To take on the competition from Volvo, Mercedes and Navistar in the commercial segment, Tata Motors is working on a new line of very competitive, fuel-efficient vehicles, he told shareholders in what could be his last letter to shareholders as the chairman of the company.
Over the past one year, Tata Motors shares rose 15.6 per cent while the BSE Sensex fell 6.4 per cent.
Cyrus P Mistry succeeds him as chairman of Tata Sons in December 2012.
Here are takeaways from his letter:
On the year gone by: The year has been a mixed bag for Tata Motors. The Company retained its market leadership in commercial vehicles and gained further market strength through the highly successful Ace and Magic – its new line of light pick-up trucks. On the other hand, passenger car sales were below expectations, even though sales of the Nano increased over the previous year.
On competition going forward: In the coming years, Tata Motors’ predominance in commercial vehicles will be challenged by the entry of international brands like Mercedes-Benz, Volvo and Navistar which have all entered, or are in the process of entering India. A new line of very competitive, fuel-efficient vehicles is being developed by Tata Motors to meet the competition head-on.In passenger cars, Tata Motors will face even greater competition from the many automotive brands that are in the country. The Company will need to address the marketplace more effectively with its existing and future products in order to regain the level of market share that it earlier enjoyed.
On Tata Nano: The fundamental economies of the Nano, which was globally acclaimed when it was unveiled in 2008 and which was plagued with start-up roadblocks in the state of West Bengal, will continue to establish itself in the Indian market with a wider sales and service network. The potential market for such an affordable car is enormous throughout the developing world.
On Jaguar-Land Rover: The Company has undertaken its most ambitious product development program in its history, and will be launching several new sports sedans and sports cars in the next two years in order to provide dealers with a more competitive and wider product range. The Company will also be offering cars with new higher-powered, more fuel-efficient engines to meet the customer preferences. Face-lifted and new models of the Range Rover as well as a competitively-priced new line of rugged, lifestyle vehicles under the Land Rover brand are also scheduled to be launched. New manufacturing facilities are being considered in China to better meet market demand for Jaguar and Range Rover in the region.