Tough road ahead for Marc Llistosella

Nandana James Mumbai | Updated on February 15, 2021

Reviving Tata Motors CV biz and sustaining the growth in the PV segment will be a major challenge

As Marc Llistosella gears up to be at the helm of Tata Motors, he will have to look at sustaining the growth momentum that the company’s passenger vehicle segment has seen — which has outpaced peers even amid the challenges of a pandemic — whilst he will also be faced with reviving its ailing commercial vehicle business.

Llistosella will be taking the reins of Tata Motors as its new CEO and MD from July, replacing Guenter Butschek.

Key challenges

Reviving the CV business and bringing it back to its original growth path while also sustaining its PV side’s growth momentum would be the key challenge in the short to mid term, says Suraj Ghosh, principal analyst - South Asia Powertrain Forecasts, IHS Markit, commenting on the challenges facing the company in the next 2-3 years.

As Jaguar Land Rover, Tata Motors’ British arm, accounts for about 80 per cent of Tata’s consolidated revenue, its performance and growth strategy will be key focus areas for the company globally, he adds.

There has been a positive change in the perception of Tata Motors in the car space in recent times, thanks to its renewed product strategy, with the PV business having seen a turnaround amid the pandemic. Keeping this growth momentum upbeat would be a key task awaiting Llistosella, say experts.

Shashank Kanodia, CFA, Research Analyst at ICICI Securities, said: “Given his past experience at Daimler India, we would expect him to help Tata Motors further consolidate its industry leading market share in the domestic market. We would also expect him to control discounting on finished products in the marketplace, which kind of helps the industry altogether.”

Previous stint

Llistosella was most recently the President and CEO of Fuso Truck and Bus Corporation and Head of Daimler Trucks in Asia. He was earlier the MD and CEO of Daimler India Commercial Vehicles Pvt Ltd.

In fact, Llistosella is credited for setting up Daimler’s bus and truck unit in India.

Tata Motors registered domestic sales of 57,742 units in January 2021, a growth of 28 per cent over last year. While its domestic CV business fell by two per cent year-on-year in January, its PV business saw a y-o-y increase of 94 per cent. During the third quarter of this fiscal year, Tata Motors posted a net profit after three consecutive quarters of loss - its consolidated net profit jumped 67.52 per cent to ₹2,941.48 crore in the third quarter ended December 2020, compared to ₹1,755.88 crore in the year-ago quarter.

While Butschek has done great work in turning around Indian operations, unscathed by the Covid-19 crisis, challenges continue on improvement in operations of its financing subsidiary, notes an auto expert who did not wish to be named. Tata Motors Finance’s profitability is still not at par with other auto financing NBFCs, he says. Improving its market share across CVs, PVs and JLR would be another challenge in the near term, he adds.

Tata Motor’s foray into electric vehicles (EVs) was another significant move under the leadership of Butschek, with over 5,000 EVs of Tata Motors plying on Indian roads today.

“Given Marc’s passion for electrification as well as renewables, we also expect him to spearhead and position Tata Motors as the most aspiring electric vehicle CV manufacturer domestically,” says Kanodia.

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Published on February 15, 2021
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