Effect of Declining Market on TATA Motors

Effect of Declining Market on TATA Motors2014

Effect of Declining Market on TATA MotorsFebruary 172014

RESEARCH PAPER ON TATA MOTORS

Research Project ReportOnEffect of Declining Market on TATA MOTORSSUBMITTED TOMIT PUNEsMIT SCHOOL OF TELECOM MANAGEMENTBY

STUDENT NAME:-WILSON D ARANJOPRN: -12092BATCH: - 2012-2014

IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENTPGDM 2012-2014MIT PUNEs MIT SCHOOL OF TELECOM MANAGEMENTMITSOT, PUNE

DECLARATION

I Mr. Wilson d aranjo hereby declare that this Research Project Report on Effect of Declining Market on TATA MOTORS is the record of authentic work carried out by me during the period from last semester and has not been submitted earlier to any university or institute for the award of any degree/diploma etc.

Name of the student: - Wilson d aranjoPRN: - 12092Date: - 17/02/2014

PLACE: - MITSOT, Pune

CERTIFICATE

This is to certify that Mr. Wilson d aranjo of MIT Punes, MIT School Of Telecom Management (MITSOT) has successfully completed the RPT work titled Effect of Declining Market on TATA MOTORS in partial fulfillment of requirement for the completion of PGDM course as prescribed by the MITSOT.This RPT report is the record of authentic work carried out by him/ her during the last semester. He / She have worked under my guidance.

Dr. Milind PandeProject DirectorMITSOT

Prof. Jenny SabuMITSOT

ACKNOWLEDGEMENT

Writing is a solitary task. However turning of millions of bytes of information requires an army of talented folks. I have been fortunate enough to be assisted by many talented and caring people. And I wish to express my appreciation all those help has been most valuable.

To all these truly outstanding people, and many others too, my warm personal regard.

I am indeed grateful to my Director Mr. MilindPande and mentor Mrs. Jenny sabu providing me the necessary guidance and facility required for completion of this project and for being an effective source of inspiration. I am thankful to the library for providing the necessary magazines and journals without which the completion of this project would not be possible.

YoursFaithfuly Wilson D Aranjo

[[ TABEL OF CONTENTS[[[[[Introductory Chapter:- Theoretical Background of the topic....................................7-11Global Economic DownturnImpact of a US recession on IndiaImpact of Recession in the Automobile IndustryThe Indian Auto Industry TodayOrganizational Profile .12-23About CompanyAbout The Product and brandGlobal PreferenceMilestoneIndustry Information....24-33MilestoneOther Tata ServicesSWOT AnalysisStrategies........34-50Marketing StrategiesHuman Resource StrategiesOperating StrategiesCustomer Satisfaction Strategies Competition.......51-53Company Analysis....54-56Awards And Achievements....57-59Observation And Conclusions.60-61Bibliography..62-63

GLOBAL ECONOMIC DOWNTURN

Definition: A recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year. A recession is also preceded by several quarters of slowing down.

Causes: An economy which grows over a period of time tends to slow down the growth as a part of the normal economic cycle. An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years. A recession normally takes place when consumers lose confidence in the growth of the economy and spend less. This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment.

IMPACT OF A US RECESSION ON INDIA Indian companies have major outsourcing deals from the US. India's exports to the US have also grown substantially over the years. The India economy is likely to lose between 1 to 2 percentage points in GDP growth in the next fiscal year. Indian companies with big tickets deals in the US would see their profit margins shrinking. The worries for exporters will grow as rupee strengthens further against the dollar. But experts note that the long-term prospects for India are stable. A weak dollar could bring more foreign money to Indian markets. The whole of Asia would be hit by a recession as it depends on the US economy. Asia is yet to totally decouple itself (or be independent) from the rest of the world.

