Guenter Butschek high on upgrades to boost Tata Motors' car business

India’s automobile market may be battling the decade’s worst slump, but Tata Motors Managing Director and Chief Executive Guenter Butschek, who completes four years in the corner office on February 15, is taking it all in the chin and is excited to lead the passenger vehicles business into a new era.
 
On Wednesday, the carmaker entered the premium hatchback segment with the Altroz. With prices starting from Rs 5.29 lakh to Rs 7.69 lakh (petrol) and Rs 6.99 lakh to Rs 9.29 lakh (diesel), the model will rival the Suzuki Baleno and Hyundai i20, among others.
 
Butshchek said after years of hard work the team has put in, it is now time to reap the benefits. “For the past three years, we have been consistently working towards building a library of products that can do more for less and help us expand our reach from 60 per cent to the envisaged 90 per cent,” he said.
 
The new products from the two modular architectures — Alfa and Omega — will allow the company to do “the life cycle management” in a much better way. “From here on we will consistently upgrade our products. Unlike the past, the life cycle management will be the new rule of the game,” he said.
 
To be sure, the journey for the passenger vehicle business has been anything but smooth.
 
After showing signs of a turnaround in 2018-2019 on the back of new launches, the company’s sales went hurtling down. While a lot of it is attributed to the overall slowdown, a structural change undertaken by the company — including a sharp focus on retail instead of the wholesales and the move away from the sales push strategy — also made the numbers look weak.
 
In the first three quarters of FY20, Tata Motors’ passenger vehicle sales dropped to 105,298 units compared to 172,353 units a year ago. Its market share in the same period dropped to 4.97 per cent over 6.80 per cent a year ago, according to Society of Indian Automobile Manufacturers.
 
Butschek called the drop as “collateral the company had to pay for the changes” and believes it would put the business on a stronger footing. “We came into this financial year with a stock of 27,000 units, one and half months. We closed the month of December with less than 9,000 units, one and half weeks,” he said, adding it releases the pressure on the company to discount.
 
On Wednesday, the company also drove in BS-VI complaint variants of the Nexon SUV, the Tiago hatchback and the Tigor. On models like the Safari and Nano, which are not being upgraded to BS-VI, Butschek said, the safety regulations would have required the company to make significant investment into the “legacy models”.
 
“Investment is a question of choice… Whether to invest in new architectures that will extend our market coverage or to invest in products that were not selling in large numbers… We would rather conserve our resources in building the future,” he said, adding something that was good enough 20 years ago may not be good anymore.
 
Butschek said his assignment has been a lot tougher than he had anticipated owing to a lot of changes on the regulatory front, the macro-economic scenario, demonetisation, the changes in the tax structure and the fierce competition.
 
“The past four years have been the years of steep learning despite three decades of experience,” he said.