Tata Motors’ recently installed new Managing Director, Karl Slym, has outlined plans to pare the company’s model range and change perceptions about quality.
Bloomberg has quoted Slym as saying at a news conference: “There’s potential for pruning as we bring in new products, as well as to make sure we have a portfolio that is all performing. We suffer from a little bit of perception of poor quality from previous years. We will continue to impact those concerns.”
Tata Motors recently reported a 4% year-on-year fall in global wholesales in September, driven by a 17% fall in Tata passenger vehicles and a 4% decline in Jaguar Land Rover (JLR) sales. Global wholesales of Tata passenger vehicles in September totalled 22,434, lower by 17%, over September 2011. Cumulative wholesales for the April-September 2012 period were 134,597, an increase of 4%.
Tata plans to improve features and add variants of its more popular models at home to more effectively compete with rivals such as Maruti Suzuki, which has just launched its new entry-level Alto 800 model, and Toyota.
According to a recent J.D. Power and Associates report, Tata’s utility vehicle Sumo and sedan Indigo had more quality problems than the average compared with similar products from Toyota and Maruti. According to Bloomberg, Mohit Arora, Executive Director at the Asian unit of JD Power commented: “Quality is among the top five reasons of purchase and Tata Motors loses out on both quality as well as the lack of new variants.” He added that rival Mahindra & Mahindra “too has issues with quality but they have managed to offset that with new launches.”
Sales of five models of utility vehicles at Tata Motors rose 16% to 23,008 in the six months to 30 September, while industry volumes jumped 56%. Total sales of the company’s Aria SUV and Xenon pick-up fell 82% to 329, while combined deliveries of the Tata Safari and the Grande dropped 39% in the period.
According to Slym: “The Aria is something that is definitely a good example of a great product that is missing the consumer.”
He declined to identify specific models that might be scrapped as part of the product range overhaul.
He concluded: “I have to blend the international experience I’ve got with working for multi-national companies with Tata’s local strengths. Our aspirations are to grow domestically as well as to grow internationally.”
In a separate Reuters report, Slym is reported to have also said the company would look to launch a next-generation version of its Nano for the US market in about three years. Ratan Tata, Chairman of the parent Tata Group, has previously indicated to Automotive News that the Nano for the US would have a bigger engine and more features, and sell for under US$10,000.
Slym was also quoted as saying: “We will continue to look for segments where there is growth, and there’s a likely pruning that will happen over time as we do that with our portfolio. The foundations and the capabilities of an organisation that can do much better than what you’ve seen in the results are there.
“We have a wide portfolio, and we have some cars in segments that are not necessarily growing how we would have expected. For us as a high volume manufacturer it’s important for us to have a variety of offerings in those key segments as we go forward.”
