A Project Report

On

“Impact of Covid-19 on business performance of the Automobile sector in

India and their Sales and Performance.

For

“Tata Motors Ltd”

By

Nishan N

Reg no. 19153

Submitted in partial fulfillment of the requirement of

Summer Internship Programme

Under the guidance of

Mr Sridhar C V

Manager Administration, SDMIMD, Mysore

&

Dr Neetu Ganapathy

Associate Professor- Systems, SDMIMD, Mysore

___________________________________________________________________________

Shri Dharmasthala Institute for Management Devel

I
 Certificate
This is to certify that NISHAN N student of first year PGDM 2019-21, bearing
the register no 19153 undertook the project entitled, “IMPACT OF COVID-19
ON BUSINESS PERFORMANCE OF THE AUTOMOBILE SECTOR IN
INDIA AND ANALYSIS OF SALES AND PERFORMANCE OF TATA
MOTORS LTD”. In partial fulfillment of the requirement of Post Graduate
Diploma In Management, SDMIMD, and that he has worked under my
guidance and supervision.

The views expressed and suggestions made are entirely of her own and based on
her empirical study.

----------------------------------------------------------------------------------------------------------------

ACCEPTED AND FORWARDED TO THE DIRECTOR FOR

APPROVAL

Place: Mysore Mr. SRIDHAR. CV

Date : Manager administration

------------------------------------------------------------------------------------------------

ACCEPTED AND FORWARDED TO SHRI DHARMASTHALA

INSTITUTE OF MANAGEMENT DEVELOPMENT

Place: Mysore Dr N.R PARASURAMAN

Date : Director

II
 DECLARATION

I, NISHAN N of first year of PGDM hereby declare that this report titled
“IMPACT OF COVID-19 ON BUSINESS PERFORMANCE OF
AUTOMOBILE SECTOR IN INDIA AND ANALYSIS OF SALES AND
PERFORMANCE OF TATA MOTORS LTD”, has been submitted during
the year 2019-21 under the guidance and supervision of Mr. SRIDHAR. C.V
Manager administration, Shri Dharmasthala Institute of Management
Development.

I also declare that this report is my original work and has previously not formed
the basis for the award of any degree

Place: Mysore NISHAN N

Date: REG NO: 19153

III
 ACKNOWLEDGEMENT

To begin with, I would like to express great respect and gratitude to our beloved
Director Dr. PARASURAMAN for giving me an opportunity to do this project
report.

My deepest gratitude to my project study guide Mr SRIDHAR. C.V for his

continuous and useful guidance and without which this project study would
have hardly being carried out successfully.

I express my sincere gratitude to the teaching and Non-teaching staff of Shri

Dharmasthala Institute of Management Development for their help, support and
kindness.

My heartfelt thanks to all respondents of the survey for their kind corporation
and I am grateful to every individual who has been my inspiration to take up
this project study and motivated me, both knowingly and unknowingly.

Date: NISHAN N

IV
 List of Contents

Chapter Contents Page no

s No
1 Introduction & Project Design 1-2

2 Industry Profile 3-10

3 Literature Review 11-19

4 Company Profile 20-45

5 Conceptual Context 46-78

6 Data Analysis & Interpretations 79-89

7 Findings 90-91

Suggestions 92-93

Conclusion 94-95

Annexure 96-99

Bibliography 100-101

V
 Chapter-1
Introduction
&
Project Design

VI
Introduction
A well-advanced transport network designates a well-advanced economy. For rapid
development, a developed and knit transportation system is crucial. As India’s transport
network is improving at a rapid pace, the automobile Industry of India is growing too. And,
the automobile industry has strong backward and forward linkages and hence provides jobs
to a large portion of the population. Hence, the role of the automobile industry can’t be
ignored in Indian economy. All kinds of passenger vehicles are produced by the automobile
industry, Indian Automobile industry comprises manufacturing of buses, trucks, defence
vehicles, passenger cars, two-wheelers etc. The industry is broadly classified into the car
manufacturing, two-wheeler manufacturing and heavy vehicle manufacturing units. The
major manufacturers are Hindustan motors, Yaya motors Ltd, Maruti Suzuki, Ford India,
Tata motors, Hyundai, Skoda India private Ltd, Kirloskar Toyota motors Ltd to name a few.
The two-wheeler manufacturing asserts dominance by companies like TVS, Honda, Hero
MotoCorp, Yamaha, Bajaj etc. The heavy motors like trucks and buses, defence vehicles,
auto rickshaws and other multi-utility vehicles are manufactured by Tata-telco, Ashok
Leyland, Bajaj, Eicher motors, Mahindra motors etc

Project Design
A Project design is a plan or a conduct of formal investigation and survey. It is the
specification of methods procedure for acquiring the information needed for the research or
for solving problem.

Research Design

Title of the study:-

“IMPACT OF COVID-19 ON BUSINESS PERFORMANCE OF THE AUTOMOBILE

SECTOR IN INDIA AND SPECIFIC ANALYSIS OF SALES AND PERFORMANCE OF
TATA MOTORS LTD”

1
Research Objective

 To study the Impact of performance of automobile sector due to Covid-19 pandemic

 To examine profitabilty status
 To analyse and study sales and marketing strategy of Tata Motors Ltd
 To make a comparitive study of financial performance of Automobile sectors

Scope of the study

The study will be done in Automobile industry specifically of Tata motors Ltd in order to
analyze the current position of its profitability and performance due to Covid-19 pandemic.
The study helps to know financial position and other factors like employee lay-offs etc. This
study is confined to only one branch and possibly be extended to other centers. Thse study is
based on the annual reports of the company balance sheet, P&L accounts for a period of 3
years and performance rate is compared to selected automobile industries such as Maruthi
Suzuki and Mahindra & Mahindra.

Research methodology
An analytical study was undertaken to obtain insight and clear understanding of the market.
For collection and reference a questionnaire was sent to few samples and personal interaction
was undertaken with one of the clients of Tata motors

Limitations of the study

 Study is restricted to India only.
 More of the primary data couldn’t be procured due to country-wide lockdown.
 Datacollected from sources such as questionnaire could not be interpretted due to Non
response issues.
 Some of the information collected are private so no violation has been undertaken by
revealing it.
 The Covid-19 outbreak approached rapidly within a short span of time and that is why
not much of in-depth information was available.

2
 CHAPTER-2
Industry profile

3
Historical background of Indian Automobile Industry
In India, there are 100 people for each vehicle, whilst the figure is 82 in China. It is foreseen
that Indian car industry will achieve mass mechanization status by end of 2018 Since the
primary vehicle appeared in the city of Bombay in 1898, the Indian automobile industry has
progressed significantly. During its initial stages, the automobile business was overlooked by
the Government and the approaches were negative. The advancement approach and different
expense reliefs by Indian government lately has made surprising impact on Indian
Automobile Industry. Indian car industry, which is at present improving at the phase of
around 17 % per annum, has become a hot goal for worldwide auto players like Volvo, Ford
and General motors.

Today, The Indian automotive industry is fully capable of producing different kinds of
vehicles and can be classified into 3 categories : heavy vehicles, cars and two wheelers.
 The first automobile in India was approached in 1897 in Bombay.
 India is recognized as a potential emerging market for automobile.
 Foreign competitors are heavily investing s in the India auto market.
 Among two wheelers, motorcycles solely contributes 80% of the segment.
 Unlike USA, the passenger vehicle market in India asserts dominance by cars that is
about 79%
 Tata Motors asserts dominance about 60% of the Indian commercial vehicle market.
 2/3rd of auto component manufacturing is used directly by OEMs
 The three-wheeler market of India is largest in the world.
 India is the largest two-wheeler producer in the world.
 India is the second largest tractor producer in the world.
 India is achieved as the 5th largest commercial vehicle manufacturer in the world.
 India is the 4th largest car market in Asia – it has crossed the 1 million mark.

About 40% of the three-wheelers are used for the purpose of transporting goods. Piaggio
covers 40% of the market share. Within the passenger transportation, Bajaj is the leader by
holding 68% of the three-wheelers. Cars assert dominance in the passenger engines market by
79%. Maruti Suzuki has share of 52% in passenger cars and is a whole monopoly in multi-
purpose vehicles. In utility vehicles Mahindra holds a share of 42%.

4
In commercial vehicle sector, Tata Motors asserts dominance in the market with greater than
60% share. Tata Motors is also the world's 5th largest medium & heavy commercial vehicle
producer.

Current scenario
The evolvement of the Indian white-collar class along the development of the economy over
the couple of years has dragged globally in auto majors to the Indian automobile market.
Also, India gives prepared labour at serious costs making India a supported worldwide
assembling centre point. The quality of the Indian markets on one hand and the decay of the
auto part in sectors such as business sector, for example, US, Japan and Europe on the other
have bought about moving of new limits and stream of money to the Indian car industry. As
designated by the International Yearbook of Industrial Statistics 2008 discharged by UNIDO,
India achieved twelfth position in the rundown of the world's main 15 automakers.

Indian OEMs Come of Age

The OEM (Indian original equipment manufacturers) are doing their imprinting today with
Tata and Mahindra as driving Indian OEMs development on the worldwide market. With
firm competition from the players worldwide, Indian OEMs have already overhauled their
innovation and are fabricating progressed structured vehicles.
'Frugal Engineering' has become the mark of the Indian car industry, with Indian OEMs
optimum utilizing the Indian lead in cost-worthy and an exceptionally skilled human asset
pool to let down the advancement costs of item. Adding to it, capabilities of their providers
have additionally encouraged to lessen expenses and assembling time. Truth be told,
worldwide OEMs are currently taking a gander at profiting by the India leveraged by utilizing
Indian-based plan and improvement focuses. Tata Indica, Nano, and Mahindra's Scorpio are
cases of items delivered by Indian OEMs to meticulous statistical surveying about the
particular fulfilment of the Indian shopper.

Production
Inspite the fact that the division was striked by financially log jam, generally speaking
creation (passenger vehicles, business vehicles, motorbikes and three wheelers) expanded
from 10.84 million vehicles in 2007-08 to 11.16 million vehicles in 2008-09. Traveller
vehicles expanded imperceptibly from 1.76 million to 1.82 million while bikes expanded
from 8.02 million to 8.41million

5
In recent times, India is known as one of the favourite investment destinations for
automotive manufacturers
 Volvo Busses India is searching for 35% development in the household deals this year
at 550-650 units as against 440 units sold in 2010
 Toyota Kirloskar engines Pvt ltd , the Indian auxiliary of Japan's Toyota engine
enterprise, is expanding its speculation by US$ 164.10 million at its assembling
destinations close Bengaluru. To reach US 824$.40 million by 2016.
 French carmaker, Renault has totally renovated its arrangements for India a piece of
another, forceful ideology that will see it creating passenger vehicles in its Chennai
plant by 2011.
 Hyundai made India as its worldwide centre for assembling little amount vehicles. It
put US$ 1Billion in its second plant in Chennai in 2013. Moreover, it is additionally
putting US$ 50 million in its innovative work, for (R&D) office in Hyderabad.
 General motors has invested US$ 1 billion into Its Indian operations.
 Mercedes Benz will be doing an investment about US$ 64.21 million in its plant at
Chakan near Pune.

Domestic market
Arrangements of vehicles and passenger vehicles have been influenced taking into
account fiscal log jam far and wide. Regardless, ignoring that there was been a minor
addition in the amount of vehicles sold in 2008-10 when appeared differently in
relation to 2007-08. Hard and vast number of vehicles sold including voyager
vehicles, business vehicles, bicycles and three-wheelers in 2008-09 was 9.74 million
as tolerably stood out from 9.65 million of each 2007-10. According to an Ernst and
Young assessment, arrangements of voyager vehicle in the country will create at a
CAGR of 12 per cent to show up at 3.76 million units by 2014 as against 1.90 million
units close to the completion of 2008-09. While family unit promote is anticipated to
contribute 2.76 million units to the full-scale tally, the preceding 1 million units
would be contributing towards conveys. something different, as per checks by means
of CARE Research. The association foresees that its supreme arrangements ought to
be around 60,000-65,000 units during the current year, up from 55,300 vehicles sold
in 2008-09.

6
Exports
As indicated by the SIAM (Society of Indian Automobile Manufacturers), car deals (counting
passenger vehicles, commercial vehicles, motorbikes and three-wheelers) in the foreign
markets expanded to 1.63 million units in 2008-09 from 1.24 million units in 2007-08. Fare
of passenger vehicles expanded from 218,411 of every 2007-08 to 335,736 units in 2008-09.
The development in send out was driven by Hyundai India, trailed by others, for instance, ,
Mahindra Renault, , General Motors India, Fiat India Automobiles and Honda Cars India.

Policy
So, in making India a capacity to deal with in the car segment the legislature drove the AMP
(Automotive Mission Plan) 2006-2016. The AMPs vision is "to rise as the pre-characterized
goal of decision on the planet for structure and production of motorcars and auto parts with
yield arriving at a degree of US$ 146 billion representing more than 10 % of the GDP and
giving 7 extra work to 26 million individuals by 2016." according to the AMP, it is evaluated
that the whole turnover of the passenger car business in India would be in the request for US$
123 billion-159 billion out of 2016. It is normal that in general terms, India would keep on
doing the most of its famous situation of being the largest tractor and three-wheeler
manufacturers in the world and the world's second biggest bike producer. By 2016, India will
develop as the world's seventh largest vehicle maker (when contrasted with the eleventh
largest as of now) and cover the fourth biggest situation in world truck fabricating segment.
Further, by 2016, the car division would double fold its commitment to the nation's GDP
from current degrees of 5% to 10 %.

Automobile Industry analysis

Indeed, even as downturn strikes universal car majors are battling to keep up feasible
marketing projections vehicle sends out from India flooded by an exceptional 57 percent year
on year in the as of late finished Led by Hyundai India Ltd and Maruti Suzuki India Ltd,
India-based vehicle creators dispatched a number of vehicles, prevalently to Europe. Fares
developed to 331,536 vehicles from 211,114 per year previously. Fares had developed by a
similarly measure 8.8 percent in the earlier year (2007-08), as per figures appeared by the
Society of Indian Automobile Manufacturers. The nation's greatest exporter, Hyundai faced
with a fare development pace of 63 percent at 235,346 units, contrasted and 144,444 units in

7
the year-back period. Local market pioneer Maruti Suzuki was second, enrolling 32.68
percent development in foreign deals at 68,834 units. Maruti and Hyundai drove new models
in the previous year, comprising Maruti's A-Star and Hyundai's i20, directed at the European
market, which is referred to as one reason behind the vigorous fares. The shortcoming of the
rupee, which fell in excess of 20 % against the dollar in the simply finished financial year,
likewise encouraged by making Indian vehicles moderate in abroad. Fare development was
additionally in vigorous in the bike classification, which enrolled 22.60 percent ascend at
1004,176 units as against 819,613 units in the past monetary year. Be it may, with the
economy worldwide slugging, request from Europe may not go up, examiners said. In the
interim, loan rates in India are at almost five-year high as banks, stressing over awful credits
placing themselves into risk, keep away from financing vehicle buys.
"The crucial concerns are availability of record, which consolidates liquidity, and high credit
costs. competitors vehicle bargains in the year completed 31 March created by an immaterial
1.3 percent from a year sooner to 1.21 million vehicles from 1.2 million in the prior year.
contenders vehicle bargains had climbed 12 percent in the past money related year. Private
arrangements of trucks and transports fell 22 percent to 384,122 vehicles from 490,494.
Bicycle bargains became 1.2 percent to 5.83 million, while bicycles expanded 9.1 percent at
1.14 million. Industry authorities and examiners expect measures taken by government
experts to goad crediting while the introduction of new models could to some degree bolster
private vehicle bargains this year. ordinary vehicle bargains stayed in every way that really
matters level, recording an immaterial 0.13 percent advancement over the previous year.
Inside this part, financial vehicles and multi-reason vehicles created by just 1.31 percent and
5.69 percent independently during 2008-09. In any case, arrangements of utility vehicles truly
declined 7.94 percent. During the extended length of March itself, vehicle bargains fell 1.15
percent over a comparable period a year back. The segment that was hardest hit was business
vehicles, with truck and transport bargains dropping a tremendous 21.69 percent during 2008-
09 over a comparable period a year prior. Medium and significant business vehicles declined
by a lot greater 33.16 percent, while the rot was less outrageous for light business vehicles,
which dropped 7.10 percent. In March 2009, business vehicle bargains fell an extensive 26.22
percent stood out from March 2008, with medium and overpowering CVs dropping 43.40
percent and LCVs basically falling 0.17 percent. Moreover, medium and considerable
vehicles created by a negligible 0.57 percent and light vehicles dropped 6.72 percent. Three-
wheeler bargains fell by 4.13 percent during the past fiscal year, while transporters grew a
solid 14.36 percent during 2008-09. Items bearers declined a gigantic 37.52 percent on

