Tata Motors grand ‘new strategy': Old car brands now only for taxis

Adopting a segregated brand and product approach to address both personal and commercial usage segments, Tata Motors has decided that only old car brands, starting with Indica and Indigo, will ply in taxi segment as it looks for a stronger presence in personal usage market.

The company, better known for its cars in the taxi segment, is trying to overcome a “unique social perspective (in India) that a brand which does well in the commercial market, nobody wants to buy for personal usage segment”.

“It is a reality in India and therefore at the portfolio level, what we have decided is that we will continue to play at the commercial segment but we will continue with different brands and products,” Tata Motors Senior Vice President (Programme, Planning & Project Management, Passenger Vehicles) Girish Wagh said.

Elaborating the company’s strategy, he said: “We want specific brands in commercial segment and specific brands essentially for the personal segment, so that they remain exclusive in personal segment.”

Therefore from that perspective, he said, “we will have Indica and Indigo as brands in the commercial segment. The reason is that they are very well accepted there. They have very good brand position and perception in that market and we will continue to strengthen that.”

Going forward, Wagh said: “At portfolio level therefore, any new product that we make we will be first targeted towards the personal usage segment and within its life-cycle it may happen that some of these products may start moving into the commercial segment when the replacement for it comes in the personal segment.”

With new models Zest and Bolt, the company has been successful to an extent in changing the perception of being a “diesel car manufacturer and a player who is making cars only in taxis”.

“So, gradually, it is helping us improve the perception in the market, bring the Tata brand back in the consideration set of personal usage customers,” he said.

Wagh, however, said the commercial segment could not be ignored either.

“Commercial market is a reality. It is going to be there. It is a significant amount of the market today. In a populous country like India, you will need a lot of means for public transportation … It will continue to grow,” he said.

On the need for a separate brand and product strategy for personal and commercial usage segments, he said: “The needs of these two sets of customers are also different. Therefore, we also need separate products which are engineered differently, which address the needs of the commercial segment.”

For example, he said “in the taxi segment the needs will be like high actual fuel efficiency, high uptime, low turnaround time during service, good network infrastructure” along with comfort and assurance that maintenance will not cost much.