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Old 23rd January 2020, 01:58   #1
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Default Safety is more important than price war: Tata Motors

Mayank Pareek of Tata Motors answers to the pertinent questions about pricing of newly launched Altroz, Nexon, and Tiago/Tigor twins.

At a time when the company's market share is at the lowest, the automaker is re-aligning its strategy to focus more on the overall quality and safety of the product rather than compromising with the price.
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NEW DELHI: Home-grown automaker Tata Motors is more focused on safety quotient rather than being price competitive in the Indian car market as vehicle safety norms become more stringent, a top executive said on the sidelines of the launch of its premium hatchback Altroz. It is quite contrary to what many automakers in India have decided that they will not pass the extra cost of BS-VI technology to the customers owing to a severe slowdown in the Indian car market.

“We are offering superior value by offering more to the customers. An attempt is made to move away from the discussion of the pricing and shift towards safety. Internally, we have decided to offer the safest car in the segment.” said Mayank Pareek, President - Passenger Vehicles, Tata Motors.

He further elaborated, “Earlier cars did not come with air-conditioners but people still used to buy them. The automated manual transmission came. Both features are now standard. Third-wave is coming, which is safe cars. New generation buyers are focusing more on safety..”

Launched in a price range of Rs 5.29 lakh - Rs 9.29 lakh, Tata Altroz comes with a host of new features in the segment such as vehicle connectivity (intelligent real-time assist), voice command, electronic stability control and rain-sensing wipers. Moreover, it is the first car in the segment that has secured a 5-star rating at the global new car assessment program (Global NCAP) crash tests. The price difference between petrol and diesel variants of Altroz ranges from Rs 1.60 lakh to Rs 1.70 which is way steeper when compared to other models in the competition.

Recall the recent announcements by Toyota Kirloskar Motors which have aggressively priced BS-VI complaint, Innova Crysta as the price difference is mere Rs 39,000 to 92,000 from the earlier model. Similarly, Kia Motors also revised the price of Rs 35,000.

Defending the price gap, Pareekh said, “It depends on which segment of customers you want to target. Fleet operators who want to run vehicles need cheaper products. But there are enthusiasts who want a peppier engine and features. We are not here to play the price game.”

He pointed, “Diesel constitutes only for 12.5 percent of the premium hatchback segment, why to sell in 12 percent and gain nothing.”

Industry experts say Altroz is priced aggressively seeing the features it has to offer. However, we have to wait and watch if customers will pay for the newly offered features or for the Tata brand which is yet to prove its mettle.

It will also be interesting to see how Altroz plays on the diesel side as the segment leader Baleno will not have any diesel variants from April 1, 2020. While the Korean car manufacturer Hyundai India which aggressively priced its recently launched Aura is also preparing to launch the next generation Elite i20.

“With Altroz, we would be covering 12 percent of Indian car market taking our overall to 70 percent of the total car market. We want to be significant players in the segment,” added Pareekh.
Looks like Tata Motors changed their stance about pricing, that means TML products are no longer going to be the most affordable of the lot. These days even Apple Inc is having tough time to justify the premium pricing strategy due to intense competition, with the not so good brand image they(Tata) have, wonder how the new stance will help them.

If they are after safety, why are they offering just two airbags even on top variants?

Source

Last edited by wheelguy : 23rd January 2020 at 02:15.
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Old 23rd January 2020, 05:52   #2
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They should improve the sales experience. Last week one of my friend went to enquire about Hexa . 3 showrooms' response was almost same as govt offices. Only Orange motors was good . I am really sad about such quality products are not able to be the market leader .. Please Tata work on this , at the end of day your service and sales are the face of Tata. Not team Bhp or Mayank Pareekh
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Old 23rd January 2020, 06:29   #3
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Default Re: Safety is more important than price war: Tata Motors

If the number of airbags would denote higher safety then most of our cars would make the cut. Tata walked the talk and has landed in an exclusive club - it was ruling for more than a year now. They should have captured that momentum then, going to town about safety. The new XUV300 has crashed that party and with pricing parity on both these models, customer gets a choice. Even now they should hammer home the point that Tata stands for the safest cars (but the new Nexon will be tested again to retain it's NCAP rating is what I hear)
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If they are after safety, why are they offering just two airbags even on top variants?
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Old 23rd January 2020, 07:50   #4
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I think customer experience and service are far bigger pain points than their cars. As much as I liked the Tiago the customer service at two of their showrooms was pathetic to say the least. Total chalta hai attitude. They need to do a comprehensive overhaul of their service staff and show them the difference between what people experience at other service centers. Even my friend who bought a tiago stopped recommending tata after one bad experience of the other at their service center as they knew he wasn't knowledgeable about cars and tried to take advantage.
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Old 23rd January 2020, 07:58   #5
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Default Re: Safety is more important than price war: Tata Motors

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If the number of airbags would denote higher safety then most of our cars would make the cut.
Nope. But it counts for many people. It is a countable, whereas structural integrity cannot be seen/counted. What I am saying is they should have gone all out and provided those extra airbags too.

