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1
Background of Tata Motors
Tata group of companies was founded by Jamsetji N Tata in the second half of the 19th century, when
India was still under British Rule. A visionary entrepreneur, an avowed nationalist and a committed
philanthropist, Jamsetji Tata helped pave the path of Indias industrialisation by seeding pioneering
businesses in sectors such as steel, energy, textiles and hospitality. The Tata group comprises over
100 operating companies in seven business sectors: communications and information technology,
engineering, materials, services, energy, consumer products and chemicals. The group has operations
in more than 80 countries across six continents, and its companies export products and services to
85 countries.
Tata Motors is Indias largest automobile company, with consolidated revenues of INR 1, 88,818
crores (USD 34.7 billion) in 2012-13. It is a Fortune 500 company, with presence both in India and
across the globe. Established in 1945, Tata Motors presence cuts across the length and breadth
of India. Today, over 7.5 million Tata vehicles ply on Indian roads, since the frst truck rolled out in
1954. The companys manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad
(Karnataka). It has also acquired Daewoo Commercial Vehicle Company (now Tata Daewoo) of South
Korea, Hispano Carrocera of Spain, and has a joint venture with Marcopolo of Brazil for manufacturing
fully built buses and coaches. In 2008 Tata Motors bought over marquee car brands Jaguar & Land
Rover from Ford. Tata Motors also has a majority stake in Italian design and engineering company
Trilix. It is the leader in commercial vehicles in almost all segments, and amongst the top 5 in
passenger vehicles with winning products in the compact, midsize car and utility vehicle segments.
It is also the worlds fourth largest truck and bus manufacturer. Tata Motors Groups over 60,000
employees are guided by the One Team One Vision philosophy - to be passionate in anticipating
and providing the best vehicles and experiences that excite our customers globally.
Evolution of Tata Motors Commercial
Vehicle (CV) Business
Tata Motors commenced production in 1954 with the manufacture of medium commercial vehicles
in collaboration with Mercedes Benz. The import content was slowly brought down over the years,
and by the year 1969 when the collaboration ended it was almost negligible. Tata Motors had by
then developed the knowhow to design its own vehicles. By the seventies the company broadened
its range to include Heavy commercial vehicles with products of its own design. It went on to lead
the M&HCV segment in India. Over the years Tata Motors has got into many new segments in the
commercial vehicle segment and also created segments of its own with innovative products like the
Tata Ace, Zip, Magic & Iris. It has gone on to be the market leader in almost all the segments that it
operates in the commercial vehicle space.
2
Global Commercial Vehicle Business
(in the last 5 years)
The commercial vehicle business around the world is cyclical in nature in terms of sales. Similar
pattern has been seen in the last 5 years. The period between FY 2008-09 was particularly severe
on the commercial vehicle industry with most Original Equipment Manufacturers (OEM) suffering
huge setback in terms of sales. OEMs from established markets continue to face a number of
challenges to maintain or grow their market position in their respective domestic markets. These
include increasingly stringent regulations, rising fuel prices and largely saturated markets.
The balance of power in the global commercial vehicle market has changed decisively over the past
fve years. Between 2006 and 2010 Western Europes share in commercial vehicle market fell from
10 to 7 percent & in North America it fell from 50 to 32 percent. Market share losses of the saturated
markets contrast with strong market share gains in the emerging markets. China sharply increased
its global market share in 2009 by about 10 percent to 28 percent, replacing the US as the largest
commercial vehicle market, largely due to governmental support initiatives. By 2010, Chinese global
market share had already grown to 30 percent. India enjoyed similar although less spectacular
growth. Asia is now by far the largest region for commercial vehicle sales, accounting for nearly one
in two commercial vehicles sold worldwide.
The commercial vehicle market will continue to grow over the coming years, with a fundamental
rebalancing of the global market. The worldwide distribution of power within the commercial vehicle
industry has shifted since 2006. Asian manufacturers have secured a stronger position at the expense
of global manufacturers, such as Daimler, Volvo Trucks and Paccar, which previously dominated the
heavy duty market.
Indian Commercial Vehicle business
(in the last 5 years)
Road has always been the dominant mode of transport in India, accounting for around 60% of the
total transport volume, in spite of them being narrow and congested with poor surface quality. Due
to the long-standing history of poor quality roads and low customer expectations, Indian trucks
have traditionally been technically unsophisticated and are mainly operated by owner-drivers who
typically take care of their trucks maintenance and repair themselves.
