2020 has been termed one of the worst years for passenger vehicle manufacturers in India in the last few decades. Multiple lockdowns associated with the Covid-19 pandemic and slowdown in the economy forced many car manufacturers in India to temporarily halt production lines. The situation was so bad in April 2020 that many automakers reported zero monthly domestic sales for the first time in the history of Indian automotive industry.
Tata Motors, a star shining bright amid all the turmoil in the Indian auto industry.
During the period Apr-Sep 2020, Tata Motors was the sole passenger vehicle manufacturer in India to report a growth of 2.63% in sales.
Source: SIAM & ET
Comparison of Market Share (H1)
|Market Share FY20||Market Share FY21|
Source: SIAM & ET
The number of units sold in October was 23,617, the company\’s highest mark since July 2012. In November 2020, the company sold 21,641 units against 10,400 units sold in the previous year\’s corresponding month, recording a growth of 108%.
The impact of this is also visible in the Tata Motors share price, which has almost tripled from its lows of Rs. 63.60 on 24th March 2020 to above Rs. 184 as on the current date.
Tata Motors\’ turnaround can be attributed to multiple factors like strong product portfolio in high volume segments, product-focused branding strategy, high safety ratings, better ownership experience, and an overhaul of its passenger vehicle business. The recent trend of preference for Made-in-India products has only made things better for Tata Motors\’ cars.
Growth in Tata Motors share price (Jul-Dec 20)
But is this momentum in Tata Motors share price here to stay? Will the current turnaround at Tata Motors also reflect in further growth in Tata Motors share price in the coming years?
To understand the answer to this question, let\’s examine the critical triggers behind this growth momentum at Tata Motors.
Launch of Turnaround 2.0
In early 2017, Tata Motors\’ management launched a new initiative named \’Turnaround 2.0\’ to gain additional market share and make the company\’s commercial and passenger vehicle segment self-sustainable and more profitable.
Introduction of Impact 2.0 Design language
In 2018, Tata Motors introduced an advanced version named IMPACT 2.0 of its earlier design architecture codenamed IMPACT according to which the interior of the company\’s passenger vehicles would be influenced by Indian architecture. In the newer models of cars launched by Tata Motors, the company started offering a clutter-free and protruding dashboard screen that is wider and better, with many other features.
New launches and facelifted models of existing cars
Once known for not so aesthetically pleasing workhorses like Sumo and Indica, Tata Motors has been quick to discontinue models with low demand. Cars such as Sumo, Safari, Nano, Indica, Indigo were discontinued after 2016.
Tata Motors not only revamped its existing cars such as Tiago, Tigor, Harrier and Nexon but also launched premium cars such as Altroz and Nexon EV. Value for money packaging with multiple feature-rich variants has helped Tata Motors to offer a wide range of products at multiple price points. For instance, the company\’s latest offering Altroz is available in 22 variants with a price range between Rs. 5,4,000 to 9,09,000 with a price difference of Rs. 20,000-25,000.
Strong focus on safety
A strong push for the safety of cars offered by Tata Motors worked well in favour of the company. To promote its vehicles\’ safety features, Tata Motors launched a series of ad campaigns on multiple platforms.