Transcript
MANAGEMENT INFORMATION SYSTEMSBatch 2011-13 Academic Year 2011-12 Term Third Program
PGDMPGDM(FS)PGDM(R)
Last Date for submission of project Section A amp B Section C amp D9th April 2012 10th April
2012
Submission of Research ProposalReportProjectAssignment
Group NumberGroup Head Name DEVASHEESH KHAREMobile No9044509077ProjectAssignmentCase TopicComparative analysis of two companies (TATA Motors and Hyundai Motors) of the automobile sector from the perspective of Marketing Finance Human Resource and Information Technology
Section BS No Roll No (in ascending order) Name (in capital letters)
1 JIML_11_050 DEFNI PRASAD
2 JIML_11_051 DEVASHEESH KHARE
3 JIML_11_FS-015 ARMINDER KAUR
Submitted to
Dr Ankit Mehrotra
ACKNOWLEDGEMENT
With a sense of gratitude and respect we would like to extend our heartiest
thanks to all of those who provided help and guidance to make this project
No Project is ever the outcome of single individualrsquos talent or effort This
work is no exception This project would not have been possible without the
whole hearted encouragement support and co-operation of our guide
friends and well-wishers Although it is not possible for us to name and
thank them all individually we must make special mention of some of the
personalities and acknowledge our sincere thanks to them
The successful completion of this project rests on the shoulder of many
persons who have helped us directly or indirectly We wish to take this
opportunity to express to all those without whose help completion of this
project would have been difficult We are indebted and thankful to all the
individuals who have guided advised inspired and supported us in making
this project a success
Our gratitude to our honorable guide ProfAnkit Mehrotra for giving us the
opportunity for developing the project and her able guidance motivation and
constant encouragement throughout our project Without her help this
project would never have been realized in its entirety
TATA MOTORSIntroduction
Tata Motors Limited is an Indian multinational automotive corporation
headquartered in Mumbai India It is the eighteenth largest motor
vehicle manufacturing company in the world by volume Part of the Tata
Group it was formerly known as TELCO (TATA Engineering and
Locomotive Company) Its products include passenger cars trucks vans and
coaches
Tata Motors is South Asiarsquos largest automobile company it is the leader
in commercial vehicles and among the top three in passenger vehicles
Worldwide it is the worlds fourth-largest truck manufacturer and second-
largest bus manufacturer It has auto manufacturing and assembly plants
in JamshedpurPantnagar Lucknow Sanand Dharwad and Pune India as
well as in Argentina South Africa Thailand and the United Kingdom Tata
Motors has produced and sold over 65 million vehicles in India since 1954
Originally a manufacturer of locomotives the company manufactured its
first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG
which ended in 1969 In 2010 Tata Motors surpassed Reliance to win the
coveted title of Indias most valuable brand in an annual survey conducted
by Brand Finance and The
Economic Times
HYUNDAI MOTORS
Introduction
Hyundai Motor India Limited (HMIL) is the largest passenger car
exporter and the second largest car manufacturer in India
HMIL presently markets 8 models of passenger cars across
segments The A2 segment includes the EON Santro i10 and the
i20 the A3 segment includes the Accent and the Verna the A5
segment includes the Sonata Transform and the SUV segment
includes the Santa Fe HMIL has set up a modern multi-million
dollar research and development facility in the cyber city of
Hyderabad It aims to become a centre of excellence for
automobile engineering and ensure quick turnaround time to
changing consumer needs It has done this to provide the Indian
customers with cutting-edge global technology
HMIL is the first automotive company in India to achieve the
export of 10 lakh cars in just over a decade It has been the number
one exporter of passenger car of the country for the sixth year in a
row
Analysis of both the companies
from MARKETING perspective
After more than
two years Tata
Motors has
dislodged Korearsquos
Hyundai Motors
in India from the second spot in monthly domestic passenger vehicle sales
The spurt in Tatarsquos June numbers has primarily been due to a dramatic
increase in sales of the Nano as well as a surge in that of the Indigo Tata
Motors Ltd main is a corporation spread throughout the world but the
headquarters is located in Mumbai India So the marketing strategies of Tata
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
With a sense of gratitude and respect we would like to extend our heartiest
thanks to all of those who provided help and guidance to make this project
No Project is ever the outcome of single individualrsquos talent or effort This
work is no exception This project would not have been possible without the
whole hearted encouragement support and co-operation of our guide
friends and well-wishers Although it is not possible for us to name and
thank them all individually we must make special mention of some of the
personalities and acknowledge our sincere thanks to them
The successful completion of this project rests on the shoulder of many
persons who have helped us directly or indirectly We wish to take this
opportunity to express to all those without whose help completion of this
project would have been difficult We are indebted and thankful to all the
individuals who have guided advised inspired and supported us in making
this project a success
Our gratitude to our honorable guide ProfAnkit Mehrotra for giving us the
opportunity for developing the project and her able guidance motivation and
constant encouragement throughout our project Without her help this
project would never have been realized in its entirety
TATA MOTORSIntroduction
Tata Motors Limited is an Indian multinational automotive corporation
headquartered in Mumbai India It is the eighteenth largest motor
vehicle manufacturing company in the world by volume Part of the Tata
Group it was formerly known as TELCO (TATA Engineering and
Locomotive Company) Its products include passenger cars trucks vans and
coaches
Tata Motors is South Asiarsquos largest automobile company it is the leader
in commercial vehicles and among the top three in passenger vehicles
Worldwide it is the worlds fourth-largest truck manufacturer and second-
largest bus manufacturer It has auto manufacturing and assembly plants
in JamshedpurPantnagar Lucknow Sanand Dharwad and Pune India as
well as in Argentina South Africa Thailand and the United Kingdom Tata
Motors has produced and sold over 65 million vehicles in India since 1954
Originally a manufacturer of locomotives the company manufactured its
first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG
which ended in 1969 In 2010 Tata Motors surpassed Reliance to win the
coveted title of Indias most valuable brand in an annual survey conducted
by Brand Finance and The
Economic Times
HYUNDAI MOTORS
Introduction
Hyundai Motor India Limited (HMIL) is the largest passenger car
exporter and the second largest car manufacturer in India
HMIL presently markets 8 models of passenger cars across
