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ACKNOWLEDGEMENT
Concentration, dedication and application are necessary but not sufficient to achieve our
goal. These must be awarded by guidance, assistance and cooperation of person to make it
tenable. We gratefully acknowledge to MR. S.SURESH who has given us the opportunity
to learn at deep level to prepare this report.
Although we have tried to make this report error free, but if someone finds any type of
error or have suggestions for this report, please tell us and we promise to fix the problem
or will adopt good suggestions.
.
To assess the Financial performance of the automobile industry.
To highlight the major competitors of Tata Motors.
To find out the various Products offered by Tata Motors and their Prices.
To study the Distribution Network and promotional activities of the company
To conduct a survey on „consumer preference for cars and heavy duty vehicles.‟
Majority of the people feel that now a day‟s car is not only a mode of transportation but a
status symbol too. The most prevalent brand was found to be MARUTI SUZUKI. Most of the
other brands were more or less in same proportion. Most distributors preferred those
companies and brands which are high on quality and had a wider scope of customer response.
Moreover target achievement and work environment were also some of the factors that
influenced them. Most of the distributors agreed that „MARUTI SUZUKI‟ is the most
striking brand among the people because of its features like economic value, low
maintenance cost and high resale value. For vehicles which are purchased in bulk especially
in case of Defence services there are no intermediaries but for other companies the dealer can
act as a felicitator.
The Tata‟s need to show their luxury through rigorous marketing and by launching a couple
of high class luxury vehicles comparable to Audi and Mercedes (though the stock and
distribution should be limited).This will create a special class for its small cars. They need to
focus now on the marketing strategy in heavy duty vehicle section also as they did in case of
Tata Ace.
Though Tata Motors is facing tough competition with Maruti Suzuki in small car section but
still is has an edge over its competitors due to the brand value that it has developed due to its
Share in heavy vehicle market.
CONTENTS
S. NO. TOPIC
1. Company History
2. Industry Structure
3. Environment
4. Products
5. Price
6. Distribution Network
7. Promotion
8. Financial Analysis
11. Annexure
C. Bibliography
1. COMPANY HISTORY
Tata Motors is a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata
and J.Baker. The largest passenger automobile and commercial vehicle manufacturing
company of India Tata Motors Limited, was formerly
called TELCO (TATA Engineering and Locomotive
Company), has its headquarters in Bombay, now
Mumbai, India. Established in 1945, the company later
expanded its operations to commercial vehicle sector in
1954 after forming a joint venture with Daimler-Benz AG
of Germany. Over 5.9 million Tata vehicles ply on Indian
roads, since the first rolled out in 1954. The company's
manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra),
Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka).
After years of dominating the commercial vehicle market in
India, Tata Motors entered the passenger vehicle market in 1991
by launching the Tata 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.
DAEWOO ACQUISITION
With the success of Tata Indica, Tata Motors aimed to increase its
presence worldwide. In 2004, it acquired the Daewoo Commercial
Vehicle Company of South Korea. Tata remains India's largest
heavy commercial vehicle manufacturer and Tata Daewoo is the
2nd largest heavy commercial vehicle manufacturer in South
Korea. Tata Motors has jointly worked with Tata Daewoo to
develop trucks such as Novus and World Truck and buses namely,
GloBus and StarBus.
HISPANO CARROCERA
After the acquisition of British Jaguar Land Rover (JLR) business, which also includes the
Rover, Daimler and Lanchester brand names 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 and
Land Rover operations for US$2 billion.
JOINT VENTURES
IMPORTANT DEVELOPMENTS
In 2005 & 06
Tata Ace, India's first indigenously developed sub-one ton mini-
truck, was launched in May 2005.. 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.
In 2007
In 2007, Tata Motors launched several concept models and future designs of existing models.
Tata Motors launched a re-designed version of Tata Xenon TL during Motor Show Bologna
which would be assembled in Thailand and Argentina. A pick-up variant of Tata Sumo was
also launched under the program 'Global Pick-Up'.
In 2008
Compressed Air Car
Motor Development International of Luxembourg has developed the
world's first prototype of a compressed air car, named OneCAT. In
2007, MDI owner Guy Negre was reported to have "the backing of
Tata".
