UVA-S-0184

Rev. May 9, 2013

TATA MOTORS LIMITED: RATAN’S NEXT STEP

On January 10, 2008, Ratan Tata, chairman of Tata Motors Limited (Tata Motors), drove
onto the stage at the New Delhi Auto Expo in the world’s cheapest car. As he parked next to two
other models of the Nano, he thought back on the day several years prior when he had promised
the world an affordable car that could be bought for under $2,500.1 At the time, India was an
emerging economy that had begun to invest millions of dollars in transportation infrastructure.
Ratan saw the influx of roads and new prosperity for Indians as the perfect environment to debut
a car that could be purchased by almost anyone. Like his personal hero, John F. Kennedy, Ratan
challenged the people around him to design and produce something that had previously been
unthinkable.

Ratan’s ability to deliver on such a bold aspiration instilled in his investors and him the
confidence that Tata Motors was capable of competing in the international automobile market.
The Nano’s production was made possible by a wide range of capabilities within the Tata Group,
which, along with Tata Motors, owned 98 other companies operating in 80 countries. Such a
diverse and complete range of resources made Tata’s future bright.2

And even as Ratan stood on the stage introducing his accomplishment, he wondered what
the next step ought to be to move his company forward. A lifelong interest in automobiles and an
appreciation of the Western car market led Ratan to believe that he would have to establish a
firm foothold in the United States and the United Kingdom to be considered a contender in the
global automotive industry. His mind turned to the ongoing bid and negotiations to acquire
Jaguar Land Rover (JLR) from Ford Motor Company (Ford). Establishing a luxury brand would
go a long way toward separating Tata Motors from regional automotive firms. Yet he had to
1
Richard S. Chang, “Tata Nano: The World’s Cheapest Car,” January 10, 2008, Wheels, New York Times,
http://wheels.blogs.nytimes.com/2008/01/10/tata-nano-the-worlds-cheapest-car/ (accessed December 3, 2010).
2
Christabelle Noronha, “View from the Top,” Tata.com, http://www.tata.com/aboutus/articles
/inside.aspx?artid=DB7yGg47wW4= (accessed December 3, 2010).

This case was prepared by Andrew Biladeau, Case Writer; Gerry Yemen, Senior Researcher; Michael J. Lenox,
Samuel L. Slover Professor of Business Administration; and Jared D. Harris, Assistant Professor of Business
Administration. It was based exclusively on public sources and contains some fictionalized content. All company
data is actual. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of
an administrative situation. Copyright  2010 by the University of Virginia Darden School Foundation,
Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com.
No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in
any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission
of the Darden School Foundation.
 -2- UVA-S-0184

think about whether the firm was well positioned to execute the acquisition if it won the bid. Or
was organic growth a safer route to the same end?

Global Automobile Landscape

The automobile industry was a revolving door of brand ownership and development
among a limited number of conglomerates. Underlying the swapping and bargaining of various
marques between companies was a tone of nationalism. Traditional American firms such as
General Motors (GM) and Ford pitted themselves against foreign competitors, particularly those
in the Far East, where automotive production was growing at a tremendous rate: Between 2005
and 2008, U.S. motor vehicle production declined 13%, while China’s production increased
63%, and India’s jumped 51%.3

The disparity between the Eastern and Western car markets reflected a global economic
slowdown, which favored cheaper and more efficient vehicles. Ford, which had been pouring
money into its fledgling Premier Automotive Group (PAG), had determined it would be more
cost-effective to dismantle the sector altogether, raise capital, and reinvigorate its mainstay
marques to form a cohesive and unified campaign. A return to core brands for Ford meant
eliminating luxury models, which had experienced a significant decline from 2004 to 2006.4

Luxury brand or not, without two raw materials—steel and aluminum—auto production
lines would be idle. Steel was at the heart of the car manufacturing process. The prices of those
resources were either a threat or benefit to a firm’s operating costs. In 2006, Tata faced
downward pressure on its margins when the price of aluminum ingot rose 23% and steel
increased $9 per ton over the previous year.5 Auto production was highly dependent upon the
steel and aluminum industries.

