AUTOMOBILE

A PROJECT REPORT

Submitted by

Aishwarya Pareek (21PGDM103)

Aishwarya Shree (21PGDM104)
Ajay Kumar Chaudhary (21PGDM105)
Aman Bajaj (21PGDM106)
Amrita Banerjee (21PGDM107)
(PGDM 2021-23)

in partial fulfillment for the award of the Diploma

of

POST GRADUATE DIPLOMA IN MANAGEMENT

in

OPERATIONS MANAGEMENT

AT

INTERNATIONAL MANAGEMENT INSTITUTE (IMI) – KOLKATA

AUGUST, 2021

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 INTERNATIONAL MANAGEMENT INSTITUTE

BONAFIDE CERTIFICATE

Certified that this project report “……….AUTOMOBILE……..” is the bonafide

work of “..………Aishwarya Pareek (21PGDM103), Aishwarya Shree

(21PGDM104), Ajay Kumar Choudhary (21PGDM105), Aman Bajaj

(21PGDM106), Amrita Banerjee (21PGDM107)…...…………”who carried out the

project work under my supervision.

Operations Management SUPERVISOR

DEPARTMENT Dr. Sachin Modgil

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 ABSTRACT

The automobile industry is one in every of the foremost important sector

of economic process of India and one with high participation in global value
chains. The expansion of this sector has been on the rear of strong government
support which has helped it carve a singular path among the manufacturing
sectors of India. The vehicles manufactured within the country are uniquely
designed for the strain of low- and middle-income citizens which make this
sector unique from other automobile-producing countries. This project
examines the contributions of state policy, infrastructure, and other enabling
elements within the expansion of the car and automotive component sectors of
India. In 2017, India became the world’s fourth-largest automobile market, and
also the demand for Indian vehicles continues to grow within the domestic and
international markets. To satisfy the longer term needs of consumers (including
the electrical vehicles) and stay earlier than competition, manufacturers are now
catching abreast of up digitization, and automation. It also analyses India’s
national policy in light of those developments. During this project, we are
comparing other automobile company with Tata Motors.

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 TABLE OF CONTENTS

S NO. PARTICULARS PAGE NO.

1. INTRODUCTION…………………………………………... 7-8

2. CURRENT OPERATIONS AND SUPPLY CHAIN

PRACTICES………………………………………………… 8-11

3. CURRENT PERSPECTIVES OF OPERATIONS……….. 11-12

4. CHALLENGES FOR CURRENT 12-13

OPERATION…………
5. OPERATIONS AND SUPPLY CHAIN OF
AUTOMOBILE INDUSTRY INDIA……………………… 14-18

6. OUTLOOK OR RECOMMENDATIONS ON THE

BASIS OF YOUR SECONDAY RESEARCH FOR THE
INDUSTRY………………………………………………….. 18-19

7. ABBREVIATION………………………………………....... 20

8. REFERENCE……………………………………………….. 21

LIST OF TABLES

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S.NO. PARTICULARS PAGE NO.

1. NUMBER OF CARS/1000 INDIVIDUALS OF VARIOUS

COUNTRIES…………………………………………………… 15

2. TOTAL EV SALES AROUND THE WORLD IN THE

YEAR 2020……………………………………………………... 17

LIST OF FIGURES

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S.NO. PARTICULARS PAGE NO.

1. AUTOMOBILE STRUCTURE………………………….. 8

2. MANUFACTURING PLANT……………………………. 10

3. GENERAL SUPPLY-CHAIN FLOW IN

AUTOMOBILE INDUSTRY…………………………….. 14

4. OPERATIONS AND SUPPLY CHAIN OF THE EV

INDUSTRY OF CHINA………………………………….. 17

1. INTRODUCTION

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 FARDIER A VAPEUR was the world's first steam powered automobile designed by
French Engineer Nicolas-Joseph Cugnot in the year 1769. This marked the beginning of the
automobile industry followed by various inventions in the sector. The first industrially
applied internal combustion engine was tested by Samuel Brown in 1826. Progress continued
as two and four cycle combustion engine were invented and petrol was used as a fuel. Around
the same time electric cars were developed and became quiet famous in the late 19 th and early
20th century. It used to offer self-start, silent operation and manual maintenance, whereas IC
cars were having unreliability, noise, and also the vibration and the steamer’s complications
and thirst. Electric cars were famous among women but remained in limited production until
the 1920s. Studebaker electric car was one such Battery-powered cars that were sold from
1902-1912.

