Tata Motors changed its strategy, transformed and won the Turnaround Star 2024 at the Forbes India Leadership Awards. Now it’s putting in more effort
Tata Motors’ sudden response came as a surprise and a bombshell.
Indian carmakers have reduced the prices of their electric cars in the country for the first time, similar to the strategy adopted by Tesla in the US, as the cost of batteries has fallen. The company’s popular Nexon has seen its price reduced by Rs 1.2 lakh, while its other model, Tiago, has received a discount of Rs 70,000. Tata Motors is India’s largest electric vehicle (EV) manufacturer, accounting for nearly 80% of the market.
“Given the recent softening in battery prices and the possibility of battery prices coming down in the future, we have chosen to make it more profitable for our customers,” said Vivek Srivatsa, marketing manager, Tata Transport, which plans to expand its EV offering. Tata Motors’ announcement comes just days after Chinese automaker MG Motor said it would cut prices on some models in a bid to weaken Tata Motors’ competition in its own market. Globally, battery packs account for more than 40% of the cost of electric vehicles, and Chinese energy producers have a 30% cost advantage in batteries.
But while it may not seem obvious, Tata Motors’ decision to oppose MG’s move reflects the fact that Tata Motors, India’s largest electric utility, has an immediate, unique advantage in the EV space. The Indian government, which has led the automotive industry to shift to alternative fuels, sets prices and makes it harder for competitors in the process.
The move also echoes Tata Motors’ story. Consider this: In 2016, the automaker had a 4.6% market share in the Indian car market, up from 10% in 2010. While the market share rose to just 4.8% in 2020, there was some growth in 2018 and 2019 due to the launch of some new models like Harrier, Tigor, Tiago and Nexon, but customers are not interested in adding more in 2020.
According to data compiled by the Association of Indian Automobile Manufacturers, Tata has become India’s third largest carmaker in the past four years with a market share of 14% as of January this year. While India’s second largest carmaker Hyundai Motor has a market share of 15%, Maruti Suzuki has a share of 42.2%.
The Mumbai-based carmaker has announced plans to launch two models targeting the 4.3-metre segment in the coming months, namely the Hyundai Creta, Maruti Suzuki Grand Vitara, Honda Elevate and Volkswagen Taigun. Tata will be introducing the much-anticipated Curvv coupe along with the legendary Tata Sierra. The automaker says this model could further expand its market reach and compete with Hyundai in the process. “If you look at our market share, it is still only 57% and the 4.3-metre mid-size SUV segment is growing rapidly,” Shailesh Chandra, CEO, Tata Motors Passenger Vehicles Ltd. told Forbes India. “So our market share is still 56% of the total time and we have achieved 14%. So the actual market share of the potential space is close to 26%.
