Showing posts with label Murphy's Law. Show all posts
Showing posts with label Murphy's Law. Show all posts

Sunday, July 17, 2016

Murphy's Law - Anything that can go wrong, will go wrong

Murphy's Law is a popular adage, that typically states: Anything that can go wrong, will go wrong.

This blogpost narrates my observation of how Murphy's law is enfolding in Tata Motor's endeavour of positioning itself as a key player in the Indian passenger car market segment.

Couple of other brief points to set the context of the blogpost:
- It is written from a qualitative aspect (hence refrained from number crunching)
- It is a personal observation (objective & subjective, in nature)
- It is not intended to be written as a case study 
- It is written as a free flowing thought journal & not written with any pre-determined conclusion

Tata Motors is India's biggest automobile company, established way back in 1945. 

They have been the front-runner, in the commercial vehicle segment (trucks, buses, mini-truck). Thanks to their length & breadth of global manufacturing and R&D facilities, acquisition of Daewoo Commercial Vehicles Company (South Korea), joint ventures with Marcopolo (Brazil), Thonburi Automotive Assembly Plant Co. (Thailand) & Tata Africa Holding (South Africa), conglomerate of subsidiaries & associate companies.

But when it comes to passenger car segment, Tata Motor's journey have been a tale of twist & turns.

They entered the passenger vehicle market in 1991 with Tata Sierra (multi-utility vehicle), followed by Tata Estate (station wagon) in 1992 & Tata Safari (sports utility vehicle) in 1998.

Tata Sierra advertisement

However, Tata Motors being ingrained in people's mind as commercial vehicle company, the switch in people's perception to view them in a new light (passenger car) became a major stumbling block.

In 1998, Indica (fully indigenous Indian passenger car) was launched.

Tata Indica advertisement

It overcome the initial round of criticism/skepticism due to it's overall good performance & when it seemed it will make inroads as a private car, it's image was once again overshadowed as a commercial vehicle when fleets of Tata Indica cabs (taxi), started plying all over India. Quite obviously, the perception of a cab (taxi) turned off many potential buyers from owning it as their family car. 

In January 2008, Tata Motors unveiled Tata Nano, at Auto exhibition in Pragati Maidan, New Delhi.

It was positioned as the world's cheapest car (no frills, fully functional, practical car for India's lower middle class but aspirational families). It was promised to be launched by October 2008, priced at 100,000 INR (3000 USD).

Tata Nano advertisement

An emotive Ratan Tata had said at Nano's launch, "Today is another milestone in what started six years ago as an emotional desire to provide affordable & safe transportation to the families of India who are exposed to the elements on two wheels, carrying a family of four in somewhat dangerous circumstances."

It was indeed realisation of a dream, he had six years ago to create a car cheap enough for Indian families to trade off their motorbikes. 

But not everyone shared the same exuberance & Tata's Nano project was publicly criticised by well reputed spokesperson like Anumita RoyChoudhury & R.K. Pachauri from organisations like 'Centre for Science & Environment (Delhi) and 'Intergovernmental Panel on Climate Change (IPCC)' respectively. They were concerned on the possibility of mass motorisation in India, leading to pollution & global warming. Expression of such environmental concerns, added to undesirable controversy to Nano's fan-fare launch.

Work at Tata Nano production facility in Singur, West Bengal begun on schedule by January 2007 & by July 2008 trial production of few cars had also commenced. But it soon ran into rough weather, due to the Singur farmer agitation gaining momentum (farmers unwilling to sell their land, lead by the then state opposition leader Mamta Banerjee). All the efforts of negotiations, enforcement of state machinery to control the situation fell flat & the protest reached a flash point raising grave concerns about Tata Motor's employees safety & security. On September 2008, Tata Motors announced temporary suspension of construction at Singur. The last effort for a breakthrough was attempted unfortunately yielding no result, prompting Tata Motors to officially announce on 3rd of October 2008, their decision of moving Nano project out of West Bengal.

On 7th of October 2008, Tata Motors tied up a new deal with Gujarat Government to relocate the Nano plant at Sanand. With this decision, started a series of herculean tasks: 
(i). car assembly operations was shifted to Pant Nagar facility (Uttarakhand) & engine and transmission line was shifted to Pune (Maharashtra). This was to ensure Nano gets delivered atleast by March 2009, instead of earlier promised date of October 2008.
(ii). Dismantling the Singur plant & transporting it to Sanand. (at a distance of 2,163 kilometers)
(iii). Re-commissioning the transported plant at Sanand.