8
account of the log jam in fiscal activity. In March this year, three-wheeler bargains truly
created by 11.40 percent over that month a year prior. Bicycle bargains also went under
genuine load in the last cash related year as a result of the unexpected stoppage in crediting to
this bit by huge private store associations. This, joined with weak purchaser feeling, has seen
the part report a little 2.60 percent advancement during 2008-09. While mopeds and bicycles
created by 4.22 percent and 9.11 percent independently, bicycle bargains were particularly
seriously hit, growing essentially 1.16 percent. Electric bicycles created by 49.48 percent, yet
from a modestly more diminutive base. During March 2009, bicycle bargains created at an
apathetic 3.65 percent over that month a year prior, indicating that a proceeded with recovery
is still sooner or later away. Toll of vehicles during 2008-09 grew immovably, showing an
extension of 23.61 percent, with all pieces recording augmentations, beside business vehicles
which were affected in view of the overall money related log jam. The toll of vehicles and
bicycles created 53.73 percent and 22.50 percent independently, while three-wheeler
exchanges created 4.85 percent. In any case, passages of trucks and transports declined by
27.67 percent during this period. According to Tata Motors, its private arrangements for
March 2009 were 52,686 units while hard and fast arrangements (checking exchanges) were
54,485 vehicles. For the entire cash related year completed March 2009, hard and fast
arrangements were 498,581, which are 14 percent lower than the 582,390 units sold in the
past monetary. The association acknowledges that the budgetary overhaul groups announced
by the governing body, particularly for business vehicles, have had a beneficial outcome.
Regardless, it feels that the enthusiasm for trucks at the retail level would regardless put aside
some push to show up at levels from the last money related. As needs be, its March 2009
vehicle bargains were 13 percent lower than those of March 2008. Meanwhile, Mahindra said
it sold 25,748 units in March 2009 in the vehicle advertise, its most important ever month to
month showcasing projections. This complexity and the 23,128 units sold in March 2008, a
solid 30 percent development in bargains for the association's utility vehicles. This joins the
most critical ever month to month bargains for the Scorpio, Bolero and the Pick-Up models,
which stayed at 19,973 units for March 2009 as against 15,366 units for a comparable period
a year back. The as of late moved xylo multi-reason vehicle in like manner sold vehemently
with 3,124 units finding buyers in the Indian market. According to Anand Mahindra, negative
behaviour pattern official and managing boss, Mahindra and Mahindra The Bolero model has
also done very well for the association, selling a record 55,924 units in 2008-09. According to
Mahindra, this makes the Bolero the chief brand in the SUV/UV/MPV segments to cross
50,000 units for two ceaseless years. Hyundai Motor India enrolled a 1.8 percent decline in

9
total arrangements during March 2009. While its bargains dropped 15.8 percent, conveys
created by 21.6 percent, by virtue of higher admissions of i10 and i20 models to Europe.
Hard and fast March 2009 arrangements were 46,160 units against 47,001 units in March
2008. The Indian market spoke to 24,754 units appeared differently in relation to 29,401 units
for that month a year back, while the charges totalled 21,406 units in March 2009 against
17,600 units of March 2008. According to Arvind Saxena, senior VP - Marketing and Sales,
"As we have communicated previously, the business is far from seeing a turnaround at the
present time. If we look at the February and March 2009 arrangements joined and balance
them with 2008 for a comparative period, by then we have enrolled an improvement of 4.5
percent, while March 2009 arrangements over February 2009 have created by 16.7 percent."
Maruti in like manner declared a business record in March 2009 with its Alto model reporting
its most essential ever month to month arrangements of 23,569 units, a jump of 20.98 percent
over the contrasting time span a year back. Honda has in like manner uncovered strong
numbers, in view of the amazing unmistakable quality of its New City, which sold 6,040
units during March 2009. This is a particularly amazing achievement, given the inconvenient
monetary circumstances succeeding right now. Hard and fast arrangements for the Japanese
carmaker during the month grew 32 percent with 7,368 units being sold in March 2009
against 5,579 units sold in February 2009. SIAM has foreseen that Indian vehicle bargains
during 2009-10 would create around five percent, driven according to popular demand from
commonplace and semi-urban markets. Business vehicle bargains are assessed to climb by as
much as seven to 10 percent during the current fiscal, while bicycles are required to create by
five percent in 2009-10, by virtue of the advancement in credit availability. Advancement
well known for vehicles would, as demonstrated by SIAM, be driven by the availability of a
couple of new little vehicles including the Tata Nano, Maruti Ritz, Honda Jazz and VW Polo.
Various positives for the division are the best in class vehicle repossession rules from the
Reserve Bank of India and falling credit costs. Arrangements of business vehicles will fire
getting this year, in view of the increase of the 50 percent degrading preferred position given
to truck owners from March '09 to June '09. Extended establishment spending by the council
should in like manner give a lift to vehicle demand in 2009-10. The advancement in light
business vehicles like the Tata Ace is furthermore expected to continue. A couple of
carmakers, in any case, can't resist negating these projections saying that they are exorbitantly
hopeful

10
 Chapter-3
Literature review

Review of Literature
Survey of writing structures an indispensable just as a basic piece of current research
considers. No exploration is viewed as complete except if a broad writing audit is made by

11
the specialist . The essential motivation behind endeavour this activity is to discover the
exploration hole between, considers led up until now or writing accessible, and furthermore
to conclude, decisively the subject of research and to get understanding into the examination
theme chose for study. In this sense this activity turns into a kind of exploratory research .

Keeping these facts in view researcher has undertaken an extensive exercise of literature
review and came to the conclusion though some books are accessible on the topics related to
the research topic chosen by the researcher, but all of these have been written in some other
outlook and none of these have direct relation to the topic of this research. In fact researcher
intended to examine the sustainability of small cars in Indian automobile sector, in the light
of new developments taking place in the Indian auto sector such as introduction of big cars by
number of auto manufacturers in Indian market in the recent past, increased in personal and
disposal income, better and improved road conditions, shifting consumers behaviour from
‘To save to consume’, easy financing and loan facility, instalment facility, symbol etc. These
facts also lead to the query whether small car will be able to withstand in the market and will
it be preferred choice of Indian car buyers. None of the books researcher gone through as
been written from this perspective. Similarly a number of research studies have been
undertaken on the subject related to the research topic, some of these have been conducted on
the subject related to research topic, some of these have studied the consumer or buyer
behaviour of these cars, some of them have studied some other aspects, like environmental
sustainability or economic sustainability but none of them have studied from the angle,
researcher intended to study.

A clear record of the audit of writing done by the scientist is being introduced here, the plan
to manufacture small vehicles for the Indian market is as old as India's freedom. As of now,
by the late 1950's, the Indian government set up a commission with the undertaking to take a
decision at the reason and costs of engine vehicles created in the nation and welcomed
recommendations for the creation of an ''Economy vehicle''. Accordingly, various producers
submitted proposition. Goodbye, for instance, presented a proposition for the permit created
of a DKW light vehicle. In 1959, it was head car constrained (PAL) that was permitted to go
into joint effort with the fiat engine organization for the creation of the fiat 500 which was
later supplanted by fiat 1100 (Mohanty et al 1994) while there were ever not many
commissions investigating the subject of mass-delivering the little vehicles. There was no
genuine exertion to understand the undertaking before the 1980s (Venkataramani-1990)

12
contends in this unique situation. Every now and then advisory groups selected by the
administration indicated to contemplate the issue if starting the assembling of the little,
conservative, "Individuals' vehicle". Be that as it may, the industriousness of country's in high
government hovers and in the arranging commission that the traveller vehicle was an
extravagance thing that took into account the necessities of the little area of the populace
definitely advanced inaction. (Venkataramani, 1990: p. 12)

India's wholly creation of passenger vehicles and MUV's rose during the 1950s to 1980s just
gradually to around 40,000 vehicles every year. Low creation volumes and significant
expenses put passenger vehicles proprietorship intentionally far from normal white-collar
class shoppers. The stagnation was above to all identified with Indi's post-freedom state
drove speculation system that supported capital merchandise creation (preferring business
vehicle creation and transports), limiting business sector rivalry through a permitting
framework and protecting of national economy by a protectionist exchange and FDI system.
Consequently, when the interest for interest for passenger vehicles in any event, for a little ca
like the Fiat 500/Padmini is limited by severe price controls and high assessments, the
flexibly side is similarly confined by an authorizing framework and protectionism that check
creation, household rivalry and bolting out International players (Becker-Ritterspatch and
Becker-Ritterspatch,2008)

In the mid-1970s mass creating a little vehicle was taken up once more. It was Sanjay
Gandhi, at that point Prime priest Indira Gandhi's child who resuscitated delivering a vehicle
for the individuals. On the sixteenth of November 1970, Sanjay Gandhi established a private
constrained organization named 'Maruti specialized administrations private restricted'. The
expressed crucial the endeavour was the advancement of a "people's vehicle"- A reasonable,
financially savvy, low upkeep and eco-friendly vehicle for India's white-collar class that
indigenously planned and delivered. Following Sanjay Gandhi's drive Prime clergyman
Indira Gandhi's bureau proposed the creation of a people's vehicle and passed a consistent
goal for its turn of events and creation. Despite the fact that Sanjay Gandhi neither had any
related knowledge in vehicle creation nor a reasonable plan proposition or tie-ups with
another organization, he was granted the agreement and elite creation permit (Venkataramani,
1990). To deliver the vehicle a subsequent organization called 'Maruti restricted' was fused in
1971 under the Indian organizations act under support of Indira Gandhi's administration the
organization got land, tax cuts and assets (Shirali, 1984, Shenoy, 2003) However, regardless

13
of all administration sponsorship and backing, Maruti-named after the Hindu divine force of
the breezes didn't take off. The youthful organization demonstrated unequipped for delivering
a solitary attractive vehicle. Separated of the issue lay in the involvement with vehicle
creation of the Nehru-Gandhi relatives who contained the organization's liquidation in 1977
(Becker-Ritterspatch, 2007)

Gandhi to restore her family name, Indira Gandhi handled the uncertain Maruti issue. In the
long run the Maruti outrage' found some conclusion when in October 1980 the Government
of India took over Maruti constrained and consolidated it in February 1981 by a
demonstration of parliament (Maruti restricted obtaining and move of undertaking go about)
as an open constrained organization. Rechristened Maruti Udyog ltd, the organization was
fused under the arrangements of the Indian organizations act, 1956 understanding that the
organization just as the business all in all could just prevail with outside participation; offers
for remote joint effort were welcomed. Also, the Indian government not just looked to
transform Maruti into an example of overcoming adversity however sought after a more
extensive political plan with the undertaking that drove the quest and choice for a remote
joint endeavour accomplice.

According to Venkataramani, the project report for the Manufacture of passenger cars and
light utility vehicles”, dated 27th May 1982 revealed that among the major goals associated
with Maruti were

 Modernization of the automobile industry of India

 Production of fuel-efficient vehicles
 A large output of motor vehicles
 Import of foreign technology and equity participation by the collaborator
 Production of a people’s car suited to Indian driving and climate conditions
 Creating potential for earning foreign exchange by export of Maruti products and
 Generating employment through establishment of ancillary industries
(Venkataramani, 1990:p. 65)
Inspite of the fact that there was a previous goal to create light business vehicles and medium
measured vehicles, delivering an eco-friendly little vehicle won. In 1981, Maruti's top
managerial staff concluded that the vehicle to be fabricated would be a little vehicle and that
the motor size ought to be kept beneath one liter (Venkataramani, 1990). The choice was

14
propelled by the justification that the Maruti task could possibly succeed if large scale
manufacturing were figured it out. This, thusly, was firmly connected to the vehicle's
moderateness and cost of activity. The choice was additionally upheld by statistical surveying
discoveries as recorded beneath.

While the 1980s saw the rise of India's little vehicle in deals and creation terms and just
because higher creation of traveller vehicles contrasted with business vehicles, inquire about
and the turn of events (R&D) for little vehicles assumed a minor job. Essentially, all item and
creation fitness lay in the hands of the remote accomplice Suzuki. First endeavours to set-up
R&D in Maruti, transcendently focusing on a minor item adjustment to neighbourhood street
and atmosphere conditions (Mohanty et al, 1994). By a similar token, creation was
immovably centred around residential interest. As the figure underneath shows in general
fares stayed unimportant until the 2000s

Change and continuity of India’s small car from the 1990s onwards:
During the 1990s and specifically during the 2000s, India's little vehicles continued to create
and become more grounded. While it was as yet the local interest structure that continued the
little vehicles in deals and underway terms, the rise of small vehicle fares and R&D further
fortified the small vehicle advertise. As the small vehicle showcase grew further, there were
changes in the business sectors subjective and quantitative terms. These progressions were to
a great extent steered in India's monetary changes that began in 1990's and gotten another lift
in 2000's

A New Industrial Policy in 1990s

Following the balance of payment crisis in the early 1990s, the Indian government launched
stabilizing measures and embarked on a new industrial policy in 1991. First stabilizing
measures included the reduction of the fiscal deficit and devaluation of Indian rupee. While
the stabilisation measures aimed at short term alleviation of the economic crisis, the reform
program addressed structural problem in the Indian economy with the more long-term
approach. Internally the reforms focused on shifting the economy from a state led
coordination and state led investment growth regime. This implied a massive de-
regulation of private sector controls and a step wise privatization of public sectors and
their enterprises. Externally, the reforms aimed at liberalizing the trade regime

15
summarised by Kruger and Chinoy (2002) as follows: In the first two years of the
reforms, measures liberalizing the trade regime included-Economic reform and small
car demand

The advancement and India's new modern strategy not just little affected the gracefully side
for creating small vehicles; similarly, significant was the effect the progression had on the
interest side for the little vehicles in India.=.
In 2004/2005 the deals of traveller vehicles and multi - utility vehicles crossed just because
the one million imprints (Maruti Udyog restricted, 2004). In 2004, India was a "the quickest
developing enormous market for traveller vehicles on the planet" (the financial expert insight
unit, 2006: p.40). However, it stayed a little vehicle advertise. The financial specialist insight
unit expressed in this unique situation: India's vehicle advertise is, anyway strikingly one
dimensional: The scaled down and minimal vehicle portions joined represented 74.5%. It was
the exceptionally value delicate, lower advertise portions, (particularly the little (A1) and
conservative (A2) fragment that profited firmly from the change driven financial
development and especially financial and fiscal changes. Additionally, the change of the
financial framework, low loan fees and the proceeded with decrease of extract obligation
rendered vehicle financing simpler and animated section level interest

Eventually, the car business profited all in all from the foundation ventures, Government
endeavours to lessen neediness and rustic turn of events. The market analyst knowledge unit
(2006) noticed that interests in rural effectiveness previously added to expanded interest in
country zones. India stays on overwhelmingly agrarian culture, so any activity to raise ranch
salaries ought to convert into rising vehicle deals. Vehicle deals. Vehicle makers are as of
now opening more businesses in semi-urban zones and country locales to tap rising wages
and requests, and these territories currently represents a developing portion of in general
deals (The financial specialist insight unit, 2006:p.39)
While the progression prompted a general opening up and division of car request in India, it
was the lower fragments that remained the most grounded recipients from the changes and
monetary development. Regardless of a solid development of the extravagance sections
(starting from an extremely low level, in any cases), India's social structure and expendable
salaries recommend that the market stayed to be overwhelmed by lower and little vehicle
portions in the then not so distant (e.g. D'Costa 2005)

16
As per India's national committee of applied financial research, in 2002 just 6.1m family
units out of an aggregate of 176m were delegated 'well-off or extremely rich', and in this way
ready to bear the cost of cruisers and bikes, yet not vehicles. A part of those hopeful shopper
family units will have just moved into the well-to-do assemble during the current financial
blast. In the event that lone 10% of these 'wealthy' families can move to the following level in
the following five years, the quantity of vehicle claiming families can move to the following
level in the following 5 years, the quantity of vehicle possessing families could ascend by
about 6m, almost multiplying current levels. Despite the fact that this auxiliary move appears
to be prominently attainable, financial stuns, for example, dry spell or a monetary emergency
that prompts a lot higher loan costs could stem interest for a while. (The financial expert
insight unit li ited,2006: p.38). The financial supportability of the little vehicle lays most
importantly on the idea of local interest in the years to come. This interest situation is
comprised however India's market change and monetary development, the political will to
additionally build up the little vehicle showcase or more all the social structure and pay
circumstance that make requests at the lower end

Likewise, this essential condition that tempts new players to present little or lately smaller
than expected vehicles into the Indian market. Take these examples are the Tata nano, but
then another smaller than usual vehicle, Renault and Baja are wanting to present in
collaboration by 2011 (e.g. Lamparter, 2008) Especially the scaled down vehicle ventures are
probably going to substantially affect the Indian car segment. As Baig (2008) states "Effect
on the auto advertise: Priced at about a large portion of the cost of the least expensive Indian
vehicle however multiple times the cost of a normal bike, the Tata nano will make another
market specialty. It might simply wind up pulling in some 5% of the 7 million yearly
purchasers of the bikes and characterize another passage level for vehicles. Indian purchased
1.2 million vehicles a years ago and Tata nano will most likely include some 300000-400000
new purchasers to this. Greater vehicles anyway are probably going to stay unaffected and
cruisers and bikes will keep on selling" (Baig 2008: 9.2)

Acore method of reasoning of the new auto strategy is that the advancement of the Indian
automobike industry (underway and R&D terms) critically relies on volumes. Volumes, thusly
can possibly, must be acknowledged in India if the vehicles created and created are affordabe for
Indian buyers. Explicit measures to dvelop the little way incorporate monetary arrangements, for
example, lower extract obligations for little vehicles. During the 2000s, the Indian government

17
diminished extract obligation for little vehicles to 8%, diverging from the 16% for the traveler
vehicles (Ministry of substantial businesses and open undertakings, 2002)
Hence, notwithstanding new accentuations in India's vehicle strategy, we see over all progression
in the objective and inspiration for cultivating little vehicles. An old issue is that little vehicles
were viewed as a sine qua non to acknowledge large scale manufacturing I India. Large scale
manufacturing, in tirn is viewed as an essential for the growth of the Indian vehicle industry and
its commitment to the Indian economy. The accentuation on eco-friendly vehicles and fare ability
are additionally old arrangement issues and mirror India's proceeding with equalization of
installments challenge. Simultaneously, the worry for wellbeing, is natural.

