Overview of Indian Automobile Industry

The automotive industry in India grew at a computed annual growth rate (CAGR) of 11.5
percent over the past five years, the Economic Survey 2008-09 tabled in parliament on 2nd
July’09 said.

The industry has a strong multiplier effect on the economy due to its deep forward and
backward linkages with several key segments of the economy, a finance ministry statement
said.

The automobile industry, which was plagued by the economic downturn amidst a credit
crisis, managed a growth of 0.7 percent in 2008-09 with passenger car sales registering 1.31
percent growth while the commercial vehicles segment slumped 21.7 percent.

Indian automobile industry has come a long way to from the era of the Ambassador car to
Maruti 800 to latest TATA nano. The industry is highly competitive with a number of global
and Indian companies present today. It is projected to be the third largest auto industry by
2030 and just behind to US & China, according to a report. The industry is estimated to be a
US$ 34 billion industry.

Indian Automobile industry can be divided into three segments i.e. two wheeler, three
wheeler & four wheeler segment. The domestic two-wheeler market is dominated by Indian
as well as foreign players such as Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, and
Suzuki etc. Maruti Udyog and Tata Motors are the leading passenger car manufacturers in the
country. And India is considered as strategic market by Suzuki, Yamaha, etc. Commercial
Vehicle market is catered by players like Tata Motors, Ashok Leyland, Volvo, Force Motors,
Eicher Motors etc.

The major players have not left any stone unturned to be global. Major of the players have
got into the merger activities with their foreign counterparts. Like Maruti with Suzuki, Hero
with Honda, Tata with Fiat, Mahindra with Renault, Force Motors with Mann.

Key Facts:

• India ranks 12th in the list of the worlds top 15 automakers

• Entry of more international players
• 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

The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors,
Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating
the vehicle the customers’ needs to a large extent.

Not only the Indian companies but also the international car manufacturing companies are
focusing on compact cars to be delivered in the Indian market at a much smaller price.
Moreover, the automobile companies are coming up with financial schemes such as easy EMI
repayment systems to boost sales.

There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the
technological advancements. Besides, there are many new projects coming up in the
automobile industry leading to the growth of the sector.

The Government of India has liberalized the foreign exchange and equity regulations and has
also reduced the tariff on imports, contributing significantly to the growth of the sector.
Having firmly established its presence in the domestic markets, the Indian automobile sector
is now penetrating the international arena. Vehicle exports from India are at their highest
levels. The leaders of the Indian automobile sector, such as T ata Motors, Maruti and
Mahindra and Mahindra are leading the exports to Europe, Middle East and African and
Asian markets.

The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the
motive of making India the most popular manufacturing hub for automobiles and its
components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting
its growth in the domestic as well as international arena.

Top Ten Players in Indian Automobile Sector

1. Maruti Suzuki India
2. Hero Motors Limited
3. Tata Group
4. Bajaj Auto Limited
5. Mahindra Group
6. Ashok Leyland
7. Yamaha Motor India
8. Hyundai Motors India Limited
9. Toyota Kirloskar Motor Private Limited
10. Honda Siel Cars India Limited

