A

PROJECT REPORT

ON

SUBMITTED
TO

SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION

AND RESERACH

BY

P.G.D.M (Mktg.)
Roll No. AM-27
2009-2010

SIBAR
PUNE- 411048

1
 CERTIFICATE

This is certifying that the project title

“TATA MOTORS” is a bona-fide work done by Mr.
NISHANT KUMAR AKELA in the partial fulfilment of
requirement for the award of PGDM [Autonomous] of
SINHGAD BUSINESS SCHOOL [SIBAR].

He has worked under our guidance and direction. His work is

found to be satisfactory and complete in all respect.
…………………..
Director Guide

Date: Date:

PLACE :- PUNE

2
 Acknowledgement

The sole efforts of any Individual are not sufficient enough to complete the
Project. The completion of a project involves the effort and interest of many people.
Same is the case with our project. There are many people whom we have to thank who
directly or indirectly helped us a lot in completion of our research.

The goal was fixed and we began with a determined resolved and put in ceaseless
sustained hard work. The higher the summit, the harder is the climb. There were times
when the goal looked beyond reach but all difficulties were accepted as challenges.
Greater the challenge, greater was the effort to overcome it.

We would like to acknowledge sincere thanks to our college for giving an

opportunity to work on this project and providing the necessary informations.

The credit goes to Our faculty members. Their constant guidance ensured that
we come out of the woods whenever any difficulties were encountered.

Above all there was and is and will always be the love of all the professors for
what is written in this report and has been the fruits of experience that they taught us.

Finally thanks to my parents and friends. It was due to their support, motivation
and encouragement.

3
Contents Page no.
1 Certificate 2
2 Acknowledgement 3
3 Indian Automobile industry 5

4 TATA 9

5 TATA Motors 10

6 Marketing Strategy of Xeta & NANO 12

7 Financial strategy of TATA MOTORS 20

8 HR strategy at TATA MOTORS 28

9 Operational strategy at TATA Motors 32

10 TATA Motors sales in figure 37

11 Conclusion 37
12 Refrences 38

4
INDIAN AUTOMOBILE INDUSTRY

The Indian automobile sector is growing at a rate of about 16% per annum and is
now going to be a second fastest growing automobile market in the world.

In the Indian automobile industry, SUVs today account for only 15 per cent of the
total market unlike western countries where it is almost 80 per cent.

Small car segment which contributes to more than 60% of the total car sales will
remain a key segment in the Indian car market. As of 2006, small cars made up
more than two-thirds of India's passenger car market. Currently India is the
second largest manufacturer of small car, second only to Japan.

• India ranks 12th in the list of the world's top 15 automakers.

• Entry of more international players.
• Concentrated in regions.
• Market size estimated to be of Rs.225 Thousand crores ( $45 Billion)
• Contributes 5% to the GDP.
• Production of four wheelers in India has increased from 9.3 lakh units in 2002-
03 to 23 lakh units in 2007-08.
• Targeted to be of $ 145 Billion by 2016.
• Exports increased from 84,000 units in 2002-03 to 280,000 units in 2007-08.

5
SHARES OF INDIA IN GLOBAL AUTOMOBILE INDUSTRY

6
7
 MARKET SHARE BY SEGMENTATION FOR CARS

Market Share (%) (2007-2008)

Economy Mid Size Premium Luxury

11.24 0.17

27.1
61.49

CHALLENGES IN INDIA’S AUTO SECTOR.

 Personnel - competition for talent is increasing, attrition rates are

increasing, labor reforms are overdue, unions add political risks and staff
costs are rising

 Socio Cultural - expect un-kept promises and / un-met deadlines, short

term thinking and actions

 Bureaucracy - slow decision making, hierarchy, political interference,

rampant Corruption

 Others - delays in Infrastructure, cultural divide in poverty, key reforms are

slow in coming and shortage of electrical power.

8
The Tata Group, a business conglomerate with a presence in over 80 countries
and a work force of around 290,000 people. The Tata Group comprised 98
companies of which 27 were publicly listed.

In 2003, the Tata Group had a presence in seven key industry business sectors -
materials, engineering, energy, consumer products, chemicals, communications
and IT, and services. The group consisted of some 80 companies.

The materials business included basic steel products, tubes, bearings, and agri
tools. The engineering business included passenger cars, utility vehicles, trucks
and buses, construction equipment, industrial machinery and commercial cooling
equipment.

The energy business included hydroelectric power projects. The consumer

products business included the group's tea, coffee, food products, home
appliances, watches and clocks, jewellery, garments and home security solution,
ceramics, water coolers and air conditioners. The chemical business included
agri products like insecticides, fungicides and herbicides. The IT and
telecommunications business included the group's software, telecommunications,
other IT-related services, and automation and control system offerings. The
services business included the group's financial services, mutual funds,
hospitality, publishing and export offerings.

9
Tata Motors, previously known as Tata Engineering and Locomotive Co Ltd
(TELCO) (Telco to tata motors in july 2003) is one of the largest companies in
the Tata Group, and one of India's largest business houses. Tata Motors is
India's leading commercial vehicle manufacturer and the third largest passenger
car manufacturer. The company is the sixth largest truck manufacturer in the
world. Tata Motors, the largest automobile company in India.

