N. Chandrasekaran asks Tata Motors to create value for the group
Mumbai: Tata Sons chairman Natarajan Chandrasekaran has asked Tata Motors Ltd to create value for the group, especially from its domestic business, in line with his objective of making Tata group companies more accountable.
“The expectations on this company are very high. If you look at the market cap of Tata Motors group, actually there is no value, which is accorded to the Tata Motors domestic business, and I’m very confident that will change this year,” Chandrasekaran said during a town hall meeting on Monday at Tata Motors Ltd’s manufacturing facility in Pune.
“Last year, if I said something positive, I was saying it with hope; but this year I’m saying all these positive statements not with hope but with confidence,” Chandrasekaran said.
Although Chandra’s statement sets up a new task for the company, which is still undergoing a turnaround, it also instils confidence in the company and in its managing director and chief executive, Guenter Butschek, who has been spearheading the turnaround.
Tata Motors’ Indian unit reported a net profit of Rs184 crore in the three months ended 31 December. That helped the owner of British luxury car firm Jaguar Land Rover Plc post an 11-fold jump in its consolidated profit for the quarter.
Since February 2016, when Butschek took charge, Tata Motors has expanded its market share in the passenger vehicle category by 160 basis points (bps) to 6.2%. In the commercial vehicles category, its market share has increased by 130 bps to 47.5%. One basis point is one-hundredth of a percentage point.
“Tata Motors celebrates over 70 years of existence and on a lighter note, I complete two years of the challenge of leading this company,” Butschek said in his speech during the town hall meeting.
“The turnaround is not over yet. Not when we still have to meet our board’s expectations, our chairman’s vision...,” Butschek said, adding that it is important for the company that its passenger vehicle business becomes “financially self-sustainable”.
“We need to prove that investing in PV is the right value proposition. This will enable the business to fund itself for the future, and also help us in taking us much beyond the aspirations of being No. 3 in domestic market... Our FY 19 business plan will continue to remain extremely demanding with stretched targets, in terms of sales, market share and financial performance,” he said.
That would comfort Ratan Tata, chairman emeritus of Tata group. “It hurt me that we lost market share in the last four-to-five years and we became the company that the country looked at as a failing company. In all the years that I was here, I really believed that this company had tremendous spirit and tremendous capabilities, I stand here today, and I’m happy to see the same spirit, that same do-ability is back together,” Tata was quoted as saying in a report on the Economic Times website.