PROFILE OF THE ORGANIZATION

TATA MOTORS LIMITED
Tata Motors Limited is India's largest automobile company, with consolidated
revenues of Rs.70, 938.85 crores (USD 14 billion) in 2008-09. It is the leader in commercial
vehicles in each segment, and among the top three in passenger vehicles with winning
products in the compact, midsize car and utility vehicle segments. The company is the
world's fourth largest truck manufacturer, and the world's second largest bus manufacturer.
The company's 24,000 employees are guided by the vision to be "best in the manner in which
we operate best in the products we deliver and best in our value system and ethics."
Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India.
Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The
company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka).
Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with
Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and
Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The
company's dealership, sales, services and spare parts network comprises over 3500 touch
points; Tata Motors also distributes and markets Fiat branded cars in India.
Tata Motors, the first company from India's engineering sector to be listed in the New York
Stock Exchange (September 2004), has also emerged as an international automobile
company. Through subsidiaries and associate companies, 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. In 2004, it acquired the
Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The
rechristened 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, and subsequently the remaining stake in 2009.
Hispano's presence is being expanded in other markets. In 2006, Tata Motors 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. In 2006, Tata Motors entered into joint venture with Thonburi Automotive
Assembly Plant Company of Thailand to manufacture and market the company's pickup
vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the
Xenon pickup truck, with the Xenon having been launched in Thailand in 2008.
Tata Motors is also expanding its international footprint, established through exports since
1961. The company's commercial and passenger vehicles are already being marketed in
several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South
America. It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine,
Russia, Senegal and South Africa.
The foundation of the company's growth over the last 50 years is a deep understanding of
economic stimuli and customer needs, and the ability to translate them into customer-desired
offerings through leading edge R&D. With over 3,000 engineers and scientists, the
company's Engineering Research Centre, established in 1966, has enabled pioneering
technologies and products. The company today has R&D centers in Pune, Jamshedpur,
Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors,
which developed the first indigenously developed Light Commercial Vehicle, India's first
Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger
car. Within two years of launch, Tata Indica became India's largest selling car in its segment.
In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first
indigenously developed mini-truck.
In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the
world have been looking forward to. The Tata Nano has been subsequently launched, as
planned, in India in March 2009. A development, which signifies a first for the global
automobile industry, the Nano brings the comfort and safety of a car within the reach of
thousands of families. The standard version has been priced at Rs.100, 000 (excluding VAT
and transportation cost).
Designed with a family in mind, it has a roomy passenger compartment with generous leg
space and head room. It can comfortably seat four persons. Its mono-volume design will set a
new benchmark among small cars. Its safety performance exceeds regulatory requirements in
India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of
overall pollutants, it has a lower pollution level than two-wheelers being manufactured in
India today. The lean design strategy has helped minimize weight, which helps maximize
performance per unit of energy consumed and delivers high fuel efficiency. The high fuel
efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the
twin benefits of an affordable transportation solution with a low carbon footprint.
In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry,
in keeping with its pioneering tradition, by unveiling its new range of world standard trucks
called Prima. In their power, speed, carrying capacity, operating economy and trims, they will
introduce new benchmarks in India and match the best in the world in performance at a lower
life-cycle cost.
Tata Motors is equally focused on environment-friendly technologies in emissions and
alternative fuels. . It has developed electric and hybrid vehicles both for personal and public
transportation. It has also been implementing several environment-friendly technologies in
manufacturing processes, significantly enhancing resource conservation
Through its subsidiaries, the company is engaged in engineering and automotive solutions,
construction equipment manufacturing, automotive vehicle components manufacturing and
supply chain activities, machine tools and factory automation solutions, high-precision
tooling and plastic and electronic components for automotive and computer applications, and
automotive retailing and service operations.
Tata Motors is committed to improving the quality of life of communities by working on four
thrust areas – employability, education, health and environment. The activities touch the lives
of more than a million citizens. The company's support on education and employability is
focused on youth and women. They range from schools to technical education institutes to
actual facilitation of income generation. In health, our intervention is in both preventive and
curative health care. The goal of environment protection is achieved through tree plantation,
conserving water and creating new water bodies and, last but not the least, by introducing
appropriate technologies in our vehicles and operations for constantly enhancing environment
care.
With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

HISTORY OF TATA MOTORS

The Company was incorporated on 1st September 1945 at Mumbai to manufacture diesel
vehicles for commercial use, excavators, industrial shunter, dumpers, heavy forgings and
machine tools. The commercial diesel vehicles which were known `Tata Mercedes Benz'
(TMB) is now called `Tata' vehicles after the expiry of the collaboration agreement with
Daimler-Benz AG, West Germany.
In 1960 the company's name, which was Tata Locomotive & Engineering Company Ltd. was
changed to Tata Engineering & Locomotive Company Ltd. In the year 1987 the company
undertook to set up a new forge shop, a high output foundry line, a new paint shop as well as
augmentation of engine and gearbox manufacturing facilities, all at Jamshedpur

In 1991 during the year the company entered into a collaborative agreement with an
internationally renowned engine research and development organization to jointly develop
higher horsepower, fuel efficient diesel and petrol engines to meet the future requirements of
the company. The last quarter saw the company launching two new passenger vehicles, the
SIERRA and the ESTATE totally designed and manufactured in India. The company
acquired a BIFR company, M/s Noduron Founders Maharashtra Ltd. The total cost for Telco
worked out to Rs.18 crores as against setting up of similar critical castings foundry. During
the year company launched new earth moving equipment TWK-3036 Tata Front End Wheel
Loader. Two new models in the EX series of hydraulic excavators were launched. A 10 tonne
pick and carry articulated crane, designed and developed in-house was also introduced.
During the year company entered into an agreement with Nachi-Fujikoshi Corporation, Japan
to manufacture arc and spot welding robots suitable for automobile manufacturing
applications. During the year, company undertook to set up a joint venture with Asian Glass
Co. Ltd., Japan to manufacture float glass to be used as wind shields for automobiles. ACC
along with Tata Exports Ltd. participated in the joint venture. The joint venture named as
Floathlass India Ltd., the Company would have a stake of 16.33%. Tata Cummins Ltd.,
Mercedes-Benz (India) Ltd., Tata Holset Ltd., Tata Precision Industries, Singapore and Nita
Company Ltd., are the joint Ventures of the
Company

Taking advantage of the broad banding policy announced by the Government of India, the
Company entered into a collaboration agreement with Honda Motor Co. Ltd., Japan, for the
manufacture of their `ACCORD' model of cars in India. On 22nd April, an agreement was
entered into between Daimler-Benz AG and Mercedes Benz AG, Germany to setup a joint
venture company Mercedez-Benz India to manufacture `E' class paneyer cans and engines in
India.

