Tata Motors waits for a jumpstart
Dec 28, 2012 (Menafn - Hindustan Times - McClatchy-Tribune Information Services via COMTEX) --The impact of Ratan Tata's personality has been substantial in almost all the Group firms. But it can be safely said that nowhere has it been as dramatic as in Tata Motors.
From being a company that merely churned out the sundry trucks and buses that trundled on the dusty highways of India back in the late '80s, Tata Motors today is a global heavyweight with an array of products next only to titans such as Volkswagen and Fiat. Its range starts with the Nano, the world's cheapest passenger car, and extends to the Range Rover, one of the most distinguished and expensive sports utlity vehicles; few companies can boast of such diversity.
The company dates back to 1945, when it was set up primarily as a manufacturer of locomotives. It quickly ventured into heavy commercial vehicles in collaboration with German's Daimler Benz, in 1954. By the time Ratan Tata took over as chairman of the company in December 1988, Tata Motors had already established itself by far as the leader in the commercial vehicle segment in India. There was little intention or ambition to do anything else, though. The RNT impact did not take long to become visible.
In 1991, soon after Ratan Tata became group chairman, Tata Motors ventured into the passenger vehicle space with its first offering, the Sierra. Over the next eight years, it launched various products such as the Estate and the Sumo, to strengthen its position and lay the foundations for its entry into the more competitive passenger car segment.
The company unveiled its first car, the Indica, in 1998. This was the first car to be indigenously designed, developed and built in India. While the market leaders were still making cars for the world and re-tuning them for the needs of the country, Tata gave the first right of refusal to Indians.
Hence, the idea of a Nano, a no-frills but practical alternative to two-wheelers, could have been incubated only at Tata Motors.
"If JRD was passionate about aircrafts, for Ratan it had to be cars all throughout," said a senior director with Tata Sons.
"The growth of Tata Motors in terms of products, technology, marketing or sales is testimony to that. The two crowning glories have to be the Nano and the Jaguar-Land Rover acquisition. Without (Ratan) Tata at the helm, these would not have happened."
If Nano showed Tata had a beating heart, JLR indicated his knowledge of where the company was weak. Never known for technological prowess in cars, the company's acquisition of the two British marquee brands was as much a statement of intent as a business overture.
The freedom that the two brands got under Tata saw them post a stunning turnaround within two years. From being an expensive bleeding legendary relic under erstwhile owner Ford, JLR today is propping up Tata Motors numbers and earning profits at a time when domestically the parent company -- and the industry worldwide -- is struggling.
As Tata steps aside and hands over the reins to Cyrus Mistry, the company finds itself in a challenging phase. If the JLR acquisition was Tata's crowning glory for the company, the Nano, despite its many positives, still remains a stuttering endeavour that threatens to become a liability rather than an asset. Further, the firm's bread and butter heavy commercial vehicle segment is also going through a demand slump.
Mistry may not have the same passion for cars as Tata, but for a company that is badly in need of fresh ideas -- and maybe a different vision -- a new boss may be a good thing.
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