Indian Automobile Industry:

TATA Motors

Submitted By:
Vikram Singh
Marketing Operations
 Presentation Flow
• Indian Automobile Industry:
– Overview
– PEST Analysis
– Porter’s 5F Analysis
• Tata Motors
– History
– Product
– Financials
– SWOT
 Indian Automobile
Industry
• Growing at the rate of 15-27 per cent over the past five
years.
• India ranks 12th in the list of the world's top 15
automakers.
• Entry of more international players.

• Concentrated in regions.

• Market size estimated to be of Rs.225 Thousand crores

( $45 Billion)
• Contributes 5% to the GDP.

• Production of four wheelers in India has increased from

9.3 lakh units in 2002-03 to 23 lakh units in 2007-08.
• Targeted to be of $ 145 Billion by 2016.

• Exports increased from 84,000 units in 2002-03 to

280,000 units in 2007-08.
Commercial Vehicles
 Key facts

• Currently going through demand correction.

• Grew at 25% in 2001-2007 as compared to 5% in FY

2008.
• Split between LCV and M/HCV.

• Dupolistic in nature
– LCV:
• M&M and TATA’s own majority marketshare.(90.8%)

– M/HCV
• Ashok Leyland and TATA’s hold 88.6% of market.
 Key Success factors

• Ability to enhance and vary product mix.

• Sales and Distribution service network.

• Access to new technologies.

• Balance between outsourcing and in-house

productions.
• Government regulations.
 Concerns

• Higher steel prices.

• Slowdown in Indian economy.

• Rise of railways in freight transports.

• Polluting vehicles.
Passenger Vehicle Industry
Market Segments
 Key Facts

• Grew 14% YoY to 1,762,131 as against1,545.223 units

in 2007-08.
• Passenger car contributed 80% of passenger vehicles
sold.
• Domestic sales grew to 12% YoY.

• Last five years CAGR of 19.5%.

• Share of exports is 12.3%.

• Fragmented market with around 14 players.

Structure of Indian PV
Market
 Key Success Factors

• Presence across segments.

• Efficient Operations.

• Wide dealer network and availability of finance.

• Access to latest technologies.

• Varied new offerings.

• Exports.

• Favorable Budget.

• Increase in affordability.
 Concerns

• Increasing raw material cost.

• High competition.

• Roads and Infrastructure.

PEST ANALYSIS
 Political-Legal Factors

• Auto Policies(AMP).

• Government regulations and support.

• 100% FDI allowed.

• Import Duties reduced.

• Budget 2008.

• Recent announcement to buy vehicles.

 Economic Factors

• GDP growth of 5.1%.

• Inflation down to 2.6%.

• Fuel prices at Rs. 44.

• Economy less affected to recession as

compared to other nations.
• Nano effect.
 Social Factors

• Growth in urbanization.

• Lower ownership costs.

• Rising incomes of middle class.

• Cars now more for convenience than status

symbol.
• Increasing rural consumers income.
 Technical Factors

• Rising world class auto-component industry.

• MNC’s bringing advanced technology with

them.
• Acquisition of foreign firms helping to gain
technology.
• Increased government involvement in
technology development.
Porter’s 5F Analysis
 Bargaining Power of
Suppliers
• Supplier concentration.

• Importance of volume to supplier.

• Differentiation of inputs.

• Impact of inputs on cost or differentiation.

• Switching costs of firms in the industry.

• Threat of forward integration.

 Bargaining Power of
Customers
• Brand identity.

• Price sensitivity.

• Product differentiation.

• Substitutes available.

• Contribution to Cost.

• High service demand.

 Threat of Substitutes
• Many models available in similar price
range.
• Little product differentiation.
• High marketing exposure.
• Availability of Close substitutes.
 Threat of Competition
• Industry concentration.
• Similar product offerings.
• High brand following.
• Diversity of rivals.
• Proprietary products.
TATA Motors
 History
• Started in 1945 in Mumbai, • The family founded:
India.
– Ironworks
• Original production was on
– Steelworks
locomotives.
– cotton mills
• 1954
– First car rolled off of the – hydroelectric-power plants
assembly line.
• Are of their endeavors have
• Tata’s are a family of Indian
been proved to be crucial
industrialists and
philanthropists. to India's industrial
development.
History
• Tata Motors is India’s
owns the largest
independent company in
India.
• Mercedes and Tata
teamed up to create a
truck line.
– First major business deal
with another firm.
• Together both companies
started their commercial
vehicle operations in
1960.
• In 1986 the company
created and sold the first
LCV
– LCV = light commercial
vehicle
– Was the Tata 407
 History
• Tata Motors decided to
pursue joint ventures.
– Cummins Engine Co.,
Inc., was the first company
to jointly venture with Tata
in 1993.
– Manufactured a diesel
engine that had high
horsepower and emitted
less harmful chemicals.
• Began creating new lines
in the late 1990’s and
early 2000’s:
– Compressed natural gas
buses
– 1109 vehicle, used for
commercial purposes.
– Ex-series
– Newly designed LCV
called the 207 DI
 Products
• Utility Vehicles
• Passenger Cars
– Safari DICOR
– Indica Vista – Sumo Grande
– Indica V2 – Sumo
• Commercial Passenger Carriers
– Indica V2 Turbo
– Buses
– Indica V2 Xeta – Winger
– Magic
– Indica V2 DICOR
– Trucks
– Indigo XL Medium & heavy Commercial vehicles
LCV’s
– Indigo Ace
TATA Novus
– Indigo Marina Defense Vehicles

– Indigo CS
 Growth and Expansion

• Large Indian market

– Familiar with market

– Brand loyalty

• Fuel efficiency

• JLR buyout $3.5 Bn.

• New Models.

• Launch of Nano.
MARKETSHARE
 Tata Motors: Finances
• Revenue as on 31st Dec 08
– Rs. 47136.30 crores
• PAT: Rs. -2632.60 crores
• Assets as on 31st March: Rs. 261182.60
crores
• Total Debt/Networth March 08: 0.80
Tata motors: SWOT
Strengths
• Well-known brand with good
reputation
•Planned and smart international
strategy
•Smart approach in responding to the
market demand.
•Alliances with key players
•Fast product development ability
Opportunities
•New long-awaited product (Nano)
• Government support
• Emerging markets high demand for
passengers cars at low costs.
Weaknesses
• Low level of infrastructures
• Lack of experience in certain new
sectors.
Threats
• Downturn of the world economy
• High level of competition
• Sustainability and environmentalism
• Oil rising prices
Thank You