IMPACT OF RECESSION IN THE AUTOMOBILE INDUSTRY Global recession has devastated the global auto industry with pinching effects on the Indian auto industry. India is a strong and growing economy but the hit of recession has put red marks on the entire balance sheet of the Indian economy. Among the leading car manufacturers, General Motors and Ford were the first one to file for bankruptcy. GM is struggling to stay alive and claims that the company has just enough cash to continue its operations. Even the merger talks of GM and Chrysler have been officially brought to a halt because of the liquidity crunch. U.S sales have fallen down by 32% which has directly affected the Indian car industry where GM has recorded a fall of 45%, Ford of 30% and Chrysler down by 35%. All the three major car manufacturers have reported declined growth after the hit of recession. After the industry experienced a heavy fall in the month of August due to inflation, September proved to be a promising month with things setting out at the right place. Then again the market went in the negative terrain swayed by the wind of recession. October usually is considered to be the best month for car sales because of the festive season. Unfortunately, this year it proved to be a curse for the Indian auto industry. At one end of the spectrum, car manufacturers like Tata Motors, GM, Hyundai, Ford, Renault, Mahindra, and Maruti Suzuki are investing huge amounts to establish new production plants and line up launch of car models. At the other end of the spectrum, SIAM has cut down the growth forecast of automotive sales from 12.5% to 9.5%. This initiative taken by SIAM further forced few car manufacturers like Tata Motors and Maruti Suzuki to cut down their production which further took away the job of almost 300 workers. Even Mahindra-Renault reduced the number of production units of their Logan. In addition, the severe liquidity crunch in the U.S market has also forced many of the car buyers to cut upgrades to bigger cars and many are pushed back from buying new cars. With deteriorating car sales, even production has gone down to a great extent, which has eventually put a negative impact on the auto component industry. In October, overall car sales declined to about 9.05% over October 2007 and the car production fell down to about 12.32%. Further to that even the month of November was not successful in bringing some charm to the industry. In fact, November recorded the steepest fall in car sales in the past five years.Maruti Suzuki recorded a fall of 27%, Mahindra & Mahindra recorded a fall of about 40%, and Tata Motors showed 12% decline in the car sales. It is also said that the recent Mumbai terror attack and the cyclonic rain in South India have added to the woes of Indian car manufacturers.

THE INDIAN AUTO INDUSTRY TODAYIn 2013 estimated rate of growth of India auto industry is going to be 9 percent. Auto industry in India has been hit hard by ongoing global financial recession. Sales figures of India automobile industry for December 2012 have shown devastating after effects of global financial slowdown.However, there is still hope for automobile industry of India in 2009 as there are certain factors working in its favor. India is blessed with a middle class, which is getting economically stronger with every passing day. This class is being touted as potential consumers for India auto industry in years to come. Indian economy has been, more or less, able to withstand tremors of global financial meltdown. Even though its rate of growth has slowed down considerably, there are hopes of an economic revival. Work force of auto industry of India is relatively well trained. All these factors indicate that there could be a decent future for India auto industry in days

Hyundai, a major automobile establishment of South Korea, has put in large sums of money in India automobile market. As per its estimates, India auto industry could become a major center for small car manufacturing organizations in future.

There are some other automobile companies of world who have shown interest in India auto market. Major names among these are General Motors, Skoda Auto and Mercedes-Benz. These companies have major plans lined up for India auto industry and are likely to invest a huge amount of money in India automobile market.

India domestic auto industry has been passing through a tough phase in 2012 and such a trend is supposed to continue in 2013 as well. Leading members of India auto industry have forecast a difficult path in 2013. Shinzo Nakanishi, managing director of Maruti Suzuki, has said that 2009 would present them with a number of challenges.

ANTICIPATING NEEDS.DELIVERING EXCITEMENT.At Tata Motors, we believe that ourstrengths stem from an organisation-wide culture which rests on fourpillars Accountability, Customer &Product Focus, Excellence andSpeed (ACES).Our renewed commitment to thesepillars drives us to achieve our missionof anticipating and providing the bestvehicles and experiences to excite ourcustomers. Not just in India, but acrossthe world. Our products span segments,customers and geographies. Ourstrengths in engineering, a deep-rootedunderstanding of customers and marketshelp us deliver best-in-class products andsuperior driving experiences.Our customers are at the heart of all wedo. We are gearing up and igniting ourpassion to offer products that meet themobility needs of our customers. We areengaging with them at our dealershipsand adopting processes to ensure thatindustry-leading practices form a key partof our service proposition.As we move ahead, we will continue toanticipate the needs of our customersand remain committed to deliverexcitement.

CORPORATE INFORMATION

TATA MOTORS LIMITEDOverview

Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), is a multinational corporation headquartered in Mumbai, India. It is India's largest passenger automobile and commercial vehicle manufacturing company. Part of the Tata Group, and one of the world's largest manufacturers of commercial vehicles. The OICA ranked it as the world's 20th largest automaker, based on figures for 2006.Tata Motors was established in 1945, when the company began manufacturing locomotives. The company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969 Tata Motors was listed on the NYSE in 2004, and in 2005 it was ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2004, it bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. It also, acquired a 21% stake in Hispano Carrocera SA, giving it controlling rights in the company. Tata Motors launched the Tata Nano, noted for its Rs 100,000 price-tag, in January 2008.In March 2008, it finalized a deal with Ford Motor Company to acquire their British JaguarLand Rover (JLR) business, which also includes the Rover, Daimler and Lanchester brand names. The purchase was completed on 2 June 2008Tata Motors has its manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and Pune.MISSION, VISION AND VALUES

