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Tata Motors hires Roland for domestic turnaround

Monday, 6 January 2014 - 7:49am IST | Place: Mumbai | Agency: dna

After success at Jaguar Land Rover, the consultancy firm is sewing up strategies for new platforms and engines.

Tata Motors (TaMo), the country’s biggest automobile manufacturer, is turning to global consultancy firm Roland Berger Strategy Consultants for advice on strengthening its operations across different segments.

According to sources close to the development, Tata Motors and Roland Berger have already started working closely to energise the former’s Indian operations which have remained under pressure due to increasing competition in the passenger vehicle market and slowdown in the commercial vehicle (CV) segment.

In the past, Roland Berger had helped turn around TaMo’s UK subsidiary Jaguar Land Rover (JLR), so the move to use its services to revitalise the parent firm appears logical.

“One of the key roles for Roland Berger here would be turning around Tata Motors’s passenger vehicle business units (PCBU), which would include drawing up strategies for new platforms and engines for the company,” said a person close to the development on condition of anonymity.

According to the people in the know, the company is targeting a turnaround for PCBU by 2016-17, to be led by introduction of new products, platforms and streamlining of processes.

A Tata Motors spokesperson said the company has been working with the consultancy firm “on a company-wide road-map to globally benchmarked products and processes across our passenger and commercial vehicle business units... to ensure we remain strongly competitive across segments”.

Tata Motors has been previously associated with the consultancy firm to advise on cash management and cost controls for the then loss-making JLR in 2009. “This is for the first time that Roland Berger is working for Tata Motors for its standalone operations,” said a source.

Experts believe that with a new team led by managing director Karl Slym taking charge at Tata Motors, association with Roland Berger will help bring new perspectives and ideas, thus preparing the company for future competition.

“The competition is getting tougher in the segments that Tata Motors operates in. Roland Berger can help bring fresh ideas, predicting competition and new possible product segments for the future. Additionally, with most of the companies looking at higher focus on exports, Roland Berger’s expertise can help in driving export strategy for Tata Motors,” said a consultant, who did not wish to be identified.

Even though Tata Motors has successfully turned around the operations of JLR, its domestic operations continue to struggle with a decline in volumes and market share.

The company on a consolidated basis reported a net profit of Rs 3,542 crore during the July-September quarter this fiscal, which was led by strong performance of JLR. On a standalone basis, the company reported a loss of Rs 804 crore during the same quarter.

Despite having a strong presence in the diesel and sports utility vehicle or SUV segments, the company’s market share in the passenger vehicles segment has steadily dropped to 8.7% during April-November of this fiscal from 14.2% in 2011-12, while its share in the CV segment dropped to 52.1% from 58.5%.

In order to regain lost car-market share, the company has already firmed up its product plans till 2020. Starting this year, the company will introduce new products, while introduction of completely new platforms will happen in 2016-17.

“The first of these new vehicles will be showcased at the Auto Expo 2014, to launch our new journey of regularly bringing in exciting new products across segments. These will include a brand new sedan and a new hatchback, both currently code-named Falcons.

The product strategy will address the gaps in our range of offerings to offer a more complete product portfolio,” said a Tata Motors spokesperson.

“As part of enhancing our customer choice on product portfolio, Tata Motors will also bring in a new petrol engine portfolio to match its strong diesel range. Combined with the CNG (compressed natural gas) offerings, this will help bring in a more holistic fuel-options strategy for our customers across different passenger vehicle segments. These and many other variants and product choices, will be backed by a significant change in the customer experience in our network through state-of-the-art showrooms, processes and service offerings... all of which are already under rigorous implementation,” the spokesperson added.

Starting this year, the company will introduce new products, while introduction of completely new platforms will happen in 2016-17. The first of these new vehicles will be showcased at the Auto Expo 2014.

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