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Breaking the cage of perception of tafeta motors in india 59

Breaking the cage of perception of Tafeta Motors in India 59

DYPIET-National Journal on Recent Trends in Engineering, Technology & Management”,VOLUME II”,

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ISSUE I”,Dec-2014

Dr. Rajendra Jarad

Professor, MBA Dept.

Dr. D. Y. Patil Institute of Technology, Pimpri, Pune

rajendra.jarad@dypvp.edu.in

Introduction:

1.1 The Indian Car Industry:

The Indian car market today can be regarded as

highly competitive one especially in the small car

segment with several players operating in the market.

Some of the players are (as per their market share”,

2017):

1. Maruti Suzuki

2. Tata Motors

3. Honda Motors

4. Toyota Motors

5. Renault

6. Ford Motors

7.Volkswagen

8. Mahindra & Mahindra

9. General Motors

10. Hyundai Motors

The market for automobile today is exhibiting strong

growth rate. According to society of Indian

Automobile manufacturers’, trends in automobile

industry is given in table no. 1 and fig. no. 1.

1.2 Tafeta Motors:

TafetaMotors Limited is an Indian Global

automotive manufacturing conglomerate and a

member of a big, prestigious business group of India.

Its products include passenger cars, commercial

vehiclesof all types, coaches, buses and military

vehicles Tafeta Motorshas auto manufacturing and

assembly plants Maharashtra, Gujrat, and otherfour

states of India, as well as in Germany, Africa, Great

Britain and Malaysia. It has research and

development centres at four different locations in

India. They also have R&D centres in South Korea”,

Great Britain and Spain to study and benchmark best

quality in world.

Tafeta Motors’major subsidiaries purchased the

English premium globally recognised car maker (the

maker of luxurious and super premium brands”,

known in the world for its quality). Tafeta Motors

has a bus-manufacturing joint venture with global

player. It has joined its hands with global automotive

for different types of vehicles of global standards.

Founded in independence as a manufacturer of trains”,

the company produced its first commercial vehicle

in early 50s. The Journey of excellence in

commercial vehicles started from there. Tafeta

Motorsentered the passenger vehicle market in

1990swhich became popular within short span of

time and was liked for its “tough, sturdy” looks”,

becoming the Indian manufacturer to accomplish the

competency of developing a domestic competitive

car. Tafeta Motors launched the passenger car which

was fully ‘India made’ in late 90sand in 2006 it also

launched the Tafeno, cheap which could be afforded

by common car.

Tafeta Operations included 74combined subsidiaries”,

3 joint operations, 2partnerships and 20 equity

method affiliates. The company had approximately

74″,000 permanent employees, including

approximately 44″,000 permanent employees at

various locations under its umbrella.

Products offered by Tafeta Motors under passenger

car segment :

Small cars -2 Models, 12 variants (Price Range –

Rs.2″,60″,000 -5″,50″,000)”,

Hatchback cars – 3 Models, 11 Variants (Price Range

–Rs. 3″,40″,000 -5″,70″,000)”,

Sedans – 3 Models, 10 variants (Price Range Rs.

5″,00″,100–Rs. 7″,80″,080)”,

SUV – 4 Models”,16 variants (Price Range –Rs.

7″,50″,000 – Rs.18″,00″,000)

Their Indian portfolio has everything they can offer”,

small cars, hatchbacks, sedans, SUVs operating on

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petrol, diesel, CNG, electric and hybrid vehicles.

2. System Overview –

Pride among employees is to be amplified:

Tafeta Chairman Emeritus Aman Tararequested

employees of Tafeta Motors to plan on becoming

leaders of industry again, saying it hurt him when the

company lost market share in the last 5-6 years and

mailto:rajendra.jarad@dypvp.edu.in1″,%20dolevikas@nevillewadia.com2

Breaking the cage of perception of Tafeta Motors in India 60

DYPIET-National Journal on Recent Trends in Engineering, Technology & Management”,VOLUME II”,

ISSUE I”,Dec-2014

the nationseen at it as a ‘failing company’. Tara, who

addressed the annual get-together of employees after

a gap of almost six years, said that under the

leadership of Chairman M.Chandramaran and MD B.