LeaderDELIVERING EXPERIENCES

Leader

In commercial vehicles manufacturing in IndiaLargest

Automobile company in IndiaOver 8 million

Vehicles rolled out on Indian roadssince inception

SETTING BENCHMARKS 4thTata Motors Limited is Indias largestautomobile company. It is the leader incommercial vehicles and among the leadersin passenger vehicles in India with winningproducts in the compact, midsize car andutility vehicle segments. It is also the worldsfourth largest bus and fifth largest truckmanufacturer.

LARGEST MANUFACTUREROF BUSES GLOBALLY

5th

LARGEST MANUFACTUREROF TRUCKS IN THE WORLD

2004

LISTED ON NYSE

62,000+

CONSOLIDATED WORKFORCE

182 countries

PRESENCE ACROSS THE WORLD

NET CASH FROM OPERATIONS` 22,062 crores1.42 times14.07%EBITDA MARGINDEBT EQUITY RATIO25+NUMBER OF NEW PRODUCTLAUNCHES IN 2012-136,600+

12NUMBER OF R&D CENTRESACROSS THE WORLDSALES AND SERVICE TOUCHPOINTS ACROSS THE WORLD

PRODUCTS AND BRANDSCommercial vehicles

SMALL COMMERCIAL VEHICLES (SCV)Ace | Super Ace | Ace ZipMagic (Passenger) | Magic Iris (Passenger)

LIGHT COMMERCIAL VEHICLES (LCV)407 | 1109 | Ultra rangeBUSESGlobus | Starbus| Starbus Ultra | Hispano |Marcopolo| Divo

MEDIUM AND HEAVY COMMERCIAL VEHICLES(MHCV)LPT 2523 | LPT 3723 | Novus | Prima trucks |Construck tippers and tractors

LCV PASSENGERWinger | Winger Platinum | City Ride LP709PICKUPSRX Pickup | Xenon Pickup

PASSENGER VEHICLES

COMPACTIndica (eV2, Vista) | Indigo (eCS) | Vista D 90MIDSIZEIndigo | ManzaUTILITY VEHICLES (UV)Sumo Gold | Sumo Grande | Safari Storme|Safari Dicor| Aria | Xenon XTVANSVenturePREMIUM AND LUXURYJaguar (XF, XJ, XK) | Land Rover (Freelander, Defender,Discovery, Range Rover, Range Rover Sport, Evoque)

MICRONano

GLOBAL PREFERENCE

MILESTONES 1. HistoryTata Motors launches its first truck in collaboration withMercedes-BenzTata Motors is a part of the Tata and Sons Group, founded by JamshedjiNussarwanji Tata andJ. Baker. The company was established in 1945 as a Locomotive manufacturing unit and later expanded its operations to commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz AG of Germany.2. CarsTata IndicaAfter years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1992 by launching the Tata Sierra, a multi utility vehicle. After the launch of three more vehicles, namely, Tata Estate (1992, a station wagon design based on the earlier 'Tata Mobile' [1989] a light commercial vehicle which some people may still think of as Tata's first passenger car), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first sports utility vehicle); In 1998 Tata launched the Indica, the first fully indigenous passenger car of India. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favorite. A badge engineered version of the car was sold in the United Kingdom as the Rover CityRover.3. Daewoo acquisitionMain article: Tata Daewoo Commercial VehicleTata Novus is one of the best-selling commercial trucks in South Korea.With the success of Tata Indica, Tata Motorsaimed to increase its presence worldwide. In 2004, it acquired the Daewoo Commercial Vehicle Company of South Korea. The reasons behind the acquisition were: Companys global plans to reduce domestic exposure. The domestic commercial vehicle market is highly cyclical in nature and prone to fluctuations in the domestic economy. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the light commercial vehicle (LCV) segment. To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoos (South Korea) (TDCV) platform. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time.4. Joint venturesTata MarcoPolo NON-AC City Bus in Delhi.The NON-AC version is only used in Delhi while AC versions are used in Bangalore, Mumbai and Delhi alikeIn 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors acquired 21% stake in Hispano CarroceraSA,Aragonesebus manufacturing company and introduced its high-end inter-city buses in the country.Tata Motors has also formed a 51:49 joint venture with Marcopolo S.A., a Brazil-based global leader, led by Brian Behrle, in bus body building. This joint venture is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems.

