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We are better prepared for slowdown, says Tata Motors CEO

We are now sufficiently robust to handle any changes in market environment, regulatory framework or competitive pressure, Guenter Butschek said.
Tata Motors MD & CEO Guenter Butschek talked about the current slowdown in the automobile market, turnaround in the company and the shift away from diesel. Excerpts:

How is Tata Motors managing the slowdown that has hit the auto industry?
We see right now a turnaround at one end and a turn down at the other but we are much better prepared for what lies ahead than we were — when the transition from BS3 to BS4 happened. We shifted gears in 2017. If we had started taking steps only now, we would be hopelessly lost. Earlier, market fluctuations would hit us over proportionately because we were not agile enough. But now, within 4 weeks of the new axle load norms, for example, we have a vehicle at ARAI for certification. We are now sufficiently robust to handle any changes in market environment, regulatory framework or competitive pressure.

So after turnaround 1.0 and 2.0, will there be a 3.0?
There will not be a turnaround 3.0 as the new principles are now a part of our DNA. Tata Motors has changed and we have embedded turnaround 1.0 and 2.0 into the organisation. The whole purpose of the turnaround was to become less vulnerable to volatility.

Will Tata Motors reduce its diesel dependence in passenger vehicles post April 2020?
There are two factors in diesel — BS6 and the CAFÉ norms that come into effect in 2022. BS6 makes diesel technology more expensive and as the gap between petrol and diesel fuel prices come down the amortisation of the higher price for diesel vehicles takes longer. The diesel shift is already happening with us — Tiago, which was expected to get 60% of its sales from diesel variants, now gets 70% of its sales from petrol ones. Going forward, for small displacement engines up to 1.2 litre, diesel may not be a viable proposition except for fleet customers. So, we will take a call product by product on diesel and also offer CNG as an alternative.

In the 1.5 litre and above segments for SUVs and sedans, diesel options will remain. Smaller vehicles could also be ideal for electrification and urban mobility, though the pricing there could be an issue.
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