[carjack3090]

What's ailing Tata Motors Production Capacities: A look at the past year for Tata Motors

Tata Motors was having a dream run from 2022 till 2024. It reached its optimum peak in 2024 with launch of Punch EV and was dispatching over 55,000 Cars to its dealers

They also reached a peak of 50 Billion Market Cap which put them among top 10 in the world

link

Tata Motors' market cap surpasses that of Stellantis NV ($50.64 billion), General Motors ($49.74 billion), Maruti Suzuki India ($48.36 billion), Mahindra & Mahindra ($43.41 billion), Ford Motor Co ($43.1 billion), Hyundai Motor ($37.88 billion), and KIA Corp ($32.29 billion).

But then suddenly disaster struck.

By end of September 2024 Tata was holding inventory stretching up to 100 days, soon the discounts flowed in and the dispatches slowed down. Tata's Market Capitalization crashed and reduced, From its highest at 50 Billion it reduced by 50 percent to 25 Billion USD



Meanwhile in September last year something significant happened. Tata announced construction of a new factory for car manufacturing at Ranipet in Tamil Nadu

link

Tata Motors Group, India’s leading manufacturer of commercial and passenger vehicles has signed a facilitation Memorandum of Understanding (MoU) with the Government of Tamil Nadu to explore setting-up of a vehicle manufacturing facility in the state. The MoU envisages an investment of ~INR 9,000 crores over 5-years and can potentially create up to 5,000 jobs (direct and indirect). Following the signing of this MoU, teams from Guidance, Tamil Nadu’s nodal agency for investment promotion and facilitation and Tata Motors Group will work together to take this opportunity forward.

The interesting aspect of the MOU was addition of the 250,000 capacity by 2030 which would take Tata's overall capacity past a million.

The overall Plant capacity of Tata Motors

Tata Motors had 4 Plants in 2 Major areas for its car manufacturing and they are as followed

• 1. Tata Pune plant that was constructed with Mercedes
• 2. Tata Pune plant with Fiat JV
• 3. Tata's Plant constructed in Sanand Gujarat
• 4. Ford's Plant that was purchased by Tata in Sanand

Tata's capacity in Pune stood at 400,000 (where Stellantis also builds few of their cars).

Tata's capacity in Sanand before Ford takeover was 250,000 which increased to 550,000 with Ford take over. The Ford plant was scalable even further to increase capacity past 600,000

link

https://economictimes.indiatimes.com...6.cms?from=mdr

At present Tata has a overall capacity of around 850,000 which is easily scalable to a million

Meanwhile Tata's sales last year were 553,000 which approximately indicated 65 Percent utilization

How are Factories run?

Factories in 21st century essentially follow two principle- Kaizen and Lean efficiency (both taken from Japan). So Factories run on a continuous production process that helps produce optimal results with as less cost involved.

Thus manufacturers almost always make high Fixed cost expenditures to ensure very low Variable cost need.



However, if the Factory is not utilized to the fullest then the Fixed Cost expenditure becomes sunk. Ford's ultimate decision to leave India was dependent on the sunk cost of their Sanand Factory

Tata's Curvv Debacle

This brings us to their highly hyped launch for last Year, the Tata Curvv. Tata Curvv was their foray and entry into the highly contested 4.1-4.3 meter zone where the likes of Creta, Seltos and Grand Vitara were ruling the roost. Tata's long absence from this segment was limiting their profitability


attaching above is the sales figure of Hyundai Creta, which was the best seller in the segment.

Naturally when Tata decided to finally enter the segment they would have assumed

Baseline sales figure for Curvv- 6k Units a month
Good sales figure for Curvv- 8k Units a month
Optimal sales figure for Curvv- 10k units a month

This meant Tata was ready with plans to bring in extra 100,000 sales a year through Curvv

But disaster struck and Curvv didn't strike the chord

The Curvv issue

1. Same old wine in new bottle? The interior spelled Nexon Plus
2. Not enticing as an EV? Same motor, same drive quality but premium pricing
3. 2 Lakh premium over Nexon? Didn't seem justifiable to most

The thing with Inventory build up


As I mentioned earlier in this thread, Tata had one of the worst Inventory held off by September last year and one bring reason for it was the terrible inventory forecast.

Tata Motors was continuously dispatching excess capacity of their cars and the sales weren't catching up.

Result- by end of September even their Best selling Car "Punch" was sold at a discount of 40k

Tata Motors made a calculative mis-judgement which I will talk of next.