The history of Tata Motors, earlier Tata Engineering & Locomotive Company Ltd.
(Telco), can be traced back to the early 1920s. The Telco plant at Jamshedpur,
originally belonged to Peninsular Locomotive Company (Peninsular), which was
established in 1923. In 1927, Peninsular was taken over by East India Railway to
manufacture passenger carriage underframes for the Indian Railways.

In 1945, Tata Sons purchased the plant from the Government of India and used it
to manufacture steam locomotive boilers and other engineering products, under
the name Telco. It tied-up with Daimler-Benz in 1954 to produce commercial
vehicles (CV) and later manufactured the same independently, after the tie-up
ended in 1969.
Telco (Tata Engineering and Locomotive Company Ltd.) began production of
medium commercial vehicles in 1954. The company started manufacturing heavy
commercial vehicles in 1983 and light commercial vehicles in 1986.

TATA Motors entered car market by launching Tata Sumo in 1994 and Tata
Safari in 1998. Variants of these models are also available in the market. The
company launched the compact Tata Indica in 1998, the sedan Indigo in 2002
and the station wagon Indigo Marina in 2004. The next car that was rolled out
was Nano, in January 2008.

10
TATA MOTORS PERCENTAGE OF SHARE IN INDIAN
AUTOMOBILE INDUSTRY

11
 MARKETING STRATEGY FOR TATA INDICA
AND TATA NANO

Tata Indica V2 Xeta: Competing in the Indian Small Car Market

INTRODUCTION

In January 2006 the company launched the Indica V2 Xeta Petrol (Xeta) car as a
refurbished version of its existing petrol car Indica V2 Petrol MPFI. According to
the company, Xeta was to benefit the customer by better meeting their needs
compared to existing options in the market - specifically by rendering better fuel
efficiency at a competitive price. Indica was an umbrella brand under which Tata
Motors had developed both diesel and petrol cars.

"The Tata Indica story resembles the fable of the ugly duckling in some ways,
with one crucial difference: the country's first indigenously designed and
manufactured passenger car never looked less than pretty. But, like the duckling
of the fairy tale, it has emerged stronger and more beautiful than ever after
overcoming global competition and a recessionary market."1

- K. A. Ananthram and Mohini Bhatnagar, independent columnists, in

October 2000.

"Tata Motors has always been known as a diesel carmaker, despite the fact that
they know petrol too. Tata now wants to shake off that image and plant the Indica
firmly in the minds of petrol punters too. And this is precisely the reason for the
new Xeta variant."3

- Siddhraj Singh, an auto-analyst with Autocar India, in 2006.

TELCO entered the passenger car market, introducing three multi-utility vehicles,
"Tata Estate" and "Tata Sierra" in 1991-92 and "Tata Sumo" in 1995-96.

12
Indica: More Car Per Car

Tata Motors has the unique distinction of giving India its first and only
indigenously built passenger car - the Tata Indica. The Indica launched in 1998
reached the 2,50,000 sales mark within 52 months of launch.

In December 1998, Tata Motors launched the first indigenously developed

compact car, the Indica. The model was displayed at the Auto Expo'98 . To
underline the "Made in India" image, the Tata Motors stall at the exposition had
models and organizers dressed in Indian attire. At the inauguration function,
which was attended by the then Union Industry Minister Murasoli Maran ,
hundreds of children waved the Indian flag. The Indica project was named
Project Mint (short for Mini Telco), when it was commissioned. This car was
partly designed and developed by Tata Motors, the original design being that of
the French car manufacturer Peugeot.

INDICA

TATA Motors entered into the compact Car segment with Launch of India’s first
Indigenously developed car INDICA

Basic Concepts of new Car

• Space
• Easy entry and exit
• Safety
• Economy of diesel
• Price
• Contemporary design

India’s Car, India’s Pride

• A car exclusively for the middle class Indian.

• A car designed for India rather than a car adapted for India
• More car, per car
• Value for money
• Pre launch promotions and brand building exercises
“We give you value for your money. Coming
up shortly, so wait for it ”

First Year – 55758 cars

• Cumulative sales for Indica were growing by 37%

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• Target Audience
– Middle class family man
– Young working Executive
• Loyalty Programme – Indica Club

RATIONALE BEHIND THE LAUNCH OF INDICA V2

The Xeta was developed by Tata Motors as a pre-emptive move to fight

competition, mainly from MUL and HMIL in the passenger car segment. The
Xeta's "eXtra Efficiency Torque Advantage" according to the company, was
proffered as an answer to the market demand for fuel-efficiency at a competitive
price.

Xeta was a refurbished version of the company's Indica V2 Petrol car. Analysts
said that through Xeta, Tata Motors intended to create a unique brand identity in
the mind of the customer for the petrol variant of Indica. The company intended
to make a major impact in the petrol driven compact car segment with the Xeta.

For the Indica, although the diesel-engined version continued to ring the cash
registers, the sales of the petrol variant (Indica V2 Petrol car) failed to gather
momentum in spite of the engine having seen refinements since it was
commissioned.

