tata motors
TRANSCRIPT
Tata Motors Limited is India's largest automobile company.
The company is the world's fourth largest truck manufacturer, and the world's third largest bus manufacturer .
Started it’s operation in 1945 .
Manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka).
INTRODUCTION
HISTORY
Tata Motors Limited is a part of Tata Group.
Founder-Jamshedji Tata (TELCO)
The company was established in 1945 as a locomotive manufacturing unit.
It tied up with Daimler Benz and entered Commercial Vehicle segment in 1954.
In 1992, Tata Motors entered the Small Vehicle Segment.
TML decided to pursue joint ventures
Cummins engine Co was the first company to jointly venture in 1993.
PRODUCT PROFILE
PASSENGER VEHICLES
MILITARY VEHICLES
COMMERCIAL VEHICLES
VISION
“Best in the manner in which we operate, we deliver,
and our value system and ethics”
GLOBAL FOOTPRINTS
6
Malaysia*Thailand
Bangladesh *Nepal, Sri Lanka
Kenya*
Russia*Ukraine* U.K.
Italy
Senegal
Afghanistan Uzbekistan
Brazil
South Africa*
Egypt
Saudi Arabia Iraq, Iran
China South Korea*
LATAM
West Africa
North Africa
West Europe
Central Asia East Asia
South Asia
South East Asia West Asia
East Africa South Africa
* Assembly Operations also
OTHER COLLABORATIONS/M&A & JVs• Tata Daewoo Commercial Vehicle• Hispano in Spain & Marcopolo In Brazil• JV with Jardine Matheson for ConcordeMotors• Technology Tie Ups at Spain,Italy
COMPETITORS
ASHOK LEYLAND
VOLVO MOTORS
SWARAJ MAZDA
MAHINDRA MOTORS
MARUTI SUZUKI
HONDA MOTORS
HYUNDAI MOTORS
MARKET STRATEGIES
Products , Brands and Advertisements :- From0% To 100%
Pricing :-Determining low price market
Place :- Selling at right place
Maintenance & Support :- Good maintenance service
VALUE CHAIN & VALUE SYSTEM
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Inbound Logistics
Operations
Marketing Service
Outbound Logistics
Suppliers , Contractors
SAP , VCM
SAP , CRM - DMS
Strategic Alliances
Transporters, Convoy Drivers Association
Dealer Network, Marketing Research
Firms, Vehicle Financing
Regional Warehouses, Dealer
Workshops, Distributors, TASS
INBOUND LOGISTICS
Long term contract with service provider’s – transporters and agents.
Personnel at regional offices for over seeing the smooth transit of goods.
Transparency and monitoring through deployment of IT – all transactions through SAP.
DTL supplies for critical high value items. Efficient storage facilities – easy storage and
retrieval.
OPERATIONS
Capital Equipment Manufacturing division – tooling development
capabilities of global standard.
Apprentice Trainee Course – ensuring stable source of skilled manpower.
Kaizen & TPM team – continuous drive to improve efficiencies.
Automated manufacturing processes.
Distributed manufacturing – Assembly units at South Africa, Thailand,
Bangladesh, Brazil etc.
Maintenance – technical competence.
Capacity Utilization – Mercedes Benz cars make use of Tata Motors paint
shop facilities.
OUTBOUND LOGISTICS
Stockyards, all across the country.
Long term contracts with transporter’s – higher volume of
business to transporters ensures competitive price.
Regional Sales Office and Vehicle Dispatch Section linked
through SAP.
Efficient security system for prevention of any kind of
pilferage.
MARKETING & SALES
Structured approach to understanding the requirements of individual customers – QFD’s conducted at regular intervals.
Clear identification of product requirements, leading to development of innovative products – Tata 207 DI, Tata Ace
Pan India presence and global footprint. Independent teams for addressing the requirements of institutional
customers – Defense, State Transport Units Helping to augment the scarce resources – Fiat selling vehicles through Tata
dealerships, in return Tata has access to Fiat’s technology and unutilized capacity.
