Team-BHP - Will Tata Motors be able to regain its market share?

Tata Motors is finding the going tough in virtually every segment where the competition is intensifying.

- The Nano was labelled a lemon but has regained sales wise and is proving the pundits wrong. The Nano continues to do well since the past few months and the northward move in the sales stakes proves that it may emerge the best selling car from Tata Motors.

- The Indica Vista launched with so much fanfare is plagued by a poor demand and is not doing as expected. The older Indica however remains popular with the taxi trade and fleet operators.

- The Indigo Manza (now Manza) is also a problem child from the Tata stable. It is not selling as expected. However the older Indigo (including the CS) sells as government cars and is also popular as taxis.

- The Sumo Grande is nothing to write home about, but the lower variants are selling well, as these are popular as people haulers.

- The Tata 207/ 407/ 607 (after driving out the Japanese brands in the 1980's) are doing well and so are the ACE and Magic. But the Ace and Magic now face competition.

- The Safari is aging and facelifts have failed to evoke any good market response.The Mahindra XUV 500, Scorpio and the Xylo have totally mauled the Safari sales.

- The Aria launched with much fanfare had never taken off and its poor sales despite the goodies package is worrisome.

- Tata Motors has admitted to increasing competition especially in its bread and butter "B" and lower "C" segments (cars) owing to the presence of a galaxy international brands.

- In the commercial vehicle sector, Tata Motors admits increasing competition from international brands like Navistar, Volvo, Mercedes Benz (Bharat Benz) and a decrease in its own market share.

Quality wise, Tata cars need much better R & D inputs for a greater market acceptability. The company has now felt the urgent need to upgrade its products owing to changing market conditions and to the fact that it is losing its market share progressively.
Actually, the recent diesel versus petrol price differential should have catapulted Tata Motors to the no. 2 slot in the car market, after Maruti but that was not to be.
With its market share sliding down, the debate is as to whether Tata Motors will be able to sustain itself and eventually regain its earlier position ?

Tata motors is suffering like anything. They lacked the will to change. The overly minimalistic approach hit them hard. Nano, though gaining sales, will have tough competition from upcoming new Maruti small car.
Indica Vista is not having market acceptance. Look at what others are offering, like interiors ( design and quality ), engine options, alternate fuel options, after sales and service, etc. Tata motors cannot match that, and if they cant, it would be tough to satisfy a modern day customer, time has changed from the day they first launched Indica, it was a huge effort, but now, its not much. Cars like Eon are much silent from inside than even Vista. It speaks something about how sincere a manufacturer is.

Its not that Tata's brand is coming in way, look at what happened to even Liva. Times have moved forward and any relatively low quality stuff wont sell anything above "very low cost".

UV segment : Tata must seriously think to fight Mahindra. Mahindra right now is holding urban customers ( with Xylo, Scorpio, XUV ) and even tightening its hold in regular rural markets ( with Bolero and derivatives ). Learn from what Mahindra has achieved. Aria had capacity to do what XUV did, but the pricing ruined it.

Sedan market : Indigo is just lost in market despite being one of the best Tata product till date after original Indica. Tata motors has to get serious in this segment too with better design, refreshes.

Small car market : We all know about this. Vista was one of the best looking hatch at the launch. But now, Tata has to flog with old Indica. And please take that central placement of meters out.

Storme is taking an eternity to come into market, why ?

Tata will end up fighting for survival for sure.

Nice topic. We can even have a debate in this thread since many different replies will be flowing in. But in my opinion, Tata has lost the race in the automobile industry as of now. The passenger car segment is rarely bringing any volumes for the stable. The image of making low quality cars is the biggest hurdle in the path of tata motors. As pointed out, the Indica and Indigo (which were responsible for the strengthning of the brand few years back) are now mainly being used just as taxis.

