Tata Motors to revamp dealerships ahead of new car launches

Mumbai: Tata Motors Ltd is working on plans to revamp its entire dealership network as it seeks to bolster attempts to stage a turnaround in its passenger vehicle business in India, said a senior company executive.

The nationwide revamp will commence next year because the Mumbai-based auto maker feels its current showrooms are not equipped enough to handle its latest range of cars and sport-utility vehicles (SUVs) including those set to be launched in the future. The product portfolio includes the Tata Harrier SUV set to go on sale early next year.

Tata Motors will leverage technologies such as augmented reality (AR) and virtual reality (VR) at shopping malls and other popular locations to inform customers about its products, Mayank Pareek, president of passenger vehicle business at Tata Motors said in an interview.

“We are making world-class cars and they can’t be sold through these kind of places (current dealerships), so we have to make world-class showrooms,” said Pareek. “So, we have worked on a new showroom design and layout which you haven’t seen yet because it is still getting approved. Next year, we will make 100 showrooms change in to this new concept.”

Tata Motors, the parent of UK-based auto maker Jaguar Land Rover, has been trying to revive fortunes of its namesake brand of passenger vehicles in India for the past four years. To achieve its aim, the company started the so-called Impact 2.0 language in designing its new vehicles, while also implementing changes to make vendors more efficient.

Tata Motors’ new products comprising the Tiago hatchback, Tigor compact sedan and Nexon compact SUV have helped the company revive sales and close the gap with Mahindra and Mahindra Ltd, India’s third-largest auto maker.

Puneet Gupta, associate director, IHS Markit, said Tata Motors’ passenger vehicle business has made a turnaround in the last one year as sales have risen as well market share. He said it is right time for the company to change the way its dealerships function as showrooms need to complement the improved products.

“The dealers now have an idea of the company’s intent when it comes to making improvement in products and other aspects of the business. So, the channel partners will be convinced to make investments in their business which will help the company,” said Gupta.

Tata Motors will be the second carmaker after Maruti Suzuki India Ltd to initiate a complete overhaul of its showrooms to attract a new generation of customers. In 2015, Maruti started the Nexa range of premium dealerships for its new range of premium vehicles, and in 2017, the company decided to upgrade existing showrooms under the Arena theme.

Tata Motors has currently around 770 dealerships which is expected to increase to 2,000 by 2022.

Pareek, who was earlier the marketing and sales chief at Maruti Suzuki, said Tata Motors will refrain from giving any name to its revamped showrooms.

In addition to changing the way the dealerships function, Pareek said the company will tap technologies like augmented reality virtual reality (AR/VR) so that the expansion can be implemented at a fast clip.

“In the future, you will not expect customers to come to you. We have to go to places where customers are going. So, let’s say if we are going to create a AR/VR thing in Select City Mall (in New Delhi) which has a footfall of one lakh people every day and even if 10% of the footfall visits our AR/VR, then you will have 10,000 people very day,” he said.

Tata Motors recorded a 31% rise in passenger vehicle sales in the domestic market in the first half of this fiscal year to 106,865 vehicles thanks to demand for its new models.