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Old 13th October 2017, 08:59   #31
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Whatever these top brass say, I always take it with a apinch of salt. No manufacturer is foolish to sell a product at a loss. All Chandra is saying is that other models aren't making as much profit as indica.

As a commonner I take loss as below. If I invest one rupee and earn 1.10 rupees it's a profit of ten paise. If I earn 90 paise, it's a loss of ten paise.
If I sell two products product a and b, product a fetches me 1.1 and product b Fetches me 1.2, it is unethical to say product A is making a loss of 10 paise.

I even remember someone said that govt is making a loss on diesel selling. People will assume that govt is selling diesel below the cost price but reality is govt isn't making as much money as petrol on diesel. In a common man term this can't be termed a loss.
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Old 13th October 2017, 10:48   #32
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Quote:
Originally Posted by abhishek46 View Post
There is nothing wrong in treating the Hexa owner in the same way as a humble Taxi guy.
Both are humans and customers too.
Quote:
Originally Posted by Sawyer View Post
why should I care if the person next to me, being served equally well, is a taxi driver/owner?
Well said guys! Try taking your Mercedes, BMW or Audi in for a service. You'll be sharing the waiting room with chauffeurs - 90% of the people around you will be drivers (most luxury car owners never visit the workshop themselves because they're too "busy"). I don't see anyone complaining there. Do you think the S-Class owning CEO of an MNC is ever going to Auto Hangar to drop off his car?
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Old 13th October 2017, 10:49   #33
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Quoting from another thread:

Quote:
Originally Posted by RavenAvi View Post

-SNIP-

- Rumours circulating between company suppliers is that every Tata vehicle rolling out from the Sanand facility is incurring a loss. Margins are extremely thin for the Tiago/Tigor twins. Moreover, to keep prices competitive, poor quality steel and compromised child parts have been used in these cars.
Avi said the same thing long before Chandra. And when Avi said this, many berated him for spreading rumors. On their behalf, I apologize to you Avi.

What concerns me is: now that we know the first part of the above quote to be true, what if the second part (concerning the poor quality steel) is also true?
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Old 13th October 2017, 11:18   #34
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

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Originally Posted by abhishek46 View Post
There is nothing wrong in treating the Hexa owner in the same way as a humble Taxi guy. Both are humans and customers too. Both should be treated appropriately as customers without bias.
On a different note, the phrase 'humble taxi guy' is a classic example of oxymoron.

Actually, overtaking an Ola/Uber taxi guy and gesturing/yelling at him is a part of Blue Whale Suicide Challenge (Bangalore edition).

Last edited by SmartCat : 13th October 2017 at 11:19.
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Old 13th October 2017, 16:00   #35
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Sometimes I really wonder why people just bash Tata cars so much.

I was owner of a Tata car (Indica Petrol, a very rare piece :-)). It was very solidly built and never give any mechanical problem to me in its 9 years of ownership. Small niggles were there, but they were mostly from the electrical areas. Fuse blown up, loose wire connections etc, but not a single mechanical problem. It used to feel very safe with all its weight on highways and it used to carry 5 adults with luggage with utmost ease. My total maintenance cost for these 9 years was just INR 29,000/-

Where Tatas can really improve upon, is in their service experience. The service center guys always used to attend only the specific issue which was mentioned by the customers. (Jitna mujhe bola hai utna hi main karunga ) I can recall one incident where the service guy told me that washing the dicky mats is not part of their "car washing and cleaning" service item.

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Old 13th October 2017, 16:33   #36
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Service experience depends on 2 things (apart from the usual dealer "grooming" by car companies) - sales (eaither high volume or high revenue per car for dealers. Best is both) and customer expectations. Allow me to try explaining:

The "best" service experience is reported for MS, Hyundai and Toyota. MS gives huge sales volume to its dealers while the other 2 give good margins on every car sold. The showrooms (who mostly own service centres too) are less reliant on spare-part sales, are satisfied more or less with the business they are running, and hence have a complete buy-in with the company mandate to serve the customers better. The other dealers like Tata ones, after-sales service and spare parts sales make a big part of their financials. Add to that, the CSE and service guys are "floaters", they keep moving from one company dealer to other. All they care about is Targets. Sell more spare -parts as long as you are here, or move to some other dealer workshop.

