tata motors is india

8/6/2019 Tata Motors is India

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History Of Tata Motors :

Tata Motors is Indias largest automobile company, with consolidated revenues of

USD 20 billion in 2009-10. It is the leader incommercial vehicles and among the top

three in passenger vehicles. Tata Motors has products in the compact, midsize car

and utility vehicle segments. The company is the world's fourth largest truck

manufacturer, the world's second largest bus manufacturer, and employs 24,000

workers. Since first rolled out in 1954, Tata Motors has produced and sold over 4

million vehicles in India.

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.[3] Tata Motors is a dual-listed company

traded on both the Bombay Stock Exchange, as well as on the New York Stock

Exchange. Tata Motors in 2005, was ranked among the top 10 corporations in India

with an annual revenue exceeding INR 320 billion. In 2010, Tata Motors surpassed

Reliance to win the coveted title of 'India's most valuable brand' in a annual survey

conducted by Brand Finance and The Economic Times.

Tata Motors has auto manufacturing and assembly plants in Jamshedpur,

Pantnagar, Lucknow, Ahmedabad, Sanand,Dharwad andPune in India, as well as inArgentina, South Africa and Thailand.


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Acquisitions

o In 2004 Tata Motors acquired Daewoo's truck manufacturing unit, now

known as Tata Daewoo Commercial Vehicle, in South Korea.

o In 2005, Tata Motors acquired 21% of Aragonese Hispano Carrocera

giving it controlling rights of the company.

o In 2007, Formed a joint venture with Marcopolo of Brazil andintroduced low-floor buses in the Indian Market.

o In 2008, Tata Motors acquired British Jaguar Land Rover (JLR), which

includes the Daimler and Lanchester brand names.

o In 2010, Tata Motors acquired 80% stake in Italy-based design and

engineering company Trilix for a consideration of 1.85 million. The

acquisition is in line with the companys objective to enhance its

styling/design capabilities to global standards.

Expansion:

The FIRST generation Tata Indica V2's excellent fuel economy, powerful engine and

aggressive marketing strategy made it one of the best selling cars in the history of

the Indian automobile industry.

After years of dominating the commercial vehicle market in India, Tata Motorsentered the passenger vehicle market in 1991 by launching theTata Sierra, a multi

utility vehicle. After the launch of three more vehicles, Tata Estate (1992, a

stationwagon design based on the earlier 'TataMobile' (1989), a light commercial

vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first sports utility

vehicle). Tata launched the Indica in 1998, the first fully indigenous passenger car

of India. Though the car was initially panned by auto-analysts, the car's excellent

fuel economy, powerful engine and aggressive marketing strategy made it one of


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the best selling cars in the history of the Indian automobile industry. A newer

version of the car, named Indica V2, was a major improvement over the previous

version and quickly became a mass-favourite. Tata Motors also successfully

exported large quantities of the car to South Africa.The success of Indica in many

ways marked the rise of Tata Motors.

Tata Motors in India

Tata Motors Limited is Indias largest automobile company, with revenues of

35,651.48 crore (US$ 8.09 billion) in 2007-08.[28] It is the leader in commercialvehicles in each segment, and among the top three in passenger vehicles in India

with products in the compact, midsize car and utility vehicle segments.[28] Tata

vehicles are sold primarily in India, and over 4 million Tata vehicles have been

produced domestically since the first Tata vehicle was assembled in 1954. The

companys manufacturing base in India is spread across Jamshedpur (Jharkhand),

Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and

Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, Tata set up an

industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to

produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a

new plant at Sanand (Gujarat). Tata's dealership, sales, service and spare parts

network comprises over 3500 touch points. Tata Motors also distributes and

markets Fiat branded cars in India

Electric vehicles:

Tata 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.[24]

Tata Motors' UK subsidiary, Tata Motors European Technical Centre, has bought a

50.3% holding in electric vehicle technology firm Miljbil Grenland/Innovasjon of

Norway for US$1.93 M, which specialises in the development of innovative solutions

for electric vehicles, and plans to launch the electric Indica hatchback in Europe

next year.[25][26][27] On 17 Sept 2010 Tata motors presented to the DTC [ Delhi


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Transport corporation] Four CNG - Electric Hybrid lowfloored Starbuses to be used

for commonwealth games. These will be the first Environmentally friendly buses to

be used for public transportation in India.

