Tata Motors to focus on rural market to boost sales

Mumbai: Tata Motors, grappling with falling car sales for a third year in a row, is planning to put a thrust on rural market among other revival measures.

The rural market accounts for 16 percent of its volume.

"The potential in the rural market is huge. Some of the best players do around 30 percent sales in rural segment and cover 85-90 percent of the market. Our rural sales account for only 16 percent of total sales, and our coverage is only 30 percent. So, there is a big upside in this segment," Tata Motor's newly-appointed president for passenger vehicle business Mayank Pareek told reporters here.

Pareek joined Tata Motors from the country' largest car maker Maruti seven weeks ago.

Acknowledging that the company needs to do a lot, Pareek said expanding into newer markets and a deeper penetration in the existing ones was on cards.

"We have already said we will be launching two new products every year and they will not be variants or facelifts but all new. But we also need to do a lot on distribution and provide high quality of service," he said.

Recently launched Zest sedan with Revotron petrol engine will also help the company revive its fortunes, he said.

"We have already delivered 10,000 units since October and while the automatic variant of the car has a 6-months booking period, the petrol variant has 3-4 months, besides an order book of 6,000 cars. One product can change the situation. We have an inherent strength of bouncing back," he said.

Pareek said he does not expect much variation in the diesel-petrol ratio with the narrowing of the price difference between the two fuels, and the ratio should be more or less equal going forward.

He said the company is also looking at new formats of selling which may include using the company's wide distribution network of commercial vehicles sales.

Forecasting up to 5 percent growth for the industry in the current fiscal, he said though the past couple of months have seen some improvement it has not been very noticeable.

"The growth in this fiscal is likely to be around 5 percent which will be better than the last year's almost flat growth. Tata Motors too have challenges and it needs to do more than what it has been doing so far.

And I think, we are rightly poised," he said.