Tata Motors charting out disciplined growth path despite challenges: N Chandrasekaran

Mumbai: Tata Motors Chairman N Chandrasekaran said to the company's shareholders that the automaker was “charting out a disciplined growth path” by focussing on generating positive cashflows, reducing inefficiencies and investing in future product development.
“Against this volatile macro backdrop, your Company is charting out a disciplined path towards a robust and resilient future,” Chandrasekaran said in the company’s 75th annual report.

Over the coming two years, the company anticipates “a tremendous deal of transformation stemming from COVID-19” as consumer behaviour changes sharply. There will be focus on health and safety features and the move to personal mobility may shape the demand for passenger vehicles, Chandrasekaran said, adding that the legacy carmaker was well poised to meet these opportunities.

He highlighted that after making losses for five years, Tata Motors’ domestic business had finally turned profitable in FY19. “However, in FY20, this turnaround journey has been interrupted, as demand deteriorated sharply on the back of an abruptly slowing economy coupled with the spread of COVID-19.”

The country’s largest commercial vehicles seller gained market share in several segments, even as overall sales declined by 34% during FY20. Meanwhile, the company’s passenger vehicles sale declined by 37% during the fiscal year and it ceded over 150 basis points in market share. The chairman attributed this decline in sale to its exercise of streamlining the supply chain and exiting non-core segments.

British subsidiary Jaguar Land Rover (JLR), which contributes over 80% to the company’s consolidated revenues, too witnessed a sales decline of 12% during FY20.

“JLR undertook a host of structural initiatives to drive efficiencies so that, despite the decrease in volumes, the business improved its profitability during the year and reduced its cash outflows, compared with previous years,” he said. “Our turnaround programme in China resulted in six months of continued double-digit Y-o-Y growth.”