The other factor is perception/expectations of customers: The excellent service satisfaction that MS gives is not echoed by the Nexa customers (at least not in the same league). Most Nexa customers talk about "All show and bling", "same executives with same knowledge levels, with Ipads" etc. Reason? Nexa charges premium, or at least look premium and hence the customers' expectations increase.

Perception also works in the same way. For a very long time, I have heard this from a variety of customers (taxi drivers, owners etc) that MS and tata cars are easy and cheap to maintain. Just take it to any FNG and he can repair it with just a pair of spanners. Somewhere down the line though, Tata lost that reliability "image" (not reliability per se). My father owns an alto (barely 14000KM run in last 9 years). Every part of it rattles, it has the cheapest of interior plastics I have ever seen and the clutch sucks from the day we bought it, the exhaust pipe rusted away and has to be replaced and many such niggles. But no one complains. My brother has a Vista Diesel. He has driven it some 80000 km in last 5 years. He keep complaining about minor niggles like loose wiring issue with ICE (which he installed from outside apparently. And our Alto has the same problem from the time when she was just 6 months old), though in private he accepts that his car has never broken down, never have him big headaches and big bills (and want to own a safari).

But people pick up negative things much easier and much faster.
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Old 13th October 2017, 16:42   #37
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

If Tata cannot improve the quality of the service they provide at their workshops, they need to consider outsourcing it altogether. If that is too radical, then they somehow need to bring in accountability. Try to turn their workshops into sections which attract good talent from the industry and retain them.

Some of the solutions or workarounds offered are truly pathetic; though it is then a catch 22 if one would prefer a cheap workaround from TASS than a costly replace (instead of repair) policy advocated by the Hondas and VWs of this part of the world.

Now that they have improved products, their service quality better keep up to those standards. Once these points are taken care of, the brand value and resale value will definitely improve.
That last point of resale value is a top draw attraction for a lot of us; and this could be the disruption that the industry could do with.

Quote:
Originally Posted by abhishek46 View Post
There is nothing wrong in treating the Hexa owner in the same way as a humble Taxi guy.
Both should be treated appropriately as customers without bias.
The wrong part is that the taxi guy is treated like that in the first place. Let us just say the taxi guy should be treated like the Hexa owner. Everyone is then happy at the end of the day.
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Old 13th October 2017, 18:33   #38
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

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Originally Posted by vinit View Post
My total maintenance cost for these 9 years was just INR 29,000/-
What was your running like? Our Honda city crossed the 29K INR by 5th service, I believe.
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Old 13th October 2017, 18:36   #39
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

If the line is to be taken as it is, that means TML's losses are minimal. Since they are selling hardly any cars at all, losses will also be pretty less .

A strange analogy used by Mr. Chandrasekharan really. But this is bound to happen when you put a primarily IT guy at the head of a salt to software conglomerate. Automobile, engineering & manufacturing are extremely complicated industries with the product complexities and even 2 different colours for the collars of employees!

And we all always have the exact solutions that are going to turn around Tata Motors. Each one of us .
They are not idiots really. I'm sure everyone at the top and mid-management in TML has done enough brain-storming to make the Jupiter's big red dot jealous. Turn arounds in businesses like these that have been running since decades and haven't been properly managed are always tedious & complex with a lot of catch-22 situations.

They'll get there. It will still take plenty time. But they'll get there. That we can be sure of.
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Old 13th October 2017, 20:54   #40
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

TATA always offer more features or specs for the money say over a Toyota and still, they are not able to sell. You don't need to do a doctorate or a special MBA to understand consumer behavior especially for a developing market like India.

Let's consider a hypothetical situation, what will happen if the famed Toyota centers are asked to service TATA cars, will they be equally good as they are now servicing Toyota? Absolutely NO, why, because Toyota uses high-quality components, designed after many Years of Research and practical run and improvements on past generation models and Dealerships have to look only at regular services or periodic replacements.

