Young car buyers are conscious about safety and the environment: Tata Motors' Shailesh Chandra

Nexon upholds all of these values.

The Tata brand name carries a lot of significance and weight. So when it comes to your individual brands, are consumers buying a Tata vehicle or are they buying a Nexon or a Harrier?

It's both. They buy a Tata car for its local manufacturer pride and for the trust. But at the same time each brand and product is a different character on its own. The Safari, for example, was the first lifestyle SUV brought in India and many people who have lived in those times have this inner aspiration of always owning a Safari. Nexon is another example which many women consumers love because of its safety and height. So people are buying our cars because of the brand and what these individual names mean to them.

Once there were cars like Tata Nano and Indica and that evolved into a fleet model. Now you have brands like Hexa, Harrier and Nexon, and suddenly you are this affordable yet cool SUV brand. Walk us through the evolution...

55 percent of our customers are first time buyers. Young people are spending more and their population is also increasing. We have only tried to align our portfolio with their choices. Young consumers don’t have a cost-of-ownership approach. Design is important to them and to us.

Along with SUVs becoming a global trend, we saw that when the model was offered at a certain price point, it was more acceptable. SUVs also do better on Indian roads due to height and ground clearance.

Therefore, we brought SUVs from a subcompact like a Punch to a Nexon. So we have the widest portfolio which is why 69 to 70 percent of our volumes are SUVs as compared to industry share of 40 percent.

Where is the growth coming from and where will it in the near future?

SUVs is one segment where the growth will continue and where the launch actions will be more intense. Another segment would be powertrains. Electrification and more eco-friendly powertrains will start gaining pace. We are touching a sweet spot by leading the charge in this space and plan to launch more models across EVs, CNG and SUVs.

In your view, what are the biggest challenges to marketing an electric future to Indians? And how do you plan to overcome these hurdles?

You have about 120-140 options available in the conventional world of ICE. But there’s only a handful of options in EVs. So the choices are less and they are less in terms of body styles, pricing and affordability levels.

The second aspect is a lot of myths and certain bottlenecks in terms of charging. Based on all cars that we have sold in the EVs space, 96 percent of the time people charge at home.

There needs to be more awareness about that. Within the city, you don't need public charging. But on highways it’s a challenge. You need more chargers to make it a more practical solution.

In the past year, with home charging solutions available, earlier the first car buyer or primary car buyer for electric used to be just 25 to 30 percent. For Nexon EVs it is now 60 to 65 percent.

So a few things have to be taken care of to really make the electric vehicles fly in terms of adoption – more choices, slightly more range, greater awareness and charging infra on the highways. If we are able to take care of all these things, then you'd ask why would you not buy an electric vehicle? They are silent, not polluting, better in performance, lower in total cost of ownership and you get an eight year warranty.

It also puts you in a strange position because you still have to sell conventional cars. So how do you balance that view on these two ends?

It's a very clear view. We have to try our best to see how fast we can accelerate electrification because that's the future and that's what the nation needs. But the challenge is that the whole ecosystem development will take its own time.

Today, auto volumes are 100 million cars and electric vehicles are 2 million. It's going to take its time. But you cannot not serve the 98 million. So, you have to therefore produce ICE vehicles.

If I take a 10 year view, 30 percent is what is projected as the penetration of electric vehicles. Even if you speed up, 70 percent is still going to be ICE. However, we want to be closer to 50 percent as a company and the remaining 50 percent of whatever conventional vehicles we are going to make should be more eco-friendly like CNG.

Will performance become commoditised with the arrival of battery-powered EVs? What will you do to stay ahead in the EV game?

It is becoming more hygiene as compared to making products more expressive, more aligned toward digital and tech-savvy consumers. So with those elements of a connected car and packed with high-tech features, performance will definitely take a backseat because it becomes a hygiene factor. It will be only for certain niche categories that you need performance still as a big differentiator.

How are we going to continue to lead the charge on electric vehicles? We are going fast and in a very firm and sure manner. We have already announced that we are going to invest nearly $2 billion in the next 5-6 years with 10 products.

Tell us about your accelerated retail strategy in southern markets? How is that working out?

We have been growing very fast the past two years and we have set our aspirations to grow fast.

We have added roughly 250 outlets in a year and we want to further add similar kinds of outlets in 2022.

What sets apart the South markets in your view?

Every region is very different. For example, in the North and West you see a major surge coming from CNG. There's more demand for SUVs down south. We have seen a major growth in states like Kerala and not just for more SUVs, but electric as well as smaller cars like Tiago and Tigor. SUVs are slightly better in the southern markets in certain states as compared to others. Nexon, Altroz and Tiago are doing really well in markets like Kerala.

EVs, for example, are really doing well in the South, in both Kerala and Karnataka and in cities like Hyderabad where we’re seeing a major explosion of EVs also.

Is it also a matter of more maturity of those markets?

If you see the natural cohorts for EVs, we have identified 3-4 of them. First is customers who are fitness inclined, who also typically care a lot for nature. Then there are digital natives who are working in the digital and tech world. Third is customers who we used to call ‘maintenance seekers’ who want hassle-free ownership experience. The fourth cohort is people who buy EVs to show themselves as responsible citizens. These are customers who are affluent, possibly own a luxury car, but also want to be seen in green cars. So these are the four categories and if you just try to imagine all these kinds of categories people and especially the digital world and tech people, more of this population is in the south in Bangalore, Hyderabad and Chennai.

So more conscious consumers and lots of startup folks…

Yes. Absolutely. And, by the way, the surprise element was many buyers of our EVs are doctors.

What are the exchanges between JLR (Jaguar Land Rover) and your business and who learns from whom?

We both learn from each other on different aspects. There are areas we have identified where we can cross leverage each other. When we were working on the Nexon EV, this was our first personal high-voltage electric vehicle, and we were not very sure about the design decisions that we had made. We thought ‘why not get it critiqued by the JLR engineers’ who have been on this journey for years and more experienced than us.

We sat them down for about a week or two, getting our design critiqued. It's not a simple thing for engineers to get them critiqued but we got it done for our selfish interests and we got very good insights which we incorporated. Since then, we have had many exchanges of knowledge: Sharing the environment in which our electric vehicles are operating in the country and therefore what decisions we are taking, and what we are collecting as data from the field. So all these exchanges happen and that is what I would attribute as one of the reasons why Nexon EV was launched as a very mature product.

We are also working closely on what we call electrical and electronic architecture, to support the future technologies like autonomy and connected cars more seamlessly. Those are the areas where we are exploring partnership options. So there's this balanced learning from each other. We have definitely explored more options. But there are hits and misses.