Tata Motors Limited
Q4 2017 Earnings Call Transcript

Published: 24 May 2017

[Vijay Somaiya:]

Good afternoon, ladies and gentlemen. Thank you so much for joining us for the Tata Motors Q4 Financial Results FY '16, '17 Press Conference. We have with us our complete senior leadership. Let me just quickly introduce them for your benefit. Mr. Günter Butschek, MD and CEO, Tata Motors; Dr. Ralf Speth, CEO, Jaguar Land Rover; Mr. C. Ramakrishnan, the Group CFO for Tata Motors Group; Ravi Pisharody, the Executive Director for Tata Motors Commercial Vehicles Business; and Mr. Mayank Pareek, President, Passenger Vehicle Business. 2016, that is FY'16, '17, has been a very interesting year, quite a few eventful activities, key milestones. Obviously, we had our challenges, but it's been a fairly good milestone-oriented year with lots of achievements. So let's jog our memory and look at down memory lane what this year has been. Can we have the AV please?

[Vijay Somaiya:]

So that was a quick rewind on what FY '16, '17 has been for in terms of milestones and initiatives. Now to tell you more about how the year has been from a business point of view, I hand it over to Günter Butschek, MD and CEO, Tata Motors.

[Günter Butschek:]

Good evening, everybody. Welcome, dear media friends. Welcome to Tata Motors Q4 results for the fiscal year '16, '17. The financial year that has just gone by was, as already mentioned, a very eventful, packed with exciting opportunities, milestones and challenges. But what has not been visible on the video that has just been displayed, we have also seen lots of very strong headwinds and unfortunately, also lot of homemade misses. The beginning of this fiscal year '17 was marked by the onset of our transformation journey to actually get future ready. Our strategic game plan, in the meanwhile you are familiar with it called, Impact, if the mission covers the mission-critical initiatives, as we launched them in September '16, they are all up and running and have started to pick up speed with the strong contribution to our results planning for the fiscal year '17, '18. To mention the few projects in sales conversion, sales and operating planning, dealer profitability and the advocacy program are underway to improve our top line, the cost management and customer experience, according to the selected 6 strategic themes for the periods ahead of us. We have been working consistently to achieve a sustainable financial performance, while delivering at the same point of time, within the given limitations, exciting innovation. However, as we will later see in the presentation by C.R., our Chief Financial Officer, we have obviously missed our objectives and we have not been able to live up to our expectations. The organizational effectiveness exercise which we launched more than a year ago, has in the meanwhile, been implemented and will ensure clear accountability and a fast and more effective decision-making, while enhancing our focus on the customers. A few words with regard to the PV business. The PV business has seen and has been witnessing a very strong growth and we have outperformed the market. Three launches in a year, it's a very rare phenomenon in the industry, even in India or in particular, in India. But with Tiago, HEXA and TIGOR, we actually kept on meeting the right interventions in the market. As a proof of our abilities to deliver, Tiago has received 18 top awards, HEXA has created positive momentum and our recently launched, "Style Back" TIGOR has also been receiving very encouraging response in the market. Our sustained efforts on the service front has resulted in achieving the #2 position in J.D. Power CSI Survey in 2016, just 13 points behind the #1 which easily translates into the objective for the months and for the years to come to actually claim the forward position. These are early inroads, but we have seen the change in the brand perception. Is this fully sustainable? Not yet. It becomes sustainable as we deliver on our commitments and as we move on with our further product line and our initiatives. With the much awaited Nexon, scheduled for the launch later this year, we will further build on our relevant markets in the most lucrative SUV segments. With continued efforts towards strengthening our brand position -- our brand proposition, we reviewed our PV product portfolio and the overall direction for the business, as most of you have attended some of the recent press meets, recent as 3 months ago, beginning of February. Our renewed Passenger Vehicle strategy envisages refocusing on attractive segments and leveraging 2 platforms in the future, in order to review its complexity, to derisk the programs and to actually create economies of scale. Additionally, to further leverage the platform, we have signed an MoU for a potential long term partnership with the Volkswagen Group/Skoda. So those include strategic alliance opportunities in trying to develop products. The actual discussions are ongoing, but are very encouraging in content and spirit. Our [indiscernible] announcement with GM Auto, we have just seen and possibly realized a well-known face in the industry, will be an additional strategic lever to bring enhanced performance versions of our products in shortest lead time to the market in order to further boost our overall value proposition and brand perception in the leak which actually addresses the aspirations, the English aspirations of our customers. While we focused on streamlining processes internally, we also worked towards achieving benchmarks that not only enhances