TATA MOTORS

(Technology Strategy ,Innovation & Growth)

“A name that no need any Introduction”

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 Prepared by
Name Roll No
Gaurang Kamat 40
Yogesh Kamat 42
Aditya Pimple 74
Siddharth Prabhu 76
Pratik Thaker 106

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TATA Motors: Commercial Vehicles

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 About the Company
• Tata Motors Limited, formerly known as TELCO (TATA Engineering &

Locomotive Co.)

• Established in 1945 in Mumbai, India

• Chairman – Mr. Ratan Tata

• Began manufacturing locomotives

• First commercial vehicle in 1954 in a collaboration with Daimler- Benz AG

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 Company Profile
• Headquarters - Mumbai.

• TML is currently headed by Ratan Tata.

• Tata Motors manufactures HCV, LCV,

Passenger cars, MUV and Military Vehicles.

• Global operations - UK, South Korea, Thailand
and Spain.
• TML
– world's fourth largest truck manufacturer.

– World’s second largest bus manufacturer.

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 Products
TATA
Motors

Military
Vehicles

Passenger Commercial
Vehicles Vehicles

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 Tata Commercial Vehicles
• High Technology & Expertise

• High Engine Power Vehicles

• Launched 11 New Products (2008 -09 )

• Wide array of commercial vehicles

• Trucks & Tractors
• Light Commercial Vehicles
• Luxury buses & Compact City Buses

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 Tata Military Vehicles

• Specialization in Military Defense Transport Solution

• Introducing new trucks for military defense purpose

• Large Investments in R & D ,to meet international standards

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 Tata Passenger Vehicles
• Tata Motors entered the passenger vehicle market in 1992.
• In 1998 Tata launched the Indica, the first fully passenger car.
• TATA Motors developed :
• Mid-sized sedan Cars (Tata Indica, Tata Indigo)
• Mid-sized SUV Cars (Tata Safari)
• Tata Motors has Launched Various Version of Passenger Cars.
• The first company ever to launch One Lakh Rupee Car, the Tata Nano.
• It is the least expensive production car in the world.

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 Market Share

1.5 5.5
6.8
Maruti Suzuki
18.3 45.7 Tata Motors
Hyundai Motors

Ta
Honda Motors
ta
22.2 Toyota
Others

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Specific market share

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Company Performance in International
Business
Export Sales Volume
 Turnover
• Gross profit in the year 2008 was 1,660.9 million and
increased to 1,910.1 million in the year 2009

• Earnings after taxes also increased significantly between 2008

and 2009 increasing from 436.6 million to 505.5 million in
2009

• After a large drop in revenues from 2004 to 2005 when the

company first went public on the NYSE it has been increasing
revenues greatly annually, from 5,422.0 million in 2007 to
7,954.0 in 2009

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 Financials
• Capital 57060 lakhs
• Reserves & Surplus 1439487 lakhs
• Borrowings 1662591 lakhs
• Profit after tax 224008 lakhs
• EPS 42.37

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 Leveraging The Resources
• How did TATA create initial resource complement to overcome the
disadvantage of being newcomers in passenger car business?

• STRATEGY • INSTITUTIONS

• Government
• R&D
• Strategic support
partnerships
• Joint (10Year
• New institutions for
Plan)
• Intensive
trade promotion,
ventures technology up-
• managemen
Acquisitions gradation, quality
enhancement (ACMA:
Automotive Component
t Manufacturers
developmen Association, SIAM:
Society of Indian
t Automobile
Manufacturers )
 Corporate Advantages from Diversified Business
 Sharing of Activities/Resource

Tata Tata Tata

TCS
Steel Motor Cummins

 Sharing of Skills/Core Competence

Tata
Tata
Steel Cummins

Core
Competence

TAML TACO
Key People

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 Global Presence
OTHER COLLABORATIONS/M&A & JVs
• Tata Daewoo Commercial Vehicle West Europe Russia*
• Hispano in Spain & Marcopolo In Brazil U.K. Ukraine*
• JV with Jardine Matheson for Italy
ConcordeMotors Central Asia
• Technology Tie Ups at Spain,Italy Afghanistan East Asia
Uzbekistan China
North Africa South Korea*
Egypt
South Asia
West Africa Bangladesh *
Senegal Nepal, Sri Lanka

LATAM
South East Asia
Brazil West Asia Malaysia*
Saudi Arabia Thailand
Iraq, Iran
South Africa East Africa
South Africa* Kenya*

* Assembly Operations also

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 Merger & Acquistion
Tata Motors has been aggressively acquiring foreign brands to
increase its global presence.
2004 - Bought Daewoo's truck manufacturing unit
Now known as Tata Daewoo Commercial Vehicle, in South Korea.

