Projectonindianautomotiveindustry and Case Study of Tata Motors

8/11/2019 Projectonindianautomotiveindustry and Case Study of Tata Motors

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OBJECTIVES

To understand the market potentiality for TATA Motors.

To determine the acceptable price of the product.

To determine the requirements and needs of the potential customers.

To know what people perceive and thinking about Tata Motors and its products.

To analyze the brand repositioning strategies of Tata Motors.

To study consumer awareness and perception about the brand repositioning strategies ofTata Motors.

To find out the satisfaction level of people.

To find out the awareness level of customer.

To find the satisfaction amongst the customers of TATA Motors.


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Automotive industry in India

The automotive industry in Indiais one of the largest in the world and one of the fastest

growing globally. India's passenger car and commercial vehicle manufacturing industry is

the sixth largest in the world, with an annual production of more than 3.9 million units in

2011. According to recent reports, India overtook Brazil and became the sixth largest

passenger vehicle producer in the world (beating such old and new auto makers as

Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil),

growing 16 to 18 per cent to sell around three million units in the course of 2011-12. In

2009, India emerged as Asia's fourth largest exporter of passenger cars behind Japan,

South Korea, and Thailand.In 2010, India beat Thailand to become Asia's third largest

exporter of passenger cars. The Indian Automobile Industry manufactures over 11 millionvehicles and exports about 1.5 million each year.[The dominant products of the industry

are two-wheelers with a market share of over 75% and passenger cars with a market

share of about 16%. Commercial vehicles and three-wheelers share about 9% of the

market between them. About 91% of the vehicles sold are used by households and only

about 9% for commercial purposes. The industry has a turnover of more than USD $35

billion and provides direct and indirect employment to over 13 million people.??? Tata

Motors is leading the commercial vehicle segment with a market share of about

64%.Maruti Suzuki is leading the passenger vehicle segment with a market share of

46%. Hyundai Motor India Limited and Mahindra and Mahindra are focusing expanding

their footprint in the overseas market. Hero MotoCorp is occupying over 41% and

sharing 26% of the two-wheeler market in India with Bajaj Auto. Bajaj Auto in itself is

occupying about 58% of the three-wheeler market.


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Key players in the automobile industry

Mahindra & Mahindra Ltd.

Tata Motors

Maruti Suzuki India Ltd.

Hyundai Motor India Ltd.

Hindustan Motors

TVS Motors

Toyota Kirloskar Motor Private Ltd.

Ford Motor Co.

Hero Honda Motors Limited

Ashok Leyland

General Motors India Private Ltd.

LML

Kinetic Engineering Ltd.

Bajaj Auto Ltd.

Hero Honda Motors Ltd.


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MarutiSwift.Maruti Suzuki, a subsidiary of Japan'sSuzuki Motor, is the largest automobile

manufacturer in India.

Mahindra Scorpio,one of India's best selling indigenously developedSUV.

TheTata Nano- the cheapest car made in India
http://en.wikipedia.org/wiki/Suzuki_Motorhttp://en.wikipedia.org/wiki/Suzuki_Motorhttp://en.wikipedia.org/wiki/Suzuki_Motorhttp://en.wikipedia.org/wiki/Mahindra_Scorpiohttp://en.wikipedia.org/wiki/Mahindra_Scorpiohttp://en.wikipedia.org/wiki/SUVhttp://en.wikipedia.org/wiki/SUVhttp://en.wikipedia.org/wiki/SUVhttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/SUVhttp://en.wikipedia.org/wiki/Mahindra_Scorpiohttp://en.wikipedia.org/wiki/Suzuki_Motor


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SWOT Analysis - Tata Motors Limited

The company began in 1945 and has produced more than 4 million vehicles. Tata Motors

Limited is the largest car producer in India. It manufactures commercial and passenger

vehicles, and employs in excess of 23,000 people. This SWOT analysisis about Tata

Motors.

Strengths

The internationalisation strategy so far has been to keep local managers in new

acquisitions, and to only transplant a couple of senior managers from India into the new

market. The benefit is that Tata has been able to exchange expertise. For example after

the Daewoo acquisition the Indian company leaned work discipline and how to get the

final product 'right first time.'

The company has a strategy in place for the next stage of its expansion. Not only is it

focusing upon new products and acquisitions, but it also has a programme of intensive

management development in place in order to establish its leaders for tomorrow.

The company has had a successful alliance with Italian mass producer Fiat since 2006.

This has enhanced the product portfolio for Tata and Fiat in terms of production and

knowledge exchange. For example, the Fiat Palio Style was launched by Tata in 2007,

and the companies have an agreement to build a pick-up targeted at Central and South

America.

