Competitor Analysis of Tata Motors

AUTOMOBILE INDUSTRY

Competitor Analysis

OF

TATA MOTORS

AND

MARUTI SUZUKI

REPORT PREPARED BY:

Fakhri KaydawalaSIMSREE, MMS

Batch of 2011

1

ContentsExecutive Summary........................................................................................................................3

Introduction -Automobile Market in India......................................................................................4

Tata Motors....................................................................................................................................6

Introduction................................................................................................................................6

SWOT Analysis............................................................................................................................7

PEST Analysis............................................................................................................................12

Maruti Suzuki................................................................................................................................22

Introduction:.............................................................................................................................22

SWOT analysis...........................................................................................................................22

PEST analysis.............................................................................................................................23

Marketing Strategy analysis for Maruti Suzuki.............................................................................24

Marketing Strategy analysis for Tata motors................................................................................28

Conclusion....................................................................................................................................30

References....................................................................................................................................30

Executive SummaryTata Motors is a company of the Tata and Sons Group, founded by Jamshetji Tata and is

currently headed by Ratan Tata who is the chairman. The company has the workforce of

22000 employees working in its three plants and other regional and zonal offices across

the country. This report analyses the current market position of Tata Motors and gives

details regarding the company’s plans and strategies for growth in the future.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual

production commenced in 1983 with the Maruti 800, based on the Suzuki Alto keicar

which at the time was the only modern car available in India, its' only competitors- the

Hindustan Ambassador and Premier Padmini were both around 25 years out of date at

that point. Through 2004, Maruti has produced over 5 Million vehicles. Marutis are sold

in India and various several other countries, depending upon export orders. Cars similar

to Marutis (but not manufactured by Maruti Udyog) are sold by Suzuki in Pakistan and

other South Asian countries.

The report captures a detailed SWOT and PEST analysis of these two Indian automobile

companies and tries to arrive at a conclusion based on observations.

Introduction -Automobile Market in India

The automobile industry in India, the tenth largest in the world with an annual production

of approximately 2 million units, is expected to become one of the major global

automotive industries in the coming years. A number of domestic companies produce

automobiles in India and the growing presence of multinational investment, too, has led

to an increase in overall growth. Following the economic reforms of 1991 the Indian

automotive industry has demonstrated sustained growth as a result of increased

competitiveness and relaxed restrictions

In 1953, the government of India and the Indian private sector initiated manufacturing

processes to help develop the automobile industry, which had emerged by the 1940s in a

nascent form. Between 1970 to the economic liberalization of 1991, the automobile

industry continued to grow at a slow pace due to the many government restrictions. A

number of Indian manufactures appeared between 1970-1980.Japanese manufacturers

entered the Indian market ultimately leading to the establishment of Maruti Udyog. A

number of foreign firms initiated joint ventures with Indian companies.

Following the economic reforms of 1991, the automobile section underwent delicensing

and opened up for 100 percent Foreign Direct Investment. A surge in economic growth

rate and purchasing power led to growth in the Indian automobile industry, which grew at

a rate of 17% on an average since the economic reforms of 1991. The industry provided

employment to a total of 13.1 million people as of 2006-07, which includes direct and

indirect employment. The export sector grew at a rate of 30% per year during early 21st

century. However, the overall contribution of automobile industry in India to the world

remains low as of 2007. Increased presence of multiple automobile manufacturers has led

to market competitiveness and availability of options at competitive costs

India’s car market has emerged as one of the fastest growing in the world. The number of

cars sold domestically is projected to double by 2010, and domestic production is

skyrocketing as foreign makers are setting up their own production plants in India. The

government’s 10-year plan aims to create a $145 billion auto industry by 2016.

According to McKinsey, the auto sector’s drive to lower costs will push outsourcing. The

auto sector could be worth $375 billion by 2015, up from $65 billion in 2002. McKinsey

thinks India could capture $25 billion of this amount. Out of 400 Indian suppliers, 80

percent have the ISO 9000 certificate—the international standard for quality management

Tata Motors

Introduction

Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive

Company), was formed in 1954. It is the only fully integrated automobile manufacturer

that now stands as India's largest and the world’s 5th largest passenger automobile and

commercial vehicle manufacturing company with a product range designed to meet

national and international transportation needs.