I think this new CEO has a practical approach, the way he has got rid of Telecom I believe next will be Tata Motors and his priorities should be to Stop producing any vehicles that get maximum complaints and lowest turnovers. Similarly, vendors should be taken to task for any warranty claims on newer launched vehicles and go strictly with penalties. They may not get so many new launches again. Every failed part should be looked deeply not just changed. Key is to produce and use only correct parts at the first time and more importantly get your designs validated before production from experts instead of leaving it for the marketplace to use and suffer.

Last edited by Turbanator : 13th October 2017 at 21:00.
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Old 13th October 2017, 22:11   #41
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

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Let's consider a hypothetical situation, what will happen if the famed Toyota centers are asked to service TATA cars, will they be equally good as they are now servicing Toyota? Absolutely NO, why, because Toyota uses high-quality components, designed after many Years of Research and practical run and improvements on past generation models and Dealerships have to look only at regular services or periodic replacements.
This is indeed a very good point you touched upon.There's another important reason why Toyota's service centres have been able to meet and exceed my expections over a decade - it is the simple need to achieve customer satisfaction, to excel and make sure the Toyota brand name doesn't get sullied in any manner.

Quote:
I think this new CEO has a practical approach, the way he has got rid of Telecom I believe next will be Tata Motors and his priorities should be to Stop producing any vehicles that get maximum complaints and lowest turnovers.
To me, that would start with the 4 wheeled rickshaw called the Nano. He desperately needs to put a lid on this and divert funds into better and contemporary models. The days of treating Indians like 3rd world citizens are long gone. Youngsters today have lofty aspirations. The 'grand old man' of the group is behind the times.

Quote:
Similarly, vendors should be taken to task for any warranty claims on newer launched vehicles and go strictly with penalties. They may not get so many new launches again. Every failed part should be looked deeply not just changed. Key is to produce and use only correct parts at the first time and more importantly get your designs validated before production from experts instead of leaving it for the marketplace to use and suffer.
I test drove the prototype Tata Safari on the TELCO (as it was formerly called) test track back in 1989-90, nearly 3 decades back. Visited the shop floor, the foundry, the canteens, heck even the Personnel department. Yeah I got a good view of what the behemoth called TELCO was doing. But due to professional reasons I cannot divulge the nature of that assignment.

While I admit all capitalist businesses have profit as their business driver very few will ever put profit over reputation. Sadly IMHO it has been the desire to squeeze every paisa from their local vendors that has lead to compromises in quality and some unhealthy business practices that I will not go into on a public forum.

Toyota isn't doing something miraculous. They're just doing one thing - the utmost desire to excel in producing modern vehicles that deliver quality, reliability, value for money & with the lowest possible running costs. It is in this arena they (and most Jap automobile companies) have succeeded in spades. How many times have you seen the Chairman of an auto company being hauled over coals as Akio Toyoda was and apologizing for the defects in his company's products? Now that is ownership!

The head honchos at TM are experienced enough to know what to do, but the biggest question is will they? I doubt it this can happen when one man's ego/personality continues to tower over the company and influence its roadmap. See the similarity between what's happening here and in a well known IT services company? They seem to find it difficult to break away from the past. And that to me is what ails TM the most.

Last edited by R2D2 : 13th October 2017 at 22:24. Reason: typos
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Old 14th October 2017, 06:38   #42
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Toyota is a very good place to learn what works - and Toyota does not keep it a secret from anyone because they know that the vital difference is applying that knowledge in breadth and depth across the supply chain, including all vendors, and staying on a small but continuous daily improvement path. Knowing the Toyota way in theory is easy, doing it is a very different ball game.

Even service gets attention by long lasting components and consumables - the 10 year life engine coolant is an example. As is the attention to ergonomics for the service station set ups. Even something as simple as washing the car twice - once before it goes for service so the tech has better line of sight to what he is working on is something that isn't rocket science. But no other service set up has this as a process step.

I am sure that TML will not go the telecom sale way - because then no other Tata business can be continued with except Titan which is the only one that delivers consistently good products and financial performance. Businesses like auto/steel are ones that Tata cannot exit because there is nothing left then for them and they might as well liquidate the group. But fixing these will take time. The question is - how much time and will they be permitted it.