But around the same time there was growth in petroleum infrastructure and Ford
Motor Company started mass production of IC vehicles. This resulted in reduction of price of
IC vehicles, and led to decline of the EV. 

Both WWI and WWII played a significant role in development and increase in production
and use of IC engine vehicles and then high speed diesel engine.

The modern global automobile industry is large with an average annual turnover of
more than 2.75 trillion euros. With the advancement in the industry and increase in demand
of this sector, global automotive companies are restructuring their business activities by
outsourcing their non-core activities to low-cost countries. Because of the current competitive
environment, automobile manufacturers are continuously innovating new characteristics in
their products and process as well as to follow environmental standards along with economic
costs. Due to this organizations source more components from low-cost countries. It also
pushes automobile companies to get engaged in mergers and acquisitions. The relationship
between automobile assemblers and their suppliers is changed due to current globalization,
implementation of lean production, and development of modularization.

This ever evolving industry has come a long way from steam engines to EV. At
present it is one of the most important industry leading the global GDP and generates huge
employment for people. Constant technological advancement and simultaneous rise in
demand and sales of the industry has made it a success.

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 Fig no.1.1- Automobile structure

2. CURRENT OPERATIONS AND SUPPLY CHAIN PRACTICES

In this report we are going to discuss about the current operation of one of the leading
automobile company of India, Tata Motors Limited during pandemic. It was established in
1945. It is ranked among the top 5 commercial manufacturing company in the world. It has
various manufacturing plant all across India and is also expanding its footstep in the
international market like Europe, Africa etc. It has also purchased Jaguar anf Land Rover in
2008 and a truck making firm Daewoo Commercial Vehicle in Japan 2004. It has the lowest
priced car in the world known as Tata Nano. Pandemic created difficulties globally in
automotive supplies and builders. It also brought changes in manufacturing processes and
consumer demands. Disorderly trends also impacted the supply chains of raw materials, parts,
and finished products. Due to these factors management had to cut back costs, optimize
manufacturing and ensure hassle less distribution of parts and products to reach its right
destination on time. The average vehicle has around 30000-35000 individual parts either
manufactured in-house or sourced from outside through a third party due to which a delay in
one section of the supply chain leads to delay in the process of manufacturing and also leads
to shutting down of the production line. This is due to the poor visibility and scatters of parts.
Due to the global nature of the automobile industry and also the impact of external factors
like external politics tariffs, trade deals and political manoeuvring significantly disturbs
which leads to change of costs in imports and export of parts. Changing consumer demands
to electrical and fuel-efficient vehicles also disturb the supply chain. These changing natures
of consumers have led many companies in this sector to invest in the R&D of advanced

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technology and different innovative ideas as pandemics have made many people think about
nature predominantly for a better future for the next generation. Supply chain management is
one of the important and necessary functions of the organization. It is a management of the
relationship between operations and processes. And is also a management of activities and
relationships which intends to attain maximum customer value and sustainable competitive
advantage. The steps involved in the supply chain are given below: -

Suppliers
Procurements
Manufacturing
Distributions
Customer

 Suppliers- The industry starts the function by finding a good supplier who can
provide the material at minimum cost and required items like the engine,
gearboxes, etc.
 Procurement- It starts when the product is at the concept stage, nodal agencies are
responsible for the development of parts and aggregate till the product is brought
to the level of regular procurement. All the necessary parts are procured and
warehoused in one place.
 Manufacturing-Then the crucial part of a process comes into the picture i.e.,
manufacturing the principal raw material and components used in TML vehicles
are steel sheets and plates, castings, forgings, and items such as batteries, plastic
parts, tires, and rubber and electrical items. 

