Turnaround management

From Wikipedia, the free encyclopedia

Turnaround management is a process dedicated to corporate renewal. It uses analysis and planning to save troubled companies and returns them to solvency. Turnaround Management involves management review, activity based costing, root failure causes analysis, andSWOT analysis to determine why the company is failing. Once analysis is completed, a long term strategic plan and restructuring plan are created. These plans may or may not involve a bankruptcy filing. Once approved, turnaround professionals begin to implement the plan, continually reviewing its progress and make changes to the plan as needed to ensure the company returns to solvency.
Contents
[hide]

1 Turnaround Managers 2 Stages

o o

2.1 Model by Jim Mayer 2.2 Model by George A. Boyne

3 Techniques

o o o o

3.1 Retrenchment 3.2 Repositioning 3.3 Replacement 3.4 Renewal

4 Hurdles or Challenges 5 Professional Organizations 6 References

[edit]Turnaround

Managers

Turnaround Managers are also called Turnaround Practitioners in the UK, and often are interim managers who only stay as long as it takes to achieve the turnaround. Assignments can take anything from 3 to 24 months depending on the size of the organisation and the complexity of the job. Turnaround management does not only apply to distressed companies' it in fact can help in any situation where direction, strategy or a general change of the ways of working needs to be implemented. Therefore turnaround management is closely related to change management, transformation management and post-merger-integration management. High growth

situation for example are one typical scenario where turnaround experts also help. More and more turnaround managers are becoming a one-stop-shop and provide help with corporate funding (working closely with banks and the Private Equity community) and with professional services firms (such as lawyers and insolvency practitioners) to have access to a full range of services that are typically needed in a turnaround process. Most turnaround managers are freelancers and work on day rates, but there are a few very high profile individuals who work for very large corporations on an employed basis and usually get 5 year contracts.

[edit]Stages
In the literature are many different models that describe the stages of a turnaround process.

[edit]Model

by Jim Mayer

The model by Jim Mayer describes 5 different stages during a turnaround process[1]: 1. The evaluation and assessment stage 2. The acute needs stage 3. The restructuring stage 4. The stabilization stage 5. The revitalization stage

[edit]Model

by George A. Boyne

There is also a turnaround model by George A. Boyne that describes seven stages.[2] This model is a simplified description of a process, which can be in reality a complex or messy procedure. Some of the visualised points may happen simultaneously, other drag on or are near term in succession. The first stage is delineated as onset of decline (1). Factors that cause this circumstance are new innovations by competitors or a downturn in demand, which leads to a loss of market share and revenue. But also stable companies may find themselves in this stage, because of maladministration or the production of goods that are not interesting for customers. In public organisations are external shocks, like political or economical, reasons that could cause a destabilization of a performance. Sometimes an onset of decline can be temporary and through a corrective action and recovery (2) been fixed. The turnaround situation (3) is the point in the process, where the minimally accepted performance is longlasting below its limits. In empirical studies a performance of turnaround is measured through financial success indicators. These measures ignore other performance indicators such as impact on environment, welfare of staff, and corporate social responsibility. The organizational leaders need to decide, if a strategy change should happen or the current strategy be kept, which could lead on the other hand to a company takeover or an

insolvency. In the public sector performances are characterized by multiple aims that are political contested and constructed. Nevertheless, are different criteria of performances used by different stakeholders and even if its use results in the same criteria, it is likely that different weights apply to them. So if a public organization is situated in a turnaround situation, it is subject to the dimensions of a performance (e.g. equity, efficiency, effectiveness) as well as its approach of their relative importance. This political point of view suggests that a miscarriage in a public service may happen when key stakeholders are ongoing dissatisfied by a performance and therefore the existence of an organisation might be unclear. In the public sector success and failure is judged by the higher bodies that bestow financial, legal, or other different resources on service providers. If decision maker choose to take a new course, because of the realization that actions are required to prevent an ongoing decline, they need at first to search for new strategies (4). Question that need to be asked here are, if the search for a turnaround strategy should be participative and decentralized or secretive and centralized or intuitive and incremental or analytic and rational. Here, the selection must be made quickly, since a second turnaround may not be possible after a new or existing poor performance. This means, that a compressed strategy process is necessary and therefore an extensive participation and analysis may be precluded. The same applies to the public sector, because the public authorities are highly visible and politically under pressure to rapidly implement a recovery plan. Is the fifth stage reached, the selection of a new strategy (5a) has been made by the company. Especially researcher typically concentrates on this one of the turnaround process. Most of them focus on the structure and its impact on the performance of the strategy that was implemented. It is even stated by the scientist, that a commercial success is again possible after a failing of the company. But different risk-averse groups, like suppliers, customers or staff may be against a change or are sceptical about the implementation of the strategy. These circumstances could result in a blockade of the realization. Also the conclusion is conceivable, that no escape strategy is found (5b), as a result that some targets cant be achieved. In the public sector it is difficult to find a recoverable strategy, which therefore could lead to a permanent failure. The case may also be, that though a recovery plan is technically feasible, it might not be political executable. The implication of the new strategy (6) ensues in the following sixth stage. It is a necessary determinant of organizational success and has to be a fundamental element of a valid turnaround model. Nevertheless, it is important to note, that no empirical study sets a certain turnaround strategy. The outcomes of the turnaround strategies can result in three different ways. First of all a terminal decline (7c) may occur. This is possible for situations, where a bad strategy was chosen or a good strategy might have been implemented poorly. Another conceivable outcome is acontinued failure (7b). Here is the restructuring plan failed, but dominant members within the company and the environment still believe that a turnaround is possible. If thats the case, they need to restart at stage four and look for a new strategy. Does an outcome of the new strategy turns out to be good, a turnaround (7a) is called successful. This is achieved, when its

