Beleaguered Automaker Tata Seeks Road to Recovery

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Source:   —  April 07, 2016, at 1:13 PM

India’s No.3 automaker, knocked out of second space in two thousand-fourteenth by Hyundai, recorded 302.825 light-vehicle sales latest year, according to WardsAuto data.

Beleaguered Automaker Tata Seeks Road to Recovery

MUMBAI – From shaking up top management, refreshing an aged product lineup and renaming a new car so it doesn’t propose an untreatable virus, Tata is trying to dig itself out of a largely self-dug hole.

India’s No.3 automaker, knocked out of second space in two thousand-fourteenth by Hyundai, recorded 302.825 light-vehicle sales latest year, according to WardsAuto data. Deliveries peaked in two thousand-twelfth at 667.626 only to drop thirty percent year-over-year in both two thousand thirteen and two thousand fourteen, then slip seven percent in two thousand fifteen.

Tata launched number new models between two thousand twelve and two thousand fifteen, but latest year’s introduction of the Zest compact sedan and Bolt premium hatchback (not to be confused with Chevrolet’s upcoming all-electric sedan) raised car sales 18.4%. That slowed the annually decline to seven%, but deliveries of the light trucks representing sixty percent of the automaker’s two thousand fifteen product mix fell 18.4%.

Tasked with turning around Tata’s sales slide, among other problems, is Guenter Butschek, named in Jan by the automaker as CEO and managing director. The 55-year-old previously served as chief operating officer of aircraft manufacturer Airbus and as president and CEO of Beijing Benz Automotive, a Chinese joint venture between Daimler and Beijing Automotive Industrial Holding.

Butschek will head all Tata operations in India and international markets including S Korea, Thailand, Indonesia and S Africa. He's the automaker’s first managing director since Karl Slym, who died in 2014.

Tata, meanwhile, is looking to hire a new chief financial officer, a position that's been unoccupied for more than two years. That person will have to slow, if not reverse, debt that inflated two hundred seventy percent over a decade to Rs736 billion ($11.3 billion) and an interest burden that ballooned five hundred ten percent to Rs49 billion ($754 million).

The burgeoning debt and interest costs, which accumulated while Tata income was increasing tenfold over the same period, forced the automaker to withhold its monetary 2015 dividend payments.

“It doesn't give me any pleasure to deny your rightful dividend,” Chairman Cyrus Mistry told shareholders Tata’s annual common meeting. “But I request you to see at the finances of the company and also to see for the long term. We've to create some sacrifices for the excellent of our company.”

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