Tata plans 407 makeover

Tata Motors is planning a significant makeover of its long-standing LCV brand, the 407 in 2012. This was announced by managing director, India operations, Tata Motors, Prakash Telang at a press meeting in Mumbai to commemorate 25 years of the LCV. Telang said the refresh would include the vehicle’s interiors as well as exteriors and also aggregates for performance. He gave no further details.

The 407 was launched in 1986 when the Indian LCV market was dominated by the duo of Eicher-Mitsubishi and Alwyn-Nissan. However, the 407 was able to beat the competition and within a few years, both the India-Japanese JVs moved out of the market.

Tata Motors has kept the 407 brand alive with a variety of changes that the company claims has helped it consolidate its position in the Indian market. Today, says the company, the LCV accounts for seven out of 10 vehicles sold in the segment in which it has a commanding 75 percent market share. About 55 percent of those who buy the 407 are first-time buyers who are small-time businessmen or entrepreneurs.

With the 407, Tata not only launched a range of cargo products but used the platform to spawn a range of small buses. This included the Cityride that was launched in 2003. This was a fully-built bus unlike other products that are typically built on a chassis. Today, fully-built buses account for 90 percent of the buses that the company makes on this platform. By 2006, the 407 platform had spawned a range of 15 bus products. In 2007, the Starbus range was transferred to Tata’s JV with Marcopolo of Brazil.

The Tata 407 was the result of two-and-a-half years of research. In 2003, Tata launched the EX range and soon also launched a CNG-powered product targeted at buyers in Mumbai and Ahmadabad where CNG is available. In 2007, the EX2 range was launched with power steering. Today, an estimated 80 percent of 407 have this feature. In 2009, the pick-up version of the 407 made its debut and the vehicle accounts for sales in the region of 18,000 units. By early 2011, an estimated 500,000 buses had been sold.

Telang, who was associated with the 407, recalled how the first vehicles were made with imported parts and the company moved fast to localise them in order to cut costs to the end user. Those were the early days of what was called Project Jupiter. He also recalled how the 407 was exported to Russia but given the then Russian political scenario, no one really knew how the vehicles actually fared in a market where sub-zero temperatures are the norm. Only much later did Tata officials get to know that the vehicle had done well in a market where not much was really known. For Tata, the 407 was the starting point for the 207, the Tata Sumo (which has had a makeover) and the Tata Sierra.

How much will the 407 change?

With a makeover on the cards, the question that arises is what kind of changes will the company make?

Typically, it’s a difficult to make significant changes with a product that has successfully stood on its own and been an unqualified success. Tata will have begin groundwork for the refresh by talking to its existing and potential customer base.

Today, Tata Motors can tap the expertise of Iveco (thanks to its alliance with Fiat) to build a model that can strengthen its position. Clearly, a refresh will keep in mind the requirements of a younger, more-tech conscious buyer.

Though not in the same space, Mahindra & Mahindra launched a refresh of the Bolero that has got off to a good start with 9,764 units sold. The Bolero is over a decade old but has truly survived the test of time. Products like the Bolero and, arguably, the 407 were built in a time when the Indian market was relatively closed to outside competition.

Today is different. As the 407 heads into the 21st century, it would be interesting to see how this workhorse fares in a globalising India. And the refresh could well head at some point to the Russian market which, like India’s, is in the throes of globalising.