After hitting rock bottom three years ago, Tata Motors is bouncing back as a major domestic car manufacturer with its turnaround strategy starting to show results.

Tata Motors, which has been hit by losses in its luxury subsidiary Jaguar Land Rover, is trying to focus aggressively on the Indian market where it sees massive growth opportunities despite adverse market conditions.

Turnaround 2.0 strategy

Early this year, the company initiated a Turnaround 2.0 strategy to enable its passenger vehicle business to be “self-funding and profitable”, build confidence and acceptability for its portfolio from old and new buyers, and in-turn look at gaining market share.

In just nine months, the results are speaking for itself. While the industry has grown barely 9 per cent this year, Tata Motors has recorded a 37 per cent growth in sales. Demand for its new vehicles has played a big role in that shift. But that’s only the tip of the iceberg, according to Mayank Pareek, President of Passenger Vehicle Business Unit at Tata Motors.

“Three years back, our domestic passenger car market share was just about 3 per cent. It is now at about 7-8 per cent. We want that every customer who buys a car to at least consider us. So far, we were not even in the consideration stage. At least that’s changes and people are buying our cars,” Pareek said. However, he feels that there’s still a long way to go for the Tata group company.

“The fact remains that we are better than what we were before. But the fact also is that there are still a small player. So, I don’t want to lose the spirit of hunting dogs. We need to be energised and humble but with a fighting spirit. Our 6.8 per cent market share is still very small, although it has improved from our all time low of three per cent. But it is still a long time to go,” Pareek said.

Tata Motors is not just looking at improving its sales but also achieving a profitable growth.

Advantage of JLR arm

While the industry is reeling under increasing costs, caused primarily from falling rupee, and rising commodity prices, Tata Motors is taking advantage of its JLR subsidiary to become a net forex earner, which means the company only benefits if the rupee falls. But that’s only an external factor.

Internally, the company is hitting on costs like never before, trying to renegotiate supplier contracts, and improving efficiencies at every point.

“The cost saving we are doing this year is six times that of what we’ve ever done,” Pareek said. “We divided each element cost. We created what we call 24 vehicle modular teams) in our factories. There is a very focussed cost reduction that’s still going on for each of the teams. We’re already ahead of our annual targets. We are also working towards improving efficiencies. How do you get more out of the same plants and improve capex efficiencies and how do you improve efficiency of buying from suppliers,” Pareek said.

While refusing to give out the company’s internal sales targets, Pareek said he expects every new buyer to at least consider buying Tata cars soon. And new launches will help the company achieve that.

In the next three years, the company is looking at launching as many has 10-15 new models based on two new architectures, Alpha and Omega, which will be revealed early next year.

The new launches will help Tata Motors fill gaps in its product portfolio and compete aggressively in the market.

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