2005 - Acquired a 21% stake in Hispano Carrocera, Spain.

2006 – JV with Fiat to manufacture Passenger Cars and Engines

2008 - Purchased Jaguar Cars and Land Rover from Ford Motor for
$2.3bn
2008 - Acquired rights from Ford, to three other brand names:
Daimler, Lanchester and Rover

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 SWOT
STRENGHTS
Market Leader – Commercial Vehicles
Strong Monetary Base of Tata Group
Top Level Management

WEAKNESS
No foothold – Luxury Segment
Branding – Mainly in Commercial Vehicle
OPPROTUNITIES
Explore Exports
International Market
Low Cost Manufacturing & Development Capability

THREATS
Existing players in the International Market
Competition from Foreign Companies in India - Volvo
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 Milestones
• Indica - India’s first fully indigenous passenger car.

• Sierra - India’s first sports utility vehicle launched in 1992.

• Tata Motors acquires Daewoo Commercial Vehicle Company
in 2004.
• Tata Motors gets listed on the NYSE in 2004.
• Acquisition of Jaguar and Land Rover in 2008.

• Tata Motors launches ‘Nano’ - The People's Car in 2009.

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 Awards
• India's Most Trusted Car Brand.

• 'Golden Peacock Environment Management Award' in 2003.

• Forbes Global 2000 list for the year 2005 - Tata Motors ranked at
1215.
• Tata Motors bagged the prestigious 'CII-EXIM Bank Award' for
business excellence in 2005.
• Tata Motors bagged National Award for Excellence in Cost
Management in 2006.
• Tata Motors - Investor Relations, ranked first in India in 2008
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 Tata Nano
The Dream Project of Mr. Ratan Tata

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Origin of nano…..

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 IDEA GENERATION
“ I saw families riding around on scooters with
kids standing up and the mother carrying a
baby and sitting pillion and decided to do
something about it. It started as a quest for
an affordable transportation solution”
- RATAN TATA

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 the applause..
“ This is a fantastic effort”
- Dr. Norbert Reithofer, Chairman, BMW

“ This is a spacious car,

Not really a small car”
- Tadashi Arashima, President & CEO, Toyota
Motors, Europe NV/SA
“ This is really fantastic. This is
what we should try and achieve”
- Carlos Ghosn, CEO- Renault- Nissan

“ This is a benchmark kind of model.

You Indians always make us think”
“ We like this car” - Rick Wagoner, CEO- General Motors

- Jean Todt, CEO- Ferrari

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The gap…..

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 Specifications of Tata Nano.
• The Standard Variant of the Car has a dealer price of rupees one lakh (US
$2500) and is the cheapest car in the world. (Transport costs and Value-
Added Taxes exclusive)
• A four-door car that can seat four-five passengers.
• It conforms to all the emission standards as well as the Offset and Side
Crash norms followed internationally.
• It is also compliant with the Bharat 3 norm and the Euro 4 norm with
respect to keeping pollution at bay.
• A 33-bhp car with a 624 cc engine.
• It will provide a mileage of 23 km/litre.
• The Nano Car has two variants - a Standard and two Deluxe (Air
Conditioned) versions.
• There is no power steering in the car.

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design…..

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 “THE GAME CHANGER”
• Chairman of the Tata Group and Tata Motors, who has described it as an eco-
friendly "people's car".

• The introduction of the Nano received media attention due to its targeted low
price.

• The car is expected to boost the Indian economy, create entrepreneurial-

opportunities across India as well as expand the Indian car market by 65%

• Nano has been greatly appreciated by many sources and the media for its low-cost
and eco-friendly initiatives which include
1) Using compressed-air as fuel
2) An electric-version (E-Nano).

