Ratan Tata steps off Tata Motors on a high

Nachiket Kelkar
moneycontrol.com

There were poetic speeches, humble requests, sadness and smiles as Ratan Tata chaired Tata Motors annual general meeting for the last time. Tata will retire as the chairman of Tata Sons at the end of the year, as he turns 75 and the baton will pass to Cyrus Mistry. Many shareholders, while welcoming Mistry, wanted Tata to stay on at least for a couple of years more. Some urged Tata to take on the role of chairman emeritus, while others wanted him to keep meeting them at least once a year. The humble Tata also thanked the shareholders for their support and urged them to continue the same for Mistry, who Tata feels is capable enough to drive the company ahead. "He (Mistry) is an engineer and MBA from UK. I believe he has all the qualities and the values that we require to make the group continue in the direction it has done all these years... "...Cyrus will need the support and encouragement you all have given to him at various companies and I hope he will have the support I have got from you," Tata said. Mistry indeed has a huge task ahead of him. Under Tata, the company has grown by leaps and bounds. Tata Motors has under him transformed from a pure commercial vehicle maker into passenger cars with the launch of Indica, India's first indigenous designed small car. Tata's vision led the company to acquire loss making British luxury brands Jaguar and Land Rover and turn it around in quick time. Today JLR accounts for majority of Tata Motors profits and has been the key driver for the company's growth in global markets at a time the domestic business has hit speed bumps. But Tata acknowledged that lot of things have not gone the way it should have been. Sales of the Nano, for instance, are still behind what the company had projected. The company aims to sell at least 2 lakh Nanos this year. Tata's humility also showed when a shareholder asked why rival Mahindra & Mahindra had raced ahead of Tata Motors in certain areas like SUVs and Tata said it was indeed shameful that Tata Motors had let that happen. "I have great respect for what M&M has been able to do... We have a great deal of introspection to do why they are ahead of us, and us catching up," he said. Competition has also increased in its core medium and heavy truck and bus segment. Till not so long ago, it was a two horse race between Tata Motors and Ashok Leyland. Tata Motors still retains the leadership with a over 56% market share. But now many foreign players like Mercedes, Navistar and Volvo are also in the race. In the luxury intercity bus segment, for instance, its Volvo and Mercedes that rule. Tata only recently launched its Divo bus in that segment and so has a lot of catch up to do. The domestic car market has also slowed due to expensive loans and high petrol prices and products from rival car makers like Maruti Suzuki's Swift and DZire are much preferred. Tata said the company needs to take on competition with confidence that it will eventually lead. Tata Motors MD PM Telang retired in June and Tata said they are close to choosing his replacement. The new MD and Mistry clearly have a tough road ahead of them. nachiket.kelkar@network18online.com