Indian vehicle manufacturer Tata, having quickly established itself as a leading player in the South African bus and truck market, is starting to make inroads into the car market.
Tata’s distributor Accordian Investments launched its Indica and Indigo passenger vehicles in December 2004.
In January 2004 it sold 255 Indica and Indigo vehicles. This doubled to 463 vehicles by April and rose to 813 in September.
Accordian’s share of the passenger vehicle market is just short of 2%, but chief operating officer Phonie Cillier says Tata is aiming to get a 10% share of the hatchback market.
”We decided to have dealerships in all the main areas in South Africa and so we rolled out 45 dealerships this last year. We have also set up a huge spare parts warehouse here in South Africa and have sent our technicians overseas for training,” says Cillier.
He says the company aims to sell 18 000 light commercial and passenger vehicles a year by the end of 2007.
”Our value proposition is our advantage,” he says. ”We have not brought in cheap cars, but rather cars that offer the consumer value for money.”
The Indica retails from R69 995 and the Indigo from R92 995, which makes them affordable compared to most models, but it is features such as power steering, electric windows, central locking, air conditioning and remote-controlled side mirrors which Tata says distinguishes it from its competitors.
Econometrix consultant Frank Beeton says Tata has done very well to establish itself and that consumers who think laterally are choosing an Indica or Indigo over older designs such as the Volkswagen Golf or Toyota Tazz as an entry-level car.
Tata will add to its range of passenger vehicles in the next few weeks with the launch of diesel versions of the Indica and Indigo Estate.
Tata has been selling its range of medium, heavy and extra-heavy vehicles in South Africa, through distributor Tata Automobile Corporation of South Africa since 1999.
Industry figures released this week for December show Tata has established itself as the number one retailer in the country in these categories.
Tata showed a 375% sales increase on 2004 in trucks with semi-forward cabins, an 84% increase in trucks with full-forward cabins and a 52% increase in bus sales. It holds 19% of the medium commercial vehicle market, a 14% share of the bus market and a 10% share in the heavy commercial vehicle market.
Beeton says Tata appears to have established itself as a senior player in the truck market without stealing sales from established manufacturers but rather creating its own market.
”They are very serious players,” says Beeton. ”People laughed at them when they entered the market, which was a mistake, and now they are going to have to be taken seriously.”
Fellow Indian vehicle manufacturer Mahindra & Mahindra has also entered the market, launching its high performance bakkie the Bolero and its 4×4, the Scorpio, in October 2004.
The National Association of Automobile Manufacturers of South Africa’s figures show Mahindra sold 945 vehicles between August and December 2005. Sales information from before August was not available.