segments The A2 segment includes the EON Santro i10 and the
i20 the A3 segment includes the Accent and the Verna the A5
segment includes the Sonata Transform and the SUV segment
includes the Santa Fe HMIL has set up a modern multi-million
dollar research and development facility in the cyber city of
Hyderabad It aims to become a centre of excellence for
automobile engineering and ensure quick turnaround time to
changing consumer needs It has done this to provide the Indian
customers with cutting-edge global technology
HMIL is the first automotive company in India to achieve the
export of 10 lakh cars in just over a decade It has been the number
one exporter of passenger car of the country for the sixth year in a
row
Analysis of both the companies
from MARKETING perspective
After more than
two years Tata
Motors has
dislodged Korearsquos
Hyundai Motors
in India from the second spot in monthly domestic passenger vehicle sales
The spurt in Tatarsquos June numbers has primarily been due to a dramatic
increase in sales of the Nano as well as a surge in that of the Indigo Tata
Motors Ltd main is a corporation spread throughout the world but the
headquarters is located in Mumbai India So the marketing strategies of Tata
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
TATA MOTORSIntroduction
Tata Motors Limited is an Indian multinational automotive corporation
headquartered in Mumbai India It is the eighteenth largest motor
vehicle manufacturing company in the world by volume Part of the Tata
Group it was formerly known as TELCO (TATA Engineering and
Locomotive Company) Its products include passenger cars trucks vans and
coaches
Tata Motors is South Asiarsquos largest automobile company it is the leader
in commercial vehicles and among the top three in passenger vehicles
Worldwide it is the worlds fourth-largest truck manufacturer and second-
largest bus manufacturer It has auto manufacturing and assembly plants
in JamshedpurPantnagar Lucknow Sanand Dharwad and Pune India as
well as in Argentina South Africa Thailand and the United Kingdom Tata
Motors has produced and sold over 65 million vehicles in India since 1954
Originally a manufacturer of locomotives the company manufactured its
first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG
which ended in 1969 In 2010 Tata Motors surpassed Reliance to win the
coveted title of Indias most valuable brand in an annual survey conducted
by Brand Finance and The
Economic Times
HYUNDAI MOTORS
Introduction
Hyundai Motor India Limited (HMIL) is the largest passenger car
exporter and the second largest car manufacturer in India
HMIL presently markets 8 models of passenger cars across
segments The A2 segment includes the EON Santro i10 and the
i20 the A3 segment includes the Accent and the Verna the A5
segment includes the Sonata Transform and the SUV segment
includes the Santa Fe HMIL has set up a modern multi-million
dollar research and development facility in the cyber city of
Hyderabad It aims to become a centre of excellence for
automobile engineering and ensure quick turnaround time to
changing consumer needs It has done this to provide the Indian
customers with cutting-edge global technology
HMIL is the first automotive company in India to achieve the
export of 10 lakh cars in just over a decade It has been the number
one exporter of passenger car of the country for the sixth year in a
row
Analysis of both the companies
from MARKETING perspective
After more than
two years Tata
Motors has
dislodged Korearsquos
Hyundai Motors
in India from the second spot in monthly domestic passenger vehicle sales
The spurt in Tatarsquos June numbers has primarily been due to a dramatic
increase in sales of the Nano as well as a surge in that of the Indigo Tata
Motors Ltd main is a corporation spread throughout the world but the
headquarters is located in Mumbai India So the marketing strategies of Tata
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
HYUNDAI MOTORS
Introduction
Hyundai Motor India Limited (HMIL) is the largest passenger car
exporter and the second largest car manufacturer in India
HMIL presently markets 8 models of passenger cars across
segments The A2 segment includes the EON Santro i10 and the
i20 the A3 segment includes the Accent and the Verna the A5
segment includes the Sonata Transform and the SUV segment
includes the Santa Fe HMIL has set up a modern multi-million
dollar research and development facility in the cyber city of
Hyderabad It aims to become a centre of excellence for
automobile engineering and ensure quick turnaround time to
changing consumer needs It has done this to provide the Indian
customers with cutting-edge global technology
HMIL is the first automotive company in India to achieve the
export of 10 lakh cars in just over a decade It has been the number
one exporter of passenger car of the country for the sixth year in a
row
Analysis of both the companies
from MARKETING perspective
After more than
two years Tata
Motors has
dislodged Korearsquos
Hyundai Motors
in India from the second spot in monthly domestic passenger vehicle sales
The spurt in Tatarsquos June numbers has primarily been due to a dramatic
increase in sales of the Nano as well as a surge in that of the Indigo Tata
Motors Ltd main is a corporation spread throughout the world but the
headquarters is located in Mumbai India So the marketing strategies of Tata
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Analysis of both the companies
from MARKETING perspective
After more than
two years Tata
Motors has
dislodged Korearsquos
Hyundai Motors
in India from the second spot in monthly domestic passenger vehicle sales
The spurt in Tatarsquos June numbers has primarily been due to a dramatic
increase in sales of the Nano as well as a surge in that of the Indigo Tata
Motors Ltd main is a corporation spread throughout the world but the
headquarters is located in Mumbai India So the marketing strategies of Tata
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Motors can be quite a task for their marketing firm This company was
founded in 1945 so Tata Motors already has a well established brand and
reportedly grossed revenue of 2145 billon dollars in 2009 Needless to say
money is not an issue for their marketing campaigns
Jaguar Land Rover TDCV and Hispano Carrocera are all owned and
operated as subsidiary brands of Tata Motors This means they market to not
only the sports car and upper class society but also the blue collar society
Currently Tata Motors has now gotten into the eco-friendly market by
designing the worldrsquos first prototype of a compressed air car The
ldquoOneCATrdquo as they call it has air tanks which can be filled in four hours but
there are plans to speed up the fueling process to a reported three minutes
SALES AND MARKET SHARES
The overall Tata Motors Group sales at 1080994 vehicles crossed the 1
million mark in 2010-11 higher by 242 compared to the previous year
Global sales of all commercial vehicles were at 512731 units while
global sales of all passenger vehicles were at 568263 units
The Company recorded sale of 778540 vehicles in 2010-11 a growth of
228 over the previous year in the Indian domestic market representing
