Tata's Sanand plant rides on Tiago, Tigor; looks to ramp up production

Tata Nano may have failed, but the Sanand factory that gave birth to the fabled small car is gearing up for second innings on the back of the success of Tiago and Tigor models.

Hitching a ride back on these models in India’s competitive passenger vehicle market, Tata Motors is looking to ramp up production at the facility by 25 per cent to 150,000 units per annum, even as it remains non-committal to the fate of Nano, which made Sanand transform into a flourishing auto cluster. 

Helped by manufacturing improvement and operational efficiency measures, the factory has been able to steadily enhance the output. It has increased the cumulative production from 10 billion in September 2011 to 20 billion in October 2013, and 30 billion in June 2017 to 40 billion in January 2018. It now plans to increase it to 50 billion by October 2018. 

From 205 vehicles per day capacity in FY 2017, the plant can now churn 450 vehicles a day, and targets 500 vehicles per day by the end of FY 2018-19. It has also managed to reduce the variable conversion cost from 30 per cent in FY17 to 60 per cent now, said Mayank Pareek, president, passenger vehicle business unit at Tata Motors.

“Turnaround 2.0 is about focused effort on passenger vehicle business,” said Pareek, adding it was based on the three pillars — sales enhancement through new product launches, cost reduction and growing operating efficiencies. The factory on the outskirts of Gujarat, which accounts for 60 per cent cars Tata Motors produces, will play a crucial role in the business objectives.

Having achieved rigorous cost-reduction targets and high-production standards, Tata Motors is working to develop Sanand as a centre of manufacturing excellence over the next two years. The facility that produces the electric version of the Tigor will serve as the hub for electric vehicles for Tata Motors. 

Based on the Omega and Alpha platforms, the Tata Group flagship plans to launch 10-12 new brands over the next three to four years, said Pareek. This will help the firm address 90 per cent of the passenger vehicle market, he added.

The firm also plans to steadily increase the number of dealerships from the current 787 to over 850 by the turn of the ongoing fiscal, take it up further to 2,000 over the next three to four years, said Pareek. These will not be traditional dealerships but digitally equipped showrooms with virtual showrooms. A plan of being able to offer service for passenger vehicles every half kilometre and getting all the service mechanics on a technology platform is also in the works, he added.

Second innings
 

• Cumulative production to rise from 45 bn to 50 bn by October 2018
• Target to take daily production from 450 vehicles to 500 by the end of FY2018-19
• Tata Motors to start its electric vehicle initiative from Sanand
• Increases variable conversion cost reduction from 30 per cent in FY17 to 60 per cent