 "Shailesh Chandra")
Automakers must be "really agile" and have enough money to keep up with changes in the industry, says Shailesh Chandra, managing director of Tata Motors. He spoke to Pavan Lall about new launches, industry trends and strategy.
Here are edited excerpts from the interview in Mumbai.
In the midst of what is India’s EV auto push you have launched a CNG hatchback variant. Why?
In the last three, four years, CNG cars are becoming more and more popular. In the personal segment, we had considered CNG as an aftermarket fitment but it has gained a lot of traction for two key reasons. One (is) that there are more models: about 17-18 models in different body types, different price points across OEMs (original equipment manufacturers). Second, an increasing number of CNG stations across the country. So three years back, it would have been 1,500 or so, even less than that, and today, it is about 5,500 CNG stations and very strong in certain states in the country like Haryana, Delhi, Gujarat, Maharashtra. These are the key centres where CNG cars are more popular and penetration is quite deep in these states.
Last year the market saw 4 lakh CNG cars sold, of which we would have sold around 50,000. Now the Altroz is, which we have launched, is absolutely a no-compromise car with twin-cylinder technology that allows for more boot space and comes with more aspirational features--the sunroof, the wireless charger and so on. The other car we may go CNG with is the Punch.
Do you see CNG penetration increasing?
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Today, CNG penetration in the industry is about 10 per cent to 12 per cent. It should start shifting more towards like 20-25 per cent by the end of this decade. So, CNG as a percentage is going to increase because it is eco-friendly. The industry's OEMs also have the pressure of meeting the CAFÉ, Corporate Average Fuel Economy norms. I eventually see by 2030 a mix of 20-25 per cent CNG and 25-30 per cent electric (vehicles) and the rest would be, you know, petrol, mixed fuels and so on.
Jaguar Land Rover (JLR) is moving fast with its EV plans: do you see Tata Motors following?
JLR has its independent plans for the markets that it serves. We explore potential synergies in areas where we see synergy. As far as our plan is concerned for EVs, Generation one, Generation two and Generation three is the approach we are working on, and Gen three is when we start with pure EVs. That is when we have an opportunity for some collaboration with JLR. So, we are actively exploring that part. So, there will be some overlap, potential overlap, which is still under finalisation or an electrical architecture area, you know, given that connectivity, ADAS and all that, pretty much a reality for all and JLR is working on technology, so, that can be another area of synergy. So, these are the two potential opportunities for synergy.
What are your plans for the sedan segment?
The general trend has declined from a percentage share perspective for sedans. Then 70 per cent of the sedan is in the compact sedans, which are smaller, less-than four-metre cars which are mostly say Tigor, D’zire, these kinds of vehicles. So, real sedans you know are really even a small part of that because the growth of SUVs is so steep it overshadows both hatch and sedan. The future launch action of all players is SUVs. So, therefore, that is definitely going to grow much faster than any other segment.
Are you saying customers are skipping the sedan phase after the hatch?
Yes, that’s where I mean--the growth for SUVs has picked up their share. The sedan was the first where it started taking its market share from. So within no time the sedan segment has gone down from 21-22 per cent to 10 per cent.
While everyone is talking EV, what happens if hydrogen or some alternate power-train suddenly emerges as the call of choice?
We always plan in terms of seven years, okay. Strategy cycles are also seven years. And you develop a point of view of these technologies how they are going to be, maybe dominant in this space. Because beyond seven years, you can always respond, because you have time. As far as Tata Motors is concerned, we are safely hedged because commercial vehicles are already working on hydrogen fuel technology. At this stage and the foreseeable future, the separation of hydrogen fuel technology and BEVs in which segments it will be dominant, is clear. In long commercial applications, hydrogen fuels will make sense or even ICE-hydrogen, for here it is clearly…but we are safe from a technology preparation perspective.
What happens after 10 years down the line is something we'll have to continuously scan and see. Lithium dependence on a certain geography is a reality, which might be even true for ICE today, a lot of dependence. But if you talk (about) cobalt, then it becomes even more geopolitical…so I assume that the world will not remain static but our point of view…is no doubt lithium Ion is going to be the lead.
What new launches do you have lined up?
Two new nameplates, which have already shown, are Curvv and Sierra in the 4.3-metre SUV segment. That's the one which is going to grow very fast. So in 2024 (it) will be Curvv and in 2025 will be Sierra. We have a portfolio of seven products right now, and you will start seeing the mid cycle enhancement of all these products in the next 18 months to 24 months. So that's going to boost the sales. We'll have one more electric vehicle that we are going to launch this financial year. So that's going to come… CNG is expanding.
What is the challenge at hand?
In the short term, slight consolidation of demand, because there has been a sharp uptick--it was a 27 per cent growth. So, now, the industry will grow slightly slower. And then again there is a circular trend which is upwards for the country that we have seen as the penetration of cars is increasing. The longer-term challenge, I would say, is this is a decade of transition. I have never seen these kinds of transitions in the past. So, as we call it, the whole architecture has to be thought through like a software-defined vehicle. It's like a mobile gadget on wheels therefore; (in) this transition you have to manage your skillsets, capabilities you have to develop and it is about shifting from ICE to EV--a major shift. You have to be really agile and very fast, at the same time have enough money to really do all these things.
