PROJECT

REPORT
ON
COMPARE THE STANDING TATA MOTORS
vis-á-vis THE INDUSTRY
&
CUSTOMER
SATISFACTION
SURVEY

TATA Motors Ltd.

:- SUBMITTED TO
SUBMITTED

BY: -

LOVELY PROFESSIONAL UNIVERSITY

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 LOVELY INSTITUTE OF MANAGEMENT
(LIM)

DECLARATION

I ARUN KUMAR GULERIA here by declare that the project report

entitled “COMPARE THE STANDING TATA MOTORS vis-á-vis THE INDUSTRY &
CUSTOMER SATISFACTION SURVEY” under guidance of Miss. Sukhwinder
Arora submitted for the requirement of a degree programme of
LOVELY PROFESSIONAL UNIVERSITY is my original work.

Any literature, data or works done by others and cited within

this dissertation has been given due acknowledgement and listed in
the reference section .

Signature :

Date :

Place : Jalandhar
 ACKNOWLEDGEMENT

In order to make my project I acknowledge a special thanks to all those people without
whose supports it would not be possible for me to complete for me to complete my report.

First of all I really thankful to my Lovely Professional University because of them I

could achieve the target. I express my sincere thanks to my project guide Miss. Sukhwinder
Arora who had guide to me throughout my project.

I would also thankful to the Satluj Motors (TATA MOTORS Dealership) for giving me
this opportunity to work on project in Mandi (H.P) . I convey my heart full thanks to the
Mr. Bhopal Singh Jamwal (Admin. Manager) and the staff members of Satluj Motors, with
their help and corporation.

Also I would like to express my inner feeling for all the people for co-operating and
helping me throughout the project.

Last but not the least I am thankful to my parents and friends who have provided me with
their constant support throughout this project.

A K G run umar uleria

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 PREFACE
The professional training is the internal part of a M.B.A program. It helps the student
understand practical aspects of Business Management in a better way as a part of my M.B.A.
program at Lovely Professional University, Jalandhar . I was supposed to work the
organization.

‘Finance Management is the systematic and objective identification, collection, analysis,

dissemination, and use of information for the purpose of improving decision making related to
identification and solution of problems and opportunity”

Perception is the process, by which an individual selects, organizes and interprets

infor mation inputs to create a meaningful picture of the world around as”

To be a Master of Business Administration student is a matter of pride because we are in

a field, which help us to develop from a nor mal human being into a disciplined, and dedicated
professional. One has to be a good learner to sharper knowledge in the particular field to achieve
and attain the desired goals and heights. I analysis the financial position of TATA Motors and
conducted a financial analysis of two of its competitors – Mahindra & Mahindra and Maruti
Udyog. To com pare the standing TATA Motors vis-á-vis the industry . I used Balance Sheet,
Profit & Loss Account, Cash Flow and Fund Flow Statement, and Ratio Analysis.

And I also conducted Customer Satisfaction Survey of TATA Motors in the Mandi
District of Himachal Pradesh. I used research questionnaires as the research and data collection
tools. The responses were collected from 100 respondents from various areas of Mandi.

I had learned lot during my project on compare the standing TATA Motors vis-á-vis the
industr y & customer satisfaction survey of TATA Motors; I hope this will be helpful to find out
financial standing of TATA Motors in automobile industry and satisfaction of consumer in Mandi
city.

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 INDEX

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 S.No. PARTICULAR Page No.
1. Declaration (i)
2.
Acknowled
gement
(ii)
3. Preface (iii)
4. Executive Summary 7
5. Introduction 10
6. Literature Review: 14
6.1 Tata Motors July Sales At 48,054 Nos. 15
6.2 First Quarter Stand-Alone Net Revenue
Rs.6405 Crores, Pat Grows 58% To Rs.514
Crores 16
6.3 Delivers First Tata Nano In The Country In
Mumbai 17
6.4 June 2009 Domestic Sales At 43,244 Nos 18
6.5 First Jaguar Land Rover Showroom Opens In
India 19
6.6 Tata Motors To Introduce Air Car 20
6.7 Consolidated Revenue In 2008-09 Rs. 70938.85
Crores, Loss After Tax Rs. 2505.25 Crores 21
6.8 Effect Of Inflation On Car
Market 24
7. Profile Of Tata Group: 27
7.1 TATA Group Companies 32
8. Profile Of Tata Motors Limited: 35
8.1 Industry Overview 37
8.2 History Of Tata Motors 39
8.3 Important Developments 39
8.4 Global Operations 48
8.5 Future Challenges 51
8.6 Milestones 52
8.7 Awards 57
9. Products Of Tata Motors: 58
9.1 Passenger cars and utility vehicles 58
9.2 Concept vehicles 59
9.3 Commercial vehicles 60
10. Marketing Strategies: 62
10.1 Launch Of Tata Nano 62
10.2 Modification In Tata Sumo 69
10.3 New Version Of Indigo ,Indigo Dicor 71
10.4 Tapping Of Rural Markets 72
11. SWOT Analysis - Tata Motors Limited 73
12. Financial Analysis: 76
12.1 Financial Overview 77
12.2 Capital Structure 78
12.3 Weighted Average Cost Of Capital 79
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12.4 Balance Analysis 81
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13. Global Automobile Industry 87
14. Indian Automotive Players: Overview Of The Players In the Indian
 EXECUTIVE SUMMARY
COMPARE THE STANDING TATA MOTORS vis-á-vis THE The project on
INDUSTRY & CUSTOMER SATISFACTION SURVEY based on financial
perfor mance and on customer survey. The main objectives of the project are:

Financial performance in automobile industry

Market performance
Market position.
Economic and the industry environment
Cost saving initiatives
Awareness regarding the facilities provided by Tata Motors.
Overall opinion about Tata Motors.
Satisfaction amongst the customers of Tata Motors

For this project Financial Statements was analysis and customer research was carried out at
various area of Mandi District of Himachal Pradesh. I learnt analysis financial statement in to
find different aspects for compare the standing vis-á-vis industry and customer ’s perception
about TATA Motors.

THE REPORTS IS DIVIDED INTO VARIOUS SECTIONS:

1. Company Overview:
This part describes the company profile. This par t recognizes the achievements and
rewards the company has achieved, it also gives little insights into what company offers
to the Corporate and the Consumers. This section also describes the kind of technology
used.

2. Company Profile:

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 This section gives the information about the company. It includes the company history
which depicts the company from the period of foundation. This section also products of
the company producing by the company.

3. Analysis of Financial:
Financial statements of the company over last few years are analysis in this section and
financial perfor mance is output.

4. Competitors of company:
The company’s competitors are finding and study the business during the financial years.

5. Comparison of company’s financial statements with competitors:

Comparison of company’s Balance Sheet, Profit & Loss Account and Fund and Cash
Flow Statement with their competitor to find the standing of company in automobile
industr y.

FINDINGS:
A detailed analysis of the company shows that the company has had a strong fundamental
as well as a strong market performance over the years. Given the economic and the industry
environment (improving outlook for the CV industry) TATA Motors would be a key beneficiary.
While a pick-up in its CV volumes is evident, operating leverage and cost saving initiatives will
improve margins.

On an average more than 73% people feel that the prices are affordable whereas 12% do
not agree, 74% believe that attractive discounts are offered whereas 26% are not satisfied with
the discounts offered. 20% said that the test drives are not offered and 15% said that post sales
follow ups are not done regularly whereas 85% said that they were done regularly but people feel
that it is the people’s car as it is satisfactor y on all other parameters: knowledgeable sales persons
, employees spent enough time before and during sales, display of merchandise is attractive,

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 availability of product, variety of mer chandize, vehicle in good condition, prices are affordable,
attractive discounts are offered, décor of the waiting area is pleasing, responds to complaints
quickly, service at TATA Motors service station is excellent, careful with personal information
and is value for money . The overall opinion about TATA Motors is very good.

“Lovely Professional University” At the end it is submitted to

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 INTRODUCTION

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 India is an emerging country with huge potential. The domestic economy is now growing
at around 9-10% per annum and India’s importance in global terms is being reinforced by
rapidly rising exports and domestic consumption. At a time when numbers of a slowdown and
overheating in the Indian economy have started gaining momentum, the Indian rupee sprang a
surprise by pushing the GDP figure past the trillion-dollar (42,00,000 crore) mark.

The automotive industr y is at the center of India’s new global dynamic. The domestic
market expanding rapidly as incomes rise and consumer credit becomes more widely available.
Manufacturer ’s product lines are being continually expanded, as is the local automotive
manufacturing base. Expectation are high that India can develop as a global hub for vehicle
manufacturers and as an outsourcing center that offers the global automotive industry solution
.
high up the automotive value chain

• India eyes 25 million automotive jobs.

India's GDP is set to double over the next decade •

In percentage terms, the automotive industry's contribution should also •
double.
In dollar terms, the sector's contribution is set to quadruple to some •
$145bn

The automobile industry in India accounts for a business volume of $45 billion and has
the potential to grow much faster both through Indian as well as international manufacturers who
have established huge facilities in the country

With the world’s second largest and fastest-growing population, there is no denying India’s
potential in both economic and population terms and the effect it will have on the auto industry
in the years to come. The country is already off to a good start, with a well-developed
components industry and a production level of 1 million four-wheeled vehicles a year, plus a
further 5 million two- and three-wheelers.

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 The implications, market drivers and scope of a future massive Indian vehicle market
are covered in the India Strategic Market Profile, a brand-new forecast of Indian automotive and
related activity to 2020. Based on Max Pemberton's unique relational long-term forecasting
model, it forecasts car and CV sales, demographics, materials usage, auto industr y employment,
and explains their inter- year of healthy growth in auto industr y.

INDUSTRY GROWTH:

Future of the
Automobile in the Economy:

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 US based consultancy, keystone predicts that India will become world’s third largest
automobile market by 2030. Overall size expected to exceed 20 million with compounded
annual growth rate of over 12%.

INDIA THEN & NOW

1983
• Number of brands 2

• Number of models 2

2008
• Number of brands 30

• Number of models 70

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 LITERATURE
REVIEW

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 Released on: 3rd August, 2009
Tata Motors July sales at 48,054 nos., growth of 18%
M&HCV sales record year-on-year growth after almost a year
- Ashish Garg

T increase compared to 15,064 nos. (14,652

ata Motors total sales (including exports) Tata + 412 Fiat) in July last year. Sales of
of Tata commercial and passenger vehicles Tata cars, at 14,537 nos., grew by 21% over
in July 2009 were 48,054 vehicles, a growth July 2008. Dispatches of the Tata Nano
of 18% over 40,729 vehicles sold in July began during the month, and the sales were
2008. The company’s domestic sales of Tata 2,475 nos. The Indica range sales were
commercial and passenger vehicles for July 8,563 nos., a growth of 14% over July last
2009 were 45,599 nos., a 23% growth over year. The Indigo range recorded sales of
37,033 nos. sold in July last year. 3,499 nos., lower by 22% over July last year.
The UV/SUV range of Sumo/Safari
Cumulative sales (including exports) for the accounted for sales of 2,638 nos., flat
company for the fiscal at 171,168 nos., was compared to July last year.
lower by 1%, compared to 172,462 nos. sold
last year. The company began the sale and deliveries
of the Jaguar and Land Rover range through
Commercial Vehicles the brands’ flagship store in Mumbai. The
The company’s sales of commercial response has been quite encouraging in the
vehicles in July 2009 in the domestic first month with the initial India stock and
market were 28,408 nos., a 27% growth pipeline imports booked to a large extent.
compared to 22,381 vehicles sold in July
last year. Cumulative sales and distribution offtake of
LCV sales were 17,750 nos., a growth of passenger vehicles in the domestic market
44% over July last year. M&HCV sales for the fiscal were 70,572 nos. (63,028 Tata
stood at 10,658 nos. turning positive after + 7,544 Fiat), against 67,559 nos. (65,746
almost a year with a growth of 6% over July Tata + 1,813 Fiat) last year, a growth of 4%.
last year and the highest since September Nano sales were 2,475 nos. Cumulative
2008 sales of the Indica range at 37,412 nos.,
Cumulative sales of commercial vehicles in reported a growth of 13%. Cumulative sales
the domestic market for the fiscal were of the Indigo family were 12,422 nos., lower
100,464 nos., a growth of 7% over last year. by 29%. Cumulative sales of the
Cumulative LCV sales were 63,180 nos., a Sumo/Safari range were 10,690 nos., lower
growth of 32% over last year, while by 29%.
M&HCV sales stood at 37,284 nos. was Exports
lower by 19% over last year. The Company’s sales from exports at 2,455
vehicles in July 2009 were lower by 34%
Passenger Vehicles compared to 3,696 vehicles in July last year.
The passenger vehicle business reported a The cumulative sales from exports for the
total sale and distribution offtake of 19,881 fiscal at 7,676 nos. were lower by 40% over
nos. (17,191 Tata + 2,690 Fiat) in the 12,855 nos. in the same period last year.
domestic market in July 2009, a 32%

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 Released on: 27th July, 2009
Tata Motors First Quarter Stand-alone net revenue Rs.6405 Crores,
PAT grows 58% to Rs.514 crores
- R. S. Sardha

T Improvement in liquidity, increased reach

ata Motors today reported revenues (net
of excise) of Rs.6404.63 crores on a stand-
alone basis for the quarter ended June 30,
2009, of the financial year 2009-10, a
decline of 7.6% compared to Rs.6928.44
crores in the corresponding quarter previous
year. Government stimulus packages for the
The company’s continued focus on cost
efficiencies, coupled with reduction of raw
material prices, inventory reduction and
improvement in sales realisation, yielded
considerable benefits resulting in the
operating margin to 11.4% (from 7.1% in
the previous year), with operating profits at
Rs.728.00 crores, an increase of 47.9% as
compared to the corresponding period of the
previous year. wake of continuing tumultuous global
Profit before Tax for the quarter grew by
58.8% to Rs.548.04 crores (Q1 2008-09:
Rs.345.09 crores) and Profit after Tax was
Rs.513.76 crores (Q1 2008-09: Rs.326.11
crores), an increase of 57.5%. The interest
cost (net) at Rs.253.45 crores for the quarter
increased by 125.6% due to increased debt
taken by the company during the previous
year to support its product programmes,
investments and working capital
requirements and depreciation at Rs.229.12
crores was higher by 26.7% reflecting the
increased investments in new products and
supporting capabilities. For the quarter
ended June 30, 2009, there was an
exceptional notional foreign exchange
valuation loss of Rs.5.54 crores (previous
year loss of Rs.161.59 crores).
across the country and introduction of new
products and variants improved the
company’s sales, except in the case of the
heavy truck segment. The heavy truck
segment is recover ing, albeit slowly, in
response to infrastructure development,
automobile industr y and Jawaharlal Nehru
National Urban Renewal Mission
(JNNURM) initiatives.
The company’s domestic sales volume at
122,120 vehicles recorded a marginal
decrease of 1.4% over the corresponding
quarter of the previous year, whilst the
exports at 5220 vehicles continued to be
severely impacted (negative 43%) in the
environment resulting in total sales volume
at 127,340 vehicles, a decline of 4.3% as
compared to the corresponding quarter of
the previous year. The company gained
market share in commercial vehicles to
67.4% during the quarter compared with
61% in the corresponding quarter of
previous year on the back of a marginal
1.1% growth in domestic sales to 72,216
units. Tata passenger vehicles declined by
10% in the domestic market to 45,846 units
but have been growing sequentially every
month of the quarter breaking into positive
growth in June. The market share for Tata
passenger vehicles has sequentially
improved from April to June 2009 with the
June exit market share at 12.5%, and for the
period being at 11.3%. Along with Fiat, the
company has a joint market share of 12.3%

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 in the industr y.
The company continues to upgrade its
resources to leverage emerging
opportunities. In commercial vehicles, the
company unveiled its new range of world
standard trucks in May 2009, comprising
multi- axle trucks, tractor-trailers, tippers,
mixers and special purpose vehicles which
are being gradually launched in India and
also in select international markets over a
period of time. An all-new Starbus range of
buses has also been introduced. A new
mileage enhancing automatic stop-start
technology, developed in-house, has been
introduced in the Ace mini truck. Tata
Motors has received a majority of the orders
for buses released by different State
Governments under the JNNURM.
In passenger vehicles, the company has
completed the process of allotment of Tata
Nanos, following the car ’s launch in March
2009. Deliveries to the allottees have since
begun. The company also opened the first
Jaguar Land Rover showroom in India at
Mumbai. Along with the Fiat Linea, Fiat 500
and the Palio, the company has commenced
the distribution of the Fiat Grande Punto in
June 2009.
The audited stand-alone financial results for
the quarter ended June 30, 2009, are
enclosed. The consolidated financial results
for the 1st quarter of Financial Year would
be voluntarily disclosed separately in due
course.