our brand, but also aligns with the rising aspirations of our customers. We strongly believe that partnerships are the path to innovation and we're consistently exploring and accelerating such kind of opportunities to redesign the future of mobility in India. We have made the significant step forward into newer spaces with the launch of TAMO, our sub-brand for future mobility solutions. TAMO, not only a sub-brand, but also in particular new [indiscernible] vertical for advanced technologies, new business models and partnerships, on the basis of a new, low-volume and investment fast to market approach, has been applauded domestically and internationally. And I think, the first announcements are currently awaited to be delivered in the Indian market. Let's actually change the subject. Let's move from the Passenger Vehicle business to the Commercial Vehicle business. The Commercial Vehicle business on the other hand and in contrast to what we have just mentioned for the Passenger Vehicle business, has actually faced an extremely volatile market in the recent few months. Some would say, actually throughout the entire fiscal year '16, '17, at least starting in the month of July, 2016. The regulatory environment achieved demonetization, delay in rollout of GST and the recent talk on BS-III to BS-IV transition, has been altogether been unexpected and unprecedented moment. Tata Motors Commercial Vehicles continuously claimed the lead in shaping the industry, the Indian CV industry, with the introduction of new technologies and innovations or I think, at this point of time and as we report on the quarter results '16, '17, we also have to acknowledge that before we actually can more aggressively move forward, we need to regain some lost ground because of our own misses. With the rich pipeline of product upgrades and new products, we're about to reclaim our lost market shares, supported by a well-calibrated set of actions under the umbrella of Impact. Kickstarting 2017 with 2 very exciting announcements. We appointed Akshay Kumar, as the Brand Ambassador, who at the same point of time, launched the new Xenon Yodha. However, the already mentioned headwinds made the CV market highly unpredictable and different approaches to the challenges has even made the typical statistics, like a market share, pretty much questionable. I would like to share an example. After the Supreme Court ruling on the 29th of March, we decided to jointly focus our dealers on clearing the retail stock in order to overall limit the financial exposure of our dealers and also of Tata Motors. While at the same point of time, one of our competitors were still pushing for wholesales. Based on our strong commitment to stronger emission norms, we prepared for a smooth, low-stock transition to BS-IV, following the initial government's policy, but even with the low-stock. And in the meanwhile, we even out a way on how to clear the stock by export -- by exploring export opportunities and we're also upgrading BS-III solutions to BS-IV solutions. The unprecedented Supreme Court ruling has created a fundamental impact on our financial and operational performance fiscal year '16, '17 with quite some carryover into new fiscal year, as it started in April, with low demand on the one hand side with the ramp up of full capacity of the BS-III or -IV solutions. But in spite all of this, we continued to set benchmarks with key product interventions and with our focus towards smart and green mobility. To mention a few, Tata LNG, hybrid electric, all the future buses. All of these buses are designed to meet the immediate and the future passenger transportation needs of green and smart cities. With consistent -- and it's a good news of the whole bus story, with consistent goals in the bus segment, we became in the fiscal year '16 '17', the #1 bus brand in India. During the year, we have also crossed the 60,000 sales mark for the very first time in Commercial Vehicle exports and we will strategically and aggressively grow that number as we move forward, on the back of new generation CV products entering into new markets and at the same point of time, consolidating our presence in the existing ones. In defense, on a different note, our ambition is to be a strategic partner to the Indian MoD, in defense mobility solutions. It's our endeavor to provide safe and robust solutions to the Indian Defense Forces, we bagged a very prestigious order for 3,195 of the Safari Storme utility vehicle, under the GS-800 general service category of the Indian Army. We're confident of our capabilities and our partnerships with other Tata Group companies, along with partnerships as it is the one with Bharat Forge and General Dynamics of the U.S., positioning us as frontrunners for the Indian MoD's prestigious USD 10 billion FICV program. We will continue to move forward in the dynamic trajectory and work towards creating and maintaining a robust product portfolio across all business units. While I think, concluding on the year '16, '17 and looking forward, it's fair to say, that the last year was all about getting our strategic direction right. Now that we have all our plans in place, so we actually gain what we think is our ground in terms of market share, it's time to deliver on these plans and therefore, our focus has started to shift from strategy to execution. That's Tata Motors, as we usually call it, stand-alone and I would like to hand over to my dear colleague, Dr. Ralf Speth, in order to tell us more about Jaguar Land Rover story for the fiscal year '16, '17. Ralf, it's your turn.