5. Tata Ace

Tata Ace was India's first mini truckMain article: Tata AceTata Ace, India's first indigenously developed sub-one ton mini-truck was launched in May 2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had changed the dynamics of the light Commercial vehicle (LCV) market in the country by creating a new market segment termed the small commercial vehicle (SCV) segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace.

6. 2007

Tata Pick Up, unveiled in 2007, is expected to enter European and American market by 2009.In 2007, Tata Motors generated revenues of Rs 31,884.69 crore.In 2007, Tata Motors launched several conceptsmodels and future designs of existing models. It also formed joint ventures with various local companies in several countries to assemble Tata cars. Tata Motors launched a re-designed version of Tata Xenon TL during Motor Show Bologna which would be assembled in Thailand and Argentina. A pick-up variant of Tata Sumo was also launched under the program 'Global Pick-Up'. The company plans to launch the new pick-up model in India, Southeast Asia, Europe, South Africa, Turkey and Saudi Arabia. Tata Motors also unveiled newer model of Tata Indigo and Tata Elegante concept-car during the Geneva Auto Show.Tata Motors also formed a joint venture with Fiat and gained access to Fiats diesel engine technology. Tata Motors is looking to extend its relationship with Fiat and Iveco to other segments like the 'Global Pick-Up' program. The launch of the 'Global Pick-Up' will mark the entry of the company into developed markets like Europe and the United States.7. 2008 Onwards8. Compressed air carMotor Development International of Luxembourg has developed the world's first prototype of a compressed air car, named OneCAT. In 2007, MDI owner Guy Negre was reported to have "the backing of Tata"It has air tanks that can be filled in 4 hours by plugging the car into a standard electrical plug. In 2008 MDI planned to also design a gas station compressor, which would fill the tanks in 3 minutes. There are no gasoline costs and no fossil fuel emissions from the vehicle when run in town, but "the compressed air driving the pistons can be boosted by a fuel burner".9. Tata NanoTata has developed a car, named Tata Nanothat aims to sell in 2008. It is the least expensive production car in the world: the price is about Rs. 1, 00,000 (USD $2,000) the company unveiled the supermini carduring the Auto Expo 2008 exhibition in PragatiMaidan, New Delhi. Bajaj Auto and Mahindra-Renaulthave [when?] plans to launch cars in this price range.Now Tata Motors Limited plan to set up the Nano factory in Sanand, Gujarat, because of the problems faced in West Bengal.

10. Jaguar Cars and Land RoverMain articles: Jaguar Cars and Land RoverAs of 27 March 2008, Tata Motors reached agreement with Ford to purchase their Jaguar and Land Rover operations for US$2 billion. The sale is expected to be completed by the end of the second quarter of 2008Tata will also gain the rights to the Daimler, Lanchester, and Rover brand names.11. Electric vehiclesTata Motors unveiled the electric versions of passenger car Tata Indica and commercial vehicle Tata Ace. Both run on lithium batteries. The company has indicated that the electric Indica would be launched locally in India in about 2010, without disclosing the price. The vehicle would be launched in Norway in 2009. 12. Global operations

The purchase of Jaguar Cars is expected to help give Tata Motors a foothold in European and American markets.

With the unveiling of Tata Elegant during Geneva Motor Show, Tata Motors revealed its intention to enter the sedan and sports car markets.

Tata Indica during an auto exhibition in Bangkok, Thailand. Indica and Xenon TL will be assembled inThailand and Argentina.

Tata Prima was unveiled during the Geneva Motor Show in 2009. The Luxury Sedan was designed by Pininfrina and has marked the entry of Tata into the international sedan market. The car is to be sold in India by 2013 and around the world by 2015Tata Motors has expanded its production and assembly operations to several other countries including South Korea, Thailand, South Africa and Argentina and is planning to set up plants in Turkey, Indonesia and Eastern Europe.13. Global brandsTata Motors has been aggressively acquiring foreign brands to increase its global presence. In 2004, Tata Motors bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving it controlling rights in the company.Tata Motors have some distinct advantages in comparison to other multi-national competitors. There is definite cost advantage as labor cost is 8-9 percent of sales as against 30-35 percent of sales in developed economies. Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. Tata Group's strong expertise in the IT based engineering solution for products and process integration has helped Tata Motors. India has a large auto component industry noted for its world class capabilities. There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. There are favorable Government policies and regulations to boost the auto industry.The Government of India announced an automobile policy in December 1997. The policy required majority-owned subsidiaries of foreign car firms to invest at least US$50 million in equity if they wished to set up manufacturing projects in India. It also forced them to take on export obligations to fund their auto part imports and required them to submit to a schedule for increasing the share of locally made parts in their cars. Mere car assembling operations were not welcomed.An Indian cabinet panel will soon consider a new automobile policy that aims to set fresh investment guidelines for foreign firms wishing to manufacture vehicles in the country. Investments in making auto parts by a foreign vehicle maker will also be considered a part of the minimum foreign investment made by it in an auto-making subsidiary in India.

