Companies

New Tata Motors chief has his work cut out

Murali Gopalan Mumbai | Updated on January 19, 2018 Published on January 18, 2016

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Gunter Butschek

Gunter Butschek takes over as CEO & MD of the auto major

Gunter Butschek takes over as CEO & MD of Tata Motors at a time the company is facing critical growth challenges in its commercial vehicle and passenger car businesses. It is nearly two years since the top position has been vacant following the tragic death of Karl Slym in January, 2014.

Butschek, formerly Chief Operating Officer of Airbus and a 25-year-old Daimler veteran, will be responsible for Tata Motors’ operations in India and overseas. Butschek will take charge from February 15, soon after the curtains come down on the Delhi Auto Expo. “Butschek fills a big void at the top of Tata Motors and his experience in China will be useful in India. With his strong manufacturing experience one would expect him to drive strong efficiencies into Tata Motors,” says Hormazd Sorabjee, Editor of Autocar India.

The new CEO will have his work cut out, according to a top auto industry official who did not want to be named. For a start, the bread-and-butter commercial vehicle business is slowly limping back to normalcy after a prolonged two-year slowdown which affected all manufacturers. Two, competitive pressure is gradually building up from rivals like Ashok Leyland, Eicher and Volvo which are getting their act together.

Finally, Tata Motors will have to contend with the added challenging of retrofitting its entire vehicle range to meet BS VI emission norms which have been advanced to 2020. With costs expected to go up due to this transition, Butschek will need to ensure that a price-sensitive segment like commercial vehicles is not adversely impacted as a result.

As for cars, Tata Motors roped in Mayank Pareek from Maruti Suzuki as President last year to turn around the business. “It would be premature to expect a revival overnight but things are falling in place on the marketing front thanks to Pareek’s efforts,” says an ancillary supplier.

Since the Nano setback, Tata Motors has been trying hard to change its image as a cheap carmaker with more upmarket products like the Bolt and Zest. Neither has set the sales charts afire and the company is now betting big on the Zica which is due to debut in the coming weeks. Pareek has constantly maintained that there is immense potential waiting to be tapped in the car business and this is where Butschek will have to step on the gas in tandem.

As an industry official says there is a ‘serious shortage’ of top talent in the auto industry space. This is perhaps equally true globally too, where only a handful of top guns dominate the space. These include Carlos Ghosn of Renault-Nissan, Fiat Chrysler’s Sergio Marchionne and Dieter Zetsche of Daimler AG.

From Tata Motors’ point of view, Butschek is the third expat CEO to be hired in less than six years. The first, Carl-Peter Forster was around barely from February 2010 to September 2011 and quit for ‘personal circumstances’. Karl Slym of General Motors followed a year later and a lot was expected of him till his untimely passing in early 2014.

The silver lining in the cloud is that, through these years, Ralf Speth has been steering JLR to a strong position except for the recent headwinds in China. It will be interesting to see how Butschek takes Tata Motors to the next level of growth in a volatile global market.

Published on January 18, 2016
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