FEATURES/Boardroom | May 15, 2013 | 585899 views

Karl Slym has a Fix for the ailing Tata Motors

Karl Slym wants to change the way Tata Motors makes and sells its cars. But the cars he has don’t sell; and his idea of those that will should take at least two years to hit the market
Karl Slym has a Fix for the ailing Tata Motors
Image: Vikas Khot

Karl Slym
Age :
Career : Started at Toyota as senior manager; spent more than 25 years in GM across roles and geographies, including seven years as head of GM’s India operations. Joined Tata Motors in October 2012.
Education : MSc in business administration, Stanford University
Interests : Music, Bollywood, cricket and travelling

It was October 2012. Karl Slym, the new managing director of Tata Motors, had just joined office. And he was keen to get a pulse of the organisation quickly. Slym asked Tapan Ghosh, regional manager (west) in the passenger vehicles division, to fix up a meeting with Kasturi Wasan, owner of Wasan Motors, one of the oldest and largest dealers of Tata cars in the country. The meeting was fixed at Wasan’s Tata-Fiat dealership in Chembur, Mumbai, at 5 pm. Slym walked into Wasan’s sprawling fourth floor office, overlooking the Sion-Trombay road, with two of his colleagues—Prashant Fadnavis, head of marketing services, and Ghosh. After exchanging pleasantries, Slym got down to business, “So Mr Wasan, how is it going?”

Wasan had been waiting for this opportunity for a long time and he didn’t hold back. Sales had plummeted to 225 units per month compared to an average of 900 units in 2008-09. Despite all kinds of marketing pushes—buy a Nano with a credit card, exchange your old motorcycle for a Nano—the car had remained a non-starter. It was the same story with the Manza, the Indica, the Safari and the Aria. There were hardly any footfalls in his showroom and his sales staff was demoralised.

“With these issues, I will not have enough money to even pay salaries to my staff. In fact, I have been thinking of closing this dealership because I have been making losses for the last two years,” he told Slym.

The new MD heard him out patiently. At the end of the meeting, which lasted about 90 minutes, Slym said, “No, Mr Wasan, don’t give up. Give me 90 days and I will do something. If you still think your dealership is not viable, then you are free to go.”

Slym’s promise of 90 days ended in December 2012. It is now actually more than 180 days but Wasan hasn’t heard from him. Ghosh has since quit to join Hyundai. According to sources, in the last financial year Wasan’s Tata dealership made a loss of about Rs 6 crore. This March, he sold only 70 units. Now he is seriously contemplating pulling the plug. He won’t be the only one to have done that. In the last two years, Tata Motors has lost three large dealers in Mumbai, one in Pune, one in Chandigarh, two in Hyderabad and two in Delhi.

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Today Tata Motors’ domestic car business is on a sticky wicket. Sales for FY2013 dropped by almost 29.2 percent to 2,22,112 units from 3,13,710 units in FY2012. In the December quarter, the standalone business posted a loss of Rs 458 crore. Analysts are expecting another loss in the current quarter. On the products front, in 2012-13 the Nano has utilised only 20 percent of its production capacity of 2,50,000 units at Sanand, Gujarat. Almost all of Tata’s other vehicles (Indica Vista, Manza, Safari, Sumo Grande, Aria) have been beaten in their respective segments by local and global competitors.

A former Tata Motors senior official, who spent more than a decade at the company and spoke on condition of anonymity, says this is the result of lack of focus, poor allocation of resources and narrow vision for the car business. “In the last five years, there were just too many things vying for attention. First, there was making the Nano itself. Then Singur and taking the plant to Sanand. Then fires in the Nano. Then Jaguar Land Rover. All of this meant that everything that had been planned for the car business was getting postponed. And we never had enough money to invest in building a pipeline for our existing brands,” he says.

Of course, Cyrus P Mistry, the chairman of Tata Sons, has taken notice. He asked the organisation to buckle up in his Lake House address to employees on April 1. “The last four years witnessed fierce competition in the passenger car market, with the entry of seven new global manufacturers and the introduction of 150 new models. The commercial vehicle segment too faced challenges with the entry of new players like Bharat Benz,” he said. “It is time to meet them and beat them in their backyard.” In his meetings with the top management, Mistry has been pushing towards making the car business profitable, developing “futuristic products that are truly world class” and to draw lessons from the turnaround of Jaguar Land Rover.

