Tata Warns of Competitive Crisis for Its Truck Unit

India’s Tata Motors Ltd. says its truckmaking operations face a “crisis situation” created by high costs, missed market opportunities and intense competition, The Nikkei reports.

“There is an urgent need for us to arrest this slide,” declares CEO Guenter Butschek in a letter to employees. He says the next three months will be “absolutely critical” and warns, “This means it will not be business as usual.”

Butschek says the company will implement an “extremely demanding” business plan that includes sweeping cost cuts, zero tolerance for delays in new-product launches and a review of all supply chain bottlenecks.

Tata named Butschek, a former Daimler AG executive, to head its domestic operations 18 months ago. Last year he revealed plans to phase out slow-selling models and streamline product development and manufacturing. But the company has been losing market share as competition grows from such rivals as Daimler, Ashok Leyland and Volvo.

The Nikkei notes that domestic sales by Tata’s commercial vehicle business in the fiscal year ended March 31 grew only 1% against an overall market expansion of 4%. The company commands 49% of India’s commercial truck market, down 10 points since fiscal 2011.

More than half of Tata Motors’ revenue and 90% of its operating profit are generated by its Jaguar Land Rover unit in the U.K. Analysts say the financial demands of remaining competitive in that sector will add to the challenge of finding the funds to update the company’s truck operations.