[Ralf Speth:]

Well, first of all, I would like to thank you and also a very warm welcome from my side. It's great to see also very familiar faces in the audience. In introducing the executives of Jaguar Land Rover, we missed our Treasurer, Ben Birgbauer and therefore, I would like also to take the opportunity to introduce our Treasurer to you. Ken is -- he reports to Ken, our CFO. He's responsible for all the money. So whenever you have questions about -- detailed questions about financial issues, please talk to him. Now earlier today, in reading the agenda, I got the information that I should elaborate about this fiscal year, including some strong facts and I tell you, I don't have any bet with me. I'm not a gambler. But what I really can do is, I can talk a little bit about the fiscal year out of our perspective, out of the perspective of Jaguar Land Rover. Overall, you know, in the automotive industry, we always have a cyclical year and we finalized this fiscal year on a very strong note, record sales record wholesales and so, at the end of the day, mostly very solid figures. And we will hear later about it. Sales and financial figures at the end of the day are always based on products and Jaguar Land Rover really can offer very, very attractive products. It's combination of very special British design, but also, engineering integrity. And in that context, 2016, '17 was really special. Think about our product range, not only the core business, but also the added additional vehicles we have shown last year. Just to give you a glimpse. Think about the new Discovery, introduced in the U.S., with a unbelievable performance off-road, but also with a versatility which is unrivaled in this kind of segment. Strong, climbing rocks, but also driving through dunes, but very, very quiet, very confident in doing the day job. Think about then just the Velar on the Range Rover side, we just announced and which we're going to roll out this year. The vehicle will be later fiscal-end in the year in India. Or think about XFL, the vehicle we have designed for China, produced in China, just for the Chinese customer. Or even more so, just some weeks ago, F-PACE was nominated as World Car of the Year. And in addition, got the award of the World Design of the Year. And in the history of this award, handed over in New York at the motor show, there was only one company which got 2 awards. So sensational that Jaguar Land Rover, as a small company, who's achieved that and I really have to say, thank you, thank you very much to my team of designers, of the engineering group, but also of the production and operational guys, who made all these kind of very, very special products happen. From an overall point of view, we see the geopolitical challenges, goes without saying and we see disruptive technologies. That means for the automotive industry, that we're going to see more changes in the next 5 years than we have seen in the last 50. We're going, as I always try to say, from ICE to ACE which means, from the internal combustion engine to autonomous connected vehicles, with hybridization or electrification and we're going to see changes in the ownership models, from owning to using to sharing. Very, very interesting approaches. And in times of this unbelievable strong changes, it's a time of agile companies. And I really can tell you, Jaguar Land Rover is a very, very agile company, a technology company, very, very well aware what it will take to answer -- provide in the future, profitable, sustainable growth. And we also know we really can handle disruptive technology. Think about ICE -- I-Pace. I-Pace is a very first car which uses the freedom of electrification to really package and have a concept which uses the absolute, ultimate opportunities. Different dimensions, longer wheel basis, shorter overhangs and, at the end of the day, a totally new design language. Interesting car and so please look forward to this very, very special, tailor-made battery-electric vehicle. So overall, I guess it was a challenging, but nevertheless, a successful year for Jaguar Land Rover. I say, thanks again, to all of our employees. And I'm looking forward to discuss with you about the future. But first of all, I would like to hand over to our CFO.

[Chandrasekaran Ramakrishnan:]