appropriate benchmark reaches the level of commercial success, like it was the case before the onset of decline. This is commonly measured in a timeframe between two and four year.

[edit]Techniques
There are different techniques that can be applied to cause a turnaround. The four main techniques are known as Retrenchment, Repositioning, Replacement and Renewal:

[edit]Retrenchment
The Retrenchment strategy of the turnaround management describes wide-ranging short-term actions, to reduce financial losses, to stabilize the company and to work against the problems, that caused the poor performance.[3] The essential content of the Retrenchment strategy is therefore to reduce scope and the size of a business. This can be done by selling assets, abandoning difficult markets, stopping unprofitable production lines, downsizing and outsourcing. These procedures are used to generate resources, with the intention to utilize those for more productive activities, and prevent financial losses. Retrenchment is therefore all about an efficient orientation and a refocus on the core business.[4] Despite that many companies are inhibited to perform cutbacks, some of them manage to overcome the resistance. As a result they are able get a better market position in spite of the reductions they made[5] and increase productivity and efficiency.[6] Most practitioners even mention, that a successful turnaround without a planned retrenchment is rarely feasible. [7]

[edit]Repositioning
The Repositioning strategy, also known as entrepreneurial strategy, its main focus is to generate revenue with new innovations and change in product portfolio and market position. This includes the development of new products, entering new markets, extrapolating alternative sources of revenue and modifying the image or the mission of a company.[8]

[edit]Replacement
Replacement is a strategy, where top managers or the Chief Executive Officer (CEO) are replaced by new ones. This turnaround strategy is used, because it is theorized that new managers bring recovery and a strategic change, as a result of their different experience and backgrounds from their previous work. [9] It is also indispensable to be aware, that new CEOs can cause problems, which are obstructive to achieve a turnaround. For an example, if they change effective organized routines or introduce new administrative overheads and guidelines.[10] Replacement is especially qualified for situations with opinionated CEOs, which are not able to think impartial about certain problems. Instead they rely on their past experience for running the business or belittle the situation as short-termed. The established leaders fail therefore to recognize that a change in the business strategy is necessary to keep the company viable. There are also situations, where CEOs do notice that a current strategy isnt successful as it should be. But this hasnt to imply, that they are capable or even qualified enough to accomplish a turnaround.[11] Is a company against a Replacement of a

leader, could this end in a situation, where the declining process will be continued. As result qualified employees resign, the organisation discredits and the resources left will run out as time goes by. [12]

[edit]Renewal
With a Renewal a company pursues long-term actions, which are supposed to end in a successful managerial performance. The first step here is to analyse the existing structures within the organisation. This examination may end with a closure of some divisions, a development of new markets/ projects or an expansion in other business areas.[13] A Renewal may also lead to consequences within a company, like the removal of efficient routines or resources. On the other hand are innovative core competencies implemented, which conclude in an increase of knowledge and a stabilization of the company value.[14]

[edit]Hurdles

or Challenges

According to Stuart C. Gilson there are three critical hurdles or challenges that management faces in any restructuring program[15]: 1. Design: What type of restructuring is appropriate for dealing with the specific challenge, problem, or opportunity that the company faces? 2. Execution: How should the restructuring process be managed and the many barriers to restructuring overcome so that as much value is created as possible? 3. Marketing: How should the restructuring be explained and portrayed to investors so that value created inside the company is fully credited to its stock price?