Tata Ace :

Tata 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.

The Ace was built with a load body produced by Autoline Industries.[18] By 2005,

Autoline was producing 300 load bodies per day for Tata Motors. Tata Ace - Apka

Pyaara Chota Hathi.

Ace is still a top seller for TML with 5M units sold to date (June 2010).[19]

Ace has also been exported to several European, South American and African

countries and all-electric models are sold through Chrysler'sGlobal Electric

Motorcars division

Tata Nano:

In January 2008, Tata Motors launched Tata Nano, the least expensive production

car in the world at about 120,000 (US $3000).[16] The city car was unveiled during

the Auto Expo 2008 exhibition in Pragati Maidan, New Delhi .

Tata has faced controversy over developing the Nano as some environmentalists

are concerned that the launch of such a low-priced car could lead to mass


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motorization in India with adverse effects on pollution and global warming. Tata has

set up a factory in Sanand, Gujarat and the first Nanos are to roll out summer 2009.

Tata Nano Europa has been developed for sale in developed economies and is to hit

markets in 2010 while the normal Nano should hit markets in South Africa, Kenya

and countries in Asia and Africa by late 2009. A battery version is also planned.

Tata Safari DiCOR

The SUV was first released in 1998 with a 2.0 litre Turbo Diesel engine.

The Safari was extensively modified in August 2005, which included the addition of

a new 3-litre DiCOR engine along with modified interiors and exteriors. This 3-litre

engine is the first diesel engine from Tata Motors with common rail technology. A 2-

litre petrol engine was also added to the range that same year. It was this modified

version that won the Motor Forum's Car of the Year for 2007, in the SUV category.

Voted by the users, it beat out rivals such as the Toyota RAV4, Land Rover

Freelander and Honda CR-V.

In October 2007 Tata unveiled the 2.2-litre Safari DiCOR which had an increased

power output of 143 PS (105 KW). But it was shortly replaced by the more advanced

DiCOR 2.2 VTT (Variable Turbine Technology) engine which had a power output of

140 PS (103 kW) at 4000 rpm and a torque output of 320 Nm (236 ftlbf) at 1700

rpm. It is widely regarded as the best engine used by Tata Motors[citation needed].

Tata recently launched a new variant of safari called Safari GX. The new Safari GX

sits just below current top end variant Safari VX. Safari Gx gets dual tone exteriors,

unique leather cum fabric upholstery, Reverse Guide System (without a camera

which along with the Screen in the Internal Rearview Mirror is only available in theVX variant). Another new feature is indicators on the Outer Rear View Mirrors.


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The market of Tatas entry in UK

Despite the global tendency for the significant fall of car sales there are certain car

segments which experience dynamic growth. According to Datamonitor (2006b) the

sales of commercial vehicles and port utility vehicles were very healthy. Windecker

(2005) stresses the influence of socio-cultural forces which formed the increased

preferences towards more fashionable, sport-type, SUV equipped cars. The

extremely high growth of SUVs was identified in US and UK.

The focus of Tatas market entry will be UK. There were several reasons for

selecting UK as the target market. These favourable factors were the status of India

as the favourable economic agent, UK Car market dynamics and potential, language

similarity. The other countries which were considered as potentially attractive were:

the USA the largest market size in the world, Russia emerging market with

significant sales potential. The option of the USA as target market was declined due

to extremely high quality requirements and other non-tariff barriers which make it

hard for a new entrant to enter this market. Besides, this market is highly mature

and experiences extreme level of competitive pressure. With regards to Russia,

there were several unfavourable factors which made it less attractive then the UK

the uncertainty of the further economic state, high entry barriers and no well

developed dealership network.