Guthek, Tafeta Motors will continue to build in the

future. Mr.Aman Tara said, “I was proud to belong to

Tafeta Motors because everything that we undertook

to do, we made best try to achieve that dream, be it

any product, our entry in car market, new ideas, new

systems”

In 2016-17 Tafeta Motors’ standalone gross

revenues was at Rs50″,000 Cr., up 4 per cent from

the previous year but the loss after tax, on a

standalone basis, was Rs3000Cr. compared to Rs

62 crore in 2015-16. Furthermore, company’s

commercial vehicles had lost share in the domestic

market, hurting its image as commercial vehicle

giant on the world map. The managers say it not

because the vehicles are inferior to competitions

one, but it is because of the complacency of sales

teams. The approach of company employees is

sluggish in responding to customers. In the

passenger vehicles business, it struggled to keep

pace with competitors. When most of the global

automakers are feeling India is booming market”,

full of opportunities, Tafeta Motors is losing its

market share consistently.

However, in 2017-18, the company has been able to

improve its sales significantly. Its cumulative

domestic sales of commercial and passenger

vehicles segments for FY18 were 5″,80″,000 units

compared to 4″,75″,000 unitsin FY17, a growth of 19

per cent.

“In all the years that I was here, I really believed

that this company had tremendous spirit and

tremendous capabilities.” Tara said. He said “We

should plan on doing that again. We should plan on

being leaders and not followers. And we should get

back the spirit that we had.”

The biggest challenge for Tafeta Motors from

marketing perspectives is according to CEO & MD

ofTafeta Motors, B. Guthek, former COO of a

global company, is to make the brand positioning

more consistent. With a wide portfolio of products

65, the brand attributes are interpreted differently

across different products. The priority is to change

present brand perception and making it consistent

across portfolio.

According to him other issues hurting are the poor

quality perception of its passenger cars as well as

unreliable service quality of its dealer network.

He quoted in one of the interviews : “We are not

going to reinvent the brand but refine it to

reflect the full scope of our activities.”

From the marketing perspective, the problems are

multiple. Prime one perception of the people

towards the cars offered by the company is poor”,

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second the advertisers attract footsteps at

dealerships after launching of new models, buzz is

created, but initial buzz is not continued in

subsequent weeks, post-sales service experience is

not satisfactory and exiting as compared to peers. It

is considered as “Indian brand” and people consider

imported and foreign brands vehicles superior to

Indian. The company provides best products which

are technically sound, competitive in terms of

pricing, having pan India reach, spending lot of

adverting and promotion, sales are not satisfactory”,

dropping year after year.

2.1The TAFEMO Concept

‘TAFEMO’, a sub-brand has been launched by

Tafeta which will be focal point for the company

for future technologies It is not like Nexa of

Suzuki, which is different distribution channel for

‘special and premium’ cars. But TAFEMO will

different sub-brand of Tafeta responsible for

developing future cars and respond to market needs

at faster pace. The vehicle sold through the present

distribution network of dealers of the company.

TAFEMO launched its first vehicle ahead of the

International Motor Show in 2017. The car

launched in the show was not hatchback, not even a

sedan but sportscar. The sports car launched has

powerful engine required for sports car and made

out of light and advanced material.

TAFEMO will operate as a different vertical of the

company. TAFEMO will follow model which will

be based on low investment, faster technology

development and testing, but ready for low volume

of sales. As a result, it will be possible for

TAFEMO to turn concept vehicles into production

models at a faster rate and lower cost. As the

customer want trendy cars at lower cost, it is vital

need for every carmaker today. If Tafeta Motors

wants to attain a dominant position across various

vehicular segments, it has to understand customer”,

their perceptions, enhance technology to match or

exceed people expectations.