The emergence of India as well as Worldwide research and production hub of

small cars
Financially, the small vehicle way in India has arrived at an affordable level. In the past this
maintenance was to a great extent driven by the idea of household request. In any case, the
Indian government imagines this way becoming considerably more grounded by transforming
India into an overall R&D and creation centre. The car crucial states in this setting "Fare open
doors for four wheelers would lie essentially in the little vehicle section as Indian
organizations have picked up aptitude in assembling vehicles in this fragment as Indian
organizations have picked up skill in assembling vehicles in this portion and appreciate a
preferred position over other low nations. India ought to gain by this ability and target turning
into an assembling centre point for A/B class vehicles. This is as of now being utilized OEMs
like Hyundai with Santro, Suzuki with Maruti 800/alto and Tata engines with Indica"
(Ministry of overwhelming ventures and open undertakings, 2006:p 13-14)

While the national car testing and R&D execution venture (NATRIP) is imagined to assume
an organizing job, various states have additionally taken individual activities as to giving
R&D offices. The legislature of Maharashtra, for instance has set up what it calls an "Auto
bunch" giving testing offices to OEM and their providers (Interview MCCI). While the
political activity is there, the inquiry is to what extent the Indian vehicle industry really
moves past being a simple innovation adopter and maker for their local markets regarding
Exports, the 2000s show another pattern pointing towards rising fares in the traveller vehicle
part. Additionally, the vast majority of the vehicle trades do concentrate on the lower
showcase portions with Hyundai being the prevailing exporter,

18
With respect to the R&D there was a rising pattern of utilizing and creating neighbourhood
capacity. On single hand there is a generic improvement of expanding R&D use in the Indian
vehicle industry, which was additionally been invigorated lately by increasingly severe
outflow guidelines (Shastry, 2004). Then again, there is an expanding little vehicle R&D
centre among certain makers, who try to form India into their corporate centre for vehicle
R&D. A legit example is Maruti-Suzuki that is forming the Indian activity into a R&D centre
for little vehicles. So also, Tata has put generously in little vehicle R&D focuses in India (The
financial specialist knowledge unit constrained, 2006). The Tata Nano is presumably the
latest and unmistakable case of India's rising neighbourhood R&D ability in the little vehicle
portion. While Tata firmly depends on nearby accomplices/providers (a large portion of the
which have worldwide contribution like Bosch, Freudenberg, Continental, Johnson

Challenges to the sustainability of the small cars in future

Looking at a host of factors including India’s demographic development(a young and fast
increasing population), upwards social mobility (rising per capita income from a lower level),
low vehicle density(8 per 1000 in 2004(Statistisches Bundesamt, 2006)), rising oil prices,
infrastructure bottlenecks and pollution problems, a small car path seems to be only
economically a sustainable path for India’s future auto-mobilization. At least, it appears to be
the most sustainable path within the traditional ambit of mass-motorization. Yet, the same
conditions that suggest a small car path also pose limitations. For example, rising oil prices
and India’s dependence on oil pose a threat, as small car demand may be more vulnerable in
the face of financial crisis than other segments. This situation may not only apply to domestic
demands but also to exports. Another threat to the Socio-economic sustainability of the small
car path is the poor road infrastructure in India(Haldea,2008).

19
 Chapter-4
Company profile

Tata Motors Ltd

Introduction
“A promise is promise and I kept my promise”- this is the historical statement which Mr.
RATAN TATA told when he initiated his ambitious TATA NANO the people’s car in India
on 23rd March 2009. Tata has always been given valuable products to the Indian Car Market

20
whether it is path breaking recently launched TATA NANO or TATA INDICA (which
created great brand into the car industry in the diesel segment).

Not exclusively is the passenger vehicle, even into the greater vehicle portion Tata is the
main single pioneer in India. Tata has accomplished its image pride in India as well as in
abroad it has made its image by obtaining Jaguar-Land Rover, Corus Steel during 2007-08.
Tata, being named among top 10 brand companies by Fortune Magazine in the year 2008. It
has been into top 100 organizations in the review of Standard and Poor Mody's examination
in the year 2008. Being into most important brand in world the purchaser fulfilment to its
clients is extremely vital for Tata's and consequently they are continually working into this
zone where their goal is to provide best items full value for their clients

The Tata Indica Vista has been one of those cars you just can't ignore. While it got well
known the world over, the responses, however blended, streamed without any problem. From
one viewpoint there has been pride "On the planet's medium size small vehicle" tag, as an
incredible achievement for Indian industry. The "World's medium size little Car" tag has been
normally welcomed with the expectation that a whole different classification of individuals
can hope to own a vehicle now

History
Tata Motors was established in 1945, as a locomotive manufacturer. Tata Group entered the
commercial vehicle area in 1955 in the wake of framing a joint endeavour with Daimler-Benz
of Germany. Pursuing quite a while of ruling the business vehicle advertisements in India,
Tata Motors entered the passenger vehicle showcase in 1991 by driving the Tata Sierra, a
game utility vehicle dependent on the Tata Mobile stage. Tata hence propelled the Tata Estate
(1992; a station cart configuration dependent on the prior Tata Mobile), the Tata Sumo (1994,
a 5-entryway SUV) and the Tata Safari (1998)
Tata launched the Indica in 1998, completely indigenous Indian passenger vehicle. Albeit at
first tested via auto experts, its brilliant mileage, amazing motor, and a forceful showcasing
technique made it extraordinarily compared to other selling vehicles throughout the entire
existence of the Indian car ventures. A more up to date form of the vehicle, named Indica V2,
was a significant development over the past adaptation and immediately turned into a mass
top choice. Tata Motors effectively traded enormous quantities of the vehicle to South Africa.
The accomplishment of the Indica assumed a key job in the development of Tata Motors.

21
 In 2004, Tata Motors bought Daewoo's South Korea-based truck producing unit,
Daewoo Commercial Vehicles Company, later renamed Tata Daewoo
 On 27 September 2004, Ratan Tata, the Chairman of Tata Motors, rang the bell at
the New York Stock Exchange to mark the listing of Tata Motors
 In 2005, Tata Motors acquired a 21% controlling stake in the Spanish transport and
mentor producer Hispano Carrocera. Tata Motors continued its market region
extension through the presentation of new items, for example, transports (Starbus and
Globus, together created with auxiliary Hispano Carrocera) and trucks (Novus,
mutually created with auxiliary Tata Daewoo)
 In 2006, Tata framed a joint endeavour with the Brazil-based Marcopolo, Bus, to
produce completely assembled transports and mentors
 In 2008, Tata Motors acquired the English car maker Jaguar Land Rover,
manufacturer of the Jaguar and Land Rover from Ford Motor Company.
 In May 2009, Tata disclosed the Tata World Truck extend together created with Tata
Daewoo; the range went marked down in South Korea, South Africa, the SAARC
nations, and the Middle East toward the finish of 2009
 In 2009, its Lucknow plant was awarded the "Best of All" Rajiv Gandhi National
Quality Award
 In 2010, Tata Motors obtained 80% stake in the Italian structure and building
organization Trilix for €1.85 million. The securing framed piece of the organization's
arrangement to upgrade its styling and plan capacities.
 In 2012, Tata Motors reported it would put around ₹6 billion in the improvement of
Futuristic Infantry Combat Vehicles in a joint effort with DRDO
 In 2013, Tata Motors reported it will sell in India, the principal vehicle on the planet
to run on compacted air (motors structured by the French organization MDI) and
named "Smaller than expected CAT"
 In 2014, Tata Motors introduced first Truck Racing championship in India "T1 Prima
Truck Racing Championship".
 On 26 January 2014, the Managing Director Karl thin was discovered dead. He
tumbled from the 22nd floor to the fourth floor of the Shangri-La Hotel in Bangkok,
where he was to go to a gathering of Tata Motors Thailand.

22
  On 2 November 2015, Tata Motors reported Lionel Messi as worldwide brand
representative at New Delhi, to advance and underwrite passenger vehicles all
inclusive
 On 27 December 2016, Tata Motors declared the Bollywood on-screen character
Akshay Kumar as brand ambassador for its business vehicles range
 On 8 March 2017, Tata Motors declared that it has marked a notice of comprehension
with Volkswagen to create vehicles for India's local market.
 n 3 May 2018, Tata Motors reported that it offered its aviation and protection business
to another Tata Group Entity, Tata propelled frameworks, to open their maximum
capacity.
 On 29 April 2019, Tata Motors declared an organization with Nirma University in
Ahmadabad to give a B Tech. degree program for workers of its Sanand plant.

Background
Tata Motors Group (Tata Motors) is a $45 billion valued company. It is a main worldwide
vehicle manufacturing organization. Its classified portfolio incorporates a broad scope of
vehicles, sports utility vehicles, trucks, transports and resistance vehicles. Goodbye Motors is

23
one of India's biggest OEMs offering a broad scope of incorporated, keen and e-versatility
arrangements

Some portion of the USD100 Billion Tata bundle set up by Jamsetji Tata in 1868, Tata
motors is among the world's driving creators of vehicles. We have confidence in 'partner
desires', by offering imaginative adaptability game plans that are as per customers' objectives.
We are India's greatest vehicle maker, and we continue beginning to stand out in framing the
Indian business vehicle scene, with the introduction of driving edge powertrains and electric
courses of action packaged for power presentations and customer comfort based at the most
diminished life-cycle costs. Our new passenger vehicles and utility vehicles rely upon
influence structure and offer a pervasive blend of execution, driveability and system.
Our emphasis on interfacing desires and our pipeline of tech-empowered items keeps us at
the front-line market. We have distinguished six key portability drivers that will reach us into
the future-secluded engineering, intricacy decrease in Manufacturing, associated and self-
ruling vehicles, , shared versatility and low all out expense of possession, Our sub-image
TAMO is a brooding focus of development that will commence new versatility arrangements
through new advancements, plan of action and organizations.

Mission
The Mission of Tata motors is to sheerly passionate in predicting and providing the best
vehicles and experiences that excite their global customers
To strive towards mobility solutions with passion to facilitate the quality of life

24
Vision
By 2024, The vison is to become the most aspirational Indian auto brand, consistently
winning, by
 Delivering superior financial returns
 Driving customer expectations, and
 Exceeding customer expectations, and
 Creating a highly engaged work force
 And to be a world class corporate constantly furthering the interest of all its
stakeholders
Values
 Integrity
 Accountability
 Excellence
 Teamwork
 Customer focus
 Speed

Type Public BSE:500570 (NYSE:TTM)

Founded 1945
Founder JRD Tata
Headquarters Mumbai, India

Key people Ratan Tata (Chairman), Natarajan

Chandrasekaran (Chairperson), Guenter
Butschek (Managing director)
Products Automobiles and engines
Revenue $43.7 billion (2019)
Net income $1023 million (2018)
Parent Tata Group
Subsidiaries Jaguar cars, Land rover, Tata Daewoo
commercial vehicle
Website https://www.tatamotors.com

25
Tata motors obtain some unique advantages in comparison to other International competitors.
There is exact cost advantage as labour cost is 8-9% of sales as against 30-35 percent of sales
in developed economies. Tata motors have extensive backward and forward linkages and it is
strongly interwoven with machine tools and metals sectors, Tata group’s strong expertise in
the IT based engineering solution for products and process integration has helped Tata
motors. India extensively has large auto component industry noted for its world class
competence. There is a huge demand in domestic markets because of infrastructure
developments and Tata motors is able to leverage its knowledge of Indian market. There are
favourable government policies and regulations to boost the auto industry

Tata Motors Cars

Tata motors cars is a division of Tata motors which manufactures passenger cars under the
guidance of Tata motors marque. Tata motors is among the top 4 passenger vehicle brands in
India with products in the midsize car, compact and utility vehicle segments. The company’s
manufacturing base is spread across Jamshedpur (Jharkand), Pune (Maharashtra), Lucknow (,
Pantnagar , Dharwad and Sanand

(Gujarat). Tata's dealership, sales, service, and spare components network contains over
3,600 touch points. Tata Motors owns more than 250 dealerships in more than 195 cities
across 27 states and 4 Union Territories of India. It has the 3rd largest sales and service
network after Hyundai & Maruti Suzuki.

Tata also has franchisee/joint venture assembly operations in Bangladesh, Kenya, Russia,
Ukraine, and Senegal. Tata also has dealerships in 26 countries across 4 continents. Tata is
present in many countries, it has managed to create a large customer base in the Indian
Subcontinent, predominantly India, Burma, Bangladesh, Bhutan and Nepal. Tata is also
present in Spain, Italy, Romania, Turkey, Chile, South Africa, , Kuwait, Qatar, Saudi Arabia,
United Arab Emirates, Bahrain, Iraq, Syria and Australia.

Tata Daewoo

Tata Daewoo (authoritatively Tata Daewoo Commercial Vehicle Company and previously
Daewoo Commercial Vehicle Company) is a business vehicle producer headquartered in
Gunsan, Jeollabuk-do South Korea, and a completely claimed auxiliary of Tata Motors. It is
the second-biggest substantial business vehicle maker in South Korea and was gained by Tata
Motors in 2004. The chief explanations for the obtaining were to decrease Tata's reliance on

26
the Indian business vehicle showcase (which was answerable for around 94% of its deals in
the MHCV fragment and around 84% in the light business vehicle section) and extend its
item portfolio by utilizing on Daewoo's qualities in the substantial tonnage segment.

Tata Motors has mutually worked with Tata Daewoo to produce trucks, for example, Novus
and World Truck and transports including Globus and StarBus. In 2012, Tata started building
up another line to make serious and eco-friendly business vehicles to confront the opposition
presented by the section of worldwide brands, for example, Mercedes-Benz, Volvo, and
Navistar into the Indian market

Jaguar Land Rover

Jaguar Land Rover PLC is a British premium automaker headquartered in Whitley, Coventry,
United Kingdom, and has been an entirely claimed auxiliary of Tata Motors since June 2008,
when it was obtained from Ford Motor Company of USA. Its foremost action is the turn of
events, assembling and offer of Jaguar extravagance and sports vehicles and Land Rover
premium four-wheel-drive vehicles.

Jaguar Land Rover has two structure habitats and three gathering plants in the United
Kingdom. Under Tata possession, Jaguar Land Rover has propelled new vehicles including
the Range Rover Evoque, Jaguar F-Type, the Jaguar XE, the Jaguar XJ (X351), the
subsequent age Range Rover Sport, and Jaguar XF, the fourth-age Land Rover Discovery,
Range Rover Velar and the Range Rover (L405).

JD Power, of the US, rates Land Rover and Jaguar as the two more awful brands for starting
quality. The Jaguar F-Pace made Consumer Reports February 2019 rundown of the 10 Least
Reliable Cars. The editors refereed to "gadgets, drive framework, power hardware,
commotions and breaks" as tricky angles.

The Jaguar Land Rover subsidiary was battling by 2019 and Tata Motors recorded its interest
in JLR by $3.9 billion. A significant part of the budgetary issue was because of a half drop in
deals in China during 2019, in spite of the fact that the circumstance was improving. All
things considered, Tata was available to considering an organization with another
organization as indicated by an announcement in mid-October, as long as the association
understanding would permit Tata to keep up control of the business. The organization
precluded the chance of an offer of JLR to another element

27
TML Drivelines

TML Drivelines Ltd. is a completely claimed subsidiary of Tata Motors occupied with the
assembling of gearboxes and axles for substantial and medium business vehicles. It has
creation offices at Jamshedpur and Lucknow. TML Forge division is additionally an ongoing
securing of TML Drivelines. TML Drivelines was framed through the merger of HV
Transmission and HV Axles

Tata Technologies
Tata Technologies Limited (TTL) is a 43%-possessed auxiliary of Tata Motors which gives
configuration, building, and business process re-appropriating administrations to the car
business. It is headquartered in Pune's Hinjewadi business region and furthermore has activity
in London, Detroit and Thailand. Its customers incorporate Ford, General Motors, Honda,
and Toyota.

The British building and configuration administrations organization Incat International,

which spends significant time in building and configuration administrations and item
lifecycle the executives in the car, aviation, and designing divisions, is an entirely possessed
auxiliary of TTL. It was gained by TTL in August 2005 for ₹4 billion. In 2017, TAL, an
auxiliary of Tata Motors, made India's first mechanical verbalized robot for smaller scale,
little, and medium ventures

Joint Ventures
Tata Marcopolo

Tata Marcopolo is a transport producing joint endeavour between Tata Motors (51%) and the
Brazil-based Marcopolo S.A. (49%). The joint endeavour produces and collects completely
manufactured transports and mentors focused at creating mass fast transportation
frameworks. It utilizes innovation and skill in body and totals from Tata Motors, and
expertise in procedures and frameworks for weight training and transport body plan from

28
Marcopolo. Tata Marcopolo has propelled a low-floor city transport which is generally
utilized by transport enterprises in numerous Indian urban areas. Its assembling office is
situated in Dharwad, Karnataka State, India

Fiat-Tata

Fiat-Tata is an India-based joint endeavour among Tata and Fiat Automobiles which
produces Fiat and Tata marked traveller vehicles, just as motors and transmissions. Tata
Motors has accessed Fiat's diesel motor and transmission innovation through the joint
endeavour.

