Mumbai: Tata Motors Ltd, India’s largest auto maker by revenue, plans to launch two new models—a compact sedan and a hatchback—next year in a bid to arrest a decline in volumes and market share.

The new models are part of the company’s project named Falcon (5/4), said Ranjit Yadav, head of passenger vehicle business unit, in an interview on Tuesday. “These will be completely new, performance-oriented models with consumer benefits focused around driving pleasure and connectivity, and the first proof-point to consumers that there is a new Tata Motors in the passenger vehicle business," added Yadav.

Tata Motors will introduce the two new models in the passenger vehicle business under a yet-unnamed brand after a gap of three years. The company launched the Aria in 2010.

Designed with inputs from the company’s technical centre in Europe, Tata Motors will showcase the models in petrol and diesel versions at the Auto Expo in Delhi in February and launch them later in the year.

The vehicle platform, re-engineered from the company’s existing X1 platform on which the Indica Vista and Manza models are based, will spawn many more models in the future, said Yadav.

Tata Motors also plans to export the new models to markets such as South Africa, Indonesia and Thailand. The sale in these countries, however, will start only in 2015, according to Yadav who hopes these passenger cars will help the company regain volumes and market share.

The maker of Safari and Indica models, which used to be the third largest passenger vehicle maker till the last fiscal year, lost its position to rival Mahindra and Mahindra Ltd. From April to October, Tata Motors’ sales fell 35% to 128,263 units from a year ago, according to industry lobby Society of Indian Automobile Manufacturers (SIAM). Its market share in the first half of the fiscal year dwindled to 8.98% from 13.18%.

Hormazd Sorabjee, editor of Autocar India, believes that while the new models might help Tata Motors reclaim lost ground to some extent, it’s unlikely to turn around the firm’s fortunes.

“These are ‘bridge’ products and could help them (the company) to serve the market for the time being, till a completely new vehicle architecture, which encompasses new range of models, is ready," he said.

In the absence of new models and negative perception attached with its existing ones, Tata Motors has also been ceding ground to Indian units of foreign car makers such as Honda Cars India Ltd and Ford India Pvt. Ltd, which have seen sales climb steadily on the back of the success of the Amaze (from Honda) sedan and EcoSport (from Ford) sport utility vehicle.

However, Yadav, who completed a year in Tata Motors last month, remains confident that the company will recover its market share. “The first half of the year has been intense with the company working closely with the dealers to improve infrastructure and service quality," he said. Yadav and his team have also simplified communication with the company’s dealers. “Earlier there were 15 to 16 people in the company talking to them. There is now one single point of contact," he said.

All the hard work seems to have started paying off, said Yadav, adding Tata Motors has improved its ranking in the JD Power Customer Satisfaction Index—from 12 last year to 7 this year.

“Starting from December, we have upped our quality standards," he said, claiming there have been no quality issues with any of the eight new upgraded variants across the five brands which the company launched in July this year.

These new versions include the Indigo eCS, Sumo Gold, Nano and Indica. There are also new CNG (compressed natural gas)-powered versions of the Indica, Indigo and Nano, as well as the explorer edition of the Safari Storme. “We have spent lot of time in putting together a portfolio till 2020," Yadav said, adding the company is also working on new variants of the Nano.

Till October, Nano’s sales dropped to 12,322 units from 43,627 units a year ago, according to SIAM.

Yadav claimed the response to Nano’s CNG version was much better than expected and the “company was out of stock".

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