Tata Motors wants to dismantle Hyundai from second place by 2020

Posted on: Jan 19, 2013 - 9:00pm IST

The current scenario of the Indian automotive market somewhat look like this – Maruti Suzuki is the leader, but not by the same margin from a few years ago. Hyundai is the prince who could one day be the king. And then there is a battle between homegrown players Tata Motors and Mahindra for the third spot.

Tata Manza Club Class triple barrel headlamps

Although Tata Motors is still the number 3 car maker in India, it is under constant threat from Mahindra’s streak of successful products such as the Bolero, Scorpio and XUV500. Tata Motors has recognized its Achilles heel and plans to strengthen its base by 2020.

TheEconomicTimes reports that Tata Motors is planning a major restricting exercise to become the number two automaker in India by 2020. This means that Tata Motors is planning to dethrone Hyundai in the next 7 years.

What is Tata Motors doing to get there?

ET reports that Tata Motors is strengthening its two major business units, Passenger cars and Commercial Vehicles, with a common vision statement – One Team One Vision.

The core philosophy to this new statement is coined in an abbreviation ACES which stands for Accountability, Customer and Product Focus, Excellence and Speed. Tata Motors is putting processes in place that will focus on these core values.

Apart from the ‘motivation’ aspect of the business, the company has restructured its key senior management executives for improved synergies. The changes include –

  • Girish Wagh, the person behind Tata Nano and Tata Ace, is now the head of product planning.
  • M Venkatram, ex employee of GM South Korea, has been brought in as the global souring head.
  • Ranjit Yadav, ex country head for IT & Mobile products at Samsung India, has been poached as the new head of passenger vehicle business for Tata Motors.

What are the changes in the Passenger car business?

The automaker is leveraging its relationship with JLR by improving synergies between its four engineering centers (in India, the UK, Italy and South Korea) and integrating backend services with JLR on designing, engineering and sourcing, etc.

New and innovative products such as a compact SUV and a new small car are in the pipeline which are two years away from hitting the production lines. The automaker is also working on improving the public perception of its ultra low cost car Nano to increase sales.

What are the changes in the commercial car business?

Tata Motors is working towards improving flexibility and reducing costs so that the company can reduce the breakeven levels to 35-40 %.

Although the market is going through some tough times, the automaker believes that it will grow at a compounded annual growth rate of 10-15 % over the next 5-10 years.

Tata Motors is also working on increasing exports to Asian countries such as Bangladesh, Nepal and Sri Lanka and parts of the Middle East and the North African region and entering more global markets.

The Challenge ahead

Dethroning Hyundai is not going to be easy. The Korean automaker is growing at a breakneck pace, taking every progressive step much faster than the competition. Internationally, by the end of this decade, Hyundai looks ready to challenge the likes of BMW, Mercedes and Audi. In India, Hyundai brings a new product almost every other quarter to keep the excitement among customers. If all goes well for Hyundai, there is no reason to believe that they will come dangerously close to Maruti Suzuki in the next five years.

[Source: Economictimes.indiatimes.com]

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14 thoughts on “Tata Motors wants to dismantle Hyundai from second place by 2020

  1. sandy says:

    Its having engineering centers in India, UK, Italy and South Korea! Yet its vehicle designs are mediocre. Maybe, we could experience good cars in the future. And as far as Tata’s infrastructure is concerned, its a strong back end. It won’t be having much problem if the officials play their mind wisely.
    But Hyundai’s performance as a mediocre car company really demands respect. There is nothing so special about their car but somehow one ends up liking it since i10 era, plus Hyundai seems to be dare devil in taking initiatives, resolve their weak points from failures through frequent product life-cycle. They try hard not to make their customer get bored. These are some of the qualities Tata to some extent adapts but needed some more, along with quality and reliability.

    Reply
  2. Vivek says:

    Now this is GREAT news!
    All the best, TML 🙂

    Reply
  3. Shankar YJ says:

    Developing new cars won’t help.
    Change people’s perceptions of their cars being purely for tours and travels.
    Which is only possible, if they stop producing them or spin out a separate business for them. And start developing cars for personal usage, with new designs, not carrying out these current ones.
    Hyundai’s Old Verna and New Verna are totally different, new design altogether. Same is the case with Elantras and Sonatas too.
    Aria from their own house suffered badly because people think Tata is meant to create cheep cars not premium.

