Tata Motors Case Study

TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................3
CURRENT SITUATION.................................................................................................................3
Company Overview.............................................................................................................4
Corporate Governance.........................................................................................................4
Financial Position.................................................................................................................5
CORE COMPETENCIES................................................................................................................5
Research & Development....................................................................................................5
Acquisitions, Mergers & Expansion....................................................................................6
Organization Location.........................................................................................................6
PEST................................................................................................................................................7
Political................................................................................................................................8
Economic.............................................................................................................................8
Social....................................................................................................................................8
Technological.......................................................................................................................9
SWOT ANALYSIS.........................................................................................................................9
Strengths..............................................................................................................................9

Weaknesses........................................................................................................................10
Opportunities......................................................................................................................10
Threats................................................................................................................................11
CAPITALIZING ON TATA MOTOR’S SUCCESS....................................................................12
CONCLUSION..............................................................................................................................12
APPENDIX A, B, C ......................................................................................................................13

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3
INTRODUCTION

Established under the parent company, Tata Group, in 1945, Tata Motors Limited has
become India’s largest automobile company. It was the first Indian automobile company to list
on the New York Stock Exchange. Tata Motors began manufacturing commercial vehicles in
1954 with a 15-year collaboration agreement with Daimler Benz of Germany. This partnership
has led Tata Motors to not only become India’s largest automobile company but also India’s
largest commercial vehicle manufacturer; the world’s top five manufactures of medium and
heavy trucks and the world’s second largest medium and heavy bus manufacturer. Having just
entered the passenger vehicles market segment in 1991, Tata Motors now ranks second in India’s
passenger vehicle market.
Tata has enjoyed the prestige of having developed Tata Ace, India’s first indigenous light
commercial vehicle; Tata Safari, India’s first sports utility vehicle; Tata Indica, India’s first
indigenously manufactured passenger car; and the Nano, the world’s least expensive car. A full
timeline of Tata Motors Limited is supplied in Appendix A.

CURRENT SITUATION

COMPANY OVERVIEW
The Tata Motors group is a passenger and commercial vehicle manufacturer based in
India. The motor group was established in 1945 as part of the larger Tata Group. They have
long been known for their commercial vehicles and in the past ten years entered into the
passenger car market. Currently, Tata Motors has a line of five passenger vehicles and a large
line of commercial vehicles producing pickups, trucks, tractor trailers, tippers, and buses. Both
product lines of the Tata Motors group have seen success, but much of this has been built upon
the more deeply established commercial vehicle product line.
Tata Motors commercial line has been established for several years in many market
segments such as Europe, Africa, The Middle East, Australia, Southeast Asia, and South Asia.
Tata Motors has expanded their business and market share around the world through a series of
acquisitions. In 2004, they acquired Daewoo commercial vehicle Company in South Korea
which was South Korea’s second largest truck manufacturer. This acquisition gave Tata Motors a
significant presence in the Korean market. They have also entered into joint ventures with
companies such as Thonburi Automotive in 2006, which allowed them to manufacture and
market pickup trucks in Thailand. “We think it makes sense for Tata to expand through
acquisition (as it did in tea and steel) than spend a decade to build the business” (Lehman
Brothers). The commercial vehicle area of the business has certainly been how Tata Motors
have built their reputation, with commercial vehicles accounting for 80-85% of company profits.
They are beginning to employ a similar technique as they now expand into the passenger car
business.
Tata Motors have been making global headlines in the auto industry lately; the largest
news being their acquisition of Jaguar and Land Rover from Ford. “Tata paid 2.3 billion dollars
to Ford for the two brands that cost Ford 5.3 billion” (Carty, USA Today). This is a major step
for the company because it catapults them into the luxury car business which they are not known
for at this time. Tata, like many new businesses it acquires, is allowing this new segment of the
business to be run by previous management since they have more experience in the luxury

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automotive business. “Tata will give us some space. They want us to run our business, be a
premium British car company” (Mike O’Driscoll, managing director of Jaguar). This is yet
another large acquisition for the Tata Motors group and could create great success for the
company in the near future.
Furthermore, Tata Motors made another large announcement regarding their progress in
the passenger vehicle segment. In January they announced that they, “would release a $2,500 car
that could replace the motor scooters commonly used in developing countries to cart around
whole families” (Carty, USA Today). This is a major break through in the automotive industry
and shows how far reaching, diverse, and competitive the Tata Motors group is becoming. Soon
they will be serving customers in the high-class luxury market while still catering to their older
niches in developing countries.