Last edited by wheelguy : 23rd January 2020 at 08:25.
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Old 23rd January 2020, 09:45   #6
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I feel Tata would come up with 6 airbag versions soon. The reason for not equipping now may be to avoid sticker shock. But I would rather buy a Tata Altroz or Nexon than buy a Hyundai i20 or Creta with 6 airbags.

It’s good to have additional airbags in a safe car, having 6 airbags in a Celerio, Wagon R, Swift, Baleno, Ertiga, Kwid, Duster, Figo etc ( all GNCAP tested ) isn't going to help at all. The crash reports show that the protection offered by 2 airbag variants of Altroz and XUV 300 adequate. Let's appreciate for what Tata and Mahindra has done, it's a right step and I'm sure they will follow up on that rather than sit on the accolades.
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Old 23rd January 2020, 10:01   #7
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Default Re: Safety is more important than price war: Tata Motors

Good lord, can we not bring the Sales/Service experiences blah blah in EVERY conversation about Tata. If the thread is about that, sure, slam Tata. But this thread is about Safety. And it is not Tata, but GNCAP terming Tata's cars safe. Entry ones as well, mind you. So, let's appreciate that.

https://www.team-bhp.com/forum/road-...ml#post4558178 (Tata Nexon: Global NCAP’s first 5-Star Indian car)

https://www.team-bhp.com/forum/road-...ml#post4736748 (Tata Tiago and Tigor score 4 stars in GNCAP)

https://www.team-bhp.com/forum/road-...ml#post4735685 (Tata Altroz gets a 5-star rating in the Global NCAP!)

The problem is the hypocrisy of the Indian customers. People prioritize FE over safety and flog the bad-experience-about-Tata horse to it's proverbial death.
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Old 23rd January 2020, 10:27   #8
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Default Re: Safety is more important than price war: Tata Motors

Good to see TML opting for this strategy. It is a good business plan in my view. Pricing/ service/ quality/ reliability were not Tata's forte anyway and this is nothing to be offended about for Tata followers. So they needed a USP to sell.

I am really glad that they thought about safety and displayed their engineering prowess in this field, which many manufacturers are still to catch up with. Good to see them advertising this too now. I think they are in a position to create a niche until mass car manufacturers like MSIL & Hyundai catch up with Tata. The designing & development guys have delivered already for Tata. How well the marketing department fares now will show how well oiled is the TML's machinery. I see the ball is in their court, again.

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Old 23rd January 2020, 10:34   #9
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Default Re: Safety is more important than price war: Tata Motors

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Originally Posted by saket77 View Post
I am really glad that they thought about safety and displayed their engineering prowess in this field, which many manufacturers are still to catch up with. Good to see them advertising this too now. I think they are in a position to create a niche until mass car manufacturers like MSIL & Hyundai catch up with Tata. The designing & development guys have delivered already for Tata. How well the marketing department fares now will show how well oiled is the TML's machinery. I see the ball is in their court, again.
Not that other manufacturers couldn't do that or doesn't have the engineering prowess to do that, it's that they don't want to do it in India. Now with Mahindra and Tata flaunting their GNCAP stars, eventually it will become inevitable for other manufacturers to catch up.
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Old 23rd January 2020, 10:39   #10
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Not that other manufacturers couldn't do that or doesn't have the engineering prowess to do that, it's that they don't want to do it in India. Now with Mahindra and Tata flaunting their GNCAP stars, eventually it will become inevitable for other manufacturers to catch up.
Right. May be I didn't articulate my thoughts well if my post conveyed anything otherwise. I did mean the same. And there is a small window for Tata here to gain advantage with the early entry to this niche club is what I meant, until other cars come lining up.

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Old 23rd January 2020, 10:42   #11
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Default Re: Safety is more important than price war: Tata Motors

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Originally Posted by saket77 View Post
Right. May be I didn't articulate my thoughts well if my post conveyed anything otherwise. I did mean the same. And there is a small window for Tata here to gain advantage with the early entry to this niche club is what I meant, until other cars come lining up.

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You articulated it rightly. I just added to what you said. Actually I think I didn't articulate it well. Anyways, we both are saying the same thing.
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Old 23rd January 2020, 11:42   #12
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IMHO - There is no point in TATA playing the price war anymore. The image hasn't really helped them and although customers expect TATA cars to be cheaper than the competition, that's not the real USP for which they buy the cars anyways.

