India (Part 3): Tata rebuilding passenger car business

Mahindra launching compact SUVs, building full lineup of commercial vehicles



The new Tata hatchback, which it is hoped will trigger the rebuilding of Tata's passenger car business (Courtesy of Tata)

 This report focuses on the latest trends of the local OEMs Tata Motors Limited (Tata) and Mahindra & Mahindra Limited (M&M).

 Tata's unit sales in India decreased from 845,000 fiscal year (FY) 2011/12 (April 2011-March 2012), to 452,000 in FY2014/15. Sales of the company's passenger vehicles decreased over 50%. While it has maintained its top spot for commercial vehicles (CVs), the company's market share has declined by almost 40%.

 As Tata works to keep its lead in CV sales, it is seeking to radically strengthen its passenger-car business based on the Horizonext strategy. In February 2016, Tata is launching a new compact hatchback that is ostensibly the most important passenger car ever for the company.

 M&M is the market leader for Utility Vehicles (UVs), but its share is dropping due to rival models entering the market. In order to strengthen its competitiveness, the company launched three SUV models during FY2015/16. The KUV100, M&M's first gasoline-powered SUV, is particularly expected to create a new class of customers for the company.

 M&M overtook Tata to become the leader of the light commercial vehicle (LCV) sector in April-December 2015. Moreover, in August 2015 M&M announced that it is developing CVs in the GVW 9-16t class, which had been missing from its lineup, and that within two-years it will expand to a full lineup that includes GVW 3.5 - 49 ton CVs.

(Note: USD figures are based on INR 1=USD 0.015)

(Additional note: The new Tata compact hatchback was to be called the Zica, but the company has announced that the name will be changed.)

Related Reports:
India (Part 1): Auto industry envisions quadrupling in next ten years (January 2016)
India (part 2): Suzuki builds new plant and set up premium car sales channel (January 2016)