Like most emerging markets, low-cost trucks dominate the Indian market. However, India has been
subject to slightly stronger fuctuations in terms of commercial vehicle development. One peculiarity
of the Indian market structure is the high percentage of light trucks. The Indian market is largely
consolidated, with a 90 percent market share split between the top 3 Indian manufacturers.
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With the opening up of economy, India has been gradually reducing protectionist measures since
the early 1990s. The automobile industry has completely opened up to foreign investments. Import
regulations and customs duties no longer constitute a true barrier for completely knocked down
(CKD) and completely built up (CBU) production. Big global players like Daimler & Volvo have entered
into the Indian market taking advantage of this favourable investment environment. Daimler has
formed a subsidiary, Daimler India Commercial Vehicles, and recently announced its own brand
for the Indian market BharatBenz. Volvo entered the luxury bus segment in 2006 and is leading
player in this segment. In 2008, Volvo Trucks formed a Joint Venture (JV) with Eicher Volvo Eicher
Commercial Vehicles (VECV). Under this JV, Volvos heavy duty trucks are being offered in India in
addition to trucks and buses already provided by Eicher. These organizations have clearly given an
indication about their long term strategy for the Indian market.
Tata Motors Commercial Vehicle
Business
Medium & Heavy Commercial Vehicles (M&HCV)
Commercial vehicles are divided into various categories based on their usage, load capacity etc.
Figure 1 gives an illustration of the basic categorization of commercial vehicles. At Tata Motors, the
M&HCV product line is broadly divided under 2 categories, namely Cargo and ConsTruck

. While
Cargo line has normal load carrying trucks, ConsTruck

Range of trucks is engineered to meet the

demands of the construction and mining industry. The cargo product line is further bifurcated on
tonnage and has a range from 16 tons to 49 tons. Similarly the ConsTruck

range has trucks and

tippers with tonnage from 16 tons to 31 tons. The various product categories of Tata Motors in
M&HCV segment, with sample models is given in the Annexure I (Figure 2)
After experiencing a volume growth of over 30% during 2009-10 and 2010-11, the buoyancy in
domestic CV industry has been on a wane. The M&HCV industry bore the brunt of slowing industrial
activity, weak investment sentiment and the impact of signifcant feet capacity addition over the
past three years, especially in the heavy-duty categories of the trucking market. Within the M&HCV
segment, the contraction in demand for the higher tonnage category of trucks such as tippers,
tractor trailers and multi-axle vehicles (MAVs) has been the sharpest. These factors caused M&HCV
volumes to shrink by a sharp 29% Year-on-Year in FY 2012-13. From transporters viability standpoint,
the current phase is characterized by reduced cargo volumes, stiff competition owing to surplus
capacities (M&HCV sales doubled from the lows of FY 2008-09, bringing down the average age of
M&HCV population to a 10 year low) and rising operating costs, especially in wake of the recent hike
in diesel prices.
Competitive landscape in the M&HCV industry has been changing very fast. The industry which had
2-3 major players, mostly domestic before 2005, has today seen the entry of major global players
into it. Today the industry has more than 10 global and Indian OEMs fghting it out in the market.
The latest entrant into this feld is Diamler with its Indian subsidiary Daimler India Commercial Vehicle
4
(DICV). Like Tata Motors it is a full range player and is expected to compete with Tata Motors in almost
all segments. Globally, in all big CV markets with majority of the players competing in the market,
the market leaders command only a 20 25% market share. Tata Motors enjoys a unique position in
the M&HCV industry in this regard. It has a 62% market share in this segment. The challenge before
Tata Motors is to retain the same and further enhance it, thus reversing a global trend in the Indian
market.
Light & Intermediate Commercial vehicles (L&ICV)
In 1981 the Govt. allowed 4 Japanese frms Toyota, Mitsibushi, Mazda and Nissan, to enter the
Indian market for Light Commercial Vehicles through joint ventures with Indian companies and also
announced its policy of broad-banding of licenses, under which companies did not have to seek
licenses for every new vehicle they wanted to manufacture. Tata Motors used this opportunity to enter
into the LCV market by designing & developing its own LCV in a record 18 months, and launched the
Tata 407 in 1985. It was followed up with the launch of the Tata 608 & Tata 709 in 1987. By mid-90s
Tata Motors had beaten all competition to be the market leader in this segment. The vehicles made
by Tata Motors were sturdier and reliable and thus better suited for the rough Indian roads. In terms
of reach and spare parts availability also Tata Motors was way ahead of its competitors.
