Tata Motors sets ball rolling to realign global operations

Tags: News

Firm to exit low penetration markets to better utilise resources

Tata Motors plans to overhaul its global presence to focus on countries where it either has a meaningful market share or strong prospects for building such a position while retracting from others in a bid to more effectively channel its resources.

“We don’t want to throw our seeds across the world and see where flowers start to grow. Instead, we will see where the soil is such that our seeds will grow. We will not be in countries where we have a one per cent market share. Instead we will evaluate international markets from the perspective of those, which will suit our present and future range of products and where we can get decent volumes,” Karl Slym, managing director of Tata Motors told Financial Chronicle. Tata Motors commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, West Asia, Southeast Asia, South Asia, Commonwealth of Independent States (CIS), Russia and South America.

The company that started exports in 1961 has manufacturing operations in South Korea, Thailand and Spain and assembly facilities in South Africa, and Thailand. Through its Jaguar Land Rover unit it also has a manufacturing presence in the UK.

There are many countries, however, where it has a token presence and needs to support its customers with after-sale services and spares. Given low sales, such markets tend to become a distraction for top management. On the other hand, its new range of Prima trucks are suitable even for left-hand-drive markets so it’s now in a position to enter far more markets than in the past. “The Prima range of trucks not only helps us in the international market, but also helps us look at ourselves from an international perspective. We can proudly say that we make trucks for bad quality roads in India as well as those that meet all international expectations, ” he said.

Slym plans to ensure that each of the global markets the company operates in are profitable. In markets such as Indonesia where it already has a presence and acceptance of its products Tata Motors is looking to redouble its bets and may even look at a assembly operation that starts with completely knocked down kits and depending on success progresses to manufacturing in country with a partner.

ypitalwalla@mydigitalfc.com

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