Tata Motors revamps strategy to regain market share

Home-grown automaker Tata Motors is revamping its product strategy for the passenger car segment to safeguard itself from competition coming from technology giants such as Google and Uber.

The company plans to launch two modular platforms and gradually phase out six existing platforms. While many of the products from the current platforms will be also phased out, some of will be transferred to the new modular platforms to be launched in 2018. This has put a question mark on the future of Nano, the much talked-about small car that failed to generate volume.

“The decision has not been taken yet,” said Guenter Butschek, chief executive officer and managing director, Tata Motors. “But if you would like to succeed in the entry-level hatchback segment, which we consider the most competitive one, you need to have a platform which is extremely made to the point to have huge volume leverage,” said Butschek.

He considers the segment most competitive because of the number of competitors, the price sensitivity and cost sensitivity, and the expected changes in the regulatory environment.

This would make the transfer of Nano from existing platform to a new modular platform impractical. The new modular platforms are aimed at launching more products across various segments to bring down the capital expenditure as customers are changing cars more frequently.

Additionally, the company will launch a sub-brand TAMO, which will be an open platform. This will allow collaboration with various technology partners to launch a low-volume niche product.

The first car under the TAMO brand will be launched at the Geneva Motor show in March, the company said.

“TAMO will help us create new segments and improve our brand appeal,” said Mayank Pareek, president, passenger vehicle business unit at Tata Motors. “This will help us regain our lost position,” he said. The company aims to be the third largest automaker in the country by 2018-19 from current fourth position.

It is also looking at a different buying experience for TAMO vehicles, although for the time being it has not confirmed if it would set up a separate retail chain as market leader Maruti Suzuki has done with Nexa.

“Introduction of TAMO will help us co-design India's automotive footprint by taking new technologies and mobility concepts as a new ecosystem," said Butschek.

He said TAMO will be a ring-fenced agile and flexible vertical that would serve as an incubating environment towards new technologies, business models and partnerships.