    Reply
  4. Ravi Mittal says:

    Yes Tata can do it..but for that 1st of all strengthen customer support team and make dealer professional or change them. Give young blood more opportunity.

    Reply
  5. AP says:

    Hyundai is amongst the fastest growing company at present and their products have displayed some exceptional improvements lately and the same have been acknowledged the world over. Thus its important that Tatas first go about improving their own R&D and need to develop some really good platforms. They need to start acquiring some technologies say like the Proton and start off from there. Its good to own brands like the Jag/LR but using their tech on basic products which will help Tata capture the market will obviously prove to be expensive. Thus better to start off developing some real good products that have good (atleast above average) quality which can improve the sales and not totally rely on the Taximarket to sell products like the Indica and the likes. Need to change the product name too is important, the general name of Indi doesnt seem to be related with quality by an average non-taxi user. All the best to Tata I.m sure they can do really well

    Reply
    1. Ramesh says:

      TATA is talking of beating Hyundai in the Indian market, not globally. This is possible if TATA perform to their potential and put decision makers and designers who understand the market. It goes without saying that globally TATA cant catch up with Hyundai.

      Reply
      1. Mohammed says:

        It’s no secret that Tata Motors have been chasing big dreams since the Indica success days. However, I feel the Singur(West Bengal)Nano plant issue got them really distracted.

        Safari, Vista, Manza, Aria and Nano are really,really good machines and put together easily deserve 20,000+ numbers every month. Unfortunately, they had to deal with a negative public perception and they’ll have to work hard to change it.

        I’ve owned Maruti (Alto), Tata(Safari, Vista, Manza), Mahindra(Scorpio)and Toyota (Innova) vehicles so far and have been most satisfied with Tata & Toyota products. The current generation Tata vehicles are definitely a class apart and highly under valued.

        They’ve some big names from the global auto industry in their R&D, Products team (stars from GM, BMW,JLR etc) and it’s only a matter of time before they truly become a global player, leave alone occupying the second spot in India. I’d expect to see Hyundai at No 1 and Tata’s at No 2 in the long term, they provide some value for the money you pay.

        Bear in mind, Suzuki is a pushover in the global automobile scene but is a sales king in India. Toyota, GM and Volkswagen are global giants, but are relatively insignifcant in India. So, let’s leave the dicussion just to the Indian market.

  6. Vipin says:

    No way.

    Because of their quality, refinement and every other aspects they just can’t beat Hyundai.

    Reply
  7. jon woo says:

    hyundai will die just like Kia ,daewoo in another 5 years frm nw

    Reply
    1. pk says:

      Are you kidding…?

      Hyundai is in 4th position above ford interms of sales. And their profit margin is best among all the OEMs.It is rougly around 12%. VW stands at 11% Other OEMs are below 8%.

      Just read above story completly.They are competing with BMW,Audi in terms of styling and design and nearing VW interms of volumes.Tata is no where near to hyundai.

      For Tatamotors, they can beat hyundai in commercial vehicle segment where hyundai is concentrating. But in passenger cars segmenth hyundai is aiming for No.1 spot by 2020 and they have the capability to do that. Rather talking like this, Tatamotors should bring some good products to change the customer perception which i think not an easy task.

      Reply
    2. sri says:

      i guess you dont know anything about cars and automarket !! so please read Indian autos blog regularly to know much about cars and about hyundai cars Daewoo was a diff case and not sure y do you pull that korean maker hear and FYI daewoo has given some best cars like cielo and Matiz

      Reply
  8. Milo Cruise says:

    Come on Tata, you can do it. Waiting for the new vehicles.

    Reply

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Kaustubh
Kaustubh Shinde

They say sooner or later your passion finds you. Sometime in late 2009, I started writing for IAB and ever since then it has been a roller coaster ride for me. An amazing experience that has taught me a lot, taken me to new places, driven some great cars and met some amazing people. When you don't find me on IAB (very rarely), you will find me either at a coffee shop or an eatery or at the nearest gadget store.Hope you enjoy IAB as much as we do!