Tata Motors has a wide portfolio ranging from a Tata Mercedez Benz truck to

diversifying into passenger cars like Tata Sierra,Tata Estate,Tata Indigo and Indica,

concept vehicles like Aria Roadster and Tata Elegante, commercial vehicles like Tata

heavy trucks and military vehicles.

Tata Motors was first listed on the NYSE in 2004. It created wealth of Rs. 320bn during

2001-2006 and stood among top 10 wealth creators in India. It has its manufacturing

bases in Jamshedpur, Lucknow and Pune. Tata Motors has recently had a couple of

important mergers and acquisitions like with JLR in UK, Daewoo in South Korea,

Hispanso and a JV with Fiat.

SWOT Analysis

STRENGTHS

Post liberalization, in order to expand rapidly, the company adopted the route to joint

ventures (JV):

21% stake in Hispano Carrocera, a Spanish bus manufacturing company and

introducing its high-end inter-city buses in the country.

Acquisition of Jaguar and Land Rover of UK, help complete its portfolio in the

premium segment

A 70% JV with Thailand’s Thonburi (auto assembler) which will set up a plant to

manufacture pick-ups and will sell them in Thailand.

The 25MT GVW Tata Novus launched from Daewoo’s platform (TDCV Tata

Daewoo Commercial Vehicle Company).

51:49 JV with Brazilian based Marcopolo (bus building). This JV is to

manufacture and assemble fully-built buses and coaches targeted at developing

mass rapid transportation systems.

In 1993, it started manufacture of high horsepower and emission friendly diesel

engines in an effort to reduce the pollution in the existing Tata engines and to

produce more environmentally friendly engines.

In 2000, it launched CNG buses and filled the product line gap through the

introduction of the 1109 vehicle which is an intermediate commercial vehicle and

is useful for medium tonnage loads.

Its Ex- series vehicles have high tonnage capacity and high pick up and the LCV

(207 DI) with direct ignition technology caters to the customers' requiring one and

same vehicle for commercial as well as personal use.

Tata Motors has a high domestic exposure of ~94% in the MHCV (Medium &

Heavy Commercial Vehicles) segment and ~84% in the LCV segment.

The latest hit of Tata Motors is its mini truck Ace which is India's first

indigenously developed sub-one ton mini-truck. Ace has rapidly emerged as the

first choice for transporters and single truck owners for city and rural transport.

The only major engine manufacturer in the world to express any formal interest in

the turbulence-boosting cylinder head grooves

There is definite cost advantage as labor cost is 8-9 per cent of sales as against 30-

35 per cent of sales in developed economies.

Tata motors have extensive backward and forward linkages and it is strongly

interwoven with machine tools and metals sectors. Also, India is an excellent

source for IT based engineering solution for products & process Integration.

WEAKNESSES

Tata Motors' range of passenger cars is still not comprehensive by industry

standards. It has a limited product portfolio which has given its key competitors

(Hyundai motors, Maruti Suzuki) an extra edge.

Even after being in the passenger cars market for quite some time, somewhere in

the minds of consumers Tata motors is still synonymous with heavy and

commercial vehicle makers and not passenger car makers. Also because of this

consumers may think the passenger cars can lack aesthetics and are more built for

robustness.

According to auto experts, low cost is a stronger motive at Tata Motors that

sometimes makes quality take a backseat.

The company is overstaffed and hence human resource utilization is sub optimal.

Also decision making gets a hard hit due to extensive hierarchy prevalent at Tata

Motors.

They do not have a presence in high volume markets like America and most parts

of Europe.

Not very high car sales volume which hampers their future plans like increasing

their production and expansion.

OPPORTUNITIES

Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage

range and introduce products in India at an appropriate time.

The JV with Marcopolo will be beneficial to both companies since the latter will

absorb technology and expertise in chassis and aggregates from Tata Motors, and

Marcopolo will provide know-how in processes and systems for bodybuilding and

bus body design.

JV with Fiat, it is likely to gain access to Fiat’s diesel technology and to the

latter’s strong overseas distribution network for its passenger cars.

Tata Motors may extend this relationship to other segments like pick-ups and

MHCVs.

