Scripting a survival
Zee’s founding family plots a twist in the tale and stays in control
Tata Motors is gearing up to capture a major chunk of the increasingly popular SUV market, with the launch of India’s first sub-compact SUV, ‘Punch’. The SUV category is seeing immense growth momentum, having grown globally six times in the last decade, where one in every three cars sold is an SUV. In India, sales ofSUVs contribute to 40 per cent of overall sales. According to Shailesh Chandra, President of Passenger Vehicles Business Unit, Tata Motors, while this growth momentum led to the proliferation of a variety of SUV styles, there is a major void in the sub-4-meter category. Here, people were only left with the options of cars and compact sedans. The core goal for Tata Punch, according to Chandra is to bring a capable SUV to fill this exact void. In an interview with BusinessLine, Chandra talked about the automaker’s efforts and future plans in the segment. Excerpts:
How is the chip shortage at the moment?
A lot of these supply chain issues seen in Q1 and Q2 were temporary, such as the Malaysia Covid wave, or the Renaissance fire in Japan. These issues will now be slowly subsiding. But still, there will be structural issues of capacity in the semiconductor world, which we as OEMs are trying to get past. For instance, we are looking to convert specialised chips to standard chips, buying from the stockists directly, looking for designs for semiconductor usage. With the situation now improving in Malaysia, we might be veering back to 300,000 sales in the industry per month.
But will the chip shortage impact Punch launch?
We will never know when it is the ideal scenario for the launch of Punch since we don’t know when the chip shortage will subside. Customers are waiting for our product. The product has relevance to being launched at the market at this point in time. So we are reconciling with the reality and launching it right now. Tata Motors Punch has seen the highest number of pre-bookings in comparison to our whole portfolio of cars. Therefore, we will try to best manage the situation, do certain prioritisation and go ahead with the launch.
Is there a dilution in the market, regarding what we now define as an SUV, does Tata Punch truly fit that definition?
There can be different ways of defining SUVs, one can live in the old world of what SUVs were, but you have to be cognizant of the fact of how consumer trends are changing and how design trends are changing. If you break down what an SUV is, it is about the external styling, the commanding seating position, the ground clearance, the departure and approach angles. If you take all these metrics into account, and its capability to do a bit of offroading, that defines SUV. In this car, we have provided such capabilities, we tick all the boxes, therefore Tata Punch fits the definition of an SUV.
Is Tata Motors gearing up to take the third place in the SUV market with the Punch?
Today, we are selling 13,000-15,000 SUVs a month, between Nexon, Harrier and Safari. And Punch is of course going to add to the volume. I truly believe that this is a very capable product that can attract customers from adjacent segments, therefore volume additions will be quite high. This will have an impact on the overall ranking of the SUV space. But I am not chasing a rank. I am targeting the rightful volume for all of these products. We have seen overwhelming bookings for Punch which is a very good sign, but you must wait for the demand to stabilise. I am still imagining that the demand is going to be significantly high, it might be a challenge to meet the demand. With limitations of supply on the electronics components side, there will be the need for some prioritisation amongst all the products in our portfolio.
Recently you launched a separate enterprise for your EV business, TML EV-Co, do you have global plans for this new enterprise?
There is going to be a global aspiration, but the first focus is to make the EV portfolio successful in the home market. It is important that first we stabilise and ensure the reliability and effectiveness of our products in India, before expanding abroad.