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Tiago and Tigor are the two vehicles that lay helped Tata Motors engineer a image change in the market and ever since their launch, the vehicles have only received minor updates, but despite that the sales of the two vehicles from the brand has been going strong. However, there are reports that the Indian carmaker has made the move of scaling down the production of Tiago hatchback and the Tigor sub-4 meter sedan by half after May.
This move from Tata Motors is only natural and keeping in trend with the state of the auto industry as of now. The reports state that Tata had achieved the desired stock of the cars but the downtick in market demand meant that the company was looking at stocks piling up. Hence in order to prevent excess stock pile-up, the brand has decided to halve the production of the two large selling models. The company was already running a production surplus as the recent fall in demand meant that the gap between demand and production only widened over time.
This move by Tata to cut the production came into effect in May and one can expect the same condition to prevail come August, so the production will remain at half the capacity till August at least. The company is also temporarily shutting down at least two production lines of commercial vehicles.
Talking of Tata Tiago and Tigor, the two models from the brand have been kind of the bread and butter model for the Indian company as the duo jointly pulls in a great number of sales and revenue for the brand. The sales for Tiago for the month of May remained 3,535 units. This is a massive decline of 50% when compared to the figures for the same month in 2018. The situation gets even more drastic as Tigor only managed to sell 306 in May 2019. The year on year fall in sales for Tigor was a staggering 90%, this when the brand had recently launched new automatic trims for Tigor. Looking at these numbers, one gets a full picture as to why cutting production was vital for Tata Motors.
Talking of slow sales in the market, ever since the Kerala floods last year, the auto sector has not come out of the sales slump it has been in. Right after the floods in Kerala came the insurance premium hike, and then hike in prices post BNVSAP norms adoption. The future is even more challenging as the BS-VI emission norms enforcement would mean that the model prices will go even higher, and this could be another damper on sales for the industry.