The two organizations some time ago additionally had a dispersion joint endeavour through
which Fiat items were sold in India through joint Tata-Fiat businesses. This dissemination
course of action was finished in March 2013; Fiats have since been dispersed in India by Fiat
Automobiles India Limited, an entirely claimed auxiliary of Fiat.

Tata Hitachi Construction Machinery

Tata Hitachi Construction Machinery is a joint venture between Tata Motors

and Hitachi which produces excavators and other construction equipment. It was formerly
known as Telcon Construction Solutions.

Tata Motors European Technical Centre

The TATA Motors European Technical Centre is a car configuration, designing, and think-
tank. Organization based at Warwick Manufacturing Group (WMG) on the grounds of the
University of Warwick in Great Britain. It was set up in 2005 and is entirely claimed
auxiliary of Tata Motors. It was the joint engineer of the World Truck. In September 2013 it
was declared that another National Automotive Innovative Campus would be worked at
WMG at Warwick's fundamental grounds at an expense of 100 million pounds. The activity
will be an organization between Tata Motors, the University, and Jaguar Land Rover, with
the 30 million pounds in subsidizing originating from Tata Motors.

Products
Cars and Sport utility vehicles
29
  Tata Sumo

 Tata Sierra (Discontinued)

 Tata Sumo Grande

 Tata Safari

 Tata Indica

 Tata Indigo

 Tata Manza

 Tata Indigo Marina

 Tata Winger

 Tata Magic

 Tata Nano

 Tata Aria

 Tata Iris

 Tata Tiago

 Tata Altroz

 Tata Tigor

 Tata Hexon

Commercial vehicles
 Tata Ace
 Tata Super Ace
 Tata TL/ Telcoline / 207 DI Pickup truck
 Tata 407 Ex and Ex2
 Tata 809 Ex and Ex2
 Tata 1618 (Semi low floor bus chassis)
 Tata 1623 (Rear engine low floor bus chassis)
 Tata 1518C (Medium truck)

30
  Tata Starbus (branded buses for city, intercity, school bus and standard passenger
transportation)

 Tata Divo (Fully built luxury coach)

 Tata City-ride (12-20-seater buses for intra-city use)
 Tata 3015 (Heavy truck)
 Tata 3118 (Heavy truck) (8x2)
 Tata 3516 (Heavy truck)
 Tata 4018 (Heavy truck)
 Tata 4923 (Ultra heavy truck) (6x4)
 Tata Novus (Heavy truck designed by Tata Daewoo)
 Tata Prima (The world truck designed by Tata Motors and Tata Daewoo)

Military vehicles
 Tata LSV (Light specialist vehicle)

 Tata Mine protected vehicle (4x4)

 Tata Stretcher Ambulance

 Tata 407 troop carrier, available in hard top, soft top, 4x4, and 4x2 versions)

 Tata LPTA 713 TC (4x4)

 Tata LPT 709 E

 Tata SD 1015 TC (4x4)

 Tata 1615 TC (6x6)

 Tata LPTA 1621 TC (6x6

Concept vehicles
 Tata Aria Roadster
 Tata Aria coupe
 Tata Indiva
 Tata Indigo Advent

31
  Tata Xover

 Tata Cliffrider

 Tata Elegante

 Tata Prima

 Tata Versa

 Tata Essota

 Tata Pixel

Electric vehicles

Tata Motors has uncovered electric variants of the Tata Indica passenger vehicle controlled
by TM4 electric engines and inverters,[54] just as the Tata Ace business vehicle, the two of
which run on lithium batteries.

In 2008 Tata Motors' UK auxiliary, Tata Motors European Technical Centre, purchased a
50.3% holding in electric vehicle innovation firm Miljøbil Grenland/Innovation of Norway
for US$1.93 million, and intended to dispatch the electric Indica hatchback in Europe the
accompanying year.[55][56][57] In September 2010, Tata Motors introduced four CNG–
Electric Hybrid low-stunned Starbuses to the Delhi Transport Corporation, to be utilized
during the 2010 Commonwealth Games. These were the primary earth amicable transports to
be utilized for open transportation in India

Notable vehicles
Tata Nano

The Nano was propelled in 2009 as a city vehicle proposed to advance as a moderate option
in contrast to the area of the Indian masses that is essentially the proprietor of cruisers and
has not purchased their first vehicle. At first valued at ₹100,000 (US$1,500), the vehicle
pulled in a great deal of consideration at its generally minimal effort. In 2018, Cyrus Mistry,
executive of the Tata Group, called the Tata Nano a bombed venture, with creation finishing
off with May 2018

Tata Ace

32
Tata Ace, India's first indigenously developed sub-one-ton minitruck, was launched in May
2005. The minitruck was a huge success in India with auto analysts claiming that Ace had
changed the dynamics of the light commercial vehicle (LCV) market in the country by
creating a new market segment termed the small commercial vehicle segment. Ace rapidly
emerged as the first choice for transporters and single truck owners for city and rural
transport. By October 2005, LCV sales of Tata Motors had grown by 36.6% to 28,537 units
due to the rising demand for Ace. The Ace was built with a load body produced by Autoline
Industries. By 2005, Autoline was producing 300 load bodies per day for Tata Motors.

Ace has additionally been sent out to a few Asian, European, South American, and African
nations and every single electric model are sold through Polaris Industries' Global Electric
Motorcars division. In Sri Lanka, it is sold through Diesel and Motor Engineering (DIMO)
PLC under the name of DIMO Batta.

Tata 407

The Tata 407 is a light business vehicle (LCV) that has sold more than 500,000 units since its
dispatch in 1986. In India, this vehicle affirms predominance of piece of the overall industry
of the LCV class, representing near 75% of LCV deals.

Tata Prima

Tata Prima is a scope of overwhelming trucks initially presented in 2008 as the organization's
'worldwide' truck. Tata Prima was the champ of the 'Business Vehicle of the Year' at the
Apollo Commercial Vehicles Awards, 2010 and 2012.

Tata Harrier

Tata Harrier is a 5-seater SUV set to match the Hyundai Creta and Jeep Compass. It is gotten
from the H5X Concept showed at the 2018 Auto Expo. It was propelled on 23 January 2019.

International Marketing

On the off chance that the sending out offices are getting effective yet the expenses of
working together from base camp in addition to time contrasts, language obstructions,
and social numbness are impeding the organization's seriousness int the remote
market, at that point workplaces could be worked in the outside nations. Here and
there organizations purchase firms in the remote nations to exploit connections, retail
facades, industrial facilities and work force as of now in the spot. These workplaces

33
despite everything report to base camp in the home market yet a large portion of the
showcasing blend choices are made in the individual nations since that staff is the
most proficient about the objective markets. Neighbourhood item improvement
depends on the necessities of nearby clients.

Marketing & Strategic Analysis of Tata Motors

We present the vital investigation of Tata Motors utilizing SWOT examination, Porter's
Model of Competitive Advantages, Porter's Five Forces Model of seriousness and Ansoff
Matrix.

SWOT Analysis was deliberately displayed by Ansoff (1980) to concentrate on two sorts of
prioritization – High prioritization of chances and High prioritization of building new skills. At
the point when "openings" are organized, the associations will in general create items that have
levels of popularity in the business sectors and when "advancement of new skills" is organized
then associations don't take a gander at the present open doors in expectation that the new
abilities will grow new open doors for them

It is hard to anticipate which one works better – they may yield various outcomes for various
associations. If there should be an occurrence of Ford Motor Company and Tata Motors there
is by all accounts a central distinction in prioritization – Ford Motor Company have
concentrated on prioritization of creating abilities and made forceful strides for the equivalent
fully expecting creating openings though Tata Motors have concentrated on prioritization of
benefiting openings and created capabilities to profit them as quick as could reasonably be
expected

SWOT Analysis for Tata motors

Having presented the SWOT analysis of Ford Motor Company, we now analyse the
SWOT framework of Tata Motors. As mentioned above, Tata Motors prioritizes
opportunities and builds their competencies around them. Their announcement of Tata
Nano is an excellent example where they have launched the model and opened bookings
much ahead of building their manufacturing competencies to meet the demand not caring

34
about the issue that they will end up accumulating a huge backlog of customer orders
[Brown, Robin (2009)].
Strengths
1) Excellent brand equity and strengths in
Indian Market
2) Legacy and Dignity of Tata brand
heritage which is almost as old as Ford
Motor Company
3) Sound global recognition in light
trucks and buses
4) Sound presence in Asian Markets
5) Ownership of the heritage of British
motor brands – Land Rover and Jaguar
6) Strategic tie up with Mercedes Benz
which is one of the hottest cars in
premium car market segment in India
7) Diversification strengths due to other
large businesses of Tata Group
Opportunities
1) Gain control over UK and Europe
markets by re-enforcing the heritage of
Jaguar and Land Rover
2) Deep roots of British style
manufacturing processes given their own manufacturing backbone for Tata Nano cars –
heritage of the British rule in India – can
Weakness
1) Under performance in US, UK and
European car markets (although done
reasonably well in light trucks and buses).
2) Unable to handle the global markets of
Land Rover and Jaguar due to lack of
preparation
3) Weak technical competencies when
compared to companies like Ford Motor
Company.
4) Perceived as too Indianized – it will take
them a long time to establish a global
branding
5) Do not possess localization skills outside
India markets – this is one of the primary
reasons for their failure in the City Rover
venture
6) Inadequate current manufacturing capacities
to meet requirements of cars leading to risky
commitment and under-delivery
7) More focus on cost and lack of focus on
advanced features
Threats
1) Jaguar and Land Rover requires lot of
funds initially which may strip down the
company to cashless levels.
2) The Singur crisis has already hit their
the company has not yet come out of the
35
 help them do better with Jaguar and Land
Rover
 3) Urgency in shifting the Singur plant to
3) Develop more joint ventures like Tata
– Mercedes Benz and introduce their
cars in the Asian markets
4) Tata Nano has taken the world by
surprise whereby many economy car
manufacturers of the world are yet to
even think of such a affordable car
 5) Introduce Asian variants of Jaguar and
Land Rover by promoting their “Power
Icon” branding – this may work
very well with Asian politicians,
Capitalists and Bureaucrats
draining down of cash in excess of
$300Million
alternate place has hit their supply chain very
badly – a large number of suppliers had
established plants in Singur to support Tata
Motors – many of them may not be having
enough cash to shift to new location of Tata
Motors Nano plant.
4) Many companies across the world are busy
developing their own models of Economy Cars
– they may launch in competition with Tata
Motors giving them tough time in the market
that currently seem to be monopolistic in
favour of Tata Motors

Strategic Analysis of Tata Motors as per Michael Porter

Diamond model of competitive advantages

Michael E Porter built up the Diamond Model to investigate the upper hands of countries to
break down how a few nations increase upper hands in certain mechanical segments by
building up their separate indigenous businesses. This model and the five powers model of
firm intensity have become experimental speculations in key investigation of organizations.
We therefore present the analysis

Tata Motors using these Models. The Michael Porter’s Diamond Model is presented in the
following figure:

Government

Machinery

36
Firm
strategy &

Rivalry
 Figure 1: Michael Porter’s Diamond Model

Organisations that have accomplished upper hands over the world have completed
developments in their item contributions, in the administrations, in the manner in which they
work together and in the manner in which they contend in the commercial centre. The
advancements of all organizations seem, by all accounts, to be their own yet are really
founded on some solid essentials of elements that interface with one another impressively
(Porter, Michael E. 1990. pp75). The precious stone model presents a solid connection of the
four basic affecting variables administering the accomplishment of an association at National
just as International level with the assistance of the controls of the nearby Government on
these Influencing factors going about as the Catalyst

Firm Strategy & Rivalry

Michael Porter characterized this factor as a forced criticalness on associations to "Enhance"

so as to contend with organizations in direct rivalry in the Local Markets. This impacting
factor is administered by the general business framework in the nation constrained by the
other Government, in which organizations are shaped, sorted out, represented and oversaw

37
through organized legitimate and legal system (like Company Law, Companies Act,
Corporate Governance Act, and so on). [Porter, Michael E. 1990. pp78, 83]

Tata Motors methodology has been diverse contrasted with Ford Motors. They vanquished
their adversaries by catching the open doors much in front of rivalry even before they are set
up to convey against orders. Their methodology has been to hold clients by charging booking
sums with the end goal that they initially secure the client base and afterward begin
manufacturing.

They are cost cognizant about overheads or additional stock and subsequently fabricate
carefully against orders. Their methodology in the dispatch of Tata Nano is the equivalent
whereby they initially mean to make sure about the clients by charging ostensible booking
sums and afterward convey the vehicles step by step as and when they are propelled. Given
that their Nano idea isn't yet tested by any opposition, it would be simpler for them to hold
the appointments with the end goal that regardless of whether they face an opposition, their
clients of first parcel will stay immaculate

Demand Conditions

Michael Porter's idea of interest conditions is identified with the local requests laid on the
organization by end clients, providers, government, and so forth hence presenting the
organization to the test of overseeing request gracefully proportion.

The interest conditions likewise get internationalized if the Government Machinery bolsters a
framework that encourages organizations to accomplish this. It is imperative to take note of
that not all organizations having solid nearby qualities can get into the International Markets

Tata Motors have not built up the competency of limitation of items and administrations
according to nearby requests. In India, they have many years of involvement with creating
items against nearby requests and thus are effective.

The Government of India has just helped them to extend their legs past as far as possible (like
the legitimate and legal structure of India has permitted them to procure British organizations
and dispatch Nano worldwide through Geneva).

But they have not aced the art of localization of products as per the regional demands in
countries of their operations. Example, they failed in City Rover miserably because they

38
tried to push cars fit for Indian conditions into Europe which is considered as a blunder
today. Hence, overall, it will take a long time for them to establish global branding

Related and Supporting industries

Porter recommended that the household Industry in a nation develops considerably if the
nearby government is effective in making and controlling the system of rivalry among
players and providers that help the enterprises. In such a national structure, a solid system of
contenders, providers and specialist co-ops is made that all things considered impact a sound
development of business, increment requests and lift supplies.

Such rivalry when stretch their legs in the worldwide markets leave a positive effect on the
nearby qualities of the nation because of inflow of cash, worldwide accepted procedures,
innovations, ideas, and licenses

The related and bolstered enterprises of Tata Motors are generally Indian based whereby
huge numbers of them don't have the capabilities to help worldwide extension of Tata
Motors. In the present setting, Tata Motors is growing their worldwide tasks utilizing their
inner groups that build up business organizes in the nations of their activity. Presently, they
have tasks run by inner workers in numerous nations outside India.

In numerous nations, they are exclusively needy upon the requests booked by clients through
their international vendors and specialist co-ops that work with their own nearby skills. This is
the explanation that a portion of their models like Tata Sierra has great acknowledgment in UK
markets.

Factor Conditions

In conclusion, the calculate conditions Porter's jewel model total the structure. Factor
conditions are identified with business bolster structure to the business that incorporates
gifted labour, fundamental foundation, flexibly channels, reserves move channels (like an
across the country instalment framework), accessibility of advances from banks and financial
speculators.

39
Analysis of Tata motors as per Michael Porter’s five forces

Model that shape Industry Competition

In 1980, Michael Porter presented the five forces that shape competition in the industry for
any business organization as – Rivalry among existing competitors, threats of new entrants,

Bargaining power of suppliers, bargaining power of buyers, and threat of substitute

products or services. These forces determine the competitive position of organizations in the
markets of their operations. We hereby introduce a brief introduction about this model
and then determine the competitive positioning of Ford Motor Company and Tata Motors

Figure 2: Porter’s Five forces strategy that shape competition

One significant perception that Michael E Porter made about these powers is that in the event
that these powers are extraordinary, at that point practically no organization increases
unmistakable upper hands and gains appealing profits for ventures.

The dangers of new contestants and substitute items and administrations are predominant in
businesses where significant developments are in progress that can possibly cause
imaginative decimation of the current items and administrations. New contestants
consistently enter the business sectors with a longing to catch pieces of the overall industry

40
rapidly and consequently will in general put parcel of focus on item estimating accordingly
topping the benefit capability of the market.

Thus, the current players in the market advantage out of the hindrances to section of new
players that basically involve – flexibly and request economies of scale, provider changing
expenses to clients (particularly when the clients have put intensely in arrangements
consistent with provider's innovation or are a lot of used to the equivalent), capital
necessities, access to dispersion channels, prohibitive government strategies, and so on.

The other two adjusting powers are bartering intensity of providers and purchasers. The
haggling intensity of purchasers will be lesser if rivalry is less given that clients won't have
numerous options for buying items. In any case, the dealing intensity of providers is higher if
there should arise an occurrence of lesser rivalry given that lesser rivalry won't build up the
provider organize (and their shared rivalry) and thus they will in general have additionally
haggling power.

The other two balancing forces are bargaining power of suppliers and buyers. The
bargaining power of buyers shall be lesser if competition is less given that customers will
not have many choices for purchasing products. However, the bargaining power of
suppliers is higher in case of lesser competition given that lesser competition will not
develop the supplier network (and their mutual competition) and hence they will tend to have
more bargaining power.