During the year 1995 a new double pick-up and Army Version of various Telco Vehicles
were developed. A new petro engine and turbo diesel engine, an up-graded 709 LCV, new
sports utility vehicle Safari expected to be launched shortly. A 25 tonne 6 X 2 truck and a bus
with cummins engine were launched.

Tata Engineering and Locomotive Company (TELCO), has acquired a second hand paint
shop, machine line and cylinders from the Australian unit of the Japanese auto giant, Nissan.
TELCO is believed to have picked up the unit for Rs. 70 crore. The total cost of import duty
would be Rs 100 crore. During the year a machine tool division was expanded so as to double
its machine building capacity and significantly reduce production times.

The Company has launched "TATA SAFARI" in its Multi utility vehicle segment. Tata
Holset's turbo charger plant inaugurated on November 25, 1996.

In 1997, the Tata Engineering and Locomotive Company Ltd. (TELCO) have emerged as
numerous uno in the Review 200 survey conducted by the Far Eastern Economic Review in
association with Citi Bank. The Company introduced a 9-tonne vehicle which was well
received in the market. A 40 tonne tractor trailer powered by a Tata Cummins Engineering
was introduced. The Company developed a low floor bus chassis to meet the specific needs
of urban transport. The Company signed a new agreement with Hitachi for manufacture of
upgraded versions of existing range of excavators.
The year 1998- Tata Engineering and Locomotive Company Ltd (Telco) announced a tie-up
with Tata Finance Ltd and ANZ Grindlays Banks as the official financiers for its small car
"Indica" to be launched in December. Tata Engineering Locomotive Company Ltd (Telco)
sold its construction equipment business into a new subsidiary company, Telco Construction
Equipment Company Ltd. The Company in its small car segment has launched "Tata Indica"
which evoked an overwhelming response in the Indian market. A new range of cummins
engine powered vehicle which include a 35 tonne and a 40 tonne articulated truck and two
variants of buses.

To make substantial improvement in the quality of bus bodies available with TATA vehicles,
the Company encouraged collaboration between Fuji Heavy Industries of Japan and the
Automobile Corporation of Goa. The new project undertakes production of bodies on TATA
chassis, conforming to the most exacting international standards. Concorde Motors Ltd., a
Joint Venture between Tata Engineering and Jardine International Motors (Mauritius) Ltd.
was appointed as dealer for the Company's passenger cars in several cities across the country,
in Feb 1998.

The year 1999-Telco became the first Indian manufacturer to offer commercial vehicles
meeting euro-I emission norms, a year before they are due to be introduced in the country. It
is proposed to make TCECL a one-stop shop for construction equipment and earthmoving
machinery. In Oct 1999, the Company won the National award for R&D Efforts in
Development of Indigenous Technology in the Mechanical Engineering Industries Sector
instituted by Department of Scientific and Industrial Research, Ministry of Science and
Technology for the year 1999. SKF Bearings India Ltd has signed an agreement with Telco to
supply hub bearings for its latest model

Tata Indica
2000 saw the Company working towards introducing two new petrol-driven variants of its
small car Indica, powered by a multi-point fuel injection engine. The Company launched the
Indica 2000, the Euro II Complaint, 75 BHP multi-point fuel injection (MPFI) version of
Indica. The Company has won the National Technology Award for indigenous development
and commercialization of the Tata Indica car. The Company has launched its new hi-tech
Indica 2000 car with MPFI petro engine in Guwahati.

Tata Engineering & Locomotive Co. is renamed as Tata Engineering Ltd. It replaced its
three-shift production line with a one-shift daily schedule starting from 26th June. In the
same year FICCI-SEDF- Business world-Compaq award for social responsiveness was
awarded to the company. The Central Pollution Control Board for Environmental Technology
award has been presented to Tata Engineering in recognition of its contribution towards
efforts to conserve the environment. TATA Engineering on September 10 announced the
addition of MPFI petrol version to the Indica V2 range.
In year 2002 Foreign Institutional Investors (FII) hike stake in the company to 13.34%
launches six new products in light, medium and heavy vehicles segments on Jan 15 during
Auto Expo. Announces financial restructuring. Displays its Tata Sedan car at the Geneva
Motor Show. Indica adjudged top selling B-segment car in 2002.Launches two new
motorsport cars (The Zero and Double Zero Pace cars). High Court Approves Tata
Engineering's Financial Restructuring. Tata Engg, BPCL tie up to market co-branded
lubricants.Tata Steel's investment in Tata Engineering has been hiked to Rs 117.98 crore over
the last year. Telco names Sedan as Tata Indigo.Unveils 'EX' series of medium and heavy
commercial vehicles. Indica sales cross two-lakh mark .Collaborates with Nippon-Arcelor for
technical knowhow on CR steel. Receives Teri's (The Energy and Resources