Quick assessment of the changing market dynamics and consumer preferences – Tata 407 LCV
Large network of dealers – use of technology : DMS.
SERVICES
Easy availability of spare parts.
Efficient collection of data from field and communication to
the respective plants.
Pan India presence, as well as global presence.
Large network of workshops – Dealer workshops
Training facilities – for dealer end
Strengths Weakness
Opportunities Threats
Market leader in Automobile industry Aggressively acquiring foreign brands to increase its global presence Produce low price car with low fuel consumption
Advantage of their low cost car by entering into third world countries where people have low purchasing power. Should focus in developing luxury cars. Joint ventures in other countries allow TATA motors to easily enter into new market.
Return on Investment in TM is low.
Has not got a foothold in the luxury car segment in its domestic market.
Have low cost advantage over its competitors, once the competitors find out the low cost production methodology then there will be no competitive advantage Major challenge for TM is rising prices of steel, Aluminum and plastic which is heavily used in vehicle manufacturing. Low safety standards can impact sales.
KEY STRATEGIES
International strategy based on the competitive advantage:
o New product (e.g. Tata Nano, the cheapest car in the World).o Acquisitions (e.g. Land Rover and Jaguar brands from Ford Motors).o Partnership with established companies (e.g. Alliance with Fiat since 2006)
to enhance the product portfolio and knowledge exchange.o Facilities for learning from other companies.o Developing programmes for intensive management development.
Consolidate position in India by exploiting opportunities:
o New mobility of young Indians.o Government’s substantial road-building programo GDP growth
GROWTH STRATEGY
To consolidate position in the domestic market and expand international footprint through development of new products by
– Leveraging in house capabilities
– Acquisitions and strategic collaborations to gain
complementary capabilities
1984 : India’s first LCV (407 truck)1996 : India’s first SUV (safari)1998 : India’s first Passenger Car (Indica) 2004 : Acquisition of Tata Daewoo, Korea2005 : Acquisition of stake in Hispano, Spain2005 : India’s first mini-truck ACE2007 : Formed an industrial JV with Fiat2007 : JV in Thailand with Thonburi2007 : JV in India with Marcopolo of Brazil.2008 : People’s car – Tata Nano2008 : Acquisition of Jaguar Land Rover
LEVERAGING RESOURCES
How did TATA create initial resource complement to overcome the disadvantage of being newcomers in
passenger car business?
STRATEGY INSTITUTIONS
Government support (10Year Plan)New institutions for trade promotion, technology up-
gradation, quality enhancement (ACMA:
Automotive Component
Manufacturers Association, SIAM: Society of Indian
Automobile Manufacturers )
R&D
Acquisitions
Strategic partnerships
Joint ventures
Intensive management development
LAUNCH OF 1ST PASSENGER CAR
57%
6%
15%
22%
Market Share Till 1998
MarutiFiatDaewooHyundai
36%
27%12%
7%
18%
Market Share after Indica launchMaruti
HyundaiDaewooFiatTata
INDICA
Epitome of persistence
Demonstrated how to manage product lifecycle effectively.
The brand successfully transcended the initial flaws, bad customer /expert reviews and brickbats to become one of the largest selling cars in the Indian auto industry.
Constant focus of Tata Motors to improve the product continuously.
Get a diesel car with that much space at the price at which Indica was selling so far
The brand made a quantum leap in 2008 with the launch of Indica Vista. Indica in a way is an example of good marketing practice
LAUNCHING OF TATA ACE The Tata Ace is a mini-truck launched in May 2005. In competition with the prevalent three-wheeled goods carriers from Bajaj Auto,
Piaggio, Mahindra and Force Motors.
Golden quadrilateral project started by the NDA government-led to creation of large number of expressways and widened many of the existing highways(a portion of traffic moved from railways to roads).
