Tata trains engines on new horizons

Tata trains engines on new horizons

Tata trains engines on new horizons

Tata Motors, one of India’s few homegrown auto players, was a rage among car enthusiasts and customers in the country during the 1990s. Piloting products like the snazzy SUV Sierra to station wagon Tata Estate, it set new trends in the then burgeoning Indian car market.

The company, a major arm of salt-to-software conglomerate Tata Sons was established in 1945, and some of its products, especially the small car Indica and Sumo, a bulky MUV, emerged as big market players.

By the turn of the millennium, however, the number of auto makers in India grew and several international players entered the country, opening up new segments and spicing up the market with a slew of car launches. The economy was doing well, and a young, upwardly mobile population was reason enough for the surge of new car models the country was witnessing.

But in the last few years, the global slowdown, coupled with issues such as rise in interest rates and fuel prices, and the fall of the rupee against the dollar has affected the automobile industry, compelling companies to adopt newer approaches and strategies, simultaneously launching new types of products. 

The heat of competition has hit Tata Motors as well, denting its place in the market, allowing others to grab valuable market share. Last month, Angel Broking said in a report on the Indian car market that Tata Motors continued its poor performance in the domestic market with total volumes in May 2013 registering 23.4 per cent year-on-year (3.6 per cent month-on-month) decline to 49,304 units, thanks to the chronic slowdown in the commercial and passenger vehicle segments. Sales of passenger vehicles alone recorded decline of 43.1 per cent y-o-y (3.8 per cent m-o-m).

The company, once a household name in the Utility Vehicles (UV) space, managed to sell only 2,267 UVs during May as against 3,227 units during the same month last year, translating to a fall of 29.7 per cent. In the car segment, Tata sold 9,665 units in May 2013, compared to 17,743 in the same month last year, registering a massive fall of 45.5 per cent.

Currently, the company is vying for the fourth or fifth place in the Indian car market, which as a whole dropped 12.5 per cent in May 2013.
Beyond the horizon

The company recently declared the dawn of a new era, led by a aggressive customer-centric strategy for its passenger vehicles business, called HORIZONEXT.

The HORIZONEXT strategy, Tata Motors believes, will help it regain its lost glory in the Indian automobile space.

HORIZONEXT, as Tata Motors explains, is the company’s next journey; a four-pronged strategy, providing the best customer experience – from best vehicle user experience to superlative purchase experience and followed by technology-intense aftermarket service support.

The strategy is built on four pillars namely, intense product focus, focus on world-class manufacturing practices, enriched customer purchase experience and consistent quality of service.

“While the Indian automobile market has become intensely competitive, our goal is to enhance our market leadership in commercial vehicles and move to a strong podium finish in the passenger vehicle market,” Tata Motors Managing Director Karl Slym told visiting journalists at the company’s plant near Pune last week, adding that the company will invest Rs 1,600 crore on its car division this fiscal.

“HORIZONEXT is the next step in line with the company’s mission to be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally,” Slym said.

Finetuning HORIZONEXT’s product focus going ahead, the company signposted upcoming launch plans by unveiling eight improved and enhanced vehicles across five of its key brands last week — an industry first. These include enhanced versions of the Tata Indigo eCS, the Sumo Gold, the Nano and Tata Indica, slapping on new colours and graphic designs, enhanced exteriors, improved high-quality suspension to offer better rides, multimedia entertainment options and introduction of the Feather-shift (or F-shift) gearbox. Besides, the company also showcased the new CNG range – Tata Indica CNG, Indigo CNG and Nano CNG – and the Tata Safari Storme Explorer Edition.  

While the new variants of Sumo, Indigo and Nano are already being shipped, the Safari and Indica models will be ready for sale in the next two months, and select variants will be phased in the next 90 days, the company said.

The cars are exemplified by major changes to design and engine. For instance, the Sumo Gold, Indica and Indigo eCS come with the powerful CR4 engine, while the F-shift gearbox available on select models is a big breakthrough in the realm of comfortable driving. Similarly, the new Nano comes with refined interiors and fresh colours. The Tata Safari Storme Explorer Edition is designed to cater to almost every offroading requirement, the company said, adding that the soon-to-be launched CNG range will target customers looking at fuel efficiency.

“These products clearly indicate the significant improvements we are bringing in product quality. While we work towards our next-generation product pipeline, we are bringing in a best-in-class vehicle experience across different passenger car categories to enhance some of our great existing brands,” Tata Motors President (Passenger Business Units) Ranjit Yadav said, adding that these launches are part of the strategy for the company’s portfolio into 2020.

Though Tata Motors believes that the latest launches will put it back in the game, a lot needs to be done considering that its competitors are constantly evolving new products and opening up new segments. For instance, Tata’s absence in the “soft UV” space has been a factor to worry about. Rivals such as Renault, Mahindra and Maruti Suzuki have developed products which have overwhelmed customers with their all-round packaging.

“We are not exactly a volume player and do not play in certain segments. Though, we now plan to have products even in those segments,” Slym said, hinting at more small car and UV launches in the pipeline.

According to an analyst with a leading brokerage firm, the key for Tata lies in launching new products, considering that its competitors are constantly developing new ones. “The eight launches it (Tata) has made are on existing platforms, which is an intermediate arrangement, with plans to launch new products in the future,” said the analyst, who declined to be named.
Time for assembly

A peek into the company’s Pune facility describes the meticulous research and labour that has been undertaken to realise HORIZONEXT.

The plant, spread over two geographical regions – Pimpri (800 acres) and Chinchwad (130 acres), boasts of a state-of-the-art final vehicle assembly line with production capacity of 1,000 vehicles per day in two shifts, which functions as per a Total Quality Management (TQM) philosophy.

The plant’s press shop has a header press capacity of 1,200-2,000 tonnes, while the robotic weld shop can crank out 1,900 bodies on a three-shift basis, handling eight models simultaneously. Other innovations include a full environment test facility (FVETF) with capabilities to carry out vehicle development work in temperatures ranging from -40 to +56 degrees celsius with humidity, solar, wind speed and road load simulation, and what Tata calls the country’s first full vehicle crash test facility. The engine development facility, with investments of around Rs 600 crore, caters to cars, UVs and small commercial vehicles.

The company said the newly unveiled models can be rolled out from the Pune plant, and Slym hinted that the facility at Sanand, Gujarat, home to the Nano plant, is designed to roll out small cars.

As part of HORIZONEXT, and Tata’s bid to provide an ‘enriched customer purchase experience’, around 150 dealerships are being planned across different regions by the end of this year. In the next few weeks, the company is rolling out 11 new service programmes for customers.

“Besides offering exciting new features, the new cars will be backed by an engaging purchase experience and transformed aftersales network,” Yadav said.

“We are igniting the passion, so that customers are central to us, in what we are offering in our products, in the manner we are engaging with them at our dealerships, and in the processes we have adopted in servicing their vehicles,” Slym added.

Now that HORIZONEXT has taken off, the company has lots to do to maintain the momentum it lost after yielding ground to competitors in the last many years. 

“There are four cultural values we are working towards -- accountability, customer focus, excellence and speed --, which brought us this far in our journey as a company and makes sure that we stay ahead,” Slym said.

According to the analyst, HORIZONEXT is a step in the right direction for Tata Motors, but “the challenging task is to watch out for the market itself, as competitors are devising different strategies on their own. Successful implementation of the strategy will be the crucial part”.