Interview: Mayank Pareek on the Tata Nexon and Tata Motors strategy

Mayank Pareek, Head- Passenger Vehicles Business Unit, Tata Motors speaks to OVERDRIVE about the new Tata Nexon and the company's strategy. This is what he had to say.

You have priced the Tata Nexon quite aggressively. What kind of numbers are you expecting?

Mayank Pareek (MP): This car is a very special car for us. The price is only one aspect. This car is very distinctly designed car. It has big road presence, a lot of power and 270Nm of torque which is unprecedented in the compact SUV space.  This car has a wonderful infotainment system and a lot more, I could go on. It's also for the first time that the entry level variant has dual airbags and ABS as standard. So, there is no compromise on safety. And of course it is aggressively priced to make it attractive for the customer. As far as numbers are concerned, let's see this from another point. The compact SUV space is the fastest growing segment today. And accounts for 10-12 per cent of the market. We think that we'll play an important role in that segment.

Any percentage or ball park that you are aiming?

MP: Very often, these numbers become limiting so we don't put any number on that.

You've always spoken about covering more segments in the market. Where do you stand right now and with the Nexon launch now, how 's the journey going ahead for Tata Motors passenger vehicles to become the number three car maker?

MP: Before the Nexon we were only present in 59 per cent of the market. With the Nexon we go to, let say, 70 per cent of the market. What it offers is an opportunity to serve an additional 10 percent of the customers. It is a well crafted strategy. If you look back to April 6, 2016, we launched the Tata Tiago and it was not only a car but a new design language, the Impact design. So Tiago, Tigor and Nexon, follow the design philosophy of Impact, which essentially means that even if you see the car from 100 metres, it should be recognisable as a Tata.

So, I think, we can  continue with this philosophy and customers have endorsed this by their vote of confidence.

Speaking about the aim to become the number 3 car maker, when are we going to expect that to happen?

MP:  No. 3 is slightly overblown and I don't care about it. What I care about is that any customer who wants to drive, should consider our car. Typically, anybody looking to buy a car, on an average, evaluates 2.6 cars.  Our vision is that one of those 2.6 cars should be a Tata car. After that, we are confident that our products are so good that you'll end up buying one.

How is the festive season looking like? You have the Tiago, Tigor, Nexon and Hexa?

MP: We expect it to be a great festive season. Even this year, in the first five months, despite GST impact and the fact that the industry has grown by 8 percent, we've grown by 11 per cent, which is not bad. But the fact remains that a lot of people postponed their decision because of the GST confusion. After that the cess thing happened. Now the dust has settled and everyone knows. India buys during the festive season. Onam in South India gave us good traction. Then there was the Ganapati festival in the west which was good for us, and earlier indications suggest that this is going to be a blockbuster season.

Any growth figures you have in mind?

MP: I think double digit growth should be possible.

Speaking about the AMP platform, what's the product pipeline on that platform? When can we expect to see an AMP product coming in? How many current products will move to the AMP platform?

MP: Our plan is that by 2020 we'll cover 95 per cent of the market with our products. We plan to do that by launching the AMP platform. The key to it is that we can make a small hatch or a big sedan. It gives you the advantage of a common platform and offer multiple products while being cost effective.

We have another platform that's based on the JLR platform which will underpin our future SUVs.

Will we see a premium Tata showrooms? Or will you have different showrooms for different cars?

MP: We will see premium showrooms in the future, but also very importantly we'll see digitisation of showrooms. We are working on a virtual showroom concept, using advanced augment reality and virtual reality to create a superlative experience. We will create showrooms where customers come in naturally, like malls or cricket stadiums. Asset like showrooms is the future.

Do you think that with the GST cess moving up, there'll be any impact on the industry when it comes ?

MP: I have been in this business for quite some time and I've seen a lot of taxes going up and down. It's a given. In a cricketing language, that's the pitch on which you play. So the option is either you complain about the pitch or prepare for it. I believe in preparing for the pitch. What happens in this type of changes is that there's confusion initially. But once the dust settles, the situation it improves.

As an automaker I have to say that taxes should be low. But I think the Government of India, in their wisdom decides these types of taxes.

 Do you see this difference in decisions as a hindrance in attracting investments?

MP: I think more clarity is always good. Taxes are the Government's prerogative. I think lower taxes is always good but the Government has to allocate resources, keeping the larger perspective in mind.

What are the challenges for EVs?

MP: As a company we welcome the EV push. The larger cause of making the environment better, reducing the dependence of fossil fuels is good. We as Tata Motors are not unknown to electric vehicles. We've been showcasing electric car concepts as early as 2010. We put 50 vehicles in the UK market to understand an EV customer. We got a wealth of data and we'll prepare. Yes, the ecosystem associated is very critical but I think the Government is planning for it.

This interview was conducted by Utkarsh Dev, assistant producer at CNBC-TV18, at the launch of the Tata Nexon in Mumbai