This, analysts said, could possibly be attributed to two factors: Tata Motors' lack
of experience with petrol cars compared to other small-car manufacturers with
established credentials in this segment, and the fact that the 'big and powerful'
tag is not necessarily a positive attribute for a petrol car in the extremely fuel-
efficiency conscious small-car segment.

14
MARKETING STRATEGY FOR LAUNCH OF XETA

POSITIONING

Through Xeta, the company intended to create a unique brand identity in the
customer’s mind for the pertol variant of indica. Car was targeted at young
buyers,

PRODUCT AND PRICING - EXTRA EFFICIENCY ADVANTAGE

Tata Motors strove to improve and refine its product continuously but customer
feedback was not always positive in all respects. The Indica V2 Petrol's 1.4 litre
engine had become a handicap as it was the biggest in the small car segment.
Also, it shared the same block as its diesel counterpart, making it inherently
heavy. Xeta was to bought the customer specifically by rendering better fuel
efficiency at a competitive price. The Xeta's "eXtra Efficiency Torque Advantage"
according to the company, was proffered as an answer to the market demand for
fuel efficiency at a competitive price.

Tata Motors had launched a new range of the Indica V2 Xeta with a 1.2-litre
engine option at an introductory limited period discount of Rs 25,000. and also
various bank loans so that even the common man can afford it. The range is
available in four models — GV, GVE, GVS and GVG and comes with maximum
power of 65.3 PS @ 5,000-5,200 rpm and maximum torque of 10.2 kgm @ 2,600
rpm.

TECHNOLOGICAL ADVANCEMENTS

TATA Motors was the first Indian automobile maker in India to launch the first
indigenously developed car “Indica”. It highlighted it technological advancement

PROMOTIONAL STRATEGIES

Xeta was promoted through various media: television, print, and the Internet. The
television campaign 'You Gotta Be Dumb' was conceptualized by FCB Ulka. M G
Parameswaran, Executive Director, FCB Ulka, said, "The creative team looking
after Indica had a leap idea, that not looking at Xeta is like refusing to have a
good time with four lovely women. When you see an advertisement like the
Indica Xeta, you instantly remember the scene from Dumb and Dumber and it's
this that the advertisers are aiming for. Now every time you think of Dumb and
Dumber, you'll be thinking of the Indica Xeta as well."

15
social media
They believed that the biggest potential of the medium is in the area of "social
media" applications -- user generated content, virals, contests and word of
mouth, for instance. The Xeta Shootout Contest is an attempt to leverage this
social media aspect of the web.

RETAIL NETWORK SUPPORT

Tata Motors' sales and distribution network in India consisted of 720 dealer
outlets which were supported by eight regional offices, 28 regional sales offices
and 38 sub-regional offices. Most of the dealers were exclusive dealers. The
company had a presence at over 2,000 locations in India, including after-sales
and vehicle servicing outlets.

Tata Motors entered into an agreement with MG Rover U.K for manufacture of
Rover branded Tata Indicas in U.K and continental Europe. Touted as the high
point of Indian manufacturing industry , the deal of tata motors with city rovers to
sell 100,000 Tata-made cars under the brand name - CityRover - over five years.
Tata Motors launches CityRover – Indicas fashioned for the European market.
The first batch of CityRovers rolled out from the Tata Motors stable in Pune on
September 16, 2003. Rover launched the car in October 2003 in four versions,
priced at £6,495-8,895.

SUBSEQUENT MODIFICATIONS

In November 2006, Tata Motors launched a new 1.2-litre engine option for the
Xeta range at an introductory limited period discount of Rs 25,000. The new
variant followed the reduction in excise duty (16 per cent excise duty vis-à-vis 24
per cent for the petrol model with a 1.2-litre engine,) in the Union Government's
Budget 2006-07.

OUTCOME

Immediately after the launch of Xeta in January 2006, the passenger car
business unit of Tata Motors reported a growth of 15 percent over January 2005
by selling the highest number of passenger cars till then. The Indica brand grew
by 18.7 percent which was attributed mainly to the launch of Xeta.

In January 2007, it was reported that Tata Motors Limited (Tata Motors) beat
close rival Hyundai Motor India Limited (HMIL)4 to capture the second position in
the fast-growing passenger car market in India, behind market leader Maruti
Udyog Limited (MUL). In December 2006, Tata Motors' car sales stood at 12,665
units against HMIL's 11,049 units.

16
The growth for Tata Motors came in the compact car segment, primarily driven by
the strong performance of the Tata Indica (Indica) range. In January 2007, the
Indica reported its highest ever monthly sales since launch, at 14,466 units, a
growth of 14% over January 2006. Industry analysts said that this growth was
mainly due to the launch of the Indica V2 Xeta (Xeta) in January 2006, and
subsequently its revamped version in November 2006.

TATA NANO ‘PEOPLE’S CAR’

In 1998 , Ratan Tata announced his dream of giving a car for one lakh.
Mr. Ratan Tata is quoted as having said he was motivated to develop an
inexpensive car when he saw, “the father (riding) the scooter, his young kid
standing in front of him, his wife seated behind him holding a little baby.”
The project to make the cheapest car in the world started in 2003. It was reported
that right from the beginning, the designers were asked to be as frugal as
possible to maintain the low price of the car.