15. Future challengesTata Xover

Plastic Car Production- Tata plans on producing a car that is made of nearly 100% plastic.OTHER TATA SERVICES1) Tata Insurance:Tata AIG Life Insurance Company Limited and Tata AIG General Insurance Company Limited (collectively 'Tata AIG') are joint ventures of the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength.2) Tata motor finance:Tata Motors is the largest automobile company in this part of Asia. The company has grown in a big way in recent years and has embarked on expansion and acquisition programs. As part of it, Tata Motors has also strengthened and expanded on its finance wing Tata Motor Finance that provides for loan and financing options to the customers buying Tata Motors automobiles. TataMotor finance (TMF) is the automobile financing wing of Tata Motors. It was launched in June 2003 and provides for loans on various segments of company automobiles like passenger cars, utility and commercial vehicles along with construction equipments.Some of the terms associated with the Tata Motor finance are as follows: Car financing/loan options available for customers belonging to different categories The repayment period varies to the tune of 36 months-84 months The interest paid on the loans are on the lower end Finance on passenger and commercial vehicles on all Tata vehicles and Fiat models Palio and Adventure include top up loans, used vehicle finance, loan takeover and refinancing The paperwork is limited and the financing company's representative can be called even at home to complete the formalities, including calculating the likely Equated Monthly Installment (EMI) that the customer might have to pay.

StrengthsIt is leader in the commercial vehicle segment in India and one of the countrys top three car manufactures.The company has a strategy in place for the next stage of its expansion. Not only is it focusing upon new products and acquisitions, but it also has a programme of intensive management development in place in order to establish its leaders for tomorrow.The company has had a successful alliance with Italian mass producer Fiat since 2006. This has enhanced the product portfolio for Tata and Fiat in terms of production and knowledge exchange.Weaknesses Tata has restricted itself to India and other developing countries.One weakness which is often not recognized is that in English the word 'tat' means rubbish. Would the brand sensitive British consumer ever buy into such a brand? Maybe not, but they would buy into Fiat, Jaguar and Land Rover.Despite buying the Jaguar and Land Rover brands. Tata has not got a foothold in the luxury car segment in its domestic. SWOT ANALYSIS - TATA MOTORS LIMITED

Threats Threats of competition from entry of international truck majors and expansion of existing international car major into voluminous B&C car segments.Other competing car manufacturers have been in the passenger car business for 40, 50 or more years. Therefore Tata Motors Limited has to catch up in terms of quality and lean production.Sustainability and environmentalism could mean extra costs for this low-cost producer. This could impact its underpinning competitive advantage. Obviously, as Tata globalizes and buys into other brands this problem could be alleviated.Opportunities With low-cost product-development and manufacturing capabilities, it is exploring export opportunities in other developing and developed countries through organic and inorganic routes.Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around USD $16 million.The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly engines. The bus has optional organic clutch with booster assist and better air intakes that will reduce fuel consumption by up to 10%.

BUSINESS DECISIONS (APRIL 2006 TO JUNE 2007)TATA MOTORS has taken numerous critical business decisions since the last one year. The endeavors include joint ventures. New product launches, setting up of new plants, break through into new market etc.

Joint ventures On 5th may 2006, Tata motors, India, and Marco polo, Brazil, announced joint venture to manufacture fully built buses & coaches for India & market abroad. This venture helped Tata to cater to the growing demand in India and abroad.On 25th July, 2006 signed a memorandum of understanding with fiat group to establish an industrial joint-venture in India to manufacture. Passenger vehicles, engines and transmissions for the Indian and overseas markets. On 18th December, 2006 Tata motors and thonburi automotive assembly plant co. (Thonburi), a Thailand-based independent assembler of automobiles, announced formation of a joint venture company in Thailand to manufacture, assemble and market pickup trucks.

Foray into new markets On 30th august, 2006 Tata group entered Russia with diverse range of trucks and buses. It hoped to sell 6000 vehicle unit year for the next 3 years. On 16th October, 2006 Tata motors forayed into Ghana with new range of vehicles. On 19th January 2007 it commissioned a plant in Pakistan to assemble Tata Daewoo trucks.

