Butschek bets big on TaMo to create the ‘halo effect’

This has been an extraordinarily busy month for Tata Motors starting with the unveiling of the Racemo sports car at the Geneva Motor Show followed by the announcement of their alliance with Volkswagen.

Just weeks prior to this, the company had launched its new sub-brand, TaMo, intended to act as an incubator for niche products like Racemo. As the crowds gathered around the Tata pavilion at Geneva, a delighted Guenter Butschek said he was confident of the road ahead.

“I am very proud of this because it is proof of what the team can achieve through alignment of purpose,” the MD & CEO of Tata Motors said in an interview. “TaMo marks the first step of that convergence.”

Many key ideas on the Racemo were generated from small teams and decisions were taken quickly. “We have incredible professionals working in Tata Motors,” he said. “There is a huge brain pool and we just need to unleash their potential.” The key was to to trust people to deliver the right ideas and cut down on decision making.

It is in this context that the incubator approach at TaMo is critical and Butschek was categorical that there would be another team for the next product, “which may be something electric for city traffic”. There was a broad hint that it could perhaps fit into the e-commerce arena for last mile connectivity.

Products retailed under the TaMo brand will not be available at all dealerships and “we may even come up with something very surprising”. The MOFlex platform, on which the Racemo was developed does not need a huge plant to assemble a car and, to that extent, space will not be a constraint. As Tata Motors has stated, it is a ‘structural technology, enabling greater freedom in surface design and efficient large-scale part integration’.

As a TaMo business model, MOFlex could even have entrepreneurs assembling future models in reasonably-sized facilities “or connect customers by webcam to the manufacturing process”. The body shape can be changed easily and the parts put together to create something different.

Interestingly, when the Nano project was conceived many years ago, one of the plans considered involved supplying kits from a mother plant to smaller assembly units across the country. The objective was to crate a sense of entrepreneurship for the people’s car.

Fast forward to TaMo and Butschek reiterated that it was important to reinforce the company’s pioneering spirit and its ability to make a difference in the market. “We have a legacy in India as Tata Motors and people will welcome the product for its aspiration. There is a lot of work to do in building a sub-brand like TaMo,” he said.

While it is intended for smaller volumes, it could still be a brand builder and create a “halo or aspiration” for other products. In the process, the goal is to build an emotive bonding with customers especially in areas such as styling, design and performance.

“Our industry is possibly at the crossroads of significant change with new market entrants such as Google and Apple on what we consider our home turf,” explained Butschek. “If we need to keep up with the pace of the market and generate volumes, we need to reposition ourselves as a brand.”

This would mean being on the consideration list for the younger population of India who dominate the demographics landscape. Decisions like buying a car are made by the families and here is where teenagers also need to be identified as potential buyers. “They are the ones who have an opinion on the car purchase and we must become more useful and relevant to them,” he said.

With TaMo, the goal is to bring something into the market that is unexpected and can demonstrate faith/confidence in Tata Motors’ ability to make top-class cars. “The Indian market is extremely competitive and price-sensitive, which leaves people very little room to play. It gives us an opportunity to give ideas quickly to customers,” said Butschek.

Tata Motors is also going through a “tremendous transformation” with a fair deal of rightsizing and questioning the rationale of decisions. “Lean organisations work and this also explains how a small team worked with tremendous agility on Racemo. The spirit and work ethic showed what they could achieve,” declared Butschek.

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