By pricing its latest launch, the Zest, competitively, Tata Motors may be able to clock annual volumes of 40,000-60,000 units, say analysts. Though, so far, rivals such as Maruti Suzuki, Honda and Hyundai have not reacted by lowering prices of similar models, a price war cannot be ruled out in days to come if the initial response to the Zest is good.
?Tata Motors has done a great job with the value proposition and the aggressive price tag for the Zest. While it may take a while, they could easily look at selling 5,000 vehicles per month despite having less than half the network of Maruti Suzuki, which sells 20,000 Dzires a month,? said Yashesh Mukhi, auto analyst at Morgan Stanley.
The Zest, Tata Motors? new entry level sedan, comes with an aggressive price tag of Rs 4.83 lakh (ex-showroom Mumbai) for the entry-level petrol. The base diesel variant carries a price tag of Rs 5.88 lakh. At these prices, the Zest is cheaper than Maruti Suzuki?s Swift Dzire and the Honda Amaze, both hugely popular cars in India.
It is logical to assume that if the new sedan has been priced so aggressively, Tata Motors? soon-to-be-launched hatch, the Bolt, would be even more competitively priced and cheaper than its rivals in the hatchback segment. The hatchback segment is the volume driver in the Indian passenger vehicle market. In addition, the prices of the Zest sedan are on a par with hatchbacks of some other carmakers, like the Hyundai Motor?s Elite i20 (which was launched on Monday). The Elite i20 comes for a starting price of Rs 4.89 lakh for the petrol variant.
?The competition, big or small, is clearly going to keep a watch and react accordingly. The kind of brand damage that has taken place over the last four years for Tata Motors will take a while to erode. Though with a good product delivery they are bound to get incremental volumes,? said Surjit Arora, auto analyst at Prabhudas Lilladher.
The new offerings from the company’s stable are well-timed, keeping in mind the ensuing festive season and the recovering car market.
?While Tata Motors may have delivered a good product, the launch comes at a time when motivation levels at the company are down,? said Puneet Gupta, associate director at IHS Automotive. ?The biggest challenge for them is to get customers back to the dealerships and drive up the sales momentum. We estimate a sales of over 40,000 cars per year for Zest.?
Tata Motors has done well by keeping the pricing ?aggressive, disruptive and closer to the hatchback space”, Gupta said, but added that the company?s competitors will also devise counter-strategies.
?The entry sedan segment in India has seen increasing competition with launch of new products. Any new launch creates fresh excitement in the market and we welcome competition in segment as it helps in expanding the market. The Amaze is showing strong sales momentum and we are confident it will continue to perform strongly in the future,? said Jnaneswar Sen, senior vice-president, marketing and sales, Honda Cars India.