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Tata Motors to rejig dealerships to counter declining sales

By Motortrend India Staff   |   02 August,2011

Tata Motors on Tuesday said it is rejigging its dealerships with plans to open product category-specific outlets as it looks to increase sales volumes of passenger vehicles. The company, which currently has 250 full-range dealerships, will open 300 Nano-specific and 100 utility vehicle-specific showrooms by the end of this fiscal.

“There are few corrections needed to be done in few areas... There is a need for rethinking and rejigging of the product portfolio. We are also looking at some alternative dealership route,” Tata Motors Managing Director India Operations P M Telang told reporters in New Delhi. He was responding to query on why the company’s passenger vehicles sales have been dropping, although the commercial vehicles segment is doing well.

Explaining the “alternative dealership” route, company Vice-President (Commercial) Passenger Car Business Unit R Ramakrishnan said: “We are moving away from full range of dealerships to product specific dealerships.”

There will be three kinds of dealerships, Nano-specific, utility vehicle (UV), specific and passenger car-specific, although some could remain full-range dealerships. “At the starting of this fiscal, we had 250 full-range dealerships. By the end of this fiscal, we will have 300 Nano-specific, 100 UV-specific (dealerships),” he said.

Passenger car-specific dealerships will also be started this year, Ramakrishnan said, but did not provide the exact numbers. “In the course of this fiscal, we will transform some UV-specific dealerships to passenger car dealerships and also some full-scale dealerships will also become passenger car dealerships. No numbers have been finalised,” he added.

The homegrown firm’s total passenger vehicles sales in the domestic market fell by 38.30 per cent in July to 17,192 units from 27,865 units in the same month last year. Nano sales also crashed by 64 per cent to 3,260 units in July.

Tata Motors, however, posted a 14.30 per cent increase in commercial vehicle sales to 40,798 units in the domestic market during the month.

Commenting on the poor Nano sales, Ramakrishnan said: “We are still at the early stages of understanding the market. We are going through a learning curve and are trying a lot of different things in marketing activities, like selling the car through Big Bazaar outlets.”

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