Tata Motors looks to diesel Nano, new compact SUV to revive sales

  • Dec 26, 2012
  • Views : 19722
  • 4 min read

  • bookmark

Tata Motors plans to rework its strategies in a bid to gain lost ground by launching a compact SUV, possibly based on the Indica's X1 platform and by giving the Nano small car a new lease of life

Tata Nano

Deep in Tata Motors' largest factory, engineers don 3D glasses to play with car designs and prototypes projected from a 10-metre wide computer screen. Their quest? The automaker's next blockbuster car model.The research and development team's task is a pressing one. As they work, sections of conveyor belt and welding stations lay silent at the Pimpri factory and lines of white and silver Indica hatchbacks gather dust along service roads outside.

Tata, a global name since it bought Jaguar Land Rover in 2008, is losing traction at home as underwhelming product tweaks, heavy discounts and slumping capacity utilisation mark a painful 18 months for its passenger division.

Not since the 2008 Nano, the world's cheapest car, has Tata unveiled a head-turning passenger vehicle, and not since the Indica's launch in 1998 has it set the Indian market alight. Now, the company is heading back to the drawing board.

More money and more attention is going to the passenger vehicle unit as the company ramps up R&D, ditches a failed product strategy and prepares to enter the mini SUV segment and reboot the so-far underwhelming Nano. "We have done something very innovative that will allow us to respond more positively, You'll see, over the next 12-18 months onwards, a fireworks of output." said Tim Leverton, Tata Motors' head of R & D. 

Tata Aria

Tata will pour more than Rs 75 billion ($1.36 billion) into the passenger vehicle business over the next five years. Less than 30 percent of that has been earmarked for facilities or upgrading hardware, leaving the rest for new products. "The business is understanding that's a heavy investment to make," Leverton said. "But it needs to be made."

Tata desperately needs a new hit model to arrest its sliding sales and eroding market share. A slew of new variants to combat competition from global brands will see it bin its inflexible past strategy of one car per market segment. The success of the new drive will hinge on how soon Tata can bring fresh designs and ideas to market. That could take time.

Tata Manza

"We're definitely not factoring in a revival in their market share for the next two to three years. We don't see any major new products ... launched over the next two to three years," said Jinesh Gandhi, auto analyst at Motilal Oswal Securities in Mumbai. "It's going to be an uphill task for them."

Tata's car sales fell 8 percent in the April-November period from a year earlier, as main rivals Hyundai Motor and Maruti Suzuki posted increases. The company relied on Jaguar Land Rover for 90 percent of its consolidated profit in the last financial year. The slowdown in its domestic business is seen as a drag on its value.

The appointment this summer of Slym, a former General Motors executive, itself marked a shift. His two predecessors were former heads of Tata's commercial vehicle business - the unit that made the biggest advances under their tenures.

Tata Aria
Get latest updates on
the automobile community
Login Now

MANY POTS COOKING

At Tata's plant in Pimpri, 140 km (87 miles) from Mumbai, most space is taken by commercial vehicle manufacturing. Building buses and goods trucks for country's bone-jangling roads is the 67-year-old company's bread and butter. Tata, the world's fourth-largest truckmaker, has spent much of the past few years devoted to its commercial portfolio.

Its Ace range of trucks redefined a segment and have sold 500,000 vehicles since 2010. It hasn't launched a car that popular since the Indica: its first crack at the then-nascent car market.

"The company is in a transitionary phase," said Leverton, a former R&D head at BMW with more than 30 years experience in the industry. "The nature of what we have got to do over the next five years in really coming to global standards in passenger cars is a reflection of what has been happening in commercial vehicles."

There are signs of green shoots, however. Leverton's 5,500-strong team, with additional R&D centres in Warwick, UK and Turin, Italy, produced Tata's first in-house designed concept cars, the Pixel and MegaPixel compact city vehicles.The mini SUV, of which Leverton declined to give details, will give Tata a foothold in one of India's fastest-growing segments, where it has been outgunned by local rival Mahindra & Mahindra's small, sporty off-road cars.

See what our community has to say! NEW

India's largest automotive community

Explore Now
comminity image
×
Recently Visited
Select Category