According to Mohan Savarkar, Punch was already seen as a capable SUV, and “we have now made it look even more so”.Mohan Savarkar smiles when asked if auto suppliers face greater pressure on margins as their OEM customers push for more affordable cars. The topic of discussion is the Tata Punch, which, in its new avatar, offers a host of additional features while keeping its price competitive.
“It is not as if one wins and the other loses and it is vital that everyone wins. So from that sense, you have to make sure that advances in material sciences and technology help you contain costs in such a way that you are able to afford all this in a smaller car,” says the Chief Product Officer & Vice President, Tata Motors Passenger Vehicles.
The key, therefore, is to use lesser material as part of the larger exercise.
“Let’s say, if you are using a certain grade of steel, you should use a high-strength (grade) which allows you to meet vehicle weights and the strength required while also ensuring that the price points do not move so much. So, it is excellent engineering that goes behind this,” says Savarkar.
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Eventually, the fraternity of engineers within the company and at its vendors’ end make sure that these goals are achieved without allowing price points to “creep up”.
There was a time when electronics were expensive. “Now we have found that even while electronics in the car go up, the prices do not necessarily increase. It is not as if you are squeezing everyone in the process since industry is able to achieve better efficiencies as time passes,” he explains.
From electrical to electronics
Everything that used to be mechanical at one point has become electrical too, including “simple things” like the outside and inside rear-view mirrors. Likewise, everything that “is becoming electrical today becomes electronic tomorrow”.
As Savarkar puts it, “So all of these things start having their own ECUs.” At one time, there were just three electronic control units in the car — one each for the engine, infotainment, and body control. Now there are 30 to 40, and even 50, in a car, depending on what one buys.
This tech is going to keep going up and we need to see how to make all this containable. That is how the journey goes.Mohan Savarkar
“This tech is going to keep going up and we need to see how to make all this containable. That is how the journey goes,” he adds. And how does one make it containable? “By going a little more high tech than what is required,” responds the Tata Motors VP.
For instance, if there is a car that needs five ECUs to do something and if “by some way you can make one chip do the job of three, it really helps”. This, according to him, is what miniaturisation has done in the PC world and has now come to the automobile industry.
Mechanical down but not out
The key is to make sure that “you are able to integrate” all the chips. It also means that the OEM needs to play a more central role than others.
Even in this changing backdrop, Savarkar insists that mechanical engineers have not become redundant since the car still needs everything to happen in a mechanical world.
The fact remains, though, that there are more electronic and software engineers playing a larger role in terms of customer-facing value. All things in the mechanical world are considered hygiene these days.
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“It is the electronics and software that create the differentiation between you and others. But it just says what kind of engineers are required today is changing for the value-add part. The other part still remains, explains Savarkar.
Whilst on the Punch, he says it has always been a successful product that has grown rapidly over the years, with a very large nationwide fan following. On the new avatar, the company thought it was time to make it bolder, smarter, faster, and safer, given that customers were “looking for all of these things”.
Catering to modern buyers
According to Savarkar, Punch was already seen as a capable SUV, and “we have now made it look even more so”. Today’s modern buyers who want to upgrade are much better informed about what is possible in the auto industry and aspire to have all these things in their cars, whether it is tech, safety, or “all the things that a car can do in terms of being an SUV”.
Interestingly, he continues, India is a country under construction, and even if one is living in a city, the moment “you come out of your society, you are going to see a lot of construction happening”. In this scenario, a normal car does not quite fit the bill, and an SUV becomes a better bet.
Everything that you expect in cars that are two segments above is now available here.Mohan Savarkar
“But then where you live does not allow you to have a large SUV and a subcompact (SUV) is an excellent fit into your lifestyle. It takes you everywhere be it long distance travel or within the city,” he reasons.
This is where Punch has been positioned to play a role as an aspirational SUV with enough space for the whole family and technological features to boot. “Everything that you expect in cars that are two segments above is now available here,” he says.
With India in a good place globally as the fourth-largest automobile producer, “everyone is already here” either as an OEM or vendor partner. All the tech has also come into the country and is “in the direction” of getting localised. “So it helps with everyone close by so that we can do a lot of stuff”.
Spotting the white space
In Savarkar’s view, it is a matter of value creation, especially in spotting the white space and ensuring that “you have products to address that space”. Eventually, there is a lot of value to be harnessed, and it is a matter of “how much research you are able to do, how many customers you manage to meet and find out exactly what they want”.
According to him, rural customers’ tastes these days are not very different from those of their urban counterparts, since they also have exposure to the same things, be it digital content and the like. “So everyone knows everything, and there is a very good case for people wanting to be aspirational and having the money to fulfil their desires,” he says.
Savarkar believes that diesel will not vanish in a hurry either, since this will boil down to consumer preferences and how they shape up. “Even today, large cars and SUVs are dependent on diesel,” he says.
Tailpipe emissions are not very different under BS 6 norms, and under BS 7, they will be identical. Hence, if there is a way for diesel engines to manage costs, they will continue for some time longer.
Similarly, product segments do not necessarily die, though hatches have shrunk from 60-odd per cent to around 20 per cent. “People have become more aspirational backed by more buying power. For the same footprint, if someone gets more value like an SUV stance/capabilities or the content of high-end cars in a smaller footprint, they would want to go for that,” explains Savarkar.