Launch of the global truck will mark the entry of the company into developed

markets like Europe and the USA. Working with Iveco means that the designs

will be in sync with the needs of sophisticated European customers.

GOI policy for modernizing of vehicles to arrest degradation of air quality and

move toward international taxing policies linked to age of vehicles, are steps

which will lead to increased sales for TATA motors Commercial vehicle division.

The cut in excise duty that enabled manufacturers like TATA Motors to reduce

prices

The need to transport higher volumes of agricultural and industrial goods.

The cut in tariff on petroleum and diesel from 8 per cent to 6 per cent will make

commercial vehicles more competitive in the export market.

Development of the national highway development program will increase TATA

sales in the long run.

Tata has developed a car it aims to sell for about $2,500 USD, which would be

considered the cheapest vehicle ever made in real terms.

There is huge demand in domestic markets due to infrastructure developments

and Tata Motors is able to leverage its knowledge of Indian market. There are

favorable Government polices and regulations to boost the auto industry i.e.

Incentive for R&D.

THREATS WITHIN THE INDUSTRY

There are a lot of new competitions coming up in the commercial vehicles segment which

threaten the huge market share which Tata Motors has garnered. Some of the new Joint

Ventures and competitions have been listed below:

M&M has formed a 51:49 JV called Mahindra International with ITEC, USA,

(parent NAVISTAR), to manufacture commercial vehicles. ITEC is the leader in

medium and heavy trucks and buses in North America, and is the world's largest

manufacturer of medium-duty diesel engines.

Force Motors: JV with MAN for manufacturing high-tonnage vehicles Force

Motors has paired up with MAN in a 70:30 JV to manufacture high-tonnage and

specialty vehicles. Further, the two companies have formed another JV to

manufacture buses in India from end-2007.

Ashok Leyland: Acquisition of Czech Republic-based Avia Ashok Leyland

(ALL) recently acquired the truck unit of Czech Republic-based Avia.

Volvo, a leading manufacturer of trucks, buses, cars, construction equipment, and

aero engines has a main focus in the area of fully built buses. In India, it has

focused on providing economical transport solutions in consonance with its values

of safety, quality, and environmental care. Its trucks are reputed for their

performance and economy and are the flag bearers in their production activities in

India.

THREATS OUTSIDE THE INDUSTRY

Farmers are agitating against the land acquired by the firm in Singur for its

ambitious Rs 1, 00,000 car project. The protest is being lead by Mamta Banerjee

of the Trinamool Congress. Farmers are protesting that the land is fertile land and

the government acquired the land without their consent. Presently this matter is

lying in the court of law and is still a contentious issue.

An Indian cabinet panel will soon consider a new automobile policy that aims to

set fresh investment guidelines for foreign firms wishing to manufacture vehicles

in the country. The policies adopted by Government will increase competition in

domestic market, motivate many foreign CV manufactures to set up shops in

India.

Increased interest rates have a potential to hit the sales. Auto loans have become

costly causing customers to defer their purchase which has impacted the sales of

Tata Motors.

The strengthening of the rupee against the dollar has made their cars less

attractive in the foreign market.

PEST Analysis

Political Assessment:

I- the auto policy of Government which has direct

implications on Tata Motors-

A brief overview-

Auto policy of Government of India envisions to establish a globally competitive

automotive industry in India and to double its contribution to the economy by 2010. GOI

policy has rightly recognized the need for modernizing of vehicles.

The Auto Policy has spelt out the direction of growth for the auto sector in India and

addresses most concerns of the automobile sector, including-

Promotion of R&D in the automotive sector to ensure continuous technology

upgradation, building better designing capacities to remain competitive.

Impetus to Alternative Fuel Vehicles through appropriate long term fiscal

structure to facilitate their acceptance.

Emphasis on low emission fuel auto technologies and availability of appropriate

auto fuels and encouragement to construction of safer bus/truck bodies -

subjecting unorganized sector also to 16% excise duty on body building activity.

The Foreign Direct Investment policy of India has undergone significant

liberalization. A new auto policy has been announced which provides automatic

approval for foreign equity investment up to 100% for manufacture of

automobiles and components.

