Guenter Butschek recasts Tata Motors to boost margins, efficiency
Girish Wagh, the man behind Tata Nano and the Tata Ace will move to a new role in Tata Motors Ltd as part of a major organizational restructuring, two people familiar with the plans said.
Wagh, senior vice-president of project planning and programme management, will pursue margin expansion as part of managing director and chief executive Guenter Butschek’s efforts to make Tata Motors future-ready, these people said, asking not to be identified.
Margin expansion is one of the 10 so-called “impact projects” identified by Butschek.
Similarly, Ashish Dhar, currently national sales head of passenger vehicles, will move to a new role of “sales conversion”.
Earlier this year, Butschek named Shailesh Chandra, formerly an executive assistant to Tata Group chairman Cyrus Mistry, to head the corporate strategy and business transformation.
As recently as three weeks ago, in order to identify and groom leaders for the future, Tata Motors engaged with the US-based Development Dimensions International Inc., which helps with assessing performance of senior executives and succession management.
In an office circular dated 6 September, Butschek, formerly a top official at Airbus Group, touched upon some of the changes. The circular, a copy of which was reviewed by Mint, also had a mention of new passenger vehicle platforms which will underpin the future model strategy of the Mumbai-based firm. One of them is referred to as Q5, is a utility vehicle platform based on the Land Rover. The others, code named X0, X1, X3 are car platforms. Of these, the Q5, an all new compact SUV will be the first to roll out in the beginning of 2018.
On 16 June, Mint reported on Butschek plans to restructure Tata Motors introducing several changes as part of the so-called three-year “2019 plan”.
In an email, a Tata Motors spokesperson said one of the core initiative in its transformation journey is the “strategic alignment of the entire organization leading to a company-wide restructuring and optimization exercise.”
For this, Tata Motors undertook a detailed analysis to improve speed, simplicity, agility. “This new structure will help us drive some fundamental changes in the way we are organized and operate currently,” said the spokesperson.
Chandra will “partner closely with business teams in the overall transformation exercise and help in developing the business strategy for the organization,” the spokesperson added.
An analyst said the efforts should yield results. “With such a massive realignment, Tata Motors has the potential to fight back and emerge as the preferred brand for the Indian consumer,” said Puneet Gupta, associate vice-president at IHS Markit, a sales forecast and market research firm, but cautioned it’s a tough journey as most competitors have built on scale and quality—therefore, the company will have to really strive hard to regain the No.3 position in the passenger vehicle market.
Tata Motors is currently placed fifth in the pecking order.
Albeit on a small base, helped by the Tiago hatchback, sales of Tata Motors passenger vehicles have been advancing month-on-month. It rose 24% to 14,601 units in September from a year ago.
Meanwhile, even as the spokesperson declined to share names of individual project leads, he pointed out the company has identified the impact projects to bring greater focus on the effectiveness of the execution. The onus to track the projects will rest with the executive committee.