In India, owning a car was considered to be a luxury. Most of the people opted to
drive two-wheelers, as cars were not affordable. Tata Nano was targeted at the
segment of two-wheeler drivers who wanted to buy a car if it was available at an
affordable price.

LOW COST AND QUALITY

The launch had raised thousands of questions about the quality of the car and
the performance. But the look of the car silenced many critics. Tata proved that
cheap does not always mean bad quality. Nano looks better than most of the
small cars that are there in the Indian market.
According to the company, the Nano also meets all emission and safety norms,
including (frontal) crash test norms in India. Its fuel efficiency is expected to be in
the range of 18-20 kilometres per litre.

TECHNOLOGY
On the technology front, the Nano certainly epitomises India’s progress in
innovation, packed as it is with several firsts. Tata Motors has filed over 34
patents for the car.

17
NANO EFFECTS

The new brand Nano will do two major changes in the Indian markets:
a. It will open up a new segment in the Indian Four Wheeler Industry
b. It will inspire many Indian entrepreneurs to have grand vision. The 1700 crore
investment that Tata made in this project will be an eye opener to many who are
reluctant to put their money in R&D.

I think Nano will redefine the pricing in the Indian small car market. Either
companies like Hyundai , Maruti may have to cut the prices of existing small cars
or they have to comeout with a similar priced car.

Nano will be making cars an affordable luxury for many Indians. To a limited
extend it will affect the two wheeler segment but only to a limited extent. The
reason is in the running cost and maintenance of four wheelers. At the current oil
prices, Cars are still expensive to run & maintain. It cannot in the near future
replace the functionality of a two wheeler until cars match the fuel efficiency of
two wheelers.

Launching NANO
The $2,000 Nano went on display in showrooms across India on April 1 , 2009
and buyers will be able to make reservations for what has been dubbed "The
People's Car" from April 9. The car will be available in three variants – one basic
version and two deluxe versions. The on-road price of the basic model (with
manual transmission and without air-conditioning, electric windows and power
steering) after registration, taxes and insurance will be around Rs125,000
whereas the deluxe models will cost around Rs150,000.

The firm could sell just up to 50,000 Nano cars in the first year, with production
limited because of a violent land ownership dispute that forced a shift in
production from West Bengal state to Gujarat in the west. The first Nanos will roll
out from existing plants, until the new Gujarat plant opens late this year or early
next.

MARKETING STRATEGY FOR TATA NANO

Tata will sell its ultracheap new car through its own retail and electronics
megastore outlets as well as auto dealerships. It will opt for "cost-effective and
innovative use of media. To make the car more easily accessible to people, the
Tata Motors team will sell the Nano not just through Tata car dealerships across
the country, but also through conventional retail outlets like Westside and Croma.

18
Westside is a lifestyle retail brand and Croma is an electronic megastore. Both
are owned by the Tata group. Westside and Croma outlets will display the Nano
and also take bookings. Also available will be a whole range of Nano
merchandise like baseball caps, T-shirts and key chains, among others. Tata
Motors will share promotion of the Nano brand with its multiple PSU bank
partners. These PSU financiers will promote the Nano brand during booking
jointly with Tata Motors and on their own. . Unlike most small cars, Nano won't be
big on advertising. There will be no TV campaign, only innovative use of print,
radio and other media, particularly the web. The Tata team is working on Nano
news in papers, Nano breaks on radio, Nano appearing in the form of messages
or ticker news on TV, online Nano games, Nano chatrooms on the Net, Nano
pop-ups on major websites and Nano conversation on Facebook, Orkut and
blogspaces. It will be also depending on word-of-mouth campaign.

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 FINANCIAL STRATEGIES OF TATA MOTORS

1. TATA MOTORS FINANCIAL STATEMENTS

TATA MOTORS SHAREHOLDING

• Indian Promoters : 33.7%

• Foreign collaborators : 0.0%
• Indian inst/Mutual Fund : 14.2%
• FIIs/GDR : 32.8%
• Free float : 19.3%
• Shareholders : 221,403

• Listed on BSE: 500570 (scrip no.)

NSE: TATA Motors
NYSE: TTM

20
COMPARATIVE BALANCE SHEET OF TATA MOTOR
For the year ended 31st march 2008

21
22
23
 2. MERGERS AND ACQUISITIONS

The company had chalked out a globalization strategy in early 2003, and had
created a merger & acquisition (M&A) team to look out for acquisition targets.

In 2004, Tata Motors, a part of the Tata Group, completed its first-ever global
acquisition - that of Daewoo Commercial Vehicle Company Limited (DWCV) in
South Korea.

In July 2006, major Italian automaker Fiat Auto S.p.A. (Fiat Auto), and the Indian

24
auto major Tata Motors (TM), signed a Memorandum of Understanding (MoU) to
form a joint venture to produce passenger cars, engines, and transmissions in
India. These products were intended both for the Indian and the international
market. Earlier, in January 2006, the two companies had signed a marketing and
distribution agreement under which TM marketed select models of Fiat cars
through a few of its dealers.