IN 2009 AND ONWARDS
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. On 23rd March,
2009 Tata Motors announced the commercial launch of
the Tata Nano. The Chairman of Tata Sons and Tata
Motors, Mr. Ratan N. Tata, said, “The Nano represents the spirit of breaking conventional
barriers.
At the beginning of the year 2008, the Company had 30 Subsidiary companies. During the
year the following changes have taken place:
The automobile sector in India was severely impacted by the disruption in the Indian and
global business environment. GDP growth slowed down considerably from 9% in FY 07-08
to 6.7% in FY 08- 09. Both turnover and profitability of the automotive sector came under
tremendous pressure. Double digit inflation and high material cost in the first half of the year
leading to higher vehicle prices, higher fuel prices, unavailability of finance, higher cost of
financing and uncertainty in the overall economic conditions impacted demand to a great
extent. Both the commercial and passenger domestic vehicles industry came under
tremendous pressure as a result of these market conditions. The commercial vehicle industry
which had already started showing signs of slowing down last year, declined by 17.4%
compared to the 7.6% growth in FY 07-08. The passenger vehicle industry, which had
showed a growth of 11.3% in the previous fiscal, went into negative zone with a decline of
0.5%. In such trying times, the Company‟s sales of 506,421 vehicles were 13.5% lower than
last year volumes. Even though domestic commercial vehicles volumes declined by 15.2%,
the Company consolidated its leadership position in the domestic market by introducing new
products to complement its existing product portfolio. The passenger vehicles volumes
declined by 4.8% in the domestic market, primarily due to the phasing in of the new Indica
Vista in the second half of the year and sluggishness of the UV segment. The Company‟s
exports declined by 38.6% during the year, due to the meltdown in major international
markets and the consequent swings in foreign exchange rates.
The industry performance in the domestic market during FY08-09 and the Company‟s share
is given below:-
Commercial Vehicles
The domestic commercial vehicle industry witnessed a decline of 17.4% compared to the
over 7.6% growth achieved in the last fiscal. Industry volumes were impacted by the steep
increase in consumer interest rates and vehicle prices, unavailability of finance for majority of
the segments and a considerable decline in industrial activity compared to the last year.
The domestic industry performance during FY 2008-09 and the Company‟s share is tabulated
below:-
The Company‟s commercial vehicle sales in the domestic and international markets, at
291,993 vehicles, were 17.2% lower than the previous year. The Company reported domestic
sales of 265,373 vehicles, which was a decline of 15.2% over the previous year. The
Company‟s market share in the M & HCV category improved from 60.4% to 61.9%. The
LCV segment also faced pressure as a result of the slowdown and the unavailability of
finance for a large part of the year.
Passenger Vehicles
The falling growth rate of the industry for the last two years slipped into negative territory
marginally this year. The tightening liquidity and the drastic increase in interest rates, coupled
with high fuel prices for a major part of the year suppressed demand to a considerable extent.
The overall slowdown in the economy also accentuated the negative sentiments with the
consumers. Despite the new launches and heavy promotion spends by players in the industry,
the industry declined by 0.5% during the year.
The Industry performance and the Company‟s performance in the segments that it operates in,
is tabulated below:-
In a challenging year for the industry, the Company recorded sales of 207,512 vehicles
(including Fiat cars) in the domestic and overseas markets. The Company continued to be
amongst the top three players in the Indian passenger vehicle market with a market share of
13.1% (only Tata cars). The Company share has been rising since the launch of the Indica
Vista in August 2008, exiting in March 2009 with a market share of 14.5%. The small car
segment which contributes to over 60% of the market and has been the major driver of
growth in the Indian market in the recent past it witnessed a marginal growth of 0.7% during
the year despite new launches. Volumes of Indica, at 111,254 declined by 18% due to the
phasing out of the old Indica in the first half and the introduction of the second generation
Indica Vista in the second half. Despite this, it remained amongst the top 3 selling cars in the
country.
3. ENVIRONMENT
The Indian auto industry is highly competitive with a number of global and Indian auto
companies present.
