May 2001 | Ananth Koovappady and Mohini Bhatnagar
Putting the customer in the driver's seat
The philosophy at Tata Engineering's passenger car division places the customer on the highest pedestal. KA Anantharam and Mohini Bhatnagar explain how the company and the car continue to set new standards in the Indian automobile industry
The Tata Indica story resembles the fable of the ugly duckling in some ways, with one crucial difference: the country’s first indigenously designed and manufactured passenger car never looked less than pretty. But, like the duckling of the fairy tale, it has emerged stronger and more beautiful than ever after overcoming global competition and a recessionary market.
The Indica’s teething troubles -- ramp-up constraints early on and a recessionary market thereafter -- are a thing of the past and the car sometimes identified with India itself has crossed the 100,000 mark in volume faster than the Maruti 800, the Zen, the Matiz and the Uno. (See for an independent testimonial.)
Getting past the 100,000 mark in quick time is a fair return onTata Engineering’s investment in developing the car: Rs1,700 crore, the largest ever made by the Tata group in a single project. Huge as the amount seems, it is still the lowest ever cost incurred by an automobile company anywhere in the world for launching a new vehicle from design to production stage.
Scepticism from far and wide had greeted Tata group chairman Ratan Tata’s announcement of the intent to produce an indigenous passenger car. Few believed that a commercial vehicles monolith like Tata Engineering could manufacture a customer-driven product like a passenger car. The shock to the sceptics was delivered when the product was unveiled at the Auto Expo in January 1998.
Constant improvements and, most importantly, the goal of creating customer satisfaction, has taken the Indica to new highs. Tata Engineering truly believes that the customer is king. So vital is this belief that customer satisfaction is factored into the job profiles and performance appraisals of all employees in the company’s marketing, sales and service departments.
It hasn’t been an easy ride. As Rajiv Dube, Tata Engineering’s general manager for the passenger car unit, says, "The going has, indeed, been tough. For somebody with no history in cars to get it all right on day one is unrealistic.
"All of us knew we would have to go through the learning curve. Our effort has always been to shorten that curve and get ahead of the competition. We never lost sight of our goal, which was to provide the customer with a product that offers the best value for money."
Having dominated the country’s commercial vehicles market, where customer pressure is far less when compared with the passenger cars segment, the effort at delivering customer satisfaction had to be institutionalised across the organisation.
It began in mid-1998, when the existing range (Sierra, Estate, Sumo and Safari) was clubbed together under a new marketing division that preceded the launch of the Indica. The organisation went through an elaborate process to create the set up. Dynamic, relatively young people driven by the challenge of producing and marketing a new car were brought into the picture.
The Indica was launched in December 1998 with just 44 dealers. The dealers, too, were chosen keeping customer satisfaction paramount. The company ensured that the Indica dealer network had the right customer orientation and that adequate investments were made in technology and people of the appropriate standards.
And Tata Engineering has gone the whole hog while strengthening its dealership spread. From 44 dealers, when the car was launched, the network now has 85 dealers across the country and will have 110 by March 2002. To provide quality after-sales services at easily accessible points across the country, the company has raised the number of ‘Telco authorised service outlets’ from 56 to 240 over the same period, with plans to push it up to 350 by March 2002.
This makes Tata Indica’s after-sales service network the second largest in India after that of Maruti, the country’s largest passenger car manufacturer, and ahead of competitors like Hyundai and Daewoo.
The large network of dealers and service outlets has gone a long way in ensuring customer loyalty to the product. So has the continuous endeavour to improve the Indica. The company’s engineering research centre has, through constant interaction with customers, added several new features to the car.
For instance, the vehicle’s suspension was found to be stiff by early users and their feedback helped the company develop a softer suspension. Mr Dube, who has been closely involved with the Indica project since it started, is quite pleased with the way the car has been received. And the figures back him up.
The Indica reached the coveted 100,000 mark much faster than the Maruti 800 or the Maruti Zen. Newer entrants like the Daewoo Matiz and the Fiat Uno are well off the pace set by the Indica. As Mr Dube says, "We have done quite well [for a company without a tradition of making passenger cars], and against competition that, in some cases, has 50 to 75 years of history in this business."
The company took its average faring in the JD Power survey in its stride and has overcome its shortcomings in double-quick time. The report was rightly regarded as representing legitimate customer complaints. Refinements were carried out on the Indica based on the findings of the report as well as constant contact programmes with customers.
The re-jigging of the Indica has been done without diluting the product’s value. "It is important to exercise your judgement as to which product improvement is introduced and when, since every product is positioned at a particular price-value point," says Mr Dube.
Tata Engineering has been in the forefront of using technology that ensures customers get the best value for their money. The Euro II diesel engine was put into the Indica in January 1999 (much before it became the norm for Indian cars) and the multi-point fuel injection petrol engine was introduced in May 2000.
The focus may have been on the Indica, but the passenger car business unit’s marketing initiatives aimed at guaranteeing customer satisfaction have been spread across the company’s entire product range, which includes the Sierra, the Estate, the Sumo and the Safari.
To make sure that genuine spare parts are easily available across the country at economical prices, Tata Engineering has set up four parts warehouses at convenient locations. There is a robust training programme in Pune for all service executives of dealer and service outlets. Additionally, the company has four regional training centres which tutor executives onsite at dealer and service outlets.
The company has set up a toll free number which can be accessed in 51 Indian cities. Also, there are customer helplines in the 10 largest cities, dealer helplines and mobile service vans in more than 50 per cent of dealerships. These initiatives have gone a long way in providing customers service in the shortest possible time.
That isn’t all. There’s a loyalty programme for customers (with benefits like discounts) at select outlets, the first time this has been done by a large-volume automobile company in India. Christened ‘The Indica Club’, the programme is growing by the day and provides Tata Engineering with a solid source of customer feedback.
There are year-round service programmes in various parts of the country and an extended warranty scheme has been recently introduced where, at nominal cost to the customer, the warranty period is increased by 18 months. The company has also used ‘co-branding’ with consumer-goods manufacturers and finance companies to boost customer loyalty.
Fleet companies and corporate houses are specially tracked and a dedicated relationship team at the regional and product level services these big clients. Special service packages are tailored to suit the needs of such customers.
Tata Engineering is using infotech and the internet to manage customers and further build its brand image. It has special websites for the Indica and the Safari with active customer interaction facilities. (There’s an independently promoted Indica users club on the Net, of which the company is a member.)
The process of linking the entire Indica dealer and service network is on and this will improve the level of service to customers. This network will track orders right to the shop floor and help immensely in parts management and delivery. On the anvil is a ‘knowledge management system’ where product complaints will be stored for the future benefit of the service network.
After all this, what next? "Customer satisfaction lies at the core of the company’s plans. We will continuously improve and improvise to ensure that the customer benefits," says Mr Dube. Coming soon are newer versions in the hatchback range and, in the near future, two new offerings on the Indica platform.
The Tata Indica in its current avatar and all its new offerings are ultimately geared towards making certain the customer is always in the driver’s seat. A satisfied customer is the best advertisement for any product. Anticipating and exceeding customer needs will remain Tata Engineering’s principal priority.