This event was followed by the acquisition of British brands - Jaguar and Land
Rover (JLR) from Ford Motor Company (Ford) in June 2008. On March 26, 2008,
Tata Motors entered into an agreement with Ford for the purchase of JLR. Tata
Motors agreed to pay US$ 2.3 billion in cash for a 100% acquisition of the
businesses of JLR. As part of the acquisition, Tata Motors did not inherit any of
the debt liabilities of JLR - the acquisition was totally debt free. The company had
acquired Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$
2.3 billion in June 2008. To finance the acquisition, Tata Motors raised a bridge
loan of US$ 3 billion from a consortium of banks. By the end of January 2009,
Tata Motors was yet to pay around US$ 2 billion towards the bridge loan.
Moreover, JLR needed further investments, that too quickly, to keep the
operations running.

MAJOR MERGERS & ACQUISITION BY TATA MOTORS

1993-TATA Cummins Ltd.

1994-TATA Holset Ltd.
1994-Mercedes-Benz India Ltd
1997-Concorde Motors Ltd.
2004- Daewoo commercial vehicles comp.
2008-Jaguar Land Rover

About JLR

Ford, a leading automaker and one of the largest multinational corporations in the
global automobile industry, acquired Jaguar from British Leyland Limited in 1989
for US$ 2.5 billion. Ford bought Land Rover in 2000 for US$ 2.7 billion from
BMW. Over the years, the operations of both Jaguar and Land Rover were fully
integrated. The Jaguar Land Rover business employs some 16,000 people,
predominately in the UK, including some 3,500 engineers at two product
development centres in Whitley, Coventry and Gaydon, Warwickshire. Jaguar
was involved in the manufacture of high-end luxury cars, while Land Rover
manufactured high-end SUVs.

25
Financing the deal

Tata Motors raised US$ 3 billion, about 30% more than the agreed acquisition
price of US$ 2.3 billion.
The additional funding was meant for engine and component supply, for which
Tata Motors had entered into a separate agreement with Ford, for any
contingencies and requirements that may arise in the future, and for the working
capital requirements of JLR.

POOR OUTCOME

The company was able to repay only US$ 1 billion by the end of 2008. Tata
Motors was required to repay the entire amount of bridge loan by June 2009. Due
to adverse financial conditions and credit freeze, Tata Motors announced that it
was planning to roll over the bridge loan, which was estimated to further add to
the debt burden of the company.

The automotive sector in India suffered severe contraction in demand, arising

from major financial and other market upheavals. This exacerbated the lack of
liquidity and unavailability of consumer finance."

REASON FOR ACQUISITION

1) The management of Tata Motors was of the view that the acquisition of JLR,
which had a global presence and a repertoire of well established brands, would
help the company become one of the major players in the global automobile
industry. Both Land Rover and Jaguar have the one thing Tata’s vehicles can
barely boast of—a premium tag—and that might be the one reason Tata is willing
to put an all-out bid even though the units are loss making. Mergers and
acquisitions is perhaps the only quick way to build a brand. To do from scratch
requires a lot of time and investment.

2) The acquisition offer seemed to open up possibilities for strong synergies like
expansion of the product line, good R&D capabilities and new markets. Prior to
Acquisition 78 percent of Land Rovers produced in UK was exported to 169
countries and 70 percent of Jaguars exported to 63 countries, with sales to
customers conducted principally through franchised dealers and importers.

3) The initial response from the employees of JLR toward the Tata Motors-JLR
deal was positive. An internal survey carried out in early August 2008 showed
that the employee satisfaction was at 78% as against 41% during the pre-
acquisition days.

26
4) It also gave Tata Motors the opportunity to de-risk its business by countering
domestic market cyclicality through overseas expansion.

5) Tata Motors was poised to gain because of its low-cost quality manufacturing
at close to European standards. Tata Motors’ vehicles meet international norms
like Euro III emission for Passenger cars, Euro II for Light Commercial Vehicles
including pick up vans and European standards for frontal and side safety impact
for passenger cars. It has a series of quality systems in place including ISO
accreditation from Bureau Veritas Quality International (BVQI).

6) Owning luxury brands will also help firms tap into the growing demand for such
products in India.
India is now home to more than 83,000 millionaires, people with more than $1
million in net assets, according to a 2006 report by finance company Merrill
Lynch and consulting firm Capgemini. This has seen the entry of luxury brands
such as Gucci and BMW.

7) Tata Motors was interested in acquiring JLR as it would reduce the company's
dependence on the Indian market, which accounted for 90% of its sales. The
company was of the view that the acquisition would provide it with the opportunity
to spread its business across different geographies and across different customer
segments.

8) In December 2002, Telco had signed a manufacturing and supply agreement

with the UK-based MG Rover Group . Under the agreement, Telco was to supply
the Indica, suitably modified to meet the applicable regulatory standards, to MG
Rover, which would then sell it in the UK and in Continental Europe as the City
Rover. Telco also planned to simultaneously market the Indica in Europe through
its own distribution network. This helped TATA Motors in marketing its Indica car
in UK.

9) Tata Motors has been short-listed for South Africa’s "Taxi Project" in which the
government will provide an entirely new transport system in that country
 Though Land Rover sales have been softening in some markets especially in
Europe, on a six month basis Land Rover sales have gone
up over 2007 globally, mainly because of higher volume of sales in Russia and
China.
 In June 2008 Jaguar was sold 3836 units in West Europe as compared
to 2924units sold in June 2007. It was a 31% increase.