CORPORATE GOVERNANCE
Since Tata Motors is a part of a large conglomerate company it needs to have a strong
corporate governance to ensure that its employees act ethically and the business continues to run
smoothly especially during the ever changing and dynamic global economy. “Tata Group’s
corporate governance is founded upon a rich legacy of fair, ethical, and transparent governance
practices” (tatacarsworldwide.com). One of the more important parts of this is the transparency
of the company people have a right to know what the company is doing not only to ensure ethical
practices, but for the insurance of their many shareholders whom have a right to know the inner
workings of the company. A full list of top management is visible in Appendix B.
Tata has created some models for employees to guide themselves through everyday
business practices to ensure that the corporate governance is continuously being upheld. The
Tata business excellence model is upheld by Tata quality management services. Quality
management is an in-house group dedicated to helping the various Tata companies achieve their
business objectives through specific processes. The two main processes that the quality
management services employees focus on are business excellence and business ethics. These
two objectives have helped build Tata into the strong, dynamic company it is today. These
models are entrenched in the company’s ethnical standards and Tata feels strongly about
enforcing both throughout the company. “Tata quality management services plays the role of
supporter and facilitator in the journey that Tata enterprises undertake to reach the peaks of
business eminence while, at the same time, adhering to the highest ethical standards” (Tata.com).
To further prove their commitment to quality and ethical practices Tata has introduced
annual quality awards for those companies conducting business with the utmost quality. These
awards are called the JRD quality value awards named after the late chairmen JRD Tata. These
awards are presented annually on July 29th, the birthday of JRD Tata. Tata has committed to
ensuring quality and ethical standards not only within Tata Motors, but throughout their many
other branches and sectors of the Tata Group. They have done so by benchmarking quality
standards through the Tata business excellence model as well as providing incentives for
companies to strive to improve the quality of their service, by awarding JRD quality
management awards.

FINANCIAL POSITION
Tata Motors have increased its earnings over the years through their various acquisitions
and joint ventures with truck manufacturers in Southeast Asia. Gross profit in the year 2006 was
1,160.9 million and increased to 1,510.1 million in the year 2007. Earnings after taxes also

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increased significantly between 2006 and 2007 increasing from 336.6 million to 405.5 million in
2007. After a large drop in revenues from 2004 to 2005 when the company first went public on
the NYSE (stock prices from May 1-22, 2008 can be found in Appendix C), it has been
increasing revenues greatly annually, from 4,422.0 million in 2005 to 7,354.0 in 2007. Tata
Motors income statement, balance sheet and statement of cash flows along with other key
statistics can be found in Appendix D.

CORE COMPETENCIES
Tata Motors is able to maintain, as well as increase, their market share by capitalizing on
their core competencies. Tata Motors is active, competitive, and dynamic in all aspects of the
automotive industry, which means that there must be many different activities going on in all
areas of the company. As a result of the ever evolving automotive industry Tata Motors must
always be changing and one way to stay at the forefront of the industry is to make continuous
improvements in technology through research and development. One way that Tata Motors has
done this is by producing one of the most efficient and low cost vehicles on the market.
Acquisitions, mergers, and expansion is another core competency that Tata Motors has is
embedded in their company structure and philosophy. Another core competency that Tata
Motors holds is being located in the India. This location has allowed them to understand not
only the Indian market but also the dynamics of emerging and developing markets. This market
understanding and knowledge allows Tata Motors to manufacture their products at lower costs,
sell them to emerging markets while making profits as well as take advantage of the strong labor
base in India.