Time will tell!
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Old 14th October 2017, 07:30   #43
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Some time in 2000, Ratan Tata went on record in saying that the big problem with the TML car business was that the company did not have what he called "car guys". People that live, breathe and therefore know cars intimately as users/enthusiasts. 17 years on I don't know how much of that problem still exists in the company and I suspect it still does in a significant way, even if not as much as it did in 2000. For instance a very senior TML sales executive I was talking to in 2013 about my impending Nano purchase hadn't a clue beyond skin deep - though he was perfectly sincere and probably was a good engineer in general terms.

None of the competition in India has these either, but it has them where it matters, where the platforms are developed - in their home countries. Although I also suspect Hyundai doesn't have many of these, which is why their cars are more like appliances than red blooded automobiles. Hyundai is also completely missing in autosports, another reason for their cars being appliances. Even Toyota isn't as present there in a big way and their stint in Formula 1 was a resounding failure. Honda on the other hand...which is why their engines are brilliant. Suzuki too is strong in motorbike racing.

Some of that problem has been solved for TML by JLR, but I have a feeling it remains an issue.

Last edited by Sawyer : 14th October 2017 at 07:32.
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Old 14th October 2017, 07:54   #44
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

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Businesses like auto/steel are ones that Tata cannot exit because there is nothing left then for them and they might as well liquidate the group. But fixing these will take time. The question is - how much time and will they be permitted it.
TATA motors closed the last financial year with a revenue of 2,69,850 crores. Out of this the domestic business accounted for 44,477 crore and the PV business is around 9000 odd crores. Now with JLR accounting for 83% of its revenues TML is in much better position than it was at the time of INDICA launch. With so much technology at their disposal courtesy JLR, the confidence in the management can be seen in the way they bid for the EESL 10000 vehicle order. The Warwick facility in UK is the prime contributor for R&D on electric vehicles and the ERC Pune is no longer the HUB of engineering. The prime example is HEXA where in course of its development so many prototypes were shipped to UK for testing and validation. With the auto market changing into EV and hybrid mode the world over TML has everything needed to face this change. Why would the question of exiting this business even arise?

Last edited by damodar : 14th October 2017 at 08:15.
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Old 14th October 2017, 08:21   #45
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Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

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To me, that would start with the 4 wheeled rickshaw called the Nano. He desperately needs to put a lid on this and divert funds into better and contemporary models. The days of treating Indians like 3rd world citizens are long gone. Youngsters today have lofty aspirations. The 'grand old man' of the group is behind the times.


Toyota isn't doing something miraculous. They're just doing one thing - the utmost desire to excel in producing modern vehicles that deliver quality, reliability, value for money & with the lowest possible running costs.
While everyone can have an opinion, it would be wise to share that only when you're sure that your opinion corresponds to a fact. I cannot fathom why you have been singularly insistent on ridiculing the Nano, a car that had 34 patents registered during the development phase, a car that redefined cost cutting strategies for every manufactuer in the country. I'm not saying this because I have one- I'm saying this because I'm an engineer and it hurts me to see the most practical urban transport product in India be ridiculed in such inglorious terms by an Indian. The Bajaj Qute was a quadricycle. The Reva (original one) was a quadricycle. The Nano is a proper car. You may not like it, but please don't discredit it in a way that's unbecoming of a member of this forum.

Coming back to your points about Toyota- well, a ride in an Etios cab will show you how much the company respects Indian life and money. My dad met with an accident in his office cab- a low speed rear collision with a Swift ruined the entire dickey. Had it been at a higher speed, he'd have been seriously injured. Service experience is relative. I keep repeating that I've had a better time in TASS than MASS or the Hyundai showroom. But not many believe it, so I'll leave it at that.

Reliability comes with experience. The first generation Hyundai cars were a joke in the US. Today, the company has about 5% of that market. To me, selling unsafe and cut-price products made from poor quality steel is a bigger crime than making a customer wait for a few extra hours to get his car cleaned at the service center.

When I saw the Tiago for the first time, I was sure that the company was not making a profit on it. It is too good for the price. It feels more premium than the Swift inside. I'm not sure how long they'd sustain this way.

Last edited by Nissan1180 : 14th October 2017 at 08:32. Reason: Removed the hyperlink.
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