Tata has very ambitious plans for the Nepali market
August 10, 2017 08:22 AM NPT
Johnny Oommen, the head of International Business Passenger Vehicle Business Unit, Tata, has experience of more than two decades in the automobile industry. He has spearheaded Tata International Business in Asia, Africa and Latin America. Oommen is currently in for the launch of Tata Tigor ‘Style Back’ car. Republica's Muna Sunuwar caught up with Oommen to talk about the business of Tata in Nepal. Excerpts:
How is the Nepali automobile market for Tata?
If you look at last four -five years, the market has seen many ups and downs. If I were to make a general statement, we have definitely seen the market growing in long term. Last year was fantastic for the market. This year, unfortunately, because of liquidity crisis, it has again seen a very sharp drop. However, seeing that Nepal has young population and also the car penetration here is still very low, the potential is huge. So, we definitely have an optimistic view of Nepali market. And barring these few episodes of liquidity crisis and natural disaster, the market is poised for growth.
Can you describe your visit to Nepal from business perspective?
It is my first visit this year. I last visited Nepal in August 2016. I am very happy to be here because it is a very significant launch. It's a product with concept which does not exist in the market. That is why we call a 'Style Back'. In 2015, we started with Zest and Bolt followed by Tiago. Now, it is Tigor. It is very important for us because of the past three launches over the past two years. With Tigor, we have launched four products which is a very aggressive approach. In the year, we shall be launching another two products if all things go as planned.
What kind of products are you planning to introduce in the Nepali market?
We have very ambitious plans for the market. We believe that customers will accept us and put us on top of their shopping list when it comes to purchasing cars. It is important that we come up with products which are truly exciting, cutting edge in terms of technology, design, comfort and convenience features and that is what we do in every successful launch. We are trying to bring in products that can address segments across the Nepali market in the long-term.
What makes Tata vehicles competitive in the Nepali market?
We have tried to strengthen our presence in the hatchback segments. And we have seen almost immediate success. Similarly, the biggest strength the number of touch-points that we have -- 20 showrooms and 24 service points across the country catering to customers all over the country with superlative sales and service experience.
How has been the business in Nepal?
Business is going well, but there is always scope to do better. There are some factors, liquidity crisis for example, that are out of our control. Nepal is a market where unfortunately customers have to pay much higher tax rates than most of the countries. As a manufacturer, we would obviously be hopeful that the tax regime becomes a little easier so that customers do not have to pay much. From a general business continuity approach, it is obviously much better for business if liquidity crisis and other constraints on customers do not happen often. Last year, we did very well, but this year we have seen large drop because of restrictions.
Is there any plan of Tata building an automobile assembly plant in Nepal?
The basis of manufacturing in automobiles is scale. You need volume in order to have a factory. Nepal is relatively a small market. The notion of having a factory makes sense only because the taxes are so high. But installing a factory just for that purpose for such a small volume actually does not make sense. But in the future, as the market grows, we will obviously be studying it and see what opportunities exist. Today, the size of the market doesn't justify the assembling or manufacturing.
What are your upcoming marketing strategies for Nepal?
The marketing strategy behind this is about launching very strong products in the market through which we can attract customers across segments. All the recent products launched here have helped us to gain several points in market share over the past 18 months. New launches have helped us strengthen our position in the markets. We are looking to build our presence even more through introduction of products, expansion of distribution network and by offering superlative sales and services.