TATA Motors Global Expansion

Global Expansion

Company Profile

• India's largest automobile company,

with consolidated revenues of

INR 1,88,818 crores (USD 34.7 billion) in 2012-13

• World's fifth largest truck manufacturer and fourth largest bus manufacturer

• Established in 1945

• Over 8 million Tata vehicles ply on Indian roads

Industrial joint venture

• With Fiat Group Automobiles

at Ranjangaon (Maharashtra)

to produce both Fiat and Tata cars and Fiat powertrains

• Domestic Joint Venture

Industrial joint venture

• Formed a 51:49 joint venture with the Brazil-based, Marcopolo, a global leader in body-

building for buses and

coaches to manufacture

fully-built buses and coach

for India.

Going Global

• Listed in the New York Stock Exchange

(September 2004)

• Has operations in the UK, South Korea, Thailand, South Africa and Indonesia

Acquisitions (South Korea)

• In 2004, it acquired

the Daewoo Commercial

Vehicles Company, South Korea's

second largest truck maker

• Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo

Acquisitions (UK)

• Ford had acquired Jaguar Cars in 1989 and Land Rover from BMW in 2000 • Ford and Tata Motors announced the anticipated deal for Tata to

pay $2.3 billion for the two brands that cost Ford $5.3 billion • In 2008, the Jaguar Land Rover company was established when Tata

Motors acquired the Jaguar and Land Rover businesses from Ford

• In September 2011, construction of a new engine plant at the i54 business park near Wolverhampton, central England, to manufacture a family of four-cylinder petrol and diesel engines

Joint Venture (Thailand)

• In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand, and entered the market in 2008

Joint Venture (Africa)

• Tata Motors' joint venture with Tata Africa Holding (Pty) Ltd. set up in 2011, has an assembly plant in Rosslyn, north of Pretoria.

• The plant can assemble, semi knocked down (SKD) kits, light, medium and heavy commercial vehicles ranging from 4 tonnes to 50 tonnes.

Market Entry (UK)

• Why UK ?? – the favourable economic agent – market dynamics and potential, language similarity

• Why not USA, Russia ??

– extremely high quality requirements and other non-tariff barriers

– market is highly mature – the uncertainty of the further economic state, high

entry barriers and no well—developed dealership network

Political Factors (UK)

• India cooperates with the UK within the regime of favourability which implies the certain benefits as reduced tariff and non-tariff barriers

• Foreign regulation provides foreign companies with flexibility of choosing

between all possible entry

and expansion modes

Economic Factors (UK)

• The target market size - The current UK

car parc is estimated to accommodate

31 million units. The market value was

contributed by the steady growth of average price level.

• The maturity of the target market - The UK market is viewed (Mintel, 2006) as highly mature. The current maturity causes overcapacity issue and significant sales fall of particular car segments.

Nevertheless, certain the sales of certain car segments have significant growth potential due to the impact of socio-cultural and technological factors

Economic Factors (UK)

• Currency stability - The current strong state of British pound against other currencies have minimised currency fluctuation risk

• The expansion of existing political and economic blocs (EU) - The importance of the recent further expansion of EU is in the enlargement of the EU as single market

Major Competetitors

In UK..

• The financial crisis hit soon after the deal closed, and demand for luxury cars tumbled in Europe and North America — its two biggest markets

• Tata Motors was forced to put more money into the company after it failed to secure financial aid from Britain

In UK..

• “The acquisition has worked because the investment has been carefully targeted and effective,” Phil Popham, global operations director for Jaguar Land Rover.

• “Our growth is supported by a disciplined financial plan involving tight cost controls and targeted investments.”

In UK..

• In 2013, Land Rover sales rose 15 percent to 348,383 units

while Jaguar nearly doubled its sales to 76,668 units

• Sales of North America rose by 40 percent Y-o-Y to 6661 units and UK jumped by 39 percent Y-o-Y to 1066 units

• The company claims to support over 190,000 UK jobs through its overall supply chain and dealer network and has plans to invest 2.75 billion pounds in its products and facilities in the financial year ending March 2014

In UK..

• According to NY Times, August 30, 2012

– Tata has done what few companies from emerging markets have been able to do — turn around and successfully run a troubled Western company

– Tim Urquhart, a senior analyst at IHS Automotive in London says, “If you look at Land Rover and Jaguar now, they probably have the strongest product line in their recent history if not ever.”

Expansion in China ??

• Perhaps for purists of this very 'British’ brand, a joint venture with Chery Automobile will see JLR vehicles assembled in China, the group’s most important market

Global Operations

• Commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia, South America, CIS and Russia

• Has franchisee/joint venture

assembly operations in

Bangladesh, Nepal, Ukraine,

and Senegal

TATA Motors in Nepal

• Exclusive distributor of Tata Motors in Nepal since 1982

THANK YOU !!!