Analysis of External Environment of the UK market


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There are numerous number of factors that might be included into P.E.S.T. analysis.

But due to various limitations (time, word limit), the factors will be outlined,

whereas the major focus will be made on several sub-factors only (according to the

Pareto Principle, it is likely that about 20% of the factors will represent 80% of the

potential effect on the business (Wit & Meyer, 1998).

Political factors

Political and legal factors play the role on the development of the industry. These

factors shape the rules of competition, operational costs and supply chain

requirements.

Oil prices resulting from international instability The special attention shall be

given to oil prices and its affect on the market requirement. According to Mintel

(2006) the increase of oil prices has created a strong tendency towards small

engines, hybrid engines and diesel engines. Current high level of oil price increase

the strain on the sales of luxury and premium cars, the majority of which are

equipped with large-size engines (more then two litres).

Administrative barriers (quality controls and operations requirements) (KPMG, 2004)

Administrative barriers need to be seriously concerned as various requirements

for safety standards and emission level might increase the costs of production and

reduce the operating profit margin.

Car parc legislation According to Mintel (2006) the UK experience the threat of

high overcapacity with the excessive traffic load of road networks.

The political relationships between countries of operations (regimes of

favourability/protectionism) (Hill, 2002) India cooperates with the UK within theregime of favourability which implies the certain benefits as reduced tariff and non-

tariff barriers.

The foreign ownership regulations (The market expansion mode (Hill, 2002) At the

present time the UK is considered as one of the most pro-FDI country in EU. The

large number of industries, including automotive one, are deregulated. It means


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that foreign regulation provides foreign companies with flexibility of choosing

between all possible entry and expansion modes.

Economic factors

One of the major location choice determinants is the current and future demand

conditions as they will affect the market growth potential, pricing strategy and

operations margin and the potential of the return on investment.

The target market size According to Mintel (2006) since 2001 there has been a

steady market growth by size and value. The current UK car parc is estimated to

accommodate 31 million units. The market value was contributed by the steady

growth of average price level. The present market value is estimated to reach the

level of 31 billion

The maturity of the target market The UK market is viewed (Mintel, 2006) as

highly mature. The current maturity causes overcapacity issue and significant sales

fall of particular car segments.

The growth potential of the target market The overall UK market experiences

negative growth due to the maturity issue. Nevertheless, certain the sales of certain

car segments have significant growth potential due to the impact of socio-cultural

and technological factors.

PDI According to Mintel (2006) the strong growth of GDP (10% between 1998-2005), personal disposable income (PDI) (19%) and consumer expenditures (18%)

reflect the high level of consumer confidence. Mintel (2006) claims that in terms of

the purchase of new cars consumer confidence has significantly fallen. By the

present moment UK consumers have been reluctant to take out new debt and

instead are choosing to service their existing debt. Additionally the levels of

mortgage equity withdrawal have declined, what indicates that UK consumers do

not seek alternative funds to buy expensive items like cars.

Currency stability The current strong state of British pound against other

currencies have created various benefits for manufacturers consumers operating in

pound zone such as predictability of operations and minimised currency fluctuationrisk .

Labour costs As the outlook of the automotive industry highlighted, the cost

factor and the capability of direct and indirect costs becomes one of the key issues

in maintaining competitive advantage. According to the opinion of the industry

specialists (KPMG, 2004), one of the key issues that will influence the operations

location decision will be labour-specific costs. According to survey (KPMG, 2004)


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industry specialists put a major emphasis on the labour-specific cost saving.

Moreover, 85 % of the respondents agreed that during coming five years there will

be a major increase of labour specific costs (cost of pensions, health care, and legal

services) in US and EU .