EV Lethargy

Tata had the first movers advantage in the EV segment in India, their Nexon EV was a run away success in its first generation, but it wasn't a grounds up EV and that had its limitation

Tata's kept mum about their grounds up EV plans, initially it was thought Curvv will be their first original EV, later Sierra was touted to be the first. Running around circles Tata chickened around bringing an Original EV plan, and year 2024 was when this caught up.

MG decided to launch their Windsor EV and the difference was starkly clear. The masses accepted the Windsor EV and it beat all of Tata's launches immediately the month it was launched

To make the matters worse Mahindra then showcased their Born Electric Cars, they were priced on par with Curvv but specked much better than it. As a result Tata postponed the launch of Harrier EV which was supposed to go live last year during the festive season

In further threads I will shed light on what next from Tata Motors

[sharmanova]

Not only the Market cap, even the share prices of Tata have reduced by ~50%



Here's what Tata Motors can do right now:

- Reduce the prices of Curvv and Curvv.ev. Also they can launch a 65 kWh battery pack for the Curvv!
- Launch petrol variants of the Harrier and Safari. Even Harrier and Safari need a price cut also, since their main competitor XUV700 has got 2 price cuts.
- A Carens/Ertiga rivalling MPV can add some numbers.
- Improve its QC, Reliability and last but not the least A.S.S

[carjack3090]

Tata Motors and the Sierra: A desperate need for it to work

Tata finds itself once again in horizons like they did almost 10 years ago when Tiago came to them as their life and game changer. Tata's Operating margin is at Paltry 4.8 percent for the last quarter, this is less than what Hyundai, Maruti and Mahindra operate with.

Thus as a result Toyota was able to beat Tata in overall revenue

link

Tata's first attempt at Mid size Crossover hasn't worked

Tata's next launch is all new Sierra, Sierra carries the old brand name but a completely new design.



As mentioned in thread above Tata carries a production capacity of around 70K per month and they are utilizing only 65 percent of it.

Sierra also carries over the most liked formula for car designing, unlike Curvv that was radical by its design. Sierra carries the boxy design that Indians love. It also comes at Goldilocks space zone of neither being too big or too small

Finally it presents an opportunity for Tata to use nostalgia to recreate buzz for new car.

With faltering margins, market cap and revenue. Tata will want Sierra to work in their favor.

[safari_lover]

I don't think Curvv can be called a dud. Not yet, anyways. It may eventually settle in at 5K per month once the CNG variant also comes in.

The current problem with Tata Motors lies somewhere else. It's the Altroz, Tigor, Harrier and Safari. They are languishing at the bottom in their segments. A few tweaks could help them gain some numbers.

Altroz - While the Baleno and Swift sell over 30K every month, the Altroz is barely managing 3K. That too with so many variants. The Racer was big dud. It brought in more bad publicity than good. Interestingly the Altroz's sales have gone significantly down after the Racer's launch. With the upcoming facelift Altroz should do a few things differently. Can they change in the engine? Can the 1.2L direct injection engine without the turbo be better than the current 1.2L NA? Discontinue the Racer variant altogether and introduce a properly fast turbo car. Call it just Altroz Turbo or Altroz RT.

Tigor - I don't understand why they don't offer the Tigor CNG to the cab segment? It should easily bring in better numbers. With their Twin Cylinder CNG tech, it's the perfect car for the Taxi segment. Better suited than the Dzire whose CNG cylinders eats up most of the boot space.

Harrier/Safari - Tata can easily reduce the starting price for these cars by simply changing the specs on the base variant. Remove Alloys, projector lamps, Auto Climate Control and may be even ESP. Instead add an half-decent infotainment system and cut the price by at least 1L. If and when the Petrol comes, that should be further 1L less. So, Harrier can effectively start at 12.99L and Safari at 13.49L. Wouldn't that be something.

[Aryanised]

I would also like to add a few more reasons behind Tata Motors’ value going bearish in the PV segment:

1. If I am buying a 30+ lakh Rs Harrier or Safari, then I do not want the same interior layout and the same 10.25 inch touchscreens and 360 cameras which a supposedly 1/3 priced car i.e. the Tiago and Punch have. (PS: they are great features if I am buying Tiago or Punch, but if I am getting a Safari, then I would want to be differentiated.)

2. QC - A major reason, I believe. It has now become a pet peeve for me to just check how misaligned the boot and rear fenders of a lot of Tata cars are. I am now able to witness these misalignments just by looking at them from a distance while I am driving and not specifically checking them out (trust me, once you get the hang of it, they’ll be easily visible).

