Rajesh Kaul has wide experience of close to three decades across functions like Sales & Marketing, Business Development, and Strategic Marketing & Planning. In his current role, he is heading sales & marketing for the commercial vehicle business unit of Tata Motors and is involved in product planning & development, operations and engineering.
Tata Motors has of late been very aggressive and it reflects in its sales numbers. How has the transition happened?
This journey began with BS6, from the mechanical systems in the vehicle moving to more electronics. So, the first level of comfort to the customers on change in technology has happened. Now, the challenge is to ensure the company is geared up to serve the customer post-sales, which is about regular mechanics, the hotbed of the ecosystem available in every nook and corner.
There are two stages: first, to train and equip them with tools to handle the products well. The second is about educating the customers to move to Annual Maintenance Contracts (AMC) and fleet management solutions, asking customers to handle their clients while we take care of vehicles. We have successfully managed, and the penetration on AMC is growing big time; this implies that the customers want not just to buy vehicles but want a complete solution for the duration, depending on their contract.
Can you help us understand with an example?
For example, car and two-wheeler carriers look for five-year AMC, while tippers want on-site service. When we are able to mature to this stage of handling customers’ end-to-end solutions and at a reasonable cost, our total cost of operation is well within the control.
In the case of electric mining tippers having limited mobility while carrying higher payloads, providing a charging station and on-site service can make large numbers of customers try, as it will lead to better TCO.
With majority of the states committed to providing CNG, I see no reason why a big chunk shouldn't be converted into CNG. However, the rising cost has to be looked into.
What about Hydrogen ICE (H2ICE) that you displayed at the Auto Expo?
H2ICE is something we bet on long term, especially for the longer haul, as electric vehicles will still be challenging. I am keeping my fingers crossed, and we will see how it pans out. We are looking for the response from the customers.
In the case of LNG, we have started getting demand for it because of its availability in the western corridor, especially across Gujarat. Even Kerala and the east coast is getting it. We are taking the lead and ensuring that we drive this change. We saw this in some buses sometime back, but we want to drive this change. I see a big role in ensuring this communication reaches every customer.
The Chairman of Tata Sons spoke about sustainability, energy transition, and digitalisation-led transformation, which are crucial for the economy. How can these objectives reach your customers?
The pandemic has taught us many things. Our customer is young, belonging to the second generation, and everybody wants to explore digital platforms, which is all about habit building. For instance, our Fleet Edge solution is not just a black-box indicating the vehicle’s location. It is about ensuring how efficiency improves and what are the elements in the efficiency improvements. The transporter, from his office, can monitor the vehicles’ movement and several other parameters, including load, mileage etc.
The energy transition is moving from diesel to CNG, LNG, electric, H2ICE, etc. Our Fleet Edge solution is a digital initiative. Today, double-digit sales of our vehicles come from the digital platform, and it is not restricted to one specific segment or location. This is practically being driven because our country is moving ahead. It has been facilitated by companies like us to move in that direction and further the customer's interest. Finally, what matters is TCO – Total Cost of Operations.
What’s your view on the announcement that 2045 will be the year Tata Motors will reach Net Zero?
We are committed, and there is no second thought about it. Every move from Tata Motors is about sustainable mobility, moving towards that mode of ensuring we achieve what we have said. We are moving in that direction, and this is truly the demonstration of vehicles that were displayed at the Auto Expo.
Are the alternative fuels that you talked about pocket-friendly?
We launched an EV a few months ago and delivered to the customers in January this year for INR 9.99 lakh ex-showroom, India, including FAME II subsidy and a five-year complimentary Tata Fleet Edge fleet management solution. This means that with the EMI for 6-year funding, the customer gets a complete maintenance solution.
The customers’ need is charging infrastructure. Therefore, before selling a vehicle, we ensure we install charging points at our dealer/ channel partner and the customers’ location. More demand for electric vehicles demonstrates that it is meeting customer expectations. I won’t be wrong if I say it will surpass customer expectations and cross the TCO with reference to the other alternate fuels.
EVs are the way forward; otherwise, all of us, our engineers, would not have invested much time and resources.
What are the challenges you expect from the marketing point of view?
It is about reach and communication around Business Return Template (BRT). It encompasses the EMIs paid by the operator plus the other expenditure, including administrative costs, which will determine the cost per kilometre. The revenue, though, is between the operator and his customer.
India is poised to do economically well. The industry had a temporary blip in FY20 after reaching a peak of over one million TIV in FY19. Then, the pandemic impacted the industry. However, this year it is on an upward trend. The prediction for the next fiscal is that it will reach close to the previous peak, which means that the industry is poised to do well. Our challenge is to leverage this.
Tata Motors is taking the initiative as the first mover in most segments, including electric bio-fuels and CNG. Reaching out to everyone is our job. We now have enough resources to reach; it is not just through print media or television; instead, it is about social media. My challenge is collating the whole stuff and translating it into leads because everybody is showing interest.
We are getting too much traffic (leads), not only online but offline too. The challenge is how to convert them meaningfully and ensure customers get the right communication. We see us moving a few notches ahead over the last few months, as the recent launches saw significant attraction in social media.
These aren’t huge challenges. Supply chain and other issues are getting sorted to deliver to the demand. We will continue to work hard, predict and resort to better forecasting. We must take the leap of faith and move ahead; all these challenges will be overcome shortly.
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