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 Fig no.-1.2-Manufacturing plants

Jamshedpur was the first location where Tata Motors first established its primary
manufacturing plant. It has two main divisions - Truck Factory & Engine Factory. 

Pune has a Production Engineering Division. Some assembly lines have been set up to
manage a diverse range of automobiles, one each for MCVs and HCVs, LCVs, Utility
vehicles, and one for Passenger Cars. 

Lucknow plant was set up to meet the demand for Commercial Vehicles in the Indian
market. This plant specializes in designing and manufacturing a range of modern buses,
including Low floor, Ultra Low-floor & CNG Buses.

Pantnagar (Uttrakhand) - The plant began commercial production in August

2007. Manufacturing process: It involves planning, designing, body, painting, resin molding,
component, sub-assembly, assembling, retailing, and distribution.

 Distribution- the company has deployed a customer relations management system at

all its dealerships across the country. TML distribution company ltd provides
distribution and logistics support for vehicles manufactured at the company’s
facilities. The company also markets commercial and passenger vehicles in and
outside the country.
 Customer- the final phase of the supply chain comes where the vehicle is delivered at
the customer’s place through 131 dealerships in 57 cities in India.

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 3. CURRENT PERSPECTIVES OF OPERATIONS

Operations management is competitive and sustainable in all types of organizations.

It’s challenging because the ever-changing nature and dynamics of the business environment
require organizations to repeatedly modify their operations to new requirements, demands,
situations, and expectations in the market.

Mostly the worldwide production and supply chain system is disrupted because of the
widespread coronavirus pandemic (COVID-19). Most of the industrial managers and
policymakers are exploring adequate operations and policies for revamping production
patterns and reach consumer demand. From a global supply chain perspective, China and
other Asian developing nations are importing the bulk of raw materials. Most of the
transportation links and distribution mechanisms between suppliers, production facilities, and
customers have broken during the COVID-19 pandemic. Most processes by which an
economic agent is integrated with its business environment intruded by operations
management. This integration effort often meets substantial changes in the way of addressing
both the internal and external nature.

The Tata Motors group based in India is a passenger and commercial vehicle
manufacturer. They have long been familiar with their commercial vehicles and within the
past ten years entered into the passenger car market. Currently, Tata Motors has produced
pickups, trucks, tractor-trailers, tippers, and buses, a line of 5 passenger vehicles, and a large
line of commercial vehicles. There is the current operational strategy of Tata Motors are as
follows:-

 Overall Tata Group companies spend Rs.12500 crore on research & development.
 Tata Technologies includes knowledge-based engineering application software that
speeds up results.
 Jaguar Land Rover developed an engine start-stop technology, that stops an engine
when the vehicle isn't moving, thus saving on fuel.
 Tata Steel Europe has high standard steel for safer and fuel-efficient vehicles.
 Its supply chain to secure cost savings as well as a sustainability equation that offers
the company a green edge has been re-hauled by Jaguar Land Rover.

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4. CHALLENGES FOR CURRENT OPERATION