The main factors in being able to produce automobiles on a mass scale across different
vehicle types was R&D, manufacturing capability, and access to successful platforms. Most
major auto companies used platforms to produce varying types of vehicles while saving on
design particulars. A dashboard display, for instance, could be used for multiple vehicles. In
addition to aesthetic nuances to vehicles, platform technology incorporated features under the
hood including engines and chassis. Platform technologies were valuable for companies because
when one was developed, it could be applied to multiple vehicles of the same class to produce
identical internal components while allowing for multiple body designs.

3
Datamonitor, “Global Automobiles & Components: Industry Profile,” April 2008.
4
John Paul McDuffie, “Should Tata Motors Buy Jaguar and Land Rover?,” Knowledge@Wharton, September
20, 2007, http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4226 (accessed December 3, 2010).
5
Datamonitor, “Tata Motors Limited SWOT Analysis,” February 2011, 8.
 -3- UVA-S-0184

In addition to platform production, most auto companies were focused on building brands
that would be familiar to consumers. In general, automobiles were big-ticket items for
consumers, and when faced with such a large purchasing decision, many buyers were swayed by
their comfort with the brand. For that reason, particular brand names were especially valuable in
the global automotive market—Jaguar and Land Rover were primary examples of universally
recognized brands.

Jaguar was originally known as the Swallow Sidecar Company until World War II, when
the similarity of its initials to those of Hitler’s elite guard, the Schutzstaffel (SS), drew negative
connotations. In 1968, almost 25 years after the name change, Jaguar merged with British
Motors Company (BMC) and deepened its ties to England. Jaguar’s cars were known for having
a sporty look and were driven by the aristocracy of England. After collaborating with Ford
throughout the late 1970s and 1980s, Ford finally purchased Jaguar outright in 1989 for $2.5
billion.

Land Rover’s image and reputation was also built in the United Kingdom. The two
automakers even shared the same parent company in the 1960s when they were owned by British
Leyland Company, which became BMC. Land Rover spun off from BMC and operated
independently in the United Kingdom until being acquired by Bayerische Motoren Werke AG
(BMW) in 1994. It was then sold to Ford in 2000.

Tata Motors’ Market in India

Ratan had always had a personal interest in automobiles and even considered applying
his Cornell architecture degree to the field of auto design following graduation from college.
Instead, he spent two years working on the floor of Tata Steel and gained an intimate
understanding of the business and its capabilities. Throughout his ascension to the top of Tata
Motors, he won traction with Indians by catering to their price sensitivity, but he did so with the
long-term goal of extending the company’s reach outside India’s borders. He believed, however,
that it was necessary to establish a sufficient base in India before expanding to Europe and the
Americas.6

As Ford was experiencing a fluctuating market in the West (Exhibit 1), Tata Motors was
capitalizing on an emerging automotive market in India (Exhibit 2). In an attempt to compete
with China as an up-and-comer in the global automotive industry, the Indian government passed
massive legislation—called the National Highways Authority of India (NHAI) Act—that would
fund the creation of highways and other domestic travel infrastructure. The increased ease of
transportation would not only broaden the company’s capabilities to transport goods around the
country but also increase demand for the automobile among Indian citizens.

6
http://www.tata.com/aboutus/articles/inside.aspx?artid=DB7yGg47wW4=.
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Before the NHAI Act was passed in 1988, the majority of Indians owned a two-wheel
vehicle. Construction associated with the act was scheduled to be completed between 2005 and
2007, which coincided with Ratan’s unveiling of the Nano; analysts called the timing a stroke of
brilliance.

The task of building “The People’s Car,” as the Nano was sometimes called, began with
Ratan’s directive to Tata Motors that it was in a time of great opportunity and had to capitalize.
There was competition from other firms to supply a car to the Indian consumer that could be safe
and reliable. The auto firm Mahindra & Mahindra had recently begun to distribute the Maruti
800, which had more features than the Nano—including air conditioning, sun visors, and radio—
but it was still roughly twice the price. Ratan rode the wave of India’s infrastructure growth by
becoming strongly leveraged in domestic vehicle sales. In 2006, 81% of Tata Motors’ revenue
came from domestic vehicle sales.7

Even though car sales in India were robust, Tata Motors faced some brawny
competitors—Maruti Udyog Limited (also known as Maruti Suzuki) and Korean-owned Hyundai
Motor Company (see Figure 1 for key 2007 comparison data).

