Cyrus Mistry to pull out all stops in resurrecting Tata Motors

Jul 08 2014, 08:45 IST
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Tata Sons chairman Cyrus Mistry says Tata Motors is at 'an inflexion point' with its entire product portfolio being revamped with relevant products for customers. Tata Sons chairman Cyrus Mistry says Tata Motors is at 'an inflexion point' with its entire product portfolio being revamped with relevant products for customers.
SummaryTata Motors has been steadily losing market share to rivals like Mahindra & Mahindra.

Tata Motors is “inculcating a culture that is intolerant to poor quality and absolutely committed to customer delight,” chairman Cyrus P Mistry said in his letter to shareholders, which is part of the company’s 2013-14 annual report.

The carmaker has been steadily losing market share to rivals like Mahindra & Mahindra Ltd, with sales declining for most of its passenger vehicles.

Mistry’s comments assume significance against the backdrop of new car launches from Tata Motors’ stable, which are expected to help the carmaker revive its fortunes. The company is launching a new hatchback, Bolt and a sedan, Zest. These cars will follow a completely different design language and sport new engines developed in-house by Tata Motors.

Tata Motors incurred significantly higher expenditure on R&D in FY14,says the annual report. On a standalone basis (excluding Jaguar-Land Rover), Tata Motors' domestic expenditure on R&D rose 21.8% year-on-year to Rs 2,144 crore. In FY13, the company's expenses had risen by only 13% to Rs 1,759.

Even at JLR, the British luxury carmaker that Tata Motors acquired in 2008, R&D investment has been gone up significantly. In FY14, JLR’s R&D expenditure rose 32% to Rs 13,274 crore. In FY13, it had gone up by around 25% to Rs 10,037 crore.

Ranjit Yadav, president of passenger vehicles at Tata Motors, had told FE in an interview that his company would be launching two new models each year till 2020 as it tries to reclaim lost market share. The Zest and Bolt mark the start of thsis exercise.

In January, the company unveiled its new engine, Revotron, which will have petrol and diesel variants. Tata Motors seeks equal contribution to its topline from petrol and diesel cars. Till now, this proportion has been skewed in favour of diesel variants.

“To ensure long-term competitiveness of Tata Motors, the company also took several steps under the Horizonext strategy — new products, quality improvement and enhancement of the consumer experience- that will help improve sustainable profitability of the business in long-term,” Mistry said in his letter to shareholders. “The company has steadily progressed in all these areas and is inculcating a culture which is intolerant to poor quality and absolutely committed to customer delight.”

Mistry said Tata Motors was at “an inflexion point” with its entire product portfolio being revamped with relevant products for customers.

“The company has stepped up

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