[edit]Professional

Organizations

There are a number of professional industry associations that provide advice, literature and contacts to turn around professionals and academics. Some are: 1. Turnaround Management Society (International / Focus on Europe) 2. Institute for Turnaround (England) 3. Turnaround Management Association (International) 4. Institut fr die Standardisierung von Unternehmenssanierungen (Germany)

History

Tata NANO - A History in the Making

Mr Ratan Tata on his vision and conviction - innovation & improvisation - and the giant leap of faith which rolled out 'People's Car' Speaking about the Rs.100, 000 worth car and its conceptualization; Mr. Tata is believed to have said that it happened by chance. Here is what Mr. Tata had to say about it all! "I was interviewed by the Financial Times [British newspaper] at the Geneva Motor Show and I talked about this future product as a low-cost-car. I was asked how much it would cost and I said about Rs1 lakh. The next day the Financial Times had a headline to the effect that the 'Tatas' are to produce a Rs 100,000 car. My immediate reaction was to issue a rebuttal, to clarify that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don't we just take that as a target. When I came back our people were aghast, but we had our goal." At the hindsight, Mr Tata recalled how nervous he was during the launch of Indica - their company's foray in to car manufacturing - a first in its rich history. "We were venturing into a new segment. We are again venturing into a new segment but in a product line in which we have 10 years of experience now." said Mr. Ratan Tata. The worlds cheapest car has arrived on the scene. It is history, no doubt. It is a landmark in the annals of the automobile industry the arrival of a car that the average man can also dream about having. It is an affordable and safe car, very compact and easy to manage. It is what is known as the peoples car. The world has been waiting for the arrival of Nano. A much talked about car, surrounded by controversies, it finally made it. It will not only cater to the Indian market, but will also reach out to masses in Europe, UK and USA. It will be an international affair. Ratan Tata, the Chairman of the Tata Group has plans of marketing it in developing countries as well such as south-east Asia and Africa. There would be some changes to cater to the international market, but it will be at attractive prices. The car will be designed to meet up to European standards. We plan to be in Europe in 2011, says Ratan Tata in an interview given to Times of India. To cater to US market, redesigning efforts will be taken care of, which will take about three years to complete.

Nano will have a profound effect on the automobile industry. The possibilities of two wheelers providing price incentives and four-wheelers lowering their price are there. Also new entrants may enter the field to compete with Nano. Ratan Tata ,of course, candidly, says the car was redesigned not to be the cheapest but as an evolution in the mode of transport. The Newsweek magazine has called Nano to be part of a new breed of 21st century cars. The Wall Street Journal claimed it was a global trend towards smaller cars. No doubt, Nano will receive much acclaim not only nationally, but internationally as well, as many people who perhaps felt they could never posses a car can do so now. Ratan Tata is definitely sure that his car Nano will make it abroad as well.

Tata Nano
From Wikipedia, the free encyclopedia

This article may require cleanup to meet Wikipedia's quality standards. (Consider usingmore specific cleanup instructions.) Please help improve this article if you can. The talk page may contain suggestions. (January 2012)

Tata Nano

Manufacturer

Tata Motors

Also called

one-lakh car

Production

2008present

Assembly

Pantnagar, Uttarkhand, India[1] Charodi, Gujarat, India (since June 2010)[2]

Class

City car

Body style

4-door

Layout

RR layout

Engine

2 cylinder SOHC petrol Bosch multi-point fuel injection (single injector) allaluminium 624 cc (38 cu in)

Transmission

4 speed synchromesh withoverdrive in 4th

Wheelbase

2,230 mm (87.8 in)[3]

Length

3,099 mm (122.0 in)[3]

Width

1,495 mm (58.9 in)[3]

Height

1,652 mm (65.0 in)[3]

Kerb weight

600 kg (1,300 lb)635 kg (1,400 lb)[3]

Designer

Justin Norek of Trilix, Pierre Castinel[4]

The Tata Nano is a city car manufactured by Tata Motors. One of the smallest as well as lowest powered (624cc) cars in the world, it was designed to be the cheapest[5] car in India aimed mainly at the lowest price segment in the Indian domestic market. The Nano sold in India is a 624cc, rear-engine (for a less complex and hence cheaper transmission), manual transmission, four-passenger, four-door car. The car lacks power steering and safety features like air-bags and ABS. The car was launched in the Indian market in March, 2009.[6] with a pre-launch price offer of 100,000 (US$

2100). Among other reasons, the new emission regulation forced Tata to refine the engine with a higher price tag.[7][8]

Contents
[hide]

