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Thursday, September 4, 2014

Why Tata ....

Recently I have been questioned by 4 important people in my life - about this question - 
"Why continue buying Tata cars and risk it or gamble it, why continue putting so much blind faith and trust in Tata cars and products, why invest so much time on Tata?"

It reached it's pinnacle of discussion recently after test driving the fabulous Tata Zest and why not go for the more reliable and trustworthy Maruti cars.

Because those people matter a lot to me and are significantly influential in all my decisions of life - it made me re-think and re-list for myself to answer the question Why Tata?

General discussion about Maruti v/s Tata ... and why Tata.

A very important question-

There is no doubt that Maruti is the NO. 1 passenger vehicle manufacturer in India.
Strong market share between 40 to 50%
& definitely the largest portfolio, with maximum variety - a car for every need and every pocket. 100% reliable too. Maybe even better than Toyota ;)

They have had a few flops too - A star, Grand Vitara, Kizashi - who doesn't ?

Yet - the question - why go for Tata. 

Primarily - yes Tata has it's faults.
Reliability is a question, yes - some things crop up every 6 to 8 months and like any Tata product the 2nd version is best.

But that is DEFINITELY changing at every level

Buying ANY Tata product - is not a decision based on the product, it is based on the company philosophy and policy. 
It is not so much about the products(s) - any of them - as the manufacturer / seller.

1. Why the reliability issues in Tata cars - because of too many vendors - too many manufacturers manufacturing the same part - hence quality is not controlled. Why so many vendors? - Because when Tata made the 1st indigenous car - Indica - it set up along with a 1000 crore+ plant - a HUGE number of parts and component manufacturers and vendors - so that it is ALL made in India rather than importing parts. Thereby - making more revenue and industrial strength for India as a country and enabling EXPORTS. 
All these people, who stood by Ratan Tata for that project - and invested in setting up these industries - he never betrayed them or left them halfway. That is why - till date they were ALL active. Recently after he retired. there was a change in management - and yet - they did not kick out the old loyal vendors. They just re-organized the entire parts system such that 1 part is now manufactured by only 1 or at the most 2 vendors and each one of them is now answerable for it, accountable for it and is penalized if found faulty. Thus it becomes more easy to locate the origin of the fault and rectify it.
EVERY company has faulty parts. Even Six Sigma certified companies like Motorola and Toyota are suffering serious quality issues. MAJOR recalls by Toyota and Honda in last 5 years. VAG (Volkswagen Audi Group) has had massive DSG gearbox failures all over the world, including India costing 85000 Rs. to the customer to repair. Recent times even Mercs in India are not spared and more the localization (read built / made / assembled in India) more the faults and quality decline.

Even PM Narendra Modi is urging the manufacturers to bring up Indian manufacturing pace and quality. Today when we look upto and applaud Micromax, Tata has been following that model and doing better at it since decades.

Which brings me to ORGANIC growth.

2. Any company can offer rich benefits upfront as a gamble to make a foray into a segment or make a splash (read stunts like Xiaomi) and then later recover costs or make profits in spares, service in long term. That's always the Korean way (Hyundai and Samsung)
The Indian market is a tricky one - even giants like Toyota publicly bowed out of the small car segment. VAG failed at achieving their targets and after their initial spurt (again Indian herd mentality hype) are now languishing at the bottom end of the sales charts with lacklustre portfolios.
Honda too had it's slump - for a good 2 years and more - but it fought back with Amaze. Similarly, Tata had a slump - complacence, mismanagement, global bands swayed off fickle minded Indians - whatever the reason - it is now fighting back with Zest. Look at the 'fight back' - 2 companies - same scenario - Tata is putting up a MUCH better fight.

Organic growth  - is like an old jungle saying "When the Lion feeds, the jungle feasts" they never eat alone.
Organic growth - ensures that all around you and in association with you grow as well as you give back and make it sustainable in the long term.