Key Players in the Indian auto industry – Passenger Cars and CVs
Other global players who are in India have plans for India includes – VOLVO, DAIMLER
CHRYSLER, BMW and NISSAN MOTORS.
4. PRODUCTS
Tata Ace
Tata 407 Ex and Ex2
Tata 709 Ex
Tata 809 Ex and Ex2
c) CONCEPT VEHICLES
d) MILITARY VEHICLES
PRICE RANGE
NO. OF
NAME OF CAR FUEL TYPE (IN RUPEES)
VARIANTS
ON ROAD
SUMO VICTA DIESEL 15 6,27,416-6,48,090
PETROL 2 4,55,567-4,78,128
INDIGO CS
DIESEL 2 5,45,364-5,70,789
6. DISTRIBUTION NETWORK
The channel of distribution, physical location, and dealership method of distribution and sales
is generally adopted. The distribution of vehicle must be in a very systematic way, from the
plant to dealership and to end user. This is not only in India itself but also to the world-wide
dealership.
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 firm at a negotiated price. The MRP is fixed by the firm at the
head office and the dealer gets a profit within these prices. As the firm 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 company itself.
Physical Distribution:
The commercial vehicles are manufactured at Jamshedpur, Lucknow and Pantnagar whereas
the passenger vehicles are manufactured at Pune plant. 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. Dealer‟s Network Worldwide:
There is minimal personal selling involved. The Sales Officers at the dealerships collect
prospective customer databases and perform cold calling to attract customers.
b. Advertising :
SUMO GRANDE
The ad showcase SUMO GRANDE as SUV with a soul of a family car, the factors like
interiors third row seating, power, low turning radius and also showcasing it as perfect for
city as well as mountains.
The ad starts with a car being driven itself in a hilly area. The ad showcases the idea of
changing the drive, style and life i.e. changing everything.
TATA representing MANZA as a high class symbol with innovations where a man finds
everything incomplete in perfect conditions & finally feel complete in his MANZA. TATA
termed it as a next generation car which makes everything else seem less than complete.
TATA ACE
TATA PRIMA
Showcasing new TATA PRIMA as a world class truck which is shaped by technology around
the world. Italian cabin design, immense power and load bearing ability. It is the truck which
meets international standards.
c. 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 firm conducts intensive sales promotion during festivals such as festive discounts during
Diwali.
d. 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 firm takes serious measures to maintain good public relations.
The firm follows business ethics to ensure that the customer is satisfied and receives good
service whenever and wherever he desires
8. FINANCIAL ANALYSIS
Tata Motor‟s consolidated Net Revenue for FY10 was Rs 925 bn up by 30% Y-o-Y.
Facilitated by improvement in global economic environment, low interest rates, and lower
commodity prices the consolidated. The Company posted a profit after tax of Rs. 25 bn,
compared with Rs -(25) bn in FY09 Company‟s Net Automotive debt stood at Rs 18.8 bn as
on March‟10 compared to Rs 23.75 bn as on March‟09. Consequently, Company‟s debt to
equity reduced to 2.05 from 4.0. Tata Motor‟s standalone Net Revenue for FY10 was Rs 355
bn up by 39% Y-o-Y basis.
After a sharp decline in sales volume in 2008-09, the commercial Vehicle industry recovered
with a strong sales growth in 2009-10. The auto industry recovered substantially in FY10 and
grew robustly at 40.2% over previous year. Robust growth was seen in third and fourth
quarter as sales volumes grew at 97.11% and 84.39% y-o-y respectively.
Facilitated by recovery in economic growth, availability of finance, easing interest rates and
increased freight availability CV domestic sales volumes increased substantially by 40.9% to
373,842 in FY10 from 265,373 in FY09. Company Performance in Domestic CV Segment:
CV Market Shares:
Domestic passenger vehicle sales stood at 259,588 (including 24,884 Fiat vehicles) during
FY10; up by 25.1% y-o-y. Market share of Tata Motors vehicles stood at 12.4% in FY10.
