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Corporate Jul 13, 2012

Tata Motors game plan: Fuel efficiency to beat competition

The dominance of Tata Motors in Indian commercial vehicles (CV) market will be challenged by the entry of global brands like Mercedes-Benz, Volvo and Navistar, the company's Chairman Ratan Tata has said.

He said, however, the company is developing a new line of fuel efficient CVs to "meet the competition head-on". In the car segment, despite the initial struggle, the company's small car Nano would continue to gain traction in India, while "the potential market for such an affordable car is enormous throughout the developing world", he added.

Reuters

Addressing shareholders in the company's annual report for 2011-12, Tata said: "In the coming years, Tata Motors' predominance in commercial vehicles will be challenged by the entry of international brands like Mercedes-Benz, Volvo and Navistar, which have all entered, or are in the process of entering India."

But, he added that the company was prepared to meet the challenges with new better products. "A new line of very competitive, fuel-efficient vehicles is being developed by Tata Motors to meet the competition head-on," Tata said.

In the fiscal 2011-12, Tata Motors had a market share of 58.45 percent in the Indian commercial vehicles segment which stood at 8,09,532 units. The company was followed by homegrown rivals Mahindra & Mahindra (15.69 percent) and Ashok Leyland (11.01 percent).

On the passenger cars segment, in which the company has been struggling to stamp its authority, Tata said competition would be even greater.

"In passenger cars, Tata Motors will face even greater competition from the many automotive brands that are in the country," he said. Tata, who is set to retire as the Chairman of the $100 billion conglomerate this December, said Tata Motors will need to address the marketplace more effectively with its existing and future products in order to regain the level of market share that it earlier enjoyed.

On the Nano, he said: "The fundamental economies of the Nano, which was globally acclaimed when it was unveiled in 2008 and which was plagued with start-up roadblocks in the state of West Bengal, will continue to establish itself in the Indian market with a wider sales and service network." Bullish about the car that was once touted as the world's cheapest, he said: "The potential market for such an affordable car is enormous throughout the developing world."

PTI


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