This segment is broadly classifed by Industry body Society of Indian Automotive Manufacturers
(SIAM) into 2 categories - the Light Commercial Vehicle (LCV) segment (which has a load bearing
capacity of 3.5 tons to 7.5 tons) and the Intermediate Commercial Vehicle (ICV) segment (with
capacity of more than 7.5 tons to 12 tons). Figure 3 in the annexure gives a detailed breakup of the
products that Tata Motors has in LCV & ICV segments.
Though in FY 2012-13 there was a negative growth in this segment (vis--vis FY 2011-12), the
industry has seen a CAGR of 13.2% over the last 5 years. Tata Motors is the undisputed market
leader in the LCV segment with nearly 70% market share and has a market share of more than 42%
in ICV segment. A snapshot of market share and volume in these segments for the last 5 years is
given in Annexure-I (Figures 9 & 10).
There are various growth drivers for this segment, the major ones being the increased demand
for last mile connectivity which saw the phenomenal growth of the Tata 407 range. The improving
conditions of Indian roads due to implementation of various Government schemes like Pradhan
Mantri Gramin Sadak Yojna (PMGSY) has led to increased sales in this segment. Focus on improved
urban infrastructure and rapid industrialization also has been a major growth driver for this industry.
The competition is also growing in this segment with Indian players like Eicher, M&M, Force Motors
and global players like Daimler (Bharat Benz) entering the fray.
The customer preference in this segment has seen a marked shift from being a very price sensitive
market to a more performance oriented market. Factors like payload, mileage, overloading capacity
etc. which used to be drivers of customer preferences have given way to factors like engine
power, reliability, cabin comfort, safety etc. Increased vehicle complexities due to opening of niche
applications across the country are bringing in its own share of challenges. Having catered to the
5
mass market for long, Tata Motors now also faced the challenge of creating a brand image of a
premium manufacturer in the L&ICV segment. The task ahead of Tata Motors is to dominate LCV &
ICV truck segment across all tonnage points and maintain proftability by building a premium brand
image.
Buses
Tata Motors has for over ffty years, continued to redefne the ways in which people look at road
travel in India. From building the earliest trucks that acted as goods transportation vehicles to
manufacturing chassis for buses that virtually support the entire public transport network in the
country, Tata Motors has always enjoyed a strong presence on Indian roads.
Today Tata Motors is the worlds fourth largest bus manufacturer with the most complete range
of transit vehicles that meet every need that arises in our day-to-day travel. It has continued to
be the leader in this segment not just by setting technological benchmarks but also by adapting
innovations effectively to suit Indian travel conditions. It manufactures a variety of premium buses
and coaches that cater to the entire gamut of utility vehicles and applications, from luxurious inter-
city travel options to safe transport choices for school going children. While fully built buses come in
a wide range from 12 seaters to 67 seaters, Chassis options vary from 4 tonne Gross Vehicle Weight
(GVW) (5 meter length) to 16 tonne GVW (12m length). Figure 4 gives an illustration of the various
segments of the bus market and products of Tata Motors in these segments. Buses are typically
divided into four categories based on their application/usage. The customer segment for buses is
further divided into 3 distinct categories the STUs (State Transport Units), Private operators, and
contract operators. Figure 6 illustrates the preferences of the various customer segments mentioned
above and describes the implications of these on OEMs as per an internal study.
The major brands of Tata Motors are the Tata City Ride, Tata Starbus, Starbus Ultra and Tata Divo.
Tata Motors has put in place an elaborate product strategy to counter its competitors in the market.
The new product range has products both from Tata Motors and Marcopolo. The range of buses
from Marcopolo is specifcally benchmarked against the best products that are currently available in
the Indian market. It can offer competition to entrenched players like Volvo & Mercedes Benz in the
luxury segment.
Like all other areas in the commercial vehicle industry the people transport category has also moved
away from its oligopolistic nature. Today the industry is crowded with a number of players both
national and international. The performance of both Tata Motors and the competition (in terms of
vehicles sold) in the last 6 years are given in Annexure-I (Figures 11, 12, & 13).
