Automobile Industry- Comparison of Two giant

A
project by
Sneha Ashok Kamble
The automobile sectors is the dominant player not only in India but also in the economy of the economy,
the due to its forward and backward linkages with several key segment of the economy, the industry has a
strong multiplier effect of industrial growth. The industry has been evolving over the year, meeting up with
challenges as varied as transition, consolidation and restructuring and thereby adopting to the new market
environment. The present paper measures the financial performance of two major automobile companies
of Indian origin, Tata motors and Maruti Suzuki after the policy of liberalization and reveals the comparative
financial strength of both companies under study on the basis of liquidity, efficient use of assets,
profitability etc.
The automotive industry in India is the fourth-largest by production in the world as per 2023 statistics. In
2023, India became fourth largest country in the world by valuation of automotive industry. As of 2023, India
is the 3rd largest automobile market in the world, surpassing Japan and Germany in terms of sales.
Currently India's auto industry is worth of more than US$100 billion and contributes 8% of the country's
total export and accounts for 2.3% of India's GDP. India's major automobile manufacturing companies
includes Maruti Suzuki, Tata Motors, Ashok Leyland, Mahindra & Mahindra, Force Motors, Tractors and
Farm Equipment Limited, Eicher Motors.
In 1897, the first car ran on an Indian road. Through the 1930s, cars were imports only, and in small numbers.

An embryonic automotive industry emerged in India in the 1940s. Hindustan Motors was launched in 1942
building Morris products, long-time competitor Premier in 1944, building Chrysler Corporation products such as Dodge
and Plymouth, and beginning in the 1960's, Fiat products. Mahindra & Mahindra was established by two brothers in 1945,
and began assembly of Jeep CJ-3A utility vehicles. In the same years, J. R. D. Tata, the chairman of Tata Group founded TATA
Engineering and Locomotive Company (now Tata Motors) in Jamshedpur. Following independence in 1947, the Government
of India and the private sector launched efforts to create an automotive-component manufacturing industry to supply to the
automobile industry. In 1953, an import substitution programme was launched, and the import of fully built-up cars began
to be restricted.
 Tata Motors
Part of the USD128 billion Tata group founded by Jamshedji Tata in 1868, Tata Motors is among the world’s leading
manufacturers of automobiles. We believe in ‘Connecting aspirations’, by offering innovative mobility solutions that
are in line with customers' aspirations. We are India's largest automobile manufacturer, and we continue to take the
lead in shaping the Indian commercial vehicle landscape, with the introduction of leading-edge powertrains and
electric solutions packaged for power performances and user comfort at the lowest life-cycle costs. Our new
passenger cars and utility vehicles are based on Impact Design and offer a superior blend of performance,
driveability and connectivity.
Our focus on connecting aspirations and our pipeline of tech-enabled products keeps us at the forefront of the
market. We have identified six key mobility drivers that will lead us into the future – modular architecture,
complexity reduction in manufacturing, connected & autonomous vehicles, clean drivelines, shared mobility, and
low total cost of ownership. Our sub-brand TAMO is an incubating centre of innovation that will spark new mobility
solutions through new technologies, business models and partnerships.
Our mission - across our globally dispersed organisation – is to be passionate in anticipating and providing the best
vehicles and experiences that excite our global customers.
Tata Motors Limited is an Indian multinational automotive manufacturing company, headquartered in Mumbai India, which
is part of the Tata group . The company produces passenger car , trucks , van buses.

Formerly known as Tata Engineering and Locomotive Company (TELCO), the company was founded in 1945 as a
manufacturer of locomotives The company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler
-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1988 with the launch of the Tata
motors followed by the Tata Sierra  in 1991, becoming the first Indian manufacturer to achieve the capability of developing a
competitive indigenous automobile. In 1998, Tata launched the first fully indigenous Indian passenger car, the Indica , and in
2008 launched the Tata Nano , the world's most affordable car. Tata Motors acquired the South Korean truck
manufacturer Daewoo Commercial Vehicles Company in 2004. Tata Motors has been the parent company of Jaguar Land
Rover since the company established it for the acquisition of Jaguar and Land Rover from Ford  in 2008.
 SWOT Analysis