RESEARCH AND DEVELOPMENT

One factor to Tata Motors success is their constant advances in automobile technology
through research and development. There is a high emphasis on thorough research that provides
the much-needed inspiration for the birth of new ideas, which in turn breathes new life into
products. They employ approximately 1,400 scientists and development officers. Tata Motors
has several research and development centers in India. The Research Center at Jamshedpur and
the Engineering Research Center in Pune are among the finest in the country (Tata.com). They
possess forums to develop and test durability, engine performance, emission, safety, design and
style, noise, hydraulics, tracks, and instrumentation. Both have won numerous national awards in
research and development efforts since their inception in 1966.
Through these advanced research centers Tata has created sophisticated emission
measurement systems and digital prototyping laboratories. Some other technologies that are part
of Tata Motors’ arsenal are those that offer improved electronic controls for engine systems and
other “vehicle drive-train and chassis systems” (Tata.com). The company is currently focused on
equipping vehicles of the future with technologies for improving communication, navigation and
entertainment. One example of these technological improvements is highlighted in the OneCAT
(Appendix E). This concept car is a fiberglass vehicle that virtually powered by air and is
emission free. The OneCAT weighs only a 350 kg and has a piston engine that runs on
compressed air. This car can run between 200 to 300 kilometers on one Euro of compressed air.
A spokesman for Moteur Development International, a company that partnered in the
development of this car said, "The engine is efficient, cost-effective, scalable, and capable of
other applications like power generation," (Autopartswarehouse.blog.com) This car is truly a

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representation of the next step in green automobiles. The car’s engine’s emission can be used as
an air conditioner in the cabin. This car is very futuristic and is still in the development stages:
“Nonetheless, Tata and Moteur Development International are confident that
OneCAT, which can accommodate three adult passengers, is competent enough to
go against potential green car rivals and energy efficient autos such as the hybrid,
bio-fuels, and electric vehicles. The ‘air car’ is targeted for release this year with a
base price of around £2,500.” (Autopartswarehouse.blog.com)

Some of Tata Motors other technological advances can be seen in the new car the Nano
nicknamed the People’s Car (Appendix E). This car, which is just emerging into the market, is
the world’s cheapest car. Tata Motors achieved this is through using new materials such as, re-
engineered plastics and modern adhesives. It will revolutionize the auto industry in India and
soon in other emerging markets when Tata starts exporting. The Nano was able to achieve its
low price and gain the attention of the entire automotive industry through its advances in
materials and adhesives technology.

ACQUISITIONS, MERGERS & EXPANSION

Like other companies, Tata Motors is always growing and expanding and the main way
they do this is through acquisitions and mergers. Since 2004, Tata Motors has merged or
acquired all of or at least part of four different companies. In March 2004, Tata Motors acquired
100 percent of the Korean based Daewoo Commercial Vehicle Company, Korea’s second largest
truck maker, for 102 million dollars. Rather than using de-culturation or assimilating Daewoo,
Tata took an integrated approach, and continued building and marketing Daewoo’s current
models as well as introducing a few new models globally just as it had been done under Korean
management.
In February 2005, they acquired 21 Percent of Hispano Carrocera, Spain-based company,
for 12 million Euro. In April 2005, Tata Motors Limited merged with Tata Finance, and lastly in
March 2008 Tata paid Ford Motor Company 2.3 billion for Jaguar and Land Rover companies
(Tata.com). These acquisitions and mergers allow Tata Motors to break into foreign markets and
develop a much larger share of the automotive industry.
It also helps them attain the knowledge, technology, and programs that allow them to
succeed in that particular sector of the automotive industry or in a particular region or culture.
For instance, the purchase of Jaguar and Land Rover allows Tata to enter into the luxury car
market without having to research the market, build the technology, among other important
aspects of getting into a new market segment. It further helps them enter into the very
competitive and highly desirable mature markets in Europe and in future hopes of securing
market segments in the United States. Tata Motors is currently in a growth stage as stated on
their website: “Tata Motors Ltd is in a mega expansion mode. The investments would be in
product development, capital expenditure in capacity enhancement, domestic and international
acquisitions and mergers” (Tata.com).