With changing competitive landscape, Tata Motors will face competition from both national and
international players in high growth inter-urban and contract segments. In the segments of urban
and semi-urban transport, expansion of MNCs is diffcult due to tender-driven and regulated nature
of the segments. The inter-urban transport segment is where the competition is maximum due to
the high revenue, high visibility nature of the segment. This segment is most attractive for MNCs
as well. The contract transport segment is witnessing mixed competition with many domestic and
international players investing in this segment.
6
The luxury bus segment is also witnessing a lot of competition from European and Chinese
manufacturers and several new entrants are expected in the near future. Volvo is currently the market
leader in this segment and plans to continue its dominance by introducing contemporary products
in the future. Daimler has already launched 2 and 3 axle luxury coaches in India and its future plans
are centered on buses and luxury coach segments. Kinglong has tied up with JCBL to sell buses in
India. It has already launched its products in the urban transport market and plans to expand in India.
Turkish manufacturer Temsa and Japanese Hino have also lined up their entry in the near future.
The impact on Tata Motors has been manifold, due to the entry of new competitors. Tata Motors
earlier foray into the luxury bus segment through its Globus brand of buses was with mixed results.
Volvo continued to be the market leader in this segment. The entry of other European players like
Daimler and Temsa will result in products that rate high on parameters like safety, comfort, luxury
and performance. This will pose a challenge for many Indian manufacturers. On the other hand entry
of Chinese players like Kinglong will create pricing pressure for the existing players in the market
offering similar features.
To meet these challenges some domestic players have entered into collaboration with global
manufacturers, with an intention to expand into full range manufacturing. Some of the strategic
partnerships that have been forged are mentioned below. All these changes in the segment have
profound implications for Tata Motors as well.
1. Ashok Leyland-Nissan They plan to enter the light bus segment through this JV. It has
already developed complete range of engine power points in heavy buses. This will be a
big challenge for the existing full range players in India.
2. Volvo-Eicher This JV is currently strong in the light bus segment, looking to expand
to full range. They are moving from franchised to captive body building. Their value for
money proposition is going to increase pressure on other players in the market.
3. Isuzu-Swaraj Mazda Traditionally this JV is strong in light buses. Their JV for luxury bus
segment has not had successes. This will remain a relevant competitor in light buses.
4. Volvo It is the most strongly placed OEM currently. It is the market leader in the inter-
urban luxury segment. It is introducing price competitive products specifc to Indian
market for this segment.
5. Daimler Daimler is making investments in Pune for captive bodybuilding of urban buses.
It plans eventual transfer of bus business under Bharat Benz. Tata Motors is not the
leader in inter-urban luxury segment. Its new products will target matching quality and
performance of Volvo. The potential full range offering and aggressive pricing by these
players is going to be challenge for existing players in India.
There are still many challenges for the growth of the bus business in India. At a macro level, the
growing penetration of other mass scale public transportation (like metros, mono rails etc.) are a
threat to the bus business. Entry of foreign full range players poses a big risk for domestic incumbents
as they look to capture a slice of the pie of bus market share. The frequently changing regulatory
7
environment also poses a risk for this business. Maintaining a dominant market share in these
market conditions remained a challenge for the bus business.
Small Commercial Vehicles (SCV) and Pick-up segment
Small commercial vehicle is the latest addition to the various segments of the commercial vehicle
industry in India. This segment and its evolution is a perfect example of the Blue Ocean Strategy
as enunciated by W. Chan Kim and Renee Mauborgne. This segment was completely dominated
by large 3-wheeler load carriers from Bajaj, Ape, Piaggio, Force Motors etc. In 2005 Tata Motors
launched the Tata Ace, a product which created an entirely new segment - the Mini Truck segment.
It wiped out the large three wheeler category within a span of three years. It spawned a new segment
which many followers tried to emulate including 3 wheeler makers such as Piaggio, Force, Mahindra
etc. Tata Motors was able to retain its market share in this segment against competing products like
Mahindra Maxximo, Piaggio Porter 1000 and many more.
Tata Motors was also the pioneer of the large pickup segment in India. In the mid 1990s Tata Motors
launched Tatamobile which later was rechristened Tata 207. The main competitor in this segment
was Mahindra & Mahindra with its Maxx pickup. The product has subsequently seen substantial
refnement since its launch. In 2012, Tata Motors launched a new pickup the Tata Xenon. This
product was well received by the market with rapid increase in sales and market share in many
geographies where Tata Motors had lower share of market. The various product categories in the
SCV segment (cargo & passenger) are given in Annexure I (Figure 5).