__________________________________________________________________________________________________

Released on: 17th July, 2009

TATA MOTORS DELIVERS FIRST TATA NANO IN THE COUNTRY IN MUMBAI
- Rojar R. Karm

T emission-friendly city car.”

ata Motors is pleased to announce that
Mr. Ashok Raghunath Vichare of Mumbai Along with Mr. Vichare, two other
has become the first customer in India of the customers, Mr. Ashish Balakrishnan (Tata
Tata Nano. Mr. Vichare received his choice, Nano LX – Sunshine Yellow) and Kores
the Tata Nano LX (Lunar Silver), at the India Limited (Tata Nano LX – Lunar
hands of the Chairman of Tata Sons and Tata Silver), also received their cars today.
Motors, Mr. Ratan N. Tata, at the company’s
dealership, Concorde Motors, today. As planned, Tata Motors has commenced
deliveries of the Tata Nano this month to
Speaking on the occasion, Mr. Tata said, “I different towns and cities of the country.
hope the Tata Nano will bring motoring Dispatches to dealerships have begun from
pleasure to those who will be buying their the Pantnagar plant, where the car is being
first car as also those who currently own produced, in accordance with schedules
cars but want a modern, contemporary, infor med to customers.

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 Released on: 1st July, 2009
TATA Motors’s June 2009 DOMESTIC SALES at 43,244 nos.
- G. Lata Sure

T total sale and distribution offtake of 19,513

ata Motors’ total sales (including nos. (17,039 Tata + 2,474 Fiat) in the
exports) of Tata commercial and passenger domestic market in June 2009, an 11%
vehicles were 45,399 vehicles, a decline of increase compared to 17,567 nos. (17,017
4% over 47,245 vehicles sold in June last Tata + 550 Fiat) in June 2008, and an
year. The company’s domestic sales of Tata increase of 17.8% over 16,563 nos. (15,388
commercial and passenger vehicles for the Tata + 1,175 Fiat) of May 2009. The Indica
month of June 2009 were 43,244 nos., a 1% range grew for the fifth consecutive month
decline over 43,814 nos. sold in June last at sales of 10,210 nos. -- a growth of 19%
year. over June 2008. The Indigo family recorded
sales of 3,522 nos., a 26% decline over June
Cumulative sales (including exports) for the 2008, but a growth of 24.4% over 2,832 nos.
company for the quarter at 123,113 nos., of May 2009. The Sumo/Safari range
declined by 7%, compared to 131,733 nos. accounted for sales of 3,307 nos., a decline
sold last year. of 11% compared to June 2008, but a growth
of 29.7% over 2,550 nos. of May 2009.
Commercial Vehicles
The Company’s sales of commercial The company launched the Jaguar and Land
vehicles in June 2009 in the domestic Rover range in the last week of June in
market were 26,205 nos., a 2% decline Mumbai.
compared to 26,797 vehicles sold in June
last year. LCV sales were 16,256 nos., a Cumulative sales and distribution offtake of
growth of 17% over June 2008, while passenger vehicles in the domestic market
M&HCV sales stood at 9,949 nos., a decline for the quarter were 50,691 nos. (45,837
of 23% over June 2008 but an increase of Tata + 4,854 Fiat), against 52,495 nos.
15% over May 2009. (51,094 Tata + 1,401 Fiat) in the same
period last year. Cumulative sales of the
Cumulative sales of commercial vehicles in Indica range at 28,849 nos., reported a
the domestic market for the first quarter of growth of 12%. Cumulative sales of the
the fiscal were 72,056 nos., a growth of 1% Indigo family were 8,923 nos., a 32%
over last year. Cumulative M&HCV sales decline over the same period last year.
stood at 26,626 nos., a decline of 26% over Cumulative sales of the Sumo/Safari range
last year, while LCV sales for the quarter were 8,065 nos., a decline of 35%.
were 45,430 nos., a growth of 27% over last
year. Exports
The Company’s sales from exports at 2,155
Passenger Vehicles vehicles in June 2009 declined by 37%
The passenger vehicle business reported a compared to 3,431 vehicles in June 2008.

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 The cumulative sales from exports for the fiscal at 5,220 nos. declined by 43% over
9,159 nos. in the same period last year.

Released on: 28th June, 2009

FIRST JAGUAR LAND ROVER SHOWROOM OPENS IN INDIA
J
aguar Land Rover's official entry to the fast-growing Indian car market was marked today by
the opening of a flagship showroom facility at Ceejay House in Mumbai by Mr. Ratan N. Tata,
Chairman of Tata Sons and Tata Motors.
Jaguar and Land Rover's award-winning vehicles are well
known around the world. Jaguar has become one of the
world's leading producers of beautiful fast cars. Land
Rover produces the world’s most versatile all-terrain
vehicles, combining refined luxury with a true breadth of
capability.

The exciting new range of premium luxury vehicles

available for the Indian market will include the Jaguar
XF, XFR and XKR and Land Rover Discovery 3, Range
Rover Sport and Range Rover. Further details, including specifications, are available on the new
Jaguar India website (www.jaguar.in) and Land Rover India website
(www.landrover.in).

Jaguar Land Rover has confirmed Tata Motors as its exclusive importer and the world-class
Ceejay House facility in Worli, Mumbai, will offer a wide range of both Jaguar and Land Rover
vehicles, with a dedicated showroom section for each brand. It aims to
establish a benchmark
experience in luxury car sales in India, with plans to
develop the dealer network throughout 2009 and 2010.

Mr. Ratan N. Tata, Chairman of Tata Sons and Tata

Motors, said: "We are extremely pleased and proud to
introduce the Jaguar Land Rover brands in the Indian
market and give the discerning Indian customer direct
access to these prestigious brands, accompanied by a
parts and service network. We hope that they will delight
customers in India just as they have done in markets the
world over."

Mr. David Smith, CEO of Jaguar Land Rover, said: "Jaguar Land Rover is delighted to have
officially opened our first showroom in India. It is an exciting time to be entering the Indian
market, a country with increasing affluence and an economy which is still growing. We believe

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 that the Indian market holds significant growth potential in the long term, and we hope to tap the
demand for premium vehicles from discerning customers."

Released on: July 7, 2009

TATA MOTORS TO INTRODUCE AIR CAR
– Ben MaGreow

T The MiniCAT which is a simple, light urban

ata Motors is taking giant strides and car, with a tubular chassis that is glued not
making history for itself. First the welded and a body of fiberglass powered by
Landrover-Jaguar deal, then the world's compressed air. Microcontrollers are used in
cheapest car and now it is also set to every device in the car, so one tiny radio
introduce the car that runs on air, transmitter sends instructions to the lights,
compressed air to be specific. indicators etc. There are no keys - just an
access card which can be read by the car
With fuel prices touching nearly $150 per from your pocket.
barrel, it is about time we heard some
breakthrough! According to the designers, it costs less than
India's largest automaker Tata Motors is set 50 rupees per 100Km (about a tenth that of a
to start producing the world's first petrol car). Its mileage is about double that
commercial air-powered vehicle. The Air of the most advanced electric car (200 to
Car, developed by ex-Formula One engineer 300 km or 10 hours
Guy Nègre for Luxembourg-based MDI, of driving), a factor which makes a perfect
uses compressed air, as opposed to the gas- choice in cities where the 80% of motorists
and- oxygen explosions of internal- drive at less than 60Km. The car has a top
combustion models, to push its engine's speed of 105 kmph. Refilling the car will,
pistons. Some 6000 zero-emissions Air Cars once the market develops, take place at
are scheduled to hit Indian streets by August adapted petrol stations to administer
of 2009. compressed air. In two or three minutes, and
at a cost of approximately 100 rupees, the
The Air Car, called the MiniCAT could cost car will be ready to go another 200-300
around Rs. 3,50,000 ($ 8177) in India and kilometers.
would have a range of around 300 km
between refuels. As a viable alternative, the car carries a
small compressor which can be connected to
The cost of a refill would be about Rs. 85 ($ the mains (220V or 380V) and refill the tank
2). Tata motors also plans to launch the in 3-4 hours. Due to the absence of
world's cheapest car, Tata Nano priced combustion and, consequently, of residues,
famously at One lakh rupees(£1200) by changing the oil (1 litre of vegetable oil) is
October. necessary only every 50,000Km.] The
temperature of the clean air expelled by the

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 exhaust pipe is between 0-15 degrees below internal air conditioning system with no
zero, which makes it suitable for use by the need for gases or loss of power.

Released on: 26th June, 2009

Consolidated Revenue in 2008-09 Rs. 70938.85 crores,
Loss after Tax Rs. 2505.25 crores
T
ata Motors today reported consolidated
Jaguar Land Rover: Jaguar Land Rover
gross revenue of Rs.74151.21 crores in made a profit in 2007 and continued to do so
2008-09. The consolidated financial in the first half of 2008. However, the global
perfor mance of the company is not meltdown, especially after July 2008 with
comparable to 2007-08 on account of the vehicle financing and demands drying up,
acquisition of Jaguar Land Rover in June impacted the auto industry worldwide,
2008. In 2007-08, the consolidated gross including Jaguar Land Rover. In 2008
revenue was Rs.40340.79 crores. therefore, Land Rover sales fell
considerably. However, Jaguar was able to
The consolidated revenues (net of excise) in maintain the sales level primarily on the
2008-09 amounted to Rs.70938.85 Crores back of a very strong consumer response to
(2007-08: Rs. 35660.07 crores). On a the newly launched XF sedan.
consolidated basis, the company reported a
Loss after Tax in 2008-09 of Rs. 2505.25 The company has actively responded to this
crores; in 2007-08, the company had changed situation by taking a number of
reported a Profit after Tax of Rs. 2167.70 urgent and long term measures. These
crores. include cutting costs drastically and working
on a plan of substantial cost reduction,
Tata Motors has reported a Basic Earnings aligning production with demand and tight
Per Share (EPS) loss of Rs.(56.88) (2007- control over cash flows. In addition, the
08: Profit of Rs. 56.24) for its consolidated company has introduced successfully new
operations. variants on both Jaguar and Land Rover
brands, and is to unveil the all new XJ sedan
Tata Motors has already reported on May shortly.
29, 2009, that its own stand-alone revenues
(net of excise) for 2008-09 amounted to TDCV:
Rs.25660.79 crores, and Profit after Tax for While market illiquidity and high interest
the year was Rs.1001.26 crores. rates in South Korea impacted the
company’s domestic performance, it
Business Highlights:
ARUN GULERIA
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 strongly grew exports. The company is
focusing on aggressive growth in both home
and international markets harnessing
stimulus packages announced by different
governments, as also product development
initiatives.

Telcon:
The company has launched several new
products, but was impacted by the credit
squeeze in the third quarter of the year. It
expects demand revival supported by
infrastructure spend in the country.

HVAL & HVTL:

Though impacted by lower volumes on the
back of decline in medium and heavy trucks,
the two companies significantly reduced
variable costs to counter the slowdown.
Their plans include strengthening in-house
design and validation capabilities and
expanding customer base in India and broad.
TMFL:
In line with Tata Motors’ sales in 2008-09,
there was a decline in disbursals. It is provider of leading Engineering and PLM
focused on incremental captive vehicle products in all major geographies winning
financing of Tata Motors through increased several projects, and has expanded presence
securitisation and borrowings on its own in aerospace design and aero structures.
books with higher ability to leverage. While the year ahead is challenging, it has
developed appropriate business structures
Tata Technologies: and processes to strengthen relationship with
The company has consolidated position strategic clients.
among the top three solutions and software

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 Released on: 29th May, 2009
Tata Motors Net Revenue in 2008-09 lower at Rs.25660.79 crores,
and Net Profit lower at Rs.1001.26 crores, due to market upheaval
T Ace and the Tata Magic, have continued to
ata Motors today reported gross revenue
improve penetration.
(stand- alone) of Rs.28599.27 crores (2007-
08: Rs.33093.93 crores) in 2008-09, a year Stimulus packages from the Government in
marked by severe demand contraction in the the last quarter of the year have to an extent
automobile industry. helped regenerate overall sales, as in the
automobile industry, but growth is yet to
Revenues (net of excise) for the year were revive to earlier levels.
Rs. 25660.79 crores compared to
Rs.28739.41 crores in 2007-08, a decline of The fall in volumes combined with peak
10.7%. The Profit before Tax was input prices and high interest rates brought
Rs.1013.76 crores compared to Rs.2576.47 margins under pressure. The company
crores in 2007-08, a decline of 60.7%. The accelerated cost reduction measures and
Profit after Tax for the year was Rs.1001.26 proactively managed working capital to
crores compared to Rs.2028.92 crores, a contain the impact as best as it could.
decline of 50.7%. The total 2008-09 sales volume (including
exports) is 506,421 units, compared to
The demand contraction was triggered by 585,649 units in the previous year. The
high interest rates and unavailability of company retained its domestic leadership
finance throughout the year; particularly in position in commercial vehicles, and
the October-December quarter post the continued to be amongst the top three in
global financial market upheavals. The passenger vehicles. Domestic commercial
impact on heavy commercial vehicles was vehicles sales amounted to 265,373 units
more severe, abetted by reduction in freight (2007-08: 312,935 units). The company
movement in different segments and increased market share in commercial
customer concerns on economic conditions. vehicles to 63.8% (2007-08: 62.2%), aided
Small commercial vehicles, like the Tata by its wide product offering. Domestic

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100
 passenger vehicles sales amounted to
207,512 units (2007-08: 218,055 units).The
launch of the second generation Tata Indica
Vista and the continuing good run of the
Tata Indigo CS has helped recover market
share in passenger vehicles in the second
half which stands at 13.1% for the year
(2007-08: 14%) and a March exit share of
14.5%. Tata Motors’ exports were 33,536
numbers (2007-08: 54,659 numbers),
impacted by the worldwide downturn in the
industr y. dividend of Rs.6/- per Ordinary share and
The launch of the Tata Indica Vista was
augmented by the distribution of the Fiat
500 and Linea, both of which have been
received well. In commercial vehicles too,
new products, introduced during the year or
the previous year, offering benefits like
higher fuel efficiency, grew at a faster rate
and helped enhance market share.
The landmark events of the year were the
acquisition of Jaguar Land Rover on June 2,
2008, and the launch of the Tata Nano on
March 23, 2009. Over 2.03 lakh fully paid
bookings were received for the Tata Nano,
the deliveries of which will begin from July
2009. The Pantnagar plant began producing
the Tata Nano during the year, while the
Sanand plant is rapidly progressing towards
completion.
DIVIDEND
The Board of Directors has recommended a
Rs.6.50 per ‘A’ Ordinary share of Rs.10/-
each for the financial year 2008-09 (2007-
08: Rs.15/- for Ordinary share). The
dividend is subject to approval of
shareholders; tax on the dividend will be
borne by the Company.
The Audited Financial Results for the
financial year ended March 31, 2009, are
enclosed.

