'There was no dearth of bankers advising us to shut down the PV business' - N Chandrasekaran

When Natarajan Chandrasekaran took charge at Tata Motors in 2017, many bankers advised him to wind up the group’s car business, said the chairman of the largest Indian auto company in a exclusive interaction with Autocar India Editor Hormazd Sorabjee. 

“There were enough bankers advising me to shut down the passenger car business, which was losing about Rs 4,000 crore a year,” he reminisced. 

When Chandrasekaran took the reins, Tata Motors’ market share in India's passenger vehicle market had slipped to around 4.5-5 percent – the lowest in a decade, and the company’s losses had been swelling year after year. However, the new chairman saw a clear gap for another player to come up.

“For me, it was very clear that there was space because the market leader was above 50 percent market share, and the next [player] was below 20 percent. So, I felt that there is an opportunity if we can get it right,” he recalled.  

At that time, India’s passenger vehicle market was becoming a solid duopoly. Maruti Suzuki had reclaimed a 50 percent share, and Hyundai was on a strong wicket due to the resounding success of the Creta SUV. 

On the other hand, the homegrown majors, Tata Motors and Mahindra & Mahindra, were facing the heat in the passenger vehicle market, with volumes and market share under stress. But Chandrasekaran had faith in the company, given its past successes. 

“If you remember the 1990s’ Indica days when Mr Tata launched all those products… Sierra, Estate, [and] Indica were all successful. We had so many iconic products like the Safari and Sumo. So, I felt that something needed to be done. And I really felt the destination place for passenger cars is electric vehicles,” he asserted.

Chandrasekaran took a gamble by jumping into a non-existent EV market, while also investing heavily to raise the fit, finish, design and quality of its iCE-based offerings.

As a result of these years-long effort, Tata Motors has not only become India’s largest electric car maker with a market share of over 70 percent, It has also clawed its way back in the traditional, ICE market, with its overall PV market share more than tripling over the last seven years. 

These efforts also not escaped the attention of investors, and Tata Motors was able to raise money from private equity firms at a surprisingly high valuation of $9 billion in 2022. 

Tata Motors’ ICE-powered cars business, which used to be subsidised by the profitable commercial vehicles business, now stands on its own feet and is on the verge of being spun off. Even the company’s EV business – which has emerged as the trendsetter in the segment in India – is close to breaking even.  

Catch the full interview here:

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