Most of the customers in these segments are frst time users / individual buyers unlike the heavier
trucks which are dominated by feet owners. These products are mostly used for last mile delivery
of goods. These products are more dependent on the consumption of goods and services and
therefore have a lesser cyclical nature in comparison to heavier trucks. The key customer buying
parameters for these products include - product performance, operating economics, and availability
of vehicle fnancing arrangements (loans).
The CV market is set to experience signifcant changes primarily with the use of hub and spoke
model. By hub and spoke model, it is meant that the freight is generated from certain regional
cluster which is then transported to various trucking centers or hubs spread across the country.
These goods are further segregated and transported across the various spokes and fnally through
these spokes the goods are delivered to the end consumers.
Future competition in this segment is expected from Chinese & Japanese automakers. The growth
in this segment depends on the ease of vehicle fnancing - loans being available to all potential
customers at low rate of interest. With various products commanding different spots in the market
share ladder the challenges for every different product was unique. While for some product lines the
challenge was to maintain the market share for others the challenge was to fght off competition and
reach the top spot. Tata Motors being a player in almost all segments has the challenge of keeping
competition at bay in all the segments and look to further grow at a faster rate and expand the
market as well.
8
Small Commercial Vehicle Passenger
In last few years, India has seen a spurt in passenger transportation with improvement in road
infrastructure, rural to urban connectivity, urbanization, industrialization, increase in disposable
income, increase in population etc. Till July 2007, only 3 Wheelers were used in Last Mile Public
Transport (LMPT) movement for inter & intra city movement.
In July 2007, Tata Magic Indias frst 4 wheeled commercial passenger vehicle was launched & it
changed the whole landscape of LMPT by assuring its passengers & operator better safety, better
comfort, better technology, higher proftability & higher status to its owner. Tata Motors has been a
pioneer in creating and growing the small commercial 4 wheeler passenger market in India.
LMPT industry is segmented based on a) Geography, b) Type of Usage. The segmentation as per
geography is either for intra or intercity uses. Type of usage can be shared and non shared application.
Tata Motors offers two products in Small Commercial Passenger Industry Tata Magic (seating
capacity 6-7 passengers) & Tata Magic Iris (seating capacity 3-4 passengers). Tata Magic & Tata
Magic Iris are used majorly for Shared Application (both within and outside city). Tata Motors has
been a pioneer in creating and growing the small commercial passenger vehicle market in India.
Between the years 2007 to 2011, Large 3 Wheeler (Seating Capacity 6 Passengers) sales dropped
drastically as operators and passengers preferred 4 wheeler vehicles. Mahindra & Force Motors
have signifcantly scaled down manufacturing of large 3 wheelers & the market is now predominantly
for 4 wheeler vehicles. However, there was still a big opportunity available within small 3-wheeler
diesel market space having size of approx. 2.1 Lac units per annum which was not addressed by
large 4 wheelers. To cater to this market, Tata Motors launched Tata Magic Iris in 2011 and in just one
and a half years of its launch Tata Iris has received good response with volumes growing quarter by
quarter across all the states with more than 40,000 Iris successfully running on roads.
Indian LMPT scenario is changing rapidly with improvement in road infrastructure, urbanization,
higher disposable income, industrialization, population growth etc. resulting in increase in passenger
travel in intra & intercity movement. 4 wheeled vehicles are being preferred by the customers
and passengers as they provide better safety to passengers/owners over 3 Wheelers. Even state
transport authorities are endorsing the advantage of 4 wheelers leading to increase in the share of
4 wheelers, in a space traditionally dominated by 3 wheelers. Many 3 wheeler manufacturers have
either launched their 4 wheelers or are planning to bring 4 wheelers as they see the transition from 3
to 4 wheels in future as inevitable. Going forward, majority of cities/towns are expected to allow only
clean fuels like CNG/LPG vehicles for intra-city public movement.
Future offerings in this segment will be from existing 3 wheeler manufacturers like Piaggio which is
coming with Ape Mini passenger version, Bajaj Auto which will bring RE60 on Quadri-Cycle norms
(yet not approved/implemented in India), Ashok Leyland which is coming with passenger vehicle
version on their existing DOST platform. This market also has the maximum potential of growth in
the near future. Can Tata Motors bring in pioneering products to further expand this market from
which the whole industry would beneft?