Demand for transportation of goods within a city was increasing because of increasing population and growth in the organized retail sector with the entry of large players. It was a big hit, selling 100,000 in just 20 months.
They wanted to diversify, augment and de-risk their sources of revenue.
Variants of TATA Ace running on CNG fuel- more environmental friendly engines launched.
Riding on the success of TATA Ace-TATA Super Ace and TATA Ace Zip launched.
Customer is King-The market research team realized that the customers in rural areas attached prestige to their transport vehicles.
Product-The 4 wheelers are safer due to greater balance. Operating cost of TATA Ace is much lower.Many changes were introduced to increase the comfort level.
Pricing-Targeted customers willing to pay a higher price for extra value provided to them ( at 2 lakhs)
Positioning-Projected as a vehicle which is reliable, sturdy, and small in size. The small elephant advertisement amply captured these attributes.
After Sales-Augmented the service network by providing training to automobile garages and branded them Tata-certified service points.
Cost-efficient production-The number of components used was kept low, the assembly line was made short, and around 80% per cent of the Tata Ace components were outsourced.
DAEWOO ACQUISITION
Daewoo Commercial Vehicle Company Ltd(DWCV) was the 2nd largest heavy truck maker in Korea.
The MoU was signed between the two companies on Nov 5th, 2003.
The complementary product range of the two companies, strengths in product development and international marketing was thought to be the opportunity.
Though the Korean company was initially apprehensive about the deal the company went through a turnaround after this acquisition.
Exports jumped about five times, revenues more than doubled and operating profit grew more than eight times.
WHY WAS IT A HIT?
The key was tripartite cooperation between Tata Motors, new management and employees.
Acquirer Tata Motors had performed operations with a 'humble attitude.' It appointed a native Korean as CEO. Respected the Korean business style
and corporate culture. Its decision to maintain the old Daewoo brand in Korea and in 10 overseas
markets, including Algeria, pleased the employees. The appointment of excellent management staff and 'strategic management.'
President Chae Kwang is behind the success of today's Tata Daewoo. Tata Daewoo's 'hidden card' was to produce 'a mid-sized truck like a large-
sized one,' a model as spacious and safe as a large-sized truck, but with a medium-sized load carrying capacity-this model sold like hotcakes.
It was the management's trust towards employees and efforts for mutual prosperity.
During the year 2008, its union members gave full support to their management with a single goal in mind: to overcome the financial crisis.
JLR ACQUISITION
Acquisition took place in 2008.
Opportunity to participate in two fast growing auto segments (premium and small cars) and to build a comprehensive product portfolio with a global footprint immediately.
Land Rover provides a natural fit above TML’s Utility Vehicles/SUV/Crossover offerings for the premium category.
Jaguar offers a range of “Performance/Luxury” vehicles to broaden the brand portfolio.
Sharing of best practices between Jaguar, Land Rover and Tata Motors in the future.
Long-term benefits from component sourcing, low cost engineering and design services
TATA NANO
THE LAUNCH:
“I observed families riding on two- wheeler the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder for such a car which is safe & affordable to any middle class family.” - Ratan Tata.
It was designed to be the cheapest car in India aimed mainly at the lowest price segment in the Indian domestic market.
The purchase price of this automobile was brought down by dispensing with most nonessential features, reducing the amount of steel used in its construction, and relying on low-cost Indian labour
THE SETBACK: But in spite of its low price, nano didn’t get very popular. Its mainly due to: its disruptive innovation which resulted in safety and space issues Its image of being a poor man’s car. production delays
THE COMEBACK: Now Tata Nano is all set to get back into business by:aggressive marketingshedding the image of being the poor man’s car.making the car more easily accessible to peoplecarrying forward its vendor partnership production strategy Tata motors already has a distribution alliance with Italian car maker fiat spa which it plans to use to sell Tata nano in overseas market.
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