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Old 14th May 2015, 15:24   #1
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Default Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Tata Motors are aiming for "a very healthy double-digit growth in sales" from this financial year onwards, and their latest strategy to re-capture the lost market share from the Indian domestic market, is to open 200 new dealerships this year.

This translates to roughly opening 1 new showroom every day after July 2015, as they pursue their target of having 1,500 Tata dealerships in the next 5 years.


Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!-tatazest13.jpg

Quote:
Mayank Pareek, Tata Motors President (Passenger Vehicles Business Unit), said, "We need to expand our network, we need to be able to reach to customers and not the other way round. We are present in 359 cities currently, which is hardly adequate. We would like to have 1,500 outlets in the next five years." He added that Tata aims "to have a presence in all the 651 districts" of the country.

About the mobile after-sales service, Pareek said the company is working on a pilot project in 3 cities on customer service. Once the pilot programme is over, and based on the feedback, the company would roll it out at a national level.

As far as new products go, Pareek said, "We need new products. This year, we will have at least two new products, if not more. We have a robust product plan till 2020. We know there are gaps in our portfolio such as compact SUV segment, which we are definitely going to fill some time in future."
SOURCE

Last edited by RavenAvi : 14th May 2015 at 15:28.
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Old 14th May 2015, 16:19   #2
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Default re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Now, this is confusing. I have never heard anyone complain about lack of sales or service outlets. Isn't TATA's network only next to Maruti's? At least they can make sure these outlets do NOT service taxi vehicles. That way, customer satisfaction can be improved to a great extent by addressing one of the main concerns. Next is to have very good service personnel in these new outlets. That will be another win. Just opening new outlets without the right concerns addressed will only add overheads.
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Old 14th May 2015, 16:53   #3
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The statement by Mr. Pareek does not make specific mention whether TATA would like to increase the penetration in taxi market or the private owners.

If they target private owners, more number of dealerships can increase the market share only if:
  • The products are more refined and upmarket to suit the taste of private owners. We see good efforts from TATA on this front.
  • The market perception and social image of the company / the products shall be changed. IMO, on this front, TATAs have been very orthodox so far. No aggressive brand promotions / sponserships like, say, Hyundai. There is some improvement, I see TATA logo in IPL, or the urban upper middleclass target customer shown in Zest ads. But this is below the threshold needed to get the message delivered.

IMO, if these actions are properly taken, more and more parties would be willing to take the dealerships and they would have adequate business too. Dealers are responsible for sales and delivery process; the brand perception is the responsibility of the company.

I admire the successful expansion made by TATAs from a mere CV manufacturer to a one with a comprehensive portfolio including MPV, SUV and passanger cars.

But, is it easy to do well in both taxi market as well as private owners' market at the same time with the same category of product under the same brand? Toyota is mostly on taxi market, Honda and Hyundai are mostly on private owners' market. GM has different product categories for taxi (Tavera) and private (Beat, Cruze etc.) market.

To an extent, Suzuki has done this with Swift and D'sire. These cars are equally well received in taxi market with no impact on their private sales. And we did not even notice, how and when did this happen! Another example of this was Ford Ikon. And to an extent, Innova. But otherwise, most other products could not succeed in taxi and private market simultaneously under the same brand.

I think, besides increasing the number of dealers, this product positioning and social perception shall be thought and conveyed properly to the market. I am sure, TATAs and Mr. Pareek would already have a strategy in place.

Last edited by Gannu_1 : 14th May 2015 at 18:29. Reason: Consecutive posts merged. Please use the 30 minute edit window to add/modify posts. Thanks!
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Old 14th May 2015, 18:06   #4
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Default re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

They can also go the RM Way like Mahindra and open up something similar to Purple club. That is what Mahindra did to increase customer satisfaction, at minimal cost, instead of making new dealerships. Brand is already built and Safari and other aspirational vehicles are already available with Tata. They just need good customer service.

With dwindling sales and no real global products in the pipeline, will 1500 dealerships survive ? At a fraction of this cost, they can add someone like an RM for all thier premium products like Safari / Hexa / Land Rover based SUV et all and see them fly out of showrooms.