PV Domestic Sales Volumes:
The passenger vehicle industry registered a substantial volume growth of 24.8% during
FY10, driven mainly by increased consumer confidence, new product launches, availability
of finance, and low interest rates.
Production
Sales
A. For the month
Profitability ratios
Profitability ratios Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Operating margin (%) 6.71 10.53 9.70 10.68 11.62
Gross profit margin (%) 3.30 8.26 7.50 8.09 9.01
Net profit margin (%) 3.77 6.96 6.94 7.35 7.02
Leverage ratios
Leverage ratios Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Long term debt / Equity 0.49 0.49 0.31 0.41 0.59
Total debt/equity 1.06 0.80 0.58 0.53 0.60
Owners fund as % of total source 48.44 55.43 63.05 65.23 62.22
Fixed assets turnover ratio 1.88 2.69 3.08 2.55 2.62
Liquidity ratios
Liquidity ratios Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Current ratio 0.84 0.89 1.24 1.24 0.99
Current ratio 0.43 0.64 0.85 1.07 0.98
Quick ratio 0.58 0.66 0.91 0.96 0.76
Inventory turnover ratio 13.47 14.44 13.26 12.63 14.06
9. CUSTOMER AND DEALER SURVEY ANALYSIS
Customer survey was done to gauze the minds of the people so that we can get the idea of
how people decide which brand and which variant to go for. Also the idea was to generate the
notion of forces working to influence the minds of people in cars and heavy vehicles sector.
We approached 30 customers and 10 distributors in Delhi and NCR region. Although it was a
small sample survey as compared to the size of the industry and brand but it was an arduous
effort as the time period was limited
The analysis of genesis of forces that control the vehicle market was done in following
manner:
QUESTIONNAIRE
PREPARATION
The most prevalent brand was found to be MARUTI SUZUKI. Most of the other brands were
more or less in same proportion. This proved that, still Maruti has got its major share when it
comes to small cars. In our sample many customers are loyalty to Maruti.
Majority of the people feel that now a day‟s car is not only a mode of transportation but a
status symbol too.
20
15
10
5
0
necessity social status both
Impact: This implication has a direct effect on „NANO‟ the common man‟s car. Though the
car is quite cheap and affordable to middle class but its major enemy is status symbol. The
standard of the middle class segment has risen to such an extent that while buying a car they
can afford to pay a little more for a vehicle in case it provides status symbol to them.
Most of the factors preferred by people were luxury oriented. It gives us the idea that people
want to have as much comfort as possible while travelling. Majority of the people even feel
that safety features like Anti breaking system (ABS), Child lock etc. are the very important.
We further extended our analysis to heavy vehicles and found that brand name had a very
strong hold over the people as compared to features and resale value.
5. Advertisement:
We then diverted our analysis to advertisement section and found that the most effective
medium for automobile advertisement was T.V., with Maruti Suzuki having the most
appealing advertisement. A very interesting fact came against our notion that a majority of
respondents feel that firms should even advertise for heavy duty vehicles as it does for cars.
no
yes
0 5 10 15 20 25
Finally we tried to dive into the mindset of people about the preference for native country
product. As most of the people replied that the concept of native company preference does
not come in their mind, the concept of ‘hamara‟ and ‘our’ is immaterial in four wheeler
market.
As the dealers are an important link between the companies so we tried to analyze the market
from a distributor point of view also. For this we went to 10 dealers of various companies and
took their view. The analysis follows
1. Preference for brand: Most distributors preferred those companies and brands which are
high on quality and had a wider scope of customer response. Moreover target achievement
and work environment were also some of the factors that influenced them.
2. Most striking brand: Most of the distributors agreed that „MARUTI SUZUKI‟ is the most
striking brand among the people because of its features like economic value, low maintenance
cost and high resale value.
3. Promotion of brand: Generally two to three campaigns a month are done by dealer‟s to
promote the brand.
4. Financial schemes for sales: The distributors usually provide banking solutions of SBI
and HDFC like banks. The firm conducts intensive sales promotion during festivals such as
festive discounts during Diwali.
5. Feedback from customers: Feedback was mainly collected on time to time basis like-
7. Need of advertisement for heavy duty vehicles: The distributors were also of the opinion
that even the heavy duty vehicles need advertisement.