__________________________________________________________
EFFECT OF INFLATION ON CAR MARKET
- Hindustan Times

T in a scenario where the stock market is on a

he growth in the car market has shown
declining results as a result of the inflation.
The effect on inflation has affected every
sector which is related to car manufacturing
and production. The increase in the price of
fuel and the steel has led to a slower growth
rate of the car industry in India. The
production of Indian cars has been brought
to a noticeable halt for inflation. inflation has taken the rise in the price rate
It has also been noticed that leading car
manufacturer in India like the Tata Motors,
Maruti, Hyndai and Honda are trying hard to
boost their production and sales of the cars
slow rise. Due to inflation it has also been
noticed that the sales of car are being
motivated by the discount offers that the
automobile companies are offering to the
buyers. Some car manufactures have gone to
the extent of giving exchange offers to the
consumers and some have introduced a
competitive finance rates. The effect of
of the cars by 3-4%, which in turn suffices
the need to meet the rise in price of the raw
materials to build a car.

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 The effect of inflation has affected not only
the production and sales of Indian cars but
also has significantly affected the car dealer,
officials and car financers. Research and
observations have led to the conclusion that
in the year 2008, the car market and the car
industr y is expected to witness 8-9% fall.

The effect of inflation on the car

manufacturers have in turn affected the
dealers in a way where they are being
pressurized to push the sales graph higher
and keep a high profit margin. The financers
in the cycle are pressurized by both car
manufacturers and dealers to pay the
consumers a cent percent financial
assistance by reducing on the loan interest
rate.

Overall it has been noticed that the

automobile market in India and specially the
car market in India have experienced a
downtrend with the inflation affecting
almost every industry to which the car
market is essentially related.

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 THEORETICAL RELEVANCE OF TATA MOTORS’S LONG TERM FINANCIAL BEHAVIOR
- Financial Institute
“As per the Trade off theory, the marginal cost and benefit of debt in determining the best financial
structure of a company is considered, at most considerate liability percentage, a companies market
value is brought up and the companies whose liability percentage diverge from the best possible can
increase their price by bringing their liability percentage towards the target”. (European Journal of
Economics)

“The pecking order theory is based on the idea of asymmetric information between managers and
investors. A company increases its debits by issuing new equities to finance new projects because if
not done the same way then and new investors are brought into consideration then the new Investors
will make most of the profit which is ”the net present value (NPV)” of that particular project which
will cause lose to the present share holders. To avoid this most of the firms tend to finance their new
projects using a security that is not undervalued in the market, which can be internal funds or some
other less dangerous debt securities. Therefore, this is what affects the choice between internal and
external financing. (European Journal of Economics).

“The M&M theor y is a theory of capital structure which explains that a company’s market price
is definite by its earning power and by the basic risk of its resources, the three most important
ways of funding, they are issuing shares, borrowing and retaining profits
“As opposed to dispersing them to shareholders in dividends” (Modigliani-Miller Theorem -
M&M)

This theory also says that if there are no taxes, bankruptcy costs, and asymmetric information, in
an efficient market then a company’s value becomes solid for finance by its sources. It makes no
difference how the company’s funds are increased either by issuing stock or by selling debt and
neither matters the dividend policy of the company”. (Modigliani-Miller Theorem - M&M)
Therefore, According to the above composed data the Tata motors raised funds from NYSE in
2004, and then from Bombay stock Exchange, Private Equity Funds, Sale of Stakes, Inter-Group
Sales and Bridge loans, so, this is in accordance to “the pecking order theory which says that a
company increases its debits by issuing new equities to finance new projects because if not done
the same way then and new investors are brought into consideration then the new Investors will
make most of the profit which is ”the net present value (NPV)” of that particular project which
will cause lose to the present share holders. To keep away from this situation most of the firms
tend to finance their new projects using a security that is not undervalued in the market, which
can be internal funds or some other less dangerous debt securities. Therefore, this is what affects
the choice between internal and external financing”.
Hence, the pecking order theory explains the need of the firms to rely on the internal sources of
the company for finances and also explains why the companies prefer debt to equity if external
financing is required.
COMPANY
PROFILE
 TATA GROUP
Tata is a rapidly growing business group based in India with significant international
operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251,543 crore), of
which 61 per cent is from business outside India. The Group employs around 350,000 people
worldwide. The Tata name has been respected in India for 140 years for its adherence to strong
values and business ethics.

The business operations of the Tata Group currently encompass seven business sectors:
communications and information technology, engineering, materials, services, energy, consumer
products and chemicals. The Group’s 27 publicly listed enterprises have a combined market
capitalization of some $60 billion, among the highest among Indian business houses, and a
shareholder base of 3.2 million. The major companies in the Group include Tata Steel, Tata
Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels
and Tata Communications.

The Group’s major companies are beginning to be counted globally. Tata Steel became
the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among the top
five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land
Rover. TCS is a leading global software company, with delivery centres in the US, UK, Hungar y,
Brazil, Uruguay and China, besides India. Tata Tea is the second largest branded tea company in
the world, through its UK-based subsidiary Tetley. Tata Chemicals is the world’s second largest
manufacturer of soda ash. Tata Communications is one of the world’s largest wholesale voice
carriers.
In tandem with the incr easing international footprint of its companies, the Group is also
gaining international recognition. Brand Finance, a UK-based consultancy firm, recently valued
the Tata brand at $11.4 billion and ranked it 57th amongst the Top 100 brands in the world.
Businessweek ranked the Group sixth amongst the World’s Most Innovative Companies. And the
Reputation Institute, USA, recently rated it as the World’s Sixth Most Reputed Firm.

Founded by Jamsetji Tata in 1868, the Tata Group’s early years were inspired by the spirit
of nationalism. The Group pioneered several industries of national importance in India: steel,
power, hospitality and airlines. In more recent times, the Tata Group’s pioneering spirit has been
showcased by companies like Tata Consultancy Services, India’s first software company, which
pioneered the international delivery model, and Tata Motors, which made India’s first
indigenously developed car, the Indica, in 1998 and recently unveiled the world’s lowest-cost
car, the Tata Nano, for commercial launch by end of 2008.

The Tata Group has always believed in returning wealth to the society it serves.
Twothirds of the equity of Tata Sons, the Tata Group.s promoter company, is held by
philanthropic trusts which have created national institutions in science and technology, medical
research, social studies and the performing arts. The trusts also provide aid and assistance to
NGOs in the areas of education, healthcare and livelihoods. Tata companies also extend social
welfare activities to communities around their industrial units. The combined development-
related expenditure of the Trusts and the companies amounts to around 4 per cent of the Group’s
net profits.

Going forward, the Group is focusing on new technologies and innovation to drive its
business in India and internationally. The Nano car is one example, as is the Eka supercomputer
(developed by another Tata company), which in 2008 is ranked the world’s fourth fastest. The
Group aims to build a series of world class, world scale businesses in select sectors. Anchored in
India and wedded to its traditional values and strong ethics, the Group is building a multinational
business which will achieve growth through excellence and innovation, while balancing the
interests of its shareholders, its employees and wider society.
CORE VALUES OF TATA
At the Tata Group our purpose is to improve the quality of life of the communities we
serve. We do this through leadership in sectors of national economic significance, to which the
Group brings a unique set of capabilities.

This requires us to grow aggressively in focused areas of business. Our heritage of

returning to society what we earn evokes trust among consumers, employees, shareholders and
the community.

This heritage is being continuously enriched by the formalization of the high standards of
behavior expected from employees and companies. The Tata name is a unique asset representing
leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally
competitive is the route to sustained growth and long-term success.

FIVE CORE VALUES

The Tata Group has always sought to be a value-driven organization. These values continue to
direct the Group’s growth and businesses. The five core Tata values underpinning the way we do
business are:

Integrity: We must conduct our business fairly, with honesty and transparency. Everything
we do must stand the test of public scrutiny.

Understanding: We must be caring, show respect, compassion and humanity for our
colleagues and customers around the world, and always work for
. the benefit of the communities we serve

Excellence: We must constantly strive to achieve the highest possible standards in our day-to-
day work and in the quality of the goods and services we provide.
Unity: We must work cohesively with our colleagues across the Group
and with our
customers and partners around the world, building strong relationships
based on tolerance, understanding and mutual cooperation.

Responsibility: We must continue to be responsible, sensitive to the countries,

communities and environments in which we work, always ensuring
that what comes from the people goes back to the people many times
over.
 TATA Group Companies
Family pride
The TATA family of enterprises comprises 98 companies in seven business sectors. This section
lists all these companies under the sectors in which they operate, besides the two promoter
companies of the Group.
The Seven Business Sectors are:
Engineering (AUTOMOTIVE):
• Tata Auto comp systems:
Subsidiaries/Associates/Joint Ventures: International Automotive, Knorr Bremse Systems
for commercial Vehicles, Tata Auto Comp GY Batteries, TACO Engineering, TACO
Faurecia Design Centre, TACO Hendrickson Suspension Systems, TACO Interiors and
Plastics Division, Taco Kunstofftechnik, TACO MobiApps Telemaics, TACO Supply
Chain Management, TACO Tooling, TACO Visteon Engineering Center, Tata Ficosa
Automotive Systems, Tata Johnson Controls Automotive, Tata Toyo Radiator, Tata Yazaki
Auto Comp, TC Springs, Technical Stampings Automotive .

• Tata Motors:
Subsidiaries /Associates/ Joint Ventures: Concorde Motors, HV Axels, HV
Transmissions, Nita Company, TAL Manufacturing Solutions, Tata Cummins, Tata
Daewoo Commercial Vehicles Company, Tata Engineering Services, Tata Precision
Industries, Tata Technologies, Telco construction Equipment.

• Engineering Services
Tata Projects, TCE Consulting Engineers, Voltas

• Engineering Products
TAL Manufacturing Solutions, Telco Construction Equipment Company, TRF

METALS:
• TATA STEEL
Subsidiaries /Associates/ Joint Ventures: Hooghly Met Coke and Power Company,
Jamshedpur Injection Powder (Jamipol), Jamshedpur Utility and Service Company
Limited (JUSCO), Lanka Special Steel, Mjunction Serves, NatSteel, Sila Eastern
Company, Tata Blue Scope Steel, Tata Metallic, Tata Pigments, Tata Refractories, Tata
Ryerson, Tata Sponge Iron, Tata steel (Thailand), Tata Steel KZN, Tayo Rolls, The
Dhamra Port Company, The Indian Steel and Wire Products, The Tinplate Company of
India, Tm International Logistics, TRF.
ENERGY:
• POWER
• Tata BP Solar India
• Tata Power
Subsidiaries /Associates/ Joint Ventures: Tata Ceramics, Tata Power Trading, North
Delhi Power Limited

• OIL AND GAS

• Tata Petrodyne

CHEMICALS:
• Rallis India
• Tata Pigments
• Tata Pigments

• PHARMA
• Advinus Therapeutics

SERIVES:
• HOTELS AND REALTY
• Indian Hotels (Taj Group)
Subsidiaries /Associates/ Joint Ventures: Taj Air, Roots Corporation (Ginger Hotels)

• THDC
• Tata Realty and Infrastructure

• FINANCIAL SERVICES
• Tata AIG General Insurance, Tata AIG Life Insurance, Tata Asset Management, Tata
Capital, Tata Financial Services, Tata Investment Corporation

• OTHER SERVICES
• Tata Quality Management Services, Tata Services, Tata Strategic Management
Group
CONSUMER PRODUCTS:
• Infiniti Retail
• Tata Tea
Subsidiaries /Associates/ Joint Ventures: Tata Coffee, Tata Tetley, Tata Tea Inc
• Tata Ceramics
• Tata McGraw Hill Publishing Company
• Titan Industries
• Trent

INFORMATION SYSTEMS AND COMMUNICATIONS:

• Nelito Systems
• Tata Consultancy Services
Subsidiaries /Associates/ Joint Ventures: APONLINE, Airline Financial Support
Services, Aviation Software Development Consultancy, CMC, CMC Americas Inc,
Conscripti, HOTV, Tata America International Corporation, WTI Advance Technology.
• Tata Elxsi
• SerWizSol
• Tata Interactive Systems
• Tata Technologies

COMMUNICATIONS
• Tata Sky
• Tata Teleservices
Subsidiaries /Associates/ Joint Ventures: Tata Teleservices (Maharashtra)
• Tata Communication
• Tata Net

INDUSTRIAL AUTOMATION
• Nelco
Subsidiaries /Associates/ Joint Ventures: Tatanet
 TATA MOTORS LIMITED
The largest passenger automobile and commercial vehicle manufacturing company of
India Tata Motors Limited, was formerly called TELCO (TATA Engineering and Locomotive
Company), has its headquarters in Bombay, now Mumbai, India. Established in 1945, listed on
the New York Stock Exchange in 2004 has created Rs. 320 billion wealth and was one of the top
10 wealth creators in India, With manufacturing facilities in the towns of Jamshedpur, Lucknow,
and Pune. This company was founded by Jamshetji Tata and is run by Ratan Tata under the
flagship company known as Tata and sons group. He commands 22000 employees working in
three plants as well as other regional and zonal offices across the length and breadth of India.

Tata motor’s passenger cars still need to reach acceptable international requirements. The
company commands an imposing 65% share of the domestic commercial vehicle market and is
tr ying to modernize this segment. The financial business of Tata motors was separated into a
subsidiar y company in sep. 2006, where it recorded a strong financial performance during the
last 5 year period. From year 2003-2007, the profits of the company went up at a CAGR of
36.4%, to attain Rs. 331, 525 million in 2007 from Rs. 95, 731 Million in 2003. B y floating two
rights issues at the end of Sep 2008 Tata Motors Ltd expected to raise Rs 4, 150 crores. They are
offering one ordinary share valued at Rs. 340 every six shares expecting to net Rs. 2.90 Crores,
the so called “A” share would have different voting and dividend rights, for every such 6 shares
held at a face value of 305 would raise Rs. 1.960 Crores, these proceed would be utilized for an
early repayment of the short term funding of 2.3 Billion $ (Rs. 10,189 Crores) Borrowed for
Acquisition of jaguar and Land Rover from their principle “The Ford Motor Company’s”.