The expansion of existing political and economic blocs (EU) The importance of therecent further expansion of EU is in the enlargement of the EU as single market. In

case of successful expansion on the UK market, Tata might consider the further

expansion in certain EU countries. According to estimations of Nieuwenhuis & Wells

(2003) the attractiveness of EU as the target market for a car manufacturer will

remain high. They claim that the attractiveness of EU as a target market will be

maintained by the increase of its market size and value as the outcome of the

extension of EU zone. However the current maturity of the market, excessive

completion and demand trend suggests that the share of Europe will drop.

Social factors

Demographic factors Demographic factor is one of the key social factors. It affects

lifestyle, consumer trends, the type of risk aversive behaviour, spending power and

value per customer. The state of demographic trends allows building projections for

the use of particular type of products. The current UK demographics have

undermined the sales of family cars

Lifestyles The change of lifestyles and habits have a direct impact on the

consumer expenditures. For instance, Mintel (2006) points out the recent increase

of preferences for second car ownership. Mintel (2006) adds that the impact of

lifestyle factors such as fashionability and luxury preferences are so strong that it

removes the negative effect of market maturity and oil prices in certain car

segments. Thus, against all odds, SUVs and luxury cars experience healthy growth,

whereas the sales in other car segments have fallen dramatically.


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Technological factors

The development of information technologies The current development of Internetopens new transactional capabilities. Currimbhoy (2004) suggests that continuous

development of technological solutions, especially in the area of digital and

communication technologies create new operating opportunities such as new

marketing mix channels, new purchase environment (e-commerce) and new market

research tools. According to Mintel (2006) the number of leading car distributors

develop e-commerce to counter the problem of overcapacity.

The impact of new technologies on supply chain architecture The development of

e-exchange channels between supply chain agents becomes the source of strategic

advantage (Currimbhoy, 2004) as it creates the ability of fast market response and

better value chain quality control.

The review of micro factors affecting UK car business

Competitors bargaining power

The UK automotive market is highly consolidated. The major rivalry involves Ford,

GM (Vauxhall), VW, Renault, Peugeot, Toyota, BMW, Citroen and Honda. The

presence of powerful competitors with established brands create a threat of intense

price wars and poses s strong requirement for product differentiation. According to

Mintel (2006) the tough competitive pressure require increasing promotional costs,

overcapacity introduces a significant price pressure. The present market conditions

are so tough, that certain manufacturers had to close certain plants to cut the costs

and survive on the market.

At the moment, the major competitive strategies are supply chain improvement,

new product development and serving the needs of emerging market segments

(Mintel, 2006). The emerging opportunities requires the extremely high level of


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operational responsiveness and leaves little space till market opportunity will be

leveraged by competitors.

Buyers bargaining power

Due to high intensity of competition on the global scale and increasing overcapacity

issue UK buyers experience very strong bargaining power. According to Mintel

(2006) buyers have indicated a high level of bargain-seeking behaviour.

Suppliers bargaining power

Though vehicle manufactures have consolidated forming large entities it did not

make a significant shift of bargaining power in OEM-suppliers relations. According to

Veloso & Kumar (2002) the consolidation in the OEM sector has triggered the

corresponding consolidation of different supplier groups. Demand chain partners,

car dealers, especially the large ones do experience large bargaining power in the

light of the overcapacity issue.

The threat of Substitutes:

Apart from direct competitors (public transport) cars compete with other transport

services: air, rail and sea. The increasing importance of door-to-door transportation

and environmental concerns decrease the current threat of other transportation

means as substitutes. One of the major sources of substitute threat comes from thesales of second-hand cars. According to Mintel (2006) the steady accumulation of

second-hand cars has become on of the major reasons of the dramatic fall of the

sales of new cars.

