It looks like Tata Motors is currently caught between the devil and the deep blue sea. The home grown carmaker has been on a comeback mission in the passenger vehicle segment with newer models like Tiago, Tigor and Hexa. However, now the commercial vehicle sector—the proverbial bread and butter—rained on the Tata's parade.
The CV business saw a dramatic drop in growth as well as market share in the first quarter of this financial year. The business saw an all-time low of 38.70 percent in April-May 2017 and it led to the exit of Ravindra Pisharody, the executive director-in-charge of the CV business in June.
Emerging reports say Tata Motors has decided to go on an aggressive cost cutting strategy to pump money to its ailing CV business. The strategy will see some of the future projects on hold or shelved. According to Autocar India, Tata Motors has decided to go on a three point strategy.
TAMO on ice
Tata Motors formed TAMO sub-brand that focuses on the low cost of ownership, eco-friendly drivelines and a modular architecture in February this year. The carmaker had also unveiled the first model of the brand, the RaceMo sports car at the 87th edition of Geneva Motor Show 2017 in March.
It looks like the board members now decided to invest nearly Rs 250 crore to get the TAMO project off on CV business. Tata Motors may think of reviving TAMO once the CV business gets back on the track.
Pulling the plug on T1 Prima Truck Racing
Tata Motors launched India's first only truck racing series, the T1 Prima Truck Racing Championship in 2014 with Buddh International Circuit as the venue. The pet project of Ravi Pishrody helped Tata Motors to better its image as a prominent CV maker. However, the automaker reportedly has spent about a whopping Rs 70 crore a year to conduct the race. After four seasons, the racing series will see an end.
Tata to Geneva Motor Show
Tata Motors first participated in the Geneva Motor Show way back in 1998. It is one of the best auto shows in the world and Tata Motors is a regular exhibitor for the past 19 years. However, the company may skip next year's show as part of the cost cutting strategy. Tata Motors has also no immediate plan to launch any cars in the European market and that also seems to have prompted the decision.
Apart from the future business plan on hold, Tata Motors' whole-time directors and key managerial personnel saw a downward revision in their remuneration during the last financial year. The salary cut has been initiated in line with the cost cutting drive.
Source: Autocar India