The Nano is Tatas iPod. Great engineering and design in a rules-breaking product that

has generated global awareness and admiration

The brand is very well established in the economy segment

Tatas management is strengthened by the collective experience of its partners and

acquired companiesthis includes general management, marketing, sales and operations

Tatas buying power is enhanced and leveraged through its size


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Tata is making smart acquisition and partnering decisions so far. Local management

teams remain in place vs. installing Tata leaders from afar.

Weaknesses

The company's passenger car products are based upon 3rd and 4th generation platforms,

which put Tata Motors Limited at a disadvantage with competing car manufacturers.

Despite buying the Jaguar and Land Rover brands (see opportunities below); Tata has not

got a foothold in the luxury car segment in its domestic, Indian market. Is the brand

associated with commercial vehicles and low-cost passenger cars to the extent that it has

isolated itself from lucrative segments in a more aspiring India?

One weakness which is often not recognised is that in English the word 'tat' means

rubbish. Would the brand sensitive British consumer ever buy into such a brand? Maybe

not, but they would buy into Fiat, Jaguar and Land Rover.

Tata Motors is not well positioned in the luxury segment. This is not a problem during

recessionary times but a lack of diversification can hurt during better times

Most of the automobiles Tata manufactures are based on older platforms

The Companys manufacturing practices trail competitors

Opportunities

In the summer of 2008 Tata Motor's announced that it had successfully purchased the

Land Rover and Jaguar brands from Ford Motors for UK 2.3 million. Two of the

World's luxury car brand have been added to its portfolio of brands, and will undoubtedly

off the company the chance to market vehicles in the luxury segments.

Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for

around USD $16 million.

Nano is the cheapest car in the World - retailing at little more than a motorbike. Whilst

the World is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer


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in terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will

cost up to 85 times more than a standard Nano!

The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly

engines. The bus has optional organic clutch with booster assist and better air intakes that

will reduce fuel consumption by up to 10%.

The Nano could sell well in other geographic markets. Expanding markets such as

China may find the Nano just the answer

Jaguar and Land Rover provide Tata with an opportunity to establish itself in the luxury

segment

Threats

Other competing car manufacturers have been in the passenger car business for 40, 50 or

more years. Therefore Tata Motors Limited has to catch up in terms of quality and lean

production.

Sustainability and environmentalism could mean extra costs for this low-cost producer.

This could impact its underpinning competitive advantage. Obviously, as Tata globalises

and buys into other brands this problem could be alleviated.

Since the company has focused upon the commercial and small vehicle segments, it has

left itself open to competition from overseas companies for the emerging Indian luxury

segments. For example ICICI bank and DaimlerChrysler have invested in a new Pune-

based plant which will build 5000 new Mercedes-Benz per annum. Other players

developing luxury cars targeted at the Indian market include Ford, Honda and Toyota. In

fact the entire Indian market has become a target for other global competitors including

MarutiUdyog, General Motors, Ford and others.

Rising prices in the global economy could pose a threat to Tata Motors Limited on a

couple of fronts. The price of steel and aluminium is increasing putting pressure on the


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costs of production. Many of Tata's products run on Diesel fuel which is becoming

expensive globally and within its traditional home market.

Powerful competitors for the luxury market including Honda, Toyota, Ford and

Mercedes-Benz are beginning to push into the Indian market

Tatas competitive price advantage will be under pressure as environmental regulations

are tightened

Rising material costs will create pressure to increase prices

There is a trending rise in diesel fuel costs which will hurt Tatas line of products


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Mid priced segment targeted by the Automobile industry

Tata Motors

Tata motors has targeted on themid priced segment through its new Tata Indigo. Tata

Indigo has an innovative design. Inspiring front frame and bright headlamps make the car

look exclusive. In the back end, the vehicle has a trendy taillights bunch. Its comfortable

seats provide you more reliable driving. Even with being a compact car, it provides

enough leg and head room for both front and rear seat passengers. Tata indigo has well-

appointed interiors. Its steering is very comfortable. Tata Indigo is available in both

diesel and petrol engine. The petrol variants of the car are GLX, GLE and, GLS while the

diesel versions come in two models LS and LX . The models are in the price tag of

approximate Rs 4.75 lakhs to Rs 5.90 lakhs.

Mahindra and mahindra motors

Hindustan motors have targeted the mid priced segments through its Verito the

Logan. The new Verito retains the famed strengths of the Logan, while adding a new

style with some key changes. Now equipped with several rugged and sporty styling

elements, the Verito is all set to be the most exciting buy in the entry level sedan category

for Indian consumers. It is competitively priced at Rs. 4.82 lakh (petrol BS3 version) &

5.62 lakh (Diesel BS3 version). The BS4 compliant version is also available for BS4

markets.

Powered by the Renault engine, the Verito is a sedan which remains true to itself and the

consumer by offering the unique proposition of space, mileage and performance along with style.