1 History

o o o

1.1 Expectations 1.2 Singur factory pullout 1.3 Design

2 Price

1.3.1 Cost cutting features

3 Model versions

o o

3.1 Europe 3.2 Export

4 Technical specifications 5 Alternative-energy engines

o o o

5.1 Compressed-air engine 5.2 Diesel 5.3 Electric vehicle

6 Effects

6.1 Indian used car market

7 Concerns 8 Reception 9 Awards 10 In the media 11 See also 12 References 13 External links

[edit]History
Seeing an opportunity in the great number of Indian families with two-wheeled rather than four-wheeled vehicles,[9] Tata Motors began development of an affordable car in 2003.[10] The purchase price of this no frills auto was brought down by dispensing with most nonessential features, reducing the amount of steel used in its construction, and relying on low-cost Indian labor.[11] The introduction of the Nano received much media attention due to its low price,[12] and the car was available to buy throughout India in early 2011.[13]

The Nano's development was foreshadowed by the 2005 success of the affordable, 4-wheeled Tata Ace truck.[10]

[edit]Expectations
In 2008 the Financial Times reported: "If ever there were a symbol of Indias ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph of homegrown engineering, the Nano encapsulates the dream of millions of Indians groping for a shot at urban prosperity."[14] "Homegrown engineering" is a relative term here as many of the systems and parts used in the Nano may not have been developed or produced in India.[15] Many have had great expectations for this small car,[16] some perhaps going a bit too far. One study, by Indian rating agency CRISIL, thought the Nano would expand the nation's car market by 65%.[17] It was also anticipated that the 2009 launch of the car would greatly affect the used-car market, with prices dropping 2530% in the lead up to the launch. However, due to limited supply (customers had a waiting period of up to one year) used-car prices reverted to their former figures.[18][19] Sales of new Suzuki Alto-based Maruti 800s (considered the Nano's nearest competitor) dropped by 20%, and used ones by 30% immediately following the unveiling of the Nano. As Autocar journalist Mark Rainford summarizes: People are asking themselvesand uswhy they should pay, say, 250,000 Rupees for a Maruti Alto, when they can wait and get a brand new Nano for less in a few months time, a car that is actually bigger.[20]

[edit]Singur

factory pullout

Main article: Tata Nano Singur controversy Tata Motors announced in 2006[21] that the Nano would be manufactured in Singur, West Bengal,[22] helped in part by a forced acquisition and reuse of farmland by the West Bengal state government[22] to entice Tata to build there.[22] Local farmers soon began protesting the forced acquisition of their land for the new factory.[23] As the protests continued through 2007 and 2008,[10] Tata first delayed the Nano launch[24] and later decided to build the car in a different state (Gujarat) instead.[2]

[edit]Design

A Tata Nano in silver.

The car's exterior was designed at Italy's Institute of Development in Automotive Engineering.[10]

[edit]Cost cutting features

The Nano's design implements many cost-reducing measures.

The Nano's trunk is only accessible from inside the car, as the rear hatch does not open. [25] One windscreen wiper instead of the usual pair[12] No power steering, unnecessary due to its light weight[12] Three lug nuts on the wheels instead of the usual four[26] Only one wing mirror[12] Radio or CD player can be fitted as accessories[12] No airbags in any model[12] 624cc rear engine has only 2 cylinders[12] No air conditioning in base model[12]

[edit]Price
Wikinews has related news:World's cheapest car launched in India, will go on sale in April

Announcing the vehicle as the least expensive production car in the world,[27] Tata aimed for a starting price of one lakh, or 100,000, rupees. This was approximately US$2000 at the time.[28]As of December, 2010, the cheapest Nano costs around US$2900.[7]

Rapidly rising material prices (up 13% to 23% over the cars development time),[29] are blamed for these price rises.[8] In late October 2010, Reuters reported that prices will be raised by an average of 9,000 rupees (US$202) from November because of rising material costs and as of the beginning of 2011 the Nano costs 140,000 rupees (more than US$3,000).[30][13]

[edit]Model

versions

Tata Nano Std

Tata Nano Europa

At its launch the Nano was available in India in three trim levels:

The Tata Nano Std priced at

142,000 (US$3,124) with a choice of three exterior colors, dual tone vinyl

seats, and a fold-down rear seat

The Tata Nano CX at

171,000 (US$3,762) with six color options, air-conditioning, two-tone seats, a

parcel shelf, assisted brakes and fold-down rear seat with nap rest

The Tata Nano LX at

195,000 (US$4,290) with all of the features of the Cx plus beige fabric seats,beige

door trim,beige dashboard, central locking, front power windows, body-colored bumpers, fog lamps, a trip meter, a cup holder, tri spoke steering wheel,mobile phone charging capabilities and a rear spoiler

