Present in multiple cities, Concorde showrooms, service and sales outlets are a fully owned subsidiary of Tata Motors
Tata Motors is officially shutting down Concorde Motors – as part of the brand’s strategy to shift focus from non-core operations. Concorde Motors, even though being the most sought-after Tata dealership for years, has been losing money due to high input costs and low sales volume. In fact, the company registered a cumulative loss of over Rs 366 crore in a period of seven years.
Concorde Motors will be entirely wound up by the end of this fiscal. Tata’s fully-owned subsidiary has already lost a fair share of outlets in prime locations. At its best times, Concorde Motors had 34 showrooms, 17 workshops and a workforce of more than 2,200 employees. One person in the know stated that this was caused by the inefficiencies of a corporate working environment. Unlike entrepreneurship or start-ups, decision-making processes in a corporate have to follow a stipulated path, which may add costs and other issues that affect business.
Economic Times was told that the initial goal of forming Concorde Motors — to establish a strong network for sales, service and repair — has been met already. To open doors to the next phase of business development, Tata Motors will step away from dealerships and focus entirely on core areas. With multiple products coming in the near future, the decision makes sense.
Meanwhile, the operations of Concorde Motors will be “seamlessly transitioned into other dealer partners” across the country; especially in the cities where Concorde is already present. In other words, Tata Motors customers will not be affected by this move and existing services will be uninterrupted.
The end of Concorde Motors could prove beneficial to various other Tata Motors authorised dealerships. Even though Concorde has been struggling, one less dealership network gives others a larger chunk of the overall market. In addition to this, the closure will not affect the revenue of Tata Motors since it can still depend on the other dealership groups and garner the same or higher amount of sales in the months to come.
While Tata Motors is moving away from dealership business, Maruti Suzuki has made the decision to invest over Rs 1,500 crore annually to obtain its own real estate for dealerships. Since the cost of urban land is becoming ridiculously high with time, many have backed off from investing in new Maruti Suzuki dealership networks. If Maruti Suzuki itself provides the space for business (at a cost, of course), this won’t be much of a problem.