Team-BHP > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 10th October 2017, 22:32   #1
Distinguished - BHPian
 
Leoshashi's Avatar
 
Join Date: Jul 2014
Location: India
Posts: 4,854
Thanked: 33,986 Times
Default N Chandrasekaran: Every Tata Car - except Indica - is losing money

N Chandrasekaran: Every Tata Car - except Indica - is losing money-tatatiagorightfrontthreequarter70545.jpg

Tata Sons Chairman Natarajan Chandrasekaran, in a recent interview to Economic times, said that every single car in the company is losing money.

Quote:
Tata Motors has been losing money on every passenger vehicle sold while its commercial vehicle business has been slumping as well. The company's luxury arm Jaguar Land Rover is the only profitable vehicle business at present.
Quote:
The report quotes N Chandrasekaran saying, "In passenger cars, our cost structures are out of whack. Every single car and model is losing money. It's important to pick up volumes and try to become profitable."

Chandrasekaran said that he wants to improve the market share of the commercial vehicle business and plans to reduce the losses on its passenger vehicles. Earlier this year, the company saw over 16,000 personnel being laid off or shifted to new roles as part of the company downsizing its work force.

Tata Motors largely operates in three businesses including PVs, CVs and luxury cars. The latter includes Jaguar Land Rover, has turned out to be the cash cow for Tata Motors contributing over 83.57 per cent of the total revenue. JLR's contribution is valued at ₹ 2,34,000 crore out of the total revenue of ₹ 2,80,000 crore. The other ₹ 45,000 crore comes from the commercial vehicle business and about ₹ 8000-9000 crore from PV sales.
Quote:
"People are targetting Nano for no reasons. The only model (in passenger vehicles) that makes money is Indica, every other model makes losses," Chandrasekaran said.
Quote:
"Nano's loss on yearly basis is only about 4 per cent of the losses that our passenger cars make, so whether you shut down Nano whether you give it a life, the number is not going to change and this is not a billion dollar question in front of Tata Motors," he said.
Sources:

https://auto.ndtv.com/news/every-tat...ekaran-1761089

http://economictimes.indiatimes.com/...w/61008579.cms

Last edited by Leoshashi : 10th October 2017 at 22:37.
Leoshashi is offline   (27) Thanks
Old 11th October 2017, 00:14   #2
BHPian
 
PraNeel's Avatar
 
Join Date: Sep 2016
Location: Jaipur
Posts: 597
Thanked: 1,637 Times
Default Every Tata Car Is Losing Money, Says Tata Sons Chairman N Chandrasekaran

Amid a slumping commercial vehicle business and the ugly spat of Ratan Tata and Cyrus Mistry, comes another jolt. Every passenger car that Tata makes is losing money, the success of Tiago withstanding.

N Chandrasekaran says, "In passenger cars, our cost structures are out of whack. Every single car and model is losing money. It's important to pick up volumes and try to become profitable."

Chandrasekaran said that he wants to improve the market share of the commercial vehicle business and plans to reduce the losses on its passenger vehicles. Earlier this year, the company saw over 16,000 personnel being laid off or shifted to new roles as part of the company downsizing its work force.

Tata Motors largely operates in three businesses including PVs, CVs and luxury cars. The latter includes Jaguar Land Rover, has turned out to be the cash cow for Tata Motors contributing over 83.57 per cent of the total revenue. JLR's contribution is valued at ₹ 2,34,000 crore out of the total revenue of ₹ 2,80,000 crore. The other ₹ 45,000 crore comes from the commercial vehicle business and about ₹ 8000-9000 crore from PV sales.

N Chandrasekaran also says, "JLR under Ralf (Speth) is doing well and will continue to do so. While if I look at the domestic business what is it that is hurting us -- the drop in profitability in a CV and the increasing losses in the passenger cars. We are working diligently and with enormous urgency. I am confident that we will turn it around."

This explains the intent to completely revamp the passenger vehicle portfolio and target towards volume segments. Recently launched Nexon fits in the compact SUV volume segment and the coming months will show whether it can replicate the success of Tiago.
Their two new SUVs, sedan and premium hatchback are next in line and their success or failure will decide the future of Tata Motors PV segment. I wish N Chandrasekaran should have stressed on improving the dealership experience and marketing strategy as well.

Last edited by PraNeel : 11th October 2017 at 00:16.
PraNeel is offline   (14) Thanks
Old 11th October 2017, 05:32   #3
Senior - BHPian
 
Sebring's Avatar
 
Join Date: Apr 2011
Location: Dubai/Bengaluru
Posts: 2,352
Thanked: 6,664 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Focus on the customer and the volumes will generate by itself. Tata Motors doesn't interact with the buyers of it's vehicles. Mails are not replied to, no one is approachable or answerable. Create a layer in the hierarchy to just meet customers and get feedback, everything else will fall in place. It's like 'we have made this pie, you have to eat it'.