THE ROAD AHEAD

One of the major problems for Tata Motors could be the slowing down of the
European and US automobile markets. It was expected that the company would
address this issue by concentrating on countries like Russia, China, India, and
the Middle East.

27
 HR STRATEGIES OF TATA MOTORS
Tata Motors, part of the Tata Group, one of the largest business conglomerates
in India with a presence in over 80 countries and a work force of around
290,000 people.

In 1938, JRD Tata was appointed as the head of Tata group. In 1956, he initiated
a programme of closer "employee association with management" to give workers
a stronger voice in the affairs of the company. Five core values - Integrity,
Understanding, Excellence, Unity, and Responsibility directed the group's growth
andbusinesses.

Currently, automobile sector in India is retaining around 10 million employees

and is expected to employ more people in near future. Unorganized sector in
employing 67% people while, organized sector is employing only 33% people,
which is a major drawback for automobile sector.

With this rapid expansion and coming up of major players in the sector, the focus
is more on the skilled employees and the need of human resource development
has increased. The companies are looking for skilled and hard working people
who can give their best to the organization. Various companies are opening
training institutes to train interested ones in this sector, like Toyota has recently
opened Toyota Technical Training Institute (TTTI) near Bangalore that will offer 4
courses in automobile assembly, mechatronics (a combination of mechanical and
industrial electronics), automobile weld and automobile paint. TTTI will provide
both a high standard of education and training in automotive technology as well
as employment opportunities.

HR PHILOSOPHY AT TATA MOTORS

• Caring, show respect, compassion and humanity for colleagues

• Work cohesively with colleagues across the group
• Encourages self-sufficiency

28
The following diagram shows the overall HRM process at TATA Motors

29
HR at TATA Motors
1) Building cross functional teams of high performing professionals with clear
career paths for individuals.

2) Started PEP (Performance ethic programme) to promote young dynamic

personnel to higher positions to replace the policy the policy seniority
based promotions and to create new socially vibrant neworks.

3) Revamped its PMS (Performance Management System) by aligning KRAs

(Key Result Areas) with business strategy at all levels.

Compensation and rewards were linked to performance. They made

performance and reward system transparent and fair within the organization
boosting the employee’s initiative to succeed.

4) Selective hiring
5) Job fitting
6) Better training and development for all and one
7) Providing better working environment
8) Motivating people to work hard
9) High retention of skilled employees
10) Institutionalized tailored management development program for officers

11) TATA Motors gave high value project involving risk to its young minds. E.g.,
Small truck project “Ace”.

12) Tata Motors encourages self-sufficiency with the aim to improving the
confidence,
morale and lives of its employees and their dependents. Employees' relatives at
Pune
have been encouraged to form various industrial co-operatives engaged in
activities
such as re-cycling of scrap wood into crates and furniture, welding, steel scrap
baling, battery cable assembly etc. The Tata Motors Grihini Social Welfare
Society
caters to employees' women dependents'. The women folk make a variety of
products, ranging from pickles and uniforms to electrical cable harnesses etc.

13) Executive Selection Scheme (ESS)

ESS is a fast track programme for accelerated growth of high potential

professionals.
This facilitates their early advancement to challenging and visible assignments
through a very systematic procedure. Candidates selected gain a huge lead in
terms of promotion and learning. They are promoted to Manager's level thereby
saving almost 10 to 13 years of work time. The successful candidates are

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relieved from their current jobs and put on various project based training
programmes under the guidance of senior managers in the Company. If the
candidates do not possess management education, they undergo a 4 months
MEP at IIM, Ahmedabad. After successful completion of training the candidates
are mandatorily rotated across departments to acquire general management
skills.The ESS is a jewel in Tata Motors overall profile as it provides a platform
for every employee of the Company to perform and achieve maximum
potential. The HR-Training Division of Tata Motors has also bagged the
prestigious and internationally recognized “Golden Peacock National Training
Award” in the category of ‘Large Employer’.

14) TATA Motors acquisition of the Daewoo truck unit in korea highlighted the
big gap between the productivity levels of Korean and Indian workers. About
600 workers in Korea make trucks that are stronger than what 1,000 workers in
Jamshedpur make. Thus TATA Motors had been more conscious on providing
training and development to its workers in order to raise the productivity.

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 OPERATIONS MANAGEMENT AT TATA MOTORS
INTRODUCTION
A comprehensive quality improvement and cost cutting initiative in
September 2000, has played an important role in the company's
turnaround, from a loss of Rs 500 crores in the year ended March 2001
to a profit of Rs 28 crores in the first quarter of 2002-2003. In 2003, Tata
Motors recorded net sales of Rs.9093.2 crores and a net profit of Rs.300
crores.

If you introduce a new vehicle, for example, and the management cannot
adequately determine what the market wants, the company is in trouble.
Theoretically, the top managers of a company should take up the role of that
ideal customer. They should be driving their competitors' vehicles, they should be
driving the best-of-breed vehicles, and they should be making cost comparisons.
"While a top manager should be the ideal customer, he should also be the
greatest critic of his company's products. If the CEO compromises, or is only
looking at the margins, then even if he is successful, the company's success will
be short lived.

