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This is just an assignment. This is not plagiarism or fraud. There is no misuse of Tata Motor Company information. It is just an analysis for an academic assignment.

An analysis case below then has a question that needs to be answered analytically.

TATA Motors (Passenger vehicles):

The revival of TATA Motors (Passenger vehicles) Tata Motors' passenger vehicle business is on a dream run, outpacing the rest of the industry in sales growth. Tata Motors set several new records in a challenging year, disrupted by two waves of Covid, a semi-conductor crisis, and a steep increase in commodity prices. The company posted the highest ever annual, quarterly, and monthly sales, supported by strong demand for their New Forever range and agile actions taken on the supply side. It recorded the highest ever annual sales of 370,372 units, registering a growth of 67% vs FY20-21. Despite the shortage of certain electronic components, the company posted the highest ever quarterly sales of Passenger vehicles. March21, and the highest ever SUV sales of 29,559 units. EV (Electronic Vehicles) sales continued to witness rapid growth in demand on the back of strong acceptance of Nexon EV and Tigor EV. In fact, the company has asked component suppliers to be ready for a volume of up to 600,000 units, or production of 50,000 units a month (Economic times, 2022). This was not the case a few years ago. The carmaker tended to attract the fleet segment instead of individual buyers. The Tata passenger vehicles became a discounted car brand and the majority of business was coming from cab and Taxi service companies. Simultaneously other brands like Maruti, Hyundai, and Mahindra were launching new cars to lure personal buyers. Eventually, by 2014 the market share of Tata cars was only 5.8% as compared to 13.7% in 2010 (Forbes India, 2021). What did Tata Motors do to turn the situation around and claim its market position? TATA Motors Passenger Vehicles till 2008: Tata Motors Group (Tata Motors) is a $34 billion organization. It is a leading global automobile manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses, and defense vehicles (Tatamotors.com, 2022) It took 37 years for Tata to enter the passenger vehicle segment after the establishment of the Tata Engineering and Locomotive Company (TELCO later renamed TATA Motors) in 1945 and then the launch of the first commercial vehicle and lorry in 1954 in partnership with MercedesBenz. In the year 1991, charismatic businessman Ratan Tata launched Tata Motors' first car or SUV Tata Sierra. At that time the number of car buyers was not much, but people's craze for this country-made SUV was worth seeing. The company then launched Estate in 1992 which was a wagon, SUV Sumo in 1994, and a mid-sized SUV Safari in 1998. The journey and popularity of Tata Motors reached the sky when the company launched the 5-seater family car, 'Tata Indica.' The car was launched in India in the year 1998. Tata Indica carried the popularity of Tata Motors from door to door. However, by then a company named Maruti had started attracting a lot of people with its Alto car, but Tata still stood unique with its low-price strategy and its positioning as a cheap to run (it was the only diesel in its class for years) and cheap to repair car. 2002 to 2007 was the golden age of the Indica. During this period, other variants like the Indigo (sedan), Marina (estate) and CS (Compact sedan) versions were developed on the Indicas platform. In fact, the Indigo CS invented the compact sedan segment. In 2008 Tata Motors launched the cheapest car in India, the Tata Nano, which was called the 'Lakhtakia car' which meant a car worth one lakh (one hundred thousand) Indian Rupees. The idea behind the project was that every middle-class people could own a car (New24 online, 2021). What went wrong? While the initial few years were exceptional for Indica, problems started to arise in the later years for the brand. Growing competition and quality issues created a bad reputation for Indica, in the personal car segment. The frugal, contemporary, and quality products from brands like Maruti Suzuki and Hyundai restricted the Indica sales to only commercial use for Taxis and Cabs, again reasserting the long-established fact that Tata Motors is good for fleet operations only. There were projects like Nano, Indigo, and Sumo that showed good initial prospects, but failed to take off. Though initially the market share was not impacted because of the sale of newly launched vehicles and demand for cars as taxi vehicles, by 2013 the same started getting impacted (As shown in Exhibit 2) (News 18, 2019) Vehicles such as Tata Indica, Tata Sumo, and Tata Safari in the early