I'm going to be dealing with dry and in part, [indiscernible] numbers, so I'll shift to a formal presentation mode. Good evening and welcome to this formal presentation on the results. Coming to the India business. The CV volumes, they're up by about 1%. In the context of what Günter talked about in terms of a challenging year. Exports, however, went up very well, crossing the 60,000 mark and a growth of 11%. In the Commercial Vehicle business, the commercial industry was up by about 3.2%, mainly led by LCVs and M&HCV buses. For the truck business, M&HCV, for the industry, was down by 1%. M&HCV truck witnessed weak growth due to weaker replacement led demand, subdued freight demand from the industrial segments and lower-than-expected pre-buying ahead of the implementation of the transition III to BS-IV. For the company, the domestic CV, we grew by 0.8% year-on-year. Again, impacted by LCV, positive on the LCV truck side and buses, but significantly affected on the truck side. With respect of Q4 of the year that ended, we launched the Tata Xenon Yodha, our lead effort by Günter, hybrid and electric buses, successfully organized the Season 4 of the Prima Truck Racing and launched the Prima range in the Kingdom of Saudi Arabia and Ultra range in Tanzania. Passenger Vehicle business, PV volumes, including our exports, were up by 22.8% in the fiscal year. Q4 and FY '17 numbers are available in the slide. This -- in terms of industry, the industry grew by 9.6%, car segment, 4% and UVs and vans by nearly 25%. For the company, compared to the 9.6% growth in the industry, our passenger car business grew by 23.5%. We very well outgrew the industry, car segment nearly, 28%, UVs and vans were slightly lower at about 2.2%. Tiago, already covered in the AV and in what Günter made in terms of his initial remarks, strong responses and accolades and has won about 18 awards in the current year. Tata HEXA was launched in Q4. You are all familiar with the unveiling of the future mobility solutions, with the sub-brand TAMO, collaboration with Microsoft for mobility solutions, the new styleback Tata TIGOR and the MoU with Volkswagen Group. Jaguar Land Rover key highlights. In Q4, as Ralf mentioned, we exited the year on a very strong note. Volumes up, excluding China joint venture, both for the year and for the quarter. Other key highlights. Record '16, '17 retail sales crossing 600,000 mark, ended with 604,000, up 16%. All regions, except overseas, led by F-PACE, XE and Discovery Sport. And you will see upward arrows practically in all regions, all major regions and markets of the world. Jaguar Land Rover has several plans in terms of electrification to meet customer demand and regulations. Hybrids, plug-in hybrids, battery electric and not sure what this picture is, but more to follow. Jaguar Land Rover also continues to focus on other technologies to be embedded in the car, in terms of assisted driving, partial automation, increased automation and go further in this journey. We already covered this in the interest of time. By the way, this presentation will be available on the Internet, on the company's website. In terms of way forward, the company will continue -- coming to Tata Motors, the company will continue to explore capital optimization for better operating efficiencies covered by several impact projects that Günter referred to, efficiencies in working capital and monetization of certain noncore assets. High impact projects, we have already referred to in the other parts. Coming to more specific segments, overall infrastructure and rural spending, hopefully, favorable GST impact and forecasted normal monsoon, is expected to support CV growth in the coming fiscal year '17, '18. Volumes of LCV and buses are expected to grow by 10%. M&HCV growth in FY '17, '18 will be impacted by slow start, surely in Q1 and perhaps Q2 in H1, post-BS-IV introduction and post-GST. We do expect a much stronger, significantly strong second half year. More specifically, in detail, in Medium and Heavy Commercial Vehicles, you will see the ramp-up of products launched in FY '17 in key product gaps which we had in the past, 37 ton and 49 ton. BS-IV, we offer EGR technology for engine power requirement up to 180-horsepower engines. And future-leading SCR technology above and also to some extent, below 180-horsepower. So that customers will have a wider choice in terms of technology depending on their usage, applications, tonnage. The SIGNA range expansion will continue across tonnages and applications and we aim to get back to position of more than 60% market share in -- over the next couple of years in the 16-ton above range. Small Commercial Vehicle and pick up, you will see the ramp-up of Xenon Yodha. You will also see refreshes and variants, along with extra deck length to further complement the existing range, ACE and Super ACE family. Light Commercial Vehicles, expansion of the new Ultra range across different tonnages and applications, launch of the superior next-generation 3 liters and 5-liter common rail engines across the ranges and launch of the AMT version in the buses segment. Export and Defense businesses will remain key focus area also for '17, '18. Passenger Vehicles, going forward, will continue to focus on the sale and ramp-up of volumes of Tiago, Tata HEXA and the newly launched, TIGOR. Launch of the Tata Nexon in the compact SUV segment to support further volume growth. Dealer network expansion and customer centricity will be continue to be a key focus area and further engagements with Volkswagen Group is one of the key highlights we expect for the coming fiscal. Ralf has already talked about the exciting new products. Going forward, we'll continue to envision to drive profitable, sustainable growth. We will continue to invest proportionately more in new products, technology and manufacturing capacity. Consistent with this, we expect for '17, '18, the investment spending is expected to be over GBP 4 billion for the year, including investment in the new Slovakia plant. Ralf already referred to the geopolitical uncertainty in major markets. We'll continue to see solid economic growth with only selected markets such as Russia, Middle East showing more fundamental weakness. JLR's planning target continues to be to achieve 8% to 10% EBIT margin, translated about 14% to 16% EBITDA margin in the medium term, supported by continued launch of new products and technologies to drive growth with greater operating leverage. However, we do expect margin pressures seen in FY '17 and historical seasonality of volume and quarterly performance to continue in FY '18. The ramp-up of exiting new products, including Land Rover Discovery and Range Rover Velar under the new models are expected to drive solid growth in FY '18 and beyond. I will stop with this. And perhaps take -- along with my colleagues, take further questions.

