Mahindra becomes the third largest car manufacturer in India as far as car sales for the first quarter of this financial year is concerned. In doing so, Mahindra has pushed over Tata Motors, the makers of Nano – the world’s cheapest car and the owners of British luxury brand Jaguar Land Rover. Tata Motors has failed to match the pace of their competitors.
If one remembers, Tata Motors was the second largest car manufacturer in India after Maruti Suzuki until 2005. In 2005, riding on the small car wave, South Korean car maker, Hyundai replaced Tata Motors as the second largest car maker in the country. Seven years later, Tata Motors has once again been pushed over, this time by a manufacturer who excels in selling SUV’s in India.
It’s not that Tata Motors did not have a chance to compete. They had their chance, which they spent in making Sumo, Safari and Nano, but unluckily, none of these offerings made an impact on buyers in growing auto market which was seeing the launch of new vehicles faster than ever.
Coming back to their plight today, Tata Motors still have a chance to get their No 3 position back from Mahindra. But considering the demand for Mahindra vehicles today, it seems rather difficult for Tata. In April to June period this year, Mahindra sold 61,504 vehicles while Tata Motors sold 60,405 units. If Mahindra is able to maintain their production, they have a chance to remain over Tata Motors by the end of this year as well.
Deepesh Rathore, MD, IHS Automotive, said, “For a large percentage of car buyers, Tata Motors is no longer an option. The company is selling products that do not meet the expectations of buyers. A large chunk of sales for Tata Motors comes from taxis, which is limited in volumes and is cyclical in nature.”
The launch of XUV500 has changed M&M’s fortunes. Not only their new SUV is popular in India, but they are also launching it in newer markets abroad. Pravin Shah, Chief Executive of M&M’s Automotive Division, said, “We are happy to have achieved a growth of 23% in the first quarter, given the pressures and various uncertainties , which the auto industry is currently facing. We expect the demand for utility vehicles to continue during the current financial year.”