Tata Motors fights perception ahead of most crucial launch since Nano

New Delhi: Anshu Verma, 28, is in the market for a car, and while he isn’t sure which one he will buy, he does know that it won’t be one from the Tata Motors Ltd stable.

“Would you buy a Tata car?” he asks rhetorically.

Purely by numbers 92 out of every 100 Indians don’t.

And that’s the challenge for Tata Motors which will launch, in August, a small car Bolt and a small sedan Zest. The first will compete with Maruti Suzuki India Ltd’s best-selling Swift, and the second with Honda Motor Co.'s popular Amaze.

Tata’s two new models could herald a fresh beginning for a company whose leadership admits that they have to make their offerings “compelling from the consumer market point of view.”

A successful launch could also dispel the notion that things are coming apart at the company after the death of its managing director Karl Slym in January; the original team put together by Slym seems to be disintegrating with the resignations of Venkatram Mamillapalle, head of purchases, and Rajesh Bagga, head of human resources and legal. Ankush Arora, senior vice-president of the commercial-passenger vehicle business at Tata Motors, quit last month.

Not surprisingly, Ranjit Yadav, president of the passenger vehicle business unit at Tata Motors, has a point to prove.

“It’s a big-bang classical launch. Our emphasis will be on to get the consumers like the vehicle and drive them around.”

Insiders say Yadav is the man who is holding the company together.

Tata Motors is also working on getting the products right.

Besides, a 1.3 litre diesel engine, the new cars will be powered by an all new 1.2 litre Revotron petrol engine with a turbo charger. Those who have driven it said that the engine has a very flat torque curve, which means it also works well at low speeds. The new petrol engine could open up a whole new market for diesel dominated Tata portfolio. Tata does offer a petrol engine with the Indica and it did once with the Safari.

In a first in the segment, the diesel variant of Zest will also be available with automatic transmission.

The new cars will come with a Harman entertainment system that will connect to the user’s smartphone, even read out text messages and respond to them through voice commands. The touch-screen powered multi-media system boasts auto volume adjuster, bluetooth, wi-fi, navigation, and can connect to the help desk of Tata Motors.

Clearly, Tata Motors wants to get it right.

Twice before, the company has launched models with great fanfare—the Indica in the late 1990s and the Nano more recently—but both lost momentum.

“I would have ensured that I get the model right the first time,” said the head of marketing and sales at a rival firm who spoke on condition of anonymity.

“And once that is taken care of, I would have worked on strengthening the brand, which has taken a beating.”

Indeed, there’s a common perception that Tata Motors’ cars are only good for taxis.

“It’s not a job that can be done easily… it takes months and years to change the perception,” said Delna Avari, head (marketing communications, passenger vehicles), Tata Motors.

“We have made a start. This is a challenge. There are people who know about the kind of work we have done with our cars and there are a lot of them who will know about it in due course of time,” Avari added.

The company says it is fighting the challenge on two fronts—through digital marketing and by catching up with global manufacturing practices.

“We ensure that we incubate the best of knowledge experience because these vehicles are not only for India but for global markets. We want to make sure that we want to use Europe as a reference market and use the global experiences there,” Yadav said.

The firm has forged partnerships to access the best technology available in the market. For instance, it works with Germany’s Robert Bosch GmBH and Austria’s AVL in the area of engine technology.

Yadav said the company’s plants in Pune and Sanand are going through the WCQ (world-class quality) rating, which is a process that determines quality-levels of a factory.

“Last year, both our plants achieved level 1; this year Sanand has already achieved level 2,” he said. There are five levels of WCQ.

The company plans to communicate these and everything else it is doing differently, mostly through digital media.

“We are investing a lot there as we believe that is helping us change the perception about ourselves,” said Avari.

Ringtones (downloaded 350,000 times), a video game, and a hologram of Formula 1 driver Narain Karthikeyan explaining the features of the two new models in at least 180 redesigned Tata Motors dealerships are all part of the strategy.

The aim is double digit market share that the company believes is rightfully its.

Tata Motors was the country’s third-largest passenger vehicle company by sales, but in September 2012, Mahindra and Mahindra Ltd surpassed its monthly sales, pushing it down to the fourth slot. The Indian passenger vehicle market is dominated by Maruti Suzuki, followed by Hyundai Motor India Ltd, the local unit of the Korean car maker Hyundai Motor Co.

“I am not under-estimating the journey that we are beginning,” said Avari.

“You can’t be making claims and do nothing.”