 As we know the current factors i.e., the pandemic has drastically changed and also
speed up the process of Automation in the manufacturing factors.
 The companies are putting off their workforces on short term work during shutdown
and temporarily laid off.
 The repercussions of Covid-19 crisis has been vast and unprecedented which has led
to many companies remain closed for month, and they have led to decrease in profit
globally in millions.
 Since the pandemic has hit every sector many indirect factors are also hitting the
Automobile industries like many people are planning to keep their current vehicle
longer than the expected period like USA (47%), China (65%), Korea (68%), Japan
(48%) and in India (82%) the most.
 In India, even before the pandemic the Automobile industry was falling due to hike
petrol prices and population growth. The fall was by 10 % in a year.
 Tata Motors to back its foot for some months but after the first wave the CEO Guenter
Butschek rethink and redesign the future for the Tata motors and started focussing on
quality, modularity and now product design with high safety standard with luxury and
entertainment by working in with Land Rover and Jaguar.
 Tata Motors is planning to bring electric vehicles in market with cost effective and
luxury sections.
 It has some cars in the market like Tata Nexon EV which has got the eye of Indian
consumers but the main problem this car is facing is the electric pods and batteries.
 Tata motors are in talk with government in manufacturing batteries.
 Tata with its partner companies like Land Rover and Jaguar which mostly deals in
luxury cars and planning to redevelop those cars with electric motors and launching
them in Europe and this would help them in expanding its market globally in
Automobile industries and compete with companies like VW and General Motors
who have recently unveiled their electric cars and Volvo has said that all of their
vehicles will be containing electric motors which will help in increasing fuel
efficiency and saving environment.
 While companies like Hyundai, Kia and Toyota are releasing Hybrid cars.

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  Many are working with AI (Artificial intelligence) and Machine Learning (ML) as a
predictive future for the automobile industry which would apply algorithm and use
data for self and save driving with IoT (Internet of things) devices to connect to smart
phones with cars infotainment systems.
 Tata Motors are also working on acquiring the raw materials like steel, hard plastic,
fibre etc., and the process of product Tata Nano whose idea was taken from Japan and
China, which required all the raw material, manufactures to be in close distance to the
final product factory. This process actually helps in cost cutting like transportation,
material accruement and decrease in the development time of the product in supply
chain and also less storage and buffer time.
 In passenger transportation, Tata Motors has unleashed the star bus electric and
hybrid.

5. OPERATIONS AND SUPPLY CHAIN OF AUTOMOBILE INDUSTRY INDIA

Current Scenario and Future Vision of Indian Automobile Industry:

The automobile industry of India is currently passing through a crisis phase, due to
global slowdown and difference in supply and demand in the Indian automobile industry.
There had been a fall in demand in the industry in the year 2019, where the sales of CV
dropped by 39%, PV by 32% and Two-wheelers by 22%. The conditions were expected to
improve by 2020, but then the Covid-19 Pandemic further disrupted the industry as a whole.
Currently the industry provides about 7.5% of the country’s overall GDP and also employs
about 32million people (directly and indirectly). India has a vision of increasing the
contribution to 12% by 2026. Automotive Mission Plan (2016-2026), says that India could
reach the 1st position in the world in production and sales of small cars, two-wheelers, three-
wheelers, tractors and buses.

Raw Materials Manufacturing

 Electronic Parts  Forging &Casting-
 Steel & Other Engine
Metal Parts Transmission Parts
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 Rubber Parts  Machining & FinishConsumer
 Plastic Parts Assembly of ProductMarket
 Glass Parts Engine
 Fig no.- 1.3 - General Supply-chain flow in Automobile Industry

India has a few major advantages which attracts foreign investors like USA, Japan, and Italy
etc. to invest in the automobile sector. Some of the following are listed below:

 Cost effectiveness of operations within the country

Material- Materials and auto components are one of the most important element
when it comes to automobile industry. Penfield (2007) mentioned that depending on
the industry much of the supply chain costs can be contained in material purchases.
Hence, most companies focus their cost reduction efforts on the material they
purchase. India being the place with about 747 auto component companies as well as
easy and affordable market for other materials, is the idle place for setting up
automobile industry.

Labour- Labour is also an important aspect when it comes to any manufacturing

industry, and expenses related to labour, effects the operations cost of the industry.
India as a country has a huge labour force available at an efficient cost.

 Large unsaturated Indian market for small cars- India is a developing country and has
a large section of middle economic class population. The average earning youth and
families of the country do not have a car at present, this makes India a hotspot for the
automobile industry.
The following table shows the number of cars/1000 individuals of various countries:-

Country Car/1000 individual

USA 980
UK 850

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 Canada 662
Japan 591
China 164
India 22

Table no. 1.1 - Number of cars/1000 individuals of various countries

According to the above table India has only 22cars/1000 individuals, which
depicts the scope of the industry within the country in the future.