Ferrier and Smith et al (1999) stated that companies that pose complacency in their
approach tend to lose market shares to their more aggressive and active counterparts.
They observed that some industry leaders tend to erode their own market shares
through new innovations that carry out a typical Schumpeter’s creative destruction of
their existing product market shares

Mapping the worldwide market scene of engine industry, the danger of new contestants is
very high on the grounds that there are countless top-notch local engine makers over the
world that are moving in the direction of entering new markets over the globe. The wonder of
Japanese organizations entering US markets and giving intense occasions to local players like
Ford Motor Company is seen by individuals the whole way across the world. The Japanese
organizations like Toyota have presented substitute items in the US, UK and European
markets and have disintegrated pieces of the pie of Ford Motor Company given that they
(most likely) were more forceful and imaginative than Ford Motor Company in these

41
business sectors. Tata Motors is one such organization that is good to go to enter worldwide
markets and posture dangers to the local showcase players with their new developments (like
Tata Nano). Their Nano models can murder nearby rivalry of minimal effort vehicles in
numerous nations in the event that they can keep up the building greatness that they have had
the option to exhibit in the test drives. They have to a great extent had the option to control
the bartering intensity of providers by ethicalness of astounding flexibly chain the executives
in the backend and subsequently can offer inconceivable costs to their clients not letting any
space for them to deal. As of now, Tata Motors are confronting a few boundaries to their
entrance in numerous business sectors – like the discharge standards of European Union –
however they are step by step taking a shot at the cures without containing much on their
nearby cost points of interest

Ansoff Analysis of Tata motors

Ansoff, H I (1958) developed a matrix to analyse the product marketing strategy of an

organization when designing a model for diversification. Following is the image of
original sketch of the matrix drawn by Ansoff himself

42
 Figure 3: A Simple form of Ansoff product marketing strategy is presented below

Each of these quadrants describes a specific product marketing strategy as detailed below:

 Existing products to be marketed in existing markets – market penetration strategy

 New products to be marketed in existing markets – product development strategy
 Existing products to be marketed in new markets – market development strategy
 New products to be marketed in new markets – diversification strategy
In order of risks, the strategy based on existing value chains of organizations possesses
lowest risks while the strategy requiring deployment of altogether new value chains by
organizations possesses highest risk. Thus, market penetration strategies possess lowest

Risks associated with the implementation, but diversification possesses highest risks
associated with the implementation. If we take a closer look at the strategies of Ford Motor
Company and Tata Motors and map with Ansoff matrix, we can easily conclude that the
Ford Motor Company is applying strategies having lowest risk although they are paying
highest price for the same whereas Tata Motors is applying strategies with highest risks
and hence is in a make or break mode. We present the following analysis for justifying this
conclusion.

Tata Motors is right now actualizing high hazard systems given that they have endeavoured
to enter two new markets where they don't have any aptitude – UK and European premium
vehicle markets with the assistance of Jaguar and Land Rover and the $2500 Nano vehicle
that may through and through build up another vehicle showcase comprehensively. In the
event that things favour them, they can possibly turn into the following Ford of the world

43
however on the off chance that the happenings don't support to them (like the Singur
emergency saw by them), at that point they can endure misfortunes that will take a long time
for them to fix.

Balanced Score card analysis of Tata motors

Figure 4: The Balanced score card system for vision and strategy

The strategy is based on four primary factors that balance each other in a strategic
framework – Customer, Financial, Internal Business Process and Learning and Growth.
The Customer and Financial perspective is the way the company appears to the customers
and the Stake Holders whereas the Internal Business Processes and Learning and Growth
perspective is the way the company appears to the internal employees and managers.

This dissertation will result in detailed financial perspective of Financials and Customers
and hence we will revisit the Balanced Score Card later in the dissertation. The internal
business processes and learning and growth perspective has been quite sound in both Ford
Motor Company and Tata motors, but the perspectives have been entirely different. Ford
Motor Company has focused on localization of products at a global platter whereby they

44
keep their parts supply chain centralized and assemble cars as per the local requirements of a
region after studying the needs. This has resulted in them able to deliver different variants of
cars as per the requirements of different countries using the same spares supplied by their
centralized supply chain vendor. Hence, the internal learning and growth of Ford Motors has
been very comprehensive with localized knowledge captured from various countries and the
benefits of global knowledge and experience effectively mixed with the localized knowledge.

Tata Motors gives off an impression of being a long way behind this procedure when
contrasted with Ford Motors, yet they give off an impression of being taking a similar way
towards globalization. They have created Nano according to Indian conditions to begin with
however are prepared to coordinate the restricted conditions required at the worldwide level –
like the tough discharge standards of Europe. They as of now have their little trucks (Tata
Sierra) working in UK which probably built up their insight on UK and European market
necessities. In addition, after the obtaining of Jaguar and Land Rover their insight will be
reinforced further. They as of now have the rudiments set up to apply the information in
Nano and it might be simply a question of time that they will have the option to accomplish
consistence for Nano against the guidelines of Europe and different nations that they are
focusing on.

45
 Chapter-5
Conceptual Context

Covid-19 (Corona Virus)

46
Introduction
The coronavirus is a group of infections that can cause a scope of sicknesses in people
including normal cold and increasingly serious structures like SARS and MERS which are
hazardous. The infection is named after its shape which appears as a crown with projections
around it and thus is known as coronavirus.

As per the Doctor a kind of normal infection that taints people, ordinarily prompting an upper
respiratory contamination (URI.) Seven unique sorts of human coronavirus have been
recognized. The vast majority will be tainted with in any event one kind of coronavirus in the
course of their life. The infections are spread through the air by hacking and sniffling, close
to home contact, contacting an article or surface sullied with the infection and once in a
while, by fecal sullying. The disease brought about by most coronaviruses for the most part
keeps going a brief timeframe and is described by runny nose, sore throat, feeling unwell,
hack, and fever.

Figure 5: An illustration of how a Corona virus looks like

The body's respiratory system includes the nose, sinuses, mouth, throat (pharynx), voice box
(larynx), windpipe (trachea), and lungs. Upper respiratory infections affect the parts of the
respiratory tract that are higher on the body, including the nose, sinuses, and throat, while
lower respiratory infections affect the airways and lungs.

47
Background
On Dec. 31, 2019, Chinese authorities alerted the World Health Organization of pneumonia
cases in Wuhan City, Hubei province, China, with an unknown cause. What started as a
mystery disease was first referred to as 2019-nCoV and then named COVID-19. Like other
respiratory diseases, COVID-19 spreads through small droplets—saliva or mucus—that an
infected person expels when they cough, sneeze, or talk. These droplets can travel three to six
feet and remain infectious for anywhere from four to 48 hours, depending on the surface.

In a matter of months, the disease has gone from being localized with the Hubei province to
impacting almost every single country in the entire world. As of April 22, there were close to
2.5 million confirmed cases of the disease and 176,786 resulting fatalities across the globe.
The disease has thus far shown an exponential growth curve, and while policy makers
scramble to flatten the curve, the measures being taken have had major negative impacts on
national economies and brought up the advent of the next global recession

48
What is a Pandemic?

On March 11, the WHO officially classified the COVID-19 outbreak a pandemic. A
pandemic, in simplest terms, is the "worldwide spread of a new disease," Ellen Foxman, MD,
Ph.D., a Yale Medicine clinical pathologist and researcher of viral infections and
microorganisms in the Clinical Virology Laboratory, tells CNET. The WHO and CDC have
their own definitions of pandemic, though they are fundamentally the same.

According to the WHO, a pandemic is "an epidemic occurring worldwide, or over a very
wide area, crossing international boundaries and usually affecting a large number of people."
The CDC defines a pandemic as "an epidemic that has spread over several countries or
continents, usually affecting a large number of people."

Is it more dangerous than other viruses?

Most instances of COVID-19 are not serious. Nonetheless, it can cause side effects that
become serious, prompting death now and again. The episode of COVID-19 has been
unexpected. This makes it hard to appraise how frequently the illness gets extreme or the
specific pace of mortality.

One report proposes that out of 1,099 individuals with affirmed cases in China, around 16%
got serious. Another report assesses that about 3.6% of the affirmed cases in China prompted
passing. These figures are probably going to change as the circumstance develops. In any
case, they propose that COVID-19 is more destructive than flu. For instance, occasional flu
commonly prompts passing in under 0.1% of cases. When testing becomes simpler and

49
progressively boundless, well-being specialists will have an increasingly precise
understanding into the specific number of extreme cases and deaths.

ARS is another sort of coronavirus. It turned into a worldwide pandemic in 2002–2003.

Around 9.6% of SARS cases prompted demise. In any case, COVID-19 is increasingly
infectious, and it is as of now the reason for additional deaths around the world.

Is there a vaccine for the virus?

Figure : A Reference picture of Covid-19 vaccine

Growing new immunizations requires significant investment and they should be thoroughly
tried and affirmed safe by means of clinical preliminaries before they can be routinely
utilized in people. Anthony Fauci, chief of the National Institute of Allergy and Infectious
Diseases in the US, has normally expressed an immunization is at any rate a year to year and
a half away. Specialists concur there's a best approach yet.

In any case, there is incredible advancement being made in such manner and various
immunization competitors have showed up in the time since COVID-19 was found. We've
ordered all that we think about potential antibodies and current treatment alternatives that are
being utilized far and wide. Numerous infections are preventable through antiviral
immunizations. Be that as it may, it takes some effort to create and appropriate protected and
powerful antibodies. An antibody for COVID-19 is probably not going to be accessible at any
point in the near future.

50
The impact of Covid-19 on the Global econom

The ongoing spread of the new coronavirus has become one of the biggest threats to the
global economy and financial markets.

The virus, first detected in the Chinese city of Wuhan last December, has infected more than
6,00,000 people in at least 195 countries and territories globally, according to the World
Health Organization. Of those infected, more than 30,000 people have died yet ending to
march, according to WHO data.

Percentage change in Real GDP Growth

2019 2020 2021

World 2.9 -3.0 5.8
Euro area 1.2 -7.5 4.7
Germany 0.6 -7.0 5.2
France 1.3 -7.2 4.5
Italy 0.3 -9.1 4.8
Spain 2.0 -8.0 4.3
Japan 0.7 -5.2 3.0
United Kingdom 1.4 -6.2 4.2
Canada 1.6 -6.2 4.2
China 6.1 1.2 9.2
India 4.2 1.9 7.4
Russia 1.3 -5.5 3.5
Latin America 0.1 -5.5 3.5

51
 Brazil 1.1 -5.3 2.9
Mexico -0.1 -6.6 3.0
Middle East 1.2 2.8 4.0
Saudi Arabia 0.3 -2.3 2.9
Sub Saharan Africa 3.1 -1.6 4.1
Nigeria 2.2 -3.4 2.4
South Africa 0.2 -5.8 4.0

Economic impact of Covid-19

To stop the spread of the infection, governments have gotten a move on phenomenal general
wellbeing and financial reactions. All through the world, social separating has now become
the standard. This has, in any case, negatively affected financial action as individuals stay
bound to their own homes and just fundamental monetary action occurring.. COVID-19 has
been an anomaly as it has all the while made each of the three simultaneously. The effects
have been as per the following:

Supply-side shocks

 Disruption in global supply chains

Many years of profound monetary mix have rebuilt worldwide exchange and
speculation. At the point when any connection in the chain breaks, upstream and
downstream providers and purchasers are affected too. The interruption that at first
started with the securing of Hubei territory has now spread universally and has just
started to show the helplessness of the gracefully chains. This impact is relied upon to
compound as reserves of upstream information materials become dearer.

 Reduction in production capacities:

With lockdowns and social distance turning into the standard, work concentrated
businesses have everything except incidentally shut down. Monetary movement
created from organizations that require human cooperation or human nearness have
been required to be postponed. Businesses, for example, competitors have seen a
drop in income to nil for the predictable time being. Thus, total flexibly has seen a
plunge over the world.

52
Demand-side trends

 Consumption of essential goods:

With the world on lockdown, total interest is relied upon to endure a significant shot.
As individuals sit in their homes, and nations endeavour to permit just development
on fundamental administrations, request is relied upon to back off.
 Price volatility:
Besides, the weight of interest on fundamental administrations is probably going to
cause an expansion in retail swelling if governments haven't made holds and stores on
important things. This is now being found in the now unpredictable market for
individual defensive rigging, N95 covers and other clinical hardware. In an ongoing
move, the United States of America was blamed for commandeering a shipment of
N95 veils booked to move towards France from off the landing area.

 Increased consumption of digital content

A study by Comscore3 has indicated an expansion in the utilization of computerized

content in the underlying days of the lockdown, and this pattern is just expected to
additionally fortify as individuals remain bolted up inside their homes. Contrasted and
the seven day stretch of Feb. 10-16, 2020 visits to sites and versatile applications in
the "General News" classification expanded by 61% in the seven day stretch of March
16-22, 2020. Be that as it may, the majority of the expansion happened as of late:
contrasted and the seven day stretch of March 9-15, 2020, visits went up by half
during the seven day stretch of March 16-22, 2020

Financial shock

 Liquidity crunch:
Adding to creation of a simultaneous demand and supply shock, COVID-19 has also
applied pressure on already strained financial system around the globe. Across the
board, central banks have implied all the tools in the monetary policy arsenal to fight

53
 the problem. Rate-cuts and quantitative easing have become the norm and are
anticipated to go on for the near future.
 Large scale default:
While Central Banks have requested banks in their territories to start putting
moratoriums on retail loans, countries have started defaulting on loans owed to multi-
lateral agencies. For the third time in its history, Argentina has defaulted on an IMF
loan. An estimate by economists Pierre-Oliver Gourinchas and Chang-Tai Hsieh has
indicated that a one-year debt moratorium could free upwards of USD 1 trillion, or
3.3% of low- and middle- income countries’ combined income might be necessary

Global economic Projections

At this point, most financial specialists are anticipating that the spread of the infection is
definitely going to cause the following downturn. Only three months back, the IMF was
foreseeing that the worldwide economy would develop by 3.3% this year. In any case, in its
as of late discharged World Economic Outlook 5, the multilateral association has now
anticipated that the worldwide economy will shrink by up to 3 percent.

The organization has also created three likely outcomes based on the effectiveness of the
policy response in curbing the spread of COVID-19.

 The first alternative (in blue) estimates the impact of the fight against the spread of
the virus in 2020, taking roughly 50 percent longer than the assumed baseline.
 The second alternative (in red) considers the impact of a second, but milder,
resurgence of the disease occurring in 2021.
 The third alternative (in orange) is a worst-case scenario that estimates the potential
impact if the present outbreak takes longer to curb in 2020 and is followed up by
another outbreak in 2021.

54
The plunges in development rates across cutting edge financial aspects and developing
markets think about the gracefully stun and request log jam, yet in addition the relating
monetary boosts gave by governments to handle the circumstance.

While all the IMF recuperation bends venture a V-shape recuperation, they additionally put
the worldwide economy in the red for the following 2-3 years. Conversely, in its COVID-19:
Briefing Note, McKinsey and Company6 has anticipated that the recuperation bend will be
reliant on two central point:

 Spread of the Virus and Public-Health Response: For the situation that there is a
strong control of the spread of the infection, the shock will be affecting present
situation and the recuperation will be speedy as it would be a little interruption yet not
a separate of gracefully chains and request. Be that as it may, if the general well-being
reaction is inadequate, long lockdowns will hit both gracefully and request, and
recuperation will depend on monetary boosts alone.

 Effectiveness of Economic Policy: While monetary boost won't have the option to
affect the life span during this period, governments would need to guarantee congruity
of the budgetary division and increment open and private obligation to guarantee that

55
 the uptick once an antibody is found is hearty. An inadequate financial strategy will
just observe bottoming by the infection, while a compelling arrangement will bring
about a more extreme upward bend after move is made.

The Indian Economy

In India, the first case of COVID-19 was on January 30; one of the passengers carried from
Wuhan by the administration. While the initial barely any inbound explorers were secluded in
light of the fact that they were put under the exacting isolate, the transmission raised in the
long stretch of March, after a few cases were accounted for everywhere throughout the
nation, a large portion of which were connected to individuals with a movement history to
influenced nations. On 10 March, the total cases arrived at 50. On 12 March, a 76-year-
elderly person who had come back from Saudi Arabia turned into the primary casualty of the
infection in the nation. The total cases as of April 22 had just surpassed 20,000.

Coming into this pandemic, India was at that point reeling with an easing back development,
a focused on budgetary area and crawling swelling. Towards the finish of a year ago,
preceding approach of COVID-19, the previous Prime Minister Manmohan Singh had just
referenced that India was going towards a condition of stagflation. The pandemic has added
layers of emergencies to this circumstance through the continuous lockdown and movement
of work back to the towns. Altogether, according to a report in Ideas for India, the Indian
economy has the accompanying issues to manage:

 Informal Sector Challenges: The casual segment relies critically upon individuals'
day by day request. With a huge piece of the potential clients of the casual part
remaining at home at the present time and pulling back from insignificant
consumptions, the endurance of casual area units will get sketchy as time passes that
the wellbeing emergency and the related lockdown delays.
 Corporate Sector Stress: Firms in the formal sector will struggle to sustain as they
will have fixed outgoings, but incoming revenue is likely to be staggered. This will
prove to be critical for firms with leverage on their balance sheets.
 Broken Banking sector: Coming into the crisis, India was grappling with high NPAs
and just before the lockdowns, one of the largest Indian banks – Yes Bank, had to be
acquired by a government bank. The corporate sector stress, especially for leveraged

56
 firms, is likely to roll over onto the financial sector as companies will not be able to
pay back loans, leading to higher volumes of NPAs.
 Limited Fiscal Deficit Leeway: Like the rest of the world, India will have limited
opportunity to increase its fiscal deficit, which will be mandatory for recovery. As the
crisis begun, the government has already announced a package of USD 22 billion
towards tiding over the most vulnerable during the lockdown.

