Market share of Tata Motors fell to 5.1 percent, its worst-ever level, despite a series of new product launches, vigorous expansion of dealer network and a number of consumer-focused initiatives.
The market share till September-end, is an all-time low, for India’s fourth-largest carmaker, in the passenger vehicle category (cars, SUVs and vans), data from the Society of Indian Automobile Manufacturers (SIAM) showed.
This is less than a third compared to its lifetime best market share of 16.5 percent clocked in 2007.
Without soft and hard top vans such as Ace Magic or Magic Express which are generally sold as commercial passenger vehicles (taxis), Tata Motors’ market share dips even further to 3.9 percent.
SIAM, however, classifies these under the van category of passenger vehicles.
The maker of Nano and Indica also was the worst performer among the top 10 carmakers in India during this year so far. With sales slipping 43 percent during April-September to 68,286 units, Tata Motors underperformed the industry which recorded a 24 percent fall during the same period.
The fall in market share comes despite new launches such as Nexon, Tiago, Tigor, Hexa, Harrier and a number of variants and derivatives during the past two to three years. During the same period, Tata Motors increased its dealership count by more than 50 percent to around 800.
The slip in market share appears to be even severe when compared to the start of the year when Tata Motors clocked 6.85 percent share by March-end, the best since 2013.
The company claims that the fall in market share should be looked at in conjunction with its efforts to clean up excess inventory with itself and dealers. The company has focussed on pushing retail sales (dealer to consumer) rather than pushing wholesales (company to dealers).
"The reduction in wholesales numbers that you see is a conscious effort to bring about a change in the mindset across our ecosystem. This entails a shift from wholesale to the retail model of reporting sales numbers. With the slowdown in the industry, our focus remains on retail acceleration, working capital rotation of the channel and stock correction. Wholesale numbers can be misleading and not the correct representation of ground realities," a Tata Motors spokesperson stated when contacted.
Interestingly, the company reduced the excess inventory of only 4,000 units since June this year, as per disclosures made after the recently concluded September quarter. This is an average reduction of less than 1,000 units a month. Yet its wholesales slumped 40 percent during the six months of the year from an average of 19,000 units a month to 11,300 units a month.
"Our retail market share has not dropped. Glad to share with you that we have taken the lead here as we are amongst the first few this financial year to declare retail numbers quarterly to SIAM," the spokesperson added.
Tata Motors is also struggling to bring down inventory days (dealer stock level) to the desired 30-day level though the company has been on it since June end.
Currently its stock levels are at 48 days or 60 percent higher than required. The company also planned to reduce inventory days to 21 in September."The target on dealer stock is to get to 30 days of stock in the coming months as a combination of absolute stock reduction and an expected gradual pick up in retail sales. With a peak festive season underway, we had calibrated our rationalisation in September to ensure that we do not lose retails," the spokesperson added.