 Skilled engineering talent - India is a pool of talent, when it comes to engineering and
other skilled professional people for employment in a company. This is an important
factor considered by the companies when investing in the automobile sector of India.

 Government policies in support of the development of the industry- The Indian

Government encourages foreign investment and also allows 100% FDI in the sector.
Further the industry has been made fully de-licensed and free import of automotive
components have been allowed. The Indian Budget 2021 acted as a blessing for the
automobile industry, as the long awaited vehicle scrap page policy has been
implemented. This will surely help to boost the growth of the industry. Further
initiative have been taken to promote sales of EV , which is the need of the hour,
looking at global warming, change in technology across the globe and rise in fuel
prices within the country .

At the present , there is a cut throat competition within the industry with number of
brands coming in within the picture , which includes home grown brands like Tata Motors,
Mahindra and Mahindra etc., as well as international players such as Hyundai, Maruti Suzuki,
Honda, Nissan, Kia, MG etc. This competition has led to restructuring, cost cutting,
improvement in quality and better responsiveness to demand.

Operations in Automobile Industry of Country (CHINA) leading in EV production and

sales

The global electronic vehicle market is heating up and China is one of the dominant
countries at the moment. It has the largest automobile market in the world and also has a

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number of Government policies to promote the sales of EV within the country. The Chinese
Govt. has invested about $60 Billion in the EV industry and is pushing to shift to completely
EV or Hybrid cars by 2035. China has significant air pollution problem and is the world’s
biggest emitter of greenhouse gases. They are also the largest importer of oil. All these
factors motivated China to decide a decade back, that they want an all society approach to
improve situations and also be a world leader in EV. The Chinese Govt. has also
implemented various rules, subsidies to push the customers to choose EV over traditional
vehicles.

Leading Nations around the world are getting more serious about shifting to EV and prevent
further climate change due to heavy carbon emission into the environment. Leaders of the
Industry are gradually shifting to either completely EV or Hybrid mode.

E.g. – GM plans to exclusively offer EV by 2035. But they surely have a long way to cover,
since last year they sold a total of 6.6 Million vehicles out of which, only 49149 were EV.

For China charging points is also a priority and they are making the infrastructure grow over
the complete nation. It has more than 500,000 charging points, with a unified approach.
Under this approach, any brand of car can be charged easily. In comparison to China USA
has about 100,000 charging points and India has only 1800 charging points across the
country.

Country EV Sales in 2020

China 1.33 Million
Europe 1.39 Million
USA 328000
India 236802

Table no.- 1.2- Total EV Sales around the world in the year 2020

Despite the pandemic the EV sales has grown by 43%, even though global sales of the
automobile industry as a whole has dropped significantly.

China is a leader when it comes to the production of car batteries and motors, and the
major cost of EV comes from batteries. 95% of the world’s batteries are produced in
Japan, Korea and China, out of which 60% is produced in China. This also acts as a
huge benefit for China’s EV industry.

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 EV is still a small section of the automobile industry. Only 5% of the total sales in the
world comes from electronic vehicles, but it can be said with certainty that it is the
future of automobile industry across the globe.

China’s Govt. Policies to promote EV

China’s Automobile Industry

Subsidies Provided
by the China Govt.

PURCHASING

Consumer Ultimate
Material Supply PRODUCTION
Market Consumer

MARKETING
Various Govt.
restrictions on
R&D vehicles other than
EV
Logistics

Capital Flow

Information Flow

Fig no.1.4 - Operations and Supply Chain of the EV Industry of China

6. OUTLOOK OR RECOMMENDATIONS ON THE BASIS OF YOUR

SECONDAY RESEARCH FOR THE INDUSTRY

The Indian Government has developed various policies to support the automobile
industry strengthen its footing during the post Covid times. The Government is emphasizing
on Atma Nirbhar Bharat and promoting the production of auto components within the
country by providing subsidies. This was done to decrease the import of parts from China

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.Tata group of industries is wide spread covering various domains. Thus Tata Motors should
utilize this opportunity and develop its own auto component company and bring in parts from
producers within the country and from JLR auto motives, so that it can follow JIT and there is
less disruption in the procurement of components for the supply chain in the future.

