When Natarajan Chandrasekaran took charge as the chairman of Tata Sons in 2017, many bankers advised him to wind up the group’s car business.
“There were enough bankers advising me to shut down the passenger car business, which was losing about Rs 4,000 crore a year,” he shared in an exclusive interview with Autocar India.
When Chandrasekaran took the reins, Tata Motors’ market share had slipped to around 4.5-5 percent – the lowest in a decade, and the company’s losses had been swelling year after year.
“For me, it was very clear that there was space because the market leader was above 50 percent market share, and the next [player] was below 20 percent. So, I felt that there is an opportunity if we can get it right,” he recalled.
At that time, India’s passenger vehicle market was becoming a solid duopoly. Maruti Suzuki had reclaimed a 50 percent share, and Hyundai was making strong inroads due to the resounding success of the Creta SUV.
Tata Motors and its homegrown rival Mahindra & Mahindra were facing the heat in the passenger vehicle market, with volumes and market share under stress.
But Chandrasekaran had faith in the company, given its past successes.
“If you remember the 1990s’ Indica days when Mr Tata launched all those products… Sierra, Estate, [and] Indica were all successful. We had so many iconic products like the Safari and Sumo. So, I felt that something needed to be done. And I really felt the destination place for passenger cars is electric vehicles,” he asserted.
Chandrasekaran took a gamble by jumping into a non-existent EV market, while also investing heavily to raise the fit, finish, design and quality of its iCE-based offerings/
As a result of these years-long effort, Tata Motors has not only become India’s largest electric car maker with a market share of over 70 percent, It has also seemingly won back the trust of the Indian car buyer, with its PV market share more than tripling over the last seven years.
These efforts also won investor recognition, and Tata Motors was able to raise money from private equity firms at a surprisingly high valuation of $9 billion in 2022.
Tata Motors’ ICE-powered cars business, which used to be subsidised by the profitable commercial vehicles business, now stands on its own feet and is on the verge of being spun off. Even the company’s EV business – which has emerged as the trendsetter in the segment in India – is close to breaking even.
Catch the full interview here:
ALSO SEE (PREMIUM): N Chandrasekaran’s mega interview with Hormazd Sorabjee
Related News :