INTERRNATIONAL BUSINESS

INTERNATIONAL BUSINESS ANALYSIS ON TATA MOTOR

SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY - MBA

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INTERRNATIONAL BUSINESS Executive Summary
The report talks about the Indian automobile industry in general and Indian automobile giant TATA Motors in particular. We have analyzed Indian automobile industry using Porter‘s 5 forces model & its performance in the recent past. Particularly we have tried to track the path of TATA Motor‘s expansion of international business in the recent past, at present as well as its future plans. We have also discussed the impact of current financial meltdown on the recent international ventures of the company.

The company is rapidly increasing its global footprint and is aiming to match the standards of international automobile manufacturers in next 3 to 5 years. This rise to the level of a world-class automotive manufacturer would involve a large quantifiable increase in revenues from outside India with a focus on certain foreign markets. Currently international business contributes 18.4% to company‘s revenues. Company is aiming to increase it by 200% in near future to reduce its dependence on one single economy and one single business cycle. This ambition of the company has led to numerous joint ventures and increased activity in countries like the U.K., South Africa, South Korea, Thailand, Brazil and Spain, as well as the company is listing on the NYSE.

With the recent acquisition of Jaguar Land Rover (JLR) from the Ford Motor company in early 2008, the company has entered into the world of high-end luxury brands. Customers of high-end luxury brands value image and exclusivity factors, while image and exclusivity conflict with the proposition of TML‘s other recent venture, the inexpensive Nano. In this manner, the decision to compete in both the high-end luxury and low-end economy markets certainly creates a big and audacious task ahead for TML. If proven successful, this strategy would provide the company with high margin (JLR) as well as high volume (Nano) revenues. These two revenue streams, if proven compatible, could mitigate each other‘s risks.

SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY - MBA

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......................................................................................................12 BCG Matrix for Tata Motors ................................................................................................................................15 TATA Motors..................................................................15 Recommendations ...............................................10 TATA MOTORS .............. 2 Indian Automobile Industry . 26 SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .................. 5 TATA GROUP ................................................................................................................................... 4 Porter‘s Five Forces Analysis of Indian Automobile Sector................................................................ 11 SWOT Analysis..................................Making Waves Internationally .................MBA Page 3 ..............................INTERRNATIONAL BUSINESS Table of Contents Executive Summary........................................................... 25 References....................................................................................

the Economic Survey 2008-09 tabled in parliament on 2nd July‘09 said. the automobile industry had evolved continuously with changing times from craft production in 1890s to mass production in 1910s to lean production techniques in the 1970s. TVS Motors. Indian Automobile industry can be divided into three segments i. Yamaha. The automobile industry.7 percent in 2008-09 with passenger car sales registering 1. which was plagued by the economic downturn amidst a credit crisis. Honda Motors. Force Motors with Mann. Mahindra with Renault. Tata with Fiat. The industry is highly competitive with a number of global and Indian companies present today.INTERRNATIONAL BUSINESS Indian Automobile Industry Hailed as ‗the industry of industries‘ by Peter Drucker. Eicher Motors etc. in 1946. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . The automotive industry in India grew at a computed annual growth rate (CAGR) of 11.e. Volvo. Commercial Vehicle market is catered by players like Tata Motors. according to a report. The major players have not left any stone unturned to be global. Like Maruti with Suzuki. Major of the players have got into the merger activities with their foreign counterparts. The industry has a strong multiplier effect on the economy due to its deep forward and backward linkages with several key segments of the economy. the founding father of the study of management.MBA Page 4 . a finance ministry statement said. Maruti Udyog and Tata Motors are the leading passenger car manufacturers in the country. The industry is estimated to be a US$ 34 billion industry. Indian automobile industry has come a long way to from the era of the Ambassador car to Maruti 800 to latest M&M Xylo.7 percent.31 percent growth while the commercial vehicles segment slumped 21. and Suzuki etc. managed a growth of 0. Force Motors. The domestic two-wheeler market is dominated by Indian as well as foreign players such as Hero Honda. three wheeler & four wheeler segment. And India is considered as strategic market by Suzuki. It is projected to be the third largest auto industry by 2030 and just behind to US & China.5 percent over the past five years. Bajaj Auto. Ashok Leyland. Hero with Honda. etc. two wheeler.

Industry Rivalry • Industry Concentration: The Concentration Ratio (CR) indicates the percent of market share held by a company. • High Fixed costs When total costs are mostly fixed costs. A high concentration ratio indicates that a high concentration of market share is held by the largest firms . Though the market growth has been impressive in the last few years (about 8 to 15%). none of which has a significant market share. the industry is considered to be disciplined.the industry is concentrated. firms can improve their economies.MBA Page 5 . the firm must produce capacity to attain the lowest unit costs. Since the firm must sell this large quantity of product. The industry is typically capital intensive and thus involves high fixed costs. A low concentration ratio indicates that the industry is characterized by many rivals. the market is less competitive (closer to a monopoly). high levels of production lead to a fight for market share and results in increased rivalry. These fragmented markets are said to be competitive.INTERRNATIONAL BUSINESS Porter‘s Five Forces Analysis 1. it takes a beat in even SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . If rivalry among firms in an industry is low. • Slow market growth In growing market. With only a few firms holding a large market share.

Also being a capital intensive industry economies of scale have important consequence. Based on the present profit levels in the market. Higher the competition in the industry lower would be the profit margin. The greater the difference between the MES and the entry unit cost.INTERRNATIONAL BUSINESS slight economic disturbances as it involves a luxury good.MBA Page 6 . • Diversity of rivals: Industry becomes unstable as the diversification increases. 2. To remain ahead in competition. In this case the diversity of rivals is moderate as most offer products which are close to standard versions and the competitors are also mostly similar in strength. Aggressive pricing is needed to sustain growth in such situations. • Highly competitive industry: The presence of many players of about the same size little differentiation between competitors. The entrance is however also affected by the start-up costs. Economies of scale are becoming increasingly important as competition is driving the profit margins to lower levels. greater is the barrier. • Economies of scale: The Minimum Efficient Scale (MES) is the point at which unit costs are minimized. one can expect the entrance of new firms into the market or not. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . auto-makers were tempted to offer value added services to the customers incurring more costs. and a very mature industry with very little growth were the features of a highly competitive industry. Threat of New Entrants These are the characteristics that inhibit the entrance of new rivals into the market and in turn protect the profits of the existing firms.

MBA Page 7 .77% in 1992-93 to 5% in 2006-07.000 crore (34 billion USD) o The industry provides direct and indirect employment to 1. No industrial licence is required for setting up of any unit for manufacture of automobiles except in some special cases o The norms for Foreign Investment and import of technology have been progressively liberalized over the years for manufacture of vehicles including passenger cars in order to make this sector globally competitive o At present 100% Foreign Direct Investment (FDI) is permissible under automatic route in this sector including passenger car segment.65. 50. The automotive industry has already attained a turnover of Rs. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . The contribution of the automotive industry to GDP has risen from 2.000 crore by the year 2007. 80.000 crore in 2002-03 which has gone up to Rs.INTERRNATIONAL BUSINESS • Government policies: o Automobile Industry was delicensed in July 1991 with the announcement of the New Industrial Policy o The passenger car industry was delicensed in 1993.31 crore people. 1. The industry is making a contribution of 17% to the kitty of indirect taxes of the Government. The import of technology/technological up gradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is allowed under automatic route in this sector o The automotive industry comprising of the automobile and the auto component sectors has made rapid strides since delicensing and opening up of the sector to FDI in 1991 o The industry had an investment of about Rs.

in the 800cc range it is the market leader and the threat of substitute products is low. The industry being capital intensive switching costs of suppliers is high. This is done in order to capture profits from the market.MBA Page 8 . Bargaining Power of Suppliers    Suppliers can influence the industry by deciding on the price at which the raw materials can be sold. Price performance comparison favors heavily towards Maruti in most product categories. Steel is a major input in this industry and so steel prices have a sharp and immediate impact on the product price.: In case of Maruti‘s products. it has become easier for the foreign players to enter the Indian automobile industry.g.    A product‘s price elasticity is affected by the presence of substitutes as its demand is affected by the change in the substitute‘s prices The cost of the automobiles along with their operating costs was driving customers to look for alternative transportation options The new technologies available also affect the demand of the product e. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . 4. Also the high availability and quality of services offered by Maruti gives the customer a better trade-off. the threat of substitutes is high. Threat of Substitutes  The replacement market is characterized by the presence of several smallscale suppliers who score over the organized players in terms of excise duty exemptions and lower overheads.INTERRNATIONAL BUSINESS With all the policies regarding the FDI and Tariff barriers as mentioned above. However. 3. other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with lower cost. The competition is intense as several players have products in the categories given by Maruti.

Here there is purchases of large volumes There is prevalence of alternative options Price sensitive customers were some of the factors that determine the extent of influence of the buyers in this industry. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .g. Buyers get incentives in the form of cost discounts and better after sales services.: In the case of Maruti. the buyer is the one who sets the price in the market.MBA Page 9 . the sales volumes have shown increasing trend over past so many years. The customers are more or less concentrated in metros or other tier two cities. Product differentiation is high as there are many categories in the passenger vehicle segment.INTERRNATIONAL BUSINESS 5. The industry is also concentrated in these regions mostly. Except the 800cc range in other categories brand loyalty is only moderate. e. Most of them are have good amount of knowledge about the product. Also it is difficult to measure since repurchases are rare. Bargaining Power of Buyers     It specifies the impact of customers on the product When buyer power is strong.

SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . In terms of market capitalization and revenues. The Tata Group has operations in more than 85 countries across six continents and its companies export products and services to 80 nations. At home in the world Anchored in India and committed to its traditional values of leadership with trust. Exports from India remain the cornerstone of the Tata group‘s international business. and Tyco Global Network and General Chemical in the US. Tata Group is the largest private corporate group in India and has been recognized as one of the most respected groups in the world. the Tata group is spreading its footprint globally through excellence and innovation. joint ventures (in South Africa. Daewoo Commercial Vehicles in South Korea. the TATA group has led the growing appetite among Indian companies to acquire businesses overseas in Europe. Over the past eight years the group has made overseas acquisitions of $18 billion. Bangladesh and Iran).MBA Page 10 . Corus. The TATA group is 11th most reputable company in the world according to Forbes. information technology. NatSteel in Singapore. communication. automobiles. but different Tata companies are increasingly investing in assets overseas through greenfield projects (such as in South Africa.some even several times larger . Jaguar and Land Rover in the UK. which constitutes 61 per cent of its total revenues.INTERRNATIONAL BUSINESS TATA GROUP TATA Group is more than 150 years old. It has interests in steel. power. tea and hospitality. Brunner Mond. Each operating company in the group develops its international business as an integral element in an overall strategy. Acquisitions are a crucial component of the global expansion of Tata enterprises.3 billion. depending on the competitive dynamics of the industry in which it operates. In the past few years. Among the bigger deals on this front have been Tetley. Australia and Africa .The Tata group‘s revenues for 2007 -08 from its international operations were $38.in a bid to consolidate operations and emerge as the new age multinationals. Morocco and China) and acquisitions. the United States.

that we become a global group. With over 4 million TATA vehicles plying in India.INTERRNATIONAL BUSINESS Priority markets While individual Tata companies have differing geographical imperatives. UK. South Africa. Competition at Home  TATA Motors is vulnerable to greater competition at home. Previously TATA Engineering and Locomotive Company (Telco). TATA Motors is listed on the New York Stock Exchange in 2004. which has a joint venture with Fiat for cars. an Indian business conglomerate that is at home in the world. carrying the same sense of trust that we do today. sums up the Tata group‘s efforts to internationalize its operations thus: ―I hope that a hundred years from now we will spread our wings far beyond India. China. Vietnam. the Netherlands. Ratan Tata. Thailand and Sri Lanka. Chairman. members of the Gulf Cooperation Council. is also facing heat from top car maker Maruti Suzuki India Ltd. Tata Sons. the Tata group is focusing on a clutch of priority countries.MBA Page 11 . The regions are North America. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . Nissan Motor. operating in many countries. engines and transmissions in India.2 billion in 2006-07. Volvo and MAN AG have struck local alliances for a bigger presence. Germany.‖ TATA MOTORS TATA Motors is the flagship company of the TATA group & is India's largest automobile player. Foreign vehicle makers including Daimler. Renault and Volkswagen. Brazil. with revenues of $7. which are expected to be of strategic importance in the years ahead. it is the leader in commercial vehicles and the second largest in passenger vehicles. Hyundai Motor.  TATA Motors.

‖ Strengths Strong domestic player: Tata Motors is India‘s largest automobile manufacturer by revenue.MBA Page 12 .1% in FY2008.2% in FY2008. The company is also the leader in the Indian commercial vehicles with a market share of 62. which in December 2006 expressed the view that the ―policy to support its companies and the improved financial profile of its entities also enhances the overall financial flexibility of TATA Motors. automobile vehicles other than two and three wheeler categories) stood at 26. The company‘s market share in the Indian four-wheeler automotive vehicle market (i.e. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .INTERRNATIONAL BUSINESS Making Waves Internationally   NANO will mark the advent of India as a global centre for small-car production International praise came from Standard & Poor‘s.7% and is the second largest player in the Indian passenger vehicles market with a share of 14.

The overall market share of the company stood at 25. The company incurred large expenditure for its R&D activities. During this time. In the recent period. The decline in sales would further affect the company‘s market share. Employee productivity: Tata Motors posted weak revenues in proportion to the total number of its employees.1% to reach INR365.24 million).324 units.8% in 2007. environmental technologies and vehicle safety through its Engineering Research Centre (ERC).INTERRNATIONAL BUSINESS Steady revenue growth: The company recorded strong revenue growth during 2004-08. an affordable family car.096 million) in 2004.230.4% to reach the total vehicle sales to 2. The weak revenue per employee of the company compared to the global auto majors indicates its weaker productivity and operational inefficiency. During the same time. The revenue per employee of the group stood at INR10 million (approximately $0. Weaknesses Decline in vehicle sales:Tata Motors recorded decline or marginal growth in its vehicle sales in the last financial year.072.3 million) in FY2008 from INR139.4% in 2008 as compared to a market share of 27.MBA Page 13 .696 million (approximately $3.53 million). the automotive industry in India recorded a growth of 10. The company recorded a sale of 585. The ERC is one of the few government recognized inhouse automotive R&D centers in India.9% over last year. the revenues of the company grew at a CAGR of 27. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .309. Research and development activities: Tata Motor has strong research and development (R&D) capability.6 million (approximately $9. The strong R&D capability enables the company to build a broad range of vehicle portfolio and improves its competitive strength in the automotive industry.73 million). and Nissan Motor ($.649 vehicles. significantly lower when compared to its global competitors such as Toyota Motor ($. the ERC developed the Tata Nano. and erode investors‘ confidence. a growth of 0. The strong revenue growth of the company has contributed to its market dominance. The company‘s R&D activities focus on product development.

Tata Motors introduced its new range of Medium and Heavy Commercial Vehicles. the government of India has permitted automatic approvals for foreign equity ownership of up to 100% in entities manufacturing vehicles and components in India. In March 2008. noise. Competition is expected to intensify further as Indian automotive manufacturers obtain greater access to debt and equity financing in the international capital markets or gain access to more advanced technology through alliances. and increase the company‘s business diversity across markets and product segments. ‗NANO‘ in January 2008 would further fuel its presence in the passenger vehicle market. The proposed tightening of vehicle emissions regulations will require significant costs for the company. In FY2008.INTERRNATIONAL BUSINESS Opportunities Product launches: Tata Motors has launched various new products during the last two year period (2007–08). Fiat. These regulations are likely to become more stringent in the near future.MBA Page 14 . Jaguar Land Rover has significant operations in the US and Europe which have stringent regulations relating to vehicular emissions. Tata Motors (Thailand) launched the Tata Xenon 1-ton pickup truck at the annual Bangkok International Motor Show. the launch of its small car. For instance in December 2007.200 dealers. Mitsubishi Motors. the company launched the Indigo sedan and Indica with the Direct Injection Common Rail (DICOR) and Sumo Grande. Acquisition of JLR provides the company with a strategic opportunity to acquire iconic brands. Ford and so on. Honda Motor. Maruti Udyog. Acquisition of Jaguar and Land Rover brands: These brands had sales operations in more than 100 countries with over 2. Environmental regulations: The company is subjected to extensive governmental regulations regarding vehicle emission levels. in recent years. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . safety and levels of pollutants generated by its production facilities. Furthermore. Threats Increasing competition: Tata Motors face intense competition from its domestic as well as foreign competitors including General Motors. Additionally. In addition.

MBA Page 15 .Making Waves Internationally Major international ventures of TATA Motors in recent past are discussed below: 1.INTERRNATIONAL BUSINESS TATA Motors. TATA Daewoo Commercial Vehicle.In 2004. TATA remains India's largest heavy commercial vehicle manufacturer and TATA Daewoo is the 2nd largest heavy commercial vehicle manufacturer in South Korea. Since the domestic commercial vehicle sales of the company are at the mercy of the structural econo mic SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . TATA Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the light commercial vehicle (LCV) segment. TATA Motors acquired the Daewoo Commercial Vehicle Company of South Korea. The reasons behind the acquisition were: a) Company's global plans to reduce domestic exposure. The domestic commercial vehicle market is highly cyclical in nature and prone to fluctuations in the domestic economy.

INTERRNATIONAL BUSINESS factors. it is increasingly looking at the international markets. sensing the huge opportunity in the fully built bus segment. Hispano Carrocera is an established and reputed bus and coach manufacturer in Spain enjoying excellent reputation for developing high quality vehicles. This was mainly to cater to the international market and also to cater to the domestic market where a major improvement in the Road infrastructure was done through the National Highway Development Project. Hispano Carrocera.In 2005. Hispano has proven competence in development of buses and coaches. b) To expand the product portfolio TATA Motors introduced the 25MTGVW TATA Novus from Daewoo‘s (South Korea) (TDCV) platform. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . With this deal Tata Motors acquired the license for technology and brand rights from Hispano. Aragonese bus manufacturing company with an option to acquire 100% holding. The total deal consisting of equity. It operates in two manufacturing locations namely. 2.MBA Page 16 . The company plans to diversify into various markets across the world in both MHCV as well as LCV segments. Zaragoza in Spain and Casablanca in Morocco. TATA Motors has jointly worked with TATA Daewoo to develop trucks such as Novus and World Truck. North Africa. TATA Motors acquired 21% stake in Hispano Carrocera SA. TATA plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time.

Further. Karnataka & Lucknow. Hispano enjoys a market share of 25 per cent in the bus market in Spain and sells considerable numbers in Europe in addition to other countries outside Europe as well. Mumbai and Bangalore Transport Corporations. besides providing it with a foothold in developed European markets. and Marcopolo will provide know-how i processes and systems for bodybuilding and bus body design.MBA Page 17 . TATA and Marcopolo have launched a low-floor city bus which is widely used by Delhi. 3. This strategic alliance with Hispano Carrocera gave TATA Motors access to its design and technological capabilities to fully tap the growing potential of this segment in India and other export markets. Joint venture has started its operations at Dharwad.P. This partnership gives both companies an opportunity to use their complementary strengths to create high-class transport solutions for intra-city and intercity mass transportation in Spain. Besides Tata Motors is also seeing this deal as a gateway into the highly competitive and matured European markets considering the success Hispano's bus range enjoys in these markets. TATA Marcopolo (TMML) . TMML JV‘s first assignment in India was to supply 500 premium class low floor buses for Delhi Transport Corporation. India and many other countries around the world. This joint venture is to manufacture and assemble fullybuilt buses and coaches targeted at developing mass r apid transportation systems.TATA Motors has formed a 51:49 joint venture in bus body building with Marcopolo of Brazil. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . U. The joint venture will absorb technology and expertise in chassis and aggregates from TATA Motors. the Hispano deal will help the Indian commercial vehicle giant grow in the bus and coach segment as the Daewoo acquisition helped it in trucks.INTERRNATIONAL BUSINESS debt and technology licensing amounted to about Rs 70 crore to Tatas.

Mitsubishi. there is a big opportunity for TML to grab substantial market share of world Pick-up market. Latin America etc to understand needs of target segments for a new Pick-up. S Africa. The car is assembled in Thailand by TataThonburi JV and in Argentina by Tata-Fiat JV. Hence. low cost market a vendor park has been established in Dharwad itself. SPRINT was the code name of the Project for development of Tata's World Pick-up (truck). Thailand. As per the study conducted by Tata Motors. It is aiming to cater to the fully built bus requirements of Indian mass as well as luxury markets. Isuzu. It was first displayed at the 2006 Bologna Motor Show. applied principles of "Concurrent Engineering".TATA Xenon was released in late 2007. it is said that so far only Toyota has achieved the Timeline of 18 months. Australia. While a new product development timeline takes between 36 to 50 months. The Xenon has been well received in Europe especially in Spain and Italy. the name SPRINT which signifies and continuously reminded project team about the Speed of the project. TATA Xenon. The team delivered project in 17 months— from styling freeze in Dec 05 to SOP ( Start of Production) in May 7. 4. distributed work load in 9 different countries in order to crash timeline by overlapping maximum possible key activities.MBA Page 18 .000 buses a year at its full capacity. Nissan. The team worked round the clock relentlessly. The company plans to make 20. Middle East. Bologna Motor Show 2006 (Dec) was the occasion when Xenon was unveiled for SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . Tata initiated an in-depth market study in various countries in Europe.INTERRNATIONAL BUSINESS Future Plans: TMML has plans to set up the world‘s biggest bus plant at Dharwad. To compete in high volume. World Pick-up market (other than USA) is dominated by Japanese Auto majors like ToyotaI.

This strategic alliance with Fiat enables the two companies jointly to present a wider range of product offerings to the Indian market. Both partners jointly manage the operations.000 cars and 300. Tata Motors signed a joint venture with Thonburi Automotive Assembly Plant Co. 5.The TATAs and Italian car giant Fiat kicked off their partnership with the former marketing Fiat cars since Mar‘06. in which Tata Motors holds 70% of the equity and Thonburi 30%. The 50:50 joint venture enabled Fiat plant at Ranjangaon. Fiat‘s Ranjangaon manufacturing facility is benchmarked against the global car manufacturer‘s units in Turkey and Brazil. Fiat branded cars are distributed by Tata through the Tata-Fiat dealer network. Middle East. and Fiat will eventually source right-hand drive Linea cars from here for the UK and Australia.INTERRNATIONAL BUSINESS public display and later in March 2007. the Thailand-based independent assembler of automobiles to manufacture. The joint venture. Pune with capacities to produce in excess of 200. The joint venture facilitated Tata Motors address the Thailand market.MBA Page 19 . Fiat has a cost advantage of 14-17% over Brazil and Turkey due to localisation of parts and labour costs. The JV may be expanded to produce trucks as well. It compares well as the lowest-cost manufacturer. the second largest pickup market in the world after the US. (Thonburi).000 engines and transmissions yearly. at steady state. it was also displayed at Geneva Motor Show 2007. Africa and SE Asia. Till date Xenon has been launched in 14 countries in Europe. TATA Fiat. assemble and market pickup trucks in Dec‘06. It enables Tata Motors to access worldclass powertrains from Fiat for its next generation car offerings while enhancing the model line at its dealerships. SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . The partnership took off to the next level in Dec‘06 with both the sides announcing the formation of a joint venture with aggregate investments of over Rs 4000 crore (over euro 665 million) in a phased manner to manufacture vehicles for the Indian and overseas markets. gets vehicles manufactured in Thonburi‘s manufacturing facility.

a compact car. The City Rover's running costs were rather high. MG Rover group used to import TATA Indica from India and sold as City Rover in UK market. JV is already producing the Fiat Palio.INTERRNATIONAL BUSINESS Fiat had almost decided to quit the Indian market but for Fiat chief executive officer Sergio Marchionne and Tata group chairman Ratan Tata coming together in 2005. Along with the rest of the MG Rover range. City Rover.000 starting price. the buying public was not impressed by the £7. MG Rover was reported to be paying Tata £3.000 for each car and. Fiat manufactures Tata Motors‘ 1 -tonne pick-up truck at its plant in Argentina for Latin American and overseas markets. Future Plans: The company is readying to launch the Grande Punto. Launched in the Autumn of 2003. 6. Such was the level of confidence among both the partners that investments began at least two years before even a formal agreement was signed.MBA Page 20 . production of the City Rover ended in April 2005 when the company went into receivership.The City Rover was a hatchback car model offered by MG Rover Group in the UK market. The second model will be Tata Motors‘ new three-box offering. and its asking price was high compared with newer. the last vehicles brought into the UK being SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . The JV is expected to break even by 2011-12. Stile and Linea models and select Tata Indica models. Planned launch of the Fiat Bravo is being delayed because of the economic slowdown. in the third quarter of the fiscal year2009-10. the car was a rebadged version of the Tata Indica. despite each model featuring a Rover corporate nose and revised suspension settings. better built and better specified rivals such as the Fiat Panda. code-named X1.

000 crore to the company. Tata Motors had launched the much. India has been established as an R&D leader. who has described it as an eco-friendly "people's car". thanks to Tata's Nano. World Truck. For the first time. the SAARC countries and the Middle-East by the end of the fiscal.TATA Motors unveiled its ‗World Truck‘ range. It will also help it penetrate international markets more effectively and competitively. and not just a low-cost hub known for SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .hyped 'cheapest' car in India in Mar‘09. TATA Nano. speed and carrying capacity. The developing infrastructure in India makes it possible for transporters to reap the benefit of trucks with higher power.Conceived in 2003. The new range from Tata Motors will meet those needs. The car is expected to boost the Indian economy. create entrepreneurial-opportunities across India. 8. developed jointly with TATA Daewoo Commercial Vehicles of South Korea in May‘09. as well as expand the Indian car market by 65%. Future Plans: The commercial launch of these trucks in India is scheduled during July-September‘09. They will debut in South Korea. The car was envisioned by Ratan Tata. The company expects international volumes to be at par with numbers in India. The trucks will be made at the Jamshedpur facility and at Gunsan in South Korea. The car has cost over Rs 2. This was one of the unsuccessful attempts of Tata Motors to go global.INTERRNATIONAL BUSINESS purchased and sold on by a non-franchised discount dealer group. Although MG Rover was bought by Nanjing Automobile of China in July 2005. 7.MBA Page 21 . South Africa. Chairman of the Tata Group and Tata Motors. the company's new owners did not include the City Rover or indeed any direct successor in their plans for a new model range.

An intelligent car at $3000 would be a good bargain after all. If the car is enriched with high technology functions to make it an intelligent car.15 billion pounds in MarApr‘08. 9.MBA Page 22 .INTERRNATIONAL BUSINESS cheap labor. the Tata Nano Europa (the European version of the Nano) was unveiled at the Geneva Auto Show. and Rover brand names. but timelines. it can have a market in the US. In Nigeria. for many Americans. Future Plans: Tata Motors will be launching it in Nigeria within the next year and a half. Lanchester. In addition to the brands. making it cheaper than even used cars in the country. almost the same as its cost in India. According to TATA Motors officials. Company is yet to decide whether the car would be assembled in Nigeria itself or if it would be made available as a Completely Built Unit (CBU). Tata gained the rights to the Daimler. Nano will greatly benefit Nigerians as there is no proper public transport system in the country. TATA-JLR: TATA Motors bought the iconic Jaguar and Land Rover operations from Ford for 1. The Nano Europa will be launched in 2011. as well. Tata Motors also gained access to 2 design SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY . Earlier this year. The Tata Nano will certainly find big takers in India. because innovation is all about thinking of the next decade and not the next quarter. It is a great innovation. However.16 lakh). the Nano will cost 357. many in the US will look forward to own it. It has shown to the world that India can be a technology leader.480 NGN (Rs 1. The company is planning to market Nano in other countries. modes and countries are yet to be finalized. Tata's Nano shows that there is a huge opportunity for Indian companies to build profitable low-cost products and then take them to the US.

dropped a third to 1. particularly from the current pool of suppliers who service TATA Motors in India. Analysts believe that TATAs‘ ownership of JLR will open doors for outsourcing of parts from India.MBA Page 23 . With the acquisition of Jaguar and Land Rover (JLR). The key acquisition would be of the intellectual property rights related to the technologies. It provides an entry point into India‘s growing luxury car market which gives new impetus to the company‘s development program as well and provides a captive customer base for the component companies of the Tatas. Present and Future Plans: A year after Tata group purchased Jaguar and Land Rover.INTERRNATIONAL BUSINESS centers and 3 plants in UK. after the $2. The acquisition paves the way for the company‘s entry into the European car market and gives the company a comprehensive range of models ranging from the luxury Jaguar to the $2. Sales. Tata Motors killed several birds with one stroke.5 billion takeover by Tata Motors last June. The bridge from the Nano to Jaguar XF is probably the biggest that exists in the industry.000 car: no other company in the world has a portfolio that wide.500 Nano.500 car and a $100.67 lakh vehicles. The India foray comes at a time when worldwide sales of luxury cars are falling. A $2. it launched the British iconic luxury brands in the Indian market. The global meltdown dragged JLR into huge losses as consumers halted purchases. In the long-run TATA Group and TATA Motors‘ footprint in South-East Asia should help Jaguar/Land Rover diversify their geographic dependence from US (30% of volumes) and Western Europe (55% of volume). SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .

INTERRNATIONAL BUSINESS Why JLR?       Long term strategic commitment to automotive sector Opportunity to participate in two fast growing auto segments Increased business diversity across markets and products Land rover provides a natural fit for TML‘s SUV segment Jaguar offers a range of ―performance/luxury‖ vehicles to broaden the brand portfolio Benefits from component sourcing.MBA Page 24 . design services and low cost engineering SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .

Saab. there is a real possibility that the brand will cease to exist. Hummer and others fail to maintain investments in either development or marketing. The Tata Indica and Tata Nano are prime examples of the company‘s innovation capabilities and bear testimony to the strength of the company‘s R&D efforts. this leaves the door open for TML to capitalize and gain both market share and momentum. TML is in a unique position to invest given the company's strong balance sheet and overall financial health. highend consumers. best in the products we deliver and best in our value systems and ethics‖. This SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .MBA Page 25 . The two ways firms compete are by either a differentiation strategy or a low cost strategy. TML‘s vision is to be ―best in the manner in which we operate. TML needs to have a similar differentiated strategies focusing separately on these brands. While the Nano targets the price conscious common man. Company needs to focus on these 3 aspects to attract the consumers of the highend market products: 1. as we've seen the route TML has taken involves competing on both strategies. Performance Characteristics 3. However. TML has come to be known as an innovator in the passenger car segment not just in manufacturing but along multiple areas along the value chain. A push in developing cutting-edge products in the Land Rover brand could enable Tata to capture Hummer customers as they look for comparable . the Jaguar Land Rover deal shows us that TML is now targeting brand conscious. As competitors such as Volvo.or better products. Brand Appeal and Endorsement 2. performance and quality are all functions of the investments made in product development and marketing.INTERRNATIONAL BUSINESS Recommendations Industry analysts expect GM to sell the Hummer brand in 2009 and without a seller in sight. Brand appeal. Quality TML can greatly enhance customers‘ perceptions of these three criteria with targeted increased investments.

MBA Page 26 .tata.tatamotors.wikipedia. References • www.org/wiki/Tata_group • http://en.July‘09 • The Economic Times SUBMITTED BY : ZAKUAN GRIFFITH UNIVERSITY .org/wiki/Tata_motors • http://en.com • www.com • http://en.org/wiki/Indian_automobile_industry • http://en.INTERRNATIONAL BUSINESS innovation fuelled growth coupled with strategic acquisitions is expected to catapult the company to a preeminent position internationally.wikipedia.com • Kelly School of Business Report on Tata Motors Limited Comprehensive Strategic Analysis • IHS Global Insight Report: India (Automotive).wikipedia.rediff.ndtv.wikipedia.org/wiki/Tata_Xenon • www.com • www.

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