EVs & CNG: Focus of Tata’s 2030 strategy

Tata Motors recently unveiled the latest versions of popular sports utility vehicles Safari and Harrier. Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, talks to Vijay C Roy on the company’s plans and emerging trends

What has been the thought process behind the launch of the new versions of Safari and Harrier?

Safari, if you remember, pioneered the entry of SUVs into India in 1998. It became an aspirational vehicle with its imposing look, performance and top-of-the-line features. It was a dream car for many. For us, it was important to keep this mind while taking the redesign project forward in the changing times.

Harrier, on the other hand, was a trendsetter when we launched it in 2019. This was the beginning of the Land Rover D8 platform. With its appealing look, modern styling and interiors which were very different, it become an instant hit. Like Safari, which is for successful people, this is for young achievers.

We felt the upgrades of Harrier and Safari should redefine what the segment should be. There were multiple things that we changed, like technology, comfort and safety. The whole lighting technology or the infotainment system, it’s not that you see today. For example, you use certain phones in 2023 but in cars, you see screens which are like 2015 tablets. So, we said, why should there be any difference? In the new models, you will see modernity in technology, connected features and audio which is top notch.

On the comfort side, two passengers have two different requirements of temperature. We have given dual zones that enable two people to set their own temperature. When it comes to safety, we have redefined it. Earlier, the focus was on improving structural safety. If an accident takes place, the occupant is safe. Structural safety is a big thing but so is active safety, which can prevent an accident. Hence, these are equipped with ADAS (Advanced Driver Assistance System). A combination of both these has led to 5-star rating being given to both these SUVs, the highest ever score that any car in India has got for adult and child safety.

Despite the shrinking demand for diesel cars, you have launched diesel variants of Safari and Harrier. Any reason? Are you planning to bring the petrol version?

Diesel vehicles account for nearly 80 per cent of the sales in the high-end SUV segment. So, we focused on diesel (SUVs) because it offers good torque performance and high fuel efficiency. We have plans to bring the petrol version. It may take more than a year.

What is the total market size for high-end SUVs?

The total sales of high-end SUVs were 1,78,232 units in 2022-23 compared to 1,42,707 units in 2021-22. It’s growing fast and will even grow faster.

Imagine the hatchback customer base especially in 2015. This segment was the biggest that time. In 2020, the customers upgraded and opted for a compact SUV. The segment which was 30,000 units earlier has grown to 90,000-95,000 per month. Now what will happen? This segment is going to upgrade to mid-SUVs. Then eventually these people will upgrade to higher SUVs; thus, a wave has started.

Also, the prices of medium cars have risen in recent past. In four-five years, a medium car which used to cost Rs 5-6 lakh is today priced at Rs 10-12 lakh. The vehicle priced around Rs 15 lakh will achieve higher growth.

What percentage of your total sales comes from the SUV segment?

The contribution of SUVs in our total sales is 65-66 per cent.

You are focusing on electric vehicles, being the market leader, but at the same time you are putting a lot of thrust on CNG vehicles.

First, you should know the context why we are doing that. We see that in 2030, there will be a major shift. Today, the CNG segment is roughly 10-12 per cent of the total passenger vehicle market, electric will be about 2 per cent, 15 per cent will be diesel, and the rest would be petrol. If I have to imagine 2030, I think 25 per cent plus or 25-30 per cent will be CNG, electric should be around 30 per cent, diesel will come down significantly. It will be sub 5 per cent and the rest would be flex fuel and petrol. This is the shift; therefore, we are preparing ourselves for the 2030 situation. That’s why we are bringing new innovations in CNG. The twin-cylinder technology in our cars is a novel concept. People don’t get boot space. Now, we have boot space coming with these CNG models. It has been very well received in the market. We will keep upping the game on the CNG side.

On the electric side, this is the eventual technology which is going to be there. We will come up with 10 products in the next three to four years. Already we have four products in the market: Tiago, Tigor, Nexon and a fleet car. Six to seven more models would come in four years or so. We are also working on the range side and hopefully, our upcoming electric cars/SUVs will come with a higher range — upwards of 500 km — in order to address the range concerns of buyers and also pave the way for hassle-free inter-city travel.

You are at number three in terms of sales, and Hyundai Motor India is at number two. With the new launches, do you think Tata Motors would be able to overtake Hyundai?

I am not worried about that. My worry is that I have fewer products. I don’t have the same portfolio size that somebody has. For me, it is important that whichever segment I am present in, in that respective segment, I am in the top three. So, Tiago is in top three, Tigor will be three or four right now, Nexon is number one, Punch is number one, the Harrier and Safari combo is number two in its segment.

I am focusing on how I can be in the top three, mostly top two. The gap that has increased with our closest rival (in terms of sales) is because we have launched a new vehicle. Also, in the last quarter, we deliberately reduced our volumes of Nexon, Harrier and Safari because of the switchover. Now since we are transitioning into the new one, I will have to clean up the inventory of the old ones and then do a smooth switch to the new models. It’s a matter of timing.

Do you have the requisite capacity to meet the demand?

We are fully ready. We have prepared for 50,000-plus capacity per month. Currently, we are selling on an average 47,000-48,000 units per month. Our Sanand facility, which was acquired from Ford, is likely to be operational by next year. The capacity at Sanand is 3 lakh, which can be expanded to 4.2 lakh units per annum. At the moment, there is no chip shortage. On an average, the waiting period for delivery varies from four to six weeks depending on the model. For new launches, it would be more because of the high demand.