The products are getting there, just need better response from the Company. Start with NEXON!
Sebring is offline   (11) Thanks
Old 11th October 2017, 06:28   #4
Senior - BHPian
 
Join Date: Jul 2009
Location: Pune
Posts: 2,665
Thanked: 1,766 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Quote:
Originally Posted by PraNeel View Post
I wish N Chandrasekaran should have stressed on improving the dealership experience and marketing strategy as well.
He does not have at his command the competencies needed; no Tata company is a leader in the retail B2C businesses with the shining exception of Titan. Titan succeeded because it was allowed by JRD Tata to be free of Bombay House mentalities/oversight, being entirely led by Xerxes Desai out of Bangalore.

From how the TML leadership has been talking since 2013 on improving the dealership experiences and from the lack of progress seen there, Tata will struggle to get volumes needed for profitability.

I get good service for my 2013 Nano, but often after escalating things to TML management in a way most people cannot. And that way of working isn't a way to manage volumes once obtained.

Last edited by Sawyer : 11th October 2017 at 06:33.
Sawyer is offline   (15) Thanks
Old 11th October 2017, 07:17   #5
Senior - BHPian
 
narayan's Avatar
 
Join Date: Aug 2006
Location: Singapore
Posts: 3,072
Thanked: 2,165 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

We have lots and lots of threads on how Tata Motors can improve their passenger car division with many of us pouring our feedback around dealership/customer experience etc etc.

Rather than making this thread also go in the same direction, which after a point of time, goes into how their pricing is wrong, Maruti Vs Tata, Local manufacturer Vs foreign player etc , it will be good if we can focus on some quantitative inputs around how they can improve their cost structure.

We have heard about the cost rationalization on the people front. Lets look at other areas they can focus on ( or probably are already focussed on ).


1. How to reduce platform development costs ? --

There is news of a small car below Tiago based on the same platform.
Land Rover based new SUV ( supposedly the all new Safari ).

2. Rationalize platforms --

By 2019 - expected to reduce # of platforms from 6 to 2. First of these is the AMP which will have hatchbacks, sedans, small SUVs. Should Tata motors enter the >4m sedan segment again. This segment ( after losing lot of ground to compact SUVs ) seems to back in the reckoning ~ 15-17k units per month and just 3 large players ( Ciaz, City, Verna ) - maybe room for a VFM product.

3. Bring back focus on taxi segment with Bolt and Zest ? - difficult to say - its a question of management bandwidth Vs leveraging existing cars for an erstwhile strong segment for the company. With the exit of the earlier Dzire ( with its large boot ) - can the Zest plug that hole ? Can the cheaper Bolt take on the stronger Liva ?

4. Sourcing/supply chain - this seems to be a weakness for Tata Motors - we see quality inconsistencies in new cars with suppliers not fully on-board to deliver the required volumes at the right quality. Likewise on after sales, parts are not always readily available. Is there room for improvement by changing the way the company manages its vendors ( vis-a-vis how Hyundai or Maruti does )

5. Parts rationalization - Maruti has been the king on this but Tata Motors seems to be catching up offlate. Notably the common steering wheel, dashboard buttons, audio systems across quite a few models. Maybe there is more they are doing that is not visible. What else can be done here ?
narayan is offline   (14) Thanks
Old 11th October 2017, 07:59   #6
Senior - BHPian
 
Join Date: Jul 2009
Location: Pune
Posts: 2,665
Thanked: 1,766 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Tata seems to have - correctly in my view - identified that profitability will come from obtaining much larger volumes than are currently obtained.

Cost rationalisation is necessary no doubt, but without growth in numbers, no amount of that will save the business.

One cannot avoid the growth imperative for success in any business, much less replace it by cost rationalisation that often also easily leads to cutting corners that cripple growth chances. Far too often Tata cars look like outcomes of corners cut, an approach that can work to an extent in the CV business that contributed in a major way to the TML DNA. But not in the owner/user car business.
Sawyer is offline   (5) Thanks
Old 11th October 2017, 09:22   #7
Senior - BHPian
 
Join Date: Oct 2006
Location: New Delhi
Posts: 1,084
Thanked: 1,698 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

That the PV arm of Tata Motors hasn't done well in the last couple of years is no secret.