a 243 market share in the Indian industry It exported 58089
vehicles from India a growth of 703 over the previous year
The Company increased its commercial vehicle sales in the Indian market
to an all time high of 458828 vehicles in 2010-11 representing a
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
market share of 618 A strong product portfolio improved reach and
penetration in the market and focus on customer oriented initiatives
including fi nance enablement ensured a 227 growth in commercial
vehicle sales Some of the key highlights were
- The Company crossed the 4 million cumulative vehicle sales mark for
its commercial vehicles
- Sale of MampHCVs grew by 267 to 196651 vehicles representing a
market share of 601 The Company continued to focus on customer
centric initiatives improved the sales of the Prima and launched
product variants to strengthen its product offerings The Company
introduced its CNG Hybrid city bus range and showcased it at the
Commonwealth Games in Delhi
- Sale of LCVs grew by 199 to 262177 vehicles representing a market
share of 632 The new products launched such as the Ace EX Super Ace
and 407 Pickup helped increase the sales With competition entering the
small commercial vehicles segment the market share in the segment was
lower as against last year
The Companys sales of passenger vehicles in the Indian market
(inclusive of Tata Fiat and Jaguar Land Rover brands) were at its
highest ever at 319712 vehicles representing a market share of 130
in 2010-11 The competition in the passenger car market continued to
increase with more international Automobile manufacturers entering the
market with a variety of product offerings Some of the key highlights
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
were
- The Company crossed the 2 million cumulative vehicle sales mark for
its passenger vehicles
- In June 2010 the Sanand plant for the production of the Nano was
inaugurated The Company completed delivery on the bookings of the Nano
and opened sales in various States in a phased manner Nano sales
increased to 70431 vehicles a growth of 129 from 30763 vehicles in
the previous year The Company focused on increasing the reach and
penetration for the Nano and also fi nancing enablement for potential
customer segments The Nano bagged the gold prize in the Best New
Product segment under the transportation category at the 2010 Edison
Award symbolizing persistence and excellence personifi ed as also the
worlds oldest and coveted international award for Good Design in
2010 conferred by the Chicago Athenaeum Museum of Architecture and
Design together with the European Centre for Architecture Art Design
and Urban Studies in the category of transportation
- The sales in the Small Car segment (comprising the Nano the Indica
and the Vista) increased to 180091 vehicles a growth of 139
representing a market share of 117
- The Indigo and the Indigo Manza sales were 87919 vehicles The
Indigo eCS and the Indigo Manza Elan variants launched in the year were
well received in the market and improved the Companys market share in
the mid-size segment to 258 (after taking Jaguar)
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- In the Multi Utility Vehicles (MUV) segment the Company sold 42741
(including Land Rovers) vehicles a growth of 270 mainly boosted by
sales of the Safari The Aria - a premium crossover and the Venture - a
multi-purpose vehicle in this segment launched during the year
facilitated improvement in market share which stood at 132
TATA MOTORS
SWOT ANALYSIS
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
TATA motors is one of the leading motor vehicle producer in the world
TATA motors has strong background and reputation in the market The
company is working to strengthen its position in automobile industry
by adopting different strategies Following are the strengths weaknesses
opportunities and strengths of TATA motors
Strengths
One of the leading company in automobile industry with more than 70 years
of experience During this period it had produced more than 3
million vehicles which is huge achievement for the company
TATA motors has been expanding its business which is obviously require
more workforce Currently TATA motors employee base is 23000
Approx
One of the strengths which is very visible in the industry and also
beneficial for TATA motors revenue are low price vehicles and low fuel
consumption
Due to TATA motors strong brand and quality vehicles it has good
reputation in the industry
It is India largest automobile company with revenues of Rs 3565148
crores (USD 88 billion) in 2007-08
TATA motors is expanding its network in International market by
aggressively acquiring foreign companies
TATA motors has been famous to introduce new vehicles this is possible
just because of the strong research and development
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
TATA motors also play active role in corporate and social responsibility
Weaknesses
Shareholders of TATA motors are not getting much from their
investments due to low ROI on shares
The thing which customer not like about TATA motors vehicles is weak
safety standards
Domestic sales are not impressive
TATA always followed the low cost advantage strategy although the
other segment such as luxury car are still untapped
Opportunities
As it is low cost vehicle product so it can take the advantage of this
strength to exploit the opportunity by entering into the third world
countries
Incorporate safety features in the vehicles to gain more customer
satisfaction and allow the safety cautious people to become the
customer of TATA motors
Manufacturing luxury vehicles to attract corporate segment
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Joint venture and acquisition in other countries
Threats
The prices of material such as steel plastic rubber is rising which also
raise the total production cost of vehicle
TATA motors has cost advantage over its competitorsIf the competitors
will follow the same strategy then it may reduce the sales of TATA
motors
Low safety standards
Fluctuation in the economic condition
Rising prices of petrol diesel and CNG
HYUNDAI MOTORS
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
SWOT ANALYSIS
Strengths -
Hyundai India has such a brand equity that it is almost assumed to be
an Indian brand with lot of good accolades for being Indiarsquos second
most selling brand next to MUL in market share
Hyundai Motor India limited is the largest car exporter from Asian
Market which showed a 10 growth compared to last FY
The domestic sales is increasing at an average rate of 191
HMIL is known for its quality products which has better performance
and it has constantly been ahead in the race with Maruti Udyog
limited in many parameters
The product length includes around 8 cars starting from new Eon in
small car segment to SUV segment Santa Fe
Among the automobile players only HMIL is known for its CSR
activities
Hyundai products never fail to win laurels in each segment from
various automobile ratings ever since its operations in India
Hyundai has the largest network of showrooms and service station
next to Maruti in India
An article in Economic times quoted that ldquoHyundai Eon launched
treads on Alto territoryrdquo indicated that Eon will act as a threat to