Effects of government policies on Tata motors -

In the past effect of Government Policy on TATA Motors CV Division Commercial

Vehicles segment sector has been at the forefront of the strong showing by the

automotive industry over the past few years. Following factors have led to growth in

sales:

The cut in excise duty that enabled manufacturers like TATA Motors to reduce

prices

The attractive financing offers and freebies enabled by low interest rate policies

by Government

The need to transport higher volumes of industrial goods

Uttarakhand plant enjoys an exemption of excise duty (otherwise – 16%) for

initial 10 years

Singur plant enjoys exemption from income tax for initial 5 years

II- LABOUR REFORMS

Labour reform is a very sensitive subject in the Indian context, given the ground realities

of poverty, illiteracy, diseases, deprivation, exploitation, low per-capita income, etc. This

means that whatever is taken up in the name of labour reforms, be it in the sphere of

employment, welfare or human resources, needs careful handling.

Tata motors’ view on labour reforms

The Tatas were the pioneers in introducing a number of ‘firsts’ in the field of labour

welfare. The group felt that unless a worker’s welfare needs were met, there would be no

profits for industry and no progress for the nation. Well ahead of any Indian legislation

on this front, several benefits — the eight-hour working day, free medical aid, provident

fund, gratuity, leave with pay, maternity leave, accident compensation, etc — were

incorporated by the Tatas into their workplace culture.

Consideration-

The Tatas are now considering labour reforms very carefully, with a view to ease the

social burden of their employees and at the same time preserve the equilibrium of job

security.

It is worth noting that labour reforms in India are discussed mostly in the context of

organized labour, and this constitutes merely 8 per cent of the country’s total labour

force. It shows that a majority of the labour force exists as unorganized.

Economic Assessment:

Favorable factors:

1. High domestic demand: There is huge demand in domestic markets due to

infrastructure developments and Tata Motors is able to leverage its knowledge of

Indian market. The Indian vehicle market expanded by 23.7% in the financial year

ending in March 2007, according to data released by the Society of Automobile

Manufacturers

2. High economic growth: Indian economy has expanded by more than 9% during

the financial year ending in March 2007. This results in prosperity and creates

demand for Tata Motors’ products

3. Reduction in taxes: The cut in tariff on petroleum and diesel from 8 per cent to 6

per cent will make commercial vehicles more economical

4. Tapping new markets: Tata is developing a car that aims to sell in 2008-09 for

about $3,000 USD will result in huge demand and increased profitability of the

company

5. Labour cost advantage: Cost advantage as labor cost is 8-9 per cent of sales as

against 30-35 per cent of sales in developed economies. This results in lower

production cost and higher margins for Tata motors’ products

6. Increase in disposable income: According World Development Indicators

database, India's purchasing power parity per capita income was $3,100 in

2004.These leads to increase in disposable income and consumption.

Concerns:

1. Rupee appreciation against the dollar: The strengthening of the rupee against

the dollar has made Tata motors less attractive to export. India witnessed

appreciation in its currency of 8.35% against the dollar between January and June

2007.

2. Increasing auto loan interest rates: Increased interest rates have a potential to

hit the sales. Auto loans have become costly causing customers to defer their

purchase which has impacted the sales of Tata Motors. Interest rates on car loans

have witnessed a surge of at least 3.0 percent points from December 2005 to June

2007

3. Spiraling inflation: Rising materials and labour cost due to inflation increases

manufacturing cost. Therefore profitability reduces. According Reserve Bank of

India, Inflation on a year-on-year basis, is 5.9% at end-March 2007

4. Globalization :

Competition in foreign markets by M & M and Ashok Leyland

Competition in Indian market by Hyundai and Volvo

Social Assessment:

Favorable factors:

1) Employment Generation: It employs a total of approximately 22349 people

according to March 31st 2007. It’s the largest automobile company in India.

2) Attitude to Work: The employees at People committed to the five integral values that

are the keystones of Tata Motors policies a) Integrity b) Excellence c) Understanding d)

Unity e) Responsibility. This results in greater productivity and more revenue for the

company.

