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Mistry plans to soup up Tata Nano as 'smart city car', can it revive sales?

Corporate Aug 21, 2013

After fall in sales, Tata Nano to be souped up, positioned as smart city car

Mumbai:Faced with steep fall in sales ofNano, Tata Motors today said it will reposition the budget caras `a smart city car' with added features such as powersteering, apart from introducing a CNG version.

"We are now focusing on increasing the features and theperceived value of the Nano with every subsequent modellaunch," Tata Group Chairman Cyrus P Mistry told shareholdersat the 68th annual general meeting here.

"We are now focusing on making it a smart city car andtargeting the young customers," he added.

Representational image of Tata Nano. AFp

Representational image of Tata Nano. AFp

Despite discounts and other freebies, Tata Motors has notbeen able to draw in customers to Nano showrooms and itsdedicated Nano plant at Sanand in Gujarat is running muchbelow even half its capacity.

"We are coming out with power steering options (on Nano),improved interiors and exteriors and better fuel efficiency,"Mistry said.

According to the latest Siam data, market share of TataMotors dived to 8.9 per cent in July in the passenger carspace, from 11.8 per cent in March, pushing it down to thefourth slot. For commercial vehicles, the share slipped to52.9 per cent from 56.1 per cent during the same period.

In the April-June quarter, Tata Motors' standalone salesdeclined 14 per cent from a year earlier, pulling down itsannualised manufacturing capacity utilisation to a low 36.2per cent, from 47.6 per cent in the fiscal ended March 2013,said a Moody's report dated August 19. It also warned ofcredit rating of the company due to the steeply falling marketshare and sales volumes.

Mistry also said the company will launch the much-delayedCNG variant of the Nano this year.

Mistry said the road ahead for Tata Motors continues to bechallenging, yet full of opportunities, adding: "Tata Motorsis committed to improve its customer-centricity, to betterunderstand customer needs and translate them into exciting andappropriate products for our markets."

Tata Motors invested Rs 3,000 crore capex in the lastfiscal and that this fiscal the capex could be more, he said.Regarding the proposal to have zero production days atTata Motors Limited, he said, "We explored the necessary blockclosure dates in TML in respective manufacturing units as bestrequired. We will continue to look at specific dates as may berequired by the business environment in the future."

To a question on the current rate of capacity utilisationof passenger cars and commercial vehicles, he said theinstalled capacity stands at 1.6 million vehicles and theproduction in 2012-13 stood at 7.73 lakh vehicles at autilisation of 48 per cent.

On the new products in the commercial vehicles space,Mistry said the Prima range is coming out with the upgradedcabins, with better fuel efficiency and technologies.

"Multi axles and hybrid bases and the new range of LCV- Ultra range, we are providing number of value added serviceto the customers," he said.

To a question on what was the company's strategy on theUV space, Mistry said: "We are doing repositioning ofdifferent products, the Aria, the Grande, to meet the customerspecific requirement in order to be more competitive."We are improving more product reliability, with thelower operating cost and through network upgradation andexpansion," he added.

Stating that there is a lot Tata Motors can do onservice, Mistry said, "We are monitoring on all the differentdimensions and there is scope for improvement in all thedimensions, in terms of responsiveness to the market,responsiveness on the service side.

"It is not a binary situation, it is a path we are on, itis a continuous journey for us to improve," he said.

PTI

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