In Conversation with Ranjit Yadav, President (Passenger Vehicle Business Unit), Tata Motors
An alumnus of the Indian Institute of Management (Bangalore), University of Delhi and Mayo College (Ajmer), Ranjit Yadav is the head of the Passenger Cars Division at Tata Motors. For over two decades he has held key positions in the consumer electronics & IT industry: at Philips India/ Asia Pacific, Hewlett-Packard Asia Pacific and Samsung India, where he was the Country Head-Mobile & IT before joining Tata Motors in October 2012.
While the script for the revival of the Passenger Cars Division at Tata Motors was written back in 2012, it has been anything but transformational. The year 2013-14 has seen sales decline sharply to its lowest in a decade. In August 2014 sales continued to remain down by 18%. Faced with a slew of new launches by competition and an overall recessionary market, the company did put up a brave and impressive show at the Auto Expo 2014, but nothing succeeds like success in the marketplace. Recently, they launched the compact sedan Zest, and plan to unveil the hatchback Bolt before the end of the year. The response for Zest has been positive with over 10,000 bookings in 3 weeks and the mood is clearly upbeat. Here, Ranjit Yadav talks to us about what’s going on behind the scene – the huge leap forward in product development, emphasis on R&D, thrust on changing perceptions and mindsets, the branding effort to meet new customer expectations and an aggressive strategy of launching two new products every year. Clearly, the company seems to have found its mojo, and the only way forward now is up.
September 2014/ In conversation with Ranjit Yadav:
LTD: Congratulations on the launch of the Zest – a very well researched and brilliantly thought out car for its segment. Is there too much riding on its success for Tata Motors, considering your current market position?
Ranjit Yadav: Zest is a very important product for us as this is the first manifestation of our Horizonext philosophy which is defined by 4 strategic pillars to fulfil customer needs and expectations – Intense Product Focus, World-class Manufacturing Quality, Enriched Purchase Experience and Consistent Quality of Service. Focus on these four pillars has helped us come out with world-class product like Zest, which will delight our consumers with its design, driving pleasure and great connectivity features.
Zest is addressing a space where we did not have a lot of play. First being the personal segment where we see a lot of growth coming in and second is the petrol segment, which holds a large share within the personal car segment. Zest marks the beginning of our journey where we launch two new products every year along with the timely refreshes for a robust product mix. With Zest we intend to capture mind-space and build stronger relationships with our customers. With 29 segment-leading features and a compelling price-point, Zest will prove to be a disruptive product in its segment, setting the benchmark for us and the industry very high.
While Zest is an important product, it is also the start of a robust product pipeline that will offer a full range portfolio.
LTD: How do you fight the dichotomy associated with the Tata identity? An immensely respected & trusted brand, but yet so low on product acceptance in the passenger car segment. Do you think there is much to be done in the branding area?
Ranjit Yadav: We are taking a huge leap in our passenger vehicle business. The Tata brand is well recognized and has a lot of credibility value with it. We are now moving to the next level where we would like to garner a significant mind-share. In the past few years, we have invested a lot in terms of capital and time to formulate our Horizonext strategy. Under this philosophy we not only offer a world-class product but also focus on the softer aspects like branding and marketing. At the core of Horizonext is customer centricity and proof of that is our latest offering, Zest.
Zest is a true example of customer feedback based product development. It is post customer feedback that we incorporated three drive modes on the1.2L Revotron engine. This has been a huge activity as it involves change in EMS software, design of torque/ power delivery, tighter emission requirements, hardware change for activation on facia, wiring harness, etc. This feature is being brought for the first time in this segment. As an outcome of various customer clinics, a lot of scope changes have been asked by Marketing. BCG had asked for change in tyre from R14 to R15 for Bolt. Similarly the change in fuel tank capacity from 37 liters to 44 liters has enhanced the product to increase the value to the customer. Front seats have been modified. The new branded infotainment from Harman is the best in class with a 8 speaker audio integrated with HVAC display, speed dependent volume control, blue-tooth streaming, which has been accustomed for the new cars. A dedicated vehicle has been given to Harman, to do the acoustic tuning to suit the interior of the vehicle.
