Tiago to be game changer for Tata Motors?

Tiago launched finally by Tata Motors after almost six months' delay. Tiago is expected to make a lot of noise in the market due to its aggressive pricing, which may lead to a price war in the segment. The much awaited car previously named Zica, is laucnhed at 3.2 lakhs only and available at a hefty discount to its peers such as Maruti Celrio and Hyundai i10. What is interesting is that the mileage for both the variants as announced by Tata Motors is the highest in the segment. The mileage as claimed by the company for its Diesel variant is at staggering 27.28 kmpl and for the pertrol variant it is 23.84 kmpl.

Tata Motors under fresh leadership of CMD Guenter Buttschek, who previously worked with Airbus as COO for four years and before that with Daimler AG for almost 25 years, is launching new models to address falling sales and unhappy distributors. Tiago is the first car launch under the Made of Great campiagn where Lionel Messi is the Global brand ambassador for Tata Motors.

Tata Motors on the bourses has been doing extremely well if you take the data for previous 1 month to 3 months. On 1 month basis the stock has given 9% return compared to 4 % return delivered by BSE auto index and only 1.03% returns offered by BSE SENSEX.

On YTD basis also the stock has outperformed the Industry benchmark and BSE SENSEX. However if we take 1 year data, Tata Motors stock has given negative returns of 33% whereas BSE SENSEX gave negative returns of 12% and BSE Auto Index delivered negative 9.95%.

If Tiago wins market share for Tata Motors in an extremely competitive and popular hatchback segment which constitutes 50% of the passenger vehicles market, Tata Motors looks extremely well poised to gain further grounds with new launches in India and JLR volumes increasing in US & China with new gasoline engines.