Aggressive pricing of Tata Motors all-new compact hatchback Tiago triggered buying in the shares of the auto major on Wednesday, traders said. The Tiago's base variant (petrol) starts at Rs 3.2 lakh (ex-showroom) in Delhi, making the car significantly cheaper than its competitors such as Maruti Suzuki Celerio.
"Variant to variant versus competition - Maruti Celerio, Wagon R, Hyundai i10 - pricing (of Tiago) is at 10-15 per cent discount," said Nitesh Sharma of PhillipCapital. Terming Tiago's pricing as "disruptive", he added that there is a "good reason" for Maruti to worry.
"Aggressively priced Tiago and Renault Kwid directly target the entry hatch segment which contributes around 40 per cent of Maruti Suzuki's volumes," Mr Sharma said.
Tata Motors has a production capacity of over 5,000 units per month for Tiago at its Sanand plant in Gujarat, PhillipCapital said.
The Tiago is an important launch for the company, which has struggled to push sales in India at a time when competitors are growing in double digits. Analysts say Tata Motors is seeking an image makeover with the curvaceous hatchback, which is being endorsed by world soccer player of the year Lionel Messi.
Tata Motors, India's fifth-biggest carmaker, also owns the Jaguar and Land Rover brands.
Tata Motors shares closed 1.55 per cent higher at Rs 376.25, outperforming the broader Sensex, which ended flat.