3. Adding to the above point, my Jiju’s 3-year-old Nexon is rusted in a lot of places— silencer, door hinges. On the other hand, our 2011 Polo (it’ll turn 15 next year and I am eagerly waiting for that) is going super strong with no rust at all. Both of them are kept in the same environment.

4. Another major perspective - suppose I have to choose b/w 2 options - a Tata safari and an XUV 700, and I finally decide to go with the Safari, the reason for that won’t primarily be the launch of new Dark edition, Kaziranga edition, IPL edition, etc. It’ll be only because of the positives that Safari is offering to me over its competitor. What I am trying to portray is that a middle-class family, which Tata is targeting, will (probably in my opinion) not purchase the car only because of some specific edition which Tata has recently launched. And they have been doing this for their entire lineup. Marutis and Hyundais don’t generally launch special editions, but are still at the top.

5. There are a whole lot of differences between a ground-up EV and an ICE converted one. A simple conversion just doesn’t show someone’s conviction of "going all in". I do believe, "we may sometimes have to put most of our eggs in one basket", like what Mahindra is doing by investing in their born EVs.

6. Tata has been focusing on safety. This line exclusively sounds perfect, right? But what if I say, "Tata is only focusing on safety"? Then this is a problem. (PS: Tata, of course, makes amazing cars as well. Its suspensions and the features it provides work really well. This was just a metaphorical way of me saying that Tata is overemphasising safety because now even its competitors are making safe cars.) This is coming from someone who thinks the most important feature one should look for is safety, even above the engine-gearbox combo or the features a car provides.

6. The usual unexplainable A.S.S. problems, EV software, not launching petrol versions of the Harrier and Safari, no 4x4 for the Safari, the delay in launching the Harrier EV, etc.

However, I still really hope and want Tata to succeed.

The two Indian brands need to make India a real member of the Global Value Chain in the automobile sector.

[LongDrives]

Originally Posted by carjack3090

Tata Motors had 4 Plants in 2 Major areas for its car manufacturing and they are as followed

Thanks for explaining Tata Motors production capacity and the facilities. You gave us a real and excellent input about the real world capability of TATA Motors. I thought Tata was lagging behind Hyundai due to capacity constraints. But that doesn't seem to be the whole picture.

I have a few point to put in.

First the TATA-FCA JV plant. Tata Motors used to assemble Nexon at the plant and now assembles the Harrier and Safari at the existing facility. Nexon's assembly line was shifted to the new plant at Sanand, which was bought from Ford. Reason, Tata doesn't need to share the profit of making the Nexon with FCA when it has the capacity. FCA also is planning a baby Jeep based on the Citroën C3 Platform and needs capacity so we better delete the capacity from Tata's book.

Secondly Sanand's earlier facility, that started with the Nano, assembles the Tiago and Tigor that has a capacity to make 2.50L cars a years, scalable to 5L cars a year, but the twins dispatch about 8k cars a month that is not even 1L a year. So the capacity is highly under utilized.

The second facility purchases from Ford started with assembly of the Nexon was shifted from FCA JV plant and as you mentioned that has a capacity was 2L cars a year scalable to much higher capacity of 6L. Nexon puts out about 15k cars a month taking the capacity to 1.8L a year. Curvv too is been assembled here adding another 3k a months adds to 36k taking the total current assembly to about 3.2L a year.

So this second plant is doing good by the scaling up the production to 3.2L a year making it's utilization capacity of 80% (assuming the current capacity is scaled to 4L a year). The Sierra, due to sharing the new Platform christened Atlas with Nexon 3.0 due to start production this year end and Curvv, will be made at the second facility assuming will sell 8k a month will achieve a production volume of approximately 4.2L a year raising total capacity to 5L units a year. Keeping production rate to around 85%.

The Pune plant that assembles the cars, derived from the X3 platform called AlfaArc, of which Punch and Altroz are made on. They sell about 20k a month that totals to about 2.4L a year. The capacity of the Chinchwad plant is 5L a year, that was the first PV plant where the Indica and Indigo were assembled, followed by Vista, Manza, Zest and Bolt. They operate only one shift and shows they are nearly at full capacity.

But the first plant, that makes the X0 platform derived cars, is lagging at less than 40% of the initial capacity. They should plan more products as this is literally lying idle.

