tata motors since 1991

8/3/2019 TATA Motors Since 1991

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Globalization: III phase -early 2000

GLOBAL AUTOMOBILE CONSOLIDATION!!!!!More than 50 Major Brands are Available in Global Automobile Industryand so nearly all are in India as well


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Industry classified in Three phases

1) Protection I phase till mid80s.2) Liberalization- II phase post 1990.3) Globalization: III phase -early 2000.

Major Policy Initiatives for the Automotive Industry after 1991Tata Motors - 2010 Market Performance


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The effect of liberisation was evident from the number of foreign companiescoming to India since 1991.

1945 -Tata Motors1947- Mahindra & Mahindra Ltd.1948 -Ashok Motors1948- Standard Motors1974 -Sipani Motors1981 -Maruti Suzuki1994 -Rover Company1994 -Mercedes-Benz1994 -General Motors India-Opel1995 -Ford Motor Company

1995- Honda Siel Cars India1995 -REVA Electric Car Company1995 -Daewoo Motors1996 -Hyundai Motor Company1997 -Toyota Kirloskar Motors1997 -Fiat Motors (Re-Entry)1998 -San Motors1998 -Mitsubishi Motors2001 -koda Auto2003 -General Motors India - Chevrolet2005 -BMW2007 -Audi2009- Land Rover and Jaguar

Five Phases of TATA MOTORS

Phase 1 Entry into passenger vehicle

Phase 2 Launch of Indica

Phase 3 Launch of Indica V2

Phase 4 New Launches

Phase 5Tatas Ambitious Project
http://en.wikipedia.org/wiki/Tata_Motors%20/%20Tata%20Motorshttp://en.wikipedia.org/wiki/Tata_Motors%20/%20Tata%20Motors


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Phase 1: TATA MOTORS

After years of dominating the commercial vehicle market in India, TataMotors entered the passenger vehicle market in 1991 by launching theTata Sierra, a multi utility vehicle.

After the launch of three more vehicles, Tata Estate (1992, a station wagondesign based on the earlier 'Tata Mobile' (1989), a light commercialvehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first sportsutility vehicle).

Phase 2 Launch of Indica

Entry into the compact Car segment with Launch of Indias firstindigenously developed car TATA INDICA. It was launched in 1998.It was the first fully indigenous passenger car of India. Though the car wasinitially panned by auto-analysts, the car's excellent fuel economy, powerfulengine and aggressive marketing strategy made it one of the best sellingcars in the history of the Indian automobile industry

Phase 3: Tata Indica V2.

Failure of Indica and subsequent launch and success of Tata Indica V2.A newer version of the car, named Indica V2, was a major improvementover the previous version and quickly became a mass-favorite.

Phase 4 : New Launches

Tata Ace, India's first indigenously developed sub-one ton mini-truck was

launched in May 2005. The mini-truck was a huge success in India withauto-analysts claiming that Ace had changed the dynamics of the lightcommercial vehicle (LCV) market in the country by creating a new marketsegment termed the small commercial vehicle (SCV) segment. Ace rapidlyemerged as the first choice for transporters and single truck owners for cityand rural transport. By October 2005, LCV sales of Tata Motors had grownby 36.6 percent to 28,537 units due to the rising demand for Ace.


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GLOBAL OPERATIONS:

The Tata Safari DiCOR is one of Tata's bestselling vehicles in India andalso has been fairly successful in the Mediterranean and Eastern Europe.

Tata has tried to revamp all its models in order to satisfy the consumer

The purchase of Jaguar and Land Rover is expected to help give TataMotors gain a foothold in the European an American markets.

Tata relies on its subsidiaries for sales outside India.

