It wasn’t an easy job for Guenter Butschek who took over as CEO and managing director of Tata Motors in February 2016. The hometown auto maker was losing ground, and as if it wasn’t enough, trouble came from unexpected quarters — demonetisation and BS IV transition norms. Notwithstanding the challenges, Butschek tells Sunitha Natti that the turnaround strategy was working well to position it among the top three — within the country for passenger vehicles and global top three for commercial vehicles. Excerpts:
You will complete two years in February. How has your journey been so far?
When I joined Tata Motors, there was a need to launch a transformation journey, setting long-term priorities, redefining the mission, vision and values, laying down the blueprint for commercial and passenger vehicles business strategy till 2020, and launching our strategic game plan with high impact projects for bottom-up and top-line improvement. My first focus was to set the company towards aspirational targets in terms of market share and financials. I’m happy to say that we have recently seen consistent growth in performance. As a legacy in itself, Tata Motors’ strength lies in talent. In the last two years, I’ve focused on streamlining talent and my aspiration is, for it to be able to walk into an open future.
What were the key challenges that you faced?
The Indian auto industry is evolving rapidly and is one of the most demanding markets globally. We have seen more market volatility in the last 18 months than what I have witnessed in my entire career. Having said that, consumer aspirations in India are constantly changing and we are prepared to fulfill these aspirations. The key challenges include unexpected and unprecedented market changes. We faced a rather hostile business cycle with headwinds (via demonetisation) and the Supreme Court ruling on BS IV transition. As a matter of fact, it was not only the market volatility that affected our performance, but also a delay on our part in reading the market.
How has the turnaround programme progressed so far?
It effectively demonstrated the company’s new approach of bringing in speed, simplicity and agility. Our accelerated efforts on sales enhancement, rigorous cost reduction have shown quick results on market share and bottom-line improvement. Our strategic game plan continues to deliver, making the ImpACT Projects, a strong pillar of our growth.
Commercial and passenger vehicle businesses saw best sales in September, 2017 within the last 4-5 years. New products made inroads, enabling progress in Q2 and Q3. We made significant improvements in operations and ramped up production by 70 per cent in the second quarter.
We also embarked on a comprehensive corporate branding exercise — ‘Connecting Aspirations’ — which defines Tata Motors as a brand that understands people and imagines mobility in all forms.
What’s the future strategy?
To achieve sustainable financial performance, while delivering innovation, Tata Motors is aiming to be amongst the top three passenger vehicle makers in India. Taking an outside-in approach, we have reviewed our existing PV product portfolio and formulated a new strategy based on customer evaluation and global progressions in terms of design, technology and innovation. Our strategy is to deliver 7-8 product variants from two platforms, for greater coverage and sizable economies of scale.
Driving our aim to be amongst the top 3 in global commercial vehicles segment, our turnaround plan is to regain market share by focusing on three key pillars — rigorous cost reduction, on-time product launches, intensive stakeholder engagement and smooth supply chain. We will introduce new products and undertake measures to improve performance.
How did Tata Motors prepare to bag the EESL order for electric vehicles amid stiff competition?
We have been continuously pushing the boundaries in the electric mobility space across its passenger and commercial vehicle segment. Our EV journey began three years ago with Manza REEV by our Tata Motors European Technical Centre, based at the University of Warwick, UK. Over the years, led by the technical capabilities, and extensive in-house R&D, we have run several innovation projects and demonstrated EV concepts like Vista, Zest, Bolt and recently, Tiago. The recent government order to deliver 10,000 EVs to EESL is an opportunity to leapfrog into the e-mobility space. We have been working collaboratively to develop an electric powertrain technology for our existing products to make them affordable.
What is your plan for the upcoming Auto Expo?
In our journey towards becoming future ready, we have charted our growth strategy with a full range of integrated mobility solutions. The government is aspiring to build smart cities and we at Tata Motors, with our end-to-end extensive product portfolio, are uniquely positioned to play a critical role in this endeavour. From providing last mile connectivity solutions to BRTS, from personalised transportation to advanced mobility, from green mobility to smart and secure mobility solutions, we have it all.
At Auto Expo 2018, we will showcase 26 smart mobility solutions across passenger and commercial vehicles, which will be brought alive in a specially curated theme across the pavilion. In line with our efforts to support the government’s vision, our pavilion is developed under the theme of ‘Smart Mobility, Smart Cities’ and will give our customers a preview of Tata Motors’ future mobility solutions. Our showcase at this year’s expo will mark the biggest and most grand display by Tata Motors.