3) Environmental Responsibility: Tata Motors has led the Indian automobile industry's

anti-pollution efforts through a series of initiatives in effluent and emission control. The

company introduced emission control engines in its vehicles in India before the norm was

made statutory. All its products meet required emission standards in the relevant

geographies. Modern effluent treatment facilities, soil and water conservation programs

and tree plantation drives at its plant locations contribute to the protection of the

environment and the creation of green belts.

4) Social Image: Tata Motors has bagged a number of awards in certain categories which

show that the society’s image of it is very favorable.

a) Tata Motors has been chosen as India's Most Trusted Brand in cars in a Readers

Digest-AC Nielsen consumer survey in 2006.

b) Tata Motors' mini-truck, Ace, which has created an all-new category in the

commercial vehicles market, received the BBC-Top Gear' Design of the Year 2006. The

company's Starbus low-floor city bus and the Novus heavy truck were adjudged second

and third respectively.

c) For the second consecutive year, Tata Motors was rated by Auto Monitor as the

'Commercial Vehicle Manufacturer of the Year' for 2006.

d) The Commercial Vehicle Business Unit won the CII-Exim Bank Award for 2005 for

Business Excellence, for being a role model of excellence in management. The award

particularly recognises excellence in the management of quality as a fundamental

process.

e) The two divisions of the company also won the Tata Group's JRD QV Awards for

Business Excellence in 2005.

f) The Jamshedpur plant and the car plant at Pune received the Union Ministry of Power's

National Energy Conservation Award, which recognise significant initiatives to reduce

energy intensity and improve energy efficiency. The Jamshedpur plant won the award for

the fourth year in a row. The Commercial Vehicle Business Unit and the Passenger Car

Business Unit also received the CII's National Award for excellence in energy

management. The Foundry Division at the Pune plant received the Gargi Huttenes

Albertus Green Foundry of the Year Award

Concerns:

1. Farmers are agitating against the land acquired by the firm in Singur for its

ambitious Rs. 100000 car project. The protest is being lead by Mamta Banerjee,

the Trinamool Congress. Farmers are protesting that the land is fertile land and

the government acquired the land without their consent. This has led to wide

unrest among the people and has adversely affected the brand image

2. Unfavorable press and media opinion on the forceful acquisition of land in

Singur. Though the media continues to talk about the mergers and acquisitions of

the group positively, the Singur project continues to be the canker in the heart

Technological Assessment:

Opportunities:

1) One lakh car: - Tata Motors' new small car project to make India's first car to be

priced at around Rs. 1 lakh was launched in early 2008. The company was keen to

explore the possibility of making cars from engineered plastics made by General Electric.

It is part of our Endeavour to make a car that is cheap to operate and maintain. The

addressable market for such a car will be around one million vehicles annually at a

mature stage which would really propel Tata motors to the league of the top automobile

companies in India.

2) Impact of technology transfer: -

a) Alliance with Fiat: Tata motors have aligned with fiat to develop the one lakh car.

The alignment will include Fiat introducing its other successful vehicles in the Indian

market like Alfa Romeo, Maserati and Ferrari. The strategic alliance would explore

opportunities for mutual benefit, including possible sourcing of technologies, power

trains and major aggregates from Fiat, sharing of common vehicle platforms between the

two companies and even possible joint development of models which could be batched

and sold by both companies in different geographies.

b) Alliance with Cummins Inc: Cummins Inc. and Tata Motors has a new agreement

that will allow their joint venture, Tata Cummins Ltd. (TCL), to begin manufacturing the

ISB engine. The expansion will increase the number of engines produced by the joint

venture from approximately 69,000 to 120,000 units beyond that time. The engines

produced by TCL will meet Euro 2, Euro 3 and Euro 4 Indian and European standards for

diesel emissions.

c) Alliance with MDI of France: India's largest automaker, Tata Motors, announced that

it will partner up with MDI of France, a technology invention company, to develop

engines powered by compressed air. This agreement envisages Tata's supporting further

development and refinement of the technology, and its application and licensing for

India.

