Tata Motors targets turning it around in 2021, to launch new cars with a low-cost model

Published On : 03 January 2020
By Tarashekhar Padhy

Tata Motors director Guenter Butschek hopes the corporate to show some progress in the fiscal year 2021 after underperforming the market this year, as he plans on a leaner cost structure, a pipeline of over a dozen products and therefore the economy where he predicts activity to select up.

After passenger vehicle sales took a hit of 18% since the financial year kicked-off in April, Tata Motors' sales fell by 25-30%, because it decreased deliveries to dealerships to help them clear inventory at their end as the industry negotiated a slowdown and before the transition to the Bharat Stage-VI emission regulations.

Now, aside from the launch of the new premium hatchback Altroz and top of the road SUV Gravitas, the corporate is going to be banking on a facelifted Nexon, an updated Harrier with options like automatic drive and sunroof, and BS-VI versions of the Tiago and Tigor, also as some critical commercial vehicle models to get volume momentum. Butschek claimed that Tata Motors' volume in both the passenger vehicle and commercial vehicle segments had bottomed out, which could only grow from here.

The automaker has the resources to outplay the market in FY21, he said. “We know the transition from BS-IV to BS-VI will still be unpredictable, but our greatest guess is once the BS-VI adoption phase is over, the volumes will start improving," he told ET. “The cyclical part is behind us. For the structural part, we have a solution. With the support of a strong economic activity, I feel we have the firepower to outperform the market in FY21, led by new launches, as we had finished nine consecutive quarters, before this downturn." Butschek said the action would be seen across passenger vehicles, electric vehicles also as commercial vehicles, in which the proof of future readiness of the corporate would be fully displayed at the Auto Expo in February.

The company had taken a strategic call to show focus from wholesale to retail so as to destock at the dealer level. This cost it in terms of market share on dispatches to dealers, which the Indian auto industry reports as sales monthly. However, on the retail front, the corporate claimed it persisted in its share, which actually improved in some markets.

Apart from decreasing its capital expansion strategy for FY20, the automaker reduced the stock at its own end and dealers by Rs 3,500 crore supported value within the second quarter itself, thereby assisting itself improve its cash position this fiscal year.