Going forward, the economy is expected to take a hit with sectors across the board bracing
for a lean period

 Reduced Growth Projections: Through the span of the most recent couple of weeks,
the breaks in the Indian economy have started to begin appearing. Market analysts,
rating organizations and banks have just begun revaluating their worldwide and
Indian gauges. While market analysts had before anticipated that the economy would
develop at about 5% in this money related year, they are presently foreseeing a
withdrawal of the GDP from between 4.7% to 0.1% for the coming budgetary year
because of the relaxed lockdown.
 Increasing Unemployment: According to the unemployment tracker survey of
Centre for Monitoring of Indian Economy (CMIE), the association that solitary 27.7
percent of the working-age populace (103 crore) was utilized in the week after
lockdown started. As per the business estimation technique for the association, inside
about fourteen days, the quantity of productively utilized has descended from 40.4
crore to 28.5 crore, a drop of 11.9 crore. Given that total interest is required to
debilitate, this number may increment in the present moment before balancing out
 Losses across Sectors: According to a McKinsey report, the compression of the GDP
won't be driven by a solitary segment however be in all cases. While cordiality,
aeronautics and auto are probably going to be the greatest failures, different divisions
as well, won't passage well

57
Impact of Covid-19 on Automobile sector

Global scenario

The automobile sector is a globally interconnected industry with a large economic footprint.
The size of the sector’s gross output (that is, the sum of its value added and intermediate
consumption) is about 5.7% of global output, according to the World Input-Output Database..

In 2018, the car business shrank just because since the worldwide money related emergency
of 2008. According to the International Monetary Fund (IMF), this fall in yield likewise
added to a lull in the worldwide economy. The drop in the division was brought about by a
blend of both flexibly disturbances and request stoppage: a drop popular after the termination
of expense motivating forces in China; creation lines acclimating to consent to new outflow
norms in the euro territory (particularly Germany) and China; and conceivable inclination
moves as purchasers embrace a cautious mentality with innovation and discharge guidelines
changing quickly in numerous nations, just as developing vehicle transportation and sharing
choices. Automobile fabricating shrank by 1.7% in 2018 by volume of vehicles delivered, as
indicated by the IMF. Vehicle sends out from the 14 greatest vehicle delivering nations fell
by 3.1 percent in 2018 when estimated in units

Chart 1: Annual percentage change in Global auto sales

The industry plunged deeper into recession in 2019, with sales dropping more than 4% as
carmakers struggled to find buyers in China and India. This led to downsizing by major
automakers. Some experts had even begun to speculate that the world may have reached
"peak car," or the point at which global demand for vehicles begins an inevitable decline.

58
Indian scenario

The business dove further into downturn in 2019, with deals dropping over 4% as carmakers
battled to discover purchasers in China and India. This prompted cutting back by significant
automakers. A few specialists had even started to theorize that the world may have reached
"top vehicle," or where worldwide interest for vehicles starts an unavoidable decaying.

Before the outbreak, the Indian auto sector was already suffering from a prolonged slump
owing to many reasons:

 Global Slowdown
There has been a global slowdown and India has been part of the same with the GDP
growing at less than 5%, the lowest growth rate seen in a long time.
 Drop in Private investment
Drop in private investment and a stressed financial sector has made it hard firms to
come by credit and weakened consumer demand.
 Transition to EV
The Indian government has also been pushing for a transition to electric vehicles over
the next decade, which some experts believe, has contributed to falling vehicle sales.

The year 2019 was one of the most noticeably awful years for the Indian vehicle industry
with falling deals and heaping stock. What compounded the circumstance in 2019 was the
disarray over BS-VI standards, the change to EVs and assumptions regarding GST cuts. So as
to adjust the stock, makers needed to depend on persistent creation cuts. During 9M FY20,
net deals of the car OEMs saw a y-o-y decay of about 14% on a y-o-y premise opposite a
development of about 16% saw during 9M FY19 while auto auxiliary players (counting tires)
saw a decrease of about 11.7% versus a development of 14.7% during 9M FY19. As far as
volume deals, industry saw a decrease of about 13% y-o-y in FY20 (April – February).
Industry benefits declined by about 27% during 9M FY20 opposite a twofold digit
development during relating period earlier year that can be ascribed to frail deals booked
alongside different arrangements and offers and limits given by OEMs during the celebration
season.

59
Earlier and Revised Projections

Projections before Covid-19

 Global: Close term possibilities for the business stay languid, and endeavours to
decarbonize represented a major test in the medium term. According to Moody's
Investors Service, viewpoint for the worldwide car producers and parts providers
stayed negative for 2020. It anticipated that worldwide automobile deals should drop
0.9% in 2020.
 Indian: For 2020, the circumstance was relied upon to stay extreme especially
because of tight credit conditions, the directing economy, and the change to BS-VI
emanations principles – making vulnerability, deterrents, and deferrals. As per a
report discharged by the Fitch Solutions, vehicle creation in India is probably going to
shrink by 8.3% in 2020. Parallelly, Moody's relied upon Indian automobile deals to
rise 0.5% in 2020 and 2% in 2021.

Revised Projections
 Global: Moody's Investors Service has cut its worldwide automobile deals gauge due
to the coronavirus flare-up decreasing interest and upsetting car gracefully chains. It
presently anticipates that worldwide car deals should drop 14% in 2020
 Indian: In February 2020, Fitch Solutions guage vehicle creation in India to contract
by 8.3% in 2020, as the automobile business faces expanding danger of gracefully
deficiency due to the coronavirus flare-up in China, perhaps hitting local yield if the
infection spreads. Presently this was before the flare-up of infection in India. Given
the uncontrolled rate at which it is developing in India, the part will have even a more
profound effect. As per ICRA, business vehicles (CV) deals volumes in India are
probably going to contract further between 8-10% in 2020-21 as the close term
standpoint of the division is overloaded fundamentally by the coronavirus pandemic.
According to gauges by SIAM, vehicle industry is losing INR 2,300 crore underway
turnover for each day of closure.19 Also, the work of the business is in danger as the
legally binding laborers represents about half of the workforce in the business. It is
likewise to be noted here, that regardless of whether the pandemic is abridged, the
purchaser estimations are relied upon to be negative and request is required to stay
quieted during H1 FY21 drove by fluctuating and unsure financial conditions.

60
Current situation of Automobile sector in India
The auto sector is facing the combined challenges of reduced production volumes caused by
supply chain disruptions and falling consumer demand for new cars. Some of the challenges
faced are:

a) Supply side constraints

Coronavirus flare-up has gracefully prompted chain disturbances and creation stop in
India. The pandemic had at first upset just the gracefully chain, particularly for
segments imported from China - China represents 27% of India's car part imports.
Inferable from the conclusion of the automobile part industrial facilities in China,
there has allegedly been a postponement in the creation and conveyance of BS-VI
agreeable vehicles. With the lockdown in India, fabricating in the auto area has
additionally halted. Creation shutdown the nation over will affect the division
significantly. Other than Internal Combustion motor vehicles, the creation of electric
vehicles has likewise been affected because of the slack in the obtainment of
segments and batteries from China
.
b) Demand side constraints
With the outbreak of coronavirus in India, the pervasive low purchaser slant has hosed
much further. In March 2020, all OEMs saw a sharp drop in wholesales due to
COVID-19 related lockdown and BSVI progress. Customer footfall in showrooms
had fallen pointedly, vehicle deals were dropping before the declaration of a
countrywide lockdown. In bikes, OEMs confronted issues over existing BSIV stock
with the vendors, which was exacerbated by COVID-19 related lockdown and a
constrained help from Supreme Court on special of BSIV stock. For the business
vehicle section, the interest headwinds are required to proceed over the close term
given the macroeconomic difficulties taking into account the ongoing pandemic flare-
up, combined with debilitating money related profile of armada administrators and
huge value climbs in view of progress to BS-VI emanation standards.
Investigators accept request is probably not going to restore much after the effect of
the episode stops, as the greater expense of obtaining on BS-VI rollout would imprint
request. Bikes and truck creators will be the most exceedingly awful hit, from the
sharp ascent in costs

61
Auto-components

India has a sizeable USD 57 billion automotive component industry, but it still imports parts
worth about USD 17.6 billion every year.25 India’s maximum dependence on imports
especially for the two-wheeler and passenger vehicle industry component wise is in steering
and braking systems, engine parts, alloy wheels and lighting systems. Also, most of the
OEMs are dependent on Chinese supply chains for the BS-IV as well as BS-VI components
such as fuel injection pumps. In the current scenario, with the overall slowdown in the Indian
economy, shifting to other alternate countries (such as Germany, Japan, Korea) for supply
may not be feasible in terms of both cost and time. Also, the gestation period and the huge
investment requirements for the auto component industry remain the restricting factors for
such immediate shift.
India’s exports of transport equipment to China account for a negligible share of about 0.5%
of the total transport equipment exported from the country, however, US & Europe together
account for about 80% share impacting the overall automotive component exports. In terms
of imports of transport equipment, about 8.6% was imported from China during FY19, almost
half of the equipment imported during the previous year. China is currently operating at
below average capacities and given the conditions, is expected to fully recover only by Q2
FY21, provided the spread of COVID-19 is curtailed. Therefore, the Indian component
industry is expected to witness supply chain disruptions in the domestic market during Q4
FY20 and Q1 FY21 to the tune of around USD 8,000 million (assuming 40% of FY19) while
local sourcing is expected to increase going forward
India’s exports of transport equipment to China account for a negligible share of about 0.5%
of the total transport equipment exported from the country, however, US & Europe together
account for about 80% share impacting the overall automotive component exports

62
Current and potential impact on the sector

Parameter Low Medium High Comments

Supply Side
Price variations of key raw  Short-term fluctuations
materials witnessed in prices of raw
materials
Production shutdown  Automotive sector already
facing weak demand; Production
shutdown across the country due
to the pandemic will
significantly impact the sector
further
Cash flow constraints  General liquidity shortfall in the
sector due to Non-banking
financial companies (NBFCs)
and banking sector situation
leading to an impact on sales
Supply chain disruption 
Disruption in supply of raw
materials like ancillaries and
other critical components have
affected imports
Imports (if applicable) 
Labour force  Availability of contract labour
for operations and support
functions may be an issue even
after the situation
Lockdown/restrictions impact 
Demand Side
Consumer sentiment  Consumers have been
postponing their vehicle
purchase decisions owing to
uncertainty surrounding the
pandemic

Relief measures taken by Governments across the Globe

Canada Ontario Government declared that it would revise a few guidelines on

63
 protection premium discounts, thusly permitting collision protection
organizations to give budgetary alleviation all the more effectively to
clients during the covid-19 pandemic. This change will mean back up
plans can offer premium refunds for as long as a year after the crisis
has finished.
China China's aid bundle for the automobile business indicates to around 8
billion yuan (USD 1.13 billion)., Local governments are likewise
stepping in. In any event twelve urban communities or regions have
urged individuals to purchase vehicles, principally by offering money
appropriations of as much as USD 1,400 for every vehicle.
France France has been planning monetary upgrade concentrating on venture
and money related guide for mechanical divisions including the car
business.
Japan Japan has reserved USD 2.2 billion of its record monetary boost
bundle to enable its makers to move creation out of China as the
coronavirus gracefully disturbs chains between the significant
exchanging accomplices.
South Korea South Korea reported to offer strategic and budgetary help to help the
vehicle business through the Corona infection. The administration
said it would accelerate customs freedom, mastermind cargo
transportation and give liquidity backing to the business which
utilizes about 12% of South Korea's workforce, as indicated by
legitimate figures.
United Kingdom Britain's money related direct power (FCA) has proposed to vehicle
renting firms to give a three-month instalment stick to clients who are
having transient challenges because of crown infection.
United States The US government has declared USD 2 trillion financial salvage
bundle for US organizations that hit the hardest by the coronavirus
pandemic, including the car business.

Initiatives taken by Auto industry

With lockdowns being controlled by most nations to forestall spread of the infection, auto
OEMs and providers across globe have logically suspended activities at some of their
creation areas. From propelling items online to expanding benefits/administration period to

64
clients redirecting their creation lines, automakers are adapting up to this emergency in
various manners.

Online deals are one of the last possibilities for salvation for certain sellers that have needed
to close showrooms because of the pandemic and state orders. A large portion of the
automakers have just service contracts and advantages to their clients, however now they are
deliberately joining the battle against the COVID-19 pandemic.

Some Demands of Indian auto Industry amidst this crisis

 Auto industry has been requesting a lower GST rate

 Auto producers are looking for better financing terms and gentler paces of enthusiasm
for their accomplices and sellers, helping the proposed advantages of the three-month
elegance period on credit reimbursements arrive at the more extensive environment.
 SIAM, ACMA and FADA, are mentioning the administration to declare estimates that
will address the liquidity crunch, request, and flexibly chain interruptions. SIAM has
looked for presentation of a scrappage arrangement, deferment of certain
administrative standards and accessibility of working capital at concessional rates.
 Federation of Automotive Dealers' Association (FADA) was looking for an expansion
of 2 months to sell and register unsold supplies of BSIV vehicles. Be that as it may,
just 10 days expansion post the lockdown, has been conceded by the Supreme Court.
 Apollo Tyres expects the government to announce a bailout package for the auto
sector.
 Industry body Federation of Indian Export Organizations (FIEO) has asked the
legislature to quickly give INR 30,000 crore worth of intrigue free working capital
term credit to trading organizations for facilitating their working capital liquidity
issues and forestall enormous scope joblessness that could follow post-lockdown,
particularly in the work concentrated areas.

Recent Policy announcements by governments by Government of India and

their impact

Announcement Details Impact

65
 The Supreme court permitted the offer A 10-day extension would
of BS-IV consistent vehicles for 10 scarcely be any great. As per
days, with the exception of in Delhi- CARE evaluations, the
Extension for NCR post continuous lockdown over purchasing conclusion after
selling BS-IV the corona infection pandemic is the lockdown time frame is
Vehicles relaxed. probably going to be 'low'
and customers will be wary in
spending, step by step on
extravagance and first-class
things.
The legislature expanded the Keeping up business as usual
legitimacy outside exchange will help exporters when the
Extension for arrangement as it has not been capable worldwide flexibly chain is
Foreign trade wrap counsels for another approach upset by the crown infection
policy for one year due to the on-going lockdown planned pandemic. It will likewise
for checking the spread of Covid-19. give more opportunity for
survey and conferences.
Reserve bank of India chose to cut the These measures should help
repo rate by 75 premise focuses to infuse liquidity and lift
RBI rate cut and 3- 4.4% while likewise allowing all budgetary worry for industry
month moratorium banks, NBFCs and FLs remembering partners just as the end-buyer.
HFCs to permit a 3-month ban for
instalments of term advance portions
extraordinary as on March 1 2020,
postponement on which will neither
effect the record of the borrower nor
the books of the pioneer

Potential impact of Upcoming “Scrappage policy”

As the business is reeling under the weight of lower deals because of increment in vehicle
cost (attributable to BS-VI change) and stifled customer request inferable from the pandemic,
the business is taking a gander at the approaching scrappage strategy which is expected to be
declared by the legislature soon. It will boost rejecting of more seasoned vehicles. Under the
proposition, vehicle proprietors will get motivators and tradeable scrappage authentications,
which they can reclaim in the acquisition of new vehicles.. Scrappage additionally takes into
account the reusing and recuperation of materials which will profit OEMs and save money on
new import prerequisites.

Scenario Assessment

66
 Optimistic Scenario
-Assess impact across core -Sense any significant -Refocus business
segments-mass vs urban,
private vs fleet
Customer
segment -Protect core segments &
prioritize segments that are
showing resilience
-Evaluate any product delay
costs & revise target
-Assess launch readiness &
Product launch identify opportunities to
accelerate launches
-Enhance promotional
activities across digital
sales journey
Channels -Enabling digital sales
strategy
-Evaluate network strength
& expansion plans
-Evaluate financial health
of suppliers & dealers and
develop support initiatives
Ecosystem -Evaluate opportunities to
enhance resilience of
ecosystem
Policy Recommendations
67
Realistic Scenario Pessimistic Scenario
impact on core areas/ segments under
segments stress
- Identify new -Protect & grow
segments that are
attractive business
relatively insulated
segments
-Review product -Shelve product
launches basis launches that do not
segment trends meet the revised
-Prepare for business case
digital/soft launches -Evaluate & invest in
-Assess launch product solutions that
readiness & ability to meet the evolving
scale up new models customer needs
-Optimize sales -Restructure sales
channels for revised channels to create
-Demand projections -More flexibility and
-Invest in convenient resilience
digital sales & -Develop integrated
marketing channels digital channels to
enhance visibility of
demand & customer
needs
-Support suppliers & -Explore opportunities
dealers with financial for strategic investment
initiatives to ensure in distressed partners
sustenance -Identify alternative
-Review & enhance sources/ channel
ecosystem continuity partners in line with
plans revised strategy
  Rate cut of GST on vehicles and components.
 Ahead extension to sell BS-IV Vehicles
 Relief packages for the auto sector (e.g Provision of working capital at concessional
rates, moratorium on rental payments for commercial property for few months and
reduction in minimum electricity tariffs)
 Precautionary Measures to address supply chain disruptions
 Incentives to facilitate localization and use local products than foreign products
 Impose ban on Chinese products.
 Fiscal stimulus by adopting “Cash for clunkers” scheme for the sector to that can
provide the required incentives to consumers to exchange their old vehicles for new,
more fuel-efficient vehicles. This can help in increasing the demand for automobiles
in the country.