reduction in Altorsquos market share
Weaknesses -
HMIL took a long time to gain the market share as its not the first
mover in India
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
In terms of most reliable and trusted brand Maruti is more strong in
Indian subcontinent
Spare parts of Hyundai vehicles are comparatively priced higher and
spare parts do not have PAN India presence
In SUV segment both Tucson and its next model Santa Fe didnt make
a major impact
Increase in commodity prices such as steel aluminium and ancillary
parts has affected margins
Since HMIL concentrates on both domestic and International sales
there are higher risks of exchange rate fluctuations
As Hyundai majorly concentrates on quality most of its product are in
premium category in each segment Hyundai is still struggling to
make a better impact in small car segment in terms of cost efficiency
like other manufactures
Hyundai doesnrsquot have any product match to compete in Corporate
orders like Tata Indica V2 Tata Sumo Tata Indigo Chevy Tavera
Ford Fiesta etc These vehicles are most preferred in both cab segment
and government booking for bulk orders
Opportunities -
SIAM ndash Society of Indian automobile Manufacturers have stated that
there is steady increase in Car sales both Domestic and Indian
contributing a valuable share in Indiarsquos Gdp
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
The export markets growth rate is 2230 compared to last fiscal year
The saving consumption pattern of India is an added advantage for
any segment doing business in India This was one of the major
reason for Indian market to survive amidst global recession
There is more scope of HMIL to enter into small car segment as its
has dedicated RampD plant in Hyderabad India Hyundai is one of the
very few companies that has widest RampD network across the world
located in Korea Europe India US Japan
Hyundai has very good opportunity in entering into commercial
vehicles and Recreational vehicles as they are already doing well
outside India Currently HMIL has its focus only on Passenger car
segment
Threats-
Though Hyundai claims itself to have no direct competitors other than
MUL there are Indian players like Tata Mahindra imposing a strong
threat for Hyundai Motors India to expand its product category
Foreign Direct Investments flowing in Indian automobile space are
not good signs for already existing Giants like MUL and Hyundai
Almost all major automobile players have started invading India to
open up their market and their manufacturing plant in IndiardquoChennairdquo
is referred to as the Detroit of Asia
Hyundai faced a slight decline in market share due to tough
competition from Fordrsquos Figo and Volkswagen- Polo
Many manufacturers have started to concentrate on small car segment
as an alternative to Nano These will slowdown the expected sales of
Eon
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Analysis of both the companies
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
from FINANCIAL perspective
Financial Analysis TATA MOTORS
(Rs in crores)
Company Tata Motors Group
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
(Standalone) (Consolidated)
2010-11 2009-10 2010-11 2009-10
Profit After Tax 181182 224008 922079 251689
Share of Minority
Interest and Share of
Profit in respect of
invest - - 5283 5417
ments in associate companies
Profit for the
year 181182 224008 927362 257106
Balance Brought
Forward from Previous
Year ndash Profit(Loss) 193413 168599 (101785) (155366)
Amount Available
for Appropriations 374595 392607 825577 101740
B APPROPRIATIONS
(a) Debenture Redemption
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Reserve - 50000 - 50000
(b) General Reserve 20000 50000 22878 52032
(c) Other Reserves - - 8420 1308
(d) Dividend
(including tax) 146703 99194 148130 100185
(e) Balance carried to
Balance Sheet 207892 193413 646149 (101785)
Current Ratio 053 044Quick Ratio 054 044Debt Equity Ratio 080 112Long Term Debt Equity Ratio 052 080
DIVIDEND
Considering the Companys financial performance the Directors have
recommended a dividend of Rs20- per share on the increased capital of
538322483 Ordinary Shares of Rs10- each (previous year Rs15- per
share) and Rs2050 per share on 96386471 A Ordinary Shares of Rs10-
each (previous year Rs1550 per share) fully paid-up and any further
Ordinary Shares andor A Ordinary Shares that may be allotted by the
Company prior to July 21 2011 (being the book closure date for the
Inventory Turnover Ratio 1386 1350Debtors Turnover Ratio 1920 1792Investments Turnover Ratio 1386 1350Fixed Assets Turnover Ratio 222 195Total Assets Turnover Ratio 135 114Asset Turnover Ratio 222 195
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
purpose of the said dividend entitlement) for 2010-11 and will be paid
on or after August 16 2011 The said dividend if approved by the
Members would involve a cash outfl ow of Rs146703 crores (previous
year Rs99194 crores) resulting in a payout of 81 (previous year 44)
of the standalone Profits of the Company
OPERATING RESULTS AND PROFITS
After a good year 2009-10 during which economies across the world
showed signs of recovery the economic conditions globally continued to
be strong and positive in 2010-11 resulting in a strong growth for the
automotive sector The Indian economy continued to do well driven by a
good performance from the agricultural and the industrial sector with a
GDP growth of 86 The automotive sector recorded a growth of over
26
in India on the back of a robust economy
Supported by its strong distinct product offerings in both the
commercial vehicle and passenger vehicle ranges the Company recorded a
turnover of Rs52136 crores a growth of 359 over the previous year
While the Company maintained a strong focus on cost control and market
pricing the increase in raw -material cost and fixed marketing
expenses resulted in a lower EBITDA margin of 99 as compared to
117
in the previous year The Profit Before Tax and Profit After Tax for
2010-11 was Rs2197 crores and Rs1812 crores respectively as compared
to Rs2830 crores and Rs2240 crores in the previous year It may be
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
noted that the previous year Profit included a net positive impact of
Rs958 crores mainly on account of Profit on certain divestments which
was partly set off by a loss on redemption of preference shares in a
subsidiary company
Jaguar Land Rover results for 2010-11 showed a signifi cant improvement
with increase both in volumes and revenue better product mix
favourable exchange rates and higher margins The introduction of the
new Jaguar XJ growing momentum of the Range Rover and Range Rover
Sport and in particular the strengthening of the Jaguar Land Rover
business in China where it opened a National Sales Company (NSC) in
mid 2010 were the main drivers In addition Jaguar Land Rover
continued to benefit from cost effi ciencies and effective cash
management initiatives adopted in response to the challenging operating
conditions in 2008 and 2009
As the global markets recovered coupled with a strong focus on product
and market initiatives particularly at Jaguar and Land Rover the Tata
Motors Group turnover in 2010-11 grew by 331 to Rs123133 crores
