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Indian Automobile Industry:

TATA Motors

Submitted By:
Vikram Singh
Marketing Operations
Presentation Flow
• Indian Automobile Industry:
– Overview
– PEST Analysis
– Porter’s 5F Analysis
• Tata Motors
– History
– Product
– Financials
– SWOT
Indian Automobile
Industry
• Growing at the rate of 15-27 per cent over the past five
years.
• 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.
Commercial Vehicles
Key facts

• Currently going through demand correction.

• Grew at 25% in 2001-2007 as compared to 5% in FY


2008.
• Split between LCV and M/HCV.

• Dupolistic in nature
– LCV:
• M&M and TATA’s own majority marketshare.(90.8%)

– M/HCV
• Ashok Leyland and TATA’s hold 88.6% of market.
Key Success factors

• Ability to enhance and vary product mix.

• Sales and Distribution service network.

• Access to new technologies.

• Balance between outsourcing and in-house


productions.
• Government regulations.
Concerns

• Higher steel prices.

• Slowdown in Indian economy.

• Rise of railways in freight transports.

• Polluting vehicles.
Passenger Vehicle Industry
Market Segments
Key Facts

• Grew 14% YoY to 1,762,131 as against1,545.223 units


in 2007-08.
• Passenger car contributed 80% of passenger vehicles
sold.
• Domestic sales grew to 12% YoY.

• Last five years CAGR of 19.5%.

• Share of exports is 12.3%.

• Fragmented market with around 14 players.


Structure of Indian PV
Market
Key Success Factors

• Presence across segments.

• Efficient Operations.

• Wide dealer network and availability of finance.

• Access to latest technologies.

• Varied new offerings.

• Exports.

• Favorable Budget.

• Increase in affordability.
Concerns

• Increasing raw material cost.

• High competition.

• Roads and Infrastructure.


PEST ANALYSIS
Political-Legal Factors

• Auto Policies(AMP).

• Government regulations and support.

• 100% FDI allowed.

• Import Duties reduced.

• Budget 2008.

• Recent announcement to buy vehicles.


Economic Factors

• GDP growth of 5.1%.

• Inflation down to 2.6%.

• Fuel prices at Rs. 44.

• Economy less affected to recession as


compared to other nations.
• Nano effect.
Social Factors

• Growth in urbanization.

• Lower ownership costs.

• Rising incomes of middle class.

• Cars now more for convenience than status


symbol.
• Increasing rural consumers income.
Technical Factors

• Rising world class auto-component industry.

• MNC’s bringing advanced technology with


them.
• Acquisition of foreign firms helping to gain
technology.
• Increased government involvement in
technology development.
Porter’s 5F Analysis
Bargaining Power of
Suppliers
• Supplier concentration.

• Importance of volume to supplier.

• Differentiation of inputs.

• Impact of inputs on cost or differentiation.

• Switching costs of firms in the industry.

• Threat of forward integration.


Bargaining Power of
Customers
• Brand identity.

• Price sensitivity.

• Product differentiation.

• Substitutes available.

• Contribution to Cost.

• High service demand.


Threat of Substitutes
• Many models available in similar price
range.
• Little product differentiation.
• High marketing exposure.
• Availability of Close substitutes.
Threat of Competition
• Industry concentration.
• Similar product offerings.
• High brand following.
• Diversity of rivals.
• Proprietary products.
TATA Motors
History
• Started in 1945 in Mumbai, • The family founded:
India.
– Ironworks
• Original production was on
– Steelworks
locomotives.
– cotton mills
• 1954
– First car rolled off of the – hydroelectric-power plants
assembly line.
• Are of their endeavors have
• Tata’s are a family of Indian
been proved to be crucial
industrialists and
philanthropists. to India's industrial
development.
History
• Tata Motors is India’s • Together both companies
owns the largest started their commercial
independent company in vehicle operations in
India. 1960.
• Mercedes and Tata • In 1986 the company
teamed up to create a created and sold the first
truck line. LCV
– First major business deal – LCV = light commercial
with another firm. vehicle
– Was the Tata 407
History

• Tata Motors decided to • Began creating new lines


pursue joint ventures. in the late 1990’s and
– Cummins Engine Co., early 2000’s:
Inc., was the first company – Compressed natural gas
to jointly venture with Tata buses
in 1993.
– 1109 vehicle, used for
– Manufactured a diesel commercial purposes.
engine that had high
– Ex-series
horsepower and emitted
– Newly designed LCV
less harmful chemicals.
called the 207 DI
Products
• Utility Vehicles
• Passenger Cars
– Safari DICOR
– Indica Vista – Sumo Grande
– Indica V2 – Sumo
• Commercial Passenger Carriers
– Indica V2 Turbo
– Buses
– Indica V2 Xeta – Winger
– Magic
– Indica V2 DICOR
– Trucks
– Indigo XL Medium & heavy Commercial vehicles
LCV’s
– Indigo Ace
TATA Novus
– Indigo Marina Defense Vehicles

– Indigo CS
Growth and Expansion

• Large Indian market


– Familiar with market

– Brand loyalty

• Fuel efficiency

• JLR buyout $3.5 Bn.

• New Models.

• Launch of Nano.
MARKETSHARE
Tata Motors: Finances
• Revenue as on 31st Dec 08
– Rs. 47136.30 crores
• PAT: Rs. -2632.60 crores
• Assets as on 31st March: Rs. 261182.60
crores
• Total Debt/Networth March 08: 0.80
Tata motors: SWOT
Strengths Weaknesses
• Well-known brand with good • Low level of infrastructures
reputation • Lack of experience in certain new
•Planned and smart international sectors.
strategy
•Smart approach in responding to the
market demand.
•Alliances with key players
•Fast product development ability
Opportunities Threats
•New long-awaited product (Nano) • Downturn of the world economy
• Government support • High level of competition
• Emerging markets high demand for • Sustainability and environmentalism
passengers cars at low costs. • Oil rising prices
Thank You

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