Tata Motors "new forever range" helps it become Rank-3 this Year. Overtakes Kia & Mahindra.
THE CALENDAR YEAR 2021 V/S CALENDAR YEAR 2020: JANUARY TO MAY.
Tata Motors domestic passenger vehicle business reported sales of 1,24,135 units in the 5-month period of the CY2021 (JANUARY TO MAY), as against 35,131 units sold over the same period LY.
The YoY increase in volumes was a stellar 253% percent and placed Tata in a comfortable No.3 spot in the Manufacturer rankings. Tata Motors PV business registered its highest-ever annual sales in 8 years and the OEM is progressing towards double-digit Market Share this year.
The CY2021 volumes are a clear indicator of how Tata Motors is gaining ground in the Indian Passenger Vehicle market. Just over half a decade back, the OEM was in the doldrums. While it was consistently losing Market Share, it was grappling with the image of being an outdated car manufacturer also had a series of quality concerns. Tata was receiving a lot of flak on issues pertaining to quality, cost, and inadequacy in its product portfolio. The OEM was heavily dependent on the entry-level product range (say Indica, Indigo, CS) and its inclination towards the taxi segment tarnished its image for the personal segment buyers.
Do note that the brand was struggling to sustain volumes and the likes of Mahindra and Honda had overtaken Tata in FY2015. Tata Motors' market share hovered ~5% and the portfolio also wasn’t profitable to both OEM and Channel Partners. It had primarily become a discounted brand and a significant share of sales was contributed by the fleet buyers as well.
LAST YEAR V/S THIS YEAR COMPARISON OF: TATA, MAHINDRA & KIA
Tata Motors has made a dramatic turnaround both in terms of volumes and brand image over the past 5 years and FY2021 has been the true testimony of it. In the last Financial Year (Apr’20-Mar’21); Tata Motors has gained the highest Market Share amongst all the car OEMs. It attained a Market Share of 8.2 percent in FY2021 against the Market Share of 4.6 percent in FY2020. Tata Motors is now comfortable >66k units ahead of fourth-ranked OEM and has firmly placed itself in the Third position. Tata managed to grow faster than Kia and Mahindra as seen in the table above.
A CLOSER LOOK AT HOW EACH MODEL HAS GROWN MONTH WISE
One of the biggest factors for the success of Tata Motors in FY2021 was that the OEM gained volumes and share in all the segments it is present in and the growth reflected in the entire portfolio!
Tata Motors has been decisive in discontinuing products that were not performing well in the market. Nine models namely Sumo, Old Safari, Nano, Aria, Zest, Bolt, Indica and Indigo were discontinued after 2016. The intention was clear to not continue ailing models which were not apt as per customer expectations and would detriment Tata’s image. It was the first phase of transformation when Tata Motors strategically moved away from an outdated portfolio to more viable and attractive product offerings. It also took the bold step of completely exiting the Taxi market!
Tiago has addressed the entry-level segment with a high-value offering and with the insistence on safety.
Altroz had a stellar launch, with head-on marketing launches against the Baleno & i20.
The Nexon has established its self strongly in the compact UV segment along Harrier has managed to create a niche for itself along with its sibling Safari.
The New Range of models Tiago, Tigor, and Nexon – invoked a lot of interest in the younger buyers and helped Tata improve its image as a more Stylish, Quality-oriented, and Updated manufacturer. Tata used its time to slowly upgrade itself and enhance its presence in the segments above – It started off with Tiago/Tigor and moved up to Nexon and finally to Altroz/Harrier and Safari. The OEM strategically timed the models to leverage the success of the lower segment models as it kept launching models in the higher price range.
The company now takes pride in its “New Forever” product range and its attempt to refresh its complete portfolio has yielded positive results.
We have a detailed analysis of the key reasons for success for Tata motors in our article: How Tata Motors became a formidable Number 3 OEM and charted a Turnaround!, do read it for a detailed perspective.