Figure 1. Competitor data, 2007 (in millions of U.S. dollars except as noted).
Hyundai Maruti Udyog Tata
New car market share, India 17.3% 55.3% 20.6%
Luxury brands Genesis SX4 None
(concept car 2007) Grand Vitara XL7
Revenues 74,418.6 3,688.0 6,717.2
Net income 1,711.2 377.7 650.5
Profit margin 2.3% 10.2% 9.7%
Total assets 89,650.6 1,850.3 2,820.7
Total liabilities 70,310.1 604.9 1,159.7

Sources: Scott Gibson, “Asian Action Pack; Equities,” Abnam.Ambro Research, December 14, 2006;
Datamonitor, “New Cars in India,” December 2007 (0102-0358); Datamonitor, “New Cars in India,”
December 2008 (0102-0358).

To produce vehicles in line with regulations and with international appeal, Tata Motors
would have to devote a major amount of capital and resources to R&D, and even then,
recognition and trust would be granted sparingly. Tata Motors had certainly been successful in
joint ventures and acquisitions to expand internationally, but those achievements were largely
made by selling generic vehicles on large contracts to governments and other public entities.

7
Tata Motors Limited annual report, 2006.
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Competing globally for luxury buyers would put Tata in the company of four premium
brands that dominated the market: BMW, Mercedes, Audi, and Volvo (85% in 2006).8 And it
would require becoming attractive to a distinct group of car owners, a majority of whom were 55
years and older (Exhibit 3).9 Several other factors made this cohort unique. Luxury car owners
tended to buy used cars more than new (although the chances of purchasing a new luxury car
increased with age and income; see Figure 2 for the geographic distribution of the world’s
richest people), were more likely to pay in cash, were markedly more inclined to see foreign
nameplates as more prestigious than domestic, and were less influenced by gas mileage or
environmental benefits.10

Figure 2. Global wealth overview.

Europe
Africa
32%
1%
India
North America 2%
Latin America
31%
4%
China
Asia-Pacific 8%
22%

Source: Credit Suisse Research Institute, Global Wealth Report, October 2010,
http://piketty.pse.ens.fr/fichiers/enseig/ecoineg/EcoIneg_fichiers/DaviesShorrocks2010(CSGlobal
WealthReport).pdf (accessed September 1, 2011).

Despite the competition, acquiring JLR would put Tata in a niche market and make it one
of the truly global players in the automobile industry. The company also had a favorable rating
from its customers—a 2006 Customer Satisfaction Study placed Tata at the top of its market for
customer satisfaction.11 That kind of service would be expected in the luxury brand market and
the company would no doubt benefit from it.

Previous Acquisitions

Tata Motors was somewhat of a pioneer in foreign automobile acquisition. In 2004, it

became the first India-based automobile firm to make an overseas acquisition when it bought

8
Bernstein Research, “The E and F Segments,” European Autos: Segmentation and Margins, 2007.
9
“Auto Market: Sport & Luxury Cars-US-January 2003,” via Mintel, (August 30, 2011).
10
Auto Market.
11
Datamonitor, “Tata Motors Limited SWOT Analysis,” February 2011, 5.
 -6- UVA-S-0184

Daewoo Commercial Vehicles. The move was a calculated attempt to meet the company’s public
goal of increasing its revenue stream from other countries by 10% to 15% over the three-year
period of 2004–2007. At the time, Tata Motors was nearing maximum capacity at 200,000 units
annually, 85% of which were being sold domestically in India. As a leading South Korean
automobile company, Daewoo offered a low-risk means of entering the global auto market for a
modest price of $116 million.12