Another problem with tata motors is that they are not able to capitalize during favourable situations. The best example for this being the NANO. It was a brilliant idea which Ratan Tata dreamt of and was executed very well too. I still feel nano is one of the greatest car in Indian automobile industry and has the potential to be a huge success. But...tata failed. Dont know why. The reason was either lack of proper advertising and schemes or the inability to stop negative vibes for the product in the market.

Same goes with the case of ARIA. Being the first Crossover vehicle in the Indian automotive scene it had a huge advantage in the segment. The car was highly loaded with features and could have brought great volumes for the stable. But as always....tata failed again.

And now the same is being repeated in the case of the Safari storme. The news about the facelift has spread around the market and hence the present safari model is going dead day by day. The brand name of "safari" is enough to bring huge customers towards the facelift. But the automobile market doesn't wait too long for anything. Due to the repeated postponing of the launch of the storme and still no concrete information about it, the potential buyers are forced to look at the other available options and hence the safari storme is loosing its customers even when it is not yet launch.

I still believe the launch of the Safari Storme (whenever it takes place) may change the fate of the TATA stable.

All of Tata's designs apart from sumo and safari seem to start and end with the Indica. Vista, Indigo, Manza and even Aria all look like an overgrown Indica. While carrying family traits is fine, I guess Tata has stretched the design language too long. They need a break from that.

Aria was a wonderful car killed by its pricing. Now even with discounts nobody wants it. Sad for a good product.

Vista and Manza in their own terms are great products offering great value albiet for some minor niggles. I hired a Vista from Jammu to Katra and Patnitop last year. I was amazed at the ride comfort it has. My Swift's ride feels from the stone age in comparison. Yet Vista sales have hit a road block. Agreed Swift trumps over the Vista in many other areas, but those three days in Vista made me realize it really is a competent product whose sales figure does no justice to the value it provides. Tata could ve Fine tuned it retaining its USP, Space and comfort.

Also why is it taking ages to come out with the Storme?

Tata I guess has the fundamentals right. It has got a good support system in place, enough dealerships, just a matter of fine tuning I suppose.

Quote:

Originally Posted by anjan_c2007 (Post 2851685)

With its market share sliding down, the debate is as to whether Tata Motors will be able to sustain itself and eventually regain its earlier position ?

You know Anjan, after reading your post i glanced at your signature and that succinctly sums up what is required at tata motors.

The company needs a very serious brand overhauling, specially for its passenger car range.
Today in India , amongst personal passenger car buyers, specially in metro and even tier - 2 cities, Tata cars just do not feature in the consideration set of potential car buyers.

Potential customers tend to shun tata when it comes to cars.
It's quite ironic, because possibly these same people would not "shun away" other Tata branded products; for example : Titan, Tanishq, shopping at Westside etc.
There are several (justifiable) reasons for such customer apathy, but chief amongst them, that have done Tata cars to death are:
1. Initial product quality (in the initial days, nowadays the Vista, Manza et al are big improvements in quality)
2. Quality of Dealerships (specially sales experience)

If we, aam junta, are aware of these shortcomings, i'm sure the good folks at tata motors also know much more about it.
The first point has now been largely addressed with the Vista and Manza, Though still not in the league of the Japs & the koreans the quality of tata cars have definitely improved and dare i say , possibly the MANZA is a better buy anyday than the ETIOS.
The second point is more difficult to address. Weaned on years of "chalta-hai" attitude from the company's part (in the initial days of poor product quality), the dealerships have also imbibed in them a level of callousness that do not deserve a place in today's world of auto retailing.