It is also in talks with private equity funds to offload 25% of stake in each of the
following 6 unlisted group units, they are Tata Daewoo commercial vehicle company, HV
transmissions, Tata motors finance, Tata technologies and TELCO construction equipment, the
sales of the stakes would possible conclude by June 2009, helping it to raise further funds for this
acquisition, earlier in July it sold 24% stake in an Auto component unit to a group firm and
booked a profit of Rs. 110 crores, it also sold 10 million shares or 1.36% of Tata steel for RS.
486 crores to Tata Sons, the holding company of whole Tata group firms.
 "The Company aims to monetize a part of its funds through a phased divestment of
certain investments preferably as inter-group sales wherever possible at current market prices in
the coming six to eight months," the money that will be released from these investments will
become a part of the capital to be lifted for repayment of the bridging loan taken for the Jaguar-
Land Rover acquisition. Taken in March 2008" (Tata Motors Profile)

It took a 15 month bridge loan of 3 billion in March from a consortium of banks to

finance the JLR accusation and its expansion plans

Since the rights issue was announced on 28 may its share value has fallen more than 30% and th
fell by 1.82% to Rs. 429.85 on BSE, even though the bench mark index gained 3.8% to end at
15, 049.86 points.

The Analysts say that, this is a

strategic move taken by Tata Motors because it is allowing the
company to make a lot of profit even when the market is in the financial pressure allows Tata
sons to raise its wager in group companies.

If the company will follow the above mentioned trends then possibly it can raise its finances in a
low liquidity and high interest rate set-up.
 INDUSTRY OUTLOOK
The Indian Automobile Industry enjoys the advantage of low cost base, high skilled
labour, strong ancillary network coupled with Government’s support by way of concessional
excise duty of 16% for small cars, ban on overloading and also significant investments proposed
for removing infrastructure bottlenecks. The CV industry is directly related to the economic
growth and development. The growth in demand for CVs is directly related to the IIP index and
any upsurge in economic activities will call for more cargo movement in the economy.

The domestic CV market grew at a CAGR of 26.7% during the last 6 years. In FY07, the
CV segment registered a growth of 32.2% due to Supreme Court’s ban on over loading trucks.
However, we believe that this is a one-time demand and the CV segment may not witness such
kind of growth repeatedly. There is a regulation that restricts the movement of vehicles above
certain age (15 years in National Capital Region and 8 years in Mumbai). Though the rule is not
being followed strictly at present, in future if this rule is implemented strictly it will result in
huge replacement demand.

With the Indian economy expected to grow at 8.5% to 9% in coming years, we expect the
demand for CVs to be fairly decent except for the fact that the industry is currently experiencing
a correction due to sharp spurt in demand in the previous years.

The CV industry witnessed a change in demand dynamics in last few years. The demand
for LCVs in the <=3.5 tonnes segment is rising at the cost of demand in 5 to 7.5 tonnes category,
while demand in 7.5 to 12 tonnes segment and 16.2 to 25 tonnes segment is booming at the cost
of demand in 12 to 16.2 tonnes segment. Demand for trailers of >35.2 tonnes is witnessing a
surge while demand for semi-trailers in 26.4 to 35.2 tonnes segment is suffering. This structural
shift in demand dynamics is due to the evolution of Hub & Spoke model of distribution, which is
now adopted by transportation players because of improved road infrastructure and also the ban
on trucks in many cities by the authorities to tackle the traffic congestion issues. According to the
Hub & Spoke model, HCVs plying over the highways to transport goods to different states and
districts, while MCVs are used in distributing goods to different cities and the last leg of
distribution in intra city is done by using <=3.5 tonner vehicles.
History
 History of TATA Motors
1.

Tata Motors launches its first truck in collaboration with Mercedes-Benz.

Tata Motors is a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata and J.
Baker. The company was established in 1945 as a locomotive manufacturing unit and later
expanded its operations to commercial vehicle sector in 1954 after forming a joint venture with
Daimler-Benz AG of Ger many.

2. TATA Indica

The first generation Tata Indica

After years of dominating the commercial vehicle market in India, Tata Motors entered the
passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. After the
launch of three more vehicles, Tata Estate (1992, a stationwagon design based on the earlier
'TataMobile' (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998,
India's first sports utility vehicle). Tata launched the Indica in 1998, the first fully indigenous
passenger car of India. Though the car was initially panned by auto-analysts, the car's excellent
fuel economy, powerful engine and aggressive marketing strategy made it one of the best selling
cars in the history of the Indian automobile industry. A newer version of the car, named Indica
V2, was a major improvement over the previous version and quickly became a mass-favourite. A
badge engineered version of the car was sold in the United Kingdom as the Rover CityRover .
Tata Motors also successfully exported large quantities of the car to South Africa.The success of
Indica in many ways marked the rise of Tata Motors.

3. TATA Brads
DAEWOO ACQUISITION

Tata Novus is one

of the best selling
commercial trucks
in South Korea.
With the success of Tata Indica, Tata Motors aimed to increase its presence worldwide. In 2004,
it acquired the Daewoo Commercial Vehicle Company of South Korea. The reasons behind the
acquisition were:
Company’s global plans to reduce domestic exposure. The domestic commercial vehicle
market is highly cyclical in nature and prone to fluctuations in the domestic economy.
Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in
 the light commercial vehicle (LCV) segment. Since the domestic commercial vehicle
sales of the company are at the mercy of the structural economic factors, it is increasingly
looking at the international markets. The company plans to diversify into various markets
across the world in both MHCV as well as LCV segments.

To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata
Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage on the
strong presence of TDCV in the heavy-tonnage range and introduce products in India at
an appropriate time. This was mainly to cater to the international market and also to cater
to the domestic market where a major improvement in the Road infrastructure was done
through the National Highway Development Project

Tata remains India's largest heavy commercial vehicle manufacturer and Tata Daewoo is
the 2nd largest heavy commercial vehicle manufacturer in South Korea. Tata Motors has
jointly worked with Tata Daewoo to develop trucks such as Novus and World Truck and
buses namely, GloBus and StarBus.

HISPANO CARROCERA

Hispano
Divo at
the 2008
FIAA in
Madrid
In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors became
acquired 21% stake in Hispano Carrocera SA, Aragonese bus manufacturing company giving it
controlling rights of the company.
JAGUAR CARS AND LAND ROVER
After the acquisition of British Jaguar Land Rover (JLR) business, which also includes the
Rover , Daimler and Lanchester brand names Tata Motors became a major player in the
international automobile market.

Jaguar XF Land Rover's Range Rover

On 27 March 2008, Tata Motors reached an agreement with Ford to purchase their Jaguar and
Land Rover operations for US$ 2 billion. The sale was completed on 2 June 2008 Tata has gained
the rights to the Daimler , Lanchester , and Rover brand names.
In addition to the brands, Tata Motors has also gained access to 2 design centers and 3 plants in
UK. The key acquisition would be of the intellectual property rights related to the technologies.
 JOINT VENTURES

Tata MarcoPolo released this low-floor bus in India and now it is widely used as public transport
• In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors
acquired 21% stake in Hispano Carrocera SA, Aragonese bus manufacturing company
and introduced its highend inter-city buses in the country.

• Tata Motors has also formed a 51:49 joint venture with Marcopolo S.A., a Brazil-based
global leader, lead by Brian Behrle, in bus body building. This joint venture is to
manufacture and assemble fully-built buses and coaches targeted at developing mass
rapid transportation systems.

• The joint venture will absorb technology and expertise in chassis and aggregates from
Tata Motors, and Marcopolo will provide know-how in processes and systems for
bodybuilding and bus body design.
 IMPORTANT
DEVELOPMENTS

In 2005 & 06

Tata Ace was India's first mini truck

Tata Ace, India's first indigenously developed sub-one ton mini-truck, was launched in
May 2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had
changed the dynamics of the light commercial vehicle (LCV) market in the countr y by creating a
new market segment termed the small commercial vehicle (SCV) 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 percent 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 is still one of the
number makers for TML, TML sold the 2,00,000th Ace in August 2008, within 4 years since its
introduction.
Tata Ace has also been exported to several European, South American and African
countries. Electric-versions of Tata Ace are sold through Chr ysler's Global Electric Motorcars
division.

In 2007
In 2007, Tata Motors launched several concept models and future designs of existing
models. It also formed joint ventures with various local companies in several countries to
assemble Tata cars. Tata Motors launched a re-designed version of Tata Xenon TL during Motor
Show Bologna which would be assembled in Thailand and Argentina. A pick-up variant of Tata
Sumo was also launched under the program 'Global Pick-Up'. The company plans to launch the
new pick- up model in India, Southeast Asia, Europe, South Africa, Turkey and Saudi Arabia.
Tata Motors also unveiled newer model of Tata Indigo and Tata Elegante concept-car during the
Geneva Auto Show.
Tata Motors also formed a joint venture with Fiat and gained access to Fiat’s diesel
engine technology. Tata Motors is looking to extend its relationship with Fiat and Iveco to other
segments like the 'Global Pick-Up' program. The launch of the 'Global Pick-Up' will mark the
entry of the company into developed markets like Europe and the United States. The project was
initially collaboration between Tata Motors and its subsidiary Tata Daewoo Commercial
Vehicles, but later Tata Motors decided to work with Iveco as Daewoo’s design was not in sync
with the needs of sophisticated European customers. The company has formed a joint venture
with Thailand’s Thonburi Company, an independent auto assembler, in which Tata Motors will
hold a 70% stake.
In 2008
COMPRESSED AIR CAR

Tata OneCAT

Motor Development International of Luxembourg has developed the world's first prototype of a
compressed air car , named OneCAT. In 2007, MDI owner Guy Negre was reported to have "the backing
of Tata".
 It has air tanks that can be filled in 4 hours by plugging the car into a standard electrical
plug. In 2008 MDI planned to also design a gas station compressor, which would fill the tanks in
3 minutes. There are no gasoline costs and no fossil fuel emissions from the vehicle when run in
town, but "the compressed air driving the pistons can be boosted by a fuel burner".

OneCAT is a five seat vehicle with a 200-litre (7.1 cu ft) trunk. With full tanks it will run
at 100 km/h (62 mph) for 90 kilometers (56 mi) range in urban cycle. It is actually a dual fuel car
but it is more efficient than any present Hybrid cars.

IN 2009 AND ONWARDS

Electric vehicles
Tata Motors unveiled the electric versions of passenger car Tata Indica and commercial
vehicle Tata Ace . Both run on lithium batteries. The company has indicated that the electric
Indica would be launched locally in India in about 2010, without disclosing the price. The
vehicle would be launched in Norway in 2009.

Tata Motors' UK subsidiary, Tata Motors European Technical Centre , has bought a 50.3%
holding in electric vehicle technology firm Miljøbil Grenland/ Innovasjon of Norway for
US$1.93 M, which specialises in the development of innovative solutions for electric vehicles,
and plans to launch the electric Indica hatchback in Europe next year.
 GLOBAL OPERATIONS
Tata Motors has been aggressively acquiring foreign brands to increase its global
presence. Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them
is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in
2008. Tata Motors has also acquired from Ford the rights to three other brand names: Daimler ,
Lanchester and Rover . In 2004, it acquired the Daewoo Commercial Vehicles Company, South
Korea’s second largest truck maker. The rechr istened Tata Daewoo Commercial Vehicles
Company has launched several new products in the Korean market, while also exporting these
products to several international markets. Today two-thirds of heavy commercial vehicle exports
out of South Korea are from Tata Daewoo.

In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus
and coach manufacturer, giving it controlling rights of the company. Hispano’s presence is being
expanded in other markets. On Tata's journey to make an international foot print, it continued its
expansion through the introduction of new products into the market range of buses (Starbus &
Globus) as well as trucks (Novus). These models were jointly developed with its subsidiaries
Tata Daewoo and Hispano Carrocera. In May, 2009 Tata unveiled the Tata World Truck range
jointly developed with Tata Daewoo. They will debut in South Korea, South Africa, the SAARC
countries and the Middle-East by the end of 2009. In 2006, it formed a joint venture with the
Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture
fully-built buses and coaches for India and select international markets. Tata Motors has
expanded its production and assembly operations to several other countries including South
Korea, Thailand, South Africa and Argentina and is planning to set up plants in Turkey ,
Indonesia and Eastern Europe . Tata also franchisee/joint venture assembly operations in Kenya,
Bangladesh, Ukraine, Russia and Senegal. Tata has dealerships in 26 countries across 4
continents. Though Tata is present in many counties it has only managed to create a large
consumer base in the Indian Subcontinent namely India, Bangladesh, Bhutan, Sri Lanka and
Nepal and has a growing consumer base in Italy, Spain and South Africa.
 The Government of India announced an automobile policy in December 1997. The policy
required majority-owned subsidiaries of foreign car fir ms to invest at least US$50 million in
equity if they wished to set up manufacturing projects in India. It also forced them to take on
export obligations to fund their auto part imports and required them to submit to a schedule for
increasing the share of locally made parts in their cars. Mere car assembling operations were not
welcomed.

An Indian cabinet panel will soon consider a new automobile policy that aims to set fresh
investment guidelines for foreign firms wishing to manufacture vehicles in the country.
Investments in making auto parts by a foreign vehicle maker will also be considered a part of the
minimum foreign investment made by it in an auto-making subsidiar y in India. The move is
aimed at helping India emerge as a hub for global manufacturing and sourcing for auto parts. The
policy sets an export target of $1 billion by 2005 and US$2.7 billion by 2010.

The policies adopted by Government will increase competition in domestic market,

motivate many foreign commercial vehicle manufactures to set up shops in India, whom will
make India as a production hub and export to nearest market. Thus Tata Motors CV will have to
face tough competition in near future, which might affect its growth negatively.
 The purchase of Jaguar Cars is expected
to help give Tata Motors a foothold in
European and American markets.

With the unveiling of Tata Elegante

during Geneva Motor Show, Tata
Motors revealed its intention to
enter the sedan and sports car markets.

Tata Indica assembled in Thailand

and Argentina .

Tata Prima
The Luxury Sedan was designed by Pininfrina and has marked the entry of Tata into the
international sedan market. The car is to be sold in India by 2013 and around the world by 2015
Tata Motors has expanded its production and assembly operations to several other countries
including South Korea, Thailand, South Africa and Argentina and is planning to set up plants in
Turkey, Indonesia and Eastern Europe.
 FUTURE CHALLENGES
Mahindra and Mahindra: JV with ITEC, North American leader in heavy trucks. •
M&M has formed a 51:49 JV called Mahindra International with ITEC, USA (parent
Navistar International), to manufacture commercial vehicles and to bolster its position in
the CV business. ITEC is the leader in medium and heavy trucks and buses in North
America, and is the world's largest manufacturer of medium-duty diesel engines.
Mahindra International aims to have a presence across the CV market (6-35 tonnes
GVW) with variants of passenger transport, cargo and specialised load applications and is
likely to start producing medium/heavy commercial vehicles from FY09.