- Ratan Tata, the Chairman, Tata Group

1) MANUFACTURING

Tata Motors had all along believed in developing strong in house design,
engineering, and manufacturing capabilities. Tata Motors performed a large part
of its manufacturing activities in-house. It had installed facilities to manufacture
engines, gearboxes and transmission mechanisms, body panels, castings and
forgings and important components & sub-assemblies. It even manufactured its
own machine tools, dies and fixtures, in its machine tools division.

Tata Motors owes its leading position in the Indian automobile industry to its
strong focus on indigenization. This focus has driven the Company to set up
world-class manufacturing units with state-of-the-art technology. Every stage of
product evolution-design, development, manufacturing, assembly and quality
control, is carried out meticulously. Our manufacturing plants are situated at
Jamshedpur in the East, Pune in the West and Lucknow in the North.

Jamshedpur:

Established in1945, the Jamshedpur unit was the company's first unit and is
spread over an area of 822 acres. It consists of 4 major divisions - Truck Factory,

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Engine Factory, Cab & Cowl Factories, and the Novus. The divestments in March
2000 hived off the Axle and Engine plants into independent subsidiaries viz.
HVAL &HVTL, respectively.

The Truck Division boasts of two assembly lines. The main assembly line,
measuring 180m in length has 20 work stations with a vehicle rolling out every 8
mins. The other line is dedicated to special purpose vehicles and for meeting the
requirements of the Indian Army.

Tata Motors, Jamshedpur, plays an active role in serving rural communities

surrounding its Works through various community centres. While striving to
create a culture for self-help amongst the local populace, it has made significant
progress in community and social forestry, sustainable development of
wastelands, road construction, rural health and education, development of rural
industries, water supply and family planning. A signatory to the UN Global Pact, it
also takes various initiatives in human rights protection, labour standards,
environmental issues, modern effluent treatment facilities, sanitation drives, soil
and water conservation programmes, tree plantation drives, etc.

Pune:

The Pune unit is spread over 2 geographical regions- Pimpri (800 acres) and
Chinchwad (130 acres). It was established in 1966 and has a Production
Engineering Division, which has one of the most versatile tool making facilities in
the Indian sub-continent. It houses a Vehicle manufacturing complex which is
one of the most integrated automotive manufacturing centers in the country
producing a large variety of individual items and aggregates. It is engaged in the
design and manufacture of sophisticated press tools, jigs, fixtures, gauges, metal
pattern and special tools, as well as models for the development of new ranges
of automobile products. Its capabilities have enabled Tata Motors to introduce
new products and improve existing ones without resorting to imports of dies or
fixtures.

Four assembly lines have been established, one each for MCVs and HCVs,
LCVs, Utility vehicles and one for Passenger Cars (Indica and Indigo). The
shops are fully automated ensuring that there is minimal chance for error in the
manufacturing processes. After the car is completely assembled, it goes
through several checks like wheel alignment, sideslip test, brake test, shower
test, and a short test run before it is ready for dispatch. All systems such as
materials management, maintenance and other activities are computerized,
enabling smooth operations and minimum inventory needs.

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Lucknow:

Tata Motors Lucknow is one of the youngest production facilities among all the
Tata Motors locations and was established in 1992 to meet the demand for
Commercial Vehicles in the Indian market. The plant, rolls out commercial
vehicles and is specialized in the designing and manufacturing of a range of
modern buses which includes Low-floor, Ultra Low-floor, CNG & RE Buses. Our
plant, rolls out commercial vehicles and is specialized in the designing and
manufacturing of a range of modern buses which includes Low-floor, Ultra Low-
floor, CNG & RE Buses.

Uttarakhand:

The company has set up a plant for its mini-truck Ace and the passenger carrier
Magic (based on the Ace platform) at Pantnagar in Uttarakhand. The plant began
commercial production in August 2007. This is the company's fourth plant, after
Jamshedpur (commercial vehicles), Pune (commercial vehicles and passenger
vehicles) and Lucknow (commercial vehicles).

NANO Plant:

The company was in the process of constructing a plant in Singur, West Bengal , but due
to continued agitations and hostility at Singur, TATA Motors decided to shift the NANO
Plant at Sanand in the state of Gujrat on 3rd Oct 2008. The integrated project manufacture
of the Nano in Sanand will have an initial capacity of about 250000 cars per annum.

2) PRODUCT DEVELOPMENT

Sumant Moolgaokar, Chairman Tata Motors, from 1970 to 1988, had played an
important role in shaping Tata Motors's R&D philosophy. Moolgaokar once
commented:

"We spend a lot of money, Rs.10 to Rs.12 Crores (US$7 to 8 million at prevailing
exchange rates) on R & D. It is our strong point...in a manufacturing industry
research and development is a series of mistakes by which you benefit. It gives
our people excitement and real knowledge. My singular contribution has been to
build a team. We regard our whole operation as one big training facility".

Tata Motors’ Engineering Research Centre has over 900 scientists and
engineers dedicated to product and process development, technology
upgradation and new product introduction. Besides, the Company works with
leading international design and styling houses.
Tata Motors has over 1400 engineers and scientists in six R&D centers in India,
South Korea, Spain and the UK.

