TATA Motors to rev up overseas focus

NEW DELHI: Tata Motors is working on revamping its product portfolio and entering new large markets to strengthen its overseas presence once vehicles developed on its recently-unveiled advanced modular platform start hitting the roads in 2019.

aAs part of its transformation, the automaker, which took the fourth spot in the local passenger vehicle market last year, has made significant changes to its exports strategy. It has already commenced engineering a transition from its previous product portfolio (Nano, Indica and Indigo) meant for commercial trade in markets overseas to next-gen products for upscale personal buyers with Tiago, Tigor, Hexa and Nexon. Plans are afoot to also enter new segments and grow stronger with upcoming launches like H5X SUV and Tigor electric vehicles.

Tata Motors recorded a 22% growth in vehicle sales in India last fiscal, dispatching 210,200 units to its dealers. However, exports fell 41% to 2,587 units. The company attributed the decline to a 31% drop in volumes to Nepal, the imposition of stringent vehicle finance rules and higher duties in Sri Lanka and the transition from “bottom of the pyramid products” to new-age models as per the transformation plan.

“As part of the transformation journey, besides the domestic business, we have made significant changes in our export strategy,” said Sujan Roy, the head of international business at Tata Motors’ passenger vehicles division. “We plan to expand to larger markets post-introduction of our new generation of modular platform products. The new upcoming modular platforms will offer us greater scale, as they are specifically designed to easily meet diverse customer requirements as well as diverse regulatory, safety and environmental standards.”

VG Ramakrishnan, managing partner at Avanteum Advisors LLP, said several factors were in favour of Tata Motors now to deliver a better performance abroad. “They have well-designed, neatly-packaged products. Tata is a well-reputed brand and distributors globally want to align themselves with the company. If they can put in place a good network and strong after sales service facilities, they should be able to grow volumes significantly, particularly in South Asia, Southeast Asia, Australia and Africa,” he said.

The company wants to focus more on growing profitably as well in foreign markets. Tata Motors has cut down on stock-keeping units and is currently exporting only ‘Made for India’ products. These are being shipped to markets which have similar customer requirements and regulations as India, to help attain better economies of scale while keeping the cost low.

“With this (renewed efforts), we wish to establish ourselves as a strong and profitable player in India’s traditional ‘zone of influence’ around the Indian Ocean,” Roy said.

The fiscal year that started this month will be the first full year which will witness the entire new generation of products available for exports. Hence, the company anticipates another healthy step-up in revenue, market share and profitability.