Strengths

• Post liberalization in order to expand rapidly the company adopted the route to joint ventures
• 21% stakes in Hispano Carrocera a Spanish bus manufacturing company and introducing its high-end inter-
city buses in the country.
• Acquisition of Jaguar and Land Rover of UK, help complete its portfolio in the premium segment.
• In 1993 it started manufacture oh high horsepower and emission friendly diesel engines in an effort to
reduce the pollution in existing Tata engines and to produce more environmentally friendly engines
• In 2000 it launched CNG buses and filled the product line gap through the introduction of 1109 vehicle
which is an intermediate commercial vehicle and is useful for medium tonnage loads.
WEAKNESSES

• Tata motors range of passenger cars is still not comprehensive by industry standards. It has a limited product portfolio
which has given its key competitors an extra edge.

• Even after being in the passenger cars market for quite some time somewhere in the minds of cosumers Tata motors is
still synonymous with heavy and commercial vehicle makers and not passengers car makers.

• Decision making gets a hard hit due to extensive hierarchy prevalent at tata motors.
Opportunities

•Government of India policy for modernizing of vehicles to arrest degradation of air quality and move toward international taxing policies linked to age of vehicles are steps which will lead to increased sales of Tata Motors commercial vehicles division

•JVLR project play a key role to enter in premium segment commercial passenger vehicles.

+
 Maruti Suzuki India Limited
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile manufacturer, based in New
Delhi. It was founded in 1981 and owned by the Government of India until 2003, when it was sold to the Japanese
automaker Suzuki Motor Corporation. As of September 2022 Maruti Suzuki has a market share of 42 percent in the Indian
passenger car marker.
Maruti Udyog Limited was founded by the Government of India on 24 Jan 1981 with Suzuki Motor Corporation as a minor
partner, only to become the formal JV partner and license holder of Suzuki in August 2021. The first manufacturing factory of
Maruti was established in Gurugram, Haryana, in the same year.
Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is India’s largest passenger car maker.
Maruti Suzuki is credited with having ushered in the automobile revolution in the country. The Company is engaged in the
business of manufacturing and sale of passenger vehicles in India. Making a small beginning with the iconic Maruti 800 car,
Maruti Suzuki today has a vast portfolio of 16 car models with over 150 variants. Maruti Suzuki’s product range extends from
entry level small cars like Alto 800, Alto K10 to the luxury sedan Ciaz. Other activities include facilitation of pre-owned car sales
fleet management, car financing. The Company has manufacturing facilities in Gurgaon and Manesar in Haryana and a state of
the art R&D centre in Rohtak, Haryana.
The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint venture between the Government of India
and Suzuki Motor Corporation, Japan in February, 1981. Presently, Suzuki Motor Corporation owns equity of 56.2%. The
Company’s shares are traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
 SWOT ANALYSIS

Strength

• Established distribution and after sales network

• Understanding of Indian market and ability to liaison with the government.
• Ability to design product with differentiating features.
• Brand image
• Experienced and known how in the technology.
Weakness

• Lack of experience in with foreign market.

• Heavy import tariff.
• Lack of premium segment commercial vehicles.
• Poor build quality and focusing on mass production.
Opportunities

• Government subsides
• Tax benefits
• Foreign collaboration with Toyota Motors.
• Increased purchasing power of Indian middleclass category.
Threats
•Threats from Chinese manufacturer.
•Indian as well as foreign competitor.
•Tata motors nano with price tag of only 1 lac that could give a big impact on sales of Maruti cars.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
 Conclusion

Maruti Suzuki has a good marketing strategy and it is showing good results however the lack of having the complete
product line may cause customers loyalty in a long run.
It is seen that the first entry of Maruti in diesel segment was not that good and successful it should try to come up
with better diesel engine along with new generation and variety of cars.
The government intervention due to having partial ownership in Maruti may cause problem in due course if the
political situations are adverse.
Tata Motors has got a very good response due to its brand name association with Tata.
It needs endorsement by celebrities with its products and needs create a good image of its products by transferring
the technical know –how and brand equity from heavy vehicle category.
Tata Motors has a good track record of having successful diesel mid size cars in its portfolio and it should encash the
same opportunity to launch the diesel versions of Nano to future increase their competitive advantage.
THANK YOU