parts of the millennium, were left on the fringes in the highly competitive Indian car market. With dwindling sales, mostly catering only to the fleet taxi market, the carmaker had fallen out of the radar with personal buyers (Forbes India, 2021). The biggest threat to the all-new Tata cars came from within. The early cars were plagued with quality problems and Telcos lack of experience in the highly complex and intricate business of making passenger cars was frighteningly obvious. What made matters worse is that the expectation from owners, after all the hoopla created, was sky high and the unimaginable demand didnt give workers enough time to gradually ramp up production and learn the ropes of building passenger cars (Autocar India, 2018). The bigger reason, however, for the Indicas teething problems and quality issues was that the Telco workforce, used to making buses and trucks, simply lacked the disciplined and meticulous mindset needed to build a sophisticated car (Autocar India, 2018). As the number of complaints started rising, and word of mouth against the Indica kept growing, sales kept falling. It seemed that Telco (renamed Tata Engineering) had bitten off more than it could chew. The prophets of doom were quick to wag their fingers and bleat I told you so (Autocar India, 2018). India market for Passenger vehicles: Today, India is one of the fastest-growing economies in the world. Over the last six decades, the automobile industry has recorded tremendous growth which is in part due to favorable government incentives and support. The auto industry is also one of the largest globally in terms of sales and production. In the 1990s, the Indian passenger vehicle industry was not even in the top 10 globally (Vista Capital, 2020), but as of 2021, it is ranked fourth globally (Forbes India) According to Mordor Intelligence, the Indian passenger car market was valued at USD 30 billion in 2020, and it is expected to reach a value of USD 52 billion by 2026 while registering a CAGR (Compound Annual Growth Rate) of over 9% during the forecast period. (Study period 2018- 2027) (Base Year- 2021) Competitors: Tata Motors is now in a narrow competition with Hyundai with its12.1% Passenger Vehicle market share in India. Maruti Suzuki sold 13.31 lakh cars 2021 financial year. The company currently holds 43% market share, which is its lowest in eight years. MSIL had a market share of about 50% until FY20. The reason behind the decline is due to lack of products in SUV segment. Also, MSIL has stopped producing diesel cars in the country. Hyundai Motor India sold 4.81 lakh cars last financial year. Hyundai reported a constant sales decline in the past couple of years, mainly due to rising competition. Hyundai currently holds 15.78% market share, which is 2 percent less compared to its previous Financial years. Tata Motors received an overwhelming response from buyers, as it currently holds the third position in the list of top 10 carmakers. The companys market share jumped to 12.1% from 8.2%. The homegrown automaker doubled its market share to over 12% in FY2022 compared to 6.8% in FY 2018-19. The company sold over 3.7 lakh cars in FY2022 as compared to 2.24 lakh cars in FY2021. The Revival: How Tata Motors overcame the challenges: Around a decade ago, Tata Motors held more than 13 percent in the domestic market, which it kept losing steadily to domestic and foreign carmakers (Forbes India,2021). From launching swanky cars to pushing digital marketing, the Tata group company is going all out to woo the millennials with its four-wheelers. The brand image was more aligned as a maker of vehicles, more for the taxi segment, which meant Tata vehicles were known to be robust, easy to maintain, and with a low cost of ownership. However, they were lacking the equity for personal buyers. But over a period of time, with new design philosophy cars coming in, they have managed to gradually change that perception. From a marketing point of view, the company is focused on three pillars that the brand stands for Great looking cars, connectivity options, and safety. (The hindu business line, 2018) The first step towards this shift in the image was the 2014 launch of the sedan Zest and later hatchback Bolt powered by its Revotron 1.2-litre turbo-charged petrol engines. The ingeniouslydeveloped Revotron engine, which was already been tested in England and Korea, came with multi-drive modes Sport, Eco and City. But these cars did not do as expected and were discontinued in 2019 (Business Standards, 2014). The turning point for Tata Motors has to be the launch of the Tata Tiago in 2016. But it was not the strongest of starts to say the least. At first, it was called as the Tata Zica - which was short for 'Zippy