Tata Motors Gets Slowdown Blues

The sales slowdown that the India auto industry is going through is among the worst in decades, and August 2019 – a month that is right in the middle of India’s festive season – has not positive news for Tata Motors. The Indian automaker registered a massive dip in August 2019 sales, which showed a 58 % fall to 7,316 units from 17,351 units a year earlier. This easily has to be one of the worst August decline in sales for Tata Motors, which does have many fresh products in its lineup, including the Nexon, Tiago, Tigor and Harrier. Despite offering attractive discounts, dealer dispatches have suffered, which indicate that dealers are not positive about moving stock during this year’s festive season. Tata Motors’ commercial vehicle division – the automaker’s bread and butter – also saw a huge 49 % decline in August 2019 sales.

Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors Ltd. had this to say about the severe sales slowdown,

Under the challenging market situation, we continued to focus on improving retail sales. Our retail sales were 42% more than offtake and as a result the network stock came down by over 3000 vehicles. This prepares dealers well for the festival season. Our prime focus remains on the working capital rotation of the channel. Our aim is to improve the retail capability, till August 2019, 72 new sales outlets were added and 3500+ sales executives were recruited. Marking the onset of the festive season, we will drive positive sentiments with special offers and several special editions. We have kick-started this by further increasing the style quotient of the Harrier with the Harrier Dark Edition. We are hopeful that the recently announced financial package by finance minister will help in improving the liquidity of market and to reduce the ownership cost. This will certainly help the industry to revive and drive the growth.

Tata Motors, among other leading automakers in India, wants the Government to reduce the rate of GST on vehicles to 18 %, from the prevailing 28 %. The GST council, a body that decides GST rates, is yet to take a decision on this. For now, Tata Motors will continue to offer attractive discounts across its car range, in a hope to make the best of what seems to be a very slow festive season. Talking car launches, Tata Motors is weeks away from launching the Altroz premium hatchback. The Altroz will compete with the likes of the Maruti Baleno, Hyundai i20 Elite and Honda Jazz, and is expected to undercut all three of these cars. The Altroz is likely to be offered with turbocharged petrol and diesel engines that are BS6 ready. At launch, only manual gearbox equipped variants are likely and Tata is expected to introduce automatic variants a few months down the line.

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