How Tata Motors planned a turnaround and became the third major automaker in FY2021
Tata Motors saw an impressive 69% year-over-year growth in the last fiscal year with 222,011 units sold in 11 years in fiscal 2021, despite zero sales in April 2020 due to the Covid lockdown. Compared to that, Tata Motors sold 131,197 units in fiscal year 2020. This surge in sales helped the automaker to reach the top 3 places in the Indian automaker rankings.
(Also Read: Tata Motors Chooses Martin Uhlarik As Global Design Manager After Pratap Bose Resigns)
The surge in sales came at a time when the auto industry as a whole saw lower sales due to, among other things, strict foreclosure, declining customer confidence and supply chain issues.
It was the first time in eight long years that the local automaker’s passenger vehicle business had recorded its highest annual sales in its history. In addition, this is the first time that Tata Motors has moved towards double-digit market share in fiscal year 2022.
No wonder the latest generation of passenger vehicles, including models like Tiago, Tigor, Nexon, Harrier, Safari and even the Nexon EV, have also helped the automaker charter a turnaround in India’s highly competitive PV market, where Maruti Suzuki dominates nearly 50% of the market share. Among the top three automobile manufacturers in the Indian PV market, with the exception of Maruti Suzuki (1) and Tata Motors (3), the other brand is Hyundai (2).
Not very long ago, Tata Motors was in turmoil. It was losing market share despite the introduction of a revolutionary product like the small Tata Nano hatchback, which fell short of expectations. The automaker was touted as an outdated car brand with serious product quality issues.[ortrayedasanoutdatedautomobilebrandwithseriousqualityconcernsaboutitsproducts[ortrayedasanoutdatedautomobilebrandwithseriousqualityconcernsaboutitsproducts
The quality, cost, and lack of products in its portfolio led the automaker to attract a lot of criticism as the OEM relied heavily on entry-level products like Indica, Indigo CS, etc. segment, instead of individual buyers. The OEM was becoming a brand of discount cars and the majority of business came from taxi operators. At the same time, other car brands were introducing new products that were gaining prominence in the segment of private car buyers.
In fiscal 2015, Tata Motors struggled to achieve volume and competing brands such as Mahindra & Mahindra and Honda were overtaking Tata in terms of sales. Its market share was only around 5%. The business of the automaker was not profitable in terms of OEM partners and distribution.
However, from there, the local auto brand has made a dramatic turnaround in terms of branding, brand value and sales volumes, over the past half-decade, and the best result was visible at during the last fiscal year. Data shows that the automaker gained 8.2% market share in FY2021, compared to the 4.6% market share recorded in FY2020.
The automaker’s cumulative sales volume in the last fiscal year was nearly 66,000 units ahead of the fourth car brand.