[Vijay Somaiya:]

May I request Günter, Ravi and Mayank to come on stage please, for a quick Q&A session. Just a guidance to my colleagues here, for the friends of the media, in fact, we have precisely 10 minutes, because we have an Analyst Meet staring at us, so I need to be respectful and mindful of the time. When you're asking your question, kindly just ask, as far as possible, short and brief questions. I've already seen show of hands, so I'm going to start with Utkarsh, next to him, let's go by the order, so Utkarsh , next to him, behind him. Those are the first 4, then I'll come to the next. Keep your questions short and sweet.

[Unidentified Analyst:]

First of all, congratulation on the numbers. You have [indiscernible] estimates by [indiscernible]. What have been the reasons? One, you have spoken about the volumes, but the margins again have been also really good. How will you attribute past good results at this point of time?

[Ralf Speth:]

So overall [indiscernible] volume always helps. But in addition also, please be aware that on the Land Rover side, over the last year, we didn't have the Defender anymore. We did ramp -- or run down the Discovery to start a new Discovery. And we're in preparation for, at the end of the day also, the Velar. So overall, it was quite clear, also quite challenging year on the Land Rover side, better on the Jaguar side. And then, think about the regional mix all around the world, but also the nameplate mix, so overall, very, very favorable.

[Unidentified Analyst:]

This is Seth for Kevin Hill [ph] from CNBC-TV18. So you saw very good volumes in the JLR segment. Do you expect this to continue into the first half of FY '18? Because you've seen very strong volumes in China, that's why. Including the Chinese JV, what is your expectation on volumes from JLR in first half of FY '18?

[Ralf Speth:]

And that is the 1 million question, as always. And at the end of the day, I really cannot give you an answer because it depends also on the economy. If the economy is going to be strong and at the moment, let's say, we see still a silver line, a silver line in the -- in China, we see that the U.S. market is coming down. Nevertheless, Europe is stronger than probably expected from everybody. The U.K. is still stable. Nobody can really predict. And not having a clear, really, prediction about the economy, it's difficult then to result out of this kind of uncertainty, a figure. So overall, I'm cautiously optimistic that this -- especially the new products we're going to launch, the new Discovery, first time in the market, the new Velar, the air space, there is a power behind and therefore, I'm cautiously optimistic.

[Unidentified Analyst:]

This is Priyanka from VCVI [ph]. I just wanted to understand, for electric vehicles, what we will see in this coming year in terms of electric vehicles in terms of launches, the amount of investment, if you could share, that you're putting in and what sort of demand also are you seeing on that front?

[Ralf Speth:]

The electric vehicle is an unbelievably interesting subject. Nobody can compare it because hardly anybody can offer electric vehicles. And at the end of the day, it's not only an issue about the automotive industry, what the automotive industry can offer, we also have to make sure that the infrastructure, at the end of the day, is growing in parallel, simultaneously. From a Jaguar, Land Rover side, we're very much proud about the fact that we're at the forefront of this kind of technology, that we will be the first to really have a consequent design and a consequent packaged car in the market than early next year. And that's a very good development.

[Unidentified Analyst:]

Sir, sorry -- and also, I wanted to understand, on the India side, in terms of Tata Motors India?