The exterior of this car is quite unique with ski racks and side cladding, which are available for

the first time on a sedan in the Indian market. Other 1 is the Bolero -Base model is priced at Rs.

6.19 lakhs (Ex-showroom New Delhi) (September, 2011) Will be available in four variants: SLE,SLX, and ZLX (New variant introduced). Features are revised front grille and new bumpers

which include the all-new hawk-eye head lamps.It consists of a new gear knob and leather

wrapped steering wheel in top model,all-new digital instrument cluster,new rear wiper and

defogger, new beige coloured interiors, new body decals/graphics.


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Tata indigo

Mahindra and mahindraverito

Mahindra bolero

Ashok leyland truck


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MARKET STRUCTURE

CHARACTERISTICS OF OLIGOPOYMARKET

Profit maximisation conditions: An oligopoly maximises profits by producing where

marginal revenue equals marginal costs

Ability to set price: Oligopolies are price setters rather than price takers

Entry and exit: Barriers to entry are high.The most important barriers are economies of

scale, patents, access to expensive and complex technology, and strategic actions by

incumbent firms designed to discourage or destroy nascent firms. Additional sources of

barriers to entry often result from government regulation favoring existing firms making

it difficult for new firms to enter the market

Number of firms: "Few"a "handful" of sellers There are so few firms that the actions

of one firm can influence the actions of the other firms.

Long run profits: Oligopolies can retain long run abnormal profits. High barriers of

entry prevent sideline firms from entering market to capture excess profits.

Product differentiation: Product may be homogeneous (steel) or differentiated

(automobiles).

Perfect knowledge: Assumptions about perfect knowledge vary but the knowledge of

various economic actors can be generally described as selective. Oligopolies have perfect

knowledge of their own cost and demand functions but their inter-firm information may

be incomplete. Buyers have only imperfect knowledge as to price, cost and product

quality.


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PRICE LEADERSHIP IN OLIGOPOLISTIC MARKETS

Oligopolies may pursue the following pricing strategies:

Oligopolists may use predatory pricing to force rivals out of the market. This means

keeping price artificially low, and often below the full cost of production.

They may also operate a limit-pricingstrategy to deter entrants, which is also called entry

forestalling price.

Oligopolists may colludewith rivals and raise price together, but this may attract new

entrants.

Cost-plus pricing is a straightforward pricing method, where a firm sets a price by

calculating average production costs and then adding a fixed mark-up to achieve a

desired profit level. Cost-plus pricing is also called rule of thumbpricing.

There are different versions of cost-pus pricing, includingfull cost pricing, where all

costs - that is, fixed and variable costs - are calculated, plus a mark up for profits, andcontribution pricing, where only variable costs are calculated with precision and the

mark-up is a contribution to both fixed costs and profits. Cost-plus pricing is very useful

for firms that produce a number of different products, or where uncertainty exists. It has

been suggested that cost-plus pricing is common because a precise calculation of

marginal cost and marginal revenue is difficult for many oligopolists. Hence, it can be

regarded as a response to information failure. Cost-plus pricing is also common in

oligopoly markets because it is likely that the few firms that dominate may often share

similar costs, as in the case of petrol retailers. However, there is a risk with such a rigid

pricing strategy as rivals could adopt a more flexible discounting strategy to gain market

share.Cost-plus pricing can also be explained through the application of game theory.If

one firm uses cost-plus pricing - perhaps the dominant firm with the greatest market share

- others may follow-suit
http://economicsonline.co.uk/Business_economics/Prisoner's_dilemma.htmlhttp://economicsonline.co.uk/Business_economics/Prisoner's_dilemma.htmlhttp://economicsonline.co.uk/Business_economics/Prisoner's_dilemma.html


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INTRODUCTION

The rapid pace of change and intense competitive pressure in today's marketplace demand that

brands continuously innovate and reinvent themselves to maintain their relevance and marketposition. In this context, brand repositioning and other revitalization strategies have become abusiness imperative for battling brand erosion. The appeal of brand repositioning is furtherheightened by the rising costs and high risk associated with launching a new brand.

Brand repositioning has received little attention in the marketing literature and has mostly beentreated as a variation of brand positioning. Biel, for example, has defined brand positioning as"building (or rebuilding) an image for a brand". The goal of positioning and repositioningstrategies relates to the management of consumers' perceptions. However, positioning focuses onthe creation of brand associations - consumers' perceptions of the attributes that differentiate thebrand from competitive offers while repositioning also implies managing existing brand

associations. The unique challenge of a repositioning strategy, thus, lies in rejuvenating the brandimage to make it relevant in an evolving environment, while honoring the brand equity heritage.

