Tata, M&M keep Brand India on top

As independent India ushers in its 67th anniversary, it will also be marked as the year when one of its oldest car plants shut down.

It was only a couple of months ago that a weary Hindustan Motors knew that the time had come to bid adieu. Nobody was interested in its iconic Ambassador any longer and there was no way it could sustain daily production of five cars with a workforce of over 2,000.

Moving on A little over a decade ago, Premier Automobiles, another big name in India since the 1950s, slammed the brakes on production of its famous Padmini model. The company was aware that it could not afford to continue rolling out this model in a market dominated by Maruti and with more rivals to follow.

Premier, of course, has reinvented itself and has since moved to an engineering facility in Pune. Its interest in the vehicle space is confined to an alliance with the Zotye group of China which makes the Rio compact SUV. From Premier’s point of view, the top priority is to stay financially stable and relevant in an intensely competitive market.

It is in this context that Mahindra & Mahindra and Tata Motors stand tall as two entities that not only weathered the MNC onslaught of the late ‘90s but have carved out their own global scripts. Even prior to this, the Tatas proved they were no pushovers when the 407 LCV blew out the Japanese quartet of Mitsubishi, Nissan, Toyota and Mazda in the ‘80s.

Visionary Post-1991, M&M and Tatas plotted their roadmaps for joint ventures in cars with stronger MNC partners like Ford and Daimler. It was Ratan Tata who first made people sit up and take notice when he made it known that the company was independently working on a car with the best mix of space, price and mileage. It was a daring vision from a man who had just taken over as Chairman of the group and who was only too aware that his company had practically zilch knowledge of making cars. The Indica proved that India had the skills and expertise to make its own car. For the few years after its launch, it caught the imagination of the nation even though it just could not capitalise on the momentum subsequently.

Beyond cars, Tata Motors was looking out for opportunities in its business of commercial vehicles and the opportunity came with the buyout of Daewoo Commercial Vehicles in South Korea. However, the headline maker which was to follow was the Rs 1-lakh car unveiled as the Nano in the 2008 Auto Expo.

The automotive world was stunned to see that a car could actually be made at this price. And even if the Nano did not quite set the sales charts afire, the fiercely nationalistic Tata had made a point. More was to follow with the acquisition of Jaguar Land Rover which is today keeping Tata Motors’ car business afloat.

Taking chances As in the case of Tata, Anand Mahindra, who had taken over as MD of M&M in 1997, knew only too well that his company would have to chalk out its own roadmap in the competitive market amongst big global brands. The alliance with Ford was critical in understanding manufacturing processes but it did not make sense hanging in there forever. This was the time M&M announced its intent to embark on Project Scorpio while calling it quits with Ford.

It was an ambitious plan which involved making a top-class SUV on a (then) extravagant budget of around Rs 600 crore. Anand Mahindra was aware that it was a do-or-die project given that the company had virtually staked its future on this SUV.

The Scorpio made its debut in 2002 . Today, the company has a clear strategy which involves SUVs as its core focus while diversifying into two-wheelers, cars, trucks and components. Its acquisition of Korea’s SsangYong Motor will not only create a larger footprint but also offer synergies in the product development space. In tractors, the company is the clear market leader with big global plans underway.

What does the future hold for Tata Motors and M&M? There is no question that both companies will have to constantly push the envelope in a fiercely competitive market where rivals are breathing down their necks.

Tata Motors desperately needs a fillip for its car and CV businesses while M&M is seeing greater pressure on its SUVs from rival models. Yet, these two companies have shown that India can hold its head high in the global automotive arena.

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