New Delhi: There’s something about comebacks that catch the imagination of everyone. Everyone admires Steve Jobs, who made Apple the most valuable brand it is today. After being rehired to lead the company he founded, he dared to do things differently, and succeeded in turning Apple into an aspirational brand.
Every business faces a host of threats and challenges they need to overcome, what matters is how the people behind the brand do so.
In India, Tata Motors has seen a see-saw in its fortunes, and has shown remarkable resilience even as newer technologies disrupt existing technologies. It started by manufacturing commercial vehicles in partnership with Daimler in the 1940s and was largely a commercial vehicles manufacturer for quite some time.
In 1998, Tata Motors achieved a significant technological milestone by launching India’s first Made-In-India car, the Tata Indica. Designed and developed locally, the Indica had a lukewarm response eventually, and was a favoured model for taxis across the country.
Sales of the Indica weren’t good, and Ratan Tata even approached Ford Motors to sell the company. When they refused, the Tata’s worked hard to turn their fortunes over, even as Maruti Suzuki and others continued to dominate the market.
By 2016, their market share dropped to 4.6% and most market analysts predicted they would remain in the fringes of the market.
During this difficult time, the Tata’s appointed Guenter Butschek, a German leader who had previously led Daimler and Airbus. He knew turning around Tata Motors was never going to be easy, but he used his extensive experience, deep understanding of the car market and belief in the company to move ahead.
By 2017, the domestic business posted a profit and there’s no going back since.
The secret to their success?
The Tatas overhauled their operations. They set achievable targets and worked hard to meet them. The first was to achieve EBITDA breakeven, which was met by September 2018. They did away with unnecessary features and procedures, boosting its agility and reducing needless delays.
They discontinued their underperforming Zest and Bolt hatchbacks to come up with a redesigned product that looked sexy, performed better than expected and offered a unique status symbol at an affordable price.
The Nexon and Tiago were superbly well received, and was the first leg in their remarkable turnaround. To further boost profitability and reduce costs, they made more than 300 changes in the Nexon without anyone noticing. They listened to everyone involved in the process, from designers to even welders from the shop floor.
The results showed. From its ebb of about 1,50,00 units sold in 2016, Tata Motors has sold more than 5,60,000 cars in 2024, leapfrogging everyone, including Maruti Suzuki to become India’s biggest car maker.
The company understood the market dynamics clearly, as most GenZ customers now prefer a big, masculine, sexy SUV over regular passenger cars. Of the top 5 selling cars, 3 are from Tata’s stable. Not only that, Tata makes more money out of every car it sells than any other carmaker in the country.
With demand slowing, incomes stagnating and aspirational purchases postponed, the Tata has a far better chance of weathering the storm than its peers.
With EV cars now gaining more market share than its ICE counterparts, the fact that Tata has cornered three fourths of the EV market is the cherry on the cake.
Now that Tata has become the market leader, how Maruti and Hyundai respond to their lost market share remain to be seen.
