Tata Motors seeks to reclaim lost ground
In deciding to launch as many as eight variants and infuse a considerable sum of Rs 1,600 crore on its car division, Tata Motors must be hoping to recoup at least part of its lost share in the car and the sports utility vehicle market segment. It is too early to say whether this gamble will pay off, because the fact is that lost customers do not so easily return. Add to this another fact: Competition in the car and SUV segment is so intense that established players and newcomers are forever jostling for prime space. The less-than successful Nano experiment and the down-market image that other Tata cars have will prove to be hurdles in the company's strategy to regain space. But this does not mean that Tata Motors will not see better days. Since public perception about a product matters nearly as much as the quality of the product, Tata Motors must concentrate on creating a positive image for its cars and SUVs through its publicity campaigns.
The Tata brand is a sound board in itself for a revamp of the image. In fact, it was the brand name that gave the Nano the momentum immediate before and after the small car came to launched. But leveraging the brand name is not enough; it must be accompanied by quality on the ground, whether it is to do with the product or the after-sales support. Tata Motors must match people's expectations not just by its own yardstick but also by the yardstick laid down by its more successful competitors in the market. So, the variants which the company plans to flood the market with must not be merely cosmetically different from one another. There is no point in giving the customer the same thing in different wrappings when he has a wide and alluring choice in the market.
Also, it is to be hoped that Tata Motors has learned from the Nano experience that raising expectations too high and then failing to meet them, can prove disastrous. The company continues to pay the price for those blunders; it's battling for the fourth or fifth position today in terms of market share. Perhaps the severe setback in the car segment made the company sluggish in the SUV market too. Barring the Safari and the Sumo, Tata Motors has not brought in any fresh product in the SUV and the multi-utility vehicle market, whereas its competitors have introduced several new versions that have caught the customers' imagination. Tata Motors' challenges are all the more formidable because it has to regain ground at a time when car sales in general are facing a downturn for a variety of reasons, not the least being a drop in the disposable income of the middle class which forms a huge proportion of the customer base countrywide, because of the insipid economic growth that the UPA regime has unleashed in recent years. But even after taking the fall in the market across the broad into consideration, the company's dip in sales is worrisome; in May alone it fell by more than 45 per cent. Thus, the iconic company has its task cut out.