To reinforce our confidence in Zest, we have launched it with an industry first service offering: 333 Confidence. This unique program offers best-in-class warranty of 3 years or 1 lakh km (whichever is earlier), an Annual Maintenance Contract (AMC) of 3 years/ 45000 km (whichever is earlier) and a free 24X7 Roadside Assistance service for 3 years. To enhance the customer engagement levels at the dealerships, Tata Motors has upgraded its showrooms to deliver customers desired world class ambience, purchase experience and after-market service. This is achieved through technology-enabled dealerships providing all-encompassing sales, service and spares. These reformatted dealerships with the new Tata Motors retail identity will take the dealership experience to the next level. Over 3000 new sales staff have been recruited nationally for Zest customers. Specially-trained sales managers at these revamped, tech-savvy dealerships will be equipped with hand-held tablets, taking the purchase experience to next level. This shows how confident we are about our product and it reinforces our intention to offer our customers high reliability, reduced cost of ownership and great resale value for the Zest.
In terms of branding we are focusing big on digital. Some successful campaigns that we have already executed are: Zestful Bollywood Pilgrimage, Revotron Labs, Zest Studios and other innovative print campaigns. All these activities have resulted in high levels of awareness for the brand Zest and Revotron.
LTD: In terms of technology, the perception is that Tata vehicles are always a couple of generations behind. Zest may prove otherwise. But going forward, are there any significant investments in green/ future technology or breakthrough R&D that you would like to share with us?
Ranjit Yadav: We are ranked among the top 18 companies by the European Commission (EC) on the basis of investment towards R&D and business innovation initiatives. This includes not just our facility in Pune but also global resources such as the Tata Motors European Technical Centre (TMETC) in Coventry, UK and the design studios in UK and Italy. As an automobile manufacturer we are constantly evolving and working on future technologies. We will share more specifics in due course of time.
LTD: Do you think the over dependence on commercial vehicles and the persisting mindset of a truck & bus manufacturer within the group hampers the way the company builds and markets its passenger cars?
Ranjit Yadav: We are among the very few companies which can leverage synergies and learnings from both Commercial Vehicle and Passenger Vehicle divisions.
LTD: Tata Motor’s global acquisitions have opened access to a new set of products, technology and design capabilities. How soon are we likely to see some of the synergies percolate down to the Tata Motors portfolio?
Ranjit Yadav: We are happy to share that we are already leveraging synergies with JLR. For Zest, we took best practices from JLR to help us with the quality focus. A new dedicated function FMQ (Forward Model Quality) was adopted from JLR and created within the Quality function to work closely with Design & Development teams and take part with program team in early stage of product concept finalization. This FMQ process was adopted from JLR for capturing customer voice and accordingly setting quality targets for failure avoidance. FMQ has worked closely with design teams on key customer sensitive processes like capturing customer voice, benchmarking, target setting and product assessment.
LTD: Nano was an opportunity. But for the customer, it is more of a compromise. If you had a chance to do it all over again, what would you do differently with this product?
Ranjit Yadav: Tata Nano is India’s most innovative car in design, engineering and technology and has always believed in reinventing the norm, thereby raising the bar for itself. Tata Nano has invoked a great deal of excitement amongst consumers. It helped put India on the world motoring map with its innovative frugal engineering and best-in-class features and price point. It is an awesome case of innovative engineering.
It has always been packaged with great value and has built more value with recent features like the remote keyless entry, twin glove boxes and a four-speaker AmphiStream™ music system with Bluetooth™ etc. Our campaigns actively position the Nano in a way that leverages its unique contemporary and global design with the features young buyers aspire for.