Today, year after year, decade after decade - Tata Sons - in ALL their avatars - have set standards of organic growth.
ANY Tata employee will tell you - we are not employees. We are family. 
Take any example - be it the Second Career Internship Training Programme for Women or the Okra tribal community that has been spun into a global art form, while preserving the fishing village.

Any Tata company is ranked amongst the top 5 companies that preserve ecology and have minimal carbon footprint or deleterious effects on the environment around them.
Their re-use policies, filtration plants are some of the best globally.

When it comes to Tata Motors - 72% of the components used in their cars are RECYCLABLE or Bio-degradable. Most other companies have it around 45 to 55%

Let's talk contribution to society - every business is done for profit. And nobody out there does any kind of business without the intention to profit. CSR (Corporate Social Responsibility) - by law is to be 2% of your net profit.
Yet for DECADES - Tata group has been spending 50 to 60% of their net profit on CSR.
And yes, they are STILL making a profit - year after year. If that's not good business, then what is?
Think of them in relation to Wayne Enterprises - the Bruce Wayne and Batman for the Indian subcontinent.
Making money by day - silently spending 100s of crores for the country and betterment of society - not just mankind but every possible living organism.
I agree - that alone - cannot be a reason just to go out and buy a product ... wait isn't that what we do at charitable auctions or other such charitable gala?
Spend money to buy a product, probably not worth it's price - because we know the money is going to be used for a good cause?
I think of EVERY Tata product in the same light.

When it comes to country - Tata's are known for NOT breaking laws, NOT giving in to corruption and bribes. They have refused to start companies when asked for bribes and shelved projects when it was not in complete synergy with the growth of the nation.
Any error by any employee or official of the company - is met with a public apology and at NO point is the customer ever made to loose money, biggest example is that of Tata Finance disaster.

New ideas, new concepts - always demand guts and risk. So far Tata Motors is a PIONEERING organization. Not once, not twice - umpteen times it has brought about revolutionary, market changing, path breaking products / concepts / strategies. Sierra, Estate (1st station wagon), Indica, Sumo, Safari (1st SUV), Indigo CS (created the class of compact sedan) and the world wide acclaimed - NANO. A feat no other company has ever been able to replicate despite big companies like Bajaj & Renault tying up.

Tata Motors has failed at ONE thing - CONSTANTLY. Marketing. They never believed in selling their products, but the Indian mind set is such that jo dikhta hai woh bikta hai'  and people would pay double for the glamour, ads, brand ambassador or just brand premium (this is the same philosophy that Xiaomi has sought to break through by pricing the phone at it's 'cost price')
But they are improving there too.

3.  Now coming to actual products -

There's a saying amongst petrol heads (automobile enthusiasts or car lovers)
"If you park it and don't look back at it ... it means you bought the wrong car"

Money can buy you anything today... almost anything.
Is it not assumed that the primary purpose of money is to buy you happiness?

Well, for me, atleast - not a SINGLE Maruti product 'excites' me. None of them are desirable or have any outstanding quality that would make me feel nice in driving them everyday.
None of them have that 'x' factor that would make me smile everytime I sit in one (barring the Gypsy)

Don't get me wrong - they are good products. Solid. But ordinary. Run of the mill. Standard. As common as the next one.
Doesn't mean I go for a Renault Pulse or a Chevrolet Sail U-Va just so I feel exclusive or different (the point is not to stick out like a sore thumb or make a fool of myself).

I can't fault Maruti - except for a lacklustre equipment list and uninspiring designs.
When I buy a car - it is usually a integral part of my life for atleast half a decade! During which I would not want to feel left out everytime I take a peek at the dashboard of the car next to me at a traffic signal and then look at the poor excuse of a dashboard / equipment list in my car. Why crib and feel inferior for 5 years!
Safety - also is usually reserved only for the Zxi variants of most Maruti cars, which are significantly expensive.
When Tata offers an upgraded comprehensive equipment list in it's top end - you definitely don't feel the pinch for a good 3 to 4 years.
Example - Manza in 2011 at 8.8 Lakhs - ABS + Airbag + speed sensor door auto lock + audio controlled phone and music system on steering + bluetooth with multiple pairing - back then most cars in that segment did not have steering mounted controls.
The only other car comparable in rear space is Sunny. Nissan Sunny - even today at 9.6 lakhs does not offer ABS & Airbags. Steering mounted ONLY audio - not bluetooth.