The acquisition allowed Tata Motors to combat domestic overexposure because Daewoo
had significant markets in South Korea and Pakistan. The deal was also in line with Tata Motors’
aggressive global expansion goal. According to Praveen Kadle, executive director of finance,
“We acquire a company only if it gives us a new technology, new markets, new products, new
customer bases, or a new product development capability. The deal must also make financial
sense.”13

To convince Daewoo that its new Indian owner was capable of a smooth transition, Tata
Motors translated all its literature into Korean for the board and hired professional translators to
facilitate communication. Tata Motors’ management also interacted directly with Daewoo
employees and assured them that they would all retain their positions after the acquisition, a
promise they would eventually keep. In a poignant tone, Tata Motors’ managing director Ravi
Kant explained, “We are connected to the local society and want to add value to it. It’s not a
question of thrusting ourselves. That is one thing, which we are strictly avoiding, anywhere we
are going.”14

In another concerted effort to increase its international presence, Tata Motors acquired a
portion of the Spain-based bus company Hispano Carrocera SA (HC) in 2005. The deal gave
Tata Motors rights to 21% of HC’s shares, technology, and brand rights. Tata Motors was
primarily interested in HC’s large commercial vehicle platforms and in replicating its compliance
with safety and emissions standards. In an act of forward thinking, Tata Motors stipulated in the
deal that the remaining 79% of HC could be purchased in the future if both companies came to
agreeable terms.

The deal allowed Tata Motors to simultaneously enter the bus market and develop a
presence internationally. HC produced high-end public transportation buses, which were in high
demand in Middle Eastern countries; similar demand was emerging in India as the government’s
infrastructure overhaul began.

12
Ian Rowley and Nandini Lakshman, “Can Tata Rev Up Jaguar?,” BusinessWeek.com, March 26, 2008,
http://www.businessweek.com/globalbiz/content/mar2008/gb20080326_384146.htm (accessed January 26, 2011).
13
Cynthia Rodrigues, “On the Fast Track: Tata Motors Takes the Inorganic Route to Growth in Its Mission to
Go Global,” Tata.com, April 2006, http://www.tata.com/company/Articles/inside.aspx?artid=zyxxMQvwTA0=
(accessed December 3, 2010).
14
http://www.tata.com/company/Articles/inside.aspx?artid=zyxxMQvwTA0=.
 -7- UVA-S-0184

In both the Daewoo and HC acquisitions, Tata Motors was intent on obtaining platform
technologies for new vehicle types so it didn’t have to engineer new components to generate new
categories of vehicles (see Exhibit 4 for vehicle types). As a result of its experience with these
two foreign acquisitions (among others), Tata Motors had realistic expectations and confidence
pursuing a potential deal with JLR. Kadle said, “The most important thing in acquisitions is
human integration. Employees from shop floor workers to senior management must be
comfortable about working with us.”15

Ford and the Premier Automotive Group

The PAG housed Ford’s most luxurious and expensive brands: Jaguar, Land Rover,
Aston Martin, Volvo, and Lincoln. Formed in 1999, the PAG was intended to separate Ford’s
marquee brands from its mass-production vehicles. Originally, the group incorporated Volvo,
Aston Martin, Jaguar, and Lincoln. Land Rover was added to the group in 2000 when Ford
purchased the firm for $2.7 billion. The brands produced anemic returns over the next several
years and forced Ford to reevaluate their status and place within the company (Figure 3). In
2006, Ford unveiled its “The Way Forward” campaign, which opened discussion about selling
off particular brands to avoid further losses. Particularly Jaguar, and to a lesser extent Land
Rover, had experienced significant declines in production and sales. In addition to those losses,
Ford had continued to invest in marketing and advertising with JLR over the previous six years,
which resulted in estimated losses of up to $10 billion.

Figure 3. Jaguar and Land Rover financial data (in millions of U.S. dollars except as noted).
CY2006 CY2007 CY2008E
Revenue 12,969 14,942 13,336
Cost of sale 10,909 11,871 10,802
Gross profit 2,060 3,071 2,534
MKTG and selling expense (% to revenue) 8.2 7.2 6.5
R&D expense (% to revenue) 5.3 5.5 5.8
General and admin expense (% to revenue) 2.8 2.4 2.5
EBITDA (prior to adjustment) 26 1037 700
Depreciation 383 387 333
Data source: Vaishali Jajoo, “Commercial Vehicles Sector Update,” Angel Broking, December 2008

On the cost side of JLR operations, several factors contributed to what the firm described
as unfavorable earnings—an increase impairment charge for long-lived assets, costly currency
exchange rates (mostly related to hedges), higher charges for personnel-reduction programs, and
warranties on previous model year cars were noted as problematic.16 Based on the year’s

15
http://www.tata.com/company/Articles/inside.aspx?artid=zyxxMQvwTA0=.
16
Ford Motor Company 10-K, 2007, 44–6.
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operating results, the PAG 2006 business plan review projected a continuing decline in net cash
flows in the next year and perhaps beyond. There was talk of refocusing the firm’s commitment
to its core automotive operations. Because PAG was a division within Ford, there were unions
that would be affected by the potential sale of JLR. Although Jaguar had 871 dealers in 64
markets, and Land Rover had 1,376 dealers in 138 markets, most of JLR’s design and production
took place in the United Kingdom; if the brands were sold, it was feared that jobs would be
shipped out of the United Kingdom (see Exhibit 5 for dealers, sales, and locations). JLR’s
presence in the United Kingdom was also due to the fact that a majority of sales took place there
and in the United States.

Ford formally decided to sell the JLR brands in June 2007. Over the next several months,
Ford accepted bids from a variety of companies including Capital Management LLC, TPG
Capital, Mahindra & Mahindra, One Equity, and Tata Motors. By November, Ford had narrowed
the offers down to three preferred bidders: One Equity, Mahindra & Mahindra, and Tata Motors.
JLR trade union members feared that the buyer would not ultimately be able to maintain the
prized and celebrated iconic branding of JLR; to address those union concerns, each bidder
would be given the opportunity to present its plan directly to the UK trade unions.

Terms of the Deal

Negotiations between Ford and its suitors dated back to June 2007. Throughout that
period, Ford had refined what it was actually selling in addition to the JLR brands. Included in
the sale would be access to JLR’s R&D departments and ownership of their respective
intellectual property. The inclusion of these terms ensured that JLR’s new owner would gain
ownership of the platforms used to produce all JLR’s vehicles.

The sale of JLR was part of a portfolio restructuring Ford was undergoing. Ford had lost
$15 billion the previous two years and had decided to dismantle PAG in an attempt to revive its
core business. Ford believed that the strength of the entire company rested on the value of the
brands under the PAG umbrella, but after 2004, a major decline in the global automotive
industry had begun to diminish that value.

The strategy was part of Ford’s “The Way Forward” campaign. It was inefficient to try to
maintain such a variety of marques when they were so unprofitable. Ford had spent 15 years and
approximately $17 billion to establish and maintain the PAG division. In 2005, Jaguar produced
85,000 vehicles—a 20% reduction from the 100,000 vehicles sold in 2001. And there had been a
37% drop in sales in the same time period. The dismantling of Ford’s PAG had begun in 2006
when it put the niche brand Aston Martin up for sale, “As part of our ongoing strategic review,
we have determined that Aston Martin may be an attractive opportunity to raise capital and
 -9- UVA-S-0184

generate value,” said Bill Ford, chairman and CEO.17 By the time Ford decided to sell Jaguar in
2007, the company was not able to cover the fixed production costs. And it had posted losses of
$282 million in the first quarter of the year. Part of the conclusion reached by the consultants was
that adverse economic conditions in the West had greatly decreased demand for luxury cars
(Exhibit 3).

A major obstacle for any company bidding on JLR would be the unions, which
represented a large portion of the work force. They complicated the bargaining process by
demanding that the new owner keep jobs and plants in the United Kingdom. JLR had strong ties
there; its departure would mean many lost jobs and also be a blow to national pride.

When the three bidders presented their proposals to union members, Tata Motors came
away a clear favorite because it planned to continue the incumbent business strategy through
2011 using the existing team. Its plans included expanding its presence in emerging markets and
keeping management in place. In fact, Tata Motors intended to let all of JLR’s 16,000 UK-based
employees stay put.18

The unions were also concerned that the other two bidders, each backed by private equity
firms, did not have the same capabilities to maintain JLR. Tata Motors, however, already had
supply chain logistics in place for distribution and would therefore be able to use some of the
money saved in those areas to bid higher for JLR.

The financial terms of the deal stipulated that for $2.3 billion, Ford would transfer the
entire businesses of JLR to the winning bidder. But none of JLR’s debt would be transferred; that
included $600 million that Ford agreed to pay into union pensions. Furthermore, Ford would
continue to supply the acquirer with various supports and services associated with and tied to the
brands. Supplemental came in the form of accounting services, powertrain supply, vehicle
stamping, vehicle components, and technological support.19

If Tata Motors won the bid, it would be able to secure the money for the acquisition by
obtaining a bridge loan of $3 billion from Citigroup and JPMorgan. Taking on a large loan of
short duration during a global financial crisis had analysts skeptical about the Tata Motors deal—
especially for a potentially difficult brand to manage. Citing a major decline in JLR’s major
markets of the United States and United Kingdom and Ford’s inability to make a profit on Jaguar
in 10 years, S&P threatened to seriously consider downgrading Tata Motors’ rating from its lofty
B+ status.

17
Sharon Silke Carty, “Will Ford Make the Leap and Sell Jaguar? Aston Martin Is on the Block,” USA Today,
August 31, 2006, http://www.usatoday.com/money/autos/2006-08-31-jaguar-usat_x.htm (accessed January 26,
2011).
18
Heather Timmons, “Ford Reaches Deal to Sell Land Rover and Jaguar,” New York Times, March 27, 2008.
19
John Neff, “Officially Official: Tata Buys Jaguar Land Rover for $2.3 Billion,” Autoblog,
March 26, 2008, http://www.autoblog.com/2008/03/26/officially-official-tata-buys-jaguar-land-rover-for-2-3-billio/
(accessed December 3, 2010).
 -10- UVA-S-0184

In addition to the challenge of taking on large debt, many people were interested in how
Tata Motors would go about advertising high-end products that stood in stark contrast to its
current line of cars, including the Nano. Tata Motors was also facing new emissions standards
litigation from the European Union that all JLR vehicles would have to comply with in the
future.20

With respect to synergies that could be realized upon the completion of the deal, Ratan
was excited about the opportunity to combine his company’s stable of sport utility vehicles with
Land Rover’s lineup. Ratan was prepared to use Land Rover technologies to upgrade his own
models and hoped to reduce the cost of Land Rover vehicles with technologies developed during
production of the Nano. The upside of Tata Motors’ array of products was that there would not
be an overlap in competing market segments.

If Ratan made the deal, there would be an immediate need to begin working on a
marketing strategy because both Jaguar and Land Rover had promising vehicles in their
respective pipelines. Jaguar was moving in the direction of producing performance vehicles: The
XFR and XKR, both upgrades from current models, were slated to roll off the assembly line in
2009 (the X-type car had a price tag in the mid-30Ks range in 2006).21 Land Rover was in the
process of updating the aesthetics of its models by giving their bodies face-lifts and redesigning
the interiors of the Range Rover and the Range Rover Sport, which would be unveiled in 2009
(the Range Rover SUV had a price tag in the low-60Ks range in 2006).22

Conclusion

The crowd cheered as Ratan Tata finished speaking and made his way backstage. He was
excited and wondered what would come next. If Ford did not choose Tata Motors as the
preferred bidder for JLR, Ratan would either have to wait for another brand to be up for sale or
try to figure out a way to grow the current Tata Motors brands to enter overseas markets. His
stomach churned as he thought of the time and energy it would take to research foreign markets,
tailor products to their individual needs, and then find ways to affordably distribute Tata Motors’
vehicles.

20
“Tata Sons to Lend Support for Financing the Deal,” Economic Times (India), March 27, 2008,
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/tata-sons-to-lend-support-for-
financing-the-deal/articleshow/2902766.cms (accessed January 26, 2011).
21
Edmunds website, “Jaguar X-Type Review,” http://www.edmunds.com/jaguar/x-type/ (accessed September
1, 2011).
22
Jerry Flint, “Ford’s Premier Automotive Goof,” Forbes.com, July 27, 2004, http://www.forbes.com/2004
/07/27/cz_jf_0727flint.html (accessed January 26, 2011) and Edmunds website, “2006 Land Rover LR3 True Cost
to Own,” http://www.edmunds.com/land-rover/lr3/2006/tco.html?style=100604445&ps=used (accessed September
1, 2011).
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Exhibit 1
TATA MOTORS LIMITED: RATAN’S NEXT STEP
Ford’s Revenues 2003–2007

Automotive Revenues
Year (in billions of U.S. dollars) Growth
2003 138.2
2004 147.1 6.44%
2005 153.5 4.35%
2006 143.3 –6.64%
2007 154.4 7.75%

Data source: Ford Motor Company annual reports, 2003–2007.

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Exhibit 2
TATA MOTORS LIMITED: RATAN’S NEXT STEP
Tata Motors’ Financials 2003–2007

Sources of Revenue

2003–04 2004–05 2005–06 2006–07

Domestic Vehicle Sales 85.70% 85.14% 80.88% 82.80%
Exports 6.75% 7.35% 9.86% 8.55%
Vehicle Spare Parts 4.26% 3.79% 4.05% 3.77%
Dividend 0.38% 0.80% 1.19% 0.76%
Hire Purchase 0.90% 0.77% 1.78% n/a
Other 2.04% 1.87% 2.23% 4.12%

Uses of Revenue

2003–04 2004–05 2005–06 2006–07

Materials 57.05% 59.77% 60.23% 61.78%
Taxes & Duties 17.93% 17.16% 16.45% 16.23%
Operation & Other Expenses 10.87% 9.43% 9.53% 9.29%
Employees 5.67% 5.03% 4.71% 4.26%
Reserve 3.16% 3.49% 3.96% 3.85%
Shareholders 1.81% 2.20% 2.05% 1.80%
Depreciation 2.46% 2.18% 2.04% 1.82%
Interest 1.04% 0.75% 0.93% 0.97%

Data source: Tata Motors Limited annual report, 2007.

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Exhibit 3
TATA MOTORS LIMITED: RATAN’S NEXT STEP
U.S. Luxury Car Owner Profile

Race/Ethnicity % Purchased New

White 92
Black 2
Asian 6
Hispanic 7
Age
18–24 2
25–34 13
35–44 11
45–54 20
55–64 22
65+ 32
Marital Status
Married 71
Not married 29
Household Income
Under $25K 12
$25K–$49.9K 12
$50K–$74.9K 18
$75+ 57

Data source: “Auto Market: Sport & Luxury Cars, United States,
January 2003,” Mintel Oxygen database, August 30, 2011.
 -14- UVA-S-0184

Exhibit 4
TATA MOTORS LIMITED: RATAN’S NEXT STEP
Tata Motors’ Vehicle Types 2003–2007

2003 2004 2005 2006 2007

Passenger
Percent 50% 48% 48% 46% 42%
Number 104,000 140,000 179,000 189,000 228,000
Commercial
Percent 50% 52% 52% 54% 58%
Number 106,000 152,000 190,000 215,000 299,000

Data source: Tata Motors Limited annual report, 2007.

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Exhibit 5
TATA MOTORS LIMITED: RATAN’S NEXT STEP
Jaguar and Land Rover Dealers and Sales, 2005–2007

Jaguar
2005 2006 2007
Dealers 880 871 859
Vehicles Sold 89,802 74,593 60,485
Europe 53% 55% 59%
N. America 36% 29% 27%
Asia-Pacific 7% 10% 9%
Rest of World 4% 6% 5%

Land Rover
2005 2006 2007
Dealers 1,400 1,376 1,397
Vehicles Sold 185,120 193,640 226,395
Europe 60% 51% 60%
N. America 26% 26% 23%
Asia-Pacific 7% 8% 7%
Rest of World 7% 15% 10%

Data source: Ford Motor Company annual reports, 2005–2007.