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Tata Motors to leverage Croma outlets for Nexon EV

Murali Gopalan Mumbai | Updated on December 18, 2019 Published on December 18, 2019

Shailesh Chandra, President – Electric Mobility Business & Corporate Strategy (File photo)

Digital displays will accompany the traditional selling format in showrooms

Tata Motors will use the group’s retail arm, Croma, to digitally showcase its Nexon EV. The car is scheduled to be unveiled in Mumbai on Thursday.

The Croma drive will be part of its “non-traditional” efforts on the distribution front, said Shailesh Chandra, President – Electric Mobility Business & Corporate Strategy, in a recent interview with BusinessLine.

The idea has been conceptualised keeping in mind the kind of customers who visit Croma outlets. “If somebody is going to buy an Apple product, he/she could be thinking electric,” reasoned Chandra.

The digital display will happen across a 6x8 feet area in select locations. These stores get considerable footfalls daily and if the desired results are achieved, Tata Motors will consider expanding this plan to more cities.

Four groups of potential buyers

“We have done exhaustive testing with the Nexon EV and have identified four groups of potential buyers,” said Chandra. The first comprises those who are fitness freaks and close to nature, which means an EV becomes synonymous with the green cause.

The second group involves tech geeks who “will love anything new on technology”. Then comes the category that does not want to be bogged down by “maintenance headaches” and an EV would be the ideal choice for them.

The fourth group of customers is perhaps the most interesting from Tata Motors’ point of view. They are referred to as the wannabe Teslas, who are enamoured by “this aura of global EVs” and arguably the personality of Elon Musk, the founder of Tesla Motors.

According to Chandra, this category of buyers would be the ones typically interested in the Nexon EV. They are reasonably affluent and perhaps own a luxury car already but would still want the electric brand association. They are typically 35-plus, well-travelled, and mostly from Bengaluru and Delhi.

Bengaluru accounts for nearly 50 per cent of the EV (electric vehicle) market followed by Hyderabad, Pune, Mumbai, Delhi, Ahmedabad and Chennai. This is where the Nexon EV will be positioned in the Croma digital drive that will support the traditional retail selling format in showrooms.

Support from group companies

According to Chandra, other group companies have also played a big role in making the Nexon EV a reality. Tata Power, for instance, has installed about 50 fast chargers in five cities and will add 250 more by the end of this fiscal year in seven cities. The company will also help out with home charging solutions.

“Working with Tata Power helped us optimise certain aspects,” said Chandra. While Tata Motors was planning for 50 kW charging, the fact remained that the grid would not be able to support more than 25-30 kW. It was this input from Tata Power on “the reality of today’s infrastructure” that was a big help.

“If Tata Power was not there, it would have been a nightmare for us,” admitted Chandra. The other group company, Tata AutoComp Systems (TACO), which supplies a host of components to auto manufacturers, is chipping in with the battery pack for the Nexon EV, while Tata Chemicals is helping out with the cell aspects.

As Chandra said, the principle between two Tata companies is “that we act as the anchor customer and supplier to each other” with the flexibility to build business with everybody else. “We benefit from this cooperation since everyone needs a starting point,” he added.

Tata Chemicals, for instance, is “actively looking at cell manufacturing” and joint visits have been carried out with Tata Motors to explore partners.

The other critical aspect is vehicle financing, which remains a roadblock for EVs and it is here that Tata Motors Finance has been roped in and Tata Capital as well, “to an extent” for the Nexon EV.

The traditional passenger vehicle (PV) business has also been an important pivot for the electric initiative, especially from the viewpoint of piggybacking on a lot of investments that have already been done.

“We are trying to leverage on the efficiencies of a big business by integrating manufacturing with most of the operations and getting the productivity benefits,” explained Chandra. By piggybacking on investments made by PV, the fixed costs are now significantly lower.

Published on December 18, 2019
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