3) Research and development: Tata Motors has a long history of investment in R&D. it

has a passenger car business unit and Engineering Research Centre (ERC). It has lead to a

very large number of business successes. Most of these innovations have been, over the

years, incorporated into automobiles, ensuring driver and passenger safety. The facilities

in the ERC have been repeatedly identified as benchmarks for the Indian industry. Today

ERC takes pride in having in its service more than 900 scientists and engineers, besides a

host of unique facilities, including the only crash test facility and 'hemi-anechoic noise

and vibration test chamber. Some of the other technologies that are part of Tata Motors’

arsenal are those that offer improved electronic controls for engine systems, aimed at

improving emission standards, and other vehicle drive-train and chassis systems, besides

fuel efficiency. Many of the obstacles the company faced two decades ago in acquiring

technology have been substantially reduced through tier-1 suppliers and through access to

specialist consultants.

4) Impact of technology training: The growth of Tata Motors and the quality of its

products are anchored securely in the skills that have been built in its employees. The

training schools run by Tata Motors are acknowledged as being the best training

establishments in the engineering industry in India. By giving the highest priority to

training, the Company has created an invaluable source of skilled craftsmen, who are

periodically retrained, so that their skills are never obsolete. Tata Motors has a pool of

highly qualified engineers, whose innovativeness gives the Company its distinct

competitive edge

5) Impact of emerging technologies: Tata Motors has established its own technical

engineering centre in Europe. Tata Motors is also investigating hydrogen, ethanol, bio-

diesel and other alternative fuels. Alternate fuels would be the way to go in the future

because of the exhaustible nature of oil. Tata motors can take a very good lead in this

field with the research it is doing. The question is whether Tata Motors should invest in

fuel cells, which are probably 20 years away from production or invest in direct hydrogen

combustion. 10 to 20 per cent hydrogen-enriched gasoline can give significant benefits

too in the longer run.

6) Impact of technology helping in the manufacturing: Through technology the

manufacturing has been made simpler and cheaper. Nowadays a single platform is used

to manufacture different types of vehicles. The robust 207 platform serves as the basis for

a number of vehicles like the Tata mobile, the Sierra, the Estate, the Sumo, the Safari and

the 207 DI. The platform (X1), is used for the Indigo and the Indica.

Shortcomings of technology:-

1) Substitutions of cars: Because of technology a lot of new options and different types

of car have been introduced. The relatively new idea of a luxury car, a family car, an

economy car has well established itself in the bymind of the Indian consumer. The

differentiation on the basis of styling and features is also integral part of the new age

buyer. The process of substitution is now faster and is clearly guided by the above

principles. The wide range of, cars and other vehicles make substitution a great threat.

2) Technological challenges: The Tata Motors challenge is to maintain its cost base but

catch up with technology and overtake the competition given by European, American and

Japanese automakers.

Maruti Suzuki

Introduction:

Maruti Suzuki is one of India's leading automobile manufacturers and the market leader

in the car segment, both in terms of volume of vehicles sold and revenue earned. Until

recently, 18.28% of the company was owned by the Indian government, and 54.2% by

Suzuki of Japan. The Indian government held an initial public offering of 25% of the

company in June 2003. As of May 10, 2007, Govt. of India sold its complete share to

Indian financial institutions. With this, Govt. of India no longer has stake in Maruti

Udyog.

The company annually exports more than 30,000 cars and has an extremely large

domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was

the India's largest selling compact car ever since it was launched in 1983. More than a

million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the

sales charts.

SWOT analysis

Strengths:

Established distribution and after sales networks

Understanding of the Indian market and ability to liaison with the government.

Ability to design products with differentiating features

Brand image

Experience and know-how in technology

Weaknesses

Lack of experience with foreign market

Heavy import tariffs

Opportunities

Government subsidies

Tax benefits

Foreign collaboration

Increased purchasing power of Indian middleclass category

Threats

Threats from Chinese manufacturers

Indian as well as foreign competitors.

PEST analysis

Political Assessment:

The auto policy of Government which has direct implications on Tata Motors

Labour reforms

Economic Assessment:

High domestic demand

High economic growth

Reduction in taxes

Tapping new markets

Labour cost advantage

Increase in disposable income

Social Assessment:

Employment Generation

Attitude to Work

Environmental Responsibility

Social Image

Technological Assessment:

Threat from One lakh car

Impact of technology transfer: -

Alliances and joint ventures

Research and development

Marketing Strategy analysis for Maruti Suzuki

Strengths (Internal Environment)

Maruti Suzuki Ltd. (MUL)

MARUTI is in a leadership position in the market.