Tata motors goals and strategy get reflected in the business decisions taken by the company over a period of time. For this purpose, we undertake a detailed analysis of the company in the next section.

MARKETING STRATEGIESa) Introduction of the new Tata NanoThe introduction of the Nano received media attention due to its targeted low price. The Financial Timesreported [: "If ever there were a symbol of Indias ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph of homegrown engineering, the $2,200 (1,490, 1,186) Nano encapsulates the dream of millions of Indians groping for a shot at urban prosperity." The car is expected to boost the Indian economy, create entrepreneurial-opportunities across Indiaas well as expand the Indian car market by 65% The car was envisioned by Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly "people's car". The Nano was originally to have been manufactured at a new factory in Singur, West Bengal, but increasingly violent protests forced Tata to pull out October 2008. Currently, Tata Motors is reportedly manufacturing Nano at its existing Pantnagar (Uttarakhand) plant and a mother plant has been proposed for SanandGujarat.]The company will bank on existing dealer network for Nano initially. The new Nano Plant could have a capacity of 500,000 units, compared to 300,000 for Singur. Gujarat has also agreed to match all the incentives offered by West Bengal government.Cost Cutting features The Nano's boot does not open, instead the rear seats can be folded down to access the boot space It has a single windscreen wiper instead of the usual some exterior parts of it are glued together, rather than welded. It has no power steering. Its door opening lever was simplified. It has 3 nuts on the wheels instead of the statutory 4 nuts. It only has 1 side view mirrorPriceTata initially targeted the vehicle as "the least expensive production car in the world aiming for a starting price of 100,000 rupees or approximately US$2000 (using exchange rate as of March 22, 2009)6 years ago, despite rapidly rising material prices at the timeAs of August 2008, material costs had risen from 13% to 23% over the cars development, and Tata faced the choice of: introducing the car with an artificially low price through government subsidies and tax-breaks forgoing profit on the car using vertical-integration to artificially boost profits on cars at the expense of their materials industries Partially using inexpensive polymers or biodegradable plastics instead of a full metal-bodyraising the price of the car option.Model versionsAt its launch the Nano was available in three trim levels: the basic Tata Nano Std priced at 123,000 Rupees has no extras; the deluxe Tata Nano CX at 151,000 Rupees has air conditioning; the deluxe Tata Nano TX at 135,000 Rupees has air conditioning, Yellow Colour Taxi Version; the luxury Tata Nano LX at 172,000 Rupees has air conditioning, power windows and central locking The Nano Europa, European version of the Tata Nano has all of the above plus a larger body, bigger 3-cylinder engine, anti-lock braking system (ABS) and meets European crash standards and emission. The base model will have fixed seats, except for the driver's, which will be adjustable, while the deluxe and luxury models will get air conditioning and body coloured bumpers.

B) Modification in Tata sumo New Tata SumoThe Toyota Qualis and now competes with Chevrolet Tavera. The discontinuation of Qualis to launch the Toyota Innova proved advantageous to Tata Sumo. The Sumo has seen a series of changes in terms of refinement in this decade. It has been the favorite choice for cab owners, as it is rugged and affordable. The Tata Sumo has been enjoying its position in the MUV market since 1994. It had stiff competition with new Sumo Victa has been portrayed as a family lifestyle vehicle, but in fact is a carryover of the old Sumo, with some cosmetic changes.

Quick Take

* Fuel Economy9/14 kmpl (city/highway)

Available Engines2.0L Inline-4, 67 bhp diesel 2.0L Inline-4, 89 bhp turbo diesel 3.0L Inline-4, 69 bhp diesel 2.2L DiCOR In-line 4, 118 bhp diesel

Available Transmissions5-speed Manual Transmission (MT)

c) New version of indigo,indigoDicorDicorVariantsThe DICOR (common rail diesel) version of Tata Indigo is available in two variants which has already hit the bull's eyes. The Indigo Dicor from Tata Motors has been made apt for Indian roads especially with its driver & co passengers oriented positive attributes.

Indigo LX DicorTata Indigo LX Dicor on the other hand features manually operated with chrome strip outer rear view window, black dials with chrome rings & star check as the new pattern for its console&ACfascia.

Indigo LS DicorTata Indigo LS Dicor features manually operated outer rear view mirror, black dials, & Benz silver as the new pattern for console & AC fascia. It has no mounted LCD screens.

