By Yatin Mota
Tata Motors Ltd. plans to expand its reach as India’s No. 4 passenger vehicle maker looks to regain lost ground in the world’s fourth-largest auto market.
The maker of Tiago hatchback and Hexa sports utility vehicle will add stores, taking the total count from 780-plus to more than 2,000 in the next few years, Mayank Pareek, president of the passenger vehicle business unit, told BloombergQuint at the company’s plant in Sanand, Gujarat. Besides the brick-and-mortar stores, it also plans to tap the online channel.
“In our country, we have more than 3,800 talukas and some of the talukas are bigger than European countries,” said Pareek. “We need to go there.”
The company’s market share fell off the peak of 12.4 percent in the year through March 2012 to a low of 4.6 percent in the 2015-16. It now ranks behind market leader Maruti Suzuki Ltd., Hyundai Motor India Ltd. and Mahindra & Mahindra Ltd. Tata Motors launched a series of new models over the last couple of years to regain lost ground, but the rebound has been slow.
The passenger vehicle business has been making losses at the operating level. The management expects the ramp-up in volumes, cost cuts and debottlenecking of capacity to aid financial performance.
It has charted out a three-point strategy:
- New product development and user experience.
- Network expansion and customer service.
- Rigorous cost reduction and an early breakeven.
Passenger vehicle sales growth has also picked up.
Pareek, however, said the company’s growth push won’t come at the cost of pricing. Tata Motors wouldn’t cut prices to gain market share and volumes, he said, adding that the company has all the things “in place to deliver profitable quarters ahead and the speed of the results delivery would surprise many”.
Yatin Mota is the co-Head of Research at BloombergQuint.