Tata Motors Group recorded its highest ever Consolidated Profit Before
Tax of Rs10437 crores (Rs3523 crores in 2009-10) and the Consolidated
Profit for the Year of Rs9274 crores (Rs2571 crores in 2009-10)
CUSTOMER FINANCING INITIATIVES
The vehicle financing activity in India under the brand Tata
Motor Finance (TMF) of Tata Motors Finance Limited - a wholly owned
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
subsidiary company has shown improvements in disbursements as well as
net interest margins driven mainly by the overall economic recovery
coupled with a strong focus by TMF on controlling costs improving
quality of fresh acquisitions and micro-management of collections TMF
financed 160781 vehicles during the year as compared to 144806
vehicles in the previous year Total disbursements at Rs7908 crores
grew by 18 as against Rs6697 crores in the previous year The
disbursals for commercial vehicles were Rs6041 crores (94446 units) as
compared to Rs5123 crores (96593 units) and for passenger cars were
Rs1867 crores (66335 units) as compared to Rs1454 crores (48213
units) in the previous year The market share in terms of the Tata
vehicles financed by TMF declined from 26 in Commercial vehicles to
21 and increased from 21 to 22 in passenger cars TMFs strategy on
managing non-performing assets (NPA) improving collection efficiencies
improvements in the Risk Scored Pricing Model approach and
thrust on customer relations through a branch based re-organized field
structure has in the last 2 years turned around and improved its
operations and Profitability setting a robust platform to enable
future growth
Jaguar Land Rover have entered into arrangements with financial
service providers to make vehicle fi nancing available to customers in
12 countries worldwide covering the largest markets by volume
including Chase Auto Finance in the US and FGA Capital (a joint
venture between Fiat Auto and Credit Agricole) in the UK and the rest
of Europe
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Financial Analysis HYUNDAI MOTORS
Particulars 2010 (Amount in
crores)
2009 (Amount in
crores)
Profit after tax 39915 35046
Net sales 401541 494291
Cash amp Cash
equivalents end of year
380 412
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
The PAT ie profit after tax stood declined from Rs 39915 to Rs 35046 for
the reason as Tata due to Costs also increased due to introduction of Bharat-
IV norms and higher spending on research and development At the same
time competition continued to grow stronger Several India-specific cars
were launched by competitors These were priced aggressively As a
consequence the ability to pass on the rising costs was constrained to an
extent
Total Sales increased from 3106000 units to 3614000 units compared
from previous year As compared to the revenue collected the sales declined
due to some increased costs as inflation
Interpretation-
If we compare the profit (PAT) and the net sales of both the companies
Hyundai is at higher profits as compared to Tata in the last financial year
As for the Customers to purchase a car sales of Hyundai are at higher
power as compared to Tata Both the companies produce quality product
which are beneficial for the public Therefore this financial data is not of
much use for the customers as from these facts they will not be able to make
their decision to purchase the car from which of the companies Both the
companies manufacture high quality products with true value Thus a
marketing analysis will be more appropriate for the customer to purchase the
car from which of the company Therefore this is just a knowledge for the
customer but not for any use for him to help him in his decision to purchase
which car
The borrowings of the Company as on March 31 2011 stood at Rs15899
crores (previous year Rs16595 crores) Cash and Bank balances and
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs2514 crores (previous year Rs2273 crores)
Tata Motors Groups borrowings as on March 31 2011 stood at Rs32791
crores (previous year Rs35108 crores) Cash and Bank balances and
current investments in Liquid Liquid Plus schemes of Mutual funds
stood at Rs12071 crores (previous year Rs9808 crores) The key
highlights were- - The Company issued rated listed securedunsecured
non-convertible debentures of Rs900 crores with maturities of 10 ndash 15
years as a step to raise long term resources and optimize the loan
maturity profi le
- In October 2010 the Company raised funds aggregating Rs3351 crores
(US$ 750 million) by an issue of 32165000 A Ordinary Shares at a
price of Rs764- per share and 8320300 Ordinary Shares at a price of
Rs1074- per share to Qualified Institutional Buyers (QIBs) under a
qualified institutional placement The said issue was well received by
the investors and the Company availed of the opportunity to price it at
the mid-upper band This milestone in the financing strategy enabled
it to come closer to its objective of balance sheet de-leveraging
- Consequent upon the holders of Foreign Currency Convertible Notes
(FCCNs) of US707 million and JPyen 30 million exercising their option
to convert their FCCNs to Ordinary Shares the Company allotted
23570426 Ordinary Shares
The Company redeemed the 0 JPyen 720 million Convertible Notes as per
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
the terms of the issue which were remaining outstanding out of the 0
JPyen 11760 million Convertible Notes issued in 2006 the balance 939
of the said Notes being previously converted repurchased
Tranche 1 of the secured rated credit enhanced listed 2 coupon non
convertible debentures aggregating Rs800 crores was redeemed as per the
terms of issue out of the 4 tranches of debentures aggregating Rs4200
crores issued in 2009-10
With a turnaround in the business and continuing strong Profitability
in 2010-11 the net debt at Jaguar Land Rover reduced to GBpound 233
million During the year Jaguar Land Rover took steps to establish
hedging lines in order to reduce risks to the business from foreign
exchange fl uctuations and establishing long term funding facilities in
order to strengthen the capital structure
Tata Motors Finance Ltd have raised Rs361 crores by an issue of
unsecured non-convertible subordinated perpetual debentures towards
Tier 1 and 2 Capital to meet its growth strategy and improve its
Capital Adequacy ratio
Tata Motors Groups gross DebtEquity ratio as at March 31 2011 at
117 was significantly lower as compared to 428 as on March 31 2010
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Analysis of both the companies from HUMAN RESOURCE
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Perspective
TATA MOTORS
Recruitment Process
- Determine the present and future requirements of the organization
inconjunction with its personnel-planning and job-analysis activities
- Increase the pool of job candidates at minimum cost
- Help increase the success rate of the selection process by reducing
thenumber of visibly under qualified or overqualified job applicants
Steps involved in selection process
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- Resumes
- Initial screening interview
- Analyze the application blank
- Conducting tests and evaluating performance