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Dealership Network
Over the years Tata Motors has established the largest network of sales, services and spare parts
centre for commercial vehicles in India. This network has over 200 dealers, more than 500 full range
dealerships and close to 1800 touch points. One added dynamic has been the growing product
line in small commercial vehicle business and therefore the need to increase the reach of the dealer
network. Setting up of a full range dealer network requires a large amount of capital investment. To
take products like the Tata Ace and Tata Ace Zip to their intended market Tata Motors has set up a
large number of sales outlets in areas where there is no presence of full range dealerships. Over the
years Tata Motors has been able to steadily increase the number of dealerships but in the present
scenario there are various questions that the organisation is grappling with. With the steady increase
in product line, product focus is slowly going down. How does Tata Motors counter this? Should
the organisation continue adding full range dealerships or should it move on to a business unit wise
dealership model?
Viability of dealerships is extremely important to keep the network healthy. The company is also
faced with the challenge of increasing the revenue per outlet which is under tremendous pressure
with competitors playing with the price structure of product lines. The challenge facing Tata Motors
is what would be the ideal network size and structure which will help it retain its hold over the market.
Service network and its importance
In the commercial vehicle industry service network plays a great role when the customer is making
a buying decision. Tata Motors has had an initial advantage as far as the reach and spread of the
network is concerned. But with new players with advanced infrastructure entering the market and
local players fooding the market with low cost options Tata Motors faces a tough challenge to
ward of competition and improve the proftability of its channel partners. Tata Motors has already
implemented a lot of innovative schemes in Annual Maintenance Contract (AMC) and Extended
Warranty to keep their service advantage intact. Today customers are increasingly moving towards
a total life cost of ownership (TCO) approach while deciding to buy a vehicle. Therefore the service
advantage will play a greater role in pre sales.
Over the years Tata Motors has ingeniously brought in various product & process innovations that
has helped it stay ahead of the Indian commercial vehicle market. Even after opening up of the
market and a lot of foreign players entering the fray Tata Motors has still held on to its position as
the market leader. In addition to the constant product innovation a lot of other initiatives have helped
Tata Motors get ahead of competition.
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Special Initiatives by Tata Motors
Project Neev
Commercial Vehicle Business Unit (CVBU) has initiated and established their rural presence in a big
way through Project Neev. Neev is currently present in the 6 states of Rajasthan, Uttar Pradesh,
Bihar, Andhra, Maharashtra and Madhya Pradesh and has footprints in 238 districts, 1,798 tehsils,
covering more than 150,000 villages. Approach to rural market is on the plank of self employment.
Through a rigorous skill building exercise, local, unemployed rural youth have been inducted and
trained to work as promoters of Tata Motors commercial vehicles, who work in their own habitations.
This has become a successful inclusive growth program for the rural geographies. This program has
been appreciated and recognized in various forums for innovation in rural marketing, noteworthy
being recognition received from the Honorable Minister of Youth and Sports in the Conference of
Ministers of States for Youth 12-13
Value Added Services
For close to 60 years now, Tata Motors has been a step ahead in offering new technologies, products
and value added services (VAS). Several industry frsts have been introduced by the company. Some
of the latest innovations on VAS are - the 4-year warranty (partnering the customer through the
lifecycle of the product). This has been designed based on the lifecycle cost study of over 15 lakh
Tata trucks & tippers operating all over the country, in varied terrain and loading conditions. Another
innovation on VAS front is the new premium Triple Beneft Insurance across its range of M&HCV,
ICV & LCV Trucks and Tippers. This is yet another frst from Tata Motors in the Indian commercial
vehicle space designed in partnership with Iffco-Tokio General Insurance Company.
Key Account Management Program
Tata Motors was also a pioneer in launching the Key Account Management program in commercial
vehicle space. Even today, it is the only manufacturer in Indian CV space that has a Key Account Portal.
Key account customers have multi-location branches and site offces which make it diffcult to share
product and service related information to their workshop managers, drivers, operations managers
etc. The key account portal offers customers several benefts. Some of these are enumerated below:
Customers can view resolution status of registered complaints through online tracking
system.
Various analysis reports are also available for making better decisions.