[Unidentified Company Representative:]

As long as you don't expect me to find -- or to give an answer on the investment, because we usually don't provide an answer on this question, that's why we have to be forward from a technology point of view. Can we answer, on the one hand side, so you might note that we have recently provided a 9-liter full electric bus for first test drives in the context of ongoing -- all the opportunities in India, I think, at this point of time, the bus is in daily. And so we're about to complete a second bus. And we're effectively ready to launch [indiscernible] on the launch of prototype, we're effectively ready to also launch if we actually obtain an auto which we assume. It's going to happen in short notice of production. And then, finally, the operational use. In this context, just a hint, it's not only about electrification, it's also about hybridization. I would like to stress once more, the prestigious product of 25 diesel hybrid buses which we have obtained last year. And there the delivery is going to happen in the weeks to come, most probably in June, the final date is still subject to confirmation. On the passenger vehicle side, you know that we have an electric drivetrain available. It's already applied for first test drives on the BOLT. It can be available and driven in the U.S. with our colleagues at TMETC. They are in the process to apply a further optimized the electric drivetrain on a different product of our latest product range, mainly on the Tiago. And without giving too much of or disclosing too much of the secret, because I hinted this already, in Geneva, the next product which is going to be launched under the umbrella of the new sub brand TAMO is certainly also going to be another electric vehicle.

[Unidentified Analyst:]

This is Naved from [indiscernible]. I have just one question about exceptional items in the profit and loss and if we could take that up. There is one about separation expenses in the consolidated numbers and another about impairment loss, could you just explain what those 2 are and any details if possible?

[Chandrasekaran Ramakrishnan:]

In [indiscernible] items, in Tata Motors, we have had to provide certain impairment of certain investments in one of our subsidiaries and that is separately called out in the results that we have put out. And there's also another major item which is about 100 -- close to about INR150 crores which is the de-risking of the inventories relating to BS-III which we had on 31st of March.

[Unidentified Analyst:]

I was referring to the employee separation cost in the consolidated numbers.

[Chandrasekaran Ramakrishnan:]

That is -- if you see the stand-alone results, there's an implied separation cost also which we have provided for in the current year. We refer to many of the initiatives undertaken in the company [indiscernible] Tata Motors, undertaking the company for reorganization and [indiscernible] in the company's operations, in terms of number of roles and managerial hierarchies and managerial headcount. As a result, we have [indiscernible] about 10% to 12% reduction in the managerial headcount, from which separation packages have been finalized. Separation also, we have taken in the year ended March, '17.

[Unidentified Analyst:]

This is Anurad from V Business [ph], sir. Just, overall, can you just tell us overall impacts of currency in this result?

[Unidentified Company Representative:]

Question to whom?

[Unidentified Analyst:]

Anyone can answer.

[Unidentified Company Representative:]

Okay. First of all, when you look at the consolidated results, as for the Jaguar Land Rover results and they are consolidated in India and Indian Rupees, we have seen a translation loss in terms of what the translation of the Jaguar Land Rover performance in pounds for '15, '16 compared to' 16, '17. And so post-Brexit, the pound depreciated quite significantly. And in the last couple of months, we have seen an appreciation of the Indian Rupee. The documentation for that, when you report consolidated results at Tata Motors level in Indian rupees, so they seem really in terms profit or plus in Jaguar Land Rover when you translate in '15, '16 compared to '16, '17, this [indiscernible] rupees, both in turnover and in the bottom line. In the turnover number, there's an impact of almost 27,000 -- INR28,000 crores due to this currency translation effect from pound to rupees and in the bottom line, an impact of about INR1,000 crores. This is, for us, a deconsolidated level. When you look at the operating performance in JLR, [indiscernible] explained in detail, fundamentally, the weakening of the pound and the strengthening of the dollar is good for the business going forward because JLR has bulk of its expenses in pound sterling and good part of its sales is in dollars or dollar-linked currencies. However, since we also have a significant amount of hedge that we take for forward power, some of these benefits will come over a period of time and you will see some mark-to-market fluctuations in the meantime. Overall, in the JLR operations, I don't really want to add anything, the year has been almost neutral in terms of currency impact compared to the previous year.

[Unidentified Analyst:]

I just want -- Nilesh [indiscernible] from Autostar Professional [ph]. Just wanted to check up on the for sales Tata Nano and production and sales figure for Tata Nano and future ready for the new stress test?

[Unidentified Company Representative:]

Sorry, didn't get the last one.

[Unidentified Analyst:]

I just wanted to confirm the modification for the new safety regulations that have come for the [indiscernible] regulations.

