Zest in time, sales at Tata Motors start to turn the corner

Sep 02 2014, 14:28 IST
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Tata Motors has received over 10,000 orders from dealers across India, the company tweeted. Tata Motors has received over 10,000 orders from dealers across India, the company tweeted.
SummaryTata Motors gets over 10,000 orders for new car; sedan sales up 106%.

In less than three weeks since the launch of its new compact sedan, the Zest, Tata Motors has received over 10,000 orders from dealers across India, the company tweeted on Monday. These cars are to be delivered to the dealers over the next two months.

This number is close to the number of passenger vehicles it sold in August. The carmaker, part of the salt-to-software Tata Group, sold 10,975 cars in August, down 5% from the year earlier.

The overwhelming initial response to the new car, which the carmaker has been relying on heavily to turn around its fortunes, may finally help it turn the corner.

“It is early days yet, but we are beginning to see the impact (of Zest’s launch) on our sedan sales, which are up 106% year-on-year in August, and this is just after having the new product in the market for 15 days,” Ranjit Yadav, president of passenger vehicles at Tata Motors, told FE.

Petrol variants of Tata Motors’ latest entry-level sedan, which will run on the newly developed Revotron engine, are seeing a waiting period of 4-6 weeks.

The Zest is also helping Tata Motors’ dealers capitalise on rising footfall as eager buyers check out the new car. Many potential customers whose budgets don’t match with the Zest’s price are being pitched other cars at lower price points.

“We are seeing a positive rub-off on sales of other models at our dealerships,” Yadav said. “Seeing the upsurge in demand, we are gradually ramping up the assembly line and gearing up for the festive season (which will continue all the way till December).”

Analysts estimate Tata Motors will sell 40,000-60,000 units of the Zest in the first year of launch due to the aggressive pricing strategy. Not only does the Zest compete with other sedans, like the Honda Amaze and Maruti Dzire, it is also priced below hatchbacks like the Hyundai Elite i20.

The company has priced the Zest at Rs 4.83 lakh (ex-showroom, Mumbai) for the entry-level petrol version. The base diesel variant carries a price tag of Rs 5.88 lakh.

“While the response to the Zest is tremendous, we expect sales to pick up after October. As momentum builds, sales could easily cross 5,000 per month,” one of Tata Motors’ largest dealers in the country said.

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