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Vivek Srivatsa, Head of Marketing, Tata Motors, talks to us about the BS6-compliant Harrier, the impact of coronavirus on production and sales, and what lies ahead for the brand
After a fantastic exhibition of the new lineup of vehicles from Tata Motors at the Auto Expo, Sirish Chandran, editor, evo India, caught up with Vivek Srivatsa, marketing head, Tata Motors, for an insight on the impact of coronavirus on the sales performance of the brand, and the new Harrier. Furthermore, the Ed got some more information about the Safari, Hexa, Altroz and the Nexon. Below is the complete interview.
Sirish Chandran: How has coronavirus hit Tata Motors?
Vivek Srivatsa: Obviously, there has been an impact; we have had a bit of uncertainty in terms of ramping up our volume production. Unfortunately, we have not been fully able to satisfy the kind of demand we got for the Altroz and even the Harrier automatic. Along with the new range of products, the Tiago and Nexon have all received a fantastic response, though we are struggling a bit with the ramp-up in production.
SC: Can you quantify ‘fantastic response’? What is your waiting period like? What numbers are you talking about?
VS: A little bit of uncertainty both in terms of components from China and also the fire at one of our vendor's plants. We are not able to put a finger on an exact strategy on how the ramp-up will take place or even improve. Hence, we are not able to provide data to customers; we are actually playing it week by week to manage the output. We have also taken the support of our dealer network and aligned customers with available trims that can be delivered as we are trying to manage with the stock we can currently produce.
SC: Which trims are under pressure?
VS: Most of the top trims, which for us are the better selling ones, as they require more components they are impacted, for example the sunroof. Our vendor's supplier fire has impacted the Altroz headlamps, which is also an issue.
SC: So what kind of waiting period is somebody looking at if they want to buy an Altroz today?
VS: Some of the trims are available within a week or approximately 10 days. The top trims have a little longer wait times. We are working really hard, especially with the components from Varroc, as we don’t want to discourage our customers. The pipelines are a bit uncertain but we are trying to ramp it up.
SC: Have deliveries started for the 2020 Harrier, as you have announced the prices at the Auto Expo?
VS: Deliveries for the Harrier have started only for the lower trims. We dispatched only the automatic cars in the lower trims (XZA and XMA) in February, and deliveries have begun. But we have a lot of demand for the top trim, which we have dispatched this month. So you will see a lot of sunroof Harriers on the roads. Here are some numbers for the Harrier, more than 70 per cent of the bookings have been for the automatic version and 80 per cent of that is on the top trim. We have some catching up to do this month in terms of meeting demand but I think we will end up satisfying most of our customers bookings for the top-trim sunroof, automatic variants this month.
SC: When the Harrier was launched people asked for three things: more power, an automatic transmission, both of which you have delivered. The last was obviously 4x4; will the Harrier get a 4x4 variant?
VS: 4x4 variants are only for enthusiasts, the market demand for which is less than one per cent. We were one of the few companies that continued to offer 4x4’s on our product line with the Hexa and the Safari, and we still continue our customer engagement events like SOUL that cater to the off-road enthusiasts when we teach them how to drive off-road. Normal customers are paired with experts and we have two- or three-day trips, where it’s only about off-roading. But it still remains extremely niche so right now a 4x4 system for the Harrier is on the backburner.
SC: The price difference for the automatic and the manual is very competitive, how did you manage that?
VS: Two ways, one is obviously we worked a lot on the costing of our components, also it is the features on offer, as we have tried to align it to exactly what the customers want. We increased the prices of the Harrier through the year, which helped soften the BS6 price increase as well. So it’s a combination of all these three and obviously we have launched the Harrier at very attractive prices, but we have moved it upwards over the last one year.
SC: How much impact on the Harrier’s cost has the BS6 update been in terms of components costs in the engine?
VS: I won’t be able to give you precise numbers, but these are industry norms which we have to follow now. I can’t share the material cost numbers but it is fairly standard the engine we used for the Harrier is used by other manufacturers as well so it is a fairly standard increase.
SC: Will the Harrier get a petrol engine?
VS: Right now no comments on that. There were three big components of the SUV market, in terms of cashment area of customers, manual and automatic petrol. We have covered two of them very strongly now. We will have to study the market and see at the same time we have tried to tackle the other two demands of the SUV market that are an automatic and a manual transmission, but for a petrol engine we have to wait and see as there was demand for petrol-engined SUVs but we also got to hear about the horror stories about fuel efficiency of petrols or turbo petrols in large SUVs. So we will wait and watch and if demand is there, we will offer one.
SC: Who do you identify as the competitors for the Harrier?
VS: When we launched there was no competitor, as it sat in a sweet spot between the 4.3m SUVs and the larger ones. Today we have MG as the most real like-to-like competition, as the other SUVs from Kia or other manufacturers are either bigger or smaller than the Harrier.
SC: When does the Gravitas come in?
VS: As we said at Auto Expo it was supposed to be a mid-year launch for the Gravitas. But with all the uncertainties of Coronavirus, it’s a bit uncertain. We have to see how the market develops and also work with the vendors and suppliers to see if they are ready to shape up, on the basis of which we will take a call. Our priority is to stabilise Harrier production and align with the vendors on a continuous supply, which itself remains to be a challenge right now.
SC: Once everything settles down, whenever that is, what numbers are you looking at with the Harrier?
VS: We want to really recover on lost opportunities. I think with the absence of the automatic, we’ve left a big part of the segment open. You will see tomorrow that the product has moved up much more in terms of how refined it was or how complete it was, and we just want to catch up all the lost opportunity. We can’t put numbers on the table, but we are confident that we will claw back good market share.
SC: Are the Hexa and Safari available right now?
VS: Only BS4 variants of the Hexa and Safari are available, and come April 1, they no longer will be on sale. We showcased a Hexa BS6 concept at the Auto Expo, so it’s on our radar, but again no comments on when it is likely to come out, due to the coronavirus uncertainty.
SC: What about the rest of the range?
VS: We have a much sharper and more focused range now starting with the Tiago, Tigor, Nexon, and Altroz and then we have the Harrier.
SC: What has the response been for the Nexon EV?
VS: From a company’s perspective the response has been very good. Unfortunately I’m not allowed to talk about the EV. But we have been facing similar problems due to coronavirus issues for the battery and some other components which are from China, so we have had trouble in ramping up. But responses from customers visiting our showrooms have been extremely positive in terms of customer profile spread across all age groups. Earlier, only doctors came to buy EVs, but now we have seen all kind of customers, eye opening in fact. Only thing I can say is future of EVs is very strong.
SC: You announced the Harrier’s extended warranty package for Rs 25,690. Why not offer the extended warranty as standard for the Harrier as for a car that costs this much?
VS: You are right; we’ll have to absorb the cost within the pricing. We have seen that customers are not very keen on it, so we just wanted to leave it to the customer and give them the choice and be very transparent about the cost as well.
SC: In terms of the feedback you’ve got from customers for the Harrier, what is it they actually like?
VS: They clearly like the robust appeal the Harrier has. The number one response we get is that people feel safer. The second response we get is that people keep appreciating the looks, which you know very well, being a fan of Pratap’s Impact 2.0 design, which has really hit home for the Harrier and the eyes they garner. The overall robust and confident feel along with the ride and handling is what customers love.
SC: Finally have the wing mirrors been redesigned?
VS: Yes they have been redesigned. As you saw, they’re much more aerodynamic and also improve visibility from the inside. So that was our feedback and we worked on it.