Strategic Management

Mid-Review Report
On
Tata Motors
Submitted To
Prof. Shaleen Gopal

By

Group SMA13
Romil Jain (166136)
Rajnish Kumar (166130)
Charvi Yadav (166036)

On
08-03-2017
COMPANY BACKGROUND

Tata Motors, formerly known as TELCO (Tata Engineering and Locomotive Company) is an
Indian multinational automotive company. It is headquartered in Mumbai, India and is a part
of the coveted Tata Group. The various products of Tata Motors include cars, trucks, vans,
coaches, buses, sports cars, construction equipment and even military vehicles. It has
manufacturing and assembly plants in India as well as abroad. Within the country, its plants
are located at Jamshedpur, Sanand, Lucknow, Pantnagar, Darwad and Pune. It also has its
plants in countries like Great Britain, Thailand, South Africa and Argentina. Tata Motors
acquired South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004
and purchased Jaguar Land Rover from Ford in 2008. Both of them are its principal
subsidiaries. It also has a bus manufacturing joint venture with Marcopolo SA known as Tata
Marcopolo. Tata Hitachi construction Machinery is the joint venture with Hitachi Company.
A joint venture with Fiat Chrysler the company makes automotive components and Fiat
Chrysler and Tata Branded Vehicles.

Operations:

It currently operates in both India and abroad with plans to establish plants in Turkey,
Indonesia and Eastern Europe.

Tata Motors Cars: Its a division which produces passenger cars under the marque of Tata
Motors. It produces vehicles in the compact, utility and midsize car vehicle segments. Tata
Motors has third largest service network and sales after Maruti Suzuki and Hyundai and more
than 250 dealerships in more than 195 cities across the country. It also has dealerships abroad
in 26 countries.

Tata Daewoo: It is a wholly owned Tata subsidiary headquartered in South Korea. Standing
at the number two position in the commercial vehicle manufacturer, it was acquired by Tata
Motors in 2004. The main reason behind this acquisition was to reduce its dependence on the
Indian Commercial Vehicle Market. By this acquisition the company expanded its portfolio in
the heavy tonnage sector. This venture has developed trucks such as Novus and World Truck
and buses such as GloBus and Starbus.

Jaguar Land Rover: A wholly owned subsidiary of Tata Motors since 2008 and was
acquired from Ford Motor Company, USA. It develops, manufactures and sells Jaguar Cars
luxury and sports cars and Land Rover premium vehicles.
TML Drivelines: Another wholly owned subsidiary of Tata Motors engaged in
manufacturing of gear boxes and axles for heavy and commercial vehicles. It was formed
through a merger of HV Transmission and HV Axles and has plants located in Jamshedpur
and Lucknow.

Tata Technologies: 86.91% owned subsidiary of Tata and provides design, engineering and
business process outsourcing services to the automotive industry.

Commercial vehicle portfolio

Tata motor includes all small commercial vehicle (SCV) of a sub-one ton, including Ace, Ace
zip, super Ace, Magic, and Magic Iris. Light commercial vehicle (LCV), intermediate
commercial vehicle, military vehicles, Medium & heavy commercial vehicle (M&HCV) and
also pickups of GVW, including RX pickup and Xenon pickup.

The current market trend of commercial vehicle

The Light commercial vehicle (LCV) recorded a 19 percent growth in September 2016 over
same period in September 2015, but the area of concern for the automobile industry is
medium and heavy commercial vehicles (M&HCVs) which account the 41 percent of the
industrys commercial vehicle sales and the sales of this segment has seen declined of nearly
20 percent over the same period. This segments (M&HCVs) includes lager trucks and buses
division.

Tata motors CVs analysis

The commercial vehicle industry has gone through various ups and downs in past few years
and manufacturers have upped their bids to stay ahead in this highly competitive market. In
order to maintain the leadership position in this market, they have to strike the right balance
between growth and profitability. Tata Motors, being the market leader with 43 percent in the
domestic CV market (50 percent of M&HCV and 3% of LCV as per data released by industry
body SIAM for April September 2016) it comes with its own disadvantages. Tata motors
typically doesnt need to display the desperation to gain the market share by providing
various discounts and credits that smaller players usually do to gain market share. Companies
like Volvo and SML, Isuzu are two of the examples which had followed the same strategy to
come down Tata motors from 58 percent to 43 percent. Even domestic companies like Ashok
Leyland and Mahindra and Mahindra are giving tough competition.
It is not easy to be a leader in any business and to be one Tata motors have innovated, provide
better services, showing presence in the global market, adapting the changing technology, and
producing reliable products according to the demand and need in the market.

Strategies followed by the Tata motors for commercial vehicle are:

Internationalization: Being the domestic market leader they are continually trying to improve
its offering in the domestic market and marking their footprints overseas as well. They have
started their assembly units in Nigeria and Tunisia and about to start operations at a new
assembly unit in Kenya, other than this they have already started manufacturing in South
Africa. They have marked their presence in South-Pacific markets like Indonesia, Vietnam,
Thailand, Philippines and Malaysia, right up to Australia, and South American markets of
Chile, Venezuela, and Bolivia. Presently, Tata motors are eyeing on bigger markets of Brazil
and Mexico.

Double their exports: In exports business, they have set a target of doubling their figures by
2018, last year 53000 vehicles were exported by them. This ambitious target of doubling has
proven the boon for the company and in late September 2016, they have acknowledged a
growth of 29 percent in total exports.

Technological Innovation: Tata motors uses the latest technology of hybrid buses which have
air brakes, articulated buses which have the second car trailing the main one first of a kind
in India. Other than technological improvement they have also invested in building the bus
body with a joint venture in Goa and two other units in Lucknow and Dharwad. Due to this
advancement in technology and manufacturing buses, they have seen growth in the order of
buses from 2800 buses order in 2015-16 to 5000 buses in present year worth of Rs 900 crore.

Focus on quality products: Tata motors have placed a large bet on products like Prima and
Ultra for M&HCVs. Their major key offering which made point of differentiation are an air
conditioned cabin, with flat beds, hence allow a truck owner to use a two driver team and get
a fast delivery and turnaround.

Tata motors and Castrol partnership: On January 5, 2017, Tata motors and Castrol today
have announced the three-year strategic partnership agreement for the supply of commercial
vehicle oils to Tata motors globally. According to the agreement, it will cover over 50
markets including ASEAN region and SAARC, Middle East, Africa, Russia and Latin
America. This will help Tata motors to provide with high-quality products and services to
enhance their market share and profitability.

Hence with the above strategies, they are not only aiming to be undisputed market leader in
the commercial vehicle but gradually they are also emerging as the key players of
internationally too.