Tata Motors formulates new retail strategy

Tata Motors has made a new addition at the top-end of its product portfolio with the 4x2 version of the Aria. While it will initially sell the crossover through its existing dealer network, it will later sell the Aria in a new sales network to be launched soon.

The Aria was launched in October 2010 and sales have not always been consistent. They touched a high of 356 units in June and a low of just 37 in May 2011. The new network will retail only the utility vehicle and crossover range (Sumo, Safari, Venture and Aria). Tata is looking for dealers and has recently put out ads in the front pages of a few broadsheets.

Tata Motors aims to set up 80-100 dealerships by the end of March 2012. The first outlet is expected to be operational in a month or so. What is the rationale behind setting up an exclusive network to sell UVs/SUVs?

“Focus”, says Rajesh Nair, head-utility vehicles, Tata Motors. “We have a very broad product portfolio, ranging from the Nano to the Aria. The new network will focus only on selling the wide range of models in the UV/SUV segments that we have now.” Currently, Tata Motors has a sales network of 250 outlets. The new step is part of Tata Motors’ strategy to restructure its retail network from full-range dealerships to product-specific dealerships. Another step under this strategy is to set up an exclusive network of around 300 dealers by the end of the current fiscal to sell the Nano. Selling vehicles at different price spectrums will be a key challenge for Tata Motors going forward.

New launches

One way to stimulate the market, especially when sales taper, is to launch new products. And Tata needed to do it more than some of the rest as its passenger vehicle sales are witnessing a higher fall than the rest. Sales have fallen by 30 percent in the first few months of this fiscal.

The first in its line-up of new launches is the Aria 4x2, which debuted on August 2. With a price tag of Rs 11.61 lakh (ex-showroom, Delhi), it is cheaper than the entry-level 4x4 model by Rs 1.3 lakh. The 4x2 version is lighter than its sibling by 200kg and hence a little more fuel efficient.

The new version has debuted nine months after the introduction of the Aria 4x4 and the company hopes that it will be able to garner more numbers. P M Telang, MD – India Operations, Tata Motors said, “As the first Indian 4x4 crossover, the Aria has broken a new path for Tata Motors. With the Aria 4x2, we make the range comprehensive. The Aria can now be availed by a larger customer segment.”

The Aria range along with the 4x2 range is being made available in 85 cities through 150 showrooms in phase 1. The new Vista will follow the Aria 4x2 and will be launched on August 22, followed by the new Safari. Tata is putting its efforts in refreshing a good part of its passenger vehicle line-up to revive sales.

More assembly units abroad

Tata Motors, which inaugurated its assembly facility for commercial vehicles in South Africa last month, is now planning to set up such units for its Nano too. Yet to be finalised, the Nano assembly units could come up in the Latin American, SAARC and the ASEAN regions. The Nano has been launched in Sri Lanka and Nepal in association with established local players.

Tata Motors is also working on diesel and electric versions of the Nano, the latter being targeted at the European market.