Shailesh Chandra, who spearheaded Tata Motors’ shift in its EV strategy, took over as President of the Tata Motors’ passenger vehicle (PV) business unit on April 1. This was a time when businesses were abruptly brought to a standstill amid the coronavirus-induced lockdown, further aggravating the prolonged slowdown in the auto sector. In an interview with BusinessLine , Chandra details how he has been steering the company through these challenges, trends in the PV industry, Tata Motors’ plans for EVs, and the expected support from the government, among other topics. Excerpts:

Since you took over the PV business recently, what are some of the changes that you have been bringing about?

I took over when it was a lockdown situation and everybody used to say that ‘I don’t know whether you are taking over in the best times or not’. Frankly, in retrospection, when I see H1, I think I got the responsibility at the right time. Because Covid-19 allowed us to experiment with many things. And all those experiments have been yielding great results for us.

I was very deeply involved in some key initiatives that we have taken in both urban and rural markets — very focused initiatives on demand creation, which have helped us. We have (undertaken) very focused initiatives on increasing demand for (certain) products, which were not doing great. And I would say that if you work on the fundamentals of the business, and get all the stakeholders together, it delivers.

How do you see the demand scenario in PVs currently?

Demand (bookings) has been growing by more than 30-40 per cent this month, compared to last month (September), and versus last year, it would be significantly higher. And this would be true for the industry. Which means a very strong festive demand is set to come to us. The second big factor which you have been hearing is the (focus on) personal mobility, with cars and two-wheelers having gone up in the priority of discretionary spending of people. This will remain a priority purchase for a lot of households. I would say this is a sustainable trend for at least a year or so.

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It’s my guess, but I’m seeing that during this festive season, bookings can be significantly higher than what the industry can serve.

Do you see any headwinds impacting this demand?

The only headwind which I see is macroeconomics, you are seeing GDP falling 10 per cent or so and this will have definite manifestations on unemployment, and loss of income, thereby impacting the overall sentiment. But now you have to see the net effect, what it is going to be. But the tailwinds are more than headwinds. And then the rural economy is doing good. Q4, after harvesting, should also become strong. And people are taking this (pandemic) as a way of life and prioritising cars above any other discretionary spend.

As you said there could be supply issues due to the increase in demand in the festive season. How are you planning to work around that?

From a level of 11,000 units (a month) last year, we have gravitated towards 21,000 plus, and it should improved (further). So, there has been a 2X growth for us, unlike other companies, which are at 1-1.2. So, for us, it is obvious that we would face certain bottlenecks. But, we took some proactive actions two months ago in anticipation of this...I will say, we will be able to unlock everything and we’ll fast ramp up to meet the demand.

Is there any update on the company’s plans to hive off the PV business into a separate unit and find a strategic partner?

The immediate focus for us, (in the) PV business, is to complete the process of subsidiarisation, which involves a lot of paperwork (for the) approval process. So, there are steps involved and we are hoping to complete all those in this financial year to the best possible extent and then subsidiarise the business and be a self-manageable entity. And (finding a) partner is a process where you start the whole process of down selecting and seeing how it makes a mutual win-win sense for both the partner and all. So, this is a long drawn out process.

Will the pandemic affect Tata Motors’ plans for EVs? Are you deferring any product launches and investment plans in EVs?

Our long-term strategy should not get impacted at all because of the pandemic. Because we know that the future is electric and we have put our bet on that. And also, the Corporate Average Fuel Efficiency (CAFE) world is going to hit us; these are realities, and the expansion of the electric segment, readiness and creating a brand image in the space of electric (vehicles) and our brand enhancement by working on new technologies — all these are related, and one cannot, therefore, compromise on these.

What support do you expect from the government? Do you think the government has done enough to help the auto sector in these trying times?

The industry has asked for a reduction in the GST rate. That should give a fillip to the overall industry, especially CVs. And implementation of some of the things that have been under discussion, such as the scrappage scheme. These two would be top of the list.

Also read: Tata Motors global wholesales decline 16 per cent in July-Sept

Specifically on the EVs, I would say that if the personal segment is also extended the FAME incentive, it can really help drive much, much higher growth. (Take) Nexon (for instance); we have been able to bring it to a level of 25-30 per cent of premium over conventional vehicles without any incentive.

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