What was happening for the past couple of years felt like a conflict of interest between the designers and the accountants? Must say that Pratap Bose and his team seemed like they believed they were competing against world-class products, whereas the feature list and specs felt like it was made to compete on price instead.

Take the Harrier for example - brilliant design, widely appreciated - and almost everyone expected it to come with a panoramic sunroof based on an old tweet from the designer, but it skipped the production versions till the obvious happened. Some obvious attention to features and QC would have prevented the huge booking backlog from shifting to products like the Kia Seltos and MG Hector when those two options arrived. Take the Altroz as another example - once again a sharp design, which is an outright bold attempt whether you liked it or not - but the specs sheet sounds otherwise. The diesel was detuned, the turbo petrol option was not provided - it is as if the accountants set price targets once the car leaves the designers domain on to production modeling. It is still not too late though - and I'm hoping Harrier BS6 sorts most feature and QC issues, whereas the Altroz is soon supplemented with JTP petrol and diesel engines (Just plonking the Nexon spec engines will do the job!)

Both the Nexon and Altroz were clearly designed to be 'the safest cars' in the market, but the lack of the 6-airbag option has hurt them now and Mahindra has run away with the title within a week of TATA advertising India's safest car.

Time to forget the price tag, TATA Motors! You have a brilliant design team, a youthful range of products (across the range - From Tiago to the Harrier) - focus on providing the best mechanicals and specifications as well - even if that means being on top of the segment in terms of pricing. As long as the cars offer value - and not just a cheaper price - there will be Indians buying them, and with pride!

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The problem is the hypocrisy of the Indian customers. People prioritize FE over safety and flog the bad-experience-about-Tata horse to it's proverbial death.
Well, perhaps then TATA Motors should consider it as big a priority as safety. It is simply human nature that negatives catch our attention first before positives (The reason why negatives are always in the newsflashes!) - so removing any negatives should be high in the priority list.

Last edited by CrAzY dRiVeR : 23rd January 2020 at 14:02. Reason: Typo
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Old 23rd January 2020, 11:53   #13
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This strategy is already in place. Their website cars.tatamotors.com only lists six cars now - Tiago, Altroz, Tigor, Nexon, Harrier, Hexa. Looks like they have quietly discontinued all others. Except for Hexa, everything is believed to be 4 or 5 stars rated. Even though Harrier is not tested yet, I am sure it will score at least 4. Come BS6, Gravitas will take Hexa's place for sometime before it emerges again.

That lineup will be a super one with every car having desirability associated with it and safest in their segment. And none of these cars is the cheapest in their segments, which was the case earlier with all of TML cars. I hope BS6 Hexa either comes with a crash rating or does'nt come at all.

Another thing they need to focus on is the future of models which doesn't do well on launch. Even if a model does not do well on launch (like Aria or Sumo Grande), they still have to stick with 2-3 year facelift cycle rather than abandoning the model. All of the remaining ones has the potential to be great sub brands like Swift and City, if they stick to model philosophy long enough and nurture them through tough times.

Last edited by padmrajravi : 23rd January 2020 at 11:57.
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Old 23rd January 2020, 14:27   #14
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Well, perhaps then TATA Motors should consider it as big a priority as safety. It is simply human nature that negatives catch our attention first before positives (The reason why negatives are always in the newsflashes!) - so removing any negatives should be high in the priority list.
Agreed after acing the safety front, TATA should be on war-footing to improve the service experience next. But if negatives are so prominent, wonder why Maruti's biggest negative never catches anybody's attention even after all the noise about how compromised all their offerings are structurally. Its baffling to see them rolling out those tin-cans month after month in truckloads. Only logical reason I see is what libranof1987 mentioned:
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The problem is the hypocrisy of the Indian customers. People prioritize FE over safety and flog the bad-experience-about-Tata horse to it's proverbial death.

Last edited by SoumenD : 23rd January 2020 at 14:30.
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Old 23rd January 2020, 14:43   #15
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But if negatives are so prominent, wonder why Maruti's biggest negative never catches anybody's attention even after all the noise about how compromised all their offerings are structurally.
Had just replied with my thoughts (related) on another thread -

https://www.team-bhp.com/forum/india...ml#post4737049

As a nation, we believe that accidents happen to others. The same attitude is seen even in two-wheeler space, where there is a rebellion against something as simple as wearing a helmet. Many people even skip insurance even though it is mandatory - because they believe the money is a waste as they won't get into accidents.

We tend to value small pleasures like dealership experience, FE every refill, etc more than the big pain of accident safety - simply because we don't the possibility that it could happen to us also anytime. Negative dealership experience is a certainty during purchase, whereas accident safety is a small probability - some people even think it won't happen "if I drive safe", "if I only drive in cities", "if I drive within speed limits, etc".
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