity, among other changes. Sales of the Nano have fallen in recent months and year on year, the car sold in the region of 53,000 units in 2012-13, down 30 percent from the 74,705 units sold in the previous fiscal. The last few months have also been hard for other key brands too. Indica and Indigo sales have fallen by 26 percent and 44 percent respectively in 2012-13. Only the Sumo recorded an increase of six percent. As far as the Aria goes, it is down to under 1,000 units in the last fiscal, down 80 percent, as the company has re-aligned the strategy for the car. This involves a price reduction of around Rs 1.5 lakh and a focus on sales only through select dealerships.



So, a lot hinges on Horizonext and it must be said that it requires guts to do a grand launch just after a year that saw flat sales and in the midst of a lacklustre market at present. Tata Motors has begun shipping the new offerings and will have launched all in three months’ time. This means the new range will be available just before the beginning of the festival season. Under the hood, Tata has improved steering (particularly for the Nano), suspension, gearshifts and NVH levels even as the interiors have been made more luxurious for the range for all five brands.More importantly, to support the new offerings, Tata Motors is improving the sales experience at its dealerships, essentially replicating what has been done at two dealerships, one each in Mumbai and New Delhi.

"The new look and experience will be extended to 150 outlets and the company will support its channel partners in this regard," says RanjitYadav, head of the Passenger Vehicle Business Unit (PVBU). In addition, the company, he said will launch 11 new service programmes but didn’t provide details.Since Slym took over last October, Tata Motors has been working to improve the overall business balance sheet at both company and dealer levels. Five hundred staffers spoke to 2,000 customers and dealers to obtain their feedback. Yadav says stock at dealers levels have been reduced with inventories down to a month. Slym has quality and purchasing departments reporting directly to him, underscoring the new priorities. On Sanand, Slym says steps have been initiated to utilise more capacity and this would include other small models as well as the Nano. Giving an overall direction, Slym adds the company will retain its general focus on the small car segment. And from an overall company perspective, Slym says Tata Motors is looking to commonise activities between the passenger and commercial vehicle sectors. As far as its dealings with Jaguar Land Rover go, the company has initiated steps at the back-end to achieve business efficiencies. Slym seemed to suggest that Tata Motors and JLR would not really focus on customer-facing activities. It may be recalled that Tata had tapped its UK arm when it faced issues with the Nano in its early days when some cars had caught fire, incidents that may have affected buyer segment One cannot expect a dramatic spike in sales in the short term. But the company hopes that its new-look offerings will entice buyers whom, it says, it has listened to very carefully. Customer-centricity was the buzzword during the day’s proceedings and should the monsoons be good and the economy show an uptick, Tata Motors will hope it will have got its recipe right.

INTERVIEW WITH KARL SLYM, MANAGING DIRECTOR, TATA MOTORS



How do you see the engineering and marketing efforts in this new range translating into impact on customer perception?

Horizonext is the bigger picture that will hopefully help change consumer perception. We have got cars that do very well quite often, especially in commercial segments. Commercial buyers don’t buy cars unless they have got great fuel efficiency, low running costs and high reliability. So, we have taken those strengths that are still within our business and added the personal customer’s feedback. We talk to consumers. I have got the next Tata car people meet me and I ask them what they would like to see. These changes aren’t refreshes so much as they are customer changes requested in these vehicles. Having said that, there are four pillars to Horizonext. One is the product, for which today is the beginning of Horizonext. We have talked about product portfolio up to 2020. But the customer will see only one car and that doesn’t necessarily change perception. Number two is quality — design for quality, engineering for quality, manufacturing setup for quality. World-class quality is embedded now in whatever we do and will translate into the products as well. The third pillar is sales. The customer gets to go to the showroom, not the factory. You have seen the showrooms in Delhi and Mumbai. It’s not only a pretty dealership, it is also the behaviour, knowledge, capabilities of our people within the dealerships. Lastly, it is hard to say which is the most important — product or service? You can have a great product and if you don’t have the right service, it will not succeed. The fourth pillar is service. We have also opened some new service centres with high technical and capable systems in place and are launching 11 new processes that’s will benefit the consumer. So it is not just about eight products across five platforms. This is the beginning of one pillar. It’s the whole ecosystem of Tata Motors.

How much improvement has been made in quality since you joined?

We have world-class quality as a requirement to meet our plans. We get the feedback from our dealers about the quality of our cars. Otherwise, if we internally focus, we can give ourselves a big badge and say we are world-class quality now. But actually we haven’t confirmed what customers are saying. So, it doesn’t get approved, it doesn’t get awarded, it doesn’t get accepted until the dealer is saying “my goodness, this is different”. So, you are free to go to a dealer and ask the question. When I do, they say there is a sea-change. That is important that the kind of thing the team is doing in imbibing the customer and the quality levels is already showing.

Coming to specific products, the Aria hasn’t played to its potential. How have you addressed it?

We have made some changes in the Aria. It’s now, from a performance point of view, very capable of going against the obvious competitor; price-wise, it is against the obvious competitor, capability-wise, it is against the obvious competitor. We have stopped selling it in every single dealership because it is wrong for us to load a dealership in the middle of Nagpur, for example, with an Aria that will never sell. So, we have reduced the people that can sell it. Our focus is on certain markets.

Could the Nano story turn a new chapter with the refreshed version? I think all of them could take a new chapter. There is the size of the pie, and there is the piece. I can’t do anything about the size of the pie that is economy-driven. But the size of my piece is what I can do something about. So, it’s up to me to do the things about the Nano and the things that you are seeing today, and continuing to do that to be able to help increase the size of my pie.

SUMANTRA BAROOAH