What were the key challenges facing Tata Motors in the process of moving

to produce passenger cars from successfully producing commercial

vehicles?
The reasons were:
Competition
Tata indica had to launch its product when the market was being fought upon by 3
major players in the segment,maruti 800 had captured the market due to its aggr
essive pricing.The other competitors were Hyundai motors with their Santro,daewo
o motors launched matiz and fiat india launched uno.The situation had become tha
t people were so price sensitive they sometimes did not take account of quality
of the vechile.
Lack of technological innovation
Like the company possessed the chasis based design for LCV AND HCV but it needed
Monocoque design for cars.
Tata had large manufacturing facilities but it needed to make smaller manufactur
ing units in different parts.
The company also lacked in knowing the customer taste and preferences,they just
possed a partial knowledge.
The gestation period is very less as compared to any other automobile industry w
hich was 18-24 months by the TATA motors.
The company needed to improve the quality with the feasible price condition for
the customer to beat MARUTI.
The supply chain management needs to be good otherwise the whole story based upo
n the supply chain management.
Other problems:
Problem in producing petrol version of the car due to the norms.
maintain a price below or similar to that of MARUTI.

How did Tata Motors overcome the challenges? Reflect on the sequence of events a
nd action plans and the impact thereof on the performance.

By stretching resources
The paint shop of Mercedes was used to paint indica,which reduced the cost and
time.
TATA motors has the ability to produce new products in short span of time,which
was used to make indica also.
Team work in the TATA motors is open they took feedbacks before making indica by
making there own model which helped them to know there shortcomings.
By accumulating resources
Machine toll facilities used to modify the second hand plants.
Robots are very much helpful they were shipped in basic form and then customized
inhouse.
Dies and fixtures were produced rather than buying.
By concentrating resources
Effective Value chain configuration aws made by the skills of designers ,costing
experts and manufacturing personnel which reduced the procurement cost .

Ratan Tata itself laid down the attributes that were needed to be met.
By complementing resources
The design skills were complemented by the inputs from IDEA.
The knowledge from diesel engines were upgraded from specific inputs from La Mod
erne Moteur.
The role of top management
Ratan Tata took the task to his hand he spearheaded the organisation to success,
the indica success was the indicator.he did not want that car to be successful b
ut he wanted that the organization to be established and known as a world class
manufacturer.all fredo was provide to the enginnering and design tem to experime
nt and learn through self learing .
JOINT Ventures and Alliances
Ratan Tata took the help of car designer IDEA to fine tune the project .A team o
f engineers and designers always interacted with the IDEA team to make necessary
changes and due to hands-on experience of the engineers they could improve upon
coefficient of drag.
Then TATA motors developed 2 versions of small car one a diesel version and petr
ol version .The petrol version cars did not pass the norms ,emission problems
so they took the help of FRANCE giant LA MOTEUR MODERNE, in collaboration with
them tey were able to solve the problem.
Outsourcing
Outsourcing needs to be followed by any company .Tata motors outsourced 80% of
the parts for indica which made the transaction cost low ,by implementing the JI
T model in supply chain.
It also made investment in TATA AUTO COMP SYSTEMS,TACO and ERC engine
ers collaborated with each other.
Supply chain configuration
TATA motors has a large network base such as within it has 90 dealers
and 290
authorised service stations.There are separate retail and distributi
on channel.
Initial customer response
With spot finace more than 50 dealership point in india were available for indic
a.