Also the portal helps to be aware of customers older feet and thus TML is aware & takes
action for replacement with new vehicles.
Customers can make online payment through portal for various services used in
workshops.
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They also can contact various Key contact persons whose details are uploaded on the
portal.
Road Ahead
Tata Motors has led the Indian commercial vehicle industry for almost 6 decades now. It is a major
player in almost all the segments of the industry. For the organization, every market segment brings its
own set of challenges, with its unique set of customers and competitors. For example the challenges
faced by M&HCV segment are completely different from those faced by SCV segment. The price
points, customer profle, customer expectations etc. are completely different in each segment. Being
a player which has a presence in almost all the segments of commercial vehicles, Tata Motors is thus
faced with multifarious challenges (as well as opportunities). With the incoming challenge from major
global players the challenges have only increased for Tata Motors.
What strategy should Tata Motors adopt to garner the best profts
and market share in all segments of commercial vehicles?
ANNEXURE-I
CV
Passenger
Based on
no. of
passengers
Rigid
< 3.5T SCV
3.5 to
7.5
LCV
7.5T-
16.2T
ICV
12T-
16.2T
MCV
(2 Axles)
25-37
T
MAVs
35 T
40 T
Tractor
Trailor
49 T
Tractor
Trailor
Goods
Figure 1- Basic Vehicle Categorization for Commercial Vehicles
Figure 2 Product Categories in Medium & Heavy Commercial Vehicles
Rigid Truck
LPT 1613 LPT 2518 LPT 3118
Tractor Trailer
LPS 3518 Prima 4028 Prima 4923 Prima 4928
Tipper
LPK 1613 LPK 2518 LPK 3118 Prima 3138
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Figure 3 Products categories in Light & Intermediate Commercial Vehicles
Figure 4 Product Categories in Bus Segment
LCV - 4 Ton
LCV
SFC 407
Starbus 16-24s
LPT 407
Starbus 28-36s
SK 407
Cityride 12-20s
LCV - 7 Ton
ICV
SFC 709
Starbus 36-42s
LPT 709
Tata Skoolbus
LPT 709 HEx2
LPK 407
Tata Skoolbus
ICV - 9 Ton
MCV
ICV - 11 Ton
SFC 909
1512 TC
LPT 1109
LPK 909
1618 TC Bus
LPT 1109 HEx2
LPT 909 HEx2
Starbus 53-64s
LPK 909
Divo bus
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Category Kay Purchase Criteria Relative Performance
Operator
Requirements
Acquisition Cost
Reliability
Resale Value
Fuel Effciency
Performance
Low cost of ownership
Passenger
Requirements
Safety
Ride comfort
Convenience
Figure 5 Product Categories in SCV Segment (Cargo & Passenger)
Figure 6 - Customer Segments in Bus Industry, their Preferences &
Implications of those on Customer Segments
Micro Trucks
<1500 kg GVW
Mini Trucks
1500-1990 kg GVW
Small pickups
2000-2500 kg GVW
Large Pickups
> 2500 kg GVW
Mini Vans
Micro Vans
Tata Ace Zip
Tata Ace
Tata Super Ace
Xenon Tata Magic
Tata Magic Iris
Tata RX pickup Tata Venture
STU Private Operators Contract Operators
Customer Preferences
There are 3 distinct customer segments STUs, Private Operators and Contract Operators
Lower Higher
Implications
STUs and Municipal Corporations
Urban and sub-urban segment
Tender driven purchase process
Acquisition cost is the biggest purchase
driver
Private Operators
Inter-urban segment
Passenger comfort, safety and reliability
are the key purchase drivers
Contract Operators
Higher Re-sale Value, Lower Operating
Economics (mileage, maintenance cost
etc.) are the key purchase drivers
Fleet owner catering to the premium
segment also value passenger comfort,