ORGANIZATION LOCATION
Tata Motors is located in the developing country of India. This location has been and will
continue to be vital to Tata’s success. In India, Tata can take advantage of the fact that

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manufacturing labor cost is only eight to nine percent of sales, compared to 30 to 35 percent of
sales in developed countries. In addition, India is one of the world’s largest producers of
automotive components which give Tata Motors direct access to many of these components. Tata
has higher bargaining power with suppliers because it is a local, not foreign, car manufacturer.
Tata Motors is able to leverage Indian automotive market because the current increase in demand
due to the improvements in infrastructure and growth of population and disposable incomes in
India. The Society of Indian Automobile Manufacturers stated, “India, where some 1.4 million
new cars are sold each year, is also a hugely attractive market for dozens of car companies and
most of them can’t risk ignoring what appears to now be a potent competitive advantage for Tata
Motors. India’s car market is expected to touch 2.2 million units a year by 2010”
(Livemint.com). Additionally, the India government has made protectionist polices and
regulations that are extremely favorable to Tata. In December 1997, the Indian government put
in place policies that require foreign carmakers to invest at least 50 million dollars in equity to
set up manufacturing operations in India. This means that Tata Motors is able to take advantage
of the low cost of labor, land assets, and overall investment practices without having to
implement this 50 million dollar investment. Finally, Tata Motors largest competitive advantage
is that it has prospered and grown in only developing markets for over 70 years. Tata Motors has
implemented programs that allow it to prosper while maintaining low costs and high profits.
Lastly, Tata Motors has a competitive advantage simply because they are part of the
larger Tata Group. Tata Group supplies Tata Motors with access to knowledge, resources,
technology and companies operating in many different industries worldwide allowing innovation
and easy availability to access other sources.

PEST ANALYSIS
POLITICAL
Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle
East, and Australia, it needs to pay close attention to the political climate but also laws and
regulations in all the countries it operates in while also paying attention to regional governing
bodies. Laws governing commerce, trade, growth, and investment are dependent on the local
government as well as how successful local markets and economies will be due to regional,
national and local influence.
On March 26, 2008, Tata Motors reached an agreement with Ford to purchase Jaguar and
Land Rover. In order to be capable of this acquisition, Tata Motors must have a full
comprehension of the governing bodies and laws regulating commerce in the home country, the
United Kingdom, but also in countries Jaguar and Land Rover operate in.
In accordance, Tata’s headquarters in Mumbai, India, strictly controls and regulates
operations in all dealerships and subsidiaries, in addition to knowing and abiding by all labor
laws in the multiple countries where they have manufacturing plants it has to watch political
change. This will be especially vital in the future as Tata Motors continues to expand and grow
into new markets. “While currently about 18% of its revenues are from international business,
the company's objective is to expand its international business, both through organic and
inorganic growth routes” (Tata.com). The foundation of the company’s growth internationally is
a deep understand of economic stimulation, customer needs, and individual government
regulations and laws. Although it is the headquarters ultimate responsibility to make sure each
individual office and branch is operating and abiding by the local laws, it will become
increasingly more important for that duty to be taken care of at the regional or even local level.

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 ECONOMIC
Operating in numerous countries across the world, Tata Motors functions with a global
economic perspective while focusing on each individual market. Because Tata is in a rapid
growth period, expanding or forming a joint venture in over five countries world-wide since
2004, a global approach enables Tata Motors to adapt and learn from the many different regions
within the whole automotive industry. They have experience and resources from five continents
across the globe, thus when any variable changes in the market they can gather information and
resources from all over the world to address any issues. For instance, if the price of the
aluminum required to make engine blocks goes up in Kenya, Tata has the option to get the
aluminum from other suppliers in Europe or Asia who they would normally get from for
production in Ukraine or Russia.
Tata Motors also has to pay close attention to shifts in currency rates throughout the
world. Currency fluctuations can equate to higher or lower demands for Tata vehicles which in
turn affect profitability. It can also mean a rise in costs or a drop in returns. But they also have to
pay attention to not just the domestic currency, the rupee, but also to the dollar, euro, bhat, won,
and pound, to just name a few. Just because the rupee is strong against the dollar does not mean
it is strong against all the other currencies. Attention to currency is important because it
influences where capital investment will develop and prosper.