Threat of New entrants:


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The high level of entry barriers (extremely consolidated industry, well-developed

value-added chain, R&D capability, investment capability in promotions and new

product development) minimises the threat of new entrants. Nevertheless, due to

globalised nature of the industry the notion of new entrant is not that clear-cut,since existing players might enter new geographical markets. Datamonitor (2006)

stresses the future potential of Chinese manufacturers to flood EU markets in case

protectionist measures are not introduced by EU countries

Acquisition Jaguar Cars and Land Rover

After the acquisition of the British Jaguar Land Rover (JLR) business, which also

includes the Daimler, Lanchester and Rover brands,[14] Tata Motors became a

major player in the international automobile market. On 27 March 2008, Tata

Motors reached an agreement with Ford to purchase their Jaguar Land Roveroperations for US$2.3 billion. The sale was completed on 2 June 2008.[10]

In addition to the brands, Tata Motors has also gained access to two design centres

and two plants in UK. The key acquisition would be of the intellectual property rights

related to the technologies.


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Joint ventures

Tata Motors has formed a 51:49 joint venture in bus body building with Marcopolo ofBrazil. This joint venture is to manufacture and assemble fully-built buses and

coaches targeted at developing mass rapid transportation systems. The joint

venture will absorb technology and expertise in chassis and aggregates from Tata

Motors, and Marcopolo will provide know-how in processes and systems for

bodybuilding and bus body design. Tata and Marcopolo have launched a low-floor

city bus which is widely used by Chennai, Delhi, Mumbai, Lucknow and Banglore

transport corporations. It's manufacturing facility is based in Dharwad.

Tata Motors also formed a joint venture with Fiat and gained access to Fiats diesel

engine technology.[15] Tata Motors sells Fiat cars in India through a 50/50 joint

venture Fiat Automobiles India Limited, and is looking to extend its relationship with

Fiat and Iveco to other segments. Tata has also formed several JV's with many small

companies in various countries around the world.

Marketing strategies of Tata motors

Marketing is the process by which a product or service originates and is then priced,

promoted, and distributed to consumers. The principal marketing functions involve


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market research and product development, design, and testing. It is the business

activity of presenting products or services in such a way as to make them desirable.

One has to consider promotion that is balanced with a suitable product available at

a reasonable price, provided at all places to maximize the sale of ones product.

Marketing Mix:

Product PRICE PROMOTION PLACE

Brand Pricing Strategy Personal Selling Channels of

Distributions

Packaging Pricing & Quality Advertising Physical

Distribution

Innovations Price &

Alterations

Public Relations Wholesaler

&Retailers

PRODUCT (Brand, Packaging, Innovations, Quality) :

Brand : Advertising is often used to make consumers aware of a products special

low price or its benefits. But an even more important function of advertising is to

create an image that consumers associate with a product, known as the brand

image. The brand image goes far beyond the functional characteristics of the

product. The products of Tata Motors have many special characteristics to them,


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but when consumers think of it, they not only think of its features, but they may

also associate it with quality, performance, class. All of these meanings have been

added to the product by advertising. Consumers frequently buy the product not only

for its functional characteristics but also because they want to be identified with the

image associated with the brand.

Tata Motors have been successful in creating and maintaining a professional brand

image.

Packaging : A vehicle cannot have a material packaging. Here, packaging refers to

and effective assembly of features. Tata Motors provide many innovative features

to suit the target customers and the product. E.g. Tata Safari Dicor has Reverse

Guide System which includes a weather-proof camera to help the driver while

reversing the vehicle.

Innovations : The various motives behind buying an automobile are Need,

Prestige, Comfort, Fashion, Jealousy and Novelty. The R & D Department

continuously strives to bring new innovations in their product. Tatas have an

industrial experience of over 100 years and they are well known with the

Psychology of Indian customers, who desire more at less price. This experience has

helped them to develop products which fulfill the expectations of Indian consumers.

Quality Control : Tata Motors have their Quality Control standards and the QC

Dept. ensures that the customer does not face any inconveniences of a defective

product.

PRICE (Pricing Strategy, Alterations, Discounts)

Pricing Strategy : The prices are fixed keeping in mind a number of factors. As

told by Mr. Desai, prices have to be at par with the prices of the competitors. Tata

Motors give a relative price advantage as compares to its competitors. The various

determinants of price are


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i. Market Condition

ii. Costs incurred

iii. Profit percentage desired by the Co.

iv. Dealer Profit

Alterations : The Company does not allow any alterations to any of the features of

the product. If there is an alteration which affects the performance of the engine,

then the warranty becomes void. However, there may be alterations in the

accessories, if desired by the customer.