But a Look at the current Positives:

1. JLR (Of course)

2. TIAGO (currently) and what appears like the NEXON (next).

3. I will say that it has Shed its "TAXI' image, largely thanks to Uber / Ola.

I see the Nexon becoming a hit among Indian consumers. Just that the Word of Mouth need NOT be Negative (if not overtly positive).






Last edited by payeng : 11th October 2017 at 09:25.
payeng is offline   (3) Thanks
Old 11th October 2017, 09:31   #8
BHPian
 
Nonstop-driver's Avatar
 
Join Date: Jun 2011
Location: Noida
Posts: 620
Thanked: 687 Times
Default re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

TML is on the right path but it needs perseverance considering the series of mistakes it has made in the past. Many CEOs have tried to rebrand Indica and Nano to shed their past but it doesn't work that way. Scrapping them in favour of completely new cars is the right approach, but it will take time.

5 years ago we didn't even bother to consider Tata's offering in the segment we were shopping in, but today we'll atleast take a test drive. The demand is changing and if Tata continues with this approach, the market should respond in 2-4 years.
Nonstop-driver is offline   (3) Thanks
Old 11th October 2017, 09:59   #9
BHPian
 
Saanil's Avatar
 
Join Date: Apr 2011
Location: Mumbai
Posts: 414
Thanked: 260 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

I am more optimistic on Tata Motors and believe that we need to be patient with it. Tata Motors has been making the right moves in the past 1 year and hope they continue to build on the momentum. I believe their marketing efforts are headed by an ex-Maruti veteran (Mayank Parekh is the name I think) hence I am a little hopeful of things getting better at Tata Motors.
Saanil is offline  
Old 11th October 2017, 10:00   #10
Distinguished - BHPian
 
ashis89's Avatar
 
Join Date: Aug 2011
Location: Bengaluru
Posts: 2,623
Thanked: 5,995 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Tata is trying to do their level best to make a comeback. They are just caught in two of their USPs - low selling price and more car per car. These were relevant earlier when a typical buyer looked for reliable spacious car with some features.

Today's informed buyer is spoiled by Hyundai's quality and Maruti's features. All this apart from giving a good car, mechanically speaking. People's expectation - get all this (and maybe some more if possible) at a good discount. Even then a buyer is apprehensive to put down his/her money, thinking about the rickety old battered smoking Indica that one gets to witness while going to office.

That's a huge maze in front of Tata and would be difficult, though not impossible, to traverse. Eager to see the turn around.
ashis89 is offline  
Old 11th October 2017, 10:10   #11
Distinguished - BHPian
 
R2D2's Avatar
 
Join Date: Oct 2008
Location: Pune
Posts: 3,130
Thanked: 5,208 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

I speak as a former Tata Motors (then TELCO) customer. The Tata Safari was the first and last Tata product my family will ever buy.

The image of this company as one that produces unreliable, low tech and utilitarian commercial vehicles doesn't do anything to help their effort to break from the past. What does one think when you hear the name Tata Motors? Commercial vehicles AKA trucks and buses!! Other vehicles are simply peripheral businesses. And as for the Nano, well, there's nothing left to say.

Given a choice, would you as a passenger prefer to travel long distances in a bus made by Tata, Volvo, Mercedes Benz or Scania? I am sure the Tata product gets the lowest priority. I rest my case.

If I were Tata Motors, I'd spin off the personal vehicles business into a separate division with new name. The ONE and only one thing that will change their fortune is the stress on QUALITY and reliability. They are still nowhere compared to the Japs, Koreans & Europeans in engineering finesse. I remember my time in the UK when Tata products got sneered at, a reaction pretty similar to the ones elicited in the EU countries I visited frequently. To a European you may as well have discussed a horse cart. That collaboration (really?) with Rover in the early to mid 2000s was a joke.

Nearly two decades after personal vehicles were introduced starting with the Indica (not counting the Tata Sumo or the nearly 3 decade old Estate) it really makes me wonder why they have not been able to up their game in all this time. The JLR inspired Nexa looks handsome for sure, but I hope the quality matches the looks.

Seriously, Mr Chandrasekaran needs to think radically and differently. Break away from the past and start anew.

Last edited by R2D2 : 11th October 2017 at 10:13.
R2D2 is offline   (7) Thanks
Old 11th October 2017, 10:17   #12
BHPian
 
penpavan's Avatar
 
Join Date: Oct 2007
Location: Blore
Posts: 431
Thanked: 183 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

A different take from R Jagannathan on Tata's car business on the backdrop of this comment from their chairman.