Repositioning can be required as the market changes and new opportunities occur. Throughrepositioning the company can reach customers they not intended to reach in the first place. If abrand has been established at the market for some time and wish to change their image they canconsider repositioning, although one of the hardest actions in marketing is to reposition afamiliar brand.

According to Solomon, position strategy is an essential part in the marketing efforts becausecompanies have to use the elements in the marketing mix to influence the customersunderstanding of the position. During the movement from something less attractive and relevanttowards a more attractive and relevant position several of strategic choices has to be made. Theones responsible for the repositioning have to evaluate why a reposition is necessary, and if theoffer is the one who will change or just the brand name. There are several risk factors that haveto be taken into consideration when preparation for a repositioning of the offering or the brand.During repositioning, the risk of losing the credibility and reliability is high and the need for athorough strategy is therefore necessary to avoid this occurrence. Some analyst argue that tosuccessfully reposition a establish brand name is almost impossible because repositioning of abrand can make the most loyal customer to switch brand. But, in some circumstances arepositioning is necessary to gain credibility if the brand is eroded. Whenever a reposition is inquestion it has to be of relevance from a customer perspective, is this achievable? Some brandswill on no account be thought on as a luxury brand and therefore an attempt to reposition willonly damage the brand image or the actual company.

Numerous failed attempts at brand repositioning testify to the difficulty of developing andimplementing such a tactic. For example, while the soft drink brand, Mountain Dew hasremained relevant to the youth market through continuous repositioning in its thirty years ofexistence, Levis' Jeans has been losing market share to newcomers such as The Gap, despitenumerous campaigns designed to reposition the brand as trendy.


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The strategic importance of brand repositioning in preserving and enhancing brand equity,coupled with the mixed results of repositioning attempts, underscores the need to develop abetter understanding of the dynamics of brand repositioning. Specifically, questions of whether,when and how brands should be repositioned need to be addressed. Research into brand

repositioning is relevant not only to the development of brand management theory, but alsoextends to corporate strategy through an examination of corporate brands.

Indian Automobile Industry

The automotive industry in India grew at a computed annual growth rate (CAGR) of 11.5 percentover the past five years, the Economic Survey 2008-09 tabled in parliament on 2nd July09 said.

The industry has a strong multiplier effect on the economy due to its deep forward and backwardlinkages with several key segments of the economy, a finance ministry statement said.

The automobile industry, which was plagued by the economic downturn amidst a credit crisis,managed a growth of 0.7 percent in 2008-09 with passenger car sales registering 1.31 percentgrowth while the commercial vehicles segment slumped 21.7 percent.

Indian automobile industry has come a long way to from the era of the Ambassador car to Maruti800 to latest M&M Xylo. The industry is highly competitive with a number of global and Indiancompanies present today. It is projected to be the third largest auto industry by 2030 and justbehind to US & China, according to a report. The industry is estimated to be a US$ 34 billionindustry.

Indian Automobile industry can be divided into three segments i.e. two wheeler, three wheeler &

four wheeler segment. The domestic two-wheeler market is dominated by Indian as well asforeign players such as Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, and Suzuki etc.Maruti Udyog and Tata Motors are the leading passenger car manufacturers in the country. AndIndia is considered as strategic market by Suzuki, Yamaha, etc. Commercial Vehicle market iscatered by players like Tata Motors, Ashok Leyland, Volvo, Force Motors, Eicher Motors etc.

The major players have not left any stone unturned to be global. Major of the players have gotinto the merger activities with their foreign counterparts. Like Maruti with Suzuki, Hero withHonda, Tata with Fiat, Mahindra with Renault, Force Motors with Mann.

Key Facts:

India ranks 12th in the list of the worlds top 15 automakers Entry of more international players Contributes5% to the GDP Production of four wheelers in India has increased from 9.3 lakh units in 2002 -03 to 23 lakhunits in 2007-08 Targeted to be of $ 145 Billion by 2016 Exports increased from 84,000 units in 2002-03 to 280,000 units in 2007-08


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COMPANY PROFILE

TATA MOTORS LIMITED

Tata Motors Limited is India's largest automobile company, with consolidated revenues of

Rs.70, 938.85 crores (USD 14 billion) in 2008-09. It is the leader in commercial vehicles ineach segment, and among the top three in passenger vehicles with winning products in thecompact, midsize car and utility vehicle segments. The company is the world's fourth largesttruck manufacturer, and the world's second largest bus manufacturer.

The company's 24,000 employees are guided by the vision to be "best in the manner in whichwe operate best in the products we deliver and best in our value system and ethics."

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India.Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. Thecompany's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune

(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka).Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture withFiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars andFiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The company'sdealership, sales, services and spare parts network comprises over 3500 touch points; TataMotors also distributes and markets Fiat branded cars in India.