Of the 16 Lakh total capacity to the top scalable limit they have developed upto only 10 lakh units but are making about 6.6 lakh cars a year, leaving aside Harrier and Safari that are made at FCA plant. That count a total of 65% capacity utilization. Assuming your quote of 8,50 lakh capacity that means they are at 85% capacity.

Originally Posted by carjack3090

Tata had the first movers advantage in the EV segment in India, their Nexon EV was a run away success in its first generation, but it wasn't a grounds up EV and that had its limitation

Nexon was a modified ICE platform but Punch onwards, the platform is Born EV but the top part is from an ICE car so that they can rationalize the cost of production. That is justifiable as EV sales are lagging and TATA did a good job by not stretching their budget where EVs in India were at a nascent stage as infrastructure was still primitive. MG sells their cars worldwide and can afford to make born EVs as they import technology and parts directly from China to assemble here. Mahindra has taken a huge gamble with Born EVs and can make profit only on volumes. They need to ramp up exports else they will end up loosing money. Remember Mercedes Benz and BMW are abandoning Born EV platforms as they are loosing money.

[ashutoshb]

The pundits have already said, Tata bet heavily on EVs and ignored Hybrids and ICE upgrades. Switching to EVs is still going to take time. Till the time, that happens, they will have to raid their parts bin and make do with what they have.

When they were doing good numbers, I didn't find any faults in their lineup. But, now that they aren't doing so well, I guess, I have a few words to say.

Nexon: Punch and Curvv are eating into the Nexon's sales. And a generation change is now due. The 1.2 GDi needs to make an appearance too. And not at an astronomical premium.

Punch: Its their best seller now. But, sales could have even further improved if they had offered a DCA transmission and a diesel like Altroz. Small can be premium. Going with this thought, it needs better interiors and the 1.2 GDi petrol.

Tiago: Again, a generation change is long overdue. With two airbags, in 2025, its a zero-star car today and I wouldn't recommend a Tiago to anyone.

Altroz: A facelift is long overdue. They have caught up on the features part though. The Turbo petrol needs to be offered without the decals and the exhaust.

Tigor: No six airbags, aged interiors, Tigor's current generation is breathing its last. Let's see if the next generation can do some wonder with its sales. The 1.2 Revotron with the 7 speed DCA would be more than welcome.

Curvv: Clearly, not a typical 4.3 metre SUV. Its a Nexon plus with cramped interiors, if you compare it with others in this segment. I see the Curvv only as a stop gap arrangement by Tata, till the time their real contender enters the battle i.e. the Sierra. And I don't believe Tata ever expected 10,000 coupe SUVs to be sold in a month.

Harrier & Safari: Desperately need a petrol engine. When is it coming? Only Tata knows. The Hexa's Dicor + Torque converter is revered. If their BS6 Dicor is alive somewhere, they can think of tinkering with it to offer it in the bottom two variants.

[07CR]

Originally Posted by safari_lover

I don't think Curvv can be called a dud. Not yet, anyways.

Curvv is on the path to being a dud. Tata expected 48000 annual sales (which itself is very low target), of which if you look the past 3 months have been 3087,3483 and 3785. Yes, the CNG MAY add sales, but I believe it will end up cannibalizing the EV/Diesel too. So that needs to be seen.

QC remains the biggest pet peeve. I was not apprehensive to buy a used Ford Ecosport Ecoboost nov 2018 car, but very afraid to buy a brand new Nexon. That explains. Until they sort this out, no new models with how much ever tech/specs they dish out will make a difference. They would make a difference, but maybe only temporary.

[ellip5i5]

The share price drop is more a factor of Jaguar Land Rover’s woes than TaMo

Given the tariff situation, it is even more exacerbated and will remain so for the better part of this year

[LongDrives]

Originally Posted by 07CR

Curvv is on the path to being a dud. Tata expected 48000 annual sales (which itself is very low target), of which if you look the past 3 months have been 3087,3483 and 3785. Yes, the CNG MAY add sales, but I believe it will end up cannibalizing the EV/Diesel too. So that needs to be seen.

If you go back to history of Tata Motors cars, all of them had a slow start including Nexon and Punch. Both of them sold around 6 thousand cars in the initial years then zoomed past 10 thousands to finally surpass 15 thousand units. Curvv too may follow them same trajectory path.

[TheStoryweaver]

Here are a few points I'd like to add to the good research:
1) Tata Motors does achieve significant sales volumes, particularly in the lower segments.