Tata Xenon is Tata's bestselling vehicle in Europe.
http://en.wikipedia.org/wiki/File:Tata_Xenon_rear_view.jpghttp://en.wikipedia.org/wiki/File:Range_Rover_Sport_front_20081205.jpghttp://en.wikipedia.org/wiki/File:2009_Jaguar_XF_DC.JPGhttp://en.wikipedia.org/wiki/File:Picture6sumo.jpghttp://en.wikipedia.org/wiki/File:Safaridicor.jpghttp://en.wikipedia.org/wiki/File:Tata_Xenon_rear_view.jpghttp://en.wikipedia.org/wiki/File:Range_Rover_Sport_front_20081205.jpghttp://en.wikipedia.org/wiki/File:2009_Jaguar_XF_DC.JPGhttp://en.wikipedia.org/wiki/File:Picture6sumo.jpghttp://en.wikipedia.org/wiki/File:Safaridicor.jpghttp://en.wikipedia.org/wiki/File:Tata_Xenon_rear_view.jpghttp://en.wikipedia.org/wiki/File:Range_Rover_Sport_front_20081205.jpghttp://en.wikipedia.org/wiki/File:2009_Jaguar_XF_DC.JPGhttp://en.wikipedia.org/wiki/File:Picture6sumo.jpghttp://en.wikipedia.org/wiki/File:Safaridicor.jpghttp://en.wikipedia.org/wiki/File:Tata_Xenon_rear_view.jpghttp://en.wikipedia.org/wiki/File:Range_Rover_Sport_front_20081205.jpghttp://en.wikipedia.org/wiki/File:2009_Jaguar_XF_DC.JPGhttp://en.wikipedia.org/wiki/File:Picture6sumo.jpghttp://en.wikipedia.org/wiki/File:Safaridicor.jpghttp://en.wikipedia.org/wiki/File:Tata_Xenon_rear_view.jpghttp://en.wikipedia.org/wiki/File:Range_Rover_Sport_front_20081205.jpghttp://en.wikipedia.org/wiki/File:2009_Jaguar_XF_DC.JPGhttp://en.wikipedia.org/wiki/File:Picture6sumo.jpghttp://en.wikipedia.org/wiki/File:Safaridicor.jpg


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Phase 5Tatas Ambitious Project

Acquisitions

Tata Motors, the first Company from India's engineering sector to be listedin the New York Stock Exchange (September 2004), has also emerged asan international automobile company. Tata Motors has operations in theUnited Kingdom, South Korea, Thailand and Spain. In 2004 Tata Motorsacquired Daewoo's truck manufacturing unit, now known as Tata DaewooCommercial Vehicle, in South Korea. In 2005, Tata Motors acquired 21% ofAragonese Hispano Carrocera giving it controlling rights of the company.Then in 2007, Tata Motors formed a joint venture with Marcopolo of Braziland introduced low-floor buses in the Indian Market. The biggestacquisitions happened in 2008, when Tata Motors acquired British JaguarLand Rover (JLR), which includes the Daimler and Lanchester brand


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names. On October 16, 2009, the Company has acquired 79% shares inTata Hispano Motors Carrocera S.A. by way of exercise of the existing calloption, through mutual agreement with the other share-holder, InvestaliaS.A., Spain. Consequently, Tata Hispano Motors Carrocera S.A. hasbecome a 100% subsidiary of the Company. In 2010, Tata Motors acquired80% stake in Italy-based design and engineering company Trilix for aconsideration of1.85 million. The acquisition is in line with the companysobjective to enhance its styling/design capabilities to global standards

Tata Motors - 2010 Market Performance

The FY 2009-10 witnessed the highest sale of Tata Motors vehiclesregistering at 642,686 units. In March 2010, Tata Motors' total sales wererecorded at 75,151 against 54,452 units vended in March2009.Collective

sales of Tata Motors commercial vehicles in the Indian market for 2010 are373,615 units. The company registered a growth of 41% considering itsprevious year's sales while the collective sales of Tata Motors passengervehicles for 2010 are 234,930 units and are estimated the highest ever forthe firm. The firm's trade from exports for March 2010 was at 4,105 unitsagainst 1,799 units in the previous fiscal


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2001- 2002 Crisis

Ten years ago, after a decade of strong revenue and margin growth, TataMotors plunged into an crisis when the demand for its trucks suddenlycollapsed. The lost sales compounded by heavy investment for its entryinto the passenger car business, the cost of complying with new emissionsstandards, and an increasing threat from overseas competitors causedTata Motors to shock the markets with a loss of Rs. 500 crores for the fiscalyear ending March 2001. During this period for the first time since 1956Tata motors didn't declare a dividend. Average share price of TML droppedfrom Rs. 217 in 1999-2000 to Rs. 102 in 2001-02.Over the next two years,the company shaved around 8 billion rupees from its cost base and nurseditself back to corporate health. The company count not show positive

figures for PAT in 2001-02and didn't declare a dividend in that year.Average share prices fell to Rs 90 in 2001-02Today Tata Motors ranks asthe world's fifth-largest manufacturer of medium and heavy trucks. Evenwhile keeping a tight grip on costs, Tata Motors moved to the offensive byrefocusing its investments on less cyclical products, including lightcommercial vehicles, buses, and spare parts; making a successful entryinto passenger cars; and responding to opportunities presented byfavourable social and economic trends.