Lord Kumar Bhattacharyya, founder and chairman of the Warwick Manufacturing group, who was part of the five-member search committee that selected Mistry as Ratan Tata's successor believe Mistry will do he can to make the company a success. “Let me tell you, Cyrus is a very forensic man. He has got a tremendous mind. And he will not go on a whim or fashion, he will do whatever is right for the company as a business. And it has to make money. Cyrus is not going to tolerate any weaknesses in the organisation. Car companies cost a lot of money, they should not only be designed well but also made well and sold well.”

Lord Bhattacharyya should know. He has seen the company’s steep decline from close quarters and believes that Ratan Tata’s vision for the car business was let down by the senior management at the company. “Ratan, as far as cars are concerned, it is in his blood. But he is not going to go and sell cars. It is up to Tata Motors to sell. Somehow, Tata Motors lost touch with the market. They had an iconic car like Nano, which Ratan had produced but it never got the due respect in marketing. If it was in any other country, it would have been a great success,” he says.

Correction: This article has been updated with spelling corrections.

This article appeared in the Forbes India magazine issue of 17 May, 2013
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Comments (47)
Pankaj Nov 20, 2013
Thanx Mr. Karl.....
for focus on marketing
Kanishk Yadav Oct 30, 2013
when the respected M.D of tata motors mr. karl slim had promised to mr wasan to give answer on his problems of sales decline within in 90 days then why he didn't answer it in 90 days and according to this article he dindn't answered in 180 days that means completely 6 months what is the reason behind that ?
Response to Kanishk Yadav:
Sambit Bhattacharya Nov 3, 2013
Dear Karthik, you forgot that Slym has joined Tata from GM. So he has also got all the fevers of Tata, say something, then forget. That's why Tata Motors is failing....
Response to Sambit Bhattacharya:
Kanishk Yadav Nov 5, 2013
strongly agree with you mr. bhattacharya, but they have to finish this fever here only otherwise tata has to close their passenger car unit very soon , they didn't know what an executive has to face while selling out the tata product like indigo or whatever it is , i had face those problems from very near tata has to come out with their rigidness, and has to do some thing about it , if we don't go so far near about seven years before when people talk about tata it looks like that they are talking about strongness , strength , durability etc but now if we heard it is only waste of all your resources to buy a product, if you are going to buy a tata product ,i know this company can do it better but i don,t know why they are ignoring this
Nitin Kohli Oct 17, 2013
Tata Motors agression and Talent cannot be questioned, but with experience of tata ownership for almost 9 years ... and working in same domain.. though some things what i notice is :
1. The structured mechanism is lacking where customer expectations in terms of service , sales and product can be captured and utilized , may it be customer feedback or complaint .
2. Dealer profitability through service , changing the mindset from sales driven to balanced business growth from sales and service .
3. Dealer process should be delinked as Customer Driven and Business driven
4. Tata brand is percieved as brand of low quality , which is key factor for First time users , ( India still has majority of FTU)
5. Holistic image needs an improvement where Customer percieve this as Package not a product .
Response to Nitin Kohli:
Sambit Bhattacharya Nov 3, 2013
At least you have got me right. I wanted to purchase Tata Indica as my first car arnd 7 yrs ago, but ended up in buying Alto. Today I am planning to buy Tata Manza "Package", not the "Product". Very true.
Sunil Kumar Oct 4, 2013
I think this TATA Motors is a classic case of a company lacking in Strategic Management
Karen S. Webb Aug 1, 2013
Valid point made earlier. Is there a plan in place for Tata motors dealerships to maintenance and repair in the United States?
Saahil Jul 17, 2013
Compact sedan segment is the best buy at present in Indian market. Swift Dzire, Honda Amaze - both are doing reasonably well. However, irony is Tata Manza Diesel (after discounts) is priced same as what Dzire and Amaze all about.

Despite same pricing, much spacious interiors, much premium sedan feel and recent price cut, Tata Motors is facing issue in selling Manza, even its selling lesser then Etios Diesel, despite been a superior product for all 3 cars

source for comparison of Manza with etios
Suresh Jul 6, 2013
TATA can not succeed in the areas where service / after-sales-service is required. The philosophy of SELL it and FORGET it will only take them so far. Whether it is car or phone or consumer durables, the after sales service is non-existent. Nobody (TATA customers) would like to go back to TATA after their first experience with TATA Customer Care.