This entire exercise lasted for 13 months & trial production of Nano at Sanand re-started in November 2009.

After overcoming this huge obstacle which is unparalleled in the history of automobile industry, Tata Motor's tasted success at Nano's launch in 2009, by receiving over 200,000 pre-bookings. But over the years the steam quickly fizzled out & sales hit rock bottom figures of only ~500 units per month, at certain instances. So what turned the dream sour? One of the probable reason was it's perceived image of a cheap car, in the consumer's mind. In the hindsight, it is now clear that car buying is not just about economics but also an emotive & social affair. Possibly the first time car buyers, didn't wanted to be perceived as belonging to lower income segment, by their choice of car ownership. The positioning of Nano got it slotted as a cheap car & it did not connect with the imagination of the consumers.  

To break Nano's undesirable image, August
2013 onwards Tata Motors started to reposition Genx Nano from a 'cheap car' to 'smart city car'. It is now reaching out to younger customers & associating it with terms like cool, peppy & fun.

In 2015, Tata Motors launched Zest (compact sedan) & Bolt (hatchback) were billed as their comeback cars.

Tata Zest advertisement

Tata Bolt advertisement

Inspite of being very good products, they are finding few takers. The issue seems not to be about the product any more, as much it is about the brand. The shackles of negative perception was proving to be a tough nut to crack, for Tata Motors. 

Tata Motors, were working very hard for launching a comeback hatchback offering - Tata Zica.
The car was backed by Tata's "Made of Great" campaign, to elaborate the brand philosophy & ideologies saying "What drives us from within is what makes us great."
Tata Zica, was scheduled for launch at Indian market by March/April 2016.

The buzz was already created around Tata Zica, but unfortunately this coincided with the widespread epidemic of Zika fever, caused by Zika virus in America. The WHO (World Health Organisation) declared the Zika virus a global public health emergency.  

Tata Motors took the decision to rename the Zica as it was uncomfortably similar to 'Zika' virus. This being a comeback car for Tata Motors, quite wisely they did not want to proceed with a controversial name that could potentially result in bad publicity & adversely affect sales. In order to show empathy to those who were affected, Tata Motors decided to change the name of the car & did so by using global crowd-sourcing competition called
"#FantasticoNameHunt' (fans voted among: Tiago, Adore & Civet).

It was finally made official, that Tata Zica will globally arrive in a new name, Tiago.
Tiago almost saw a fiasco at birth, when it was named Zica, while a virus named Zika took the world by storm.

Tata Motors roped in Lionel Messi as the global brand ambassador for Tata Tiago & was made part of 'Made of Great' advertising campaign. (It was a happy coincidence, that their brand ambassador Messi's son's name is Thiago).

Tata Tiago was launched in India in April 2016, & by it's third month itself, Tiago outsells every other model from the Tata stable.

Tiago's good product quality & Messi's image, managed to pull in the young, first time car-buyers into Tata Motors showroom. Messi, has been signed for a two year deal & he is an integral part of Tata Motor's solution for pulling up their passenger vehicles business.

Just when things seemed to be falling in place for Tata Motors, it's ambassador Messi landed into a series of misfortune. Messi, after a sterling performance upto the finals of Copa America, missed his shot in the penalty shootout & Argentina lost to Chile. An emotionally shattered Messi, impulsively announced his retirement from international football. In a week's time, Messi & his father were convicted of tax fraud in Spain (3.5 million Euros as fine, with prospects of suspended jail term of 21 months).

Tata Motors did issue an official statement post Messi's retirement announcement, it will not change their relationship with Messi & he continues to be their brand ambassador.

One feels genuinely sorry for Tata Motors, as Murphy's law recurrently keeps unfolding into their journey of making inroads into the Indian passenger car market segment.

 There are three new launches lined up for Tata Motors in days to come, Kite-5 (code name) in sedan segment, Hexa in SUV segment & Nexon in the compact utility segment. Going by Tata Motors promising pipeline, they seem to have kept a long-term vision for positioning themselves in the Indian passenger vehicle segment. It will be interesting to see, how their journey unfolds from here on......hopefully with their grit & determination, they would be able to nullify Murphy's law, from their story line sooner or later.