• Tata Group is expected to mass-manufacture the Nano, particularly the electric-

version, and besides selling them in India, to also export them worldwide

• If ever there were a symbol of India’s ambitions to become a modern nation, it

would surely be the Nano, the tiny car with the even tinier price-tag
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 What makes it so cheap !

• The Tata Nano uses plastics and adhesives rather

than welding.
• Introducing the car with an artificially low price
through govt-subsidies and tax-breaks, or using
vertical-integration, or
• partially using inexpensive polymers or
biodegradable plastics instead of a full metal-body.
• It has no AC, no power steering, no power windows,
no power bells and whistles.

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 Roadblocks Faced

• Singur issue
• Rise in raw material prices
• Traffic congestion
• Pollution
• Competitors
• Net earnings reduced
• In 2010 , 2 Tata Nano cars caught fire.

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 Strategies
International strategy based on the competitive advantage
:

●
New product (Eg: Tata Nano, the cheapest car in the World).
●
Acquisitions (Eg: Land Rover and Jaguar brands from Ford Motors)
●
Partnership with established companies (Eg: Alliance with Fiat since 2006) to enhance the product portfolio and knowledge exchange
●
Facilities for learning from other companies.
●
Developing programmes for intensive management development.

Consolidate position in India by exploiting opportunities :

●
New mobility of young Indians.
●
Government’s substantial road-building program
●
GDP growth

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 Core Competency
Active, competitive, and dynamic in all aspects of the automotive industry

●
This helps them manufacture their products at lower costs, sell them to emerging markets while making profits as well as take
advantage of the strong labor base in India.

Always evolving by making continuous improvements in technology through research

and development

Producing most efficient and low cost vehicles on the market

Acquisitions, mergers, and expansion

Located in the India has allowed them to understand not only the Indian market but
also the dynamics of emerging and developing markets

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 Company v/s Competitors

Commercial Vehicles

Passenger Vehicle

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 Strategic Alliance
• Introduction of New Versions

• Modifications in Older Vehicles. (Sumo)

• Introduction of Cost Effective Cars ( Nano)

• Tapping the Rural Market

• Tata Motor Finance

• Tie up with various State Government for providing Tata Buses for public services.

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THE “TATA MOTORS AND JLR”
AQUISITION

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 Objective of Acquisition

Tata Motors’ To establish its presence in the high-

●

end premier segment of the global

objective automobile market

Ford Motor To shore up own core business with

●

the help of shutting down

s’ objective:- unprofitable operations

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 Funding of JLR Acquisition
• Tata Motors needed to refinance $3 billion of the JLR acquisition
bridge loan by June ’09

• Company raised $1.1 bn through issue of equity shares but it still

leaved $1.9 bn raised via a combination of
– foreign equity issuance ($500 million),
– sale of stakes in subsidiaries ($670 million)
– raising of working capital facilities at JLR ($700 million)

• Funding of future growth

– TMFL (subsidiary of Tata Motors)
– Tata Capital ( financial services company formed by Tata Group also
engaged in Vehicle financing

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Sales

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 Recent Development
• Global Leader/presence both in means of Quality and Quantity

• Security & procurement of raw materials

• Entering the new markets

• Eliminating the RED color from balance sheet

• Struggle to digest the big ticket global acquisitions

• Leadership crisis within the company

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 Future Plans
• Major Future Plans

1. Capitalize on Tata Nano - Fast Delivery

2. Launch New Commercial Vehicles
3. Tie up with more State Govts. for Efficient & Safe City Buses at low cost
4. Launch of Jaguar & Land rover Vehicles in India
5. Bridge the outstanding loans
6. Focus on Cost Reduction
7. Expand Network

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 Future Challenges
• Tata Motors relies heavily on its sales in India

• Tata Motors now faces stiff competition from fellow compatriots like
Mahindra, Maruti as well as multinational brands like Toyota and Chevrolet

• It has faced controversy over developing the ‘Nano’

• Ashok Leyland, Tata's biggest competitor in the Indian heavy commercial

vehicle market
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Th a n k Yo u

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