I will buy the Storme today, if it can give me front facing third row and someone to listen and fix my problems / niggles.
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Old 14th May 2015, 18:30   #5
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Default re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

This move may be more towards capturing the rural market, new showrooms in Tier III and rural areas. They have lost a lot of rural market to the Mahindra's.
Tier I & II cities have abundant showrooms and service centres.

Also worthwhile to see is how many new showrooms they actually end up opening, 6 months from now.
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Old 14th May 2015, 18:37   #6
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Default re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

So 1 new dealership per day for this year's target of 200 new dealerships.

Does anyone know how successful this similar claim ("400 new dealerships in 5 months") in 2011 turned out?


Also what's the current number of dealerships? Since Pareek is talking total outlets in 5 years (1500) that's actually roughly 700* new outlets in the next 5 years.

*= Guessing/assuming they already have roughly 800 dealers across those 359 cities.

Last edited by Rehaan : 14th May 2015 at 18:47.
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Old 15th May 2015, 13:18   #7
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Default Re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

I'm a bit puzzled by this news.

Tata has approximately 270 dealers in India. The average sales / dealer for 2014 was 39 each month (127,118 cars / 270 dealers / 12 months). With massive fixed costs, I can tell you no dealer can survive selling only 40 mass market cars each month. The Forbes India website isn't loading currently, but they had a nice article on how Tata dealers are unhappy and / or shutting down (cached version).

The only way this is going to work is if Tata opens new dealerships in NEW locations (and Pareek does appear to be thinking in that direction). But there is no way the current lot of dealers will allow new ones to come up in their city / territory.

It's going to be a challenge though. Seeing Tata's poor sales performance, how many businessmen will be willing to invest crores in a dealership for their cars?
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Old 15th May 2015, 15:18   #8
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Default Re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Quote:
Originally Posted by GTO View Post
Tata has approximately 270 dealers in India.
^ That's as of the 2013 number mentioned here (Average Sales / Dealership : Indian Car Manufacturers)

...so that means they definitely didn't manage to open 400 new dealerships in 2011!

Quote:
Originally Posted by GTO View Post
With massive fixed costs, I can tell you no dealer can survive selling only 40 mass market cars each month.
200 new dealerships in 6 months is a TALL task.

I have a feeling that if this is actually a real plan, they will be more 'points of information/sale' than actual full-fledged dealerships.

In other words, something more along the lines of the 'digital showrooms' that Renault had announced : link (Renault India will open first-of-a-kind digital showrooms!)
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Old 15th May 2015, 16:04   #9
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Default Re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Pardon my ignorance, but are all of these dealerships planned for Passenger Vehicles? I am asking this because in the Team Bhp news article it is mentioned that through these dealerships Tata Motors plans to increase the sales of their old models like Indica and Indigo.

I personally feel if Tata Motors is going for such an initiative, a healthy chunk of these dealerships could be commercial vehicle dealerships.

I have never owned a Tata vehicle, so cannot comment about the after sales part. But yes over a period of time I have heard from various sources that the after sales and servicing is not upto the mark which I believe Tata Motors should address first, before introducing newer dealerships.
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Old 15th May 2015, 16:16   #10
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Default Re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Instead of loading the gun and just opening 1 dealership everyday is meaning-less.

Isn't better they open 1 dealership in a month or so making it easier to focus on customers, servicing and overall satisfaction?!

Which is a better option:

1) Having the highest dealership number in country but low customer satisfaction?

OR

2) Having the best satisfaction with a lower number of dealerships?

With advent of dealerships under their belt, training of man power would be very difficult and to understand what the personnel have really understood so that it is applied well in their daily routine.
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Old 15th May 2015, 21:17   #11
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Default Re: Tata Motors to open 200 new dealerships this year - 1 every day from July 2015!

Quote:
Originally Posted by GTO View Post
I'm a bit puzzled by this news.


It's going to be a challenge though. Seeing Tata's poor sales performance, how many businessmen will be willing to invest crores in a dealership for their cars?
My thoughts exactly. To pony up the funds for new outlets, investors must have had access to some aggressive plans by Tata, under NDA of course.

Wonder if the good folks in T-BHP have access to "li'l birdies" in the dealer community :-)
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