[Unidentified Company Representative:]

Okay. I will take this. I think just to mention that all the products that we sell or are going to sell must comply with all the regulations. So as the regulations come, we will keep seeing that and it's obvious that all the products which we're trying to sell or selling must comply with the thing. Although we don't sell -- we don't share product-wise sales figure, but Nano is an [indiscernible] important tool for us in very specific markets and it is going as per our plan. Specific numbers, we really avoid. So if I was to say that against a market growth of 9%, TML has shown a growth of 22% last year. Even in month of April, when industry grew by around 10%, we had a 23% growth. And we think that momentum will continue.

[Unidentified Analyst:]

This is Shafique [ph] from the Financial Express. Just a question on the balance sheet, reserves are lower by about, I think, INR21,000 crores and doesn't look like a lot of it is because of reconsolidation to ACE. So if you could throw some light on that.

[Unidentified Company Representative:]

I'm sorry. On the balance sheet, could you repeat the question?

[Unidentified Analyst:]

Reserves are down by about INR20,800 crores and doesn't look like it's because of transition to ACE. So if you could just throw some light on that.

[Unidentified Company Representative:]

Obviously, we'll see [indiscernible] with the consolidated balance sheet. In the consolidated balance sheet, there will be an impact of the loss in Tata Motors which will go into the reserves. And if you recall, there's also an impact on the reserves on account of the revaluation of some of the liabilities related to pensions in Jaguar Land Rover.

[Unidentified Analyst:]

Sir, I'm Bindu. You said that this year, the focus will be to monetize some non-core assets, if you can please elaborate?

[Unidentified Company Representative:]

For sure, I'll be able to able to comment on specific ones. As and when they are taken, we will share it with you, but we will be working on them in a focused manner this year.

[Alex Mathew:]

This is Alex from BloombergQuint. Just a couple of questions, Günter. In your opening...

[Unidentified Company Representative:]

Get closer, Alex, mic closer.

[Alex Mathew:]

In your opening statement, you spoke about a few objectives that you missed out on. And thereby, you having to review certain objectives that you want to going into the new year, can you essentially delve a little on that? Also secondly, I would like to understand, you also said that there would be a spillover effect of the BS-III inventory that you currently have. What is the current inventory that you have of BS-III vehicles? And what are the kind of financial impact that we're likely to see? To what extent will that go through in the next financial year?

[Günter Butschek:]

Keep on going, the answer to the question is going to last for the rest of the evening. And we will happily entertain you. I will take the first part of the question. Whereas the second one as far as the spillover effect is concerned, since this is mainly a commercial vehicle issue, I would like to hand over to Ravi to provide a bit of an insight of what has happened towards the end of March and what we have seen in the month of April. As far as the mentions homemade misses are concerned, we have not been on time with some of the product launches. I don't like to go into the details why some of the product launches were effectively late. But effectively, we were against our initial planning for the fiscal year '16, '17. At '17, we effectively lost the volume. With the loss of the volume, we lost the market share. This is possibly one of the biggest misses at all where we do have evidence, unfortunately, in both business units, in PV as well as in CV. So that if you ask us if we're happy and satisfied with our overall market performance, I think, at least this year, on the last -- we're not happy with it because we really would've appreciated to be in the market with the new product, with the new -- with the upgrades of some products on time in order to really serve the opportunities available in the market in PV as well as in CV. There are many other loss -- misses, as I would say. [indiscernible] it's not in the first instance initially targeted the margins where we had last year, you might know, a huge impact for a couple of weeks in terms of production because of the supplier issue where we actually had to relocate a significant number of trucks worth of tooling load in order to reestablish production and to relaunch production on our site. This was issued -- if we would have acted quite in advance, taking -- anticipating these kind of issues to come, we certainly would have had much more stability in our operational side. And thus the operational side, a better predictability as far as products available for the sales were concerned. So these are lots of -- sometimes, it looks and appears like a smaller issue, but this is something which we have now started as part of the action plans I had been referring to, to really pay attention with the new organizational structure where the business units have been cut into platforms, on the PV side according to the market segments. On the other side, in platforms on the PV side where we have dedicated teams, cross-functional teams which actually fully own their products in terms of actual P&L, but also, as far as new product developments are concerned, in order to make sure that we don't miss on these opportunities anymore, that we actually start stringently delivering against our plans in order to actually report in the future against our commitments and, hopefully, against overachieving our commitments as they have been used as an assumption in the business plan. While the transition '16 to '17 -- or '15 to '17, '18 is a special -- bears special element, I would like to hand over to Ravi.