Tata Motors, the first company from India's engineering sector to be listed in the New YorkStock Exchange (September 2004), has also emerged as an international automobile company.Through subsidiaries and associate companies, Tata Motors has operations in the UK, SouthKorea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two

iconic British brands that was acquired in 2008. In 2004, it acquired the Daewoo CommercialVehicles Company, South Korea's second largest truck maker. The rechristened Tata DaewooCommercial Vehicles Company has launched several new products in the Korean market,while also exporting these products to several international markets. Today two-thirds of heavycommercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motorsacquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, andsubsequently the remaining stake in 2009. Hispano's presence is being expanded in othermarkets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a


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global leader in body-building for buses and coaches to manufacture fully-built buses andcoaches for India and select international markets. In 2006, Tata Motors entered into jointventure with Thonburi Automotive Assembly Plant Company of Thailand to manufacture andmarket the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand)has begun production of the Xenon pickup truck, with the Xenon having been launched in

Thailand in 2008.

Tata Motors is also expanding its international footprint, established through exports since1961. The company's commercial and passenger vehicles are already being marketed in severalcountries in Europe, Africa, the Middle East, South East Asia, South Asia and South America.It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia,Senegal and South Africa.

The foundation of the company's growth over the last 50 years is a deep understanding ofeconomic stimuli and customer needs, and the ability to translate them into customer-desiredofferings through leading edge R&D. With over 3,000 engineers and scientists, the company's

Engineering Research Centre, established in 1966, has enabled pioneering technologies andproducts. The company today has R&D centers in Pune, Jamshedpur, Lucknow, Dharwad inIndia, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the firstindigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch,Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created anew segment by launching the Tata Ace, India's first indigenously developed mini-truck.

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and theworld have been looking forward to. The Tata Nano has been subsequently launched, asplanned, in India in March 2009. A development, which signifies a first for the global

automobile industry, the Nano brings the comfort and safety of a car within the reach ofthousands of families. The standard version has been priced at Rs.100, 000 (excluding VATand transportation cost).

Designed with a family in mind, it has a roomy passenger compartment with generous legspace and head room. It can comfortably seat four persons. Its mono-volume design will set anew benchmark among small cars. Its safety performance exceeds regulatory requirements inIndia. Its tailpipe emission performance too exceeds regulatory requirements. In terms ofoverall pollutants, it has a lower pollution level than two-wheelers being manufactured in Indiatoday. The lean design strategy has helped minimize weight, which helps maximizeperformance per unit of energy consumed and delivers high fuel efficiency. The high fuelefficiency also ensures that the car has low carbon dioxide emissions, thereby providing thetwin benefits of an affordable transportation solution with a low carbon footprint.

In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry,in keeping with its pioneering tradition, by unveiling its new range of world standard truckscalled Prima. In their power, speed, carrying capacity, operating economy and trims, they willintroduce new benchmarks in India and match the best in the world in performance at a lowerlife-cycle cost.


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Tata Motors is equally focused on environment-friendly technologies in emissions andalternative fuels. . It has developed electric and hybrid vehicles both for personal and publictransportation. It has also been implementing several environment-friendly technologies inmanufacturing processes, significantly enhancing resource conservation

Through its subsidiaries, the company is engaged in engineering and automotive solutions,construction equipment manufacturing, automotive vehicle components manufacturing andsupply chain activities, machine tools and factory automation solutions, high-precision toolingand plastic and electronic components for automotive and computer applications, andautomotive retailing and service operations.

Tata Motors is committed to improving the quality of life of communities by working on fourthrust areas employability, education, health and environment. The activities touch the livesof more than a million citizens. The company's support on education and employability isfocused on youth and women. They range from schools to technical education institutes toactual facilitation of income generation. In health, our intervention is in both preventive and

curative health care. The goal of environment protection is achieved through tree plantation,conserving water and creating new water bodies and, last but not the least, by introducingappropriate technologies in our vehicles and operations for constantly enhancing environmentcare.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

HISTORY OF TATA MOTORS

The Company was incorporated on 1st September 1945 at Mumbai to manufacture dieselvehicles for commercial use, excavators, industrial shunter, dumpers, heavy forgings andmachine tools. The commercial diesel vehicles which were known `Tata Mercedes Benz' (TMB)is now called `Tata' vehicles after the expiry of the collaboration agreement with Daimler-BenzAG, West Germany. The company also used to manufacture pulp and paper making machinery.In 1960 the company's name, which was Tata Locomotive & Engineering Company Ltd. waschanged to Tata Engineering & Locomotive Company Ltd. In the year 1987 the companyundertook to set up a new forge shop, a high output foundry line, a new paint shop as well asaugmentation of engine and gearbox manufacturing facilities, all at Jamshedpur