Force Motors Ltd: JV with MAN for manufacturing high-tonnage vehicles Force •
Motors has paired up with MAN in a 70:30 JV to manufacture high-tonnage and specialty
vehicles, such as long-haul trucks, tippers, tractor trailers and multi-axle vehicles in the
16-32 tonne range at its Pithampur plant, with an initial capacity of 24,000 units per
annum and at an investment of Rs7bn. The JV plans to sell nearly half of its production in
the domestic market, while the rest is to be exported to the Middle East, Turkey, Russia,
Asia and Africa. Further, the two companies have formed another JV to manufacture
buses in India from end-2007.

Ashok Leyland: Acquisition of Czech Republic-based Avia. Ashok Leyland (ALL) •

recently acquired the truck unit of Czech Republic-based Avia for US$35m. Avia
manufactures 6-9 tonne LCVs and has a capacity of 20,000 units per annum. The
acquisition has given ALL direct access to an entire range of Avia trucks, Avia’s press
shop with dies and tools, welding lines, state-of-the-art paint shop and R&D facilities.
ALL has also entered into technology agreements with Hino Motors of Japan and ZF of
Germany to complement its in-house R&D efforts and developing complementary
components and aggregates.

Suzuki : Suzuki through its subsidiary, Maruti Suzuki in the Indian market may also be •
alarming. Maruti has aggressively launched family cars to undermine the Tata models.
 MILESTONES

1945 Tata Engineering and Locomotive Co. Ltd. was established to manufacture •
locomotives and other engineering products.
1948 Steam road roller introduced in collaboration with Marshall Sons (UK). •

1954 Collaboration with Daimler Benz AG, West Germany, for manufacture of •
medium commercial vehicles. The first vehicle rolled out within 6 months of the
contract.
1959 Research and Development Centre set up at Jamshedpur. •

1977 First commercial vehicle manufactured in Pune. •

1983 Manufacture of Heavy Commercial Vehicle commences. •

1985 First hydraulic excavator produced with Hitachi collaboration. •

1986 Production of first light commercial vehicle, Tata 407, indigenously designed, •
followed by Tata 608.
1991 Launch of the 1st indigenous passenger car Tata Sierra . •
One millionth vehicle rolled out. •
1994 Launch of Tata Sumo - the multi utility vehicle. •

1995 Mercedes Benz car E220 launched. •

1996 Tata Sumo deluxe launched. •

1997 Tata Sierra Turbo launched. •

1998 Tata Safari - India's first sports utility vehicle launched. •

2 millionth vehicles rolled out. •
Indica, India's first fully indigenous passenger car launched. •
2001 Indica V2 launched - 2nd generation Indica. •
100,000th Indica wheeled out. •
Launch of the Tata Safari EX •

2002 2,00,000th Indica rolled out. •

Launch of the Tata Sumo'+' Series •
Launch of the Tata Indigo . •
Tata Engineering signed a product agreement with MG Rover of the UK. •
2003 On 29th July, J. R. D. Tata's birth anniversary, Tata Engineering becomes Tata •
Motors Limited.
3 millionth vehicle produced. •
First CityRover rolled out •

2004 Tata Motors and Daewoo Commercial Vehicle Co. Ltd. sign investment •
agreement and completes acquisition of Daewoo Commercial Vehicle Company
Tata Daewoo Commercial Vehicle Co. Ltd. (TDCV) launches the heavy duty •
truck 'NOVUS' , in Korea
Sumo Victa launched •
Indigo Marina launched •
Tata Motors lists on the NYSE •
2005 Tata Motors rolls out the 500,000th Passenger Car from its Car Plant Facility in •
Pune
The Tata Xover unveiled at the 75th Geneva Motor Show •
Branded buses and coaches - Starbus and Globus - launched •
Tata Ace , India's first mini truck launched •
The power packed Safari Dicor is launched •
Tata Motors launches Indica V2 Turbo Diesel . •
One millionth passenger car produced and sold •
Inauguration of new factory at Jamshedpur for Novus •
Launch of Tata Novus •
 Launch of Novus range of medium trucks in Korea, by Tata Daewoo Commercial •

Vehicle Co. (TDCV)

2006 Tata Motors vehicle sales in India cross four million mark •
Indica V2 Xeta launched •
Passenger Vehicle sales in India cross one-million mark •
Tata Motors first plant for small car to come up in West Bengal •
Tata Motors and Fiat Group announce three additional cooperation agreements •
2007 Construction of Small Car plant at Singur, West Bengal , begins on Januar y 21 •
New 2007 Indica V2 range is launched •
Tata Motors and Thonburi Automotive Assembly Plant Co. (Thonburi), announce •
formation of a joint venture company in Thailand to manufacture, assemble and
market pickup trucks.
Roll out of 100,000th Ace •
Tata- Fiat plant at Ranjangaon inaugurated •
Launch of a new Upgraded range of its entry level utility vehicle offering, the •
Tata Spacio.
Launch of Magic, a comfortable, safe, four-wheeler public transportation mode, •
developed on the Ace platform
Launch of Winger , India’s only maxi-van •
Fiat Group and Tata Motors announce establishment of Joint Venture in India •
Launch of the Sumo Victa Turbo DI , the new upgraded range of its entry-level •
utility vehicle, the Sumo Spacio
Tata Motors launches Indica V2 Turbo with dual airbags and ABS •
Launch of new Safari DICOR 2.2 VTT range, powered by a new 2.2 L Direct •
Injection Common Rail (DICOR) engine.
Rollout of the one millionth passenger car off the Indica platform. •
2008 Latest common rail diesel offering- the Indica V2 DICOR , launched. •
Indigo CS (Compact Sedan), world’s first sub four-metre sedan, launched. •
Launch of the new Sumo -- Sumo Grande, which combines the looks of an SUV •
 with the comforts of a family car.
Tata Motors unveils its People's Car, Nano, at the ninth Auto Expo. •
Xenon, 1-tonne pick-up truck, launched in Thailand. •
Tata Motors signs definitive agreement with Ford Motor Company to purchase •
Jaguar and Land Rover.
Tata Motors completes acquisition of Jaguar Land Rover. •
Tata Motors introduces new Super Milo range of buses. •
Tata Motors is Official Vehicle Provider to Youth Baton Relay for The III •
Commonwealth Youth Games Pune 2008.
Indica Vista – the second generation Indica, is launched. •
Tata Motors launches passenger cars and the new pick-up in D.R. Congo. •

2009 • Tata Nano is launched.

 MANAGEMENT
Board of Directors:
Mr. Ratan N Tata (Chaiman)

Mr. N. A. Soonawala
Dr. J.J. Irani
Mr. V.R. Mehta
Mr. Nusli N Wadia
Mr. S. M Palia
Dr. R. A. Mashelkar
Mr. Ravi Kant
Mr. P. M. Telang

Senior Management
Mr. Ravi Kant : Executive Director
Mr. P. M Telang : Executive Director
Mr. Rajive Dube : President (Passenger Cars)
Mr. C Ramkrishnan : Chief Financial Officer
Mr. P.Y. Gurv : Vice President (Corporate Finance- Accounts and Taxation)
Dr. S. J. Tambe : Vice President (Human Resource)
Mr. Zackria Sait : Vice President (Technical Services)
Mr. A. M Mankad : Head (Car Plant)
Mr. S. B. Borwankar : Head (Jamshedpur Plant)
Mr. S. Krishnan : Vice President (Commercial-PCBU)
Mr. Ravi Pisharody : Vice President (Sales & Marketing)
Mr. H. K. Sethna : Company Secretary
 AWARDS

PCBU bags Handa Golden Key Award….

Tata Motors receives Uptime Champion Award 2007.
Aggregates Business, CVBU, bags ’Best Supplier Award’ from ECEL.
‘NDTV Profit’ Business Leadership Award.
Tata Motors bags National Award for Excellence in Cost Management…
Tata Motors’ TRAKIT bags silver award for Excellence in Cost Management…
Tata Motors Pune – CVBU has bagged the “Golden Peacock National Quality Award.
Tata Motors was awarded four prestigious honors, at the ‘CNBC TV18-Auto Car’.
Tata Motors chosen as India’s Most Trusted Brand in Cars…
Business Today selects Mr. P.P Kadle as India’s Best CFO in 2005…
Pune Foundry Division bags prestigious Green Foundry Award…
Tata Motors is ‘Commercial Vehicle Manufacturer of the Year’…
ACE bags ‘Best Commercial Vehicle Design’ at the BBC-Top Gear Awards…
Tata Motors bags the prestigious ‘CII –EXIM Bank award’ for business excellence…
‘Car Maker of the year ’ Award for Tata Motors…
Tata Motors is ‘Commercial Vehicle Manufacturer of the year’.
‘CFO of the Year Award 2004’ awarded to Mr. Praveen P Kadle, Executive Director.
Tata Motors wins ‘Golden Peacock Award’ for Corporate Social Responsibility.
Tata Motors – Jamshedpur wins ‘Energy Efficient Unit Award’.
Tata Motors wins the first CSIR Diamond Jubilee Technology Award.
Tata Motors Jamshedpur & Lucknow win awards…
 Products of TATA Motors
[1] Passenger cars and utility vehicles

TATA
SUMO GRANDE

TATA SAFARI
 Indica Vista

• Tata Sierra
• Tata Estate
• Tata Sumo/ Spacio
• Tata Indica
• Tata Indigo
• Tata Indigo Marina
• Tata Winger
• Tata Nano
• Tata Xenon XT
• Tata Xover

[2] Concept vehicles

• 2000 Aria Roadster

• 2001 Aria Coupe
• 2002 Tata Indica
• 2002 Tata Indiva
 • 2004 Tata Indigo Advent
• 2005 Tata Xover
• 2006 Tata Cliffrider
• 2007 Tata Elegante
• 2009 Tata Prima

[3] Commercial vehicles

TATA 1616 STARBUS

TATA MARCOPOLO BUSES

• Tata Ace
• Tata TL/ Telcoline /207 DI Pickup Truck
• Tata 407 Ex and Ex2
 • Tata 709 Ex
• Tata 809 Ex and Ex2
• Tata 909 Ex and Ex2
• Tata 1109 (Intermediate truck)
• Tata 1510/1512 (Medium bus)
• Tata 1610/1616 (Heavy bus)
• Tata 1613/1615 (Medium truck)
• Tata 2515/2516 (Medium truck)
• Tata Globus (Low Floor Bus)
• Tata Marcopolo Bus (Low Floor Bus)
• Tata 3015 (Heavy truck)
• Tata 3118 (Heavy truck) (8X2)
• Tata 3516 (Heavy truck)
• Tata 4923 (Ultra-Heavy truck) (6X4)
• Tata Novus (Heavy truck designed by Tata Daewoo)

[4] Military vehicles

• Tata LSV (Light Specialist Vehicle)
• Tata 2 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 LPTA 1615 TC (4x4)
• Tata LPTA 1621 TC (6x6)
• Tata LPTA 1615 T
 MARKETING STRATEGIES
1.
LAUNCH OF TATA nano
TATA unveiled its long awaited 1 Lakh rupee car (actually a little over 1 lakh after tax) for the
masses and they call it “The People’s Car” . It’s a sweet looking small car, just enough to take
four people around the city. 1 Lakh rupees roughly translate to 2500 rupees monthly installment
and because of this reason TATA is expect to sell record breaking numbers and leave Indian

roads blocked.

Following TATA Nano

car specs in comparison
with Maruti 800:
Overall Length of Nano
is 3100 M M which is
7% shorter than
Maruti 800 •
Overall Breadth of
Nano is 1 500 MM which
is 4% Wider than
Maruti 800 •
Overall Height of Nano is 1 600MM which is 14% Taller than Marut i 800 •
Overall inside Space of Nano is 21% Bigger than Marut i 800 •
Engine Capacity 623CC 2 Cy linders, Maruthi 800’s got 3 Cylinders •
Power 3 3BHP, less than Maruthi 800 •
Top Sp eed: 120 Kmph Top Speed Lower Than Maruti 800 •
Fuel eff iciency is 20 Kmpl just as Maruti 800 •

TATA Nano will hit the roads and as it is a definite threat to Maruti 800. TATA stated that
the initial production of this car will be of 250,000 a year. After about four years of hard efforts
TATA Nano ( 1 lakh rupee car ) was on road now.

The introduction of the Nano received media attention due to its targeted low price. The car is
expected to boost the Indian economy , create entrepreneurial-opportunities across India , as well as
expand the Indian car market by 65%. The car was envisioned by Ratan Tata , Chairman of the Tata Group
and Tata Motors , who has described it as an eco-friendly "people's car". Nano has been greatly
appreciated by many sources and the media for its low-cost and eco-friendly initiatives which include
using compressed-air as fuel and an electric-version (E-Nano). Tata Group is expected to mass-
manufacture the Nano, particularly the electric-version, and, besides selling them in India , to also export
them worldwide.
 Critics of the car have questioned its safety in India (where reportedly 90,000 people are
killed in road-accidents every year), and have also cr iticised the pollution that it would cause
(including criticism by Nobel Peace Prize winner Rajendra Pachauri ). However, Tata Motors has
promised that it would definitely release Nano's eco-friendly models alongside the gasoline -
model.

The Nano was originally to have been manufactured at a new factory in Singur , West
Bengal , but increasingly violent protests forced Tata to pull out October 2008. Currently, Tata
Motors is reportedly manufacturing Nano at its existing Pantnagar ( Uttarakhand ) plant and a
mother plant has been proposed for Sanand Gujarat . The company will bank on existing dealer
network for Nano initially. The new Nano Plant could have a capacity of 500,000 units,
compared to 300,000 for Singur. Gujarat has also agreed to match all the incentives offered by
West Bengal government.
 The Tata Nano is a rear-engined , four-passenger city car built by Tata Motors , aimed
primarily at the Indian market . The car is very fuel efficient, achieving around 26.00 km/l on the
highway and around 22.00 km/l in the city. It was first presented at the 9th annual Auto Expo on
Januar y 10, 2008, at Pragati Maidan in New Delhi . Nano had a commercial launch on March 23,
2009 and a booking period from April 9 to April 25, generating more than 200,000 bookings for
the car. The sales of the car begin in July 2009, with a starting price of Rs 115,000 ( rupees ). This
is cheaper than the Maruti 800 , its main competitor and next cheapest Indian car priced at
184,641Rupees.
DESIGN

Ratan Tata , the Chairman of Tata Motors, began development of the

world's cheapest production
car in 2003 , inspired by the number of Indian families with two-wheeled rather than four-
wheeled vehicles. The Nano's development has been tempered by the company's success in
producing the low cost 4 wheeled Ace truck in May 2005.

Contrary to speculation that the car might be a simple four-wheeled auto rickshaw , The Times of
India reported the vehicle is "a properly designed and built car". The Chairman is reported to
have said, "It is not a car with plastic curtains or no roof — it's a real car."