No Corporate can do well if they can not retain their existing customers. Just having low price is not sufficient, to attract more customers, especially if the product is also of a very low quality .

Most products (not just cars), low-cost or premium would have minor issues when mass produced and marketed. It is how you deal with these issues as a Corporate which would determine good and not-so-good Brands. Great brands have totally different philosophy of thinking couple of steps ahead to provide customers a great experience year after year for umpteen years before they are regarded as GREAT BRANDS.

Hope someone from Tata Motors at least bothers to read these feedbacks?????
Geok Jul 5, 2013
Being an owner of 2 Tata cars over the past 7 years, I can very well say space in Tata cars is something no other cars can boast at in this price range. However, quality and service issues are evident and hitting the brand image of the company. As somebody mentioned in the thread, feedback is brushed under the carpet. The cars have huge potential but marketing and service pull it down to the bottom. If issues reported are fixed temporarily only until such time that the customer care calls up for feedback and after which it again surfaces, then that is a huge letdown. Instead of providing stop gap solutions to issues reported during service, it would make a mountain of difference if the issue is properly fixed and not just for a week or two.

Karl has a big challenge on hand in not just ensuring that the product sells but also ensuring that the products sold are serviced properly. And this can happen only if the attitude across the company right from the product engineers to the service technician change their 'its-okay' attitude. I know friends who initially were planning to buy a Manza but backed out because of the attitude of the sales folks. If the sales rep says that the clutch in a demo car with 5000 kms on the odometer is bad because its a Tata car, you dont need to look far to know the root cause of the problems and a potential customer can only imagine what he might have to put up during service.

Wishing Karl all the best.
Kumar M Jul 5, 2013
I have worked in TATA Dealership after my completion of my BE Automobile, It was my right decision taken to work with TATA Dealership, because these workshops are nothing but practical workshops. As a student you can see and learn all type of technical concerns in TATA dealerships. You cannot find a single car without any concerns, and concerns will repeat day by day. The support we get from the RSM's is amazing, because TATA HR will recruit a people who knows theoretically but not practically. When I was working with TATA Dealership I was fighting with RSM's to look to customers concerns, they never bother and proper solution is not given by them intime. RSM's will always blame dealership saying that it is a wrong diagnosis, i would like to suggest TATA Management kindly appoint a skilled persons who have already working in dealerships, so that they are better in understanding customers concerns.

Really I am proud of me because as a BE Automobile Engineer, I have worked in all areas in the Dealership and agained sufficient knowledge about how to make the customer satisfy. Through my own skills and dealing with customers, today I am working for a branded company in Automobile dealership in India as a General Manager and our dealership is getting SSI and CSI scores more than the country level and our dealership customer retention is more than 85%. Dealership can make revenue is only the way to look of customer retention and references. 70% of our sales and services we get only through reference and 30% we get customers to retention customers references. If all dealership follow the same, I would like to say that dealership can generate more revenue and customers will be buying the same product YOY.

At least know TATA motors can get up from sleep and listen to the customers voice and customers perception, by listening this still there is a scope to improve their dealerships. If TATA officials goes in the same direction, then you can see the end day because is it nearing to all TATA Dealerships.

First thing is that TATA Motors has lost Mouth of Words, and they have lost premium segment customers. Even their employees (TATA Group) are not willing to take TATA Brand vehicles and they dont want to get into trouble. If you need real feedback, let TATA group officials can have a survey with their own employees, then they will come to know the reality.

Hats off to Mr. Ratan Tata for giving car for cheaper price with cheapest quality maintained car to India people. TATA cars are purchase by the people who wants to suicide in his life or people want to lose their life only can buy a TATA car and travel in this car.

Kindly take this feedback and practically visit the TATA Sales and Service dealership, and understand the customers needs and requirements. Then you will understand the market scenario.

Kindly come out with quality cars with better features, then people will once again look for TATA Brand vehicles.
Peter Jul 3, 2013
I have been using an Indica Turbo for the past 7 year now. The car has not given up on me even ones. However there were some niggles that need attention ones in a while. Tata cars are good as long as the authorized service center guys just do the job. But they seldom does what they are supposed to do. What I hate in all TATA cars, Now that I own a Manza club class, is the fit and finish. After spending 9 lakks on the car, if you look closer at the corners and under carpets, you can see the inferior paint works and protruding metal pieces. Looking at the sercive center attitude compared to the last 7 year, I see a marginal improvement there.