In 1991 during the year the company entered into a collaborative agreement with aninternationally renowned engine research and development organization to jointly develop higherhorsepower, fuel efficient diesel and petrol engines to meet the future requirements of thecompany. The last quarter saw the company launching two new passenger vehicles, the SIERRAand the ESTATE totally designed and manufactured in India. The company acquired a BIFRcompany, M/s Noduron Founders Maharashtra Ltd. The total cost for Telco worked out to Rs.18crores as against setting up of similar critical castings foundry. During the year companylaunched new earth moving equipment TWK-3036 Tata Front End Wheel Loader. Two new


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models in the EX series of hydraulic excavators were launched. A 10 tonne pick and carryarticulated crane, designed and developed in-house was also introduced. During the yearcompany entered into an agreement with Nachi-Fujikoshi Corporation, Japan to manufacture arcand spot welding robots suitable for automobile manufacturing applications. During the year,company undertook to set up a joint venture with Asian Glass Co. Ltd., Japan to manufacture

float glass to be used as wind shields for automobiles. ACC along with Tata Exports Ltd.participated in the joint venture. The joint venture named as Floathlass India Ltd., the Companywould have a stake of 16.33%. Tata Cummins Ltd., Mercedes-Benz (India) Ltd., Tata HolsetLtd., Tata Precision Industries, Singapore and Nita Company Ltd., are the joint Ventures of theCompany

Taking advantage of the broad banding policy announced by the Government of India, theCompany entered into a collaboration agreement with Honda Motor Co. Ltd., Japan, for themanufacture of their `ACCORD' model of cars in India. On 22nd April, an agreement wasentered into between Daimler-Benz AG and Mercedes Benz AG, Germany to setup a jointventure company Mercedez-Benz India to manufacture `E' class paneyer cans and engines in

India.

During the year 1995 a new double pick-up and Army Version of various Telco Vehicles weredeveloped. A new petro engine and turbo diesel engine, an up-graded 709 LCV, new sportsutility vehicle Safari expected to be launched shortly. A 25 tonne 6 X 2 truck and a bus withcummins engine were launched.

Tata Engineering and Locomotive Company (TELCO), has acquired a second hand paint shop,machine line and cylinders from the Australian unit of the Japanese auto giant, Nissan. TELCOis believed to have picked up the unit for Rs. 70 crore. The total cost of import duty would be Rs100 crore. During the year a machine tool division was expanded so as to double its machinebuilding capacity and significantly reduce production times.

The Company has launched "TATA SAFARI" in its Multi utility vehicle segment. Tata Holset'sturbo charger plant inaugurated on November 25, 1996.

In 1997, the Tata Engineering and Locomotive Company Ltd. (TELCO) have emerged asnumerous uno in the Review 200 survey conducted by the Far Eastern Economic Review inassociation with Citi Bank. The Company introduced a 9-tonne vehicle which was well receivedin the market. A 40 tonne tractor trailer powered by a Tata Cummins Engineering wasintroduced. The Company developed a low floor bus chassis to meet the specific needs of urbantransport. The Company signed a new agreement with Hitachi for manufacture of upgradedversions of existing range of excavators.

The year 1998- Tata Engineering and Locomotive Company Ltd (Telco) announced a tie-up withTata Finance Ltd and ANZ Grindlays Banks as the official financiers for its small car "Indica" tobe launched in December. Tata Engineering Locomotive Company Ltd (Telco) sold itsconstruction equipment business into a new subsidiary company, Telco Construction EquipmentCompany Ltd. The Company in its small car segment has launched "Tata Indica" which evoked


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an overwhelming response in the Indian market. A new range of cummins engine poweredvehicle which include a 35 tonne and a 40 tonne articulated truck and two variants of buses.

To make substantial improvement in the quality of bus bodies available with TATA vehicles, theCompany encouraged collaboration between Fuji Heavy Industries of Japan and the Automobile

Corporation of Goa. The new project undertakes production of bodies on TATA chassis,conforming to the most exacting international standards. Concorde Motors Ltd., a Joint Venturebetween Tata Engineering and Jardine International Motors (Mauritius) Ltd. was appointed asdealer for the Company's passenger cars in several cities across the country, in Feb 1998.

The year 1999-Telco became the first Indian manufacturer to offer commercial vehicles meetingeuro-I emission norms, a year before they are due to be introduced in the country. It is proposedto make TCECL a one-stop shop for construction equipment and earthmoving machinery. In Oct1999, the Company won the National award for R&D Efforts in Development of IndigenousTechnology in the Mechanical Engineering Industries Sector instituted by Department ofScientific and Industrial Research, Ministry of Science and Technology for the year 1999. SKF

Bearings India Ltd has signed an agreement with Telco to supply hub bearings for its latestmodel

Tata Indica.2000 saw the Company working towards introducing two new petrol-driven variants of its smallcar Indica, powered by a multi-point fuel injection engine. The Company launched the Indica2000, the Euro II Complaint, 75 BHP multi-point fuel injection (MPFI) version of Indica. TheCompany has won the National Technology Award for indigenous development andcommercialization of the Tata Indica car. The Company has launched its new hi-tech Indica2000 car with MPFI petro engine in Guwahati.

