News Hour- Competition for Tata Motors to get more intense: Ratan Tata

Acknowledging that his firm's "predominance in commercial vehicles will be challenged" by the entry of international brands like Mercedes-Benz, Volvo and Navistar, Ratan Tata, the chairman of Tata Motors, India's largest automobile firm in terms of turnover, said his company is gearing up for the battle ahead. "A new line of very competitive, fuel-efficient vehicles is being developed by Tata Motors to meet the competition head-on," Tata wrote to shareholders in the annual report for financial year ending March 2012. Having seen its market share falling from 64 per cent in FY-10 to 59 per cent in FY-12, Tata Motors has undertaken a slew of measures, which includes 50 new products and an investment of around Rs 1,500 crore in FY-13. On the anvil are low-priced Prima trucks and light duty Ultra range trucks. An analyst said the entry of the world's largest truck maker Daimler through Bharat Benz brand in August will pose the biggest challenge to Tata Motors. Competition will even come from the likes of Ashok Leyland, VE Commercial (Volvo Eicher truck JV), Mahindra Navistar, which are making big ticket investments to build capacities. Umesh Karne, auto analyst with BRICS Securities, says the international competition that one is witnessing right now is more intense then what one had anticipated before. The market share for leaders will come under pressure, Karne said. "There is no big secret but for Tata Motors to continue to build the product portfolio with specific applications and deliver value. What gives Tata Motors the edge over others is the sales and service network, which will be very tough to match in the short term by the competition," Karne added. Tata Motors posted 15 per cent growth in CV business in FY 12 to 5,30,000 units from 4,59,000 units in FY-11. The passenger car business grew slower at 4 per cent to 3,33,000 units in FY 12. Tata says Tata Motors will face even greater competition in the passenger car segment. "The company will need to address the marketplace more effectively with its existing and future products in order to regain the level of market share that it earlier enjoyed," asserted Tata. Reflecting on the mini car Nano, he said despite the initial roadblock, Nano would continue to grow in India and has a big potential overseas. "The potential market for such an affordable car is enormous throughout the developing world," said Tata. While the situation back home may be tough, its luxury cars under the Jaguar Land Rover badge are gaining accolades and glory globally, with strong response to the compact SUV Evoque. JLR, which today contributes to more than 70 per cent of Tata Motors profits, saw volumes and value growing by over 30-35 per cent in FY-12 and the company has lined up slew of new products to keep the momentum goin.
(source:economictimes.indiatimes.com)