By Richard Rittorno
Auto manufactures typically run with the herd, as they attempt to provide consumers with what they want or what they didn’t know they wanted. When one auto manufacturer raises prices, the herd follows. Not so for Tata Motors (NYSE:TTM). While many auto manufacturers have raised prices or are currently thinking about raising prices, Tata Motors is setting itself apart by relaunching its compact car, Indica eV2, with an updated, fresh look while lowering the price by 23,000 rupees.
This provides a Tata Motors with a strong economic solution for its customers, with cars at prices ranging from 4,01,162 rupees to the fully decked-out version at 4,87,619 rupees, selling in high-end showrooms like Delhi. Tata Motors took the relaunch a step further and not only gave the eV2 a fresh look, but also is providing customers with a choice between a rail diesel engine and an MPFI gasoline engine.
The choice of engines along with stylish exteriors that revamp headlights with integrated stop lamps, new front bumper styles, and alloy wheels all at a reduced cost of 23,000 rupees has set Tata apart from India’s other auto manufacturers. Companies such as Audi India, General Motors, Honda Cars, Maruti Suzuki have raised vehicle prices or are currently in the process of raising prices. Honda Cars of India, for example, just raised its prices as of Oct. 1, 2012, on its Brio, City and Jazz cars by 2.6%.
As for India’s largest auto manufacture, Maruti Suzuki of India, it announced it will be raising prices on its vehicles as soon as it can work out the details. Audi of India announced it will be increasing the price of its sport utility vehicle by 50,000 rupees in October.
This should position Tata Motors well going into the fourth quarter, setting the auto manufacture apart from the herd. If its sales people can upsell customers, that bodes quite well for Tata.
The bottom line for Tata Motors is as follows: Tata Motors is lower on the day, but the strategic move made by the company could mean Q4 benefits that are being priced in at the moment.