Major strength of MARUTI is having largest network of dealers and after sales

service caters in the country.

Complementary product range in small car segment

o Maruti 800

o Omni

o Alto

o Zen

o Wagon R

Good promotional strategy is adopted by MARUTI to transform concepts to

products

Baleno: “Missed the flight catch Baleno” The most comfortable Car even in long

drives

Esteem: “My Daddy’s Big Car” Affordable mid size car

Alto: “Lets Go” The fuel efficient and affordable car

After Sales Service “Kya yanha Maruti Service Station hai”. Availability of

service stations even in the remotest place in the country.

Refurbished Cars: MARUTI has also entered into second hand car market with a

brand name “Maruti True Value”.

Loyal Customer Base is another big strength of MARUTI. In JD Power survey,

MARUTI has been awarded consequently 5th year for best customer satisfaction.

Strong Brand Value

Availability of raw material

Weakness (Internal Environment)

Lack of having products in mid size car segment could result in shifting of loyal

customers who has a desire to upgrade their cars.

Low interior quality in cars.

Labour Laws and Labour Unions are not conducive to growth

Government intervention due to having share in MARUTI.

Opportunity (External Environment)

MARUTI may encash the opportunity to enter again into the diesel segment of the

cars to compete its nearest competitor TATA in diesel segment of small cars. Though

MARUTI launched Zen in diesel version but it was not successful.

MARUTI has launched its LPG version of Wagon R and it was a good move

simultaneously MARUTI can start R&D on electric cars for a much better substitute

of the fuel.

Economic growth of the country is sound and promising in future.

Liberal policies of GOI.

Big Market: Domestic and Abroad

Threat (External Environment)

Tata Motors’s Nano with a price tag of Rs. 1 Lac and that could give a big impact on

sales of MARUTI

TATA MOTORS is a challenger and trying hard to achieve number one position in

the market.

China may give a good competition as they are also planning to enter into car

segment.

Marketing Strategy analysis for Tata motors

Strengths (Internal Environment)

In few years of operation, Tata Motors has secured a challenger position in the car

segment being second largest car manufacturer of India.

Product line in all sizes of cars.

Presence in diesel segment of cars.

Option available to customer to upgrade their cars being with the company.

Good Promotional strategy

Strong Brand Value.

Availability of raw material

Weakness (Internal Environment)

Less number of dealers and service stations

Not able to transfer its car specialty as Maruti is doing rather more relied on its brand

name. Though endorsing celebrities was successful initially but at the same time

company needs to transfer the thoughts by telling better qualities of the car to its

customer as MUL is doing

No celebrity endorsing the brand

Opportunity (External Environment)

Tata Motors may also enter into the diesel segment for Nano. The company lauched

its mid size cars in diesel segment with CRDI engines and it was very successful.

Tata Motors has a faster and better go-to-market strategy than its competitor Maruti.

R&D on fuel substitution has become must to sustain longer in future.

Economic growth of the country is sound and promising in future.

Liberal policies of GOI.

Big Market: Domestic and Abroad

Threat (External Environment)

o Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could

give a big impact on sales of other products of Tata Motors. It could also lead to price

wars with its competitors

o Maruti is very fast in reaction to developments made by Tata Motors to retain its

leadership position.

o China may give a good competition as they are also planning to enter into car

segment.

Conclusion

Maruti Suzuki has a good marketing strategy and it is showing good results however, the lack of

having the complete product line may cause customer loyalty in a long run. It is seen that the first

entry of Maruti in diesel segment was not that good and successful it should try to come up with

better diesel engines along with new versions of cars. The government intervention due to having

partial ownership in Maruti may cause problems in due course if the political situations are

adverse.

Tata Motors has got a very good response due to its brand name association with Tata. It needs

endorsement by celebrities with its products and needs create a good image of its products by

transferring the technical know-how and brand equity from heavy vehicles category. Tata Motors

has a good track record of having successful diesel mid size cars in its portfolio and it should

encash the same opportunity to launch the diesel versions of Nano to future increase their

competitive advantage.

References Annual report of Tata motors

Annual report of Marati Udyog

www.wikipedia.com