An interesting point over here to note is that Maruti also faced serious issues with their dealerships in the late 90's (when competition was just starting to come in in the shape of hyundai and daewoo).
Maruti successfully turned the situation around by having a dedicated taskforce looking into the sales experience aspects of the dealerships, imposed stiff penalties on any level of sales complaints and was pretty unforgiving to its dealer family. The point is Maruti at that point of time and even now were and are market leaders in marketshare as well as volumes. Also the chances of a dealer breaking away from the Maruti fold to another OEM was relatively slim. Tata Motors on the other hand is not the market leader. I do not mean to say that the company is scared of its dealerships but it definitely will think twice before weilding the rod because if due to stringent action a dealer wholesale is stopped or worse the dealer scoots off to another OEM there will be an adverse effect on marketshare.
Its a curious Catch - 22 situation. Can this be solved? Believe so, with the help of a blockbuster, reliable product offering. Not half baked iterations of existing product line, but a completely new model altogether.
And lastly tata motors needs to get itself some hardcore "car guys" at the helm of it affairs.
People who will be able to crystallise into action Anjan's signature :)

I think that the TATAs are not being able to keep pace with the times. They seem to be stuck in an era when the manufacturer was the king i.e. there was hardly any manufacturers and there was a huge waiting period for anything that they produced. The Indian auto industry has come a long way since then, and, unfortunately, TATA does not seen to have moved with the times.

Take the case of interiors. It is hard to fathom as to why TATA vehicles have such poor fit and finish, poor plastics and niggles. All points to a lackadaisical attitude/ poor QC. What they do not seem to get is the fact that the customer is today spoilt for choice and if you do not have the product, someone else does!! Same is the case with A$$. In over two decades, TATA has not been able to get it's A$$ right!! The only reason for this can be that they don't want to or could not care less. The result is that many a customer say tata to the company only because of stories of poor A$$.

Coupled with all this is the fact that TATA is associated with VFM vehicles. The reason that the Aria failed was that it was too steeply priced for a TATA vehicle. If the pricing is not right, the Storme could also face the same fate.

Somehow, the TATA brand rings a chord in my heart as a pure Indian brand and it is sad to see it slowly wilt away. I sincerely hope that the TATA management gets it's act together and gets the passenger automobile division on track fast!

I think Tata is suffering a lot due to higher development costs when compared to Mahindra which is what affects it's pricing and causes it to loose out in the SUV segment.
As bhpians we love the nano, I want to buy one myself but whenever I mention it to a colleague or friend the first thing they tell me is that it burns up. Sadly they are the bulk of the customers and that is reflecting in it's sales. That car deserves better than whats come it's way so far.
Tata also suffered big time after Maruti started using our 'national engine'.
I was all out to buy an indica diesel and out came the swift Vdi, I was still tilting to the indica but news of the vista launch was out and I refrained from buying it due to the fear of low resale post the vistas launch. A swift Vdi is still serving me well as a second car.
Tatas biggest advantage 13 years ago was their diesel engine something Maruti did not really have. Had Tata taken giant strides in quality it could have retained that spot but it's a very difficult uphill battle in the passenger car market for them given where things stand today.

The Storme is not going to dent the XUV (IMHO based on looks and the products age when viewed from a general public point if view) and if not priced correct it may not be able to dent the scorpio either.
When I was out shopping for my 4wd the Safari and Scorpio were my only options. The 1.6 lakh price difference made me buy a Scorpio again.

Inspite of having some of the best products in their respective segments, they are going nowhere with the sales!

Tata should, first and foremost, fix 'niggling' problems in their cars. That can only happen with a stringent QC. It is not something they can do in the short term and certainly needs vision, direction and relentless implementation. What can we classify as niggles, minor irritants or failures is a topic for another thread. However, people are a whole lot less tolerant if a Tata car gives niggling problems than what they would be if it were to be any other manufacturer. So, the bar for Tata is even higher than it is for others. They need to understand this.

IMO, this image of unreliable cars is what hurts Tata the most. Be it the entry level segment (where Nano plays) or the premium UV space (where Aria is trying to play).

They need to reliaze reliability is the singular most important factor that can turn their fortunes around.

Look at Mahindra, they a built a reputation for reliable cars and people are queing up to buy their 15-lakh offering. Just making a brilliant car and *wishing* it sells for 18-odd lakhs doesn't help if it isn't reliable enough.