Another way of improving their supply chain management is by expanding your

distribution networks. Distribution network is crucial in creating an effective supply chain
management system, which is why implementing solutions like Digitalization and AI of the
raw materials and components would be beneficial in the long-term as it helps in collecting
data of the import and export of the parts and determine and minimise the time for the final
product which would lead to reduction in resources and increase in cost saving.

As we studied the Automobile industry of China to understand their operations and

high sales related to EV, we can say that their policies and subsidies drive both the producers
and the customers to shift to EV. Situations of the Indian automobile industry is quite similar
to that of China, when it comes to global warming and prices of fuel. Tata should produce
batteries within the country (since majority of the cost of EV comes from batteries), so that
their cost of production is decreased and they can provide better prices to attract more
customers.

Tata motors should focus on making the initial suppliers to set up their facilities
within the country or near to its final manufacturing plant so that it can directly deal B2B
with the ordering plant and remove the third party, and the supplier shall commit for setting
up a local facility within a time-bound.

One major aspect of EV cars are its charging stations. It being a relatively new sector
of automobile industry, lacks a proper infrastructure that covers the whole country. China's
has a unified approach towards charging of the EV, so that EV of any brand can be charged
from any station. Tata should join hands with other companies and the government to
develop a proper charging infrastructure around the country to provide smooth service after
sales of EV and also promote customers to buy EVs without facing any hassle related to
charging.

Organisation should monitor and track employee’s health, create new guidelines for
quarantine periods and allow flexible work shifts for both on floor and work from home.

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 Tata motors should invest in R&D and bring in EVs with driver less technology and
advanced entertainment system for its luxury segment of JLR, to cater all segments and
customer groups of the country.

7. ABBREVIATION

CV - Commercial Vehicles
PV - Private Vehicles
GDP - Gross Domestic Product
FDI - Foreign Direct Investment
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 EV - Electronic Vehicles
GM - General Motor
MG - Murris Garages
AI - Artificial Intelligence
IoT - Internet of Things
IC - Internal Combustion
WWI - World War I
WWII - World War II
JLR - Jaguar Land Rover
VW - Volkswagen
MCV - Medium Commercial Vehicles
HCV - Heavy Commercial Vehicles
LCV - Light Commercial Vehicles
CNG - Compressed Natural Gas
JIT - Just-in-time
B2B - Business to Business

8. REFERENCE

 Part of the ARCIALA Series on Intellectual Assets and Law in Asia book series
(ARCIALA).
 How big is Indian Automobile Industry in 2021, Make in India, GDP
Contribution, Employment, Future – You tube
 Why China Is Beating The U.S. In Electric Vehicles – You tube

 Tata Motors admits impact of Coronavirus on India operations- Mint

 Operations management of the Tata Motors Group. Published: 1st Jan 2015 in

Marketing.
 Towards data science.com

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 Mckinsey.com
 Scribd.com

 Automotive industry BY John Bell Rae 

 wikipedia.org/wiki/Automotive_industry
 blumeglobal.com/learning/automotive-supply-chain
 en.m.wikipedia.org/wiki/List_of_Kia_design_and_manufacturing_facilities
 https://www.thehindubusinessline.com/companies/tata-motors-bets-big-on-ev-
space/article35022014.ece
 http://www.businessworld.in/article/Lithium-Discovered-In-India-What-Does-It-
Mean-For-Renewables-/19-01-2021-367321/
 The Future of Technology in the Automotive Industry- Karl Utermohlen. Mar 30,
2018.

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