[edit]Europe
This export version of the Nano was first shown at the 2009 Geneva Motor Show[31] but has yet to go on sale. Heavily upgraded to meet EU safety and emission standards, the car will have a number of improvements over the standard Nano, including an extended wheelbase, a new 3-cylinder engine, power steering, an anti-lock braking system (ABS) and an improved interior and exterior.[31] The Nano Europe will be more expensive, heavier, and less fuel efficient than the standard Nano with prices said to be around US$6000. [32] At the 2011 Geneva Motor Show Tata unveiled the Tata Pixel, a rear engined, four passenger city car based on the Nano Europa platform.[33]

[edit]Export
Export to other developing countries may begin in late 2011, and export versions will probably differ little from those sold on the Indian market.[34]

[edit]Technical

specifications

The Nano(2012) is a 38 PS (28 kW; 37 hp) car with a two-cylinder 624 cc rear engine. The car complies with BS4 Indian emission standards and can also meet European emission standards as well.

Engine:

2 cylinder petrol with Bosch multi-point fuel injection (single injector) all aluminium 38 metric horsepower (28 kW) 624 cc (38 cu in)

Value Motronic engine management platform fromBosch

2 valves per cylinder overhead camshaft

Compression ratio: 9.5:1

bore stroke: 73.5 mm (2.9 in) 73.5 mm (2.9 in)

Power: 38 PS (28 kW; 37 hp) @ 5500 +/-500rpm

[35]

Torque: 51 Nm (38 ftlbf) @ 3000 +/-500 rpm

Layout and Transmission

Rear wheel drive

4-speed manual transmission

Steering

mechanical rack and pinion w/o servo

Turning radius: 4 metres

[3]

Performance

Acceleration: 0-60 km/h (37 mph): 8 seconds

[3]

Maximum speed: 105 km/h (65 mph)

[3]

Fuel efficiency (overall): 25.2 kilometres per litre (4.24 litres per 100 kilometres (66.6 mpg-imp; 55.5 mpg-US))

Body and dimensions

Seat belt: 4

[36]

Trunk capacity: 150 L (5.3 cu ft)

[37]

Suspension, Tires & Brakes

Front brake: 180 mm drum

[3]

Rear brake: 180 mm drum

[3]

Front track: 1,325 mm (52.2 in)

[3]

Rear track: 1,315 mm (51.8 in)

[3]

Ground clearance: 180 mm (7.1 in)

[3]

Front suspension: McPherson strut with lower A arm

Rear suspension: Independent coil spring

12-inch wheels

[38]

Supplier

[39]

Part/system

[39]

Texspin

Clutch Bearings

Bosch

Oxygen sensor, Gasoline injection system (diesel will follow), starter, alternator, brake system

Continental AG

Gasoline fuel supply system, fuel level sensor

Caparo

Inner structural panels

HSI AUTO

Static sealing systems (Weather Strips)

Delphi

Instrument cluster

Rane Madras Limited

Steering Assembly

Denso

Windshield wiper system (single motor and arm)

FAG Kugelfischer

Rear-wheel bearing

Federal-Mogul

Pistons, Piston rings, Spark plugs, Gaskets, Systems protection

Ficosa

Rear-view mirrors, interior mirrors, manual and CVT shifters, washer system

Freudenberg

Engine sealing

GKN

Driveshafts

INA

Shifting elements

ITW Deltar

Outside and inside door handles

Johnson Controls

Seating

Mahle

Camshafts, spin-on oil filters, fuel filters and air cleaners

Saint-Gobain

Glass

TRW

Brake system

Ceekay Daikin/Valeo

Clutch sets

Vibracoustic

Engine mounts

Visteon

Air induction system

ZF Friedrichshafen Chassis components, including tie rods AG

Behr

HVAC for the luxury version

Drr

Lean Paint Shop

[edit]Alternative-energy

engines

While the Nano is driven by a gasoline-powered engine, several more-radical powerplants have been proposed but not put into production.

[edit]Compressed-air

engine

Tata Motors signed an agreement in 2007 with a French firm, Motor Development International, to produce a compressed air car Nano.[40]While the vehicle was supposed to be able to travel approximately 200 kilometres (120 mi) on US$3 of electricity to compress the air,[41]Tata's Vice President of Engineering Systems confirmed in late 2009 that vehicle range continues to be a problem.[40]

[edit]Diesel
A website has speculated that the Nano might be made available with a diesel engine.[42] Tata motors have not confirmed this but have stated, "As of now there is no Diesel variant of the Nano. The Nano is only available in a Petrol version."[43]

[edit]Electric

vehicle

Tata has discussed the possibility of producing an electric version, [44] and while it showcased an electric vehicle Nano at the 2010 Geneva Motor Show,[45] no such car is currently on the market. If an EV Nano is sold it is expected to be the "world's cheapest electric car",[46] use lithium-ion batteries, and have a range of 80 miles (130 km).[47] A Norwegian electric car specialist, Miljbil Grenland AS, has been named as a supposed partner in the project.[44]

[edit]Effects
The introduction of a cheap, mass market auto such as the Nano is bound to have some unforeseen effects.

