Tata Motors posted a worrying 96% drop in profits in the October to December quarter. That makes it all the more evident why Tata Motors, which rose to fame in passenger vehicles with Indica, is stepping out of its erstwhile image.
The company has stopped selling the car, which helped it reach 13% market share in 2013. That’s down to 5% now as its new models since Indigo -- launched over a decade ago and are no more manufactured -- flopped.
Even the Zest and the Bolt, which were supposed to change Tata Motors, are struggling in the market, despite a new engine under the hood.
Here is where Tata Motors’ latest obsession of becoming premium fits in.
According to Guenter Butschek, CEO and managing director of Tata Motors, TAMO “is about proof of concept ... about bringing new technologies and ideas fast to the market.”
“TAMO as a new, separated vertical will operate in the first step on a low volume, low investment model to provide fast tracked proves of technologies and concepts,” the company said in a statement.
Basically, TAMO would be a vertical that hopes to do everything that the Tata Motors could not achieve -- from getting cutting-edge technology to connected car solutions for its future products. The company will create an open platform, where technology firms -- large and small -- can plug-in.
However, legacy remains. Tata Motors has struggled with low volumes and had it not been for Jaguar Land Rover, Tata Motors would have been in red.
Some would say this is Tata Motors’ Nexa moment. Maruti Suzuki, India’s largest carmaker selling one out of every two cars, opened a new distribution channel in 2015, to sell “premium cars” such as the S Cross, Baleno and the recent launch Ignis. Hyundai, too, is moving towards selling more premium models, and so is Mahindra & Mahindra hosting some premium SUVs.
Tata Motors is perhaps the last to the party. That makes it all the more difficult for the company to cut through competition. But, it has had some relief with the launch of Hexa, a crossover launched in January.
The first TAMO car might be a sports car, which the company teased on Monday and will unveil at the Geneva International Motor Show on Tuesday.
Recently, in built up to the TAMO phenomenon, the company also showed a C-Cube concept at an event in Mumbai, where it announced partnership with Microsoft to make connected cars.