Amit Darak

Kapil Bhalerao
Prajakta Bhasme
Shradha Charan
Vandana
 Tata Motors
• Industry : Automotive Manufacturing

• Started in 1945 in Mumbai with Initial production of locomotives

• Part of the Tata Group which is one of the top five business houses in

India, having history of 185+ years of successful business ventures

• Significant markets in Europe, Australia, South East Asia, Middle

east, Africa, UK etc.

• Today, Tata Motors is the second largest passenger vehicle player in

the domestic market with a market share of 16.6%

Organization Structure – TATA Motors
Senior Management Team
 Glimpses of Annual Report
• Automobile sector
– Amongst the worst-hit industrial sectors during
the period global meltdown
• Automotive sales in North America,
Continental Europe and the United Kingdom
were particularly hard-hit in 2008-09
– Rise in fuel prices
– Collapse of the banking institutions
 Glimpses of Annual Report
• Consolidated net revenues: 92,519 crores
• Profits: Rs. 2,571 crores
• Domestic sales in India for cars and commercial
vehicles
– 633,862 units
– Growth of 34.1%.
• Passenger vehicle sales
– 260,020 units
– Increased by 25.3%
 Automotive Industry
• Symbol of technical marvel by human kind
• One of the fastest growing sectors in the world
• Dynamic growth factors
– Nature of competition
– Product life cycle
– Consumer demand
• Styling, safety, and comfort
– Labor relations
– Manufacturing efficiency
“The industry is at the crossroads with global mergers and
relocation of production centers to emerging developing
economies”
Profile: Indian Automotive Industry
• The industry has grown at a CAGR of 14% p.a
over the last 5 years
• Presently, India is
– 2nd largest two wheeler market in the world
– 4th largest commercial vehicle market in the world
– 11th largest passenger car in the world and is
expected to be the 7th largest market by 2016
• The industry has emerged as a key contributor
to the Indian economy
 Players: Indian auto industry
Indian
• GM • Tata Motors
• Toyota Auto • Mahindra & Mahindra
• Ford Industry • Bajaj Auto
• Hyundai • TVS Motors
• Maruti Suzuki Global Indian • Hero Honda
• Honda • Bajaj Tempo
• Skoda OEM OEM • Ashok Leyland
• Volvo
• Mercedes

• Delphi • Bharat Forge

• Visteon Global Indian • Sundram Fasteners
• Bosch Suppliers Suppliers • Rane Group
• Denso • Shriram Pistons
• Valeo • RICO Auto
• Thyssen Krupp Engineering & • Sono Koyo Steering
Development
Companies

The Indian auto industry is highly competitive

with a number of global and Indian auto companies present
 Automotive clusters in India
North / Central South
Ashok Leyland Eicher Ashok Leyland Enfield
Force MotorsHero Honda Ford Greaves
Hindustan Motors Honda Hindustan Motors Hyundai
Delhi-Gurgaon-Noida-
Ghaziabad Honda SIEL ICML Mahindra & MahindraTatra
Ludhiana Kinetic LML Toyota Kirloskar TVS Motors
Haridwar Volvo
Majestic Maruti Suzuki
Piaggio Yamaha
Swaraj Mazda Tata Motors
Pitampur

Jamshedpur East West

Hindustan Motors Ashok Leyland Atul Auto
Rajkot-Halol Kolkata Tata Motors Bajaj Auto Daimler Chrysler
FIAT Force Motors
GM Greaves Kinetic
M&M Premier
Mumbai-Pune-Nasik Skoda Tata Motors
Aurangabad Hyderabad

Major automotive clusters

Chennai Bangalore Hosur
•Mumbai-Pune-Nasik-Aurangabad (West)
•Chennai -Bangalore-Hosur (South)
•Delhi-Gurgaon-Faridabad (North)
 Strategic Analysis
• Core Ideologies – Integrity, understanding,
excellence, unity and responsibility.
• SBU structure - evolved through acquisitions, joint
ventures and partnerships .
• SBUs divided as:
 Cash flow generator – commercial vehicles
 Potential top performer – Jaguar
 Top performer – Tata Technologies and Light
vehicle segment.
 Cont…
• Core competencies – low cost car; acquisition, merger and
expansion; developing market.
• CSR:
 Green matters – production complies with environment standards
 Employability – training the local youth
 Health – free health programmes
 Education – Shiksha Prasar Kendra
• 7P’s – promotion, purpose, product, price, place, people and
process
• Balance Score Card Collaborative Hall Of Fame Award – company’s
performance.
 SWOT Analysis
• Strength – high market share, low price car,
reputation, aggressive global acquisition, R&D and
high corporate responsibility.
• Weakness – low ROI, inability to meet safety standards
and low domestic sales.
• Opportunities –for people with low purchasing power,
improvise safety features.
• Threats – leakage of production methodology, rising
prices of aluminium, steel and plastic and other
palyers.
 Current Issues -

• Successor of Tata Group

• Weak hold in high-end premium car segment
• Acquisition of Jaguar/Land Rover
 Successor of Tata Group
Possible facts which may influence the decision –
• 65% of the total income is from overseas
• No representation of international professionals at all
• Old blood more than young
• Need to advertise in brands other than IT, steel and
cars
• In the period of Ratan Tata the income has increased
10 times but profit only by 4 times as most of it was
distributed among shareholders
Weak hold in high-end premium
car segment
Customer Habits & Market Segmentation – which made Tata
successful

• Cars priced below Rs. 500,000 account for nearly 80% of the
market.
• Vehicles priced between Rs. 300,000 – 500,000 form the
largest segment in the passenger car market.
• Indian customers are highly discerning, educated and well
informed. They are price sensitive and put a lot of emphasis
on value for money
• Preference for small cars. Small cars are socially acceptable,
even amongst the well-off
• Preference for fuel efficient cars with low running costs. The
Tata Indica has the lowest running cost at Rs 2.30 per km.
 Key Market Drivers – Social

• Growth in urbanization
• Upward migration of household income levels
• Low interest rates translating to low financing
and acquisition costs hence greater
affordability.
• 85% of Cars are financed in India (15% in
China)
 Tata’s strategy to counter cyclicity

• Retain high Market Share in existing segments

& enter less cyclical segments in India
• Build Strong position in emerging segments in
new geographies
• Lower Break Even Point
 Acquisition of Jaguar/Land Rover
Possible Favorable outcomes :-
• To spread its business across different geographies
and across different customer segments
• Opportunity to move into the Premium car and SUV
segment with access to two world class, iconic brands
• Long term benefits from component sourcing, low
cost engineering and design services
• It would reduce the company’s dependence on the
Indian market, which accounted for 90% of its sales
 Possible Unfavorable outcomes or Challenges :-
• Need of huge capital expenditure to revive the
fortunes of Jaguar and Land Rover
• No experiences in these segments
• Tough competition with Volkswagen, Daimler,
and BMW
• Impact on profitability of Tata Motors in the
near future
• Slowing down of the European and US
automobile markets
Future potential of Automobile Industry
• Creating new wealth by delivering value to the
world and by delivering value to the domestic user
• Employability opportunity
• Globalization and the convergence of information
and communications
• Automobile Component industry emerging as a
major destination for global players
• Increasing size of domestic market
 Challenges Ahead
• Road infrastructure
• Transportation fuel
• Technology infrastructure
• Societal partnerships
THANK YOU…