Ratan Tata hails Mahindra & Mahindra; says JLR building compact cars

MUMBAI: Bidding goodbye to his shareholders, Ratan Tata, the chairman of India's largest automobile company, Tata Motors, expressed disappointment at trailing Mahindra & Mahindra in the highly competitive passenger vehicle market.

Addressing shareholders for the last time at the company's annual general meeting on Friday, Tata expressed admiration for the feats of M&M, India's largest maker of utility vehicles.

"(I have) a great respect for what Mahindra & Mahindra has been able to do. I have certain degree of sadness and shame that we have let that happen. I think we have a great deal of introspection to do as to why, Mahindra should be ahead of us, then us catching up."

Mahindra and Mahindra overtook Tata Motors in the passenger vehicle market for the first time in the first quarter (April to June) of financial year 13 with sales of 61,504 units compared to sales of 60,405 units for Tata Motors. The see-saw battle saw Tata Motors again regaining its number three position in passenger vehicle sales in July 2012, but the difference between M&M and Tata Motors is just several thousand units. Maruti-Suzuki and Hyundai Motors occupy the first two slots in India's passenger vehicles market. The segment includes both cars and utility vehicles.

Speaking about future competition in the commercial vehicles segment, Tata said, the company will have to single-mindedly retain and protect its market position across all segments. "Failure to do so will see us slipping," he warned and said, "I hope the employees will rise to the occasion in spirit to meet the needs of the changing times."

On his dream project, the small car Nano, Ratan Tata said the company had achieved its goal of offering families an all-weather affordable means of transport, but added that much remained to be done.

"There is still a lot more work that needs to be done to make it successful. We have 1000 demo points. I think we have to do more to propagate Nano to get the right volumes. I would hope that we can sell at least 2,00,000 Nanos in 12 months period."

Tata said if the company is able to increase the volumes of the Nano, "then it will have the impact that it was meant to have." Referring to Jaguar Land Rover ( JLR) Tata said the company is working on an ambitious product plan which will see JLR building smaller compact cars as well as getting into segments to take on Mercedes Benz, BMW and Audi more aggressively.

"We have not had that benefit for several years, we decided that now JLR needs to build new products and get into new segments and that is what we are pursuing. It is a very ambitious task and it is really for the future health of the company," said the chairman of Tata Group, the largest employer in UK.

Seeking the support and encouragement of the shareholders for Cyrus Mistry, who is slated to succeed him at the end of this year, Tata said: "I want you to extend the same sort of support and encouragement that you have given to me all these years, to Mistry as well."

He assured shareholders that Mistry's passion for automobiles equalled his. On the ailing Spanish bus subsidiary Hispano, Tata said the economic situation in Spain accounted for its troubles. "What (Hispano) was once a very premium bus company in Spain and in Europe is in (a) tough space. So we are looking at what best we can do whether we could continue or not to continue with that subsidiary."