Tata’s New Models Show Confidence in Indonesia

Tata’s New Models Show Confidence in Indonesia

By Heru Andriyanto on 11:38 am Mar 21, 2014


The interior of the Vista hatchback. (JG Photo/Heru Andriyanto)

  1.  Newcomer Tata Motors believes the Indonesian auto market has room for all, as it strengthens its presence by adding three new models in the face of long-time domination by Japanese auto giants.

The Indian manufacturer brings in the Vista hatchback, seven-seater multipurpose vehicle Aria and sport utility vehicle Safari Storme, whose exterior carries a striking resemblance to Land Rover’s Discovery family.

Those three bring the total model portfolio here to five, in addition to the two models launched when the company started to hit the Indonesian market last September.

“When we talk about these Japanese brands, they have been here for the last 30-40 years. We have a lot to learn from them. We are here not to compete with the big Japanese brands,” Tata Motors Indonesia president Biswadev Sengupta told the Jakarta Globe.

Both the Aria and the Storme are represented by base models only, in an apparent attempt by Tata to build awareness of a more affordable product.

During our test drive on Tuesday, the 2.2-liter diesel engines on both cars impressed the participating journalists on the hill drive towards the Puncak area and more surprisingly for the minimum vibration and noise.

The patented Dicor fuel injection engine also matched a more traditional petrol engine in terms of straight line pace on the highway.

“I can go 120 kilometers per hour with engine revolutions around a low 3,000 rpm,” said AutoBild journalist named Toni while driving the Aria on the Jagorawi toll road. “It means high output is achieved on relatively little fuel, which is good for a family car.”

Tata said the diesel engine employed the common-rail direct fuel injection system that featured high-pressure fuel feeding for optimized output and fuel efficiency.

But that aside, consumers in the country’s crowded MPV segment will immediately notice that the base models don’t have airbags, a low point for a car that costs Rp 260 million ($22,800) for the Aria and Rp 285 million for the Storme.

The Vista, on the other hand, could lay a strong foundation for Tata’s sales depending on how the company markets the product.

The hatchback has dual SRS (supplemental restraint system) airbags, Bluetooth connection and audio and phone control on the steering wheel. Moreover, the engine is built by Italy’s Fiat and the engine control unit comes from Magneti Marelli, the same ECU supplier of Ferrari.

On top of that, the Vista is priced only Rp 135 million, about Rp 100 million less than the upper variant of Honda’s Jazz.

Biswadev maintained confidence that Tata would ultimately find its way into Indonesia and become a key player, with some unique advantages and strategies on the table.

“I believe we can develop our own market. The Indonesian market is big, it crossed the 1.2 million mark last year [in the number of cars sold], and keeps growing,” he said. “There is enough space for all manufacturers here in Indonesia and all will earn, provided you give good service to the customers.”

Tata has long targeted fleet sales and leasing for mass transportation, including a prototype for low-cost public transport minivan or angkot using the platform of its Super Ace pickup and a partnership with Bluebird taxi company to rent Arias.

Unlike other manufacturers in the country, Tata has a wide range of products from small pickups to cars to mining trucks, Biswadev said and this year, 10 new models and 18 variants including the higher Arias and Stormes will be shipped to Indonesia, he said.

“Our job now is to build our brand and good quality network, that’s our target. If we can do that properly, volume and other business parameters will ultimately be taken care of,” he said. “It’s true we are not doing a charity, it’s business. But business is a long-term project. Right now the objective is to build our brand because we are just coming in to the market, many people still don’t know about Tata brand; not only about the name Tata, but what we stand for, our value, and what kind of cars we make.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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