As for a short term measure, promote the Vista/Manza as if there is no tomorrow :D. Maybe, throw in a few comparisons with the Swift and Dezire. With Maruti's production in doldrums, they must capitalize on this opportunity to get some numbers.

I think in the case of TML, the commercial vehicle influence on passenger cars is a key problem. While it helped with the SUMO, Spacio etc. the same cannot extend to cars and new gen utility vehicles.

Secondly, they have no consistent long term top managers, always a churn which, in turn , influences the organisation. Every 2-3 years a major change at the top. Product development cycles are also 4 to 5 years. Imagine the internal stress and chaos for product teams, every top manager wants to leave his mark.

Thirdly, it's the words vs actions syndrome .. even that is "Chalta Hai". Over the years the "on the ground" improvement effort has not matched the pace of change in the market. A tata vehicle owners has to run from pillar to post to get his problem resolved. That customer satisfaction gap is only increasing leading to the present situation.

There are two primary reasons I will not touch Tata Motors products.
- Poor quality of finished product
- Dealer Apathy and horrid after sales service

When you are buying a car, it has to be well built I do not want to run to the service center the very next day after buying it. Unfortunately Tata Motors thinks that first lot customers are their guinea pigs for R&D. This attitude has to stop and products should work as well as say a Toyota or a Honda once it leaves the factory. This can only be done with better quality management and emphasis on quality rather than bargain basement price.

The second problem is after sales service - When I buy a 10 lac car, I don't want to servicing my car at the same facility where hundreds of call center indicas and sumos are being serviced. I want more attention and better service quality compared to what call center cabs want. I'm not looking to just somehow shoehorn the car into running like they do with the call center cabs. I'd like the car to be running perfectly and I don't mind spending a bit to keep it in perfect condition. The solution to this is simple - have separate service centers for individual customers who are buying your high end products. Commercial vehicles should not be serviced at the same place. Don't ask individuals to go through the misery of dealing with service folks who have a call center cab fixing mentality.

The top two influencers in a car purchase in india, as per a google study were friends and relatives (47%) and online (42%). And tata does not figure well in any of these.

People who used to buy tata cars once upon a time used to recommend them because of they were VFM or they were suited to indian conditions, or because of the fact that a zillion taxiwallahs could not be wrong. While TML has moved forward, their competition such as Ford & Mahindra have progressed much faster, with their offerings such as the xylo and figo being far more VFM than what tata gives. And whatever few loyal customers tata have, they manage to antagonize with their poor service - most of them have moved onto other marques, thus alienating the few people who could have actually given the car a good recommendation. Even cabbies are now spoilt for choice with products like the figo, the verito, xylo and the XUV5OO beating tata at their own game. I, a staunch fan and a somewhat happy Indica owner, would probably buy a figo if I had to buy a new car.

And online - we all know what the prevailing opinion about tata products here on team bhp is well enough. And the mags, despite how much you pay them, they can only put so much lipstick on a pig.

Although have been supporter of Tata group due to their integrity, innovation, strategic thinking and social angle to business, however I think Tata group will find it increasingly difficult to regain the market share and position. The reasons being -

a) cars always been aspiration product, the choices in budget cars available from better brands (Toyata, Ford et al).
b) Tata no longer is monopoloy of diesel engines in hatch/sedan classes, as every single manufacturer (except Honda) has competant product. Those compared to the Tata's coarse engineering and poor fit finish & QCed products
c) The branding goofed up by using Indica and Indigo for Vista and Manza, the bread and butter products.
d) Positioning of partner products. I think not using Fiat's portfolio of products to compete better and than killing them may have helped Tata in short term, but it will hit them badly. I would have loved to see Tata influencing the Fiat decision on product and positioning with minimal conflicts to their own.
e) Incompetant and Babu attitude of service/sales outlets

Although these are negative, I would love to see Tata Motors surprises by doing what TCS did to the blue eyed boys in IT clap: