Tata Motors and the Automotive Industry

The Smart People Emily Frey, Eric Harmon, Arielle Hord, Caitlin Kantosky

Outline
History and Product offerings Tata Group & Corporate Responsibility Financial Analysis Tata s Future & what impact, if any, for the American auto market

History
Started in 1945 in Mumbai, India. Original production was on locomotives. 1954
First car rolled off of the assembly line.

The family founded:

Ironworks Steelworks cotton mills hydroelectric-power plants

Tata s are a family of Indian industrialists and philanthropists.

Are of their endeavors have been proved to be crucial to India's industrial development.

History
Tata Motors is India s owns the largest independent company in India. Mercedes and Tata teamed up to create a truck line.
First major business deal with another firm.

Together both companies started their commercial vehicle operations in 1960. in 1986 the company created and sold the first LCV
LCV = light commercial vehicle Was the Tata 407

History
Tata Motors decided to pursue joint ventures.
Cummins Engine Co., Inc., was the first company to jointly venture with Tata in 1993. Manufactured a diesel engine that had high horsepower and emitted less harmful chemicals.

Began creating new lines in the late 1990 s and early 2000 s:
Compressed natural gas buses 1109 vehicle, used for commercial purposes. Ex-series Newly designed LCV called the 207 DI

Products
Tata Indigo
Created in 2002 Mid-sized sedan. Different models run on either normal gasoline or diesel fuel. Seats 5 people. Same luxuries as American made vehicles.

Products
Tata Indigo SW
Station wagon version of the Indigo. Same basic features as the Indigo. Seats 5 people. Different models fun on different fuels. Different optional safety features than other vehicles.

Products
Tata Indica
Hatchback version of the Indigo sedan. Easily affordable. Smallest in the line of Tata vehicles to date. Seats 5 people. Same basic features as the sedan.

Products
Tata Safari
Mid-sized SUV. Has a special engine called DICOR.
Direct Injection Common Rail. Allows the engine to intercool itself.

Comes in either a 4x4 or a 4x2. Can seat 7 passangers.

Products
Tata Sumo
Runs off of diesel fuel. Seats up to 7 passengers. Has a separate rear and front suspension for an optimal ride. Has two separate air conditioners for the front and rear of the vehicle.

Tata Group
100 companies throughout 7 business sectors Engineering, materials, energy, chemicals, services, consumer products, information systems and communications Tata AutoComp Systems - Automotive Tata Steel - Materials Tata Power - Energy Rallis India - Chemicals Tata Realty and Infrastructure - Service Tata Tea - Consumer Products Tata Technologies - Information Systems and Communications

Corporate Social Responsibility

A Company that cares about the future Committed to corporate social responsibility Signed the United Nations Global Compact Plays role in community development Environmentally-friendly products and technology

Corporate Social Responsibility

Two main concerns: Reduction of pollution Restoration of ecological balance Implemented soil and water conservation programs Cleaner Engines Advanced emission-testing labs Developing alternate fuel engines Sewage treatment facilities Encourages tree planting

Corporate Social Responsibility

India Recycling Culture Value in discarded products Europe Throw-away culture European ELV Directive

Corporate Social Responsibility

Community Development Community Service Division Promote economic independence Self-initiated cottage industries

Tata Finance: overview

Stock Trend Growth and Expansion
Sales assets

Financing Operations Tata vs. American Companies

Tata Motors Inc. Stock

TTM NYSE since 2004 $15.84 as of Friday (Yahoo, 2008) Down 8% in last year

Since 2004: TTM

Growth and Expansion

large Indian market
Familiar with market Brand loyalty

Fuel efficiency Mahindra & Mahindra- $1.88 billion

Debt vs. Equity

Debt growth: $2.3 billion $4.1 billion Equity growth: $1.2 billion $2.1 billion
55 million outstanding shares ROE : 19%

Debt/ equity ratio: .87

Industry average: .58 Cash now for growth

Growth
Asset growth doubled since 2005
Acquisition of Jaguar and Land Rover from Ford

Sales:
$7.6 billion and grew 42.2% from 2006

PROFITS!!
$.95 billion on 2005 $1.5 billion on 2007

Cash Management
Liquidity and solvency are good Inventory Improved cash management:
12% of assets in 2005 4% of assets in 2007

Comparatively Speaking
Brand: Sales: # of employees Profit Margin Tata $7.6 billion 33,900 20% Ford $172 billion 246,000 17% GM $181 billion 266,000 6.7%

Effects on U.S. Economy

Slow economy
High oil prices Demand for fuel efficiency Cut backs

Tata s effect

Jaguar and Ford

Purchase from Ford
Concerns

Changes or Plans
More Tata vehicles Made in India
Future

U.S. Car Companies

$ 2 Billion in sales GM-$50; Ford-$40; Honda- $20 In the U.S. Going overseas
75% by 2017 for GM

Expanding in India

U.S. Car Companies

Toyota- 7.5% increase in profits Foreign Markets
No help 1. Can t offset 2. India out of reach

The Next Auto Capital

Detroit current auto capital 21st century belongs to India 2050 in India and China
Labor Environment

Future of the Nano

Not for the U.S.
3rd world countries U.S. standards

Detroit make or buy version

Summary
Tata history and products Tata Group Tata: Social Responsibility Tata Motors Finance Future

Questions