reliability and safety
14
Year Tata Motors Hindustan
Motors
Ashok
Leyland
Force
Motors
Mahindra &
Mahindra
Piaggio TOTAL
2007-08 101847 3 0 5483 44976 4945 157254
2008-09 89150 50 0 1981 47277 9012 147470
2009-10 121403 281 0 3678 76487 11094 212943
2010-11 152201 312 0 6726 105588 9124 273951
2011-12 209895 157 7593 5862 127029 10579 361115
2012-13 254257
214
34794 3335 142796 2469 437865
Figure 7 - No. of vehicles sold by Tata Motors and competitors in SCV Cargo
Segment in last 6 Years
Figure 9 - No. of vehicles sold by Tata Motors and competitors in LCV Trucks
Segment in last 6 Years
Figure 8 - No. of vehicles sold by Tata Motors and competitors in SCV
Passenger Segment in last 6 Years
Year Tata Motors Force Motors Mahindra &
Mahindra
TOTAL
2007-08 11136 0 0 11136
2008-09 28659 0 0 28659
2009-10 48931 0 0 48931
2010-11 51051 237 0 51288
2011-12 60203 147 25434 85784
2012-13 94376 11 22313 116700
Year Tata Motors Ashok
Leyland
Mahindra &
Mahindra
Force
Motors
Eicher Swaraj
Mazda
TOTAL
2007-08 19009 0 4830 902 3288 2610 30639
2008-09 17078 3 3486 1757 2404 1495 26223
2009-10 26997 0 4804 1886 3844 1802 39333
2010-11 30693 1 5449 1416 5287 1189 44035
2011-12 35293 0 5872 1464 6291 1348 50268
2012-13 26654 0 4344 1294 5082 1517 38891
15
Figure 11 - No. of vehicles sold by Tata Motors and competitors in LCV Buses
Segment in last 6 Years
Figure 12 - No. of vehicles sold by Tata Motors and competitors in ICV Buses
Segment in last 6 Years
Year Tata Motors Ashok
Leyland
Eicher Mahindra &
Mahindra
Force
Motors
Swaraj
Mazda
TOTAL
2007-08 13317 616 1509 5284 5360 2234 28320
2008-09 11789 523 1022 2613 4027 1944 21918
2009-10 15382 812 1407 2813 5779 1835 28028
2010-11 20706 699 2484 4785 8321 3031 40026
2011-12 20976 398 3319 4456 11093 3189 43431
2012-13 20499 328 4040 2315 10926 2321 40429
Year Tata Motors Ashok
Leyland
Eicher JCBL Mahindra &
Mahindra
Swaraj
Mazda
TOTAL
2007-08 1417 765 1317 0 0 2090 5589
2008-09 3239 682 1225 0 0 1605 6751
2009-10 5251 1107 1726 1 0 1821 9906
2010-11 5684 1588 2318 0 0 3276 12866
2011-12 6066 2487 3091 0 84 3303 15031
2012-13 6611 3058 3253 0 79 3913 16914
Figure 10 - No. of vehicles sold by Tata Motors and competitors in ICV Truck
Segment in last 6 Years
Year Tata Motors Ashok
Leyland
Eicher Swaraj
Mazda
TOTAL
2007-08 19138 1774 16274 3663 40849
2008-09 13527 1271 10587 2331 27716
2009-10 21214 1502 17099 3864 43679
2010-11 25489 2810 22583 4529 55411
2011-12 32326 4169 25734 4875 67104
2012-13 24262 6477 22910 3767 57416
16
Figure 13 - No. of vehicles sold by Tata Motors and competitors in MCV
Buses Segment in last 6 Years
Figure 14 - No. of vehicles sold by Tata Motors and competitors in M&HCV
Trucks in last 6 Years
Year Tata Motors Ashok
Leyland
Eicher JCBL Swaraj
Mazda
Volvo
(incl. VBIPL)
TOTAL
2007-08 15522 16809 487 0 0 240 33058
2008-09 12203 15344 110 0 0 484 28141
2009-10 16850 15298 202 178 42 607 33177
2010-11 15014 18837 157 0 76 568 34652
2011-12 14650 18262 856 0 95 677 34540
2012-13 11315 15584 1371 0 18 601 28889
Year Tata
Motors
Ashok
Leyland
AMW Eicher Volvo MB India Mahindra &
Mahindra
Swaraj
Mazda
TOTAL
2007-08 129961 56061 3611 4392 823 206 32 0 195086
2008-09 84705 29796 3623 1625 913 219 6 0 120887
2009-10 111822 39228 3792 2119 1006 215 0 0 158182
2010-11 145943 59863 6792 5165 1000 103 843 2 219711
2011-12 153972 56345 10021 7719 595 85 3490 3 232230
2012-13 101194 45437 6533 7517 616 0 2977 21 164295
17
Source: SIAM (Society of Indian Automobile Manufacturers)