New look Tata Motors to hold on to Indica, Indigo

Even as Tata Motors is looking to reinvent itself by launching some new models starting with compact sedan Zest and followed by two models every year till 2020, it would continue to retain its earlier passenger car models like Indica and Indigo, pinning hopes that early signs of an economic revival could revive sales in this category.

"There is no immediate plan to phase out either Indica or Indigo. In the passenger segment, we were a bit under-represented and Zest would start to address that category. But our other brands are very strong in the categories they are in. With economy turning around brands like Indigo and Indica would start growing and it is already happening. Indica, for example, is strong in the commercial passenger segment, which so far was muted but now growth in coming in," Ranjit Yadav, president, passenger vehicles unit of Tata Motors said.

The comments assume significance, especially, at a time when Tata Motors' sale of compact segment cars, which includes brands like Indica, Vista and also Indigo CS, has suffered a steep drop of 35% in the first quarter of the current financial year (2014-15), down to just 15,055 units from 23,144 a year back.

In fact, Tata Motors' passenger car segment performance over the years have been hit hard, as brands like Indica and Indigo lost their inspirational values among the vehicle owners due to quality issues and poor marketing. This prompted the company to shift the models to the commercial passenger segment, which, too, has been facing the vagaries of economic downturn.

"We will continue to sell brands like Indigo CS which is also sub-4 meter like Zest. I think our new launch wouldn't undercut that model as Indigo CS is a strong vehicle with strong preferences, particularly in states of east like Odisha. Last year we announced new variants of Indico and Indica and we would continue to refresh them. So, after Zest, we will launch Bolt (its hatchback version), the new Indigo and Indica down to the Nano, the new Nano Automatic which we have announced," Yadav said on the sidelines of a press conference to showcase its new compact sedan Zest in the city.

Yadav referred to Horizonext initiative last year when it unveiled 8 upgraded and enhanced products, across 5 brands.

"We believe the compact sedan will grow this year, so also the hatchback. In fact, I believe, every segment will grow. The question is which segments will grow faster and what where the switching would happen," he said.

Tata Motors is now pinning its hope on revival in demand in the domestic market.

"In FY14, auto volumes in most sub-segments had been under pressure. The first quarter of FY15 has, however, shown the marks of an early stage in demand recovery. The lowered excise duty till December would help consolidate demand till the benefits of a virtuous cycle of economic recovery kick in boosting industrial growth and consumer incomes," Anand Rathi research recently said in a report on the auto sector.