Ratan Tata Revisits How India’s Indigenous Passenger Car industry was Born 25 Years ago With the launch of the Tata Indica

Ratan Tata

Ratan Tata Revisits How India’s Indigenous Passenger Car Industry Was Born 25 Years Ago With The Launch of The Tata Indica

New Delhi: December 1998 marked the birth of India’s indigenous passenger car industry when a compact hatchback car – the Tata Indica – was first introduced in India by Tata Motors.

It was not only designed but manufactured in India, making it the first fully indigenous Indian passenger car.

The story of Tata Indica is a story of pain and joy, of rise, fall and re-rise. In 1998, Tata Motors introduced the Tata Indica and initially received several accolades including record bookings resulting in strong market shares.

But this happiness was soon overshadowed as the company suddenly faced a wave of unexpected customer complaints.

Generally, complaints are related to product quality issues that arise soon after launch. Some Tata Indica buyers started dialing in to flag high noise and vibration levels in the car.

Additionally, they also reported issues related to scrolling up and down windows. The engine’s performance came in for criticism.

While they were dealing with all the negative reactions, Tata Motors saw a decline in the sales of the Indica during the year 2000-01 when they posted a Rs. 500 crore announced the biggest loss.

Dissenting voices soon became active and many even criticized Tata Motors and Ratan Tata for making a big mistake in betting on indigenous cars.

In the Indica project, Rs. Despite a massive investment of Rs 1,700 crore, all was not well for the Tata Group. At that time, Tata Motors had also decided to sell its car business and Ratan Tata and his team went to the US to meet Ford’s then chairman Bill Ford.

At that meeting, Tata was insulted by Ford, who said, “You don’t know anything, why you started a passenger car division.

We are doing you a big favor by buying your car division.” However, the Tata team decided not to sell their car business to Ford and returned to Mumbai.

Tata worked on his car business, shifting his focus to Tata Motors. In the following years, the car maker became a successful company around the world and just nine years after the Ford incident i. E. By 2008, Tata Motors had the highest selling cars in the market.

The turnaround of Tata Motors

The turnaround was so powerful that Ford, struggling to turn a profit from its sales in 2008, approached Ratan Tata to sell its car business.

The latter offered to buy the Jaguar and Land Rover range of cars from Ford, which were their best-selling cars at the time.

The 85-year-old businessman at the time steered the Tata Indica story towards the necessary reforms. Tata Motors has come out with a new, stronger Indica that has overcome major quality issues. The updated car launched in the market in 2001 was known as Indica V2.

Ratan Tata, chairman of Tata Trust, commemorated the launch of Indica on Instagram with a note. Posting a picture with an Indica car, the veteran businessman wrote, “25 years ago, the launch of the Tata Indica was the birth of India’s indigenous passenger car industry. It brings back fond memories and holds a special place in my heart.”

The new, updated Indica V2 marked not only the revival of the Indica but its resounding success. It became the fastest selling automobile in Indian history when it completed sales of 100,000 cars in less than eighteen months.

In 2018, Tata announced the decision to discontinue two of their car models – Indica and Indigo ECS.      

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