[edit]Indian

used car market

The Nano is thought to have affected the used car market in India, as some Indians may opt to buy a Nano rather than a used vehicle. The new-car market is also being affected. New car sales of the Maruti 800, the second-cheapest car in India, dropped by 20% and used model sales dropped by 30% immediately before the Nano's introduction.[20]

[edit]Concerns
The cost cutting measures in the design, as well as the unproven fresh design caused some concerns.

Gradability (on an uphill drive): Since the car has a shorter wheel base, a tall boy design (elevated centre of gravity), and over and above all these, a rear-engine (for a less complex and hence cheaper transmission) concentrating the weight on the rear, caused a fear of safe gradability on an uphill drive. Tata addressed this specifically is the post launch ads.

Power (for highways): The 624cc engine raised concerns of inadequate power for a four passenger vehicle. Added to this was the maximum speed limit in a four speed transmission. This raised questions on the usability of the vehicle in highways and long rides. Thus the car gave an impression of an in-campus vehicle ruling out the possibility of a family car for the lower middle class India. This is a major issue addressed in Nano ads.

Safety (Fire): An engine housed under the rear seat with the radiator vent facing backward allowing only a lesser air intake, and hence lesser cooling, along with more plastic/polymer elements (part of the cost cutting as well as weight reducing measures) in the inner panels, caused safety concerns even before the launch. A few fire incidents involving the Nano were reported.[7] This led Tata to add safety devices to the vehicle although no recall was initiated, and according to Tata the car is safe. [7]

Safety (Impact): The body panels of the Nano are of low weight, aiming at a low overall weight to cope with the low power of the engine and a high mileage requirement in the market. This cause concerns of passenger safety during an impact/collission.

[edit]Reception
After several years of sales that have rarely met expectations, and generally have run at about 50% of potential, it is apparent that many of the claims made for the car were optimistic at best. Rather than buying the cheapest car available purchasers bought secondhand, or more expensive new cars.[48]

[edit]Awards

'Amul girl' in a topical ad about 'Tata Nano', Dadar, Mumbai, 2008

2010 Business Standard Motoring Indian car of the year[49] 2010 Bloomberg UTV-Autocar car of the year[50] 2010 Edison Awards, first place in the transportation category[51] 2010 Good Design Awards, in the category of transportation [52]

[edit]In

the media

Small Wonder: The Making of Nano is a book about the creation of the Tata Nano.[53] Tata Group launched a Tata Nano GoldPlus, a 24K Gold plated version of the Nano car to celebrate the 5000 years of Jewellery design in India.[54]

Turnaround A big U turn by the small car, Tata Nano

Suresh Nandi, DHNS

Small Wonder Soon after the monthly sales dropped to 500, a Tata crack team worked hard to turnaround the fortunes When the Tata Group Chairman Ratan Tata announced the very idea of Rs 1 lakh-car primarily for lower middle-class segment in 2003 -- a family of four ( papa, mum and two kids) whose mode of transportation was scooter a sort of an indulgence to upgrade from scooter to car, rivals in the industry just smiled, if not mocked at the idea. But Ratan Tata was serious of his intention and even spelt out that Tata Motors would conceive a small car which will be