SOCIAL
Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a
company will affect how well a company performs. This includes every stakeholder from the
CEO and President, down to the line workers who screw the door panel into place, from the
investor to the customer, the culture and attitude of all these people will ultimately determine the
future of a company and whether they will be profitable or not. For this reason, Tata Motors
tends to use an integration and rarely separation technique with foreign companies they acquire.
On the other hand, some economic issues that Tata Motors face must also be looked at
from a more localized perspective. For instance, the market in India for cars is much different
than the market for cars in Italy. For one, India has over one billion more people than Italy does,
thus the market is much larger or not as limited. Second, you must also take into affect the
demographics and the average income of each market. Italians have a higher average income per
capita than Indians and Italian citizens tend to drive larger and fancier cars. For this reason, the
Tata Nano might not do so well in the Italian market. In summation, Tata Motors views the
economy from a global perspective with operations across the entire globe; however, they must
also maintain a local market understanding and knowledge when it comes to product positioning
and placement throughout the different markets Tata conducts business in.
In 2004, Tata Motors acquired Daewoo Commercial Vehicles Company, which was at
the time Korea’s second largest truck maker. Rather than using de-culturation or assimilating
Daewoo, Tata took an integrated approach, and continued building and marketing Daewoo’s
current models as well as introducing a few new models globally just as it had been done under
Korean management.
With the new acquisition of Jaguar and Land Rover, Tata will have to be careful with
how they handle the acquisition. While Land Rover is thriving while under the helm of Ford,
Jaguar was more of the trouble child. “Jaguar cost Ford some $10 billion during its 18-year
stewardship and its sales were in headlong decline, especially in America, its most important
market. Industry analysts also struggled to see what value Tata could add that had eluded Ford,

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and what synergies there could be between a maker of trucks and basic cars… and two luxury
marques.” (Economist). Separation could be a good approach for the immediate future to keep
the name of Jaguar and Land Rover distinguishable and associated with the luxury automobile
market. Overall, Tata does a good job of integrating some aspects of their large multi-national
conglomerate into new acquisitions; however, the company must also understand that separation
from the name Tata can be valuable in some social areas.

TECHNOLOGY
Tata Motors and its parent company, the Tata Group, are ahead of the game in the
technology field. The Tata Group as a whole has over 20 publicly listed enterprises and operates
in more than 80 countries world-wide. This equates to Tata Motors having lots of experience and
resources to draw from for research and development purposes. “The foundation of the
company’s growth is a deep understanding of economic stimuli and customer needs, and the
ability to translate them into customer-desired offerings through leading edge R&D” (Tata).
Employing 1,400 scientists and engineers, Tata Motors’ Research and Development team is
ahead of the pack in India’s market and right with the rest of the field internationally. Among
Tata’s firsts are “the first indigenously developed Light Commercial Vehicle, India's first Sports
Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car,” as well
as the increasingly famous Tata Nano, which is projected to be the world’s cheapest production
car (Tata). In the automotive industry, it is becoming increasingly crucial for manufacturers to
stay on top of the technology curve with new problems always rising such as escalating gas
prices and pollution problems. Tata recognizes this and dedicates lots of resources and time into
research and development to be even with or preferably ahead of other competitors, global
trends, and changing economies. In all, an automobile manufacturer must change, adapt, and
evolve to stay competitive in the automotive game, and this is exactly what Tata is doing with
their rapid growth, and extensive research and development.

SWOT ANALYSIS

STRENGTHS
Tata Motors excels when it comes to innovation through intensive research and
development. Their ability to make the least expensive car on the market, the Nano which will
retail for $2,500, is far beyond what any other car dealership has created. This innovation gives
Tata Motors their main competitive advantage. Tata Motors makes everything from tractor-
trailers to the world’s least expensive car. This product diversity grants them a competitive
advantage over their competitors because they can satisfy more markets and customer needs.
Another strength that Tata Motors possesses is high corporate responsibility. They donate a
portion of their profits from stock increases towards a specific charity. This highlights Tata
Motors overall desire for community improvement while also emphasizing Tata Motors’ high
morals and values which is something money can not buy.
Tata Motors is also a very eco-friendly company. One of their goals is to produce an
emission friendly car, and in 2000 Tata Motors launched the first compressed natural air bus.
This air bus requires the owner to plug the car into a standard electric plug for four hours to fill
the air tanks. This brought the concept of an “air-car” to reality and the name for this
compressed natural air car is “OneCAT.” OneCAT has no gas costs or fossil fuel emissions
which makes it a very attractive car for the more mature markets but also the upper classes in

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developing countries at this point. It is also a great car to have in highly populated countries,
such as China and India, because pollution with its adverse effects is a very large concern.
OneCAT also is more efficient that any other present Hybrid car, so when inventors think they
have the best product out on the market, they actually do not. There will always be something
else to invent or improve on and Tata Motors is a prime example of that.
Tata Motors is unique in a way in which when it buys a company. Tata Motors keeps the
original management of that company intact. The company that Tata Motors purchases will look
exactly the same in terms of management and organizational structure as if it was never
purchased by Tata Motors.

WEAKNESSES
There are strings attached with every new invention and improvement on products.
These strings are Tata Motors weaknesses and what other groups perceive as their weaknesses.
One weakness that Tata Motors faces is its inability to meet safety standards. Although they
have made the most inexpensive car out on the market, it has yet to pass all the safety standards
which is a legal factor. Some consumers and pessimists inquire as to how Tata Motors can make
such a cheap car and withstanding a car accident or not just falling apart after hitting something
once. Pessimistic people also want to believe that car manufactures are already doing everything
they can to keep costs low for the consumer, and if that is the case, then putting the cheapest car
out on the market automatically questions if it is safe to drive.
Tata Motors only have been making passenger cars for the approximately last ten years.
This can be viewed as a weakness from a customer standpoint since a decade does not seem like
a lot to consumers and therefore they will think that Tata Motors is inexperienced car
manufacturing. Consumers will wonder how a car manufacturer can be in the market for 10
years and produce the cheapest car out on the market. How can Tata Motors manufacture such
a cheap car that meets emission and safety standards being so young? This causes consumers to
be skeptical.
Another weakness that Tata Motors faces is within its domestic market. Car sales in
India are less than 1 million annually. This draws a problem because Tata Motors may not get
the sales that the company hopes for and how can they sell cars to people who are not buying
cars?
The new and innovative OneCAT still has some rough spots that need to be worked out
and one of them is that it has pollutant emissions and greenhouse gas emissions from the
generation of electricity used to compress the air. So although it is marketed as being emission
free, it technically is not and this is another weakness. Also, OneCAT only goes 62 miles per
hour for 56 miles in an urban cycle. This is not very far and Tata Motors will have to improve
on this weakness as well as the emission weakness in order to draw more comsumers to this new
automobile.

OPPORTUNITIES
Tata Motors has already opened the doors for many new and innovative ideas, but not
only for their company, but their competitors as well which could turn into a threat. One of the
major opportunities that Tata Motor faces is that as of right now 90 percent of China and India’s
adult population do not own cars, partly because cars are costly and require more expenses after
purchased. So the market for a low-priced car is huge which benefits Tata Motors perfectly
since they produce the lowest priced car on the market. This is a huge opportunity for Tata

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Motors because if they can get their feet into that market of people that do not have cars because
they cannot afford them, then they will make large profits down the road. China’s total car sales
are estimated at over 8 million dollars annually and they were the world’s second largest car
market in 2006. China’s government forecasts that demand for cars will top 20 million by 2020.
With Tata Motors in the market with the cheapest car, China’s demand for cars will probably
increase even more significantly which will in turn increase sales for Tata Motors.
Japan, North America, and Europe automobile sales went up over the years because of
demand for smaller cars increased. This demand for smaller cars is a great window of
opportunity for Tata Motors because not only are their cars small, but they are cheap and
environmentally friendly as well. Once people in these countries get Tata Motor automobiles
then their automobile sales will continue to rise.
As of March 2008 Tata Motors finalized a deal with Ford Motor Company to acquire the
British businesses, Jaguar Cars and Land Rover. This is a huge opportunity for Tata Motors
since they will acquire the large knowledge base and technologies for producing and marketing
luxury vehicles. This acquisition helps them dive into the more mature markets in Japan, Europe
and the U.S. The knowledge transfer from these two companies will greatly improve Tata
Motors ability to continue to grow and flourish in both developing and developed market
segments.

THREATS
The obvious threat to Tata Motors is intellectual property rights. Tata invented the
cheapest car on the market and every automobile manufacturer wants to know how Tata did it.
Headhunters are soon going to find out this valuable information and make it available to their
own company. This is a huge threat to Tata Motors because at first they had low competition,
but once other car manufactures find out how they invented such a low cost car, and then these
companies too will jump on board and design their own line of low cost automobiles. On one
hand this can be a threat, but on the other it may not affect Tata Motors at all because people will
still want to purchase their product since they were the pioneers of all the excitement.
Other companies are starting to compete for some of this market share. In fact, the
Pakistan’s Transmission Motor company has built a basic four-wheeler for only $2,100. This car
is considerably cheap and the Pakistan Transmission Motor company started exporting them to
Sudan, Qatar, and Chile. This is going to be the beginning of new emerging car manufactures
that will be producing low priced cars.
Another obvious threat is that dealing with gas prices. Gas prices continue to rise and the
Nano requires gas, but those who purchase the Nano probably do not have a lot of money and so
if gas prices keep jumping up then that market of consumers will not be able to purchase the car.
If OneCAT can be made as cheaply as the Nano then that will benefit the consumers even more
because they will get a car that does not run on gas and it will be cheap to purchase. On the
other hand, gas company will not want OneCAT to hit the market because there will be no
profits to be made off the vehicle. Gas companies have a lot of say over the automobile industry
so this could be a big threat.
Another main concern that Tata Motors faces is that cheap cars in India will have an
adverse effect on pollution and global warming because most of the population will be able to
afford the cars. With more people driving cars there will be more accidents and deaths, as well
as higher fossil fuels leaked into the environment causing even more pollution then there already
is.

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 Tata Motors is family owned and this can potentially cause problems down the road
because some family members can become greedy and money hungry. Once they really start to
rapidly grow then there may be family feuds and people not pulling their part.
Another threat is the whole point of their cars being made with cheap plastic. Are these
cars durable? Will they hold together in a head-on collision? As off August 2007 there was no
further information on this topic though.

CAPITALIZING ON TATA MOTORS’ SUCCESS

Arguably, one of the most significant aspects of a business’s strategy is constant
environmental scanning, or looking for opportunities that will either help a business grow or
salvage plummeting profit margins and stock values. In the case of Tata Motors, and the
creation of the Nano and OneCAT from a line of service and military vehicles provide a variety
of different ways for other companies as well as other industries to capitalize on the success that
Tata has realized. There are three main avenues that businesses can take to exploit the success
that Tata Motors has generated. First, through acquisitions and mergers, like early discussed,
Tata integrates the management, programs, and knowledge of the businesses it buys out.
Secondly, Tata Motors places heavy investment into research and development. These two points
have been discussed extensively throughout this report so please refer to the previous sections:
Core Competencies and the SWOT Analysis. Finally, Tata understands and has succeeded in
growing, profiting, and reducing costs in developing markets for over half a century.
Tata Motors, like its parent company Tata Group, has much knowledge and
understanding in working in developing markets and countries. Companies considering
expanding into developing markets should consider forming a joint venture or partnership with
any of Tata Group’s numerous industries. The knowledge transfer can save time and money and
further ensure a more successful expansion.