The only way TATA can see success with its wonderful portfolio of vehicles is to focus on quality workmanship, performance and a good service network. The problem with this company is right from the manufacturing until delivery and on there are quality issues.

Still why people buy these cars? is because they see some value in the space and comfort it has to offer. Besides these there is nothing anyone can think off when it comes to TATA. I have heard many people say that Manza would have been sold like hot case if any other company other than TATA would have produced and sold it.

I have been using the Manza for the past 7 months now and I am a happy customer with respect to the performance and space. Recently the car gave up on me and when the 24/7 service of TATA was called, they immediately responded to the location and even came down with a bottle of chilled water. Also hats off to them for taking my request of towing my car to my preferred workshop which otherwise is towed to the closest center. Things are improving, but for a significant change TATA should focus on the later.
Pradeep Jul 3, 2013
I am a owner of tata vehicle for around 8 yrs now. Let me shre my point of view, just after 3 months of buying the vehicle I felt cheated. Only thing that tata offers is a car which is cheapest in segment and has more space .. nothing more.

At the entry level , indica is competing with santro, alto etc .. At that segment people look for ease of driving, pleasure to drive. Now Indica is a tough vehicle to drive as compared to others for a first time buyer. You damn can't figure out the lenght of it's bonnet and length/breadth of vehicle.
A/c is horrible, if you switch on a/c your car loses it's power. Now some of these things are fixed. Tata don't care about after sales support. Every other car manufacturers go for recall of their cars and provide free replacement of parts if found faulty which is a nuisance for tata.
If you go even to a maruti workshop, the type of courtesy and the env that they provide for a M800 owner is more than a manza owner. Who is at fault ? so poor condition of workshops, you come across bad cheating people having attitude looking at fooling you... No one to hear to your complaints.

Does a customer wants this ? Na .. who wants to treated like this ? On top of that when you are going for servicing you are rubbing shoulders with taxi drivers all the time ? Does I want that ? No .. why should I buy another tata vehicle of course I recommend all my friends and relatives to stay away from tata ...

BTW most of the dealers and workshops in delhi have closed in around 2-3 months .. Is there a hope left for tata or have they given up. I guess enough points for tata to ponder and act upon if they want ... else they would be doomed in car segment
Dev Abhishek Jul 2, 2013
I have been the proud, but somewhat disillusioned and dismayed owner of three Tata vehicles now. It was a national pride thing for me, since the Indica is largely an Indian engineered car, but national pride goes only so far. The car is still value for money, and safe, but Tatas have to address the fact that Indicas have more down time than other car-makers, and more trips to the workshop, even if overall cost of ownership is low. And please, the Manza deserves a bigger engine!
Achin Juneja Jul 2, 2013
There is a big disconnect between the company honchos and the dealers. Customer feedback regarding obvious manufacturing defects, is brushed under the carpet by 'Plant representatives'. The problems don't go away if ignored. They have to be tackled head-on. Till this ostrich like approach persists, the company is only going one way: Down.
Rao Jun 17, 2013
what is bad thing for TATA is, people are treating its vehicles as taxi's. 1st it should come out from that image. They need to come up with new brand and that needs finest marketing strategy.
Jitender Singh Jun 11, 2013
main reason for decline in sale is " word of mouth", any one who buys tata car will never advice to his friends and relative to go for that car as due to poor quality he has suffered a lot. i have tata manza and every second month i have to take it to workshop to fix some or the other thing. same is the case with most of other fellow whom i interact at workshop. many of my friends and relative have taken my view before taking new car, i strongly advice all of them for not to go for tata cars. so untill and unless new head improves " word of mouth" tata motors will keep on going downhill
Somesh Dutt Jun 10, 2013
A fantastic article. You were able to piece each and every problem area which a huge organization like Tata is facing, some of which is visible while others are not. I really liked the entire article in totality as it gives me an insight about what Tata has been going through and where does it stand now after incorporating several changes.
Jj Jun 5, 2013
Tata makes diesel cars. Diesel price is getting closer to petrol. So why should someone buy a diesel car?

If Tata can build cars to answer this question, then the numbers will improve.
Response to Jj:
Rahul Jun 6, 2013
Others also make diesel cars, and they do sell even with the petrol-diesel price gap.

