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Tata ready to push Xenon further

No replacement: Walkinshaw Automotive is not looking to replace MD Darren Bowler while it is “reorganising the business structure” for Fusion Automotive, however its Tata distribution operations continue “at this point”.

Fusion Automotive eyes sales boost with ESC-equipped Xenons arriving in September

22 Jul 2014

TATA Motors’ Australian distributor Fusion Automotive is expecting a significant uplift in sales of its sole offering, the Xenon utility, when electronic stability control (ESC) is added as standard across the range in September.

The Indian-owned car-maker relaunched the Xenon range in October last year without the safety technology, meaning it could not achieve more than a two-star ANCAP safety rating, according to the crash-test authority’s guidelines.

ESC was originally set to be added to the range at the beginning of this year, which was then pushed out to mid-year and is now locked in for September, with the delay being blamed on further testing carried out by Tata and Bosch in China.

Fusion Automotive managing director Darren Bowler said that while a lack of ESC does not necessarily make or break a light commercial vehicle brand in Australia, he anticipates interest in Tata to grow when the ESC-equipped vehicles arrive in dealer showrooms in the coming months.

“We are still a new brand so I don’t think there will be an overnight success story from 20 cars in a day to 100 cars in a day,” he said. “That would be nice, but I think the message, when it gets out there over the three or four months, I think we will see an increase in sales and enquiry.

“From a percentage point of view I wouldn’t want to pre-empt what that is, but internally we have talked about where we think it will be, and our ordering cycles are based on where we think it will be as well.

“Our dealers are placing orders for those cars that are ... double what they have been ordering. They are very confident.” Tata is not registered with the Federal Chamber of Automotive Industries (FCAI) and therefore does not report its sales, but Mr Bowler confirmed it has sold about 150 Xenons in Australia since launch, which he said was “about on par” with where the company wanted to be.

“We didn’t want to come in and flood the market from an oversupply point of view. Our plan was to launch vehicles with ESC and ESC vehicles are being built at the moment in India and will arrive in September,” he said.

“At that point we will have a second phase of our branding, making noise about safety. But the build-up has been about getting the brand out there, getting the network established, training dealers and getting customers to understand who Tata is as a global brand.”

Tata is one of India’s largest private companies and includes automotive, beverages, hotels, communications, electricity, retail and construction subsidiaries under its wide-reaching global banner.

The ESC-equipped Xenons will be re-rated by ANCAP within the next six weeks and while Mr Bowler said he could not predict what new rating it would be given, the importer is hoping to boost its crash safety credentials in order to better appeal to larger fleet buyers.

Currently, the Xenon is off the shopping list for mining companies and other major business buyers that mandate a five-star ANCAP rating for their fleets, but Mr Bowler said the company is keen on entering that market, should it get a top score.

“I am not going to pre-empt what ANCAP are going to release on the vehicle but if you are in there with those segments and especially mining, with that minimum rating they will buy, if that door opens by all means our foot will be in there quicker than a lot of other people.”

Part of the Walkinshaw Group, Fusion Automotive is pitching the Xenon in the $20,000 to $30,000 pick-up segment, which means some customers of higher-priced Thai-built alternatives such as the dominant Toyota HiLux and increasingly popular Ford Ranger may not consider the Indian-built workhorse.

Mr Bowler conceded that taking sales from the major players is a tough assignment and that the company is happy to focus on the entry-level utility segment.

“The Tata brand is not for everyone. People are brand loyal in that particular segment, HiLux has dominated for a long time. It’s a great product. Everyone is trying to come in there and have a go at that,” he said.

“We are not playing in that top end of the LCV segment, we are playing in the entry segment, making sure we look after that particular segment by what we can deliver at a price point.”

Discussing sales targets for the remainder of 2014, Mr Bowler said that there was “no set target” that Fusion had to achieve by the year’s end, and that the focus was on ensuring Australian consumers knew about the brand.

“It’s honestly about brand building and getting the message right. If we do all of that sales will follow. For us it’s just getting story right, it’s getting product right, it’s setting up the network and having that brand right,” he said.

“Of course there is a plan in place that says, this how many (sales) we want to be at, this is where we would like to be, but it’s also about timing and getting it right from the start.”

Shortly after the relaunch late last year, there were nine Tata dealers in Australia, and Mr Bowler has confirmed there are now 23 across the country, with 40 expected by the end of the year and 60 to 65 by the end of 2015 or early 2016.

“We are working feverishly to appoint dealers. We are ahead of our target in terms of dealers. We were aiming for 20 by the end of year one and we are ahead of that,” he said.

“We have people talking to us about wanting franchises but we are trying to strategically locate dealers in right footprint. It’s better to mange brand that way.”

For the time being, Tata’s focus in Australia will be on the LCV segment, but Tata-branded medium and heavy commercial vehicles are on the agenda, while a mooted rollout of passenger vehicles is about five years away.

The Xenon is priced from $21,990 driveaway for the 4x2 single-cab tray and tops out at $27,990 driveaway for the 4x4 double-cab Pick-up, which puts Tata’s offering in the same end of the market as the Chinese-built Great Wall V-series ($17,990 to $27,990 driveaway) and fellow Indian brand Mahindra’s Pik-Up ($18,990 to $25,990 driveaway).

Mr Bowler said Tata’s history and status as a global brand helps to differentiate it from Great Wall.

“We are a global brand so our credibility worldwide with Tata Motors in building over eight million commercial vehicles in last six years puts you in a very credible position over some of the competition,” he said.

“We are not talking about one particular model. We are talking about a global force behind it, with Tata Motors owning the Jaguar Land Rover stable, and some of the technology that cascades down into the product, some of the future of where you are heading opens up the doors into a lot of other areas rather than just one brand with one particular product.”

Before the Xenon, Tata sold the Telcoline in Australia in the late 1990s/early 2000s in limited numbers which was a commercial failure and experienced a number of issues with build quality in its short time on the local market.

Mr Bowler said that while there may be some consumers that will still view the Tata brand negatively, most people will see it as a new player in the Australian market.

“Not too many people remember when Tata were here. A lot of people are seeing it as new brand and as a price-effective brand. As the dealer network is establishing, we are seeing a whole range of new customers,” he said.

“We have had dealers come knocking on our door saying, ‘I was a Tata dealer 15 years ago, I want to be a Tata dealer again today’. So whatever experience they had then, good or bad, they are coming to us now saying, ‘I want to be a part of this. I know how good this thing is and can be and I want to be in this from day one’.”

Fusion Automotive has ramped up the promotion and marketing of the Xenon in recent months, with television and radio commercials and billboards advertising the utility range, and it has just registered a fleet of evaluation vehicles at dealers that potential buyers can test drive for a week to use as they would normally use their ute.

“The vehicles are to be used and what is working for us is bums in seats and the dealer having the confidence to give that customer a car. Take it for a week, go and use it on your farm and what we are finding is the feedback from that is fantastic,” Mr Bowler said.

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