Recommendations

1. Tax and compliances related

Short-term
 Tax booster in the form of short-term GST rate cuts to increase the demand.
E.g. rate cut for ICE-powered vehicles (Internal combustion engine)
 Deferment of GST payments to boost liquidity
 Building trust by suspending tax audits
 Efficiency in processing exporter’s claims such as duty drawback, GST
refunds etc.
 Consumer attractiveness by allowing income tax deduction on auto loan

Medium to long term

 Allow OEMs and other automotive firms to operate on previously granted

approvals and licenses, given the expiry date is approaching near, for a period
of 6 months.
 GST rate cut for ICE vehicles
2. Easing financial stress in the sector

68
 Short-term
 Operational benefits in the form of wage subsidy to small industries or
income support for contract workers for a period of 3 months
 Reduction in interest rates on delayed payment of tax for 3 months.

Long term

 Develop a repayment support scheme for automobile and related firms,

especially the MSME dealers and auto components manufacturers and sellers

3. Support for end customers

Short-term
 Rate cut by RBI resulting in reduction in interest rates for retail customers.

Long term

 Fast track the implementation o the vehicle-scrapping scheme for passenger

and commercial vehicles to incentivize purchase of new vehicle

Impact of Covid-19 on Tata Motors Ltd

The flare-up of the Novel Coronavirus (COVID-19), which started in Wuhan, China in end-
December 2019, is quick spreading its appendages over the world and is majorly affecting all
parts of society, including the car business. All through January and February, automakers
and their providers have been scrambling to keep vehicle mechanical production systems
murmuring however March has seen the business make purposeful move, in a state of
harmony with government warnings, to guard its faculty.

Much the same as some other Automobile organization even in India even Tata engines had
an extraordinary effect because of the Corona infection. The pandemic dominatingly affected
on Production, disconnected deals and administrations, share costs and very little on business
and Layoffs. Not at all like numerous IT firms which picked to cutbacks of their
representatives to spare themselves from the activated misfortunes Tata engines didn't lay off
any of their workers and adjusted an alternate system to defeat the misfortunes however the
misfortunes were obvious.

69
Major impacts

The sales was dropped by 35 percent

Tata motors announced saying worldwide wholesales of all its passenger vehicles stood 26
percent lower than expected.

Tata motors has announced further droop in its worldwide marketing projections. The
organization has discharged a stamen saying its gathering worldwide wholesales, including
Jaguar Land Rover remained at 2,31,929 units in the January-March quarter, lower by 35
percent contrasted with Q4 figures in 2019.

Tata motors said that the worldwide wholesales of all passenger vehicles in the final quarter
of 2019-20 were at 1,59,321 units. This is lower by 26 percent from a similar period a year
back.

Jaguar Land Rover could sell just 1,26,979 units in this period. Jaguar wholesales for the
quarter were 32,940 units, while Land Rover wholesales were at 94,039 units.

In the business vehicles section, worldwide wholesales of all Tata Motors and Tata Daewoo
go in Q4 FY20 were at 72,608 units, lower by 49 percent from it Q4 figures a year ago.

For most piece of the Q4, deals of all vehicle fabricating organizations hit its least ebb
because of the continuous coronavirus pandemic. In March, Tata Motors sold a sum of
12,924 vehicles in India, contrasted with 74,679 units the organization sold in a similar
period in 2019

Impact in Domestic market

In the local market, Tata Motors retailed 11,012 units in March 2020, as against 68,727
vehicles in March 2019. This legitimately means a fall of 84%.

Tata Motors on Wednesday reported that it has recorded an uncommon fall regarding
generally speaking deals for the long stretch of March due to the coronavirus lockdown.

The organization sold a sum of 12,924 vehicles a month ago when contrasted with the 74,679
units sold in the relating month of 2019.
In the residential market, Tata Motors retailed 11,012 units in March 2020, as against 68,727
vehicles sold in March 2019. This legitimately means a fall of 84%. As far as yearly figures,

70
the organization figured out how to sell 4,42,052 units in the local market in FY20, in
contrast with the 6,78,835 units sold in FY19, it was an immediate hit of - 35% deals. The
local passenger vehicles (PVs) deals was somewhere around 68% in March 2020 as the
organization sold just 5,676 units, as against 17,810 units in March 2019. The yearly
residential passenger vehicles deals endured a shot of 38% as Tata sold 1,31,197 PV units in
FY20, as against 2,10,143 units in FY19. Then again, Tata has additionally reported that it
has about exhausted its BS 4 stock which is obviously a positive sign thinking about that
greater part of the automakers are confronting genuine difficulties with respect to a similar
issue.

Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors Ltd. said,
“Vehicle sales was affected by the Covid-19 outbreak and the subsequent nationwide
lockdown. However, the customer response to our newly launched models – the Altroz and
the refreshed BS 6 range is encouraging. Our BS 6 vehicle stock is near zero in the entire
network. I would be handing over to Mr. Shailesh Chandra who I am sure will take the PV
team and the business to the next level, by delivering an exciting customer experience and
building on the strength of the NEW FOREVER product portfolio."

Referring to extreme free income issues, global rating organization. Fitch has minimized the
evaluations of Tata engines to 'B' and furthermore modified down the attitude toward the
organization that claims the marquee British brands Jaguar Land Rover to negative from
stable. The office sees Tata engines merged income to decay by 10 percent in FY21 because
of the impact of the pandemic-related shutdown, which may ascend by 8 percent in FY22

Company’s Ratings Downgraded

S&P downgraded Tata motors ratings

S&P Global evaluations has minimized Tata motors to progressively helpless against non-
instalment grade 'B' referring to more vulnerable than anticipated credit measurements
inferable from the interruptions and financial effect from the coronavirus pandemic.

The evaluations organization which had before appraised Tata engines B+ has, anyway
stayed with the point of view toward the stable.

71
‘The effect of Covid-19 on the worldwide car market will make an enormous imprint in the
ongoing great advancement that JLR's administration has made in guiding the business back
to benefit and improving credit measurements. Thus, this would postpone the improvement
we had expected in Tata engines 'credit profile' S&P said in an announcement. It further said
the past 'B+' rating on Tata engines was predicated on desire that incomes and net revenues at
both Jaguar Land Rover and Tata engines Indian tasks would improve consistently in fiscals
2020-2022..

"Indeed, even before the Vovid-19 flare-up, JLRs deals volumes for financial 2020 were
probably going to decrease, while the Indian activities were influenced fundamentally by
basic changes in the business vehicle portion and an easing back economy", it expressed.

Fitch downgrades Tata motors to ‘B’ on Covid-19 impact

Organization says Covid-19 will disturb firms Indian activities and furthermore sway key
auto advertises al- inclusive that are served through its UK-based firm. Jaguar Land Rover.

Rating organization Fitch has minimized Tata motors Ltd.’s long haul guarantor default
rating from 'BB-' on altogether lower productivity and income desires over the couple of
years. The viewpoint is negative.

The agency said Covid-19 will affect request and lead to interruption in Tata motors Indian
tasks. Key auto advertises internationally that are served through its completely claimed UK-
based auxiliary, Jaguar Land Rover car plc, will likewise be affected.

Moody’s puts Tata motors on review for downgrade

The company's corporate family evaluating and Ba3 senior debt without collateral rating have
been put on survey for downsize. Worldwide FICO assessment organization Moody's
financial specialists administration has put Tata motors Ltd on survey for downsize, referring
to powerlessness of the organization's as of now feeble credit profile in the midst of the
covid-19 outbreak all around.

72
Statement of Tata motors on Covid-19

In the wake of getting the rates downsized by different organizations because of the
organizations languid execution due to Covid-19 now Tata motors is consistently observing
the advancing coronavirus circumstance intently and reacting properly as per applicable
government prerequisites and guidance in China and different locales it works.

Their primary goal has been the wellbeing and security of their workers. Shanghai-based JLR
China and Chery Jaguar Land Rover staff have been telecommuting since the finish of the
lunar occasion and the workplaces and JV plant revived in the seven day stretch of the 24th
February. Creation will be increase as the quantity of representatives coming back to work
and request increments

Proposed actions taken by Tata motors

Tata motors issues Covid-19 advisory for its employees

In a correspondence to its workers, the organization has suspended all universal travel and
confined household voyaging as well.

In the wake of developing number of crown infection cases, The Tata engines on Friday gave
Covid-19 warning for its workers. As indicated by the warning notification surveyed by ET
Auto, the organization has suspended all global travel while residential voyaging grants
including open vehicle needs the endorsement of their particular Ex com part. Further, all the
instructional courses, meeting including 20 or more individuals just as outer and interior
occasions have been required to be postponed until further notification.

The company's employees have additionally been encouraged to connect with through virtual
gatherings as all the guests have been confined o Tata engines constrained destinations. In
any case, the organization sees restricted effect of infection on their household organizations
and will be intently checking the circumstance going further. "With some adaptability in the
blend (models, trim levels) the present perceivability ensures creation volumes up to mid-
March. The Further arranging skyline contains a few vulnerabilities which are relied upon to
be moderated to a huge degree, the circumstance could prompt constrained volume
misfortunes in the final quarter" Tata motors said.

73
Implementing work-from-home policy for staff

Tata motors asked their staff in office-based jobs at central station and provincial workplaces
including their outsider staff to telecommute as a prudent step against the coronavirus
disease. Tata motors is only one among various organizations all around and in India to
receive telecommute culture in the wake of pandemic. In an inside correspondence to the
organization staff, the MD and CEO of Tata engines Guenter Butschek said that in the course
of recent weeks, the organization has found a way to maintain a strategic distance from the
spread of infection.

employees in office-based jobs, incorporating outsider staff in organization HQ deals and

showcasing HO in empowering capacities in local workplaces and buy group situated in Pune
will telecommute. They are relied upon to stay associated and take an interest in every single
authority commitment remotely during working hours. The organization had established a
group to screen and start activities to lessen hazard to representatives and has built up a three-
level reaction plan dependent on the rate of disease in urban communities it works it or has
producing locales.

Facility shutdowns

Shut down operations at Pune unit

Tata motors announced it was preparing to temporarily shut down its operations at its Pune’s
plant which is the biggest factories from March 24th “If the situation warrants” The
announcement by the auto manufacturer, which makes trucks and passenger cars at its Pune
factory.

“We have been monitoring the situation closely and all data seem to point out that
Maharashtra has been most impacted by the virus. In the interest of safety of our employees
in the state , we have decided to rapidly scale down activities at Pune site to get to skeletal
operations by the end of Monday, 23rd March 2020, and be ready for plant closure by the end
Tuesday March 24th,2020 of the situation warrants, “a statement by Tata motors read.

74
Shutdown of Maharashtra plant

Tata motors also shut down their operations at one its car factory in the western state of
Maharashtra which is one among the facilities which were shut down and willing to extend
it if the corona virus deepens.

International Factory shutdowns

Jaguar Land Rover temporarily suspends production at plant at its Slovakia-based Nitra plant
curb the spread of virus.

JLR suspends production in UK

Jaguar Land Rover temporarily suspended production at its UK manufacturing facilities to

curb the virus spread.

It also intends to resume production in the week of April 20 whilst JLRs manufacturing
plants in Brazil resumed their operations at that time.

In a statement. Tata Sons chairman N Chandrasekaran said that all group companies would
make full payments to temporary and daily wage earners for the months of March and April-
even if they were not able to come into work due to quarantine measures, site closures or
plant shutdowns

Services rendered by Tata Group to its employees & staffs amidst

Covid-19 outbreak

Tata group to fully compensate temporary staffs

Tata group companies including Tata motors will ensure full payment to temporary workers
and daily wage earners for March, April and May even if they are not able to come to work
due to the quarantine measures or site closures amid the coronavirus outbreak.

Terming Covid-19 outbreak a major global crisis, Chandrasekaran said the nation needs
collective efforts in these tough and uncertain times.

75
At the Tata group, they have asked all our companies to exercise extreme caution. The health
and safety of our employees, their families and our suppliers, vendors and larger ecosystem is
of paramount importance, He said.

They have made all the arrangements to adopt work rapidly and extensively from home to
ensure that employees travel only in the most essential cases, excluding situations in which
they are involved in the delivery of products and services of the larger public good.

In case of micro, small and medium enterprise (MSME) sector, Tata group companies follow
a policy of making timely payments of legitimate dues.

CSR activities undertaken by Tata motors amid Covid-19 outbreak

Focusing on supply of essentials to communities most effected by Covid-19 lockdown

Tata motors has been focusing on the supply of essentials to the communities most effected
by the Covid-19 lockdown by facilitating production of protective gears and medical kits to
curb spread of Covid-19 as part of its CSR initiative. The company has so far provided over
25000 packets of cooked meals and over 5000 grocery kits (ration) to migrants, stranded
communities, urban slums, drivers, co-drivers, mechanics, contractual and temporary
workers, among others as part of the initiative. In addition to this the company has also
established two helpline numbers for temporary and contractual workmen for food related
requests in Lucknow and is providing water to 19 police stations and traffic police in Pune.

Tata motors also said it has partnered with Indian oil corporation to distribute food packets
and personal protective kits to truck drivers visiting companies “Saarthi Aaram Kendra
(SAK)” in Narsipura near Bengaluru and Bawal near Gurugram.

Besides, the company is supporting and assisting self-help groups to manufacture home-made
certified masks and sanitisers for distribution across hospitals, vendors, health-workers,
police stations, army personnel and in communities around the company’s plants. Till date,
the company has enabled the manufacturing of 17000 home-made certified masks, adding to
that it also has facilitated N95 masks, sanitisers and personal protective equipment kits that
are being distributed to municipal hospitals. Further, it has conducted health check-ups and
provided basic medication to over 500 stranded truck drivers and co-drivers in Belur,
Dharwad, it said.

76
Tata commences airlifting of critical supplies through Tata international

Tata trust has commenced airlifting of critical supplies for country-wide deployment to
support India’s of Tata International limited, The group’s international trading and
distribution company.

The items being imported comprise personal protection kits including coveralls masks, gloves
and goggles and surgical masks of different grades. The supplies was transported through
Air India aircrafts. The consignments were about one crore individual units and the total
value committed was 150 crores.

Educating masses for containment and prevention

Tata motors is emphasizing on good health practices by putting up banners and other related
information material to spread awareness in slums and amongst low-income group
communities. The company is also leveraging its social media platforms to spread awareness
about simple and easy precautionary measures one can adopt to stay unaffected and healthy.

The Tata intervention follows the Chairman, Ratan N. Tata’s statement that “Urgent
emergency resources need to be deployed to cope with the needs of fighting the Covid 19
crisis, which is one of the toughest challenges the human race will face”

Current Scenario

Tata motors announced a calibrated restart of manufacturing operations for both commercial
and passenger vehicles from its plants located at Pantnagar (Uttarakhand) beginning last
week and from Sanand (Gujarat). Tata motors plants in Lucknow (Uttar Pradesh), Dharwad
(Karnataka), Jamshedpur (Jharkand) and Pune (only for ambulance vehicle manufacturing)
are in final stage of readiness and expect to begin production over the next few days . This
commencement of operations follows receipt of all necessary approvals from relevant
government authorities.

They are planning to restart operations with limited, essential staff in each plant, adhering to
all mandated safety norms while efficiently meeting operational requirements. The support
and cooperation extended by local authorities, state and central government, Union partners

77
Every employee re-joining the workplace is required to download and use the mandatory
‘Aarogya Setu’ app. Employees are also required to periodically check-in and declare the
status of their own, as well as their family’s health on the Tata motors in-house health track
portal. In addition, all the employees and visitors entering and exiting the plant premises are
also being screened for temperature checks. Tata motors has used the lockdown time to
design new ways of working respecting the mandatory safety norms and aggressively
adopting digital via rigorous sessions conducted virtually, employees, dealers and suppliers
partners were oriented to this and trained on the feature rich BSVI offerings for effectively
selling and engaging with customers.

Nearly 200 dealerships and 300 workshops for passenger vehicles and over 400 sales outlets
and 885 workshops for commercial vehicles have begun operations with a new set of
standard operating procedure (SOPs) defining minimal interactions and maintaining prudent
social distance while engaging with customers. Over the last few days, customers have
initiated new bookings, deliveries of passenger vehicles have commenced, and workshops are
seeing increasing in flow of vehicles for servicing. All discussions with customers are being
done virtually using digital tools and any meetings, if necessary, are being conducted with
prior appointments and post verification of all requirements. Documents for vehicle insurance
and registration are being collected via mail or specifically installed drop boxes and vehicle
deliveries are being done only after all formalities are completed. Customer vehicles arriving
at workshops for repairs and servicing too are completely sanitised before being handed over
post service.

Test drives are being offended on request and with prior appointment at customer’s preferred
location. Only one person drives the vehicle with a dealer staff member sitting in the rear seat
to avoid any physical contact. For its commercial vehicle customers, Tata motors extended all
possible technical support to keep vehicles running during the lockdown. Additionally,
timelines pf vehicle warranty, free services and Tata Suraksha AMC have also been
extended. To support local communities, Tata motors is actively providing essentials to
sections of society most impacted during lockdown. Supplies of food, masks, and sanitisers
along with information kits on precautions to be taken for health and hygiene, have been
arranged for thousands of frontline hero truck drivers, transporting goods and services in
multiple locations across the country. Further, via several channels, the company is also
providing educational material in regional languages to raise awareness amongst the lowest
strata of the society regarding precautions to be taken to combat COVID-19.