cheap, affordable, fuel-efficient and above all sturdy to withstand the rigours of any mega city traffic. Undeterred by rival criticism, Tata pursued his dream -- needless to say of making affordable personal transportation available to millions. He didnt leave anything to chance to make the success of world's ultra-cheap car from India. Though production Nano had initial problems as Tata Motors was forced to shift the car plant from West Bengal to Gujarat, the company launched Nano, countrys smallest car, in March 2009. It was done through the booking route since it had only limited capacity and deliveries of the much-talked about small cars began in July 2009, as per a staggered calendar. Initial troubles As the intial booking response was huge, the company decided to initially sell the car only through booking list and free sales or open sales of Nano was introduced in a phased manner, to fine tune the marketing & sales infrastructure and the finance support. So, we began with one state in August, gradually adding three to four till December, by when we covered 12 states. In January 2011, we extended open sales to the rest of the country, a Tata Motors spokesperson said. But then, like any ambitious project that has its share of (teething) problems, Nano too had its share. As a few cars caught fire for unclear reasons, it dampened the excitement of prospective buyers -- albeit temporarily and led to an all-time low sale of 509 units in the month of November 2010. Another problem the company faced was booking related. The pay-first, drive-later booking model adopted by it attracted a bunch of customers for whom the car wasn't quite targeted for. Of the 2.06 lakh bookings the company got initially, a big chunk were urban buyers who were actually purchasing this as a second car. Many booked the car hoping to pocket a premium by selling the right. But as sales dipped, their initial excitement wore off and cancellation mounted. Also, the distribution strategy failed to bridge the last mile to the consumer segment that group chairman Ratan Tata built this car for. Lower income customers were apprehensive and hesitant to walk into large Tata Motors showrooms. Reaching out Not allowing the temporary setback to affect his enthusiasm, Ratan Tata (now 73) -- who will retire in about two years' time -- charted out the path with a renewed vigour. He forged a crack team from his trusted lieutenants at Tata Motors who reworked execution strategy and put in place a new and unconventional distribution system. All this helped Nano sales picking up fast and reach a peak of 10,000 units mark in April 2011. Sales started the upward journey from December 2010 (see chart). the Whats more, a 10-member crack team headed by R Ramakrishnan , VP (commercial-passenger cars), and Girish Wagh, vice-president & head (small car project), are now monitoring the Nano's progress, say top officials. The company adopted a two-prong strategy for the Nano revival plan. First, Tata Motors set up 210 'F Class showrooms', each only about 500 sq ft in size and stocking just one car in smaller towns, and hired 1,200 people to man them. Then, it tied up with value retailer Big Bazaar to gain traction among the 150

million footfalls the retailer gets every year. There is a Nano parked in every Big Bazaar outlet and the touch and feel experience has accelerated decision-making, especially in smaller towns, says Future Group Customer Strategy President Sandip Tarkas, who heads this initiative at Big Bazaar, which has 70 outlets in smaller cities and towns. This was in addition to the companys 619 odd regular sales outlets. Of course, Tata Motors spokesman said, this is a continuing initiative and will be deepened, as is required. Besides, the company is exploring appointing full-fledged dealerships, only for the Tata Nano, in small towns. The general approach of taking a vehicle closer to where the customer is a learning from the Tata Ace, which too since its launch has been made available through dedicated outlets, in addition to regular commercial vehicle showrooms. Now that Nano is on a growth path, the company expects first-time buyers to account for over 80 per cent of the sales of the small car in the coming months. However, Tata Motors' Vice President R Ramakrishnan points out that 80 per cent of the bookings during the first round were from buyers who already owned a vehicle, while the remaining 20 per cent were from first-time buyers. He recently said: The proportion is now shifting. Last month, over 50 per cent of our sales were reported from first-time buyers. We are expecting the numbers to increase by another 30 percentage points over the next few months. Loan facility To make the car buying easy the company made financing arrangements with about 29 public sector banks, private banks, non-banking finance companies, cooperative banks. Customers can avail of options up to 90 per cent at easy rates. Over and above that, its own captive finance arm, Tata Motors Finance, is clearing loan applications in just 48 hours to customers. Our teams are working with financiers at regional, state and even branch levels for smooth and effective functioning, the spokesman said. Thanks to these efforts sales of Nano have picked up in rural markets too. Even as Tata Motors' focus on tier-II cities is seen as a correct strategy as they are natural markets for the Nano, says Abheek Singhi, partner & director of The Boston Consulting Group, yet he feels: .but I think the vehicle would have to be more rugged for the rural market where the roads are bad and users are not well versed with good upkeeping of a car . New assurance To boost consumer confidence -- especially after some Nanos catching fire on roads -- Tata Motors had announced various schemes, including offering a free four-year/60,000-km extended warranty and a comprehensive maintenance contract for new buyers at Rs 99 a month. Volumes for the compact car have picked up since then. In sync with its avowed goal of converting scooters and mobike owners to upgrade in favour of Nano, the company has come out with Mega loan cum exchange mela for existing two-wheeler owners. ...we are moving in the direction we had initially targeted.

Over one million 2-wheelers are sold in the country every month. We expect bike buyers to account for a rise in Nano sales, Ramakrishnan said. Besides, depending upon the relevance of a scheme in a particular geography, we have schemes for exchanging a two-wheeler or a car. Other schemes have included a Tanishq gift voucher for Rs 5,000 for a woman buyer, an anniversary offer an accessory package (in January marking the unveiling of the Tata Nano in January 2008), free insurance (ran in March). Industry sales Even as the Nano registered its best sales ever in April, in macro terms the automotive industry itself saw a sharp deceleration. Industry sales in April grew only 13 per cent, after a 30 per cent growth recorded in FY11, as per the data released by Society of Indian Automobile Manufacturers (SIAM). However, smaller cars did much better than the more expensive and larger cars which grew much slower than the smaller ones. Though the Nano bucked this trend, but it is still ranked only 14th in the bestsellers list, way behind the Maruti Suzuki Alto, Swift, Wagon R and even bigger cars like the Dzire. In that sense, Nano still has a long and difficult terrain ahead to steer. Moreover, it will still have to work hard to maintain the an image that its is as safe as any other car in the country.