Breaking the cage of perception of Tafeta Motors in India 61

DYPIET-National Journal on Recent Trends in Engineering, Technology & Management”,VOLUME II”,

ISSUE I”,Dec-2014

TAFEMO will use two platforms to manufacture all

types of cars, instead of six platforms used now.

Out of these newly adopted platforms one is

Advanced Modular Platform, which will have the

capability to manufacture vehicles ranging from a

small hatchback, a luxurious sedanto a sports car.

The “modularity” of a platform is a key, which

gives freedom to a car maker to manufacture a car

of dissimilar length, wheelbase and height, while

retaining the central framework. The use of similar

parts in all types of cars means lower cost of

supplies because of standardisation and the

company can bargain further to have economies of

scale.

In coming years, as customers’ demand for

connectivity and technological convergence is

going up, companies like Google and Apple will

continue to drive innovation in the automobile

sector. To have an open platform approach will

make it easy for TAFEMO to listen to such kind

companies and incorporate solutions in their

products quickly.

In the past it has been seen that theearlier launched

small and cheap car in spite of being a

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technologically sound product, failed to lure

consumers as the brand perception was severely

negative because of wrong positioning of the

product. Recently launched products are doing

well; catching attention of the people but any

longer now the company can afford a frill of a flop

product. TAFEMO hence, will have to ensure

development of new cars will create disruption. To

stay ahead of technology curve, the company needs

to come up with innovations and new thinking, as

something novel, not expected can disrupt the

present brand perception.

As the market is evolving and changing faster”,

every few months the product life cycles of

vehicles are decreasing at anfast-tracked rate. Pace

to market should be high, frequent at lower cost is

required to increase market share. The important

parameters deciding brand perception are quality”,

design, style, safety, technology / innovation, fuel

economy, performance, value. The company needs

to showcase above things to customers in the

communication.

3. Case Study:

Customer Perception:

A survey of customers was conducted to study

brand perception of Tafeta Motors. Some of the

responses are enlisted as below :

 Customer perceives Tata cars as noisy vehicle.

 Manoeuvring is difficult.

 Low resale value.

 Young girls and ladies are not considered as an

important segment.

 Not having pride in owning a car.

 Perceived as heavy commercial vehicle

manufacturing company.

 Cars are not aesthetically appealing.

 When designing a car, they do not the car

aerodynamically sound as well as attractive, as a

result, most of their cars end-up in a taxi-driver’s

garage and have that golden shiny number plate. (

used by fleet owners like Ola, Uber)

 Cost effective cars

 Value for Money

 Low quality and prone to breakdowns.

3.1 Appendices

Cate

gory

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

Pass

enge

r

Vehi

cles

26″,6

5″,01

5

25″,0

3″,50

9

26″,0

1″,23

6

27″,8

9″,20

8

30″,4

7″,58

2

32″,8

7″,96

5

Table No.1 :Indian Passenger Car Industry

Statistics

https://www.financialexpress.com/tag/google/

Breaking the cage of perception of Tafeta Motors in India 62

DYPIET-National Journal on Recent Trends in Engineering, Technology & Management”,VOLUME II”,

ISSUE I”,Dec-2014

Fig. No. 1 : Market Share of Indian Passenger Car

Industry

4.Conclusion :

Tafeta Motors surely deserves credit for having the

mettle to dream, visualize and to implement. Not all

carmaker have the courage to execute their dreams

with such kind investments. Be it small car, cheap”,

their SUVs sports car, electric car

Tafeta Motors has been trying to undertake a brand

transformation and getting rid of the quality

perceptions for a long. They are trying to bring

connectivity, safety and design to attract young

people. They are bringing international sport stars

to showcase contemporariness, trendiness. They are

trying for better experience at showrooms”,

improving their online presence. In a market as

ruthless as India, where customer looks for and are

crazy for “Imported” or “Foreign” brands and

technology, the way ahead is not very easy.

References:

http://siamindia.com/statistics.aspx?mpgid=8&pgid

trail=14

http://siamindia.com/statistics.aspx?mpgid=8&pgidtrail=14

http://siamindia.com/statistics.aspx?mpgid=8&pgidtrail=14

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