November 1, 2012: Karl Slym, Managing director, Tata Motors
The managing director of Tata Motors on his priorities, the Nano project, and the current slowdown in India.
What would your top three key tasks be as managing director?
First, to make sure I understand the perception of the Tata Motors brand. So, in the short time that I’ve been here, I’ve been speaking to dealers and customers in Pune, Mumbai, Kolkata, Lucknow and Delhi. Talks touched upon what they felt, interactions with customers who haven’t bought, and also those who have their cars serviced with us. Priority number two is to look at our organisation. I think on the car side, we have grown rapidly in the 12 years or so but haven’t necessarily had the opportunity to look at what we need to do from a structure point to support that rapid growth. I think while CVBU (commercial vehicle business unit) has had 58 years to grow and morph into the business unit that it is, passenger cars has been a fast and furious ride to the position it’s in and not a chance to think about what it needs to be. The third piece we can umbrella as a question mark, but that includes two big things, product – what the customer is looking for? Have we got plans to be able to meet that today, tomorrow, and in the long term? We can’t shy away from the fact that we don’t have the best name in the market as far as customer satisfaction is concerned. That's another area to look at.
The brand equity in the car business seems to have lost some shine. How best can you polish it and take it to the next level?
The brand has such huge equity in India and even globally as well. But as you said, it’s had some knocks recently. It’s important for us that it’s not severely damaged. It’s not terminal. Having the right products, and a customer-centric approach can help fix it very quickly. I do believe a good portion of it has already been fixed. However, perceptions last a lot longer than reality does. So we have two things to attack – we’ve got that what remains as a reality, we need to make sure that’s cleaned up, and then also we’ve got to give the customer the realisation that it’s not like that anymore, that it has, indeed, changed.
The new Safari Storme is one such opportunity to prove that the reality is better than perhaps the perception. Can you elaborate?
What we have done is to pick out the strong DNA of the previous Safari which is obviously very successful. While we have done that, we have brought it up to 2012-13 and beyond in terms of looks, interiors and driveability. Our job today with this is to keep a hold of the strong parts of this and bring the others into the current time frame.
Mahindra & Mahindra had overtaken Tata Motors in the passenger vehicle market, for the first time, during Q1 2012-13. Keeping Tata Motors ahead will be one of your key tasks, won’t it?
Our aspiration is to be, at least, at number two in the market, and there is no reason why we can’t go beyond that. However, my opinion is that it’s how we do that, not that we need to do that. Obviously, if we sell cars tomorrow at a Rs 500,000 discount, then we could very quickly get to that number two position for a short period of time. But that’s not sensible. We need to build a strong foundation to be able to build our growth in terms of portfolio, quality and customer satisfaction.
You bring with you rich experience from General Motors. What is the frequency of new additions you think Tata Motors should have at this stage of its life?
I think it depends on what we’re looking at. Some vehicles have a DNA that we can keep for the longer term and manage with upgrading the architecture to what’s required now, and then the sort of things that have got a lifespan that needs to be curtailed and then replaced. So it really depends on the particular car.
As far as Tata’s global operations, can you throw some light on what you see in the immediate future for Tata Motors to grow globally as an OEM?
Yes, we’ve got quite a lot of international business and, most recently, we’ve got into Indonesia. We have got some strong footholds in several markets. What we need to do is focus ourselves on the markets where our products are going to be the winners. That means maybe we’ll have to reduce in some that we’re in at the moment but we’ll add new ones as well where it will make sense for Tata to be there.
In which markets do you think the prospects are better and in which would you want to curtail your presence?
Indonesia and ASEAN are strong ones, otherwise we wouldn’t be playing there. But South Africa is also a great market for our products. Also, a part of Europe has huge potential for our vehicles. There are some markets that we have got to review as to whether there’s a better business result for us in the medium term, let’s say, and if there isn’t then we need to take a sensible view about those markets. We don’t want to be a minor one percent marketshare person.
The compact SUV segment has much promise. Is that where you would also like to have a product?
We are a volume player. We have niche luxury products in Jaguar and Land Rover. But in the main, we’re a volume player. Therefore, we would look to position ourselves in markets where the volumes are. That’s very clear in India where we’ve got the small car segment, although the segment is now multiple (sub) segments big, I believe. In the higher end of the small segment, in saloons, then of course SUV or MPV or MUV, that area is also good for us. So those are three areas where you’ll see us not only continue with the current products that we’ve got but also look to expand our range there.
And the Nano Europa. Will the production version of that be one of your key projects?
Nano is a key project. It’s a great car that has not given us what it should have done. There’s nothing wrong with it, so it’s a matter of making sure we do a much better job of getting out to the customer domestically and internationally. So not only the Europa but the Nano project is a priority for me and the company, and obviously it’s close to Ratan Tata’s vision as well.
What do you think must be done for the Nano to reach its potential?
There is nothing wrong with the car. It was, in my opinion, and I’m giving you the answer from the outside really, that when it was launched, the potential was frightening for all of the competition. But then such a huge build up over a number of years turned into, I would say, the preparation for Diwali was great, but someone forgot to get the fireworks! I think the task of go to market, not marketing, is where it fell apart a little bit. Yes, we need CNG, yes, we need diesel, those kind of things, but we don’t need to come up with a new Nano as the project is right, the car is right. We need to be able to now fix, which is hard because if you do it right the first time, it’s a lot easier than having to try and do it the second time. But we’re seeing a lot of success as we get people to realise what the car is.
What’s your view on the slowdown here?
In the long term, the prospects of places like India are going to be there. In the more developed markets, the downturn could last for a long period of time. I never think that’s going to be the case in India. Even a downturn is often a growth that western markets would be very happy with. So I’m not sure we’ll get back to like 12 percent CAGR but I don’t think it’ll be too long. We’ll see a short blip of positiveness during the upcoming festival season as is normal. I don’t think it’ll be as positive as last year for the festival season because of this overall sentiment. We are affected by the global market. We don’t stand alone anymore. So unless Europe and North America start to see their benefits, then we will have some restraint in this.
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