Tata Engineering & Locomotive Co. is renamed as Tata Engineering Ltd. It replaced its three-shift production line with a one-shift daily schedule starting from 26th June. In the same yearFICCI-SEDF- Business world-Compaq award for social responsiveness was awarded to thecompany. The Central Pollution Control Board for Environmental Technology award has beenpresented to Tata Engineering in recognition of its contribution towards efforts to conserve theenvironment. TATA Engineering on September 10 announced the addition of MPFI petrolversion to the Indica V2 range.

In year 2002 Foreign Institutional Investors (FII) hike stake in the company to 13.34% launchessix new products in light, medium and heavy vehicles segments on Jan 15 during Auto Expo.Announces financial restructuring. Displays its Tata Sedan car at the Geneva Motor Show.Indica adjudged top selling B-segment car in 2002.Launches two new motorsport cars (The Zeroand Double Zero Pace cars). High Court Approves Tata Engineering's Financial Restructuring.Tata Engg, BPCL tie up to market co-branded lubricants.Tata Steel's investment in TataEngineering has been hiked to Rs 117.98 crore over the last year. Telco names Sedan as TataIndigo.Unveils 'EX' series of medium and heavy commercial vehicles. Indica sales cross two-lakh mark .Collaborates with Nippon-Arcelor for technical knowhow on CR steel. ReceivesTeri's (The Energy and Resources Institute) CoRE-BCSD (Corporate roundtable on developmentof strategies for sustainable development and environment-business council for sustainable


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development) corporate social responsibility (CSR) awards for '01-02. Unleashes Safari's petrolversion; priced at Rs 9.35 lakh.

The year 2003- Tata Unveils CityRover .Tata Motors Ltd signed a binding Memorandum ofUnderstanding (MoU) with Deawoo Commercial Vehicle Company Ltd (DWCV), Korea for the

acquisition of this company. It introduces Tata SFC 407 EX Turbo Light Commercial Vehicle(LCV). The Company changed from 'TELCO ' to 'TATAMOTORS' w.e.f December 24, 2003. Inthe same year Tata Safari ranks No 1 in MUV/SUV segment.

2004:- The year of glory. Tata Motors launch an upgraded version Indica on January 15, 2004,in a bid to shore up sales of the small car.

Auto Expo: Tata unveils new version of Indica. Tata Motors unveils Indica V2. Tata Motorslaunches new Indica V2 in Kerala. Tata Motors introduces new 'Indicab' for tour operators. Themuch hyped Rs one lakh passenger car project of Tata Motors was going ahead as planned. TataMotors enters agreement with Ukraine bus building firm. Tata Motors enters into agreement with

Etalon. In a move to consolidate its presence in the light commercial vehicles segment, TataMotors has launched a new variant of its 407 series with increased pay load capacity called SFC407EX. Tata Motors buys Daewoo truck unit for Rs 465 crore. Tata Motors unveils Tata SFC407 EX. Tata Motors inks agreement with Austrian, French companies. Acquires DaewooCommercial Vehicle Company Ltd (DWCV), Korea. Tata Motors launches most anticipated new6-tn truck in India.

Tata Motors, the country's largest commercial vehicles manufacturer unveiled the new LPT909EX Turbo Truck in Tamil Nadu. Tata Motors and Tata Africa unveiled a range of passengercars, utility vehicles, pick-ups, trucks and buses for the South African market. Tata Motors haslaunched a face lifted version of its multiutility vehicle, Tata Sumo. Tata motors rolls out TataSFC 407EX BS II turbo light commercial vehicle.

Tata Motors unveils Tata Safari DICOR in Kerala market on August 11, 2005. Tata Motorsrolls out 2 luxury variants of Indigo. Tata Motors unveiled new Indica V2 Turbo with a pricetag of Rs 4.10 lakh for DLG variant and Rs 4.31 lakh for DLX. Tata Motors ropes in CVTech tomake parts for its small car. Tata Daewoo inks pact with Pakistan co.

Tata Motors has been presented the Golden Peacock Global Award for Corporate SocialResponsibility (CSR) in the Large Business category by the Institute of Directors in 2007. TataMotors buys Nissan facility in S. Africa. Tata Motors has got a prestigious order from the DelhiTransport Corporation (DTC) for 500 non-AC, CNG-propelled buses. Tata Motors Ltd hasappointed Mr. P M Telang as Executive Director (Commercial Vehicles).