34
The company's R&D facilities include India's only crash-test facility and a hemi-
anechoic chamber for testing of noise and vibration.
The company draws on the expertise of leading international design and styling
houses such as the Institute of Development in Automotive Engineering and Stile
Bertoni in Italy.

TATA Motors starts working on new products that would be required by the
market after 3-5 years.

3) VENDOR MANAGEMENT

In 1997, Tata Motors promoted Tata Autocompsystems Limited (TACO) with the
objective of forming joint ventures with international auto component
manufacturers and giving a special thrust to vendor development.

4) COST CUTTING

To cut costs, Tata Motors tried innovative techniques such as zero-based

costing. The company's engineers re-worked the cost of components all over
again. For example, earlier, Tata Motors paid for its forged components on a
cost-plus basis as claimed by a vendor. Under the new system, it paid a price
depending on the weight of the forging, leading to savings of 25%.

5) QUALITY MANAGEMENT

Tata Motors started a comprehensive quality improvement initiative in September

2000. The initiative played an important role in the company's turnaround, from a
loss of Rs.500 crores in the year ended March 2001 to a profit of Rs.28 crores in
the first quarter of 2002-03. Every year, about a quarter of Tata Motors' workforce
went through training courses, which were rated highly in the Indian engineering
industry.

Personnel were trained before building workshops. In case of imported

machines, engineers and workers were sent to the foreign manufacturer's
facilities to receive training well before the arrival of the machine.

TATA Motors is focused on Improving Product Quality and upgrading product

features.

6) Acquisition for inorganic growth

1993-TATA Cummins Ltd.
1994-TATA Holset Ltd.
1994-Mercedes-Benz India Ltd
1997-Concorde Motors Ltd.

35
2004- Daewoo commercial vehicles comp.
2008-Jaguar Land Rover

7) CUT IN ENERGY CONSUMPTION

Energy Cost as % of Manufacturing Cost has come down. This resulted in saving
of Rs 10.7 crores in energy during 2003-04.

8) DISTRIBUTION NETWORK
The new subsidiary company TATA Motors had formed, which is the TML
distribution company, which will be a central focal point for sales and distribution
operations and logistics operations for Tata Motors.

9) The Tata Indigo was declared the best value for money car at the prestigious
CNBC Auto Car Auto Awards 2003. Tata Indica had also received the voice of
the customer award for the best diesel small car at NFO Automotive India 2002.
In October 2003, Tata Motors received the Balanced Scorecard Collaborative
Hall of Fame Award for having achieved a significant turnaround in its overall
performance

10) The Bureau Veritas Quality International (BVQI) for ISO

9001:2000 Quality Management System (QMS) as well as ISO
14001:1996 Environmental Management System (EMS) recently
certified Tata Motors' passenger car unit, Pune.

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TATA SALES IN FIGURES (31ST MARCH 2009)

Tata Motors’ domestic sales for the month of March 2009 were 52,686 nos. The
company’s total sales (including exports) were 54,485 vehicles. March 2009
domestic sales nos. were 13% lower than that of March 2008. The company’s
sales (including exports) for the fiscal 2008-09 were 498,581nos, 14% lower than
582,390 nos. sold in the 2007-08.

Commercial Vehicles

The company’s sales of commercial vehicles in March 2009 in the domestic

market were 29,006 nos., 24% higher than that in February 2009 but 19% lower
than 35,993 vehicles sold in March 2008.

Passenger Vehicles

The company’s sales of passenger vehicles in March 2009 in the domestic

market at 23,680 nos. were the highest this fiscal, 24% up over February 2009,
but 4% lower than 24,737 vehicles sold in March last year. The March 2009
passenger car sales of the Indica and Indigo range put together at 18,642 nos.
were the highest this fiscal, surpassing February 2009 sales of 15,524. The
Indica range sales at 13,678 nos. were 5% higher than March 2008 and the
highest this fiscal. The Indigo range sales of 4,555 nos. were 8% higher than
February 2009, but 11% lower than March 2008.

Exports

The company's sales from exports at 1,799 vehicles in March 2009, were up 36%
over February 2009, but declined by 69% compared to 5,765 vehicles in March
2008.

Jaguar & Land Rovers sales

In 2007 Jaguar sales were 20,600 and in 2008 (oct) they are 24,600, so there is
an increase of 4000 as per Jaguar is concerned. As far as Land Rover is
concerned there is a reduction from 76,000 to 60,000.

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 BIBLIOGRAPHY

REFERENCE:

1. www.thehindubusinessline.com
2. www.wikipedia.org
3. www. icmrIndia.org
4. www.findarticles.com
5. www.the hindu.com
6. www.financialexpress.com
7. www.ibef.org
8. www.ecch.com
9. www.tatamotors.com
10. www.money.rediff.com
11. www.finance.yahoo.com
12. www.tata.com
13. www.mouthshut.com
14. www.auto.indiamart.com
15. www.Carskerala.com
16. www..surfindia.com
17. www.clickindia.com
18. www.indiacar.net
19. www.economictimes.com
20. www.blog.carhzoo.com

BOOKS

1) CASE FOLIO: ICFAI JOURNALS AND MAGAZINES

2) MARKETING MANAGEMENT; KOTLER

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