2) The flagship products, the Harrier and Safari, are compromised. They weren't engineered from the ground up and, consequently, seem to have numerous flaws. These vehicles, which are flagship cars, fall short of justifying their price. Buyers spending upwards of 20 Lakhs typically expect reliable vehicles free from electronic glitches and compromises. Furthermore, Tata doesn't seem to have fully resolved these issues. Comparing Mahindra's offerings in the same segment highlights a clear preference among buyers for Mahindra over Tata.

3) Convenience and reliability are aspects that are often perceived as lacking with Tata vehicles. As consumers become more knowledgeable and their purchasing power increases, their expectations rise. Tata isn't typically associated with convenience and reliability and often receives a pass on these aspects when buyers consider vehicles priced above 11-12 Lakhs.

There's a clear reason why Toyota, despite offering fewer features, sells well in the higher segments compared to the feature-rich Safari and Harrier.

I sense a degree of complacency when sales figures were high, as dealers held the upper hand. However, with demand subsiding, the consumer shall have the upper hand again.

Tata does have a second chance when their initial customer base (the small segment buyer) looks to upgrade their vehicle in the future. Based on my understanding, the Punch and Nexon are relatively well-engineered. These consumers might consider upgrading within Tata's lineup if the company significantly improves its After-Sales Service (ASS), reliability, and Quality Control (QC).

It will be interesting to observe their performance in next few years.

[It's Magic]

A few pointers from my side:

• Launch petrol variants of the Harrier and Safari.
  
• The Harrier EV has been anticipated for a long time. Tata should have launched it during last year's festive season.
  
• The Nexon needs a proper facelift, as the introduction of the Curvv has made it look dated.
  
• Tata needs to think about the future of the Altroz. It's a good product but has been completely ignored by them. Its facelift is long overdue, and now it looks dated compared to its competition.
  
• The Tigor is another car that has started to look dated compared to the competition. It's lacking a CNG option, which might appeal to the cab segment.
  
• There is a strong need for focus on Quality Control and After-Sales Service. Significant improvement is needed in these areas.

[shyampsunder]

While the EV market continues to grow, Tata's EV marketshare continues to fall. While people do mention QC and ASS their impact and severity in EVs is much higher.

Based on informal surveys among early Nexons, Tiagos and Tigors, battery replacements under warranty for these cars seem to be atleast 10x to 20x higher than their competitors. It's baffling to see customers who have seen multiple battery replacements for the same car. Simply unheard of with any other OEM globally.

Anecdotally we have seen the issues go down with newer models and launches but the trust in Tata as a brand for a lot of us EV enthusiasts is down in the drain. When friends and family want to buy EVs, these early enthusiasts are the ones they go to and I have steered atleast 5 prospects away from buying Tata EVs.

Personally I would have bought a Tiago EV as a second car if not for all the critical failures which are too many in number to dismiss as isolated issues.

I wish Tata Motors had come clean, issued a recall and instilled trust in people on their EVs.

[Kosfactor]

Originally Posted by ashutoshb

Harrier & Safari: Desperately need a petrol engine. When is it coming? Only Tata knows. The Hexa's Dicor + Torque converter is revered. If their BS6 Dicor is alive somewhere, they can think of tinkering with it to offer it in the bottom two variants.

We have some early adopters of these twins in the family, so I am of the opinion that Tata should outsource the powertrain entirely and work on the rest of the vehicle.

Given it is summer- let them start with the AC.

[sri_tesla]

Originally Posted by sharmanova

Not only the Market cap, even the share prices of Tata have reduced by ~50%

Market cap = share price x number of total shares
So, market cap directly reflects the drop in share price as long as the number of shares stays constant.

Tata Motors' share price is heavily influenced by JLR sales. In FY24, JLR sales grew by 27%. Due to the growth in both JLR and domestic sales, combined with a bull market, the share price went up significantly. FY25 (April 2024 to March 2025), sales were flat for both JLR and Tata Motors. This, coupled with a bear market, caused the share price to decline drastically. Even after this decline, the share price is higher than it has ever been before 2024.

Both Tata Motors and JLR lack a coherent vision. They were ahead in EVs due to quickly developed patchwork EVs. The success of Nexon EV made them greedy, and they continued to raise prices for successive models while keeping the specs (battery capacity, charging speeds) the same or worse. Even after 5 years of the initial Nexon EV launch, they still don't have a ground-up EV platform. 90% of their ICE sales are coming from <4m cars.