2008 - 2009 Crisis

TMs original core business in the passenger car division (small cars inIndia) was mildly influenced by the crisis as TMs passenger car salesdecreased by only 5%. The company was much more negatively affectedby the decline in sales of its commercial vehicle division which represented

not yet taking into account the JLR acquisition some 2/3 of its turnover.However, the financial crisis had a much more serious impact [in the lastquarter of 2008 and the first quarters of 2009] because of the burden oftwo major strategic initiatives. The shift of the production site

and postponement of the full Nano launch which was originally scheduledfor launch in March 2008 by two years led to unexpected resource needs(new manufacturing site) and a shortfall of otherwise expected 2008-09revenues. While this burden was not caused or much exacerbated by thecrisis in the global car industry, the acquisition of JLR only few monthsbefore the onset of the crisis actually affected TM much more: the dramaticdecrease in JLRs sales (JLR being fully exposed to European and US


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markets) significantly increased the heavy losses of the new combinedcompany in FY 2008/09; even more importantly, the refinancing of the shortterm bridging loan of $ 3 billion for the acquisition became much morecomplicated and costly in a situation of dried up capital markets.The refinancing difficulties and increasing financing cost contributed to aserious debt overload of TM which might have led to bankruptcy (and atake-over)if the TM would have been a stand-alone company and would nothave been protected and supported by its affiliation to the Tata group andits well-connected chairman. While it is no surprise that the crisis caused(temporary) problems and challenges for TMs business it seems muchmore remarkable how little effect it had on the companys strategy. TMsteered through the crisis without much change in its path-changing (Nano)as well as its path-breaking(JLR) strategy initiatives. The constancy ofpurpose as well as a continuous and consistent execution of strategic plans

was maintained despite highly skeptical capital market markets whichhad temporarily withdrawn support from TM. The unwavering pursuit ofa transformational strategy of TM in the face of the financial crisis can beultimately explained only by the affiliation of the company to a very strongand supportive conglomerate with a particular mode of operation: TM isone of the few strategic companies of the Tata group; it is guidedpersonally by the Chairman of the Tata Group who has committed thegroup to a course of globalization and innovation while relying on Indiascomparative location advantages; it allows the company to sustain longperiods of low profitability and significant investments in resource andcapability accumulation; TM profits from the value and attraction of theTATA brand in its dealings with suppliers, customers and the Government,as well as in attracting talented staff; it also profits from various groupsupport services like the groups excellence model, its acquisition andfinance expertise and its training efforts. This inherent affiliation strength enabled TM to even use the crisis as an accelerator for theimplementation of its strategies by legitimizing a more swift course towardscost cutting in the JLR operations (announced closure of one plant and shiftof significant supply sources to India). It may also have facilitated the far-

reaching changes in TMs top management as experienced top managerswere available due to the crisis and a change of top management seemedto be justified in view of TMs difficulties and temporary low performance. Itcan therefore be concluded that the financial crisis has not much affectedTMs transformational change or even reinforced and accelerated it.


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REFERENCES

1.http://business.mapsofindia.com/automobile/car-manufacturers/tata-motors.html

2.http://imaginmor.com/automobileindustryindia.html

3. http://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-India
http://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.htmlhttp://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.htmlhttp://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.htmlhttp://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.htmlhttp://imaginmor.com/automobileindustryindia.htmlhttp://imaginmor.com/automobileindustryindia.htmlhttp://imaginmor.com/automobileindustryindia.htmlhttp://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-Indiahttp://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-Indiahttp://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-Indiahttp://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-Indiahttp://world.honda.com/news/2010/c100309Motorcycle-Production-Plant-Indiahttp://imaginmor.com/automobileindustryindia.htmlhttp://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.htmlhttp://business.mapsofindia.com/automobile/car-manufacturers/tata-%20%20%20%20motors.html

tata motors since 1991

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