Tata Motors is currently putting in place new measures to offer more safety for Nano. The company’s managing director?India operations PM Telang in an interaction with FE?s Shweta Bhanot expresses discontent with the way Nano is perceived in the market and about the company’s plans on Jaguar & Land Rover.
Are you content the way Nano is portrayed in the market?
I personally believe it deserves a better chance. It is a path-breaking vehicle and is going to do wonders for India. I would have been happy if the media was more supportive of this initiative. In many parts of the world, Nano is seen as a big threat. Any adverse comment picked up by international media can portray Nano, in their language, as a cheap vehicle in which safety is compromised. This is unfortunate. Nano meets all the safety standards of international expectations in terms of crash, safety and quality. We have gone overboard to overcome this stigma—compromise on safety. We have prepared the car for even the unusual circumstances by offering additional safety measures.
Has this in any way delayed your global plans for Nano? By when will the Nano be launched in Europe?
It will take more than a year for the Europe launch.
When are you planning to introduce 800 cc Nano?
We are currently working on an 800 cc diesel engine Nano and the plan is to share the engine between the Ace category of vehicles and the Nano. There is no time frame for the launch as yet.
Can you sketch out the plans of Tata Motors with Jaguar Land Rover (JLR) in phase II?
We like to keep the individuality of the acquired company alive and the best examples could be the Tata Hispano and Tata Daewoo. Our approach has been to look at areas of synergies to work together with the acquired companies. We will be undertaking the same approach with JLR and identify areas of synergies. We clearly see opportunities in overall workmanship, aesthetics and upgrading of our vehicles. JLR, on the other hand, can look at advantages of low engineering and component cost with us. The intention is to make sure that both the partners feel comfortable with the pace of progress. We are looking at possibilities of working together in India and the first such project will be the assembly of Freelander 2 early next year from our Pune plant. We have also looking at the possibility of joint engine development programme that suits requirements of both the partners. For our passenger vehicles requirements, we would like bigger size engine of something like 2 litre, while JLR is seriously looking at downsizing its engines to meet the CO2 emission standards. There will be common playing field somewhere in this area.
Your Korean venture, Tata Daewoo, has seen its profits more than halve in the September quarter over the last year. What have been the reasons for its bad performance?
Tata Daewoo is struggling with some challenges at its home front. One of the problems was that when Daewoo operations had collapsed, there were three wings of automobile including trucks which was taken over by Tata Motors, cars by General Motors and bus wing by another independent company. However, at that time all had decided to stay with Daewoo?s sales company – Daewoo Motor Sales Corporation for marketing and distribution. This company has got into financial problem in the last few months and everyone decided to go independent. We have set up a new distribution company, a 100% subsidiary of Tata Daewoo Commercial Vehicles, to look into the marketing and distribution and therefore this transition has impacted the business.
Coming to the home front, your partnership with Fiat is seen to be going through some glitches including high dealer attrition. What is your view on it?
There is no rift with Fiat and we are committed to promote the Fiat brand. There are challenges as there has been legacy attached with the Fiat brand and it will be difficult to erase it so quickly. But we are working towards it. As far as dealer attrition is concerned, competition has increased and poaching will happen but it is not a matter of concern.
Do you see a need for a greenfield plant in the short to medium term?
We don?t see a need for a greenfield plant today and the reason being we have already taken advance actions at our Lucknow and Jamshedpur plants. There is enough headroom to grow. It is only the Ace category of products that are facing capacity constraint and we feel that 2.5 lakh unit per annum capacity is not enough at Pantnagar plant in Uttarakhand. Therefore, we are increasing the capacity to 3 lakh units per annum through de-bottlenecking by the fourth quarter of this financial year. This will be the phase one. In the second phase, we plan to produce Ace family from our Dharward plant in Karnataka. We are setting up a full-fledged facility for Ace range of products there. Our studies show that 65% of the demand for Ace category of products comes from west and south region and this fits it well.