- Preliminary interview
- Core and departmental interviews
- Reference checks
- Job offer
- Medical examination
- Placement
Training programmes at TATA MOTORS
All employees are evaluated based on performance and merit The company
has customized the Performance Management System (PMS) for the
requirements of different categories of employees-managerial supervisors
and bargainable employees All employees have the opportunity of moving
to higher levels This is based on their personal preparation and desire to
move
- Target setting at individual level
- Mid year review amp feedback to employees
- Mid course correction in line with business needs
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- Annual review amp feedback
- Performance based ratings
- Rewards compensation career planning
HUMAN RESOURCES
The overall employee relations were peaceful and harmonious throughout
the year The Company continued to create a productive learning and
caring environment by implementing robust and comprehensive HR
processes 2010-11 saw the Company attracting substantial talent to fi
ll some key Senior Leadership positions The permanent manpower
headcount also increased by 7 to 26214 This increase in headcount
supported the production and sales of over 8 lakh vehicles The
productivity in terms of the turnover per employee has gone up by
193 to Rs96 lakhs employee The Commercial Vehicles Business Unit
showed consistent improvement over the years and is better than its
competitors on all of the 8 HR Management parameters as rated by A C
Nielsen
The long term wage settlements were signed between the management and
its unions at locations where the settlements were due for
negotiations The bonus settlements at all our plant locations were
signedannounced in the month of SeptemberOctober The Tata Motors
Employees Union elections at Pune CVBU and PCBU were conducted
peacefully on March 9 2011 with new representatives being elected
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Jaguar Land Rover have generally enjoyed cordial relations with
employees at their factories and offices and have not had any strikes
in the last eight years More than 96 of manufacturing shop floor
workers and approximately 45 of salaried staff in the UK are members
of a labour union Jaguar Land Rover signed a landmark settlement deal
with the Unions which would lead to the creation of new jobs in the
next decade including 1500 jobs at its Halewood facility Liverpool
in 2011 Jaguar Land Rover is recognised as a preferred employer in the
UK and has won recognition in The Times Top 100 Graduate Employers
for 2011 has won entry into The Times Top 50 Employers for Women and
one to note as a first time entry in The Times Best Companies
survey
SAFETY amp HEALTH - PERFORMANCE AND
INITIATIVES
All of the Companys operating plants in India have been certifi ed to
OHSAS - 18001 and ISO - 14001 standards and all the CVBU units have
been conferred with the Golden Peacock Award on Safety amp Health
Jamshedpur plant was adjudged first and was awarded by CII
(Confederation of Indian Industry) Eastern Region in Safety Health amp
Environment Practices The Company took steps towards ensuring that
every single individual working within its plant premises is protected
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
from any harmful impact of hisher working and the inherent risks
Towards this end the Company recently completed a diagnostic of the
existing safety systems through DuPont and is taking steps to raise the
safety standards to world class levels ZAP (Zero Accident Plan)
meetings are held all across plants and the defi ned bay owners in
these plants champion these meetings Tata Marcopolo Motors Limited
would be implementing IMS ndash 18001140019001 in both their plants in
2011-12 and other initiatives to increase focus on safety including
conducting of periodical audits to measure and ensure safety A host of
initiatives on health and wellness were taken across all plants in
India Specifi cally a Health Index was initiated in the Pune plant
and Ergonomics study carried out to improve workplace environment
HYUNDAI MOTORS
Hyundai Motor Co formed in 1967 was a part of the large South Korean
Chaebol - the Hyundai Group - until the group split in September 2000 In
the last four decades Hyundai managed to establish itself all over the world
as a company producing reliable technically sound and stylish automobiles
In the 90s the company started aggressive overseas expansion programs By
the late 90s when Southeast Asian crisis struck the company like all the
other chaebols faced serious financial problems To survive it had to cut its
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
labor force The company offered various retirement schemes unpaid leave
for two years etc to workers and expressed its inability to support its entire
workforce in the slack period The unions refused to compromise and the
management too held its ground Finally the government intervened to force
a negotiated settlement between the union and the management
Issues
raquo Damage that unhappy management-labor relations can cause to an organization
The Hyundai Motor Co (Hyundai) was in the midst of acute labor problems
in the late 1990s and early 2000s Until the mid 1990s Hyundai had been
successful in handling South Koreas traditionally disruptive labor unions It
had kept strikes at bay with nearly double-digit pay hikes and other benefits
But the Southeast Asian crisis3and the general slump in the automobile
industry in the late 1990s forced the company to restructure and cut down
jobs However the Hyundai labor union and workers rebelled against the
managements efforts to restructure the organization and the company faced
strikes and worker unrest repeatedly from late 1990s to early 2000s
Members of the Hyundai group4 such as the Hyundai Construction and
Engineering and Hynix Semiconductor were also facing financial troubles at
the time and were on the brink of insolvency Founder chairman of the
Hyundai Group Chung Ju-yung commented We are losing our
international competitiveness5 Regretting the continuous labor unrest he
said Wages have doubled in three years and productivity has gone down6
The labor problems Hyundai faced were not an isolated case in South Korea
By the late 1990s the chaebols had grown into large mismanaged structures
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
with many having several unprofitable units During the economic slump of
the late 1990s most of these chaebols felt the need to downsize There was
also mounting pressure from the IMF on the South Korean government to
undertake strict economic reforms and restructuring measures The labor
unions which have traditionally been very strong and influential in South
Korea felt threatened
Since jobs were being cut social unrest and a feeling of insecurity among
the labor class was rising The unions resorted to extreme measures in an
effort to establish their authority Although all over South Korea companies
were facing labor unrest Hyundai was among those that were hit the most
Labour Problems in the Late 1990s
The slump in the South Korean economy in late 1990s was bound to have an