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CURRENT SITUATION

The Tata Motors group is a passenger and commercial vehicle manufacturer based in India. Themotor group was established in 1945 as part of the larger Tata Group. They have long beenknown for their commercial vehicles and in the past ten years entered into the passenger car

market. Currently, Tata Motors has a line of five passenger vehicles and a large line ofcommercial vehicles producing pickups, trucks, tractor trailers, tippers, and buses. Both productlines of the Tata Motors group have seen success, but much of this has been built upon the moredeeply established commercial vehicle product line.

Tata Motors commercial line has been established for several years in many market segmentssuch as Europe, Africa, The Middle East, Australia, Southeast Asia, and South Asia. Tata Motorshas expanded their business and market share around the world through a series of acquisitions.In 2004, they acquired Daewoo commercial vehicle Company in South Korea which was SouthKoreas second largest truck manufacturer. This acquisition gave Tata Motors a significantpresence in the Korean market. They have also entered into joint ventures with companies such

as Thonburi Automotive in 2006, which allowed them to manufacture and market pickup trucksin Thailand.

Tata Motors have been making global headlines in the auto industry lately; the largest newsbeing their acquisition of Jaguar and Land Rover from Ford. Tata paid 2.3 billion dollars toFord for the two brands that cost Ford 5.3 billion (Carty, USA Today). This is a major step forthe company because it catapults them into the luxury car business which they are not known forat this time. Tata, like many new businesses it acquires, is allowing this new segment of thebusiness to be run by previous management since they have more experience in the luxuryautomotive business. Tata will give us some space. They want us to run our business, be apremium British car company (Mike ODriscoll, managing director of Jaguar). This is yet

another large acquisition for the Tata Motors group and could create great success for thecompany in the near future.

Porter's five forces analysisis a framework for the industry analysis and business strategy.It uses concepts developed in Industrial Organization economics to derive five forces, whichdetermine the competitive intensity and therefore attractiveness of a market.

The Five Forces:1.The threat of substitute products-As we know the Indian customers choices range frommileage, pick-up, power steering to various other things so substitute is very important aspect in

this industry as other product available in the market may act as the substitute to the brands ownexisting product.

2. The threat of the entry of new competitors-New completion from the new entrant or fromexisting company is also highly potent force which a company must have to take care of for itsmarket share and growth.


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3. The intensity of competitive rivalry-The very effective way of putting competitor out of trackis pitching new vibrant products in the market so a company must be aware of this tactics by itsrival company so that it can cater the effect.

4. The bargaining power of customers-Another important aspect for a car or auto company where

they have to manage the pricing control of their product to spurt the sales in the market.

5. The bargaining power of suppliers- The distribution channel is very important in country likeIndia where the demand is highly different with all across its dimension so, supply is very muchrequired in the industry for a company.

PRODUCTS OF TATA MOTOR

1. Passenger cars and utility vehicles:

TATA SUMO GRANDETATA SAFARIIndica Vista

Tata SierraTata EstateTata Sumo/ SpacioTata IndicaTata IndigoTata Indigo MarinaTata WingerTata NanoTata Xenon XTTata Xover

2.

Concept vehicles:2000 Aria Roadster2001 Aria Coupe2002 Tata Indica2002 Tata Indiva2004 Tata Indigo Advent2005 Tata Xover2006 Tata Cliffrider2007 Tata Elegante

2009

a Prima

3.

Commercial vehicles:

TATA 1616 STARBUS

TATA MARCOPOLO BUSES

Tata Ace Telcoline /207 DI Pickup Truck

Tata 407 Ex and Ex2


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Tata 709 ExTata 809 Ex and Ex2Tata 909 Ex and Ex2Tata 1109 (Intermediate truck)Tata 1510/1512 (Medium bus)Tata 1610/1616 (Heavy bus)

Tata 1613/1615 (Medium truck)Tata 2515/2516 (Medium truck)Globus (Low Floor Bus)Tata Marcopolo Bus (Low Floor Bus)Tata 3015 (Heavy truck)Tata 3516 (Heavy truck)

Tata 4923 (Ultra-Heavy truck) (6X4)Tata Novus (Heavy truck designed by Tata Daewoo)

4. Military vehicles:

Tata LSV (Light Specialist Vehicle)

Tata 2 Stretcher AmbulanceTata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versionsTata LPTA 713 TC (4x4)Tata LPT 709 ETata SD 1015 TC (4x4)Tata LPTA 1615 TC (4x4)Tata LPTA 1621 TC (6x6)Tata LPTA 1615 T


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Projectonindianautomotiveindustry and Case Study of Tata Motors

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