Tata Motors is embarking on a new strategy to overcome distribution restraints across its passenger and commercial vehicles segments in India. The company plans to use its truck network to stock and sell passenger cars in locations that do not currently have passenger car dealerships. At the same time it will stock and sell commercial vehicle products at passenger car dealerships in markets not covered by the commercial vehicle network.
Mini-trucks, such as the Ace (pictured), will be delivered to vehicle dealerships in relevant markets while passenger vehicles, such as the Nano and Sumo, will be delivered to and sold through commercial vehicle dealerships.
Tata was reticent on the details of the new optimised network, saying only that it was exploring the best options and that implementation would depend on the suitability of a product in a particular geography.
While questions remain over what this will mean for carriers and how capacity will be affected, it does indicate a willingness amongst the country’s leading manufacturers to pursue innovative remedies to the existing challenges for automotive distribution in India.
Tata may be leading by example, as its executives have said it would like to see more innovation for its logistics providers as well. At last year’s Automotive Logistics India conference, Prem Verma, the CEO of Tata’s vehicle logistics subsidiary, TML Distribution, said that logistics providers needed to be seen as game changers. “They need to bring radical changes in every facet of OEM business and have to provide end-to-end solutions.”
“A logistics providers’ forte cannot be only size and quality of fleet,” Verma added, “as unfortunately an LSP must have more than that. The Litmus test is whether or not it is willing to go beyond being a glorified transporter.”
Currently Tata Motors has 254 passenger vehicle dealerships handling 600 outlets across India. It’s commercial vehicle network, meanwhile, is made up of 200 dealers running 1,000 outlets, with a significant number of them exclusively stocking the Ace mini-truck. In 2007 Tata introduced a passenger version of the Ace.