effect on Hyundai also The automobile segment was among the first to be
hit by the downslide in the economy The domestic automobile sector had
negative growth of almost 55 in 1998 compared to the previous year
Hyundai was responsible for almost 50 of total automobile production in
South Korea and was therefore badly hit The domestic sales of the company
fell by 55 in the year 1998 and its exports crashed by 74 percent to only
15056 units Hyundai recorded a 200 billion won loss in 1998
According to company officials Hyundais six assembly plants with a yearly
production capacity of 165 million vehicles were operating at only 40
percent of their capacity In May 1998 Hyundai reacted to this grim
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
situation by announcing plans to lay off 27 percent of its 46000 workforce
in South Korea and to cut pay bonuses and benefits in a bid to save 230
billion won
Unfortunately for the management of the company Hyundai had one of the
most powerful and militant unions The decision of the company to lay off
workers sparked off agitations not only in Hyundai but in other companies
too The unions were particularly offended at the governments approval of
Hyundais decision
In a demonstration in Ulsan where Hyundai has its biggest automobile
plant 32000 employees participated in rallies All across South Korea
almost 120000 employees from about 125 companies participated in
demonstrations against Hyundai and the governments decision The
government had to deploy nearly 20000 riot police to control the
demonstrators
Labour Problems in the Early 2000s
On September 1 2000 Hyundai officially cut ties with the Hyundai Group
and had relocated its head office to Yangjae-dong Seoul Korea - a move
that was seen as symbolic of its rebirth as an independent automotive
business group In December 2001 Hyundai forecasted its highest profits
ever - $900 million for the year
In the same year it posted 234 percent growth in unit sales and a 745
percent improvement in net income Most importantly Hyundai vehicles
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
were being accepted as a technologically advanced stylish and reliable in
overseas markets like the US and Europe In the United States the worlds
largest auto market Hyundai recorded a 42 percent sales increase in 2001
This was an era of growth reorganization and new market exploration But
the success story was marred by another strike threat in Hyundai
Workers at the Ulsan plant went on a two-day strike in December 2001
demanding higher wages and higher bonuses They also demanded a 30
share in the profits that year as a performance bonus
The management clarified that though the company had done well that year
it could not afford performance bonuses to the tune of 30 of profit The
reasons given were firstly the increased influx of imported cars into South
Korea was bound to hurt Hyundais market share and margins in South
Korea
Secondly General Motors purchase of Daewoo was a threat that could not
be ignored or taken lightly and the company had to gear itself up to be able
to compete with General Motors and lastly the most important reason
stated was that due to the appreciation of the Korean won Hyundai cars
were becoming less competitive in international markets and profitability
consequently would be hurt
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Analysis of both the companies
from TECHNOLOGICAL
Perspective
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
TATA MOTORS
INFORMATION TECHNOLOGY INITIATIVES
Tata Motors Group continues to lead in the use of Information
Technology as an integral part of its strategy and goes beyond the
organisations boundaries to cover suppliers dealers and customers
The Company won an Architecture Excellence Award in the IT Service
Management category at the ICMG World Conclave The Companys
competitive advantage includes a world class Customer Relations
Management solutions (CRM) with integrated Dealer Management System
(DMS) used by more than 2500 channel partners CRM capabilities are
now being replicated in its international operations Major highlights of the
year are-
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- Enhancement of the Call Center operations capabilities to get
benchmark customer interaction performance addition of Key Accounts
Portal and deployment of Used Vehicle and Customer Loyalty solution
- Strengthening of IT support through distributed warehouse management
and spares planning systems for its after market operations
- Implementation of ERP for large and complex maintenance operations
for the Delhi Transport Corporation
- Supplier self service with design collaboration solution extended to
additional 550 vendors with more than 2500 vendors
- Use of manufacturing automation systems to run lean production
operations with advanced systems in plants for Nano and Ace
- Expanded analytics and planning solutions to all key business
functions with plans to embrace advanced analytical capabilities
- Jaguar Land Rover completed IT transition from Ford and launched
multiple strategic ERP programs
- Jaguar Land Rover has commenced IT enhancements with the
implementation of SAP ERP software in the UK and SAP all in one in
the National Sales Companies Jaguar Land Rover is also transforming
its product development capabilities with new toolsets including
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Product Life Cycle Management (PLM)
- TDCV Korea started its own sales and marketing operations which
went through the ERP implementation to support retail sales and
initiated centralized IT procurement to leverage common contracts and
terms
The Tata Motors Group companies are collaborating on various fronts in
the use of Information Technology including deployment of
state-of-the-art video conferencing system The Tata Technologies Group
continues to be a strategic partner in strengthening the Tata Motors
Group IT capabilities
NEW PRODUCT TECHNOLOGY AND ENVIRONMENT
FRIENDLY INITIATIVES
The Company strives to be at the forefront of innovation and works to
launch products aimed at the emerging needs of its customers It
continues to develop and build on its in-house capabilities and works
with the right partners to ensure that it has competitive product
offerings Some of the Companys key products and initiatives for the
year include
- Showcased the Tata Pixel - a concept for a future city car at the
Geneva Motor Show
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- Launched the Aria - a premium crossover with high-end features such
as 4x4 Torque on Demand ESP six airbags
- Launched the BS IV compliant variants of the Indica and the Indigo
CS the Indica eV2 and Indigo eCS with segment leading fuel effi
ciencies These vehicles are powered by the Companys 14L CRAIL
engine
- Launched Elan - a high end variant of the Indigo Manza sedan
- Ace Zip and Magic Iris were test marketed in various parts of the
country and are expected to be formally launched across the country in
May this year This completes the Ace family offerings now spanning
from the Ace Zip and Magic Iris at the lower end and the Super Ace and
Venture on the higher end
- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace
platform
