Driving change at Tata Motors

Six months after he left Maruti Suzuki to become president of Tata Motors’ passenger vehicles division, Mayank Pareek says he has a handle on what needs to be done to get it through the rough patch it is in now. He gives Fortune India the details. Edited excerpts:

What was Tata Group chairman Cyrus Mistry’s brief to you when you joined?
Just do it ... like the Nike ad.

No ... seriously...
We had discussions about what was going on within the company and what could be done to improve the situation. Since then, we have had lots of meetings and even now we are in touch every day. We’re lucky that he spends so much time with us. Tata Motors is a priority for him.

You came from the market leader, Maruti Suzuki, to join Tata Motors’ passenger cars division, which has seen its market share dip and has struggled in recent times. What made you move?
Tata Motors has not been performing, but people connect with it and want it to do well. I thought it was a challenge. When I left Maruti it was doing well, but there was a time when it had lost 20% market share. So, I’ve been through that cycle. Tata Motors has also been about innovation. The Indigo created a segment that is now populated by the Maruti Dzire and the Honda Amaze, but it was a Tata concept.

What are the key challenges at hand?
Providing a first-rate customer experience for passenger cars is one. The shopping experience has two components—hardware and software. You can have the nicest building, but if service is poor, it’s of no use. In the past five years, we were selling more and more cars to fleet customers and these are used as cabs. Their requirements differ from those of a customer buying a car for personal use.

What are you doing about that?
For the Bolt hatchback, we created a new sales team of 1,256 employees at the dealership level. Called Force Bolt, the team will engage and communicate with customers, do post-sales follow-up, and so on. Here’s how the ratios work: If 100 people enquire about a car, around 35 book it. Of those 35, 80% close the deal. So we’re trying to harvest more from what we sow because if there are 300 enquiries, just an extra percent would mean a deal. We are also trying to resolve customer complaints on the same day.

What are the majority of complaints about?
I just saw 10 complaints yesterday. Owners are unhappy when their cars taken for service are not returned on the same day, as 70% of customers have only one car. We are introducing a solution that will have technicians drive out to customers in Tata Winger vans and service their cars at their home or office parking lots. The vans will even be equipped to dry-wash a car. The pilot tests are on and this facility should be available soon.

What else are you working on?
We have 458 dealers and feel the need to increase it by three times. Maruti has 1,500 sales points and 3,000 service points. We should be in each of the 650 districts of India. This will happen over the next three to four years. The Bolt and the Zest aren’t technically new cars. They’re built on existing platforms and have a lot in common with existing models. A completely new car would be expensive [to build]. Re-skinned cars sharing underpinnings and parts—that’s how the world works today. For example, BMW’s latest electric car, the i8, has up to 60% in common with other BMW cars. So, every year, we will launch two new cars. The product plan will involve three facets—launch two cars every year, keep upgrading existing cars, and create new segments.

Does the Nano need a branding overhaul, a different name perhaps?
We won’t comment on that but it’s certainly in a compelling segment. The car has opportunities in a country where only 18 in 1,000 people own cars.

What are the big differences in the way Tata Motors and Maruti Suzuki work?
The culture at Suzuki was process-oriented—no ad hoc steps. At Tata, people have more latitude and are allowed to dream.

What’s your target as far as market share and sales go?
My vision is to make Tata Motors one of the top three choices in the buyer’s mind. If we can achieve that, the rest will follow.

Anything you will not do?
The new models will not be sold to fleet operators to be used as taxis. The Indica and the Indigo will be available [for that], but none of the new cars.