Tata Offers Car Buyback as Sales Continue to Fall Dramatically image

Tata comes with a new strategy to increase sales level after a decade low, by promising customer to buy back their Manza sedans.

Tata guarantees its customers 60% of the purchase price three years after the buyer has acquired the vehicle only if the purchase is made in the next two months. The automaker also announced it will reduce prices for some of it vehicles this week by around 50, 000 rupees ($912), Manza’s price being with 8% lower.

Tata had to come up with a new strategy after it had lost share in India to Toyota and Mahindra & Mahindra and after sales plunged 70% in February to the lowest level in the past 10 years. As high interest rates and the slow economic growth continues to affect the Indian market, the country’s automakers’ association has lowered in January the full-domestic auto sales target for the third time over the past six months.

“Tata Motors has a big problem in the local car business,” said Juergen Maier, a Vienna-based fund manager at Raiffeisen Capital Management. “Tata Motors needs to get its quality and design right.”

Tata has seen February sales drop to 10,613 units from 34,832 units, while Maruti Suzuki India, the country’s biggest automaker, fell 9% to 97,955 units.