NEWS
Tata build-up
Resurrecting an old but largely unknown name takes time and commitmentThe distributor of the Tata Xenon in Australia, Fusion Automotive, has a long road ahead of it in making Tata a household name.
To illustrate how challenging the future remains for Tata, consider this: Fusion Automotive has no immediate plans to join the FCAI (Federal Chamber of Automotive Industries). It's simply a matter of cost, says Fusion Automotive MD, Darren Bowler, and CEO Oliver Lukeis.
"It's an expensive exercise to join the FCAI," Bowler told motoring.com.au yesterday.
"$30,000 per year, to join... You've gotta be endorsed by two board members as well, so we'd have to go and pitch our business to other members... they'll then put us forward to join and then we need to be approved by the committee..." Lukeis added.
"And for that you get to put your [sales] numbers in VFACTS," Bowler tag-teamed with a smile. "I could spend 30 grand on advertising [instead] – and sell cars."
"It is something that in future we'd like to be a part of, because then you have a voice in the market..." Lukeis observed.
"At the moment, the investment to be a member just doesn't justify it for us... certainly at some point in time we will have to be..." Bowler concluded.
A cost of $30,000 per year would be chicken feed for larger car companies, but Fusion is a small company fighting on multiple fronts to establish Tata as a brand. It's also trying to balance the effort and cost to establish and expand a dealer network with enhancing the brand image to increase sales. Either alone won't do the trick. Dealers cannot be sustainable with just a trickle of sales, and national sales will be forever limited if the dealers are in the wrong place or there are too few.
That problem can be best exemplified by Queensland and Victoria. Queensland is more a rural market for the Xenon, Bowler believes, but in Victoria, in contrast, the Xenon is selling more to metro-based plumbers and electricians – tradies, in other words. Locating the dealers appropriately is a fundamental verity for the brand, just as it is for any other car company.
Sales will naturally flow for a brand that delivers on its promise. Bowler has the marketing man's knack of making Tata's budget-price value equation sound unique in the market, but there are plenty of other brands offering that same sort of value, as he admitted.
Korean brands have been a game changer in that sense, Bowler suggests. Chinese brands five years ago provided very competitively priced products, but other global brands "have brought their prices down" since then.
"What we're doing is saying: 'Yes, there's an opportunity in the market between $20,000 and $30,000 for a light commercial vehicle', but we're offering feature content and safety in all of those areas."
Ever since Opel declared its hand and left the country after just one year, it's logical to ask whether there will come a time when Fusion or Tata throw their respective hands in the air and say that the Aussie market is just too hard – and slink off into the night. Bowler seems to be of the belief Opel's management was unrealistic in its approach to the Australian market.
"If you lived by those rules in this industry, you wouldn't enter the industry," he said. "It is very competitive, as we know. We have costings and budgets and timelines that we want to meet; for us, we're committed to the brand; we have the support of Tata Motors in India; we're in it together.
"It's not us as a distributor; just doing it on our own. We have the support of India to drive this brand in this business.
"Entering the market with Xenon is the entrance for us; the gateway is open – and the future is very, very big."
But it has started from tiny acorns in this country.
When Tata first arrived in Australia, through an outfit based in Queensland, the only model sold was the Telcoline LCV range. Since then a single solitary dealer in Queensland has kept the brand name alive – firstly maintaining a parts inventory for Telcoline owners and subsequently introducing the Xenon range.
From October last year Fusion Automotive took over distribution of the Tata Xenon and put the brand on a national footing. Fusion is a branch of the Walkinshaw group and it was established to help the company diversify and remain viable in Australia.
The reason for diversifying? Come 2017 Holden will close the doors of its Elizabeth plant in South Australia, thus ending the supply of locally-built donor cars for HSV to modify. HSV is the jewel in the local Walkinshaw crown.
Tata – and Fusion Automotive – are very important then to Walkinshaw's on-going viability.
Surrendering doesn't seem to be an option.
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Written byKen Gratton
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If the price does not contain the notation that it is "Drive Away", the price may not include additional costs, such as stamp duty and other government charges.
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