Discounts : Discounts are decided by the Co. every month. Any further discounts

made from the profits of the dealer. However, the Co. may compensate the dealer

for the discounts allowed to a certain extent.

PROMOTION (Personal Selling, Advertising, Sales Promotion, PublicRelations)

Personal Selling : There is minimal personal selling involved. The Sales Officers at

the dealerships collect prospective customer databases and perform cold calling to

attract customers.

Advertising : Advertising is a form of commercial mass communication designed to

promote the sale of a product or service. Tata Motors is responsible for the

advertising of its products. The dealer does play any role in the advertising. The

various media used for advertising are T.V., Newspapers, Magazines, Hoardings,

Internet etc. The dealer conducts point-of-purchase displays to advertise the

products. The advertisements done by the Co. help the dealer to capitalize on the

market.

Sales Promotion : The purpose of sales promotion is to supplement and

coordinate advertising and personal selling; Sales promotions are designed to

persuade consumers to purchase immediately by providing special incentives such

as cash rebates, prizes, extra product, or gifts. The Co. conducts intensive sales

promotion during festivals such as festive discounts during Diwali.

Public Relations : Public Relations is a management function that creates,

develops, and carries out policies and programs to influence public opinion or public

reaction about an idea, a product, or an organization. The Co. takes serious

measures to maintain good public relations. The Co. follows business ethics to

ensure that the customer is satisfied and receives good service whenever and

wherever he desires


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PLACE (Channels of Distribution, Physical Distribution)

Channels of Distribution : In case of vehicles, dealership method of distribution

and sales is generally adopted. Tata Motors have also adopted dealership method of

distribution of its products. The dealers purchase products from the Co. at a

negotiated price. The MRP is fixed by the Co. and the dealer gets a profit within

these prices. As the Co. deals in commercial and passenger vehicles, there may be

a single or distinct dealerships to market its commercial and passenger vehicles in a

town. However, if there is a single dealership appointed, then the commercial and

passenger vehicles are managed under Commercial Vehicles Dept. and Passenger

Vehicles Dept. respectively.

Tata Motors have contracts with the Government of India and it supplies buses and

passenger vehicles, in some cases, to the Govt. Sometimes, bulk quantities of

vehicles are ordered by a Govt. Dept. or a private company. The sales, distribution

and billing of these are looked after by the Co. itself.

Physical Distribution : The commercial vehicles are manufactured at Jamshedpur,

Lucknowand Pantnagar whereas the passenger vehicles are manufactured at Puneplant. From the plant, the finished product is transported to the dealerships. The

nation-wide dealership, sales, services and spare parts network comprises over

2,000 touch points. The dealerships are strategically located in the target and

potential markets to ensure efficient and timely availability of its products in the

market.


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Tata Motors Success Mantra

Tata Motors is India's largest company in the commercial vehicle sector. Thecompany is the worlds fourth largest truck manufacturer and second largest bus

manufacturer in the world. In India, Tata Motors is the leader in every commercial

vehicle segment and it is the third largest passenger car maker.

Tata Motors is able to produce more than 4 million different types of vehicles such

as cars, trucks, commercial vehicles, SUVs and many more since the company

began in 1945.

The marketing strategy of Tata Motors is one of the most successful marketing

strategies used by a car maker in the car industry. The car company lays emphasis

on the Product Branding and Advertising. Advertising is the common way to makepublic aware of the new product. Besides, advertising also help to create a brand

image. Over the years, Tata Motors have been successful in their own might in

creating a brand image for itself.

Tata Motors also stresses on the packaging, innovations and quality control of a

product. Tata Motors is being able to provide many innovative features to lure

customers. E.g., the Tata Safari 4X4 Dicor with its Reverse Guide System, where a

weather-proof camera is fixed to the rear end of the car to help the driver while

reversing the car.