To achieve its design goals, Tata refined the manufacturing process, emphasized innovation and
sought new design approaches from suppliers. The car was designed at Italy's Institute of
Development in Automotive Engineering — with Ratan Tata requesting certain changes, such as
the elimination of one of two windscreen wipers. Some components of the Nano are made in
Germany by Bosch , such as Fuel Injection , brake system, Value Motronic ECU, ABS and other
technologies.

The Nano has 21% more interior space (albeit mostly as headroom, due to its tall stance) and an
8% smaller exterior compared to its closest rival, the Maruti 800 . Tata offered the car in three
versions: the basic Tata Nano Std; the Cx; and the Lx. The Cx and Lx versions each have air
conditioning, power windows, and central locking. Tata has set its initial production target at
250,000 units per year.
COST CUTTING FEATURES
The Nano's trunk does not open. Instead, the rear seats can be folded down to access the trunk •
space.
It has a single windscreen wiper instead of the usual pair. •
It has no power steering. •
Its door opening lever was simplified. •
It has three nuts on the wheels instead of the customary four. •
It only has one side view mirror. •
PRICE
Tata initially targeted the vehicle as "the least expensive production car in the world"— aiming
for a starting price of 100,000 rupees or approximately, despite rapidly rising material prices at
the time.

As of August 2009, material costs had risen from 19% to 29% over the car’s development, and
Tata faced the choice of:
introducing the car with an artificially low price through government subsidies and tax- •
breaks
forgoing profit on the car •
using vertical-integration to artificially boost profits on cars at the expense of their •
materials industries
partially using inexpensive polymers or biodegradable plastics instead of a full metal- •
body
 raising the price of the car •

Nano is available in three trim levels:

The basic Tata Nano Std priced at 123,000 Rupees has no extras; •
The deluxe Tata Nano CX at 151,000 Rupees has air conditioning; •
The luxury Tata Nano LX at 172,000 Rupees has air conditioning, power windows and central •
locking
The Nano Europa, European version of the Tata Nano has all of the above plus a larger body, •
bigger 3-cylinder engine, anti-lock braking system (ABS) and meets European crash standards
and emission norms.

The base model will have fixed seats, except for the driver's, which will be adjustable, while the
deluxe and luxury models will get air conditioning and body coloured bumpers.
Technical specifications
According to Tata Group 's Chair man Ratan Tata , the Nano is a 33 PS (33 hp/24 kW) car
with a 623 cc rear engine and rear wheel drive , and has a fuel economy of 4.55 L/100 km
(21.97 km/L, 51.7 mpg (US), 62 mpg (UK)) under city road conditions, and 3.85 L/100 km on
highways ( 25.974 km/L, 61.1 mpg (US), 73.3 mpg (UK)). It is the first time a two-cylinder non-
opposed petrol engine will be used in a car with a single balance shaft . Tata Motors has
reportedly filed 34 patents related to the innovations in the design of Nano, with powertrain
accounting for over half of them. The project head, Girish Wagh has been credited with being
one of the brains behind Nano's design.

Much has been made of Tata's patents pending for the Nano. Yet during a news
conference at the New Delhi Auto Expo, Ratan Tata pointed out none of these is revolutionar y or
represents earth- shaking technology. He said most relate to rather mundane items such as the
two-cylinder engine’s balance shaft, and how the gears were cut in the transmission.

Though the car has been appreciated by many sources, including Reuters due to "the way
it has tweaked existing technologies to target an as-yet untapped segment of the market", yet it
has been stated by the same sources that Nano is not quite "revolutionary in its technology", just
low in price. Moreover, technologies which are expected of the new and yet-to-be-released car
include a revolutionary compressed-air fuel system and an eco-friendly electric-version,
technologies on which Tata is reportedly already working, though no official incorporation-date
for these technologies in the new car has been released.

According to Tata, the Nano complies with Bharat Stage-III and Euro-IV emission
standards. Ratan Tata also said, 'The car has passed the full-frontal crash and the side impact
crash'. Tata Nano passed the required 'homologation’ tests with Pune-based Automotive Research
Association of India (ARAI).This means that the car has met all the specified criteria for
roadworthiness laid out by the government including emissions or noise & vibration and can now
ply on Indian roads. Tata Nano managed to score around 24 km per litre during its
‘homologation’ tests with ARAI. This makes Tata Nano the most fuel efficient car in India. Nano
will be the first car in India to display the actual fuel mileage figures it recorded at ARAI’s tests
on its windshield. According to ARAI it conforms to Euro IV emission standards which will
come into effect in India in 2010.

REAR MOUNTED ENGINE

The use of a rear mounted engine to help maximize interior space makes the Nano similar
to the original Fiat 500 , another technically innovative "people's car". A concept vehicle similar
in styling to the Nano, also with rear engined layout was proposed by the UK Rover Group in the
1990s to succeed the original Mini but was not put into production. The eventual new Mini was
much larger and technically conservative. The independent, and now-defunct, MG Rover Group
later based their Rover CityRover on the Tata Indica .

Tata is also reported to be contemplating offering a compressed air engine as an option.

 nano ’s TECHNICAL SPECIFICATIONS
Engine: 2 cylinder petrol with Bosch multi-point fuel injection (single injector ) all
aluminium 33 horsepower (25 kW) 624 cc (38 cu in )

Value Motronic engine management platform from Bosch

2 valves per cylinder overhead camshaft
Compression ratio : 9.5:1
bore × stroke : 73.5 mm (2.9 in) × 73.5 mm (2.9 in)
Power : 33 PS (33 hp/24 kW) @ 5500 rpm
Torque : 48 N·m (35 ft·lbf) @ 2500 rpm
Layout and Rear wheel drive
Transmission: 4-speed manual transmission

Steering: mechanical rack and pinion

Turning radius : 4 metres
Performance: Acceleration : 0-70 km/h (43 mph): 14 seconds
Maximum speed: 120 km/h (75 mph)
Fuel efficiency (overall): 20 kilometres per litre (5 litres per 100 kilometres
(56 mpg ; 47 mpg ))
imp
- - US

Body and dimensions: Seat belt : 4

Trunk capacity: 150 L (5.3 cu ft)
Suspension, Tires & Front brake: drum
Brakes: Rear brake: drum
Front track: 1,325 mm (52.2 in)
Rear track: 1,315 mm (51.8 in)
Ground clearance : 180 mm (7.1 in)
Front suspension : McPherson strut with lower A arm
Rear suspension: Independent coil spring
12-inch wheels
2. Modification in TATA Sumo
The Toyota Qualis and now competes with Chevrolet Tavera. The discontinuation of
Qualis to launch the Toyota Innova proved advantageous to Tata Sumo. The Sumo has seen a
series of changes in terms of refinement in this decade. It has been the favorite choice for cab
owners, as it is rugged and affordable.

The Tata Sumo has been enjoying its position in the MUV market since 1994. It had stiff
competition with new Sumo Victa has been portrayed as a family lifestyle vehicle, but in fact is a
carryover of the old Sumo, with some cosmetic changes. The Sumo comes in nine Victa variants:
CX 10/7 Str, DI CX 7/9/10 Str, DI EX 7/9 Str, DI GX 7/9 Str, DI LX 7/9 Str, EX 10/7Str, GX 7
Str, GX TC 7 Str, and LX 10/7 Str. All variants, except the Victa DI variants, are powered by a 2-
litre Inline-4 diesel engine. The GX and GX TC variants get a 2-litre turbocharged diesel engine
that generates 89 bhp. The Victa DI variants get a 3-litre turbocharged diesel engine. Refinement,
both internal and external, is evident across the variants. Tata's latest three variants under the
'Sumo Grande' category are LX, EX and GX available in 2-seater, 7- seater and 8-seater
configurations. Sumo Grande boasts of a powerful 2.2-L Direct Injection Common Rail
(DICOR) engine

SUMO SPACIO
A no-frills version called the Tata Spacio is also available. It is equipped with a 3000 cc
DI diesel engine sourced from the popular LCV Tata 407. The prominent visual difference was
the presence of round headlamps instead of the rectangular lamps. A soft top version of the
Spacio called the Spacio ST was also introduced for the rural markets. After the facelift, the
Spacio inherited the styling elements of the older Tata Sumo. In 2007, the Victa became available
with the Spacio's 3000 cc engine. And in terms of styling, the positioning of the spare wheel was
changed from the rear tailgate to the underbody of the vehicle. This model comes in 8 and 10
seater variants and is ver y much popular with private transporters & contract taxi vendors
because of its lower cost.

SUMO VICTA
The new Sumo Victa released in 2004 featur ed power windows , power steering , dual AC,
central locking , clear lens multi reflector head lamps, crystal finish tail lamp cluster, anti glare
ORVMS with electronic control, remote keyless entry , tachometers , LCD monitors, voice
warnings, multiple trip odometers are all either standard or available options.

New TATA Sumo (SUMO GRANDE)

Tata launched the Sumo Grande on January 10 , 2008 powered with a new generation
2200 cc 120 bhp (89 kW; 122 PS) DICOR ( D irect I njection C ommon R ail) engine. It is the most
up market version of the Sumo available and features completely different body work. It lies
below the Tata Safari in Tata's product portfolio.

SUMO GRANDE Specifications

Top speed 148 km/h (92 mph)

0 to 100 km/h (62 mph) 17.6 s
Engine Type 2.2L DICOR, 32 Bit ECU and Variable Geometry Turbocharger
Displacement (Capacity) 2179 cc
Transmission 5-speed manual
Power 120 PS (118 hp/88 kW) @ 4000 rpm
Torque 250 Nm (184 lb·ft) @1500 rpm
Valve Mechanism DOHC
Cylinder Configuration Inline 4
Fuel Type Diesel
Fuel Tank Capacity 65
(Ltrs.)
Minimum Turning Radius 5.25 meters
Wheel size 16 inch
Tyres 235/70 R 16 (tubeless)
Ground Clearance 205 mm / 8.07 inches
Steering Power Steering, Tiltable & Collapsible
Colours Zephyr Green, Marine Blue, Sunset Orange, Mineral Red, Arctic
White, Arctic Silver, Quartz Black. (7 Colours)

TATA
SUMO
GRANDE
(More than meets the eye)
3. NEW VERSION OF INDIGO ,INDIGO DICOR
Dicor Variants
The DICOR (common rail diesel) version of Tata Indigo is available in two variants which has
already hit the bull's eyes. The beefy & bony structured sedan has the capacity to deliver
maximum torque of 140Nm @ 1800 - 3000 rpm. The Indigo Dicor from Tata Motors has been
made apt for Indian roads especially with its driver & co passengers oriented positive attributes
such as:
Anti- submarine front seats
New electronic instrument cluster with engine RPM meter
Rear Seat with double folding backrest
Video player with MP3: with headrest mounted LCD screens
1.4-litre as rail diesel engine

Indigo LX Dicor
Tata Indigo LX Dicor on the other hand features manually operated with chrome strip outer rear
view window, black dials with chrome rings & star check as the new pattern for its console &
AC fascia.

Indigo LS Dicor
Tata Indigo LS Dicor features manually operated outer rear view mirror, black dials, & Benz
silver as the new pattern for console & AC fascia. It has no mounted LCD screens.
 Mileage (City) : 14.75 kmpl
Mileage (Highways) : 18.35 kmpl
ENGINES
Petrol 1396 cc MPFI Petrol Engine with 32-Bit Microprocessor
Max. Power - 85 PS @5500 rpm
Max. Torque - 12 Kgm @ 3500 rpm
Diesel Turbo-charged 1405 cc Indirect Injection Engine with Intercooler
Max. Power -70 PS @ 4500 rpm
Max. Torque - 13.5 Kgm @ 2500 rpm
Dicor 32-bit microprocessor based 1396 cc DICOR (Direct Injection Common
Rail) 16-valve engine with Dual Over Head Camshafts and a Variable
Geometry Turbocharger (VGT)
Max. Power-70 PS@4000 rpm
Max. Torque - 140Nm@1800-3000 rpm

TAPPING OF RURAL MARKETS

4.

According to the National Council for Applied Economic Research, or NCAER, rural
India accounts for 70% of India’s population, 56% of the national income, 64% of the total
expenditure and one-third of the total savings. So, the difficulties faced in cracking these markets
pale before the huge potential they offer a company. Of the total sales (of consumer goods),
around 55% come from rural India, and going ahead, the contribution is likely to grow. NCAER
data suggests that in real terms, at 1999 prices, the size of the rural economy will be about Rs16
trillion in 2012-13 compared with Rs12 tr illion in 2007-08. The share of non-farm income will
be about two-thirds of the rural economy by 2012-13.

Noticing this huge potential Tata motors now plans to tap the rural market, 60 per cent of
which runs on cash. Tata motors ltd. is working on strategies to make inroads into these markets.
 SWOT Analysis - Tata Motors
Limited
SWOT – Strengths, Weaknesses, Opportunities, Threat
STRENGTHS

• The internationalization strategy so far has been to keep local managers in new
acquisitions, and to only transplant a couple of senior managers from India into the new
market. The benefit is that Tata has been able to exchange expertise. For example after
the Daewoo acquisition the Indian company leaned work discipline and how to get the
final product 'right first time.'

• The company has a strategy in place for the next stage of its expansion. Not only is it
focusing upon new products and acquisitions, but it also has a programme of intensive
management development in place in order to establish its leaders for tomorrow.

• The company has had a successful alliance with Italian mass producer Fiat since 2006.
This has enhanced the product portfolio for Tata and Fiat in terms of production and
knowledge exchange. For example, the Fiat Palio Style was launched by Tata in 2007,
and the companies have an agreement to build a pick-up targeted at Central and South
America.

WEAKNESSES

The company's passenger car products are based upon 3rd and 4th generation platforms, which
put Tata Motors Limited at a disadvantage with competing car manufacturers.
• Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat has not
got a foothold in the luxury car segment in its domestic, Indian market. Is the brand
associated with commercial vehicles and low-cost passenger cars to the extent that it has
isolated itself from lucrative segments in a more aspiring India?
 • One weakness which is often not recognised is that in English the word 'tat' means
rubbish. Would the brand sensitive British consumer ever buy into such a brand? Maybe
not, but they would buy into Fiat, Jaguar and Land Rover.

OPPORTUNITIES

• In the summer of 2008 Tata Motor's announced that it had successfully purchased the
Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the
Wor ld's luxury car brand have been added to its portfolio of brands, and will undoubtedly
off the company the chance to market vehicles in the luxury segments.

• Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for
around USD $16 million.

• Nano is the cheapest car in the World - retailing at little more than a motorbike. Whilst
the World is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer
in terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will
cost up to 85 times more than a standard Nano!

• The new global track platform is about to be launched from its Korean (previously
Daewoo) plant. Again, at a time when the Wor ld is looking for environmentally friendly
transport alternatives, is now the right time to move into this segment? The answer to this
question (and the one above) is that new and emerging industrial nations such as India,
South Korea and China will have a thirst for low-cost passenger and commercial
vehicles. These are the opportunities. However the company has put in place a very
proactive Corporate Social Responsibility (CSR) committee to address potential
strategies that will make is operations more sustainable.