The question is still - why should someone buy a Tata over a Toyota or Ford.
Response to Jj:
Dev Abhishek Jul 2, 2013
There are many reasons. In the UK, diesel is typically more expensive than petrol. Nonetheless, most cars sold are diesel unit. You can easily research exact reasons on the web.
Rahul Jun 4, 2013
If anyone from Tata Motor's top executives are reading ....

Indian car market isn't a mature market as such, and a very cost AND image conscious one. Market research may look for logic, but logic isn't always (in fact rarely) what drives people.

Take image. People don't buy Tata cars because of the image of a taxi. Oddly enough, the same reasoning is given for the Toyota Etios not selling too well. But in Europe, I have seen BMWs, Mercedes Benz E-class and Audi A4/6 as taxis. Yes, Europe has much higher standard of living, but apparently Europeans aren't finicky about buy a BMW or Audi because it's also commonly used as a taxi, are they ? India has a very class conscious public, thus a car predominantly seen as a taxi, is unlikely to find a buyer for a family car. Toyota tried in vain to steer away from the taxi image, by culling the Qualis and bringing in the Innova, only to have the Innova too picked up by fleet operators. Now that Swifts and Dzires too are being registered as taxis, let's wait and see if Swift/Dzire sales reduce in light of the taxi image.

Now what does a commercial user want in a car ?
1. Dependability, reliability and durability : the more time a car spends on the road, the more money it makes. The more time a car spends off the road in a workshop, the more money it loses. A non-functional car makes fleet availability lower, affecting business , losing customers.

2. Cheap to maintain : easy availability and low cost of spares, wide service network so that repairs/service can be done anywhere and at low cost, with low turn-around time.

3. Space and comfort : Would a customer want a cramped, uncomfortable car , or a spacious, comfortable one ? If you had a fleet of cramped, uncomfortable cars and a rival had a fleet for more spacious, comfortable cars , who would get more customers ?

So - add that up and infer, that Indian customer forgoes a car that is reliable and durable, cheap to maintain, and spacious in favour of cars that are more expensive to buy and maintain, possibly very cramped ( Swift , Dzire ) - only because they are more upmarket. And yet , Suzuki loses out premium car sales ( Kizashi , Baleno , Grand Vitara ), because it is seen as a cheap, mass-market brand compared to the Hondas and Hyundais, even. Where does that put Tata Motors ? It slots in below Maruti - and nearly two classes/slots below Honda/Hyundai , the latter successfully selling the expensive Verna despite being a cheap Asian brand as per international standards !

The customer's mindspace is a tricky one. Money isn't plentiful for the Indian customer, so not only are we cost-conscious, but very image conscious in order to appear richer than we are !

What Tata Motors needs, is a re-invention of the brand name, or a new brand name ; like what Infiniti is to Nissan or Lexus is to Toyota. And besides the quality part, segregate commercial buyers from family/individuals as much as possible - not just at the showroom but also product lines. And new products, that are well built and upmarket inside out, and in no way reminiscent of the legacy Tata vehicles.
Response to Rahul:
Neha K Jun 7, 2013
This is an unusual but very interesting insight...and well-written too. Why don't you publish it on a discussion forum and see how the idea pans out?
Response to Rahul:
Sumedh P Jun 10, 2013
I agree with u on this point... Tata motors needs a new brand which has nothing to do with taxi image it has generates.
"What Tata Motors needs, is a re-invention of the brand name, or a new brand name ; like what Infiniti is to Nissan or Lexus is to Toyota. And besides the quality part, segregate commercial buyers from family/individuals as much as possible - not just at the showroom but also product lines. And new products, that are well built and upmarket inside out, and in no way reminiscent of the legacy Tata vehicles."
2) Better looking sleek car designs.. they should learn something from Hyundai... tata cars especially indica vista and manza.. its looks like the outer body is stuck together in a hurry and is not at all streamline.
I really hope tata motors does well.. it's real true blue Indian.
Response to Rahul:
Harshit Jun 18, 2013
Rahul lets me act as a devils advocate right now. lets discuss your points one by one:

1). You said we Indians don't buy a car that has an image of taxi. Actually it in not right, the behavior is not radical always take the e.g. of innova, yes a preferred Taxi but at the same time a preferred car for family too, Take Scorpio a good size of scorpio is used as a taxi but yes still a iconic car to own. As far as the parent brand name is concerned you cant say that a company which is known for making economical cars (meant for Taxi) cant position same parent brand as a family car manufacturer. Mahindra and mahindra is the eg right in front of you. Commander, Bolero were all taxi segment vehicles but yes they were able to position there new vehicles well in the market.