Read on,

https://swarajyamag.com/business/sho...s-under-attack
penpavan is offline   (2) Thanks
Old 11th October 2017, 10:27   #13
BHPian
 
Join Date: Feb 2011
Location: .
Posts: 653
Thanked: 692 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

After having invested my hard earned money into a TATA flagship product and having faced the wiper motor issue in the 2nd month of ownership, I have only ONE and ONE suggestion for TML -

For heavens sake -

Please, please either change or be ruthless with your "auto ancillary" providers TML on the quality of parts that they supply you with.

These providers have and continue to soil your name in the Indian Automobile Industry.

What an Indian wants from you is the longevity of all the "movable" parts in your machines, we can live with less of chrome, less of leather, what is the point in proving a HK when the belt/motors snaps in the middle of the road ?

Quality of parts that are in constant motion when the vehicle is being driven or the ones that a customer has to use on a daily basis (Power Windows/Door Lock Unlock buttons/ Turn Indicators/ Buttons and switches all across), needs and needs to be improved.

I'm sure 100's and thousands of owners in the past would have recommended the same to TML and only god knows what will it take for them to listen to this!!

TML please draw a leaf out of MSL, ensure the longevity of parts and that is all that you need to succeed and make people vouch for your products.

As someone who really wants TML to grow leaps and bounds, please cut some some Tata Steel Flab out of TML and that shall help further.
Torquedo is offline   (12) Thanks
Old 11th October 2017, 10:57   #14
Senior - BHPian
 
sandeepmdas's Avatar
 
Join Date: Feb 2005
Location: Varkala
Posts: 1,233
Thanked: 966 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

Wow, they finally got a top guy who calls a spade a spade!

Quote:
Originally Posted by ashis89 View Post
Even then a buyer is apprehensive to put down his/her money, thinking about the rickety old battered smoking Indica that one gets to witness while going to office.
For a period of almost a decade (2005 - 2015) the top brass of Tata were apparently under the impression that their car brands, esp. the Indica and Sumo, are iconic, much like the Toyota Corolla or Ford Mustang. The re-re-re-branding of cars (Sumo, Sumo Gold, Sumo Victa, Sumo Grande, no-Sumo Grande...) was based on this assumed philosophy. It never occurred to them that the Indica (my first car!) and the Sumo were losing or lost the mass appeal completely due to the taxi image. Maybe the top echelon just might have lost its connect with the ground realities and grass roots level.

The Grande was actually a good car, so was the Manza 90. Sadly, these were almost DOA with their Sumo and Indigo prefixes.

The other Indian car maker, Mahindra and Mahindra also make contraptions like Magic Iris (which comes with a huge TATA emblazoned at rear). Just an hour back my XUV was crawling behind two coughing and gasping Mahindra pickups carrying fish baskets. Most Innovas I see on road are yellow-boards, but almost all ministers in Kerala also use them.

The reason is both these companies sell and support their products in a far better and appealing manner. In addition, Toyota has a reputation for reliability and M&M carefully cultivates a culture of "work hard, play hard". Just look at their Live young, Live Free campaign.

This is where Tata has lost it's script. Let us wish them every success in this day of a new beginning.
sandeepmdas is offline   (3) Thanks
Old 11th October 2017, 11:12   #15
BHPian
 
Varun_HexaGuy's Avatar
 
Join Date: May 2017
Location: Hyderabad
Posts: 284
Thanked: 1,369 Times
Default Re: N Chandrasekaran: Every Tata Car - except Indica - is losing money

One of the main reasons for this is nothing but their slow pace of bringing new products to the market. It is because of their slow pace they get dismal sales despite good products in hand. Just see the Hexa. It was launched when one of its chief competitors is about to receive a major facelift (read as XUV500) and was launched just a bit ahead of the Jeep. Secondly, why would a layman bother to buy a new Tata over a well-established Mahindra or a Reliable Toyota (we know it isn't!). If a layman wants something new and fresh, then he's got the Jeep Compass.

Though they've launched the vehicle late, add to that their marketing was dismal. There was no aggressive marketing from the side of TML. See Mahindra, they've gone as far as they could in-terms of marketing and the tagline, "Live Young, Live Free" has become very popular.

The same is happening with the Tigor. It was launched at a time where one of it's chief competitors (Dzire) received a major facelift and that contributed to low sales of the Tigor. IMO, the same will follow the Nexon. It's launched at a time where again one of it's competitors is yet to receive a major facelift (Ecosport) and then again the sales numbers of the Nexon are bound to fall. Till then, will wait and see what our Indian consumers have in store for the Nexon.

Last edited by GTO : 13th October 2017 at 10:43. Reason: Language
Varun_HexaGuy is offline   Received Infraction
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright 2000 - 2021, Team-BHP.com
Proudly powered by E2E Networks