Tata Nano: The turnaround vehicle?

The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM Indias Leading B-School Lakhs of lower-middle income households in the country will now be able to fulfill one of their longstanding wishes, that of owning a car Tata Motors earned international acclaim in 2003 with the announcement that it will introduce a Peoples Car to be priced at about Rs.1 lakh ($2,000). Though this idea was scoffed at initially stating the impracticability of the same, after years of efforts and dedication by the company, Nano was successfully unveiled in January 2008, silencing the critics. The company then went on to create more headlines in mid-2008 when it acquired the premium auto brand, Jaguar-Land Rover (JLR). However, since then, fortunes have taken a virtual U-turn for Tata Motors as the global sub-prime crisis multiplied manifold, leading to the crumbling of global financial systems, sending global economies into a downward tailspin and pushing them into recession. This put considerable strain on the companys financials, which now faced a double whammy owing to the near collapse of the global demand for JLR products and the considerable evaporation of domestic automobile demand owing to the economic slowdown. Now lots of hope is being pinned on Nano and its role in resurrecting the dwindled fortunes of one of the largest domestic automobile players in India. So, can the small car achieve the big feat of reviving Tata Motors growth? Probably, this possibility is being raised considering the history that Tata Indica had an important role to play in contributing to the fortunes of Tata Motors. However, it seems highly improbable that the Nano will be able to achieve this feat. Consider the following:

 JLR is expected to contribute over 50% of Tata Motors net revenues over the next couple of years, with the balance coming from domestic commercial vehicle and passenger vehicle sales. The expected sales volume of the Nano and its price tag suggests that at best, it would contribute 2-2.5% to the consolidated topline of Tata Motors by financial year 2012. The contribution in terms of net profit from Nano is expected to be negligible considering the expected ex-factory cost of the car and the margins earned on it. The problems Tata Motors is currently facing largely pertain to the debt on its books and the slackened demand for JLR products globally. Thus, we believe that for the fortunes of the company to turnaround partially, the US and the European economies have to gain strength as the fate of JLR hinges on the consumer spending in these economies. Secondly, the domestic demand for CVs must also revive to support Tata Motors growth. Debt servicing and debt repayment over the next 2-3 years will also have an important role to play in improving the fundamentals of the company. To conclude, while the Nano has managed to garner headlines for Tata Motors, we do not believe it will be able to repeat history any time soon for financial reasons. However, the company deserves huge credit for ensuring that the dream, and undeniably the most ambitious project of Mr. Ratan Tata, comes true. Also, with this achievement, Tata Motors has ensured that lakhs of lower-middle income households in the country will now be able to fulfill one of their long-standing wishes, that of owning a car.

Tim Connolly, CEO of Emerge, stated, "We are proud of the early results achieved by the Nexus Nano team, including new COO Mel Roseman and CFO Chris Mathers. While the turnaround to profitability is not complete, this performance level is a significant milestone for Nexus to achieve and we are proud of their hard work." About Emerge Capital Corp. and Corporate Strategies Inc. -- Emerge Capital Corp. provides business growth, organizational restructuring, and turnaround execution services for emerging and re-emerging public companies through our wholly owned subsidiary, Corporate Strategies Inc. (www.corporate-strategies.net). Emerge Capital is unique because we accept payment for our services in the common stock of the companies we serve, aligning our interests with those of the client's shareholders and preserving their corporate cash reserves for working capital and growth. As Emerge Capital succeeds, the shareholders of our valued clients succeed. Emerge Capital believes our approach provides Emerge shareholders with an opportunity to realize greater gains than merely receiving cash payments for our services. We consider Emerge Capital to be the ultimate business resource for emerging and re-emerging public companies. All statements included in this press release, other than statements of historical fact, are forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors could cause actual results to differ materially from the expectations that are disclosed in this press release. While Emerge Capital Corp./Corporate Strategies Inc. believes its forecasting assumptions are reasonable, there are factors that are hard to predict and influenced by economic and other conditions that

are beyond Emerge Capital Corp./Corporate Strategies Inc.'s control. Among the other important factors which could cause actual results to differ materially from those in the forwardlooking statements are detailed in Emerge Capital Corp./Corporate Strategies Inc.'s filings with the Securities and Exchange Commission.