The pricing policy of Tata Motors is always appreciated by the public. The price of acar can be determined by factors such as market condition, cost incurred to build a

car, profit by company and dealer profit. Tata Motors makes use of strategies such

as discount and special promotions every now and then. This attracts car lovers to

opt for a Tata car. Tata Motors gives discounts based the companys profit or from

dealers profit at a certain range.

Tata Motors has felt its presence across India and abroad with its showrooms. This

is another marketing strategy of Tata Motors that boosts sales of vehicles.

The car company has established many servicing centres as well which stands as a

back bone for the company to connect with the people. Tata Motors easy access tothe general public has made the brand grow in size and stature. Tata, due to its

presence in the commercial as well as the passenger vehicle segment, know the

pulse of the people unlike many other car makers.

Tata which is a huge conglomerate has branched its business into various segments

like finance, banking, public sectors domains and other major fields apart from

automobiles which has made Tata a household name in India and abroad.


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SWOT Analysis - Tata Motors Limited

The company began in 1945 and has produced more than 4 million vehicles. Tata

Motors Limited is the largest car producer in India. It manufactures commercial and

passenger vehicles, and employs in excess of 23,000 people. This SWOT analysis is

about Tata Motors.

Strengths

The internationalisation strategy so far has been to keep local managers in

new acquisitions, and to only transplant a couple of senior managers from India into

the new market. The benefit is that Tata has been able to exchange expertise. For

example after the Daewoo acquisition the Indian company leaned work discipline

and how to get the final product 'right first time.'

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 fortomorrow.

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. For example, the Fiat Palio Style was

launched by Tata in 2007, and the companies have an agreement to build a pick-up

targeted at Central and South America.

Weaknesses

The company's passenger car products are based upon 3rd and 4th

generation platforms, which put Tata Motors Limited at a disadvantage with

competing car manufacturers.


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Despite buying the Jaguar and Land Rover brands (see opportunities below);

Tat has not got a foothold in the luxury car segment in its domestic, Indian market.

Is the brand associated with commercial vehicles and low-cost passenger cars to

the extent that it has isolated itself from lucrative segments in a more aspiring

India?

One weakness which is often not recognised 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 (see

opportunities and strengths).

Opportunities

In the summer of 2008 Tata Motor's announced that it had successfully

purchased the Land Rover and Jaguar brands from Ford Motors for UK 2.3 million.

Two of the World's luxury car brand have been added to its portfolio of brands, and

will undoubtedly off the company the chance to market vehicles in the luxury

segments.

Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in

2004 for around USD $16 million.

Nano is the cheapest car in the World - retailing at little more than a

motorbike. Whilst the World is getting ready for greener alternatives to gas-

guzzlers, is the Nano the answer in terms of concept or brand? Incidentally, the new

Land Rover and Jaguar models will cost up to 85 times more than a standard Nano!

The new global track platform is about to be launched from its Korean

(previously Daewoo) plant. Again, at a time when the World is looking for

environmentally friendly transport alternatives, is now the right time to move into

this segment? The answer to this question (and the one above) is that new and

emerging industrial nations such as India, South Korea and China will have a thirst

for low-cost passenger and commercial vehicles. These are the opportunities.

However the company has put in place a very proactive Corporate Social

Responsibility (CSR) committee to address potential strategies that will make is

operations more sustainable.

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%.

Threats


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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, asTata globalises and buys into other brands this problem could be alleviated.

Since the company has focused upon the commercial and small vehicle

segments, it has left itself open to competition from overseas companies for the

emerging Indian luxury segments. For example ICICI bank and DaimlerChrysler have

invested in a new Pune-based plant which will build 5000 new Mercedes-Benz per

annum. Other players developing luxury cars targeted at the Indian market include

Ford, Honda and Toyota. In fact the entire Indian market has become a target for

other global competitors including Maruti Udyog, General Motors, Ford and others.

tata motors is india

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