And let's not even discuss spares - example the front bumper of Nissan and Renault are the SAME. Yet it costs 6500 for Renault and 8300 for Nissan !

Forget reliability for a moment - and think accidents that happen anytime in Mumbai. Scratches. Stones falling, Bikers, Pot holes - anything you can think of - can happen.
Don't say 'IF' - that's precisely how the insurance industry works ;)

Let's talk practical experience
Manza - electronically operated outer mirror with company painted matching shade - 1500 Rs.
Company manufactured toughened factory tinted window glass - 1100 Rs.
Nano - AC vent 95 Rs.
Manza brake & clutch pedals - 34 Rs.
Nano - Axle - 1500 Rs.

One can't compare the FUN of driving a Nano to the weird shape of the Alto 800 or the Celerio
Can't compare the sofa and hall of Manza to the claustrophobic Dzire

Probably the only 2 products if I were forced to buy from Maruti woulds be Swift or Ertiga.


Another point is the feel - the experience.
As a customer at Maruti - you are another customer of the lakhs that they have. At any of the service centre's there is no escalation response or any special privileges.

ONE trip to a Concorde workshop - and you realize the difference.
One can argue that CCD coffee, free Wifi, Dell Vostro laptops or tablets for the service advisors make no difference.
Maybe not even the pick up drop service, separate drivers lounge etc.
Agreed - but do we not pay MONEY for the 'experience'.

The feel, the thrill, the comfort, the joy, the satisfaction - the experience.
The food at Hotel Central Peninsula and Peninsula will more or less be the same! - Yet the price varies - because the experience varies, the feel varies.

Same applies to the service centre of a car. The workshop. Ideally you would visit once a year per car - minimum. For service.
There are bound to be some other minor issues that crop up in every car - and if you are as fastidious about maintenance as me, then your bulb change, wiper change, 3M treatment and Wurth cleaning, Anti-rust, teflon et.c would all be done at the authorized service center rather than Koliwada or Milan subway.

So minimum 2 trips a year - and in both those trips - the feel, the experience - where you are given importance as a customer, treated with respect, good relations maintained by service advisors, invited for various customer meets and sent for movies and dinners complimentary ... all that ... when you actually paid significantly LESSER money than the competition when you bought their product (even the 'inexpensive' Nano customer like me - where the Nano top end is 1.3 lakhs cheaper than an equally equipped Alto 800) .. all of that DOES matter.

Because THAT is what we always pay for right?

Hasslefree service, tension free, peace of mind (with Gold AMC is unparalleled).

The feel, the experience - that's the difference between countless other hings we spend or splurge upon - from the type of grocery shopping, to the restaurant we choose to eat or the brands we wear.

Do we base our underwear on public perception - as to what people will think if the band shows? No. We base it on our comfort. (if you actually do that ... God bless you).

Similarly - why base any purchase in life based on what someone else will think about it. You buy it with your own hard earned money for your own pleasure, satisfaction and that smile on your face.
If you are not utilizing money to get pleasure - then you are doing it all wrong.

When you sit in a fully equipped Tata car like the Zest, or the spacious sedan like Manza and drive out of their service center - you have that smile, that satisfaction.
Then why would you care about anyone else driving by who wonders why you bought a Tata car - because they will never know.

Because a Tata car - like almost everything Tata - is not about the product. It is about a way of life - known as Tata.

It is most often than not a simple decision of whether you live by your heart or the analysis of your mind.

It's not a common dilemma - because most often that not - once you experience a Tata car first hand - your heart and mind get synced.

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Original Work by Dr. Suraj A. Dhirwani

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