2.Now as per the insight shared for a commercial user. If you read the comments shared by others you will realise the gap between perception of Indica, Indigo you mentioned and what a rest of users think. as jitender singh said in his comment "i have tata manza and every second month i have to take it to workshop to fix some or the other thing. same is the case with most of other fellow whom i interact at workshop". Let me say its all about perceptions my friend and let me tell u i own a swift VDI even i visit the mechanic every now and then but still i feel my car is a good car.
3. Reinvention of Brand Name: Nissan created infinity so that it can play in a different segment (premium) lexus The same story. To lauch a new brand to fight in the same segment I think its just foolishness that too when your present brand is like TATA which enjoys a good amount of brand equity. What i feel should be done is Brand Rejuvenation. Re-energies the brand, make controlled Go to market plans for the new launches. work to establish brand image of a new generation brand which is opposite to the attributes you dont want to associate with (The only for taxi brand, The inconsistent brand)

As far as customer mind space is concerned we as marketeers can only guess with our gut feeling its only the customer who decides how to behave at that moment. Rational or irrational, Status conscious or value for money, we can only act as an influencer.

Now lets discuss the case of Hyundai and Maruti which you were referring to. Both maruti and Hyundai are known for the small segment cars (mainly hatchbacks and medium sedans) but today maruti despite its efforts to have a car in the premium sedan (15-20 lakhs) segment in its product portfolio is unable to create its space where Hyundai did it. Lets ask this question why maruti failed and Hyundai succeeded. Maruti launched kisashi, Vitara and failed because it was never able to prove its name in the category just below premium sedans (Rs 9-15 lakhs) where as Hyundai first proved its name in this segment and then graduated to the next level. With Accent then verna and then verna fluidic. Even Hyundai did the same mistake earlier. They launched Sonata, then sonata elentra but failed to establish the product.
Response to Rahul:
Sivasankaram K Jul 2, 2013
The comments are well reasoned. I heard many first time car buyers rejecting Indica because it gives the feeling of a Taxi. This is how the image was generated, it is true in the case of Logan also. There are other models that run as Taxis but they are not labelled as Taxis. In Germany most of the Taxis are Mercedes Benz cars. There is no such label for Benz as Taxi. So it is not solely because of Taxi image Indica got a negative openion from public but the servicing by any of the Tata appointed companies was awfully bad. Concorde of course is (at least was) the worst. Employees of Concord behaved like Govt. officials and treated the customers as those approaching for undue favors. It is true that executives and the like first car buyers were bracketed with fleet operators and Taxi drivers. Most fundamental is the psyche of the Indian buyer. For the same cost Indian buyer prefers a VW or a Toyota or a Honda or a Chevrolet or a Hyundai to an Indian car. Surprisingly M
Response to Harshit:
Rahul Jul 2, 2013
@Harshit :

Indeed the Innova is used as a taxi ( I mentioned that in earlier post), but it isn't a preferred family car except for those with large families or those who travel long distances often. The better quality of body, engine and interiors does mitigate the taxi image as compared to Tata Vista/Manza. As an urban personal vehicle, the Innova is rather large and bulky to drive/park in our congested cities. It is the preferred choice for those looking for an MUV - due to travel/passenger capacity requirements - yes since 1 car carrying the family is preferred to 2 cars for the same, and because of the better build and ride comfort as well as reliability, but it is not the preferred family car outside the big/joint family market. People with that budget and not requiring 7-8 person seating prefer sedans like Civic and Corolla or Verna/Elantra or Skoda Laura, or SUVs like XUV if they want something for rough roads or touring but not strictly for the seating capacity.

Regarding reliability and perception , it is statistical. Now sure Tata doesn't have Toyota levels of reliability, but for the average fleet operator, cost of running/maintenance and reliability are the main operational parameters. There have been people who own Honda Civic/Ford Fiesta and Maruti Swifts, and saying the Swift runs higher maintenance bills. Between cost of maintenance per visit and number of visits per year, is a wide range of points that people are comfortable with. And to stress on perception - many Royal Enfield owners have high satisfaction levels - despite the frequent niggles and breakdowns, because the emotional reward to them is worth the financial pain of unreliability ! of course there are those who wise up and switch after frustrating experience with the Royal Enfields.

