Tata Motors on Wednesday launched a variant of the Tiago, called Tata NRG, at a starting price of Rs 5.49 lakh.
Tata Motors on Wednesday launched a variant of the Tiago, called Tata NRG, at a starting price of Rs 5.49 lakh. While the Tiago, launched in 2016, is a hatchback, the variant has the appearance of a Sports Utility Vehicle (SUV). The Tiago NRG will compete with Maruti Suzuki’s Swift and Celerio, Honda’s Amaze and Hyundai Motors’ i20 and Grand i10. Mayank Pareek, president (passenger vehicles), Tata Motors, said the Tiago NRG was meant for a customer looking for a compact car with a premium feel to it. Tata Motors plans to introduce three other products before Diwali including JTP which is a variant of Tiago. The Tiago sells approximately 8,000-9,000 units a month. The Nexon launched in 2017 is also selling well.
Moreover, Pareek said the company was looking to launch another 12-15 products before 2021. However, the company will not need to invest significantly in these products as much of the capex has already taken place, Pareek said. “Much of the investment is already done, “Pareek said.
Tata Motors now has a share of 6.7% in the passenger vehicles space with sales of 98,702 units in the five months to August; at one point its share was just 3%. The company has reported a growth in sales of PV of 36% y-o-y between April and August. Maruti Suzuki is the unquestioned market leader in passenger vehicles with a commanding share of 52% between April and August. The second position in the space is occupied by Hyundai Motors with a 16% share followed by Mahindra & Mahindra with 6.8% market share.
In Q1FY19, Tata Motors the company reported EBITDA (earnings before interest, tax, depreciation and amortisation) of Rs 5,430 crore, up 9% y-o-y but a consolidated net loss of Rs 1,900 crore due to losses in its Jaguar Land Rover (JLR) business since it contributes 78% of total revenue of Tata Motors. However, the standalone business fared well with 8.7% EBITDA margin, up 940 bps y-o-y.
Analysts with UBS Global Research observe that Tata Motors’ improving India business will offer some downside support but given the overwhelmingly large size of the JLR business relative to the India business, a major deterioration in JLR would overwhelm these other positives. Tata Motors stock closed Wednesday’s trading session at Rs 262.65 on the BSE, down 1.70% over Tuesday’s close. The stock has lost 36.2% since January majorly due to the poor performance of the JLR business.