While continuously speaking to our customers we have understood that the brand has been bonding with its users in a very emotional way. Which made us realise that customers have always used the Nano as a Smart City Car. Urbanization in this country is expanding at a very rapid pace, the towns are becoming cities and cities are becoming mega cities and we are trying to keep in pace with this rapid development. The Nano with its unique qualities has created its own segment. The Nano Twist has received a good response and we expect this momentum to continue. In the next few years, we hope to bring more variants.
LTD: The Utility Vehicle segment is hotting up. With the Estate, Safari and Sumo, Tata Motors had an early mover advantage, but today remain a marginal player. Going forward, what are your plans for this segment?
Ranjit Yadav: We believe we have a good product mix of UVs. Safari, Sumo, Movus and Aria are class-leading products and we will keep refreshing them at the right time of their product cycle. Under our Horizonext strategy we have promised to come out with two new products every year and we have looked at all segments, including the SUVs and MUVs. Earlier this year at the Auto Expo, we had showcased Nexon, our concept for a compact SUV. We had also announced that we will come out with a production version within 24 months which is going as planned and you will see the final product in the year 2016.
LTD: JLR has literally risen from the ashes like a phoenix. Any plans of leveraging their capabilities in the volume market with cutting edge products? A Jaguar inspired hot hatch or an Evoke inspired mini SUV for instance, designed specifically for the Indian market?
Ranjit Yadav: While there has been no direct platform sharing with JLR there has been a lot of process learning which continually happen and intellectual assets and facilities are being shared for advance engineering and testing. As of now we do not have any announcement regarding product development in conjunction with JLR.
LTD: Tata has never been quick to meet market demands and changing customer preferences. When competitors launch new products, Tata comes up with new versions of old models. When can we look forward to any potentially exciting Tata product that will shake up the market?
Ranjit Yadav: We have already launched a very compelling product, Zest, which we believe is a disruptive product in its segment. Very soon, Bolt will be launched. And every year you will see two brand new products from Tata Motors besides the timely refreshes of our existing portfolio.
LTD: What according to you is the next big game changing innovation that the automobile industry should look forward to?
Ranjit Yadav: Besides the constantly evolving engines and drivability, the industry is moving towards automobiles being personalized and customized as per one’s preferences. The vehicles will be connected to the web just like your mobile phone. We have already made progress in this direction. During the Auto Expo earlier this year, we had announced our tie-up with Samsung for the ‘Drive Link’ technology. It has Integrated App for Navigation, Smart-Phone Integration, Driver Information System (DIS), Rear-Seat Entertainment, Driver Assistance System and more. Based on Samsung’s ‘Drive Link app’ on MirrorLink™ technology, the innovative in-car smartphone technology is designed to offer a significant in-car access to the smartphone features and content, while ensuring no distraction to the driver, with safe use of connectivity while driving. This is geared to give Tata Motors passenger vehicle customers the freedom of listening to music, hands-free calling and navigating to a destination, all from their smartphone.
LTD: In an era where most urban purchase & consumption decisions are increasingly influenced by online reviews and information, how important is social media to you personally? And has the CEOʼs personal role become more challenging with the pressure of being active on social media to further the brands that he/she represents?
Ranjit Yadav: We understand the power of internet and we are leveraging it to the fullest. As mentioned earlier, a lot of focus is being put on social and digital activities, examples of which we have already provided. I personally participate in social media conversations and believe it is a terrific medium to understand the pulse of the consumers.
LTD: What would one find in your garage? And what passions do you pursue after hours?
Ranjit Yadav: I have driven all cars which we offer today and I travel quite often to Pune to test drive cars at the test track. In my personal time, I like playing golf.
LTD: What would be your message to the youth, who wish to make a career in the automobile industry? And also a word about how Tata Motors would continue to remain relevant to the next generation automobile consumers?
Ranjit Yadav: Connectivity is the next big thing and Tata Motors is on a path to do wonders in this area. So the next generation can look forward to our next offerings and stay connected all times, with us and with our cars.