Re: reinventing brand name. Yes, I'm well aware the the other named brands are luxury brands of mainstream brands/manufacturers. But in India, luxury is very different definition. Tata has a strong brand image but not for urban passenger vehicles. It's mainly commercial vehicles (trucks , buses and UVs ). How many people associate a level of pride with a Manza or Vista ? A Tata personal vehicle is a long shot from being a status symbol. Some practical people not looking for status symbol but just utility , like space, comfort and cost, buy Manza/Vista or Logan/Verito , but in the total volumes in that segment, if they're better than VW, Honda ,Chevrolet and Fiat, bulk of their sales being taxis, which is why Tata is still 4th or 5th largest 4 wheeler manufacturer. Mahindra's sales come from rural sales than urban.

As for Hyundai, now that is an unexpected success story , no doubt. Maruti wishes they had success in the sedan segment like the Verna. Hyundai started out similar, they got a small car, the cheapest they made, and built their brand ( SRK sure got them loads of publicity ). Once the Santro established Hyundai as a viable and reliable alternative to Maruti, they tried (and failed) with more expensive vehicles (previous gen Sonata, Elantra, Verna) , with only the Santro , Accent , i10 and i20 doing well. It wasn't until the fluidic designs that Verna became popular - but by this time, the expensive i20 at INR 9 lac for top end variants, had build enough reputation for people to spend around 10-13 lac for a sedan. Elantra and Sonata still aren't big sellers (but then, past 15 lac the volumes shrink considerably anyway), that will take some more time as the Verna builds Hyundai's credibility in the 10-15 lac range.
Yuvaraj Jun 4, 2013
The main problem is design, all products (Indica, Indigo, Indigo CS, Vista, Manza, and Aria) are looking more or less same especially frontal section. Why should anyone go for high end product if it is nothing more than just like grown up brother.
Tata has to design at least one full fledged entry level sedan. Trunk integration is awful in Indigo and Manza. Look at Volkswagen Vento(Polo) and Jetta(Golf) their trunk integration is so much seamless.
Diesel Nano is need of the hour.
Sunup Jun 4, 2013
Another big let down for TATA cars is the way they treat their customers as guinea pigs. The current 2012 Nano is far more reliable than the original one. Same with other models like Indica, with the current one having manifold reliability over the original Indica. This is not so with other car manufacturers and their models. So people will tend to hesitate to buy Tata cars. Already there is talk of a refreshed 2013 Nano and other models like Indigo ECS.

So people will wait for them to arrive, thus driving down sales of the current stock southwards. Also, they are very slow in making decisions and bringing out models. If a diesel Nano was available from late 2012 onwards, the Nano story would have been different now. Now by the time the diesel Nano comes out, diesel prices would go up even further and the tilt towards diesel cars would die down further. So there goes another opportunity. Same with an automatic/CVT version for the Nano. An affordable AT city car would have done wonders to their sales. But they didn't think on those lines too. So it's not Slym, but only God Almighty who can save Tata Motors' Indian operations.
Shyamsunder Jun 4, 2013
Indians are proud of the brand and want to own, the company needs to ensure reliability. A four year maintenance free period and sleeker models will do the trick. In Bangalore especially people are weary of once 'cheap to maintain' maruti bills. My friend paid 9000 for Swift service. Honda spares aren't widely available. Tata needs to research on such chinks and exploit it.
Raphel Lazar Jun 4, 2013
The main problem is not discussed here. Just look at the quality, its below average. Every 6 out of 10 Indicas back panel is deformed with in one year of ON ROAD. This is pathetic. Its just going out of shape, loosing finish, which drives sensible buyers, and tata gets only those buyers who looks for Diesel and a body with 4 wheels.
Chnage the quality perception, rest will follow.
Vikesh Jun 4, 2013
Brilliant article, I think Mr Slym has rightly pin pointed the need of the hour strategy Product planning, Quality deployment, Purchasing in all One Team one Vision, Also rightly pointed car business being run by commercial vehicle guys, The new management has enough understanding and experience of the passenger vehicles business. But it will take at least three years to arrest the current situation. Given that the car business is a cash guzzler, it will require investments in new products and marketing.
Pavan Jun 4, 2013
Brilliant article and Tata really deserves to be at the top of the table .
Aria is a top notch product and yet it fails just because of a tata badge on it.
Tough times ahead for Tata and i just hope they can come out of this mess