[Ravindra Pisharody:]

I think, in the [indiscernible] going to refer to really refers to the weak interim sales. I mean, normally, as in any other transition, the first month of the new period really has some sales coming from the previous initial month. To give an example, I have come public saying that we have 15,000 vehicles unsold of BS-III. If the Supreme Court judgment had not gone the way it went on 29th, those 15,000 or a large part of that 15,000, would have been sold to dealers in April. As it happened previously, that certainly became not available. Now the financial consequences of the starting leftover is not spilled over to '17, '18. I want to clarify that. I think that's what you probably misunderstood. The financial consequences of that stock is fully provided for in the results that Mr. Ralf has shown. But April, the weak sales because suddenly, on 29th of March, the quantity of BS-IV production required for a normal sales month was just not there. Even today, we're struggling with vendor-related issues who felt that the BS-IV ramp-up would be much slower over a 3 or 4-month period.

[Unidentified Analyst:]

Suresh from Money Central [ph]. Just one question on the VRS that was rolled out by the company. How much reduction in headcount did we achieve? And are we done with that or are we expecting more to follow?

[Chandrasekaran Ramakrishnan:]

As I mentioned, it's roughly in the range of about 10% to 12% reduction in headcount. Those on the days of managerial cadre. I'm not talking about local, managerial cadre . On a base of about approximately about 10,000, 11,000 people, we're talking about a 10% to 12% reduction in the workforce.

[Unidentified Analyst:]

I have two small questions. [indiscernible] from Reuters. On Brexit, is there -- a question for Ralf, is there any investment that you're diverting or postponing until the terms of Brexit become clear? And on Tata Motors in general, are you all -- can you give me a number of models that you will launch this year or in the next few years?

[Ralf Speth:]

Brexit, I guess, nobody knows what is going to happen or what will happen because, at the end of today, it's a negotiation process. You know that I was in the remain campaign and I'm still part of it because I'm absolutely convinced that next to just economical issues, there are so many other factors which are very important. Think about peace we had a very long time. Think about automation. Think about defense and so many other things. At the end of the day, we're where we're. It was a democratic process and we have to honor a democratic process. I guess, government understands, but I'm also quite sure that's in the interest of both the U.K., but also Continental Europe, to have, at the end of today, free and fair trade, [indiscernible] and the free access to elite talent from both sides. Only with free access, this free trade, the nations prosper. And by the way, this kind of theory was already -- is already more than 200 years old. Go back to Adam Smith. You can read all these kind of theories. I don't know the outcome of the negotiations, so please, at the moment, I cannot give you any detailed information about that.

[Chandrasekaran Ramakrishnan:]

I think, product launches, I'll cover the PV part. The last -- already, this calender year, launched 2 new products, the HEXA and TIGOR. And I think which is right. Generally, we don't comment on future product, but I think Nexon is in public domain. So Nexon we launch on Diwali.

[Unidentified Company Representative:]

The second answer to this question for CV because it depends on what you call new models. But if I look at products which we did not have, it's a completely new introduction, like the Ultra 15 [indiscernible]. This is one of the reasons you may be -- you may have referred to, that an Ultra 15 product, [indiscernible] multiaccess truck. So if we look at completely new, new introductions, then it will be 12 to 15 new products. But if I look at the variance like extended load body on an ACE XL, on a variance of 16-ton products with higher wheel risk, it will be more than 100 during the year.

[Ralf Speth:]

Sorry. I don’t know whether I've answered your question completely because you also mentioned do we continue with our investment, am I right? Are we continuing with our investment? In that context I say, from a product point of view, nothing is going to change. We're rolling out our complete product portfolio as planned according to the cycle plan. It's so important that we keep -- it's so important that we deliver our vehicles. But we also, as you know, invest over proportion and the complete product creation process and in that context, also in capacity, we're on track, absolutely on track to setting up a new manufacturing footprint in Slovakia. We're building up, as you know, a new plant in Nitra, roundabout one hour away from Vienna. And this plant is really on track and can cover a lot of capacity.

[Vijay Somaiya:]

Great. Thank you, friends. Thank you so much. We come to the end of the press conference. Do join us for high tea. And once again, stay safe, have a great evening. Thank you, so much.