CONCLUSION

Tata Motors is an overall strong company that has found strength and expansion through
its parent company, Tata Group, but also through its numerous acquisitions and mergers.
Although Tata Motors stock prices have fallen since the start of the 2008 year due to suggestions
that Tata Motors is overreaching by adding luxury brands to pair with the Nano, the world's
cheapest car. Chairman of Tata Group, Ratan Tata, rejects suggestions that, ``We're not trying to
be a global player,'' he told reporters in New Delhi Jan. 10 after unveiling the Nano, which will
be built in a new plant costing 10 billion rupees ($249 million). ``We will grow internationally in
select markets'' (Krishnamoorthy).

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Appendix A

Tata Motors Timeline:

1945- Tata Engineering and Locomotive Co Ltd (TELCO) is set up as a locomotive maker at the
end of World War II

1954- Company shift to making trucks in a joint venture with Germany’s Daimler-Benz

1961- Exports begin with the first truck begins being shipped to Ceylon (present-day Sri Lanka)

1977- First commercial vehicle manufactured in Pune

1983- Manufacture of heavy commercial vehicles commences

1986- Production of first light commercial vehicle

1991- Launch of the first passenger car, the Tata Sierra. One millionth vehicle rolled out.

1994- Enters joint venture to make Mercedes Benz cars in India

1999-Beings production of India’s first fully indigenous passenger car, the Indica

2002-Ends joint venture with Daimler

2002-TELCO is renamed Tata Motors Ltd.

2003-Tata Motors Ltd. Announces plan to build world’s cheapest car for 100,000 rupees (1,250
pounds or 2,500 dollars)

2004- Acquires South Korea’s Daewoo Commercial Vehicle Company and is listed on the New
York Stock Exchange

2005- Buys 21 percent stake in Spanish bus maker Hispano Carrocera SA, launches mini-truck,
the Ace

2006- Signs initial agreement with Fiat

2008- Unveils one-lakh (100,000 rupee) “People’s Car” also know as the Nano. Acquires Jaguar
and Land Rover.

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Appendix B

Top Management of Tata Motors Ltd.

Name Age Since Current Position

Sait, Zackria -- 2007 Vice President - Technical Services
Mani, Shyam -- 2007 Vice President - Sales & Marketing, CVBU
Rajarao, M. -- 2007 Vice President - Manufacturing, Pune
Girotra, K. -- 2007 Vice President - Lucknow Works and FBV
Tambe, S. -- 2007 Vice President - Human Resources
Thakur, R. -- 2007 Vice President - Finance
Gurav, P. -- 2007 Vice President - Corporate Finance - Accounts and Taxation
Krishnan, S. -- 2007 Vice President - Commercial, PCBU
Dube, Rajiv -- 2007 President - Passenger Cars
Arya, A. -- 2007 President - Heavy and Medium Commercial Vehicles
Mehta, V. 73 1998 Non-Executive Independent Director
Wadia, N. 63 1998 Non-Executive Independent Director
Palia, Sam 69 1998 Non-Executive Independent Director
Soonawala, N. 72 1989 Non-Executive Director
Irani, Jamshed 71 1993 Non-Executive Director
Gopalakrishnan, Ramabadran 62 1998 Non-Executive Director
Tata, Ratan 70 1996 Non-Executive Chairman of the Board
Mashelkar, Raghunath 64 2007 Independent Director
Mankad, A. -- 2007 Head - Car Plant
Telang, P. 59 2007 Executive Director - Commercial Vehicles
Sethna, H. -- 2007 Compliance Officer, Secretary
Ramakrishnan, C. -- 2007 Chief Financial Officer, Executive Director
Kant, Ravi 63 2005 Chief Executive Officer, Managing Director, Director

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Appendix C

Above: Tata Nano

Below: Tata OneCAT

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