We will change customer mindset on EVs: Tata Motors CEO Guenter Butschek

Market leader Maruti on Day 1 of the AutoExpo 2020 made it clear it doesn’t believe in the feasibility of electric vehicles (EVs) for the India market just yet. On Day 2, however, Tata Motors Managing Director and Chief Executive Officer GUENTER BUTSCHEK in conversation with Arindam Majumder said there is a difference between his company and the market leader. Edited excerpts:

Auto shows are losing sheen globally. Companies find it lucrative to do their own launches. But you have a grand stand here. What drove that?

The global discussion is motivated by different considerations — budget and the impact on consumers that it can’t attract enough eyeballs compared to the investment made. Does it actually fit in today’s context where customers expect solutions?

I think there are reasons why companies kept away from this edition of the AutoExpo — the underlying industry slowdown and a sluggish economic environment. We, too, had a similar dialogue: Should we participate or not?

India is our home market. As an industry, it is our duty to simulate the market. The expo is a perfect forum for that. Our pavilion caters to both the product and the solution, with greater emphasis on electrification.

When the slowdown started, we thought it to be cyclic; that it wouldn’t last long. It has been 18 months since. It largely stemmed from subdued economic activity. The stimulus needs to come from the government. The Centre did take steps — starting from infrastructure booster shot to steps in the recent Budget to drive economic revival.

Do you think these steps are sufficient to trigger demand?

I am not the right person to make a judgement. The government has its constraints. I think the government did a fine job strike the right balance between the wish list and the constraints.

The steps announced in the Budget will not yield results overnight. We are in the midst of a major transition from Bharat Stage (BS)-IV to BS-VI. By April 1, a big confusion which held back customers will get cleared.

Market leader Maruti has said that it will go slow on EVs as there is no customer appetite. You have taken a contrasting stand. Is there a different perspective that you are seeing the market EV with?

I think there is a difference between Maruti and us. This player always thinks about how to meet a certain price point to stay relevant to his customer base, which is largely budget-driven. Ours is different: We think we need EVs to drive investment in the ecosystem which will finally determine the speed of adoption to electrification. That’s why we are different as a group.

Does the Indian customer think about a clean planet or the price?

I can take the customer thinking for granted or I can embark on a journey to change the customer thinking.

You are one of the prime cogs in the wheel of Tata Sons Group. But currently, you are having a rough ride. The promoter group is having to invest cash. 

When do you think you can give it back?

When I joined four years back, we initially thought that in three years we will be future ready. All issues were effectively sorted in three years. Steps were taken to lower cost, improve efficiency or to drive new products. Then came 2016-17 — goods and services tax, demonetisation, transition from BS-IV to VI brought us to ground zero again. With Chandra as the chairman, we decided to change the plan from transformation to turnaround.

What has been the result?

Everything is under our control. Productivity, efficiency, cost, and reduction of supplier base to 300 from over 450. We have been able to increase dealer profitability, maintain optimum stock levels. That’s the reason why we performed quite well in the third quarter.

What we didn’t do was put unreasonable metals into the system for a higher market share, increasing pain of dealers.

Are you seeking strategic partnership for your future journey of your passenger vehicle unit?

The chairman mentioned we are looking for strategic collaborations because the new technologies drive the demand for sharing initial investment and capacity. It can go from entire spread from technical licence to everything. But nothing has been decided yet.