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Tata Motors is planning to launch two models in Q4. mint
Tata Motors is planning to launch two models in Q4. mint

Tata Motors preps for festival bounce

  • Betting big on festive season, the automaker has ramped up production to 16,000-18,000 cars a month

Riding a pandemic-fuelled demand for both small cars and sports utility vehicles, Tata Motors has ramped up monthly production to 16,000-18,000 cars for the coming months, three people aware of the company’s production schedules said.

The move comes after Tata Motors reported its lowest domestic wholesales in a decade in FY20, with average factory dispatches sliding to less than 11,000 units per month.

However, fears of infection from public transport have spurred sales of vehicles post the nationwide lockdown, and the company saw its passenger vehicle wholesales cross 18,000 units in August. Tata Motors last produced over 18,000 units in April 2019.

“The planned production volumes, which are 50-75% higher year-on-year, are driven by demand for three key models—Nexon (a compact SUV), Altroz and Tiago," one of the three people said, requesting anonymity.

The Nexon continues to be the top-selling passenger car for Tata Motors, followed by the Tiago, a hatchback, while Altroz, also a hatchback, is beginning to pick up momentum in the market, he added.

“Even as the company is bullish on the demand offtake during this year’s festive season, it has lined up two new vehicle launches for the March quarter that will ensure decent production volumes," said the second person.

Tata Motors plans to launch a compact SUV codenamed Hornbill and a seven-seater multi-utility vehicle named Gravitas in Q4 FY21.

“While the Gravitas is a seven-seater based on the Harrier SUV, the company is betting on the Hornbill for good volumes," the third person added.

Declining to comment on planned production schedules, Shailesh Chandra, president, passenger vehicle business unit, Tata Motors, said that while the demand growth is significantly higher, the momentum is expected to continue through the festive season.

“We continue to witness a robust recovery and our supplies are being steadily ramped up to cater to the growing demand, despite industry-wide challenge in the supply chain," he said. “Post that we will have to see how the demand sustains."

Chandra said the company is witnessing a growing preference among consumers in the top 50 cities. “This gets reflected in a 450 bps jump in market share in these top 50 cities as compared to 300 bps at the all-India level," he said.

According to Chandra, the company is also witnessing strong traction on its digital sales portal called Click-to-Drive, which was introduced in April.

“More than 40% of our overall leads are now coming from digital alone. Adding to that, various digital parameters like web visits, lead generation, retails among others have more than doubled when compared to the same period last year," Chandra said.

Gaurav Vangaal, associate director, light vehicle production forecasting, IHS Markit said, Tata cars like Nexon and Tiago offer most value-for-money features including design and safety in their respective segments.

“Tata Motors never got a fair chance to sell the Altroz premium hatchback this year. It was launched in January and faced supply constraints in February followed by covid-19 disruptions when it came to production ramp up and market demand," he said, adding that the company now aims to capitalize on festive momentum.

However, he warned that the upcoming model launches such as the next generation Hyundai i20 and Kia Sonet may pose a challenge for Tata Motors to sustain the high demand seen currently.

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