Tata Motors intends to regain ground it ceded to rivals and re-enter the league of top three carmakers in the country. But that may be easier said than done, given how its market share has sunk to a new low.
Tata Motors finished fourth in FY20 with a share of 4.98 percent of the passenger vehicle (PV) segment, as per data shared by the Society of India Automobile Manufacturers (SIAM). It clocked sales of 138,238 PV units, a fall of over 40 percent, and far greater than the 18 percent decline posted by the industry during the same year.
The country’s top three carmakers – Maruti Suzuki, Hyundai and Mahindra & Mahindra (M&M) control 75 percent of the domestic PV market. M&M finished third in FY20 with a share of 6.73 percent, Hyundai had 17.48 percent and Maruti Suzuki led the pack with 51.03 percent.
For Tata Motors, a market share of under 5 percent is less than a third compared to its lifetime best market share of 16.5 percent, clocked in 2007, as per SIAM data.
The fall in share has come on the back of a series of new product launches, vigorous expansion of the dealer network and a number of consumer-focussed initiatives. Nexon, Tiago, Tigor, Hexa, Harrier and several variants and derivatives were launched by the company during the past two to three years.
Uphill task
In a Finance Partnership Meet organised by Tata Motors, the company said it aspires to not only be among the ‘Top 3 OEMs in terms of total sales’ but also double its sales in the ‘medium term’, as well as grab the number 1 or number 2 positions in the segments the company is present in currently.
If it has to get even to the third spot, currently occupied by Mahindra & Mahindra, the Mumbai-based company will either have to almost double its FY20 market share or hope other companies lose share.
The company refused to provide any dates for these targets to be achieved. “The 2x target sales pertains to passenger vehicles. As this and the target to become one of top three in the PV segment is the aspiration, no timeline is indicated”.
In the past two-three years, Tata Motors has increased its dealership count by more than 50 percent to around 860. At least another 100 dealerships are planned this year with the aim of doubling dealer throughput. “We plan to increase the number of outlets per dealer to provide a greater catchment area and increase sales”, Tata Motors said in the presentation.
New launches
Tata Motors is betting on the success of new launches and those in the pipeline to be able to meet those aspirations. The company managed to launch the premium hatchback Altroz just before the nationwide lockdown came into effect.
A seven-seater version of the Harrier, called Gravitas, will make its way to showrooms in a few months followed by a sub-compact SUV currently codenamed HBX. This new mini SUV is slightly smaller than its elder sibling Nexon.
A battery electric version of the Altroz is also in the pipeline, apart from a mid-size SUV in the same category as the Hyundai Creta and Kia Seltos.
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