ENGINES

Petrol1396 cc MPFI Petrol Engine with 32-Bit Microprocessor Max. Power - 85 PS @ 5500 rpm Max. torque - 12 Kgm @ 3500 rpm

DieselTurbo-charged 1405 cc Indirect Injection Engine with Intercooler Max. Power - 70 PS @ 4500 rpm Max. Torque - 13.5 kgm @ 2500 rpm

Dicor32-bit microprocessor based 1396 cc DICOR(Direct Injection Common Rail) 16-valve engine with Dual Over Head Camshafts and a Variable Geometry Turbocharger(VGT) Max.power-70 PS@4000 rpm Max.torque - 140Nm@1800-3000 rpm

e) Tapping of Rural MarketsAccording to the National Council for Applied Economic Research, or NCAER, rural India accounts for 70% of Indias population, 56% of the national income, 64% of the total expenditure and one-third of the total savings. So, the difficulties faced in cracking these markets pale before the huge potential they offer a company. Of the total sales (of consumer goods), around 55% come from rural India, and going ahead, the contribution is likely to grow. NCAER data suggests that in real terms, at 1999 prices, the size of the rural economy will be about Rs16 trillion in 2012-13 compared with Rs12 trillion in 2007-08. The share of non-farm income will be about two-thirds of the rural economy by 2012-13. Noticing this huge potential Tata motors now plans to tap the rural market, 60 per cent of which runs on cash. Tata motors ltd.Are working on strategies to make inroads into these markets.

HUMAN RESOURCE STRATEGIESa) Hiring Practices Hiring the right talent is the greatest challenge in business environment and new and innovative hiring strategies are the need of the hour if Indian companies have to succeed in the changing global scenario. With Indian companies entering the phase of global mergers and acquisitions, already there is a shift in standard hiring practices, the compensation being offered, sharing the vision of the company and transmitting a sense of passion in the company to the prospective employee will go a long way in attracting the right talent. A smart and sophisticated workforce will be the most important corporate resource over the next 20 the demand for this resource is sure to go up; however, the supply is already dwindling. 2. Re-organizing the organizational structure of co.:At the time ofrecession its important task of hrpersonal to reorganize the structure of the company.So as to avoid extra man force and duplication of work. 3. Reducing in the incentives given to employees.Human resource manager should cut incentives of individuals. For ex-If marketing manager used to get incentives for hoteling accommodations 2000 per day.it should be cut down to 1200 per day. As already due to recession he will get equal amount of service by paying the fewer prices. 4. No salary cuts and increase in Resource and DevelopmentThey have not cut salaries of employees. But they have reduced the extra working hours, which means the work which is to be done in two hours it has to be completed in two hours. They have reduced delays in work.

OPERATIONS STRATEGIESa) Reducing no. of shifts :Tata motors have reduced its number of shifts from 3 to 2 in a day and so as to control reduce cost of production. And started making production according to the sales required.

b) Quality Management

Quality management is crucial to effective operations management, particularly Continuous improvement. More recent advancements in quality, such as benchmarking and Total Quality Management, have resulted in advancements to operation s management as well.

c) Inventory Management

Costs can be substantial to store and move inventory. Innovative methods, such as Just-in-Time inventory control, can save costs and move products and services to customers more quickly.TATA MOTORS STRATEGIC GOALS (SUMMERIZED IN TABLE 1)

Table 1

CUSTOMER CARE TEAMRole of the Customer Care Manager:

Customer Care Manager is the leader of the customer care team. He is accountable for the sales satisfaction index of the dealership. The customer care manager ensures that every customer is properly followed up and feedback is recorded. Also the customer complaints are recorded and resolved as soon as possible to the level of satisfaction. The customer care executives report tothe customer care manager.

Customer Care Executive:-

Initially does the Post Sales Follow up (PSF) and monitors the feedback forms at the showroom

Post sales follow up. PSFs are done in order to get the first hand feedback from the customer about the experience that they had during the sales and delivery process. The first PSF is done within the 72 hours of delivery and the voice or exact wordings of the customer are recorded. The next PSF call is made after 15 days after the vehicle is delivered. The feedback form system is a very important tool to obtain customers feedback on the experience that the customer had during the purchase of his/her car.

Firstly customer acre manager gives a control number to all complaints received and records the same in the customer complaints control register. Then customer acre manager gets in touch with the customer over the phone and expresses regret on the inconvenience faced by the customer Immediate action is taken to ensure that the customer complaint is resolved and writes a letter of apology The customer care manager along with the concerned DSE, then visits the customer, hands over the letter and takes satisfaction note from the customer Then he sends a copy of the letter and the satisfaction note to Maruti Udyog Ltd. And also files a copy of the same in the customer complaints register/file. Then the CCM discusses the customer complaints in the weekly meeting with the general manager on SSI with the entire showroom staff. Necessary counter measures are taken to ensure that such complaints are not repeated in future.