Proud owner of Safari :)
Tipoficeburg May 18, 2013
Thanx Mr. Karl.....for analysing TATA MOTORS CVBU
Adriaenssen May 17, 2013
Ashok May 17, 2013
Tata Steel has just taken a $ 1.3 billion impairment charge. Indian Hotels' acquisition of shares in Oriental Hotels has lost value. Ratan Tata's legacy will have to be carefully evaluated.
Adriaenssen May 16, 2013
@ Sandeep, be proud of Tata, be proud of your country and the achievements of its captains of industry.
In Europe taxi drivers prefer Mercedes Benz, see my point?
Response to Adriaenssen:
Sandeep May 17, 2013
Adria,Iam just highliting the point of personal car buyers aversion to TATA vehicles.
No way I mean derogatory to my country nor Tata.Tata is a symbol of legacy and I know that.
Response to Sandeep:
Adriaenssen May 17, 2013
Sandeep, then maybe this is the right occasion to find out why.
Tata Motors built the first completely indigenous car, the Indica.
They have a range of private vehicles and SUV's that I find quite adapted to the Indian market.
What is the reason of the "aversion" you have mentioned?
How can this be overcome?
I know this is really TML's marketing department's job, but I can't help ;-)
Anish May 16, 2013
"The new MD heard him out patiently. At the end of the meeting, which lasted about 90 minutes, Slym said, "œNo, Mr Wasan, don'™t give up. Give me 90 days and I will do something. If you still think your dealership is not viable, then you are free to go."

Slym'™s promise of 90 days ended in December 2012. It is now actually more than 180 days but Wasan hasn'™t heard from him."

Once Tata motor's state of affairs understood by Karl Slym , he himself might have thought 9000 days may not be sufficient for him to bring the company on track .
Sandeep May 16, 2013
Tata car means taxi car, and it fits the bill as that's what taxi guys want..more car per car.That's the standard notion and the personal buyers backstep because they don't get the premium "feel" with what other car owners receive in society.In India car buyers are upper middle class guys and buying TATA let's them down in their circle.
Tata Motors, as I have understood from the article works like govt company,out of focus.
Lucas Pb Adriaenssen May 16, 2013

Allow a non-Indian to make a comment.
I have followed Tata Motors for 9 years now, since I introduced MDI's compressed air technology to Mr Ratan Tata himself.
Chairman fully understood the tremendous potential of this clean and affordable technology for the economic and environmental situation of His country.
At his arrival at TML I also wrote a short memo to Mr Slym.
Nano failed due to wrong marketing and too high total cost of ownership for its targeted customers.
Combine the two elements above and you have the answer Chairman would have put in action.
Response to Lucas Pb Adriaenssen:
Xyz May 18, 2013
It is not true, your technology to put plainly was 'a lot of hot air', it did not stand independent evaluation. Is there wonder no one else is interested in compressed air technology.
Mukesh Jain May 16, 2013
I think, now TATA is going in right direction as far as we hear in the atmosphere..God knows what excatly will come out and when..
One thing is sure that Competition is very aggressive and they will also not leave any stone unturned in the business...TATA needs to work with Fourtime speed and first time right to turn around in car segment...CV market is also becmoing challening every year passing by...for TATA its now or never game...We have many examples like Escorts Tractors, now vanished within no time...
Sachi Mohanty May 16, 2013
"The man is a firm believer in the principal"

Or 'principle'?

I am sad to realize that Tata Motors is in such a sorry state of affairs.

They got to really innovate in a car market where competition is so cut throat.

Who'll come up with a car that has it entire top part built from color-changing composite-plastic material combined with carbon-fiber or something for strength?

Think of those windows on the new airplanes? I think it's the Dreamliner that has those fun windows. Or is it the 380?

Tesla is the way of the future! If not those battery packs, at least go for its sleek looks.
Dheeraj May 15, 2013
Don't know about Tata's quality but Forbes needs to do a better job in editing its content.. believe spelled as belive and space spelled as pace.. something is wrong. Forbes must deliver better.
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