Tata Motors - An Insight

Tata Motors – An Insight
BY:
Neetika Sharma
Jyoti Sahrawat
Dhruv Dudeja
Angad Dhillon
Adarsh Awana
Company Profile
• 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.
• It is India's largest company in the automobile and
commercial vehicle sector with upwards of 70% cumulative
market share in the domestic commercial vehicle segment,
and had a 0.81% share of the world market in 2007 according
to OICA data.
SWOT analysis
Strengths
• The internationalization 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 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 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 program of intensive
management development in place in order to establish its
leaders for tomorrow.
Weaknesses
• Despite buying the Jaguar and Land Rover brands (see

opportunities below); Tat 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?
• 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.
• 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 (see
opportunities and strengths).
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.
• The new global track platform is about to be launched from
its Korean (previously Daewoo) plant. Again, at a time when
the World is looking for environmentally friendly transport
alternatives, is now the right time to move into this segment?
The answer to this question (and the one above) is that new
and emerging industrial nations such as India, South Korea
and China will have a thirst for low-cost passenger and
commercial vehicles. These are the opportunities. However
the company has put in place a very proactive Corporate
Social Responsibility (CSR) committee to address potential
strategies that will make is operations more sustainable.
• 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 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%.
Threats
• Sustainability and environmentalism could mean extra costs
for this low-cost producer. This could impact its underpinning
competitive advantage. Obviously, as Tata globalizes and buys
into other brands this problem could be alleviated.
• Rising prices in the global economy could pose a threat to

Tata Motors Limited on a couple of fronts. The price of steel
and aluminum is increasing putting pressure on the costs of
production. Many of Tata’s products run on Diesel fuel which
is becoming expensive globally and within its traditional home
market.
• 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 Maruti Udyog, General
Motors, Ford and others.
• 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.
Changes in Business Policies
• Change in the top management
• Working Capital mgt
• Quality Initiatives for Clear and visible results
• Gearing up with CRM
• Getting the right systems
• Customer’s Safety First
• Partnering Again
Present Sales Figures– Tata
Motors
2005 - 2006 2004- 2005 Growth
454345 (total exports) 399566 13.7%
56406 (cumulative for 44432 27%

march)
6508 (cumulative) 3964 64.2%
22609 (PV – march) 20000 13.1%

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Tata Motors – An Insight

• The internationalization strategy so far has been to keep local

• Despite buying the Jaguar and Land Rover brands (see

• One weakness which is often not recognised is that in English

• Tata Motors Limited acquired Daewoo Motor’s Commercial

• The range of Super Milo fuel efficient buses are powered by

• Rising prices in the global economy could pose a threat to

• Other competing car manufacturers have been in the

454345 (total exports) 399566 13.7%

56406 (cumulative for 44432 27%

6508 (cumulative) 3964 64.2%

22609 (PV – march) 20000 13.1%

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