• The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly
engines. The bus has optional organic clutch with booster assist and better air intakes that
will reduce fuel consumption by up to 10%.
THREATS

• Other competing car manufacturers have been in the passenger car business for 40, 50 or
more years. Therefore Tata Motors Limited has to catch up in terms of quality and lean
production.

• Sustainability and environmentalism could mean extra costs for this low-cost producer.
This could impact its underpinning competitive advantage. Obviously, as Tata globalizes
and buys into other brands this problem could be alleviated.

• Since the company has focused upon the commercial and small vehicle segments, it has
left itself open to competition from overseas companies for the emerging Indian luxury
segments. For example ICICI bank and DaimlerChrysler have invested in a new Pune-
based plant which will build 5000 new Mercedes-Benz per annum. Other players
developing luxury cars targeted at the Indian market include Ford, Honda and Toyota. In
fact the entire Indian market has become a target for other global competitors including
Mahindra and Mahindra, Maruti Udyog, General Motors, Ford and others.

• Rising prices in the global economy could pose a threat to Tata Motors Limited on a
couple of fronts. The price of steel and aluminium is increasing putting pressure on the
costs of production. Many of Tata's products run on Diesel fuel which is becoming
expensive globally and within its traditional home market.
FINANCIAL
ANALYSIS
 FINANCIAL OVERVIEW
Year 2008- 2007-03 2006-03 2005- 2004-03
03 03
Equity Paid Up 385.54 385.41 382.87 361.79 353
Network 7813.99 6843.8 5510.68 4111.39 3589.77
Capital Employed 14094.51 10852.94 8447.52 6606.81 4849.54
Gross Block 10805.32 8749.85 7945.16 6611.95 5985.4
Net Working Capital -1248.57 1997.22 1923.41 -19.92 -1477.22 (Incl Def.
Tax)
Current Assets 10781.23 10688.65 9638.56 7188.72 3830.76 (Incl Def. Tax)
Current Liabilities and 12029.80 8691.43 7715.15 7208.64 5307.98
Provision (Incl Def. Tax)
Total Assets/ Liabilities 26118.26 19534.28 16148.55 13797.29 10135.33
Gross Sales 32885.03 31611.21 23673.43 20152.03 15165.85
Net Sales 28529.40 27185.77 20293.30 17088.59 12895.55
Other Incomes 972.93 547.11 693.92 560.29 427.79
Value of Output 28488.92 27535.45 20550.21 17232.59 12753.57
Cost of Production 24611.49 23290.95 17447.80 14614.45 10511.53
Selling Cost 1179.48 1068.56 756.54 581.41 455.56
PBIDT 3654.39 3527.98 2867.81 2319.87 1877.42
PBDT 3228.78 3159.47 2574.32 2102.06 1674.94
PBIT 3002.08 2941.69 2346.87 1869.71 1494.82
PBT 2576.47 2573.18 2053.38 1651.90 1292.34
PAT 2028.92 1913.46 1528.88 1236.95 810.34
CP 2681.23 2499.75 2049.82 1687.11 1192.94
Revenue earnings in forex 2844.12 2714.68 2384.81 1497.85 1016.64
Revenue expenses in forex 1695.58 1504.74 1132.9 671.40 354.38
Capital earnings in forex 00000
Capital expenses in forex 1314.31 472.76 264.88 226.84 43.22
Book Value (Unit Curr) 202.68 177.57 143.93 113.64 101.69
Market Capitalisation 24037.11 28048.94 3507.39 14976.30 17331.23
CEPS 67.44 62.31 51.19 44.88 32.77 (annualised), (Unit Curr.)
EPS 50.52 47.10 37.59 32.44 21.93 (annualised), (Unit Curr.)
Dividend 150 150.00 130 125.00 80.00 (annualized %)
Payout 29.7 31.85 34.6 38.66 36.44 (%)
Year Dividend Per Share(DPS)
in Rs.
2003-04 8.00
2004-05 12.50
2005-06 13.00
2006-07 15.00
 2007-08 15.00
FORMULAE AT GLANCE
Cost of Equity, K =
e

Dividend Per Yield = Dividend Per Share / Book Value

Growth rate (G) = Retention Ratio x ROE
= (1- Payout Ratio) x ROE
ROE = (PAT – Preference Dividend) / Equity Shareholder Funds
Equity Shareholder Funds = Equity Share Capital + Reserves – P& L A/C (Dr. Balance)

Cost of Debt K =
d

ROI =
CAPITAL STRUCTURE
(Rs in Cr.)
2 2 20 2 20
Year 008 007 06 005 04
DPS(Rs) 15 15 13 12.5 8
Book Value(Rs.) 202.68 177.57 143.93 113.64 101.69
Payout (%) 29.7 31.85 34.6 38.66 36.44
Retention Ratio 0.703 0.6815 0.654 0.6134 0.6356
PBT 2576.47 2573.18 2053.38 1651.9 1292.34
Tax 139.01 476 363.35 363.82 96
PAT 2437.46 2097.18 1690.03 1288.08 1196.34
Preference Dividend 0 0 19.94 0 0
Equity 385.54 385.41 382.87 361.79 353
Reserves 7453.96 6484.34 5154.2 3749.6 3236.77
P & L Account(Dr
Balance) 0 0 0 0 0
Equity Shareholder Fund 7839.5 6869.75 5537.07 4111.39 3589.77
ROE 0.31 0.31 0.30 0.31 0.33
Growth Rate (%) 21.86 20.80 19.73 19.22 21.18
Cost of Equity (%) 29.26 29.25 28.76 30.22 29.05
Interest 425.61 368.51 293.49 217.81 202.48
Total Debt 6280.52 4009.14 2936.84 2495.42 1259.77
Cost of Debt (%) 6.78 9.19 9.99 8.73 16.07
PBIT 3002.08 2941.69 2346.87 1869.71 1494.82
Capital Employed 14094.51 10852.94 8447.52 6606.81 4849.54
ROI (%) 21.30 27.11 27.78 28.30 30.82
WEIGHTED AVERAGE COST OF CAPITAL
Year 2008
Proportion Cost Weighted
Source Amount (%) (%) Cost (%)

Equity 385.54 6.14 29.26 1.80

Debt 6280.52 94.22 6.78 6.38
6666.06 100.36 8.18
Year 2007
Proporti
on Cost Weighted
Source Amount (%) (%) Cost (%)

29.2
Equity 385.41 9.61 5 2.81
9.1
Debt 4009.14 91.23 9 8.39
4394.55 100.84 11.20
Year 2006
Proporti
on Cost Weighted
Source Amount (%) (%) Cost (%)

Equity 382.87 13.04 28.76 3.75

Debt 2936.84 88.47 9.99 8.84
3319.71 101.50 12.59
Year 2005
Proporti Cost Weighted
Source Amount on (%) (%) Cost (%)

Equity 361.79 14.50 30.22 4.38

Debt 2495.42 87.34 8.73 7.62
2857.21 101.84 12.00
Year 2004
Proporti Cost Weighted
Source Amount on (%) (%) Cost (%)
Equity 353.00 28.02 29.05 8.14
Debt 1259.77 78.11 16.07 12.55
1612.77 106.13 20.69
 WEIGHTED AVERAGE COST OF CAPITAL (WACC)
Vs
ROI
Year WACC ROI Difference
(%) (%)
2008 8.18 21.30 13.12
2007 11.20 27.11 15.91
2006 12.59 27.78 15.19
2005 12.00 28.30 16.30
2004 20.69 30.82 10.13

REASONS
Fiscal 2008-09, the second year of 11 Five Year Plan saw a marginal fall in GDP growth rate of th

9%.
• The slowdown in economy.
• Increase in inflation.
• Poor credit availability.
• Hardening of interest rate
• Rise in price of input material
• Proposed increase in fuel price and volatility in foreign exchange rates.
• Manufacturing expenses, employee cost increase.
 • Net raw material consumption inclusive of processing charges increased, with pressure
on volumes and margins.
BALANCE SHEET ANALYSIS
From the above statement it is seems that the company has become highly geared year
after year. To substantiate this, the net current asset which is a representation of their long term
debit is on the increase (Rs. 27,203.30 million In 2006, Rs. 40,235.10 million in 2007, and Rs.
58,792.80 million In 2008) this forms a lower percentage of the total debit (when short term
debit and capital cases are added) the company is perhaps aware of the results that may effect the
interest on the total equity and rather have a preference for short term loans as the environment
dictate, hence, increasing the total equity year by year.

During the year, the Company recorded its highest ever sale of 5, 85,649 vehicles and
grew its turnover to Rs. 33,094 crores to remain as India's largest automobile company by
revenue.

The Company's margins were under pressure during the year due to rising interest rates,
constraints in availability of vehicle financing from outside sources and unprecedented increase
in prices of raw materials.

For long term financial plan and expansion of the new product (Nano) Tata has decided to
raise funds from the stock market rather than going for a loan option (GEARING). This is
because in the past heavy amounts were gained as interest on loans which have a negative effect
on the profit and returns to the stake holders. To support my analysis in financial year 2006, Rs.
36,641 million loans was taken, and in the year 2007, Rs. 79,137 million loan was taken, And
also the companies net profit margins have gone down abruptly from 6.8% in 2005 to 5.6% in
2007, most probably because of the rising cost of the raw material used by the 5 company, but
still the profits of the Tata Motors remain highest than the other auto manufacturers.

The rate of interest on vehicles in India is running very high, because of which the sales
growth have gone a little down. Even then Tata Motors have increased there profits to 6.2% year
after year. And are still financing most of their sales, up to 31% in 2007 from 24% in 2006.
Hence, gross accounts receivable are greater than before by 35% every year and they also had to
make up the shortage of cash by borrowing. When combined with the other expenses to the
growth of fuel, it has augmented its short as well as it’s the long-term debt extensively.
The EBIDTA (earnings before interest, taxes, depreciation, and amortization) margin at 10.8%
was lower than last year as increase in input costs could only be partially absorbed by the market.
Note: Amortization = non-cash expense of writing off intangible assets over their useful lives.

The Profit Before-Tax at Rs.2, 576 crores was 0.1 % higher than last year, The Profit after Tax at
Rs.2, 029 crores, was 6.1 % higher than last year.

FINANCIAL PERFORMANCE
With significant increase in the Company's capital expenditure program’s and the
growing business requirement, the overall borrowings of the Company stood at Rs.6, 280.52
crores at a Debt: Equity ratio of 0.80:1.

The Indian economy remained in high growth phase but witnessed moderation in GDP
growth to 90/ in FY 07-08 as compared to over 9% growth achieved in the previous two years.
The commercial vehicle industry which grew by over 33% in FY 06-07 was impacted by
moderation in economic growth as wet as substantial reduction in vehicle financing and posted a
8.1% growth this fiscal. The passenger vehicle industry also witnessed a slowdown but managed
to grow by 11.1 % by increasing discounts on mature products, launching new models and due to
reduction in excise duty announced by the government in Budget during February'08. Vehicle
exports also grew, albeit at a slightly lower rate of 11.9% as compared to 14.8% witnessed in the
previous year.

Amidst moderation in economic growth, a high interest rate regime and tightening of the
liquidity position, the domestic passenger vehicle industry was able to grow by 11.3% to an all
time high of over 1.5 million vehicles, albeit at a lower growth rate than 21% of the last fiscal.
The Industry's growth rate in fact fell to single digit in the last four months of the fiscal. Growth
was primarily driven by new launches and discounts on existing volume models. Along with two
wheelers, entr y level cars (price point below Rs 3 lacs) declined by 2%.The luxury segment
however doubled in size to over 5,000 vehicles and were immune to the slowing market
conditions. Of over 90 models in the industry the top 10 constitute 65% of the industry sales.

After six years of consecutive growth, the Company's passenger vehicle sales decreased
marginally by 4.5% to 2, 18,055 vehicles (including 3,297 Fiat branded vehicles) and the
Company had a 14.2% share in the passenger vehicle market between TATA and Fiat branded
vehicles.

Fiscal 2008-09, the second year of 11th Five Year Plan saw a marginal fall in GDP
growth rate of 9%. In view of the slow down in economy, increase in inflation, poor credit
availability, hardening of interest rates, rise in prices of input materials, proposed increase in fuel
prices and volatility in foreign exchange rates, the commercial and passenger vehicle industry
has a challenging year ahead, with pressure on volumes and margins.

“ Fiscal 2006 2007

(Millions of Rupees)
Total short-term debt 7,973 33,145
(Excluding current portion of long-term debt)
Long- term debt net of current portion 27,203 40,235
Total Debt 36,641 79,137”
 FINANCIAL ANALYSIS OF TATA
MOTORS
• On the back of a 3.9% volume growth, the company registered 14.4% y-o-y growth in net
revenue to Rs.60.57 bn during 1QFY09 due to vehicle price increases and favorable mix
• Signif icant cost increases were witnessed in raw material consumption and employee cost
which witnessed y-o-y growth of 18.2% and 13.9% respectively.
• Excluding the impact of foreign exchange valuation related losses, the Company’s
EBITDA stood at Rs.5,304.7 mn, compared to Rs.5,463.0 mn the year ago quarter.
EBITDA margin, excluding foreign exchange losses was 7.7% in 1QFY09, compared to
9.0% 1QFY08.
• In a rising cost scenario, pressure on margins was visible as the company’s raw material
cost as percentage of net revenues of the Company rose by 240 bps to 72.0% in 1QFY09;
from 69.7% in 1QFY08.
• Cost reduction in 1Q FY09 stood at 294 mn.
• Net interest expense increased 37.7% y-o-y to Rs.1123.3 mn in Q1 FY09, compared to
Rs.815.6 mn due to rising interest rates and higher debt. However, the interest expense as
a % of net sales increased marginally from 1.3% in Q1 FY08 to 1.6% in Q1 FY09.
• Tax rate for first quarter declined substantially and stood at 5.5% as compared to 21.2%
for same period last year, on account of large dividends received by Company on its
Investments/Subsidiaries which are not taxable in the hands of the Company and
weighted deductions available on R&D expenditure.
• As on 30th June’08, the balance sheet size of the Company was Rs. 183.98 bn as
compared to Rs 150.96 bn as on 31st March’08. Net of vehicle financing loans and
receivables the Company’s capital employed was Rs 178.33 bn as on 30th June’08
against Rs.135.76 bn as on 31st March’08.
• As on 30th June’08, 385.62 mn shares (Face value Rs.10) were outstanding on the
balance sheet of Tata Motors.
• The Gross total debt (inc. FCCNs) stood Rs 94.97 bn as on 30th June’08 as compared to
Rs. 62.8 bn as on 31st March’08. The Company’s Net Debt (Net of the surplus investible
funds) stood at Rs 89.3 bn as on 30th June’08. As on 30th June’08, the Company’s net
debt to equity ratio stood at 1.12:1.
 • Up to June 30th, 2008, 99.94% of the 1% convertible Notes (due 2008) and 97.09% of
the Zero coupon Convertible Notes (due 2009) have been conver ted into Ordinary Shares
/ ADSs. There have been no conversions of the other FCCNs issued by the Company.
• The Company’s Balance Sheet includes Receivables and loans of Rs. 27.94 bn