Steps to be followed after receiving customer complaint:

Role of the Customer Care Manager:

Customer Care Manager is the leader of the customer care team. He is accountable for the sales satisfaction index of the dealership. The customer care manager ensures that every customer is properly followed up and feedback is recorded. Also the customer complaints are recorded and resolved as soon as possible to the level of satisfaction. The customer care executives report tothe customer care manager.

Customer Care Executive:-

Initially does the Post Sales Follow up (PSF) and monitors the feedback forms at the showroom

Post sales follow up. PSFs are done in order to get the first hand feedback from the customer about the experience that they had during the sales and delivery process. The first PSF is done within the 72 hours of delivery and the voice or exact wordings of the customer are recorded. The next PSF call is made after 15 days after the vehicle is delivered. The feedback form system is a very important tool to obtain customers feedback on the experience that the customer had during the purchase of his/her car.

According to TATA MotorsA customer is the most important visitor on our premisesHe is not dependent on us,We are dependent on him,He is not an interruption on our work,He is the purpose of it.He is not an outsider on our business,He is part of it.We are not doing him a favor serving him,He is doing us a favor by giving us theOpportunity to do so

Moments of truth

Expectation---------------satisfaction---------------------reality If you get what you expected

Expectation---------------dissatisfaction----------------reality If you get less than you expected

Expectation---------------delight--------------------------reality If you get more than you expected

When customers dont complain they go somewhere else.

Customers dont complain. They pass on their dissatisfaction to their colleagues, family, greengrocer, suppliers, consultants, managers, sports club, grandparents, neighbors, director, to you.

COMPETITION

INDIAN AUTOMOTIVE PLAYERS: OVERVIEW OF THE PLAYERS IN THE INDIAN INDUSRRYThe Indian auto industry is highly competitive with a number of global and Indian auto companies present (table 2). Hence, we have conducted an inter-company analysis of Tata with Mahindra and Mahindra and MarutiUdyog, to get an idea of the companys position (operations and profitability) vis a vis its competitors.

Table 2INTER COMPANY ANALYSIS

To compare the standing Tata motors vis--vis the industry. We have conducted a financial analysis of two of its competitors. Mahindra & Mahindra and MarutiUdyog. The company is based on the detailed analysis of the financial statements on the lines of liquidity, solvency, profitability and efficiency.

AWARDS AND ACHIEVEMENTS

TATA MOTORS

OBSERVATION A detailed analysis of the company shows that the company has had a strong fundamental as well as a strong market performance over the year. Given the economic and the industry environment (improving outlook for the CV industry) Tata Motors would be a key beneficiary. While a pick-up in its CV volumes is evident, operating leverage and cost savings initiatives will improve margins.

CONCLUSION

Over the period of time, fear of a slowdown in the United States of America have increased. The impact of the subprime crisis along with a slowdown in mortgages has led to a significant lowering of growth estimates. Since the United States dominates the global economy, any slowdown there would have an impact on most of the global economic variables.

For India, it could mean a further appreciation in the rupee vis--vis the US dollar and a darkening of business outlook for sectors dependent on US companies. The overall impact of a US slowdown on India would, however, be minimal as the factors driving growth here are more local in nature. Unlike the rest of Asia, India is a strong domestic demand story, so any slowing in the US is likely to have a more muted impact on India. Strong growth in domestic consumption and significant spending on infrastructure are the two pillars of Indias growth story. No sector has a dominant influence on earnings growth and risks to our estimate are limited. Corporate India is also learning to master the art of efficient capital management, reduction in costs and delivery of value-added services to sustain profit margins. Further, interest rates are expected to be stable primarily due to control over inflation and proactive measures undertaken by the RBI

BIBLIOGRAPHY

[1] Philip Kotler, Kevin Keller, Marketing Management (Twelth Edition)

[2] Marketing Management, TheMcGraw.Hillcompany,RajanSaxena (Third Edition)

[3] www.pearsoned.co.in/pkotler

[4] http://www.genmills.com/corporate/company/india.aspx

[5] http://www.tatamotors.com/our_world/press_releases.php?ID=500&action=Pull

[6] http://iegd.institut.com

[7] http://www.rotman.utoronto.com

[8] http://www.docasi.com/doc/12248800/Grand-Project-on-NANO-Car

[9] http://www.capitaline.com

[10] http://www.tatamotors.com/our_world/press_releases.php?ID=458&action=Pull

Research paper on TATA Motors5