Car' - but then it had to be changed as the Zica Virus outbreak happened at the same time. The name was then changed to Tiago and the world first got to see the car in flesh during the 2016 Delhi Auto Expo (News18.com, 2019). The Nexon, which was launched in 2017, the Harrier in 2019, and the Altroz in January 2020, contributed to as much as 60 percent of the sales in 2020. Of that, Altroz and Harrier were manufactured on the Alfa and Omega platforms, respectively. The two platforms, the first of which was introduced in 2018 on the Harrier and later the Altroz, marked a shift in the companys practice of developing specific platforms for every model. There is also the companys hatchback, Tiago, which was initially christened Zica, that has been holding steady in terms of sales, and clocking over 6,000 units a month since the past few years (Forbes India,2021). Platforms are design architectures that include the underfloor, engine compartment, and frame of a vehicle. Having just two platforms helps streamline manufacturing, reduces development and manufacturing costs, unlike earlier when there were multiple platforms for various models. It also helps with capacity utilization, reducing risks, improving vehicle reliability, and reducing time to market. The Omega platform was based on the wildly successful SUV Discovery, owned by Tata Motors subsidiary Jaguar Land Rover which was acquired in 2008 (Forbes India,2021). The Nexon has truly changed the fortunes of Tata Motors. In many ways, it was the gamechanger. Somehow it managed to understand the pulse of the customer. There is no doubt that the past five years have seen a significant turnaround and most of their launches during this time have been timely and targeted the mass segments. Along the way, they also ensured they addressed issues of quality and even brought onboard global suppliers which helped quality standards. In 2020, Nexon was the top-selling vehicle for the group. Among others, the company also began offering world-class brands and components such as JBL or Harmen in its vehicles (Forbes India,2021). Tata Motors upgraded its flagship SUV, the Harrier, giving it more power as part of the companys plan to meet Indias environmental norms. The Nexon too got a facelift and an engine upgrade. On the downstream side, Tata Motors has been upping its ante with simplification and digitizing of customer journeys and by offering an array of financing options with low EMIs, longer tenures, and up to 100 percent on-road funding It also helps that most of the current models have 10 to 14 variants, which allows for a choice for the buyer at every Rs 20,000 mark. Whats even remarkable is that the average selling price has been growing and tactical offers (discounts) have come down significantly, indicating a shift to value-based selling instead of a price point-based approach (Forbes India,2021). Tata cars are also considered safe with a good GNCAP rating. The Global NCAP or GNCAP is a voluntary project by a UK-registered charity. The programs primary aim is to promote vehicle crash testing and reporting in upcoming markets worldwide. The vehicle safety rating system rate different types of four-wheelers based on their crashworthiness. Out of top 10 safe cars in India, Tata has 5 cars in the list. (acko, 2022) All that only means the brand has now returned to being among the top considerations while making a purchase. Tata Motors also kept refurbishing its dealer network, bringing in new energy. Today, there is no doubt that the company is among the real frontrunners in the passenger vehicle market (Forbes India,2021). In the EV segment, the company currently is in the demand discovery phase. There is a strong pipeline of bookings that it has. There's a long waiting list, which is very evident. If you go to any showroom there is a slightly longer waiting list for EVs, which means that the pipeline is strong but at the same time every quarter the company is also significantly ramping up the supplies. In the first quarter of the current fiscal year, the company dispatched about 1,700 vehicles. in the second quarter about 2,700 units and in the third quarter over 5,500 vehicles. The company continues to see how it can further increase the supply so that it can bring down the waiting list and service this demand which is growing at a very fast pace. The company sells models like Nexon EV and Tigor EV in the domestic market (Economic Times). It would be interesting to see where the company heads in the future and if it will be able to grab the second and eventually the first place in the India Passenger vehicle market share.

Question

1) What marketing strategy went wrong with TATA till 2008?

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