FINANCIAL PERFORMANCE AS A MEASURE OF

OPERATIONAL PERFORMANCE:
• In a challenging environment, the Company has been able to marginally grow its
revenues and profits. Whilst the Company's profit after tax improved to Rs.2,028.92
crores from Rs.1,913.46crores in the previous year, the margins were under pressure
mainly due to the rising input costs and lower volume growth.
• Turnover, net of excise duties increased by 4.6% to another record high of Rs. 28,730.82
crores from Rs.27, 470.03 crores in FY 2006-07.The total number of vehicles sold during
the year increased by 0.9% to 585,649 units from 580,280 units in FY 2006-07.The
domestic volumes increased by 0.8% to 530,990 units from 526,806 units in FY 2006-07,
while export volumes increased by 2.22% to 54,659 units in FY 2007-08 from 53,474
units in FY 2006-07.
• Net Raw Material consumption inclusive of processing charges increased by 6.2%to
Rs.21, 082.10 crores in FY 2007-08, from Rs.19,849.04 crores in FY 2006-07. Material
Cost as a % of net turnover has increased to 73.4% from 72.3% for the last year. This was
largely a result of increase in prices of steel, aluminum, nickel, copper and natural rubber.
However, the Company managed to lower the impact through its on going cost reduction
program with initiatives like global sourcing, vendor rationalization and value
engineering.
• Employee Cost increased by 12.9% during the year to Rs. 1,544.57 crores from Rs.
1,368.09 crores registered in the previous year mainly inline with trends in industry and
economy. The manpower increased marginally to 23,230 from 22,349 with increases also
in flexible manpower.
• Manufacturing and Other Expenses increased by 2.4% to Rs. 3,011.83 crores in FY 2007-
08 from Rs.2,940.53 crores in FY 2006-07.These were 10.5% of net turnover for the year
as compared to 10.7% for the previous year.
• Profit before depreciation, interest and tax increased by 0.5% to Rs.3,575.50 crores from
Rs.3,557.56 crores in FY 2006-07.The margin decreased to 12.4% from 13% in FY 2006-
07.
• Depreciation (including product development expenditure) for 2007-08 increased by
6.8% to Rs. 716.66 crores from Rs.671.31 crores in FY 2006-07 on account of increase in
fixed assets. It represents 2.5% of net turnover as compared to 2.4% for FY 2006-07.
• Net interest cost decreased to Rs. 282.37 crores in FY 2007-08 from Rs.313.07 crores in
FY 2006-07. Despite increase in interest rates and increase in capital expenditure, the
reduction was mainly on account of significant reduction in the Company's vehicle
financing portfolio (on account of securitization), better working capital management,
interest earnings and larger capitalization of interest in line with the increase in capital
expenditure.
• Profit before Tax (PBT) of the Company increased by 0.13% to Rs. 2,576.47 crores from
Rs. 2,573.18 crores in FY 2006-07.
• Profit after Tax (PAT) increased by 6.03% to Rs. 2,028.92 crores from Rs.1, 913.46
crores in FY 2006-07. This was mainly on account of a lower tax provision owing to the
increase in spends on Research and Development and income from capital gains, which is
subject to a lower tax rate. Basic Earning Per Share (EPS) increased by 5.79% to
Rs.52.64 as compared to Rs.49.76 last year.
• Investments increased to Rs.4, 910.27 crores in FY 2007-08 from Rs.2, 477.00 crores in
FY 2006-07.
The Profit Before –Tax at Rs. 2,576 crores was 0.1% higher than last year. The Profit •
after Tax at Rs. 2,029 crores , was 6.1% higher than last year.
Financial performance of a company is satisfactory and attaining good return’s of the •
capital employed even in peak stage as WACC is less than about 13.12%
 GLOBAL AUTOMOBILE
INDUSTRY

EXPECTED GROWTH by 2015-16

• Expected to grow at 13% p.a over the next decade to reach around
USD $ 120 - 159 bn by 2016.
 INDIAN AUTOMOTIVE PLAYERS:
OVERVIEW OF THE
PLAYERS IN THE INDIAN INDUSTRY
The Indian auto industry is highly competitive with a number of global and Indian auto companies
present. Hence, we have conducted an Inter company analysis of Tata with Mahindra and Mahindra and
Maruti Udyog, to get an idea of the company’s position (operation and profitability) vis a vis its
competitors.
INTER COMPANY ANALYSIS:
Key Pla yers in the Indian auto industry – Passenger Cars And CVs

The largest Player in the Indian industry. Plans to launch new and exciting products
in the Indian markets, including the ‘100,000’ cars.

TOYOTA has vision of capturing 10% share of Indian passenger car market by 2010.

The third largest passenger car manufacture in India and one of the largest
exporters of vehicles. Has establishes India as one of its manufacturing bases in the
world, is planning to invest heavily to boost exports from India.

Maruti Suzuki’s JV in India and the largest passenger car manufacturer in India.

One of the leading players in the Indian premium cars segment.

One of the largest players in the UV/ MUV segment

One of the leading players in the Indian premium cars segment.

Plans to enter the small car segment by re-launching the matiz.

The 2 largest CV manufacturer in India. nd

Other global players who are in India have plans for India includes – VOLVO, DAIMLER
CHRYSLER, BMW and NISSAN MOTORS .

Project involves:
 Financial performance in automobile industry
Market performance
Cost saving initiatives
Introduction about TATA Motors
Procedure followed by TATA Motors for catering to the needs and queries of the
customers
Quantitative research
Awareness regarding the facilities provided by TATA Motors.
Overall opinion about TATA Motors.

Scope of the Study:

• To find the Market position.

• For Economic and the industry environment.

• This study would be useful for companies to know what people perceive and thinking
about Tata Motors and its products.
• This study would be useful to other students as a secondar y data.

• This study would be useful to for m strategies.

Research Methodology:

The purpose of methodology is to describe the process involved in research work. This
includes the overall research design, data collection method, the field survey and the analysis of
data.

Objective of the Study:

• To know the consumer satisfaction.

• Financial performance in automobile industry.
• Market performance.
 • Market position.
• Economic and the industry environment.
• Cost saving initiatives.
• To find out the satisfaction level of people.
• To find out the awareness level of customer.
• To find the satisfaction amongst the customers of TATA Motors.
Sources of Data Collection:
Primary:
For my survey primary data have been used as a questionnaire to collect the data.
SECONDARY:
The secondar y data has been collected from the following modes:
• Magazines

• Books

• Newspaper

• Data through internet sources

RESEARCH DESIGN:
Research Design is the arrangement for conditioned for data collection & analysis of data
in a manner that aims to combined relevance to research purpose with economy in procedure.
A research design is a master plan or model for the conduct of formal investigation. It is
blue print that is followed in completing study.

The research conducted by me is a descriptive research. This is descriptive in nature

because study is focused on fact investigation in a well structured from and is based on primar y
data.
RESEARCH PLAN

Type of study: For completing my study I have gone for sample study because looking at •
the size of population & the time limitation it was not convenient for me to cover entire
population. Hence, I have gone for sample study rather than census study.
Sampling Plan:
A sample design is a definite plan for obtaining a sample from a given population. It refers to the
technique or the procedure that researcher would adopt in selecting items to be inched in the
sample i.e. the size of sample. Sampling plan is determined before data are collected.

STEPS IN SAMPLING PLAN :

Sampling Frame:
The list of sampling units from which sample is taken is called sampling frame.
Mandi City map was studied thoroughly and samples were selected from the place
in a scattered manner to get effective result.
SAMPLING SIZE:
Total sample size is 100. The following sample size according to area wise is as
follows:
20 LUNAPANI
10 JAIL ROAD
20 CHALCHOWK
20 NER CHOWK
10 REWALSER
10 SUNDER NAGAR
10 PANDO

SAMPLING PROCEDURE:
The selection of respondents were accordingly to be in a right place at a right time and so
the sampling were quite easy to measure, evaluate and co-operative. It was a randomly area
sampling method that attempts to obtain the sample of convenient.

Analysis:
The important factors and data’s collected were sequentially analyzed and graphed.
Limitation of the study:

• I will have to rely upon the information get from secondary sources (Balance sheet, Profit
& Loss Account and Cash Flow ) and given by respondents, which may not be fully true.
• This study will be limited to only some areas of Mandi District of Himachal Pradesh.
• It is only for short period of time.
• Lack of professional approach since researcher is a student
• The sample size is only 100 so the sample may not be truly representative of the Delhi
population.

FIELD WORK:
I have collected the data through medium called questionnaire collecting the responses
from 100 people in all. I had done my field work in the following area.
LUNAPANI, JAIL ROAD, CHALCHOWK, NER CHOWK, REWALSER, SUNDER NAGAR,
PANDO

I started my project very first educating the respondents about my entire project, and ask
them to co–operate with me. Mostly all the respondent were aware of this type of surveys. So I
didn’t face any type of difficulty during my project in the process of explaining and taking there
responses on the questionnaire.
 Comparison of
THE STANDING
TATA MOTORS vis-
á-vis THE
INDUSTRY
 TO COMPARE THE STANDING TATA MOTORS vis - á - vis
THE INDUSTRY. I CONDUCTED A FINANCIAL ANALYSIS OF
TWO OF ITS COMPETITORS – MAHINDRA & MAHINDRA
AND MARUTI UDYOG.
The comparison is based on the detailed analysis of the financial statement on the lines of
Liquidity, Solvency, Profitability and efficiency.

LIQUIDITY POSITION:
Purpose of the Liquidity Ratios: The liquidity ratios help to determine a company’s
ability to meet its short-term liabilities. It can be in the form of the current ratio, liquid ratio,
absolute ratio or the operating cycles. While the current ratio, liquid ratio and absolute cash ratio
provide information about the company’s ability to payoff the shot-term obligations, the
operating cycle provides qualitative information about how quickly the company can convert its
stock into cash.
Company Analysis:
• Current Ratio for TATA Motors is greater, which implies that it has comfortable liquidity
position, however as compared to its competitors it is least liquid since inventories form a
considerable portion of its current assets and cash i.e. the most liquid asset, the least.
• Further, it has a negative operation cycle, which is primarily due to the high credit period
provided to its creditors. While both TATA and M&M have similar inventory days M&M
has an even lower operating cycle due to an even higher credit period. Maruti on the
other hand has an operating cycle of 7 days, which is much higher as compared to the
other two.
LIQUIDITY POSITION GRAPHICAL:

Liquidity Ratio - Liquid Ratio

1.4
1.2
1
0.8
Maruti 0.6
1.04 1.08 1.27
0.4 Mahindra
0.2
TATA 0

Year 2008 -09

 Inferences Drawn: We can,
therefore conclude that TATA
Motors has a favorable liquidity
position which is neither too high nor
too low, as an extremely high
liquidity position would
mean that the company is not using
its funds well while a low liquidity
position would imply that
it would have difficulty in meeting its short term obligations.

SOLVENCY POSITION:

Purpose of the Solvency Ratios: The solvency ratios are used to measure a company’s ability to
meet its long term obligation. The commonly used ratios to ascertain the solvency position of a
company are Debt Equity Ratio and Interest Coverage Ratio.

Debt/Equity Ratio: The ratio gives the proportion of debt and equity in the total capital structure.
TATA Motors has a debt equity ratio of about 52% which means that one-third of its total assets
are financed through debt. Maruti on the other hand has a low Debt Equity Ratio only 9% i.e the
company primarily uses its profits and reserves to find its assets.
Interest Coverage Ratio: A ratio used to determine how easily a company can pay interest on
outstanding debt. The ratio is calculated by dividing a company’s earning before interest and
taxes (PBIT) of one period by the company’s interest expenses of the same period.

PBIT/Sale: The lower the ratio, the more the company is burdened by debt expense. When a
company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be
questionable. An interest coverage ratio below 1 indicates the company is not generating
sufficient revenues to satisfy interest expenses. TATA Motors has an ICR of 9.22 which implies
that it can easily service its debt obligations. However, its ICR is much less as compared to its
competitors. This is primarily because it the proportion of debt financing employed by TATA
Motors is much higher as compared to M&M or Maruti Udyog. Consequently its debt obligation
is also higher than the other tow.

SOLVENCY RATIO GRAPHICAL ANALYSIS:

 PROFIT MARGIN
RATIO:
This ratio measure how much out of
every rupee of sales a company keeps
as earnings. The two
determinants of profit margin are
Operating Profit
PBIT

It is interesting to note here that while TATA Motors has a higher operating profit margin of 12%
as compared to M&M’s 9%, its Net Profit Margin (PBIT/Sales) of 10% is much lower than
M&M’s 15%. This implies that a large portion of TATA’s profit are from its operations while
M&M has a considerable amount of non operating income. Maruti has the highest profitability
among the three companies indicating that it has been most successful in controlling its costs.
Rate of Return Ratios
ROTA: ROTA is an indicator of how profitable a company is relative to its total assets.
ROTA given an idea as to how efficient management is at using its assets to generate
earnings.
ROCE: It indicated the efficiency and profitability of a company’s capital investments.
ROCE should always be higher than the rate at which the company borrows; otherwise
any increase in borrowing will reduce shareholders’ earnings
PROFITABILITY RATIO GRAPHICAL ANALYSIS:
 Inferences about the companies:
ROTA and ROCE for TATA Motors
is the least among the three
companies. While TATA has an
ROCE of 25% Maruti’s ROCE is
nearly 30%. It implies that
there is potential in the industry that
is not being fully exploited by TATA
Motors. There is still
considerable scope for the company to increase its profits by effectively utilization its assets.

MARKET POSITION:
PE ratio and MV/BV is lowest among the three companies for TATA Motors, despite the
fact that its earnings and book value is higher than M&M. The reason as to why these ratios are
low is clearly its low market value as competitors. The MV/BV Ratio for M&M is 5.2 which is
much higher than TATA’s 3.73 despite the fact that M&M’s BV per share is Rs. 148.11 which is
lower than TATA Motors’s BV of
Rs. 198.66 per share.
 RESULT/ CONCLUSION:
A detailed analysis of the
company shows that the
company has had a strong
fundamental
as well as a strong market
performance over the years. Given
the economic and the industry
environment (improving outlook for the CV industry) TATA Motors would be a key beneficiary.
While a pick-up in its CV volumes is evident, operating leverage and cost saving initiatives will
improve margins.
Current Ratio for TATA Motors is greater, which implies that it has comfortable liquidity
position, however as compared to its competitors it is least liquid since inventories form a
considerable portion of its current assets.

TATA Motors has a debt equity ratio of about 52% which means that one-third of its total
assets are financed through debt.
TATA Motors has an ICR of 9.22 which implies that it can easily service its debt
obligations.
However, its ICR is much less as compared to its competitors. This is primarily because it
the proportion of debt financing employed by TATA Motors is much higher as compared to
M&M or Maruti Udyog
TATA Motors has a higher operating profit margin of 12% as compared to M&M’s 9%,
its Net Profit Margin (PBIT/Sales) of 10% is much lower than M&M’s 15%.
ROTA and ROCE for TATA Motors is the least among the three companies. While TATA
has an ROCE of 25% Maruti’s ROCE is nearly 30%. It implies that there is potential in the
industr y that is not being fully exploited by TATA Motors.