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Last Updated : Aug 03, 2020 05:19 PM IST | Source: Moneycontrol.com

COVID-19 to change consumer behaviour tremendously, says Tata Motors Chairman N Chandrasekaran

Though an expensive alternative to public transport, personal mobility will become a more accepted way of travel in the future.

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In light of the deadly spread of COVID-19, health and safety features will become priority thereby changing the way consumers shop, forcing companies to look at new avenues to sell cars, N Chandrasekaran, chairman, Tata Motors said.

Addressing shareholders in the 75th annual report, Chandrasekaran said, “As we look ahead over the next two years, we anticipate a tremendous deal of transformation stemming from COVID-19. Consumer behaviour will change in numerous ways, from demanding more integrated digital experiences to prioritising health and safety features across purchasing decisions.”

Though an expensive alternative to public transport, personal mobility will become a more accepted way of travel in the future. This is already seen through an uptick in demand for small hatchbacks during June and July as reported by the country’s largest carmaker Maruti Suzuki.


“The move to ‘slow’ travel and personal (versus public and/or shared) transport may shape future demand for passenger vehicles. Greater scrutiny will be placed on building environmental sustainability and climate resilience into the very core of business models,” Chandrasekaran added.

Tata Motors is pushing through a strategic plan that will see the passenger vehicle business including electric vehicle division placed under a separate entity. The company is trying to bring in a partner who can assist in getting future ready but has declined to cede control of the division.

“The global auto industry has grappled with multiple issues during the year. On one hand, we saw greater clarity emerge on Brexit; yet on the other hand, mounting trade tensions, muted global growth and enhanced regulatory norms have fundamentally changed the contours of the business environment,” Chandrasekaran observed.

The Indian auto industry faced an unprecedented year, marked by significant headwinds. Domestic auto sales declined by 18 percent in FY20, the lowest since the data series was introduced in 2001.

Alongside a broad economic slowdown, regulatory changes—including changed axle load norms and the migration to BSVI emission standards—fuelled uncertainty for both consumers and suppliers.

During FY20, Tata Motors completely revamped its product portfolio with the upgradation to Bharat Stage VI emission norms. Yesteryear models like Zest, Bolt, Nano, Sumo and Safari made way for Nexon, Tiago, Tigor, Altroz and Harrier. The company also launched its second all-electric model – Nexon EV – after upgrading its first EV car Tigor.

“In FY19, we delivered positive net income of Rs 2,021 crore, after making losses for five years. In both FY18 and FY19, TML produced positive free cash flows, following five years in negative territory. In FY20, this turnaround journey has been interrupted, as demand deteriorated sharply on the back of an abruptly slowing economy coupled with the spread of COVID-19,” Tata Motors chairman stated.
First Published on Aug 3, 2020 05:13 pm