9. Criteria for obtaining the dealership: The dealers also need to fulfil some criteria for
obtaining the dealership like location, budget, area of sales etc.
10. Direct supply to the companies: For vehicles which are purchased in bulk especially in
case of Defence services there are no intermediaries but for other companies the dealer can
act as a felicitator.
Though TATA motors is big player in heavy vehicle market, it still needs some innovation
work in small car section. Some of the related problems and suggestions are
1) Tata motors has a huge no. of competitors in small car segment. Through the launch
of TATA NANO, it embarked one of the greatest innovations of the century in
automobile sector by producing the cheapest car but still some issues related to it are
to be tackled.
Though being cheaper than Maruti 800 it didn‟t affected the sales of Maruti
800, its nearest competitor, although the production of MARUTI 800 has been
put down.
TATA NANO can‟t be targeted for a huge market share of rural India as when
it comes to bad roads and frequent long drives people prefer Maruti 800 which
is its nearest rival.
What Tata motors can do in the above case is that they should go on
with TATA NANO mainly targeting the metropolitans and big cities.
Once they have acquired a major market share, they should launch its
modified variant with higher price comparable to but cheaper than
Maruti 800 having strength and long distance travelling capacity for
sub urban and rural market.
2) Another problem that lies with Tata motors small car segment is the common notion
“Tata vehicles as a carrier not as a luxury item”. Tata motors in India are mainly
famous for their carriers and this tag gets attached even with small luxury cars which
affect their sales.
The Tata‟s need to show their luxury through rigorous marketing and
by launching a couple of high class luxury vehicles comparable to Audi
and Mercedes (though the stock and distribution should be
limited).This will create a special class for its small cars.
3) In heavy vehicles section though Tata‟s enjoy most of its market share with its trucks
and buses. But the launches of its new variants are only known when they hit on
roads. e.g. Tata‟s 6-wheeler Trucks were replaced by 6 wheeler LP trucks gradually
and then later on with 10-wheeler LP trucks. Now a days they are being replaced by
Tata‟s Haiver but the change is very slow. In case any competitor launches its variant
of same type it can affect Tata‟s sales.
They need to focus now on the marketing strategy in heavy duty
vehicle section also as they did in case of Tata Ace.
11. ANNEXURES
A. Sample Customer Questionnaire
Q.5. Please tell us your preferences that you would like to have in a car or a heavy duty
vehicle.
Q.6. What factors do you look for while purchasing a heavy duty vehicle or a car?
Q.7. According to you, should firms advertise for heavy duty vehicles as it does for cars?
Q.9. According to you, which automobile company‟s ads are the most appealing?
Q.10. While buying a vehicle does the concept of native company preference comes to
your mind?
Q.1. What preference do you look for before applying for dealership?
Q.2. Which brand do you think is the most striking among the people and why?
Q.4. What are the financial schemes that you provide for sales?
Q.7. Do the heavy duty vehicles need advertisement? If yes, what measures do you take?
Q.9. Do the dealers need to fulfil some criteria before of obtaining the dealership?
C. BIBLIOGRAPHY
1. Tatamotors.com
2. Tatacarsworldwide.com
3. Yahoofinance.com
4. Valuereseacrhonline.com
5. http://www.capitaline.com
6. http://www.tatamotors.com/our_world/press_releases.php?ID=458&action=Pull
7. http://tatamotors.com/our_world/press_releases.php?ID=431&action=Pull
8. http://www.complaintsboard.com/complaints/tata-motors-c104509.html
9. http://auto.indiamart.com/cars/tata-indigo/tata-indigo-review.html
10. http://ir.tatamotors.com/for_shareholders/sp.php#ordinary
11. http://money.rediff.com/companies/tata-motors-ltd/10510008/share-holding
12. http://money.rediff.com/companies/tata-motors-ltd/10510008/cash-flow
13. htttp://www.moneycontrol/com/tata-group/tatamotors
14. http://www.yahoofinance.com/tatamotors
15. http://www.carwale.com/research/cars/tata