We are targeting a double-digit market share in PVs: Tata Motors’ Shailesh Chandra

S Ronendra Singh Nandana James Mumbai/Delhi | Updated on February 22, 2021

Tata Motor’s Shailesh Chandra

‘Our aim is to continuously grow on the back of strong product portfolio, additional products’

Tata Motors is eyeing a double-digit market share in the passenger vehicles segment in the near-term on the back of a robust product strategy, as well as its approach to ‘reimagine the front-end’, said Shailesh Chandra, President, Passenger Vehicles Business Unit (PVBU), Tata Motors. In an interview with BusinessLine after the launch of the new Safari on Monday, Chandra said: “Our ambition would be to continuously grow on the back of our strong product portfolio, some additional products which are going to come, and on the back of the lead that we have taken on the electric vehicle side which is going to hit the inflection point very soon.” Excerpts:

How do you plan to sustain the growth momentum that the company has seen in PVs?

In FY20, we were selling, on an average level, 11,000 units a month. In this financial year, post the lockdown — and when the industry started stabilising a bit —in Q2, we went up to 18,000 units a month and then in Q3, it was 23,000. And in Q4, in the first month, we went up to 27,000 units. We have five products in our portfolio right now, which is called the New Forever range, which has gained a lot of traction… When I compare the booking market share to my wholesale market share, there's a gap of 70-80 basis points, which means that the demand is still not fully being met through the supply ramp-up that we have done. Still, there is a bit of supply that we have to cover for the demand for these five products.

Also read: Tata Motors launches new Safari at starting price of ₹14.69 lakh

We are launching Safari today, so there will be an additional volume that will come. We'll also be launching the Hornbill. So we have two more promising products coming in SUVs which is growing at the fastest pace. So, whatever we have been able to grow so far — which is a 49 per cent growth year to date, as compared to an industry decline of nearly 12 per cent —we see ourselves growing much higher and further strengthening our market position, and with our ambition to be in a double-digit market share, which is greater than 10 per cent.

By when do you plan to achieve a double-digit market share?

I will not convey any timeline but this is something which is our short-term target. Last month, we were at a market share of 8.9 per cent. Last year, we were at 4.8 per cent... So it's not very far away that we can seen hitting 10 per cent, given that we have two more promising products.

Will the product strategy be an important part of achieving this goal?

Both the product strategy as well as what we call as reimagining the front end. We have taken some very transformative steps in the front end which has led to this kind of a smooth growth, and a massive change in the dealer profitability. I would say less than 40 per cent of the dealers used to be profitable. But today, most of our dealers make money, and therefore that strengthens their ability to get more working capital into the business, which is so important for growth... There is a lot of work that we have done in improving the dealer profitability, a lot of work on the micro market side — 20 urban micro markets that we have identified where we have a high total industry volume, but our market shares are not to the extent it should be. So, some massive work has been done there. And a retail focus right from end to end, I would say...So, as a combination of the product strategy and reimagining the front end — both as a combo — is the strategy going forward.

What's the game plan for Safari? How do you see the competition there?

Safari would have a very unique positioning and more as an SUV, not an MPV. But it offers the full utility of what an MPV does. Therefore, it will attract a lot of customers, who are also looking from a utility perspective of seven seats, but (also) getting an option which is a solid SUV. The Safari is going to attract a lot of customers from adjacent segments. This will come because of emotive reasons — there's a connect with the Safari brand — and there will be rational reasons, more utility like seven seaters. All (this) will come in combination to drive the sales of Safari.

What will be your game plan for the sedan segment?

If you see the sedan segment, 70 per cent of the sales, if not more, comes from the compact sedans, which is less than four metre. And we have a strong product, Tigor, serving that segment. We may have to see how we meet the excitement around that product. If you really see the centre of gravity of demand, it is lying in the high-end premium hatches, compact sedans, and the SUVs. And our strategy would be that we serve all these segments but be in those sub-segments of those product segments where there is a greater intensity of buy and interest. And we might come with more innovative options going forward for those people who still would prefer more car-like but not fully dedicated to SUVs. We will continuously think in terms of how we meet the needs of that kind of a customer segment. But you have seen the trend — clearly, the trend of sedans is declining, and it is moving more towards the compact SUVs and the mid-size SUVs at the cost of sedans, I would say. And also, to some extent the premium hatches are taking away the share from the sedans. So it is getting eaten away from both the divisions.

On electric vehicles, what is the change in the customer demand now compared to two years ago?

Last year, 90 per cent of the sales used to come from the fleet segment. This year has been a paradigm shift — 90 per cent plus comes from the personal segment now. And out of this 90 per cent, 65 per cent of the total industry sales is just because of one car which is the Nexon EV.. because it has, for the first time, broken a lot of myths around electric vehicles.

We are working very closely with Tata Power… Already 350 plus charges have been installed by Tata Power — many of them are on the highways and going forward, they have a very, very aggressive plan in terms of expanding and we are working very closely in terms of which are the highways we should (identify) first… Electric is going to become mainstream. and we will be bringing greater choices for personal buyers.

Do you think the current semiconductor shortage, as well as the rising commodity prices can come in the way of the company’s plans and targets for PVs?

The semiconductor crisis remains a reality for all the auto players. We are working very closely with the suppliers; wherever there is a semiconductor involved, we are going down to tier-2 with semiconductor suppliers to see whether there are bottlenecks. We are also shifting to alternative suppliers. We are doing many things in terms of also reviewing if there can be lesser uses of semiconductors, (and) we are changing the mix if required. But really struggling, I would say, as the struggle is for all the other players in terms of getting some stability as far as the supplies are concerned.

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Published on February 22, 2021
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