78
 Chapter-6
Data Analysis & Interpretation

79
Ratio Analysis

According to J. Batty “The term accounting ratio is used to describe significant relationships
which exist between figures shown in the balance sheet, in a profit and loss account, in a
budgetary control system or in any other part of the accounting organization”. The accounting
ratios indicate a quantitative relationship which is used for analysis and decision making. It
provides basis for inter-firm as well as intra-firm comparison. The ratios will be effective
only when they are compared with ratios of base period or with standards or with the industry
ratios. The financial statement viz income statement, and balance sheet report what has
actually happened to earnings during a specific period and presents a summary of financial
position of the company at a given point of time. The statement of retained earnings ,
reconciles income during the year and any dividends distributed with the change in retained
earnings between the start and the end of the financial years under study.

1) Liquidity ratio: The Liquidity ratio measures the liquidity of the firms and its ability to
meet its maturing short-term obligations. Liquidity is defined as the realise value in money,
the most liquid of assets, it is the ability to meet all present and potential demands on cash
from any source in a manner that minimizes cost and maximises the value of the firm. Thus,
corporate liquidity is a vital factor in business.

a) Current ratio
b) Quick ratio
c) Absolute liquid ratio
d) Defensive-interval ratio

Current ratio:

This ratio measure the solvency of the company in short-term. Current assets are those assets
which can be converted into cash within a year. Current liabilities and provisions are those
liabilities that are payable within a year.

Current assets
Current ratio=
Current liabilities

80
 The Table showing comparative current ratio

Company Current assets Current liabilities Ratios

Tata motors Ltd 11796.12 18220.99 0.6473
Maruti Udyog Ltd 7316.10 14000.70 0.5225
Mahindra & Mahindra 15087.10 13794.84 1.093677
Ltd

The current ratio levels the ability of the firm to meet all the obligations maturing within a
year. Conventionally it is said that the current ratio should be 2:1. It means that for every one
rupee for current liability the firm must have two rupees worth of current assets. The reasons
for this conventional norm is that, all the current assets cannot be converted into cash
immediately.

The chart showing comparative current ratio:

Current ratios
1.2

0.8

0.6

0.4

0.2

0
Tata Motors Ltd Maruti suzuki Ltd Mahindra & Mahindra
Ltd

Interpretation:

A Current ratio of 2:1 indicates a highly solved position. A current ratio of 1:33:1 is
considered by banks as the minimum acceptable level for providing working capital finance.
M&M have a positive current ratio (1.0936) comparatively as Tata motors and Maruti Suzuki
has negative working capital as their Current liabilities exceeds current assets. Maruti Suzuki
has less current ratio (0.5225).

81
Quick ratio/ Acid test ratio:

Quick ratio is used as a measure of the company’s ability to meet its current obligations.
Since bank overdraft is secured by the inventories, the other current assets must be sufficient
to meet other current liabilities.

Current assets−Inventory
Quick ratio=
Current liabilities

Table showing Comparative liquid ratio

Company Current assets- Current liabilities Ratios

inventory
Tata Motors Ltd 7134.12 16994 0.41980
Maruti Suzuki Ltd 3990.4 12703.4 0.31412
Mahindra & Mahindra 11247.83 12904.83 0.87153

The Chart showing Comparative quick ratio

Quick ratios
0.87
0.9
0.8
0.7
0.6
0.42
0.5
0.31
0.4
0.3
0.2
0.1
0
Tata Motors Ltd Maruti Suzuki Ltd Mahindra &
Mahindra

Interpretation:

In this chart, Mahindra & Mahindra indicates a highly position when compare to the other
companies whilst Maruti Suzuki has the lowest quick ratio.

82
Absolute Liquid/Super quick ratio

It is the ratio of absolute liquid assets to quick liabilities. However, for calculation purposes,
it is taken as ratio of absolute liquid assets to current liabilities. Absolute liquid assets include
cash in hand, cash at bank and short term or temporary investments.

Absolute liquid assets

Absolute quick ratio=
Current liabilities

Absolute liquid assets=cash in hand+ cash at bank+ short-term investments

Table showing Comparative absolute liquid ratio

Company Cash and Short-term Current Ratio

bank investment liabilities
Tata motors Ltd 1306.61 9537.23 16994.00 0.8536
Maruti Suzuki Ltd 178.90 3910.5 12703.40 0.3219
Mahindra & 3731.66 9097.75 12905.84 0.7049
Mahindra

The company’s absolute liquid ratio is 0.64:1 and an ideal ratio is 0:5:1 it means that more
50% of current assets are highly liquid. Hence the company’s liquidity position can be able
to meet uncertainties in payment obligations of short-term liabilities.

Chart showing comparative absolute liquid ratio

83
 Absolute liquid ratio

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Tata motors Ltd Maruti Suzuki Ltd Mahindra & Mahindra

Interpretation:

The chart is showing Tata motors Ltd is more than the liquid liabilities ( 0.8536) compared to
the other companies. Hence the company liquid position cab be able to meet uncertainties in
payment obligations of short-term liabilities when it is compared to the other companies.

Profitability Ratios

The profitability ratios are to help assessing the adequacy of profit earned by the company
and also to discover whether profitability is increasing or declining. The profitability ratios
show the combined effects of liquidity, asset management and debt management on opening
results

Gross profit margin:-

This ratio measures the gross profit margin on the total net sales made by the company. The
gross profit represents the excess of sales proceeds during the period under observation over
their cost, before taking into account administration, selling and distribution and financing
changes.

Sales−cost of goods sold Gross profit

X 100 Or X 100
Sales Sales

Table showing comparative Gross profit ratio

84
 Company Gross profit Sales Ratios
Tata Motors Ltd 5497.57 69202.76 7.9441
Maruti Suzuki Ltd 13484.5 86020.3 15.67595
Mahindra & Mahindra 8184.41 53614.00 15.26543

The Chart shows comparative Gross profit ratio

Gross profit ratios

15.68 15.27
16

14

12

10
7.94
8

0
Tata motors Ltd Maruti Suzuki Ltd Mahindra & Mahindra

Interpretation:

A high margin enables all operating expenses to be covered and provides a reasonable return
to the shareholders. In order to keep the ratio high, management has to minimize cost of
goods sold and improve sales performance.

From the above table it clearly shows that the gross profit ratio of Maruti Suzuki Ltd is
slightly more than of Mahindra & Mahindra.

Profit on sales ratio:-

This ratio indicates the extent to which all profits will go up should the sales go up by a
specified quantum.
85
 Profit after tax
Profit on sales=
Sales

The Table showing Profit on sales ratio

Company Profit after tax Sales Ratios

Tata Motors Ltd 2020.6 69202.76 0.087196
Maruti Suzuki Ltd 7500.6 86020.3 0.087196
Mahindra & Mahindra 4796.04 53614.00 0.089455

Chart shows the comparative Profit on sales ratio

Profit on sales
0.1
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0
Tata Motors Ltd Maruti Suzuki Ltd Mahindra & Mahindra

Interpretation:

In the above chart the profitability ratio of Mahindra and Maruti are almost same.

Return on Total assets (ROTA):-

The profitability of the firm is measured by establishing relation of net profit with the total
assets of the organisation. This ratio indicates the efficiency of utilization of assets in
generating revenue.

Net profits after tax

ROTA= Total assets

86
 The Table showing comparative return on assets ratio

Company Profit after tax Total assets Ratios

Tata Motors Ltd 2020.6 38810.6 5.2063
Maruti Suzuki Ltd 7500.6 46274.3 16.209
Mahindra & 4796.04 35176.03 13.6344
Mahindra

Chart showing comparative Return on assets ratio

R e t ur n on as s e t s

16.21
13.63

5.21

Tat a Mo t o r s L t d M a r u ti S u z u k i L t d Mah i n d ra &

Mah i n d ra

Interpretation:

Return on total assets the Maruti Suzuki Ltd is higher (16.209) compared to the other
companies. Tata motors is low return (5.2063) when compared to the other companies.

Operating profit ratio

Operating profit ratio studies the relationship between operating profit (EBIT-Earning before
interest and tax) and sales. The purpose of this ratio is to find out the amount of operating
profit for each rupee of sales

Operating profit
O perating profit ratio= X 100
Sales

Table showing comparative operating profit ratio

87
 Company Operating profit Sales Ratios
Tata Motors Ltd 7291.14 69202.76 10.5359
Maruti Suzuki Ltd 13560.3 86020 15.7641
Mahindra & 8298.8 53614 15.4787
Mahindra

Chart showing comparative operating profit ratio

Operating profit
18
15.76 15.48
16
14
12
10.54
10
8
6
4
2
0
Tata motors Ltd Maruti Suzuki Ltd Mahindra & Mahindra

Interpretation:

A high ratio is an indicator of the operational efficiency of the Maruti Suzuki Ltd (15.76)
compared to other two companies. A low ratio stands for operational efficiency of the firm,
when comparing with other companies. The purpose of this ratio is to find out amount of
operating profit for each rupee of sales.

Stock Turnover ratio

This ratio establishes the relationship between cost of goods sold and average value of
inventory of stock. The purpose of this ratio is to show the number of times the inventory of a
firm is rotated in a year. It gives an indication of the efficiency of inventory management

Sales
Stock turnover ratio= X 100
Inventory

Table showing Comparative stock turnover ratio

88
 Company Sales Inventories Ratios
Tata Motors Ltd 69202.76 4662.00 1484.401
Maruti Suzuki Ltd 86020.30 3325.70 2586.532
Mahindra & 53614.00 3839.27 1396.463
Mahindra

Chart showing Comparative stock turnover ratio

Stock turnover ratio

3000

2500

2000

1500 2586.53

1000 1484.4 1396.46

500

0
Tata motors Ltd Maruti Suzuki Ltd Mahindra & Mahindra

Interpretation:

This chart is showing a high inventory turnover ratio for Maruti Suzuki Ltd is an index of
efficient inventory management and a low ratio for Mahindra & Mahindra stands for
comparatively inefficient inventory management. A low ratio also implies that the firm has
excess stock in relation to production and sales when the comparison to other companies.

89
Chapter-7
Findings

90
Findings

This study has been undertaken based on Impact of Covid-19 pandemic and the economic
slowdown on the automobile sector and specifically on Tata Motors Ltd and comparison of
financial analysis through ratio analysis technique with the companies such as Tata Motors
Ltd, Maruti Suzuki Ltd and Mahindra & Mahindra. The major findings with respect to the
study are stated below

 After undertaking a research on current Indian automobile sector, it was already

affected with the economic slowdown with the low sales of cars and their
performance got deteriorated due to the Covid-19 pandemic.
 Though the current ratio of Tata motors Ltd is average compared to other two
companies. Mahindra & Mahindra leads to the top position in this ratio.
 A quick ratio of 1:1 indicates highly solvent position. Mahindra& Mahindra again
leads to the position whilst Tata is in between and Maruti Suzuki is low liquid solvent
position compared to other companies as a supplement to the current ratio in
analysing liquidity.
 Tata’s absolute liquid ratio is relatively high and Maruti Suzuki has low ratio
compared to other companies.
 The Gross profit margin of three companies showed that the Tata has relatively less
profit margin than other companies and Maruti Suzuki has high gross profit.
 The Net profit margin ratio of Mahindra is high and Low of Tata motors.
 Return on total assets (ROTA) of Tata motors is less than other two companies and
Maruti Suzuki has high Return on total assets.
 Tata motors has operational inefficiency as its ratio is lower than Maruti and
Mahindra.
 A high inventory turnover ratio is an index of efficient inventory management and a
low ratio stands for inefficiency inventory management. Here Tata has more ratio
than Mahindra and less than Maruti Suzuki.

91
Suggestions

92
Suggestions

As analysed necessary steps should be taken by Tata Motors Ltd to increase Gross profit
ratio, profit on sales ratio, Return on total asset ratio, Operating profit ratio to improve
company profits and reputation and for the future market growth and predominantly cope up
with the Covid-19 situation and equity share-holders easy to invest in this company when
compared to other companies.

The Gross profit ratio will be increased by sales are also maximum level to sell the products
and company gross profit ratio will also improve.

Major Recommendations to the Tata motors

 Identify, prioritize and accelerate cost-out measures across the enterprise.

 Optimize working capital and identify measures to deliver rapid, tangible cash
benefits.
 Revise forecast assumptions; prioritizing downside scenarios given the current level
of market uncertainty.
 Identify potential sources of collateral to secure access to additional borrowing
solutions should active scenario planning suggest that liquidity will become an issue
 Focus on employee safety and care as to avoid any Covid-19 infection and adapt
limited workforce capacity.

93
Conclusion

94
Conclusion

The Covid-19 pandemic may be controlled if sufficient precautionary measures

are adapted to control the disease. The prediction about pattern of the outbreak
in India may help the policymakers to take comprehensive and necessary action.
The number of deaths may be controlled as compared to any other countries
because of the measures which are already being adhered by country.

The further study of other sectors like Education, economic conditions, medical
facilities, climatic conditions, religious beliefs etc may strengthen the prediction
and help in controlling the outbreak of Covid-19.

95
Annexure

96
Questionnaire

I am Nishan N, a student of SDMIMD, Mysore pursuing my first year of PGDM. As I am

doing a project on “Impact of Covid-19 on business performance of the automobile sector in
India and their sales and performance”. As lockdown and social distancing have rapidly
become the new norm for many of us, there is growing realization that it could have a lasting
impact on what mobility solutions people will prefer in coming days. Kindly spare some of
your free time to answer this questionnaire:

1) Name:_______________

2) Gender

a) Male [ ]
b) Female [ ]
c) Prefer not to say [ ]

3) Age:_______

4) Which personal vehicle do you own currently?

a) 2W [ ]
b) 4W [ ]
c) None [ ]
d) Other:________

5) Which vehicle will be your preferred mode of travel post covid-19 lockdown?

a) Public bus/Metro [ ]
b) Ride hailing/shared mobility [ ]
c) Private vehicles [ ]
d) Other:_______

6) Before Covid-19 outbreak what was your preferred travel/commute?

a) Public bus/Metro [ ]
b) Ride hailing/shared mobility [ ]
c) Private vehicles [ ]
d) Other:_______

97
7) Has your intention to own a car strengthened after the Covid-19 outbreak?

a) Yes [ ]
b) No [ ]
c) Maybe [ ]

8) If Yes, then why has your intention to own a private car changed?

a) Flexibility of time & travel [ ]

b) Reduces chances of infection & social distancing [ ]
c) Family can travel together [ ]
d) Upgrade from 2W [ ]
e) Societal status [ ]

9) During the current lockdown what kind of issues have people faced by not owning a
personal vehicle in your view?

a) Unable to get a vehicle during emergency [ ]

b) Unable to commute to get essentials [ ]
c) Anxiety/emotional distress due to unavailability of public transportation [ ]
d) Other:______

10) If you are a current personal vehicle owner (4W) do you intend to upgrade your vehicle
when normalcy returns post the lockdown?

a) Yes [ ]
b) No [ ]
c) Maybe [ ]

11) If no, what are your reasons for opting for upgradation?

a) Adequate availability of public transportation [ ]

b) Too early to upgrade vehicle existing vehicle [ ]
c) Postponed purchase amidst uncertainty [ ]
d) Change in travel habits/preference post covid-19 lockdown [ ]
e) Other:_____

98
12) If you were to purchase/upgrade a 4W post the lockdown, which type of vehicle would
your needs the most?

a) Hatchback [ ]
b) Compact sedan [ ]
c) Premium sedan [ ]
d) Mid-size SUV [ ]
e) Luxury sedan [ ]
f) Full size SUV [ ]
g) Pre-owned vehicle [ ]
h) Other:____________

99
Bibliography

100
References

 https://en.wikipedia.org/wiki/Tata_Motors
 https://www.tatamotors.com/about-us/company-profile/
 https://www.tatamotors.com/media/press-releases/
 https://www.tatamotors.com/press/tata-motors-adopts-a-3-pronged-csr-approach-to-
combat-covid-19/
 https://www.business-standard.com/article/companies/fitch-downgrades-tata-motors-
to-b-on-covid-19-impact-outlook-negative-120041601090_1.html
 https://www.business-standard.com/article/companies/covid-19-impact-s-p-
downgrades-tata-motors-ratings-keeps-outlook-stable-120040300265_1.html
 https://www.livemint.com/news/india/covid-19-impact-moody-s-puts-tata-motors-on-
review-for-downgrade-11585282295839.html
 https://economictimes.indiatimes.com/news/company/corporate-trends/tata-trusts-
commences-airlifting-of-critical-supplies-through-tata-international/arti
 https://economictimes.indiatimes.com/industry/auto/auto-news/focusing-on-supply-
of-essentials-to-communities-most-affected-by-covid-19-lockdown-tata-
motors/articleshow/75045223.cms?from=mdr

 https://economictimes.indiatimes.com/markets/stocks/news/coronavirus-whats-its-
impact-on-indias-auto-sector/articleshow/75078607.cms

 https://www.businesstoday.in/sectors/auto/tata-motors-may-shut-maharashtra-plant-
due-to-covid-19-concerns/story/398839.html

 Aruna.G, D. A. (2013). A Literature Review Of Mergers And Acquisitions

101