- The Prima range launched in the previous year was expanded with the
introduction of the Prima Construck range of tippers in the market
Some Prima trucks were also launched in Korea and some of the tippers
are soon expected to be launched in the international markets
- Jaguar Land Rover launched the all new Jaguar XJ the new 44 V8
diesel Range Rover and the new 22 diesel Land Rover - Freelander
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
- Jaguars Advanced Design Team and the Jaguar Land Rover Technical
Innovation Team created a concept car for the Paris Motor Show to
celebrate 75 years of Jaguar Design and Innovation The resultant - a
stunning Jaguar C-X75 is a radical combination of hyper-car
eco-friendliness and 21st century technology which won Car of the
Show capturing the imagination of millions Jaguar Land Rover recently
announced their partnership with Williams F1 to bring a version of this
concept to the market in 2013
- Tata Hispano Motors Carrocera SA Spain introduced 4 new brand
models of its buses viz Area - an urban bus 2 hybrid urban buses and
Naya - a new deluxe coach This alongwith the Xerus and Intea models
launched last year would expand its product range in high-end
busescoaches
Development of Environment Friendly Technologies
As a responsible automotive manufacturer the Tata Motors Group
continues to develop vehicles and technologies to reduce its carbon
footprint Some of the signifi cant initiativesachievements are
- Showcased its CNG parallel Hybrid low-floor city buses in the
Commonwealth Games in Delhi
- Tata Indica Vista EVX developed by engineers at our European
subsidiary - Tata Motors European Technical Centre Plc bagged the
Most Economic Small Passenger EV and the Most Economical and
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
Environment Friendly Small Passenger EV under the Small Passenger EV
category at the inaugural Royal Automobile Club Brighton to London
Future Car Challenge
- Migrated to meeting the BS IV emission norms by developing BS IV
compliant range of vehicles in particular Indica eV2 and Indigo eCS
with 14L CRAIL engines with segment leading fuel effi ciencies
- Jaguar and Land Rover continue to invest heavily in environmental
innovation to support delivery of the 2012 European Union requirement
for reduction in CO2 The 2010-11 new model launches including the all
new Jaguar XJ the new 44 V8 Diesel Range Rover and the new 22 Diesel
Land Rover - Freelander realised improvements in CO2 performance in
excess of 10 The Jaguar XF and Range Rover Evoque to be launched in
the second quarter of 2011 would continue this trend The Jaguar XF
22 Diesel 8 speed automatic transmission variant with StopStart
technology reduces the entry model CO2 output whilst the Evoque
features a number of lightweight vehicle effi ciency and Powertrain
technologies that make this the most fuel effi cient Range Rover ever
Jaguar Land Rover is working on introducing a new Premium Lightweight
Architecture for its products This has seen a host of environment
friendly technologies including new aluminium alloys down-sized
powertrains Eco HMI sustainable materials best-
CO2 navigation routes electronic power steering aerodynamic features
and many more technologies These technologies enable the delivery of
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
class leading Luxury and Performance combined with low CO2 and lay
the foundation for effi cient hybridization of the platform Jaguar
Land Rovers initial Full-Hybrid programme is also in advanced stages
In 2010-11 some of the Plug-In Hybrid projects of Jaguar Land Rover
were completed and have provided the technical foundation for a
production development programme for Parallel Plug-in Hybrids In
addition Jaguar Land Rover has made signifi cant progress on a number
of ongoing collaborative Research and Development programmes
investigating a wide range of CO2 reduction technologies These include
radical combustion engine downsizingpressure charging alternative
power sources for Series Hybrids Flywheel KERS and waste energy
recovery systems
Tata Hispano Motors Carrocera SA Spain won a prestigious order for
supplying 10 CNG Series Hybrid low-floor city buses to be built on
the Companys chassis to EMT Madrid a Madrid city public
transportation company
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
HYUNDAI MOTORS
Hyundai - New Technology
A voice-activated audio and media devices Automatically repaired surface
nicks and scratches A car that protects its driver when lane deviations and
rear collisions are detected
New Technology for driver safet y and convenience
The most representative infotainment system is telematics created by the
fusion of telecommunication and informatics Featuring a state-of-the-art
communication terminal with built-in GPS that is connected to various other
electronic devices in the vehicle the system offers various useful
information to the driver to promote safer driving HyundaimiddotKia Motors
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
became the first company in Korea to offer an integrated telematics service
called Mozen to enhance the comfort and pleasure of driving
-HOLOGRAM-HUD
Space holographic technology is a progressive technology that displays
various driving and driver convenience information on the front windshield
in the form of a 3D hologram
-DSM(Driven State Monitoring)
DSM employs facial recognition engine technology to determine the driverrsquos
state by monitoring changes in the driverrsquos eye movements and facial
muscles with an infrared camera installed inside the car By measuring the
driverrsquos blinking and facial direction patterns it sounds an alarm sound and
relays strong vibrations to the seat when abnormal states are detected
-Self healing scratch shield
SRC (Scratch Recovery Clear) uses the elasticity of special chemically
composed matters in a clear paint that has selfhealing properties Scratches
are automatically fixed over a period of time
-Solar cell sunroof
Solar cells are a representative form of environmentally-friendly and
renewable energy We are applying solar cells to automobile sunroofs and
using the AC fan operation to reduce the AC load during summertime
while enhancing cooling performance and cooling fuel efficiency
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
-Pre ndashcrash headrests
Pre-crash headrests help prevent driver neck injuries by detecting possible
rear collisions using a rear-facing radar or camera that is built into the
vehicle When a possible collision is detected the headrest automatically
moves closer to the driverrsquos head for added protection Once the risk has
passed the headrest then returns to its normal position after a certain period
of time
-Nano glass(wiperless vehicles)
Nano technology is utilized to automatically remove water or dust from the
front windshield without the need for wipers
-Honeycomb Tires
The non-pneumatic tires eliminate the possibility of flat tires with its special
honeycomb-shaped tires or wheels that are covered in rubber on the outside
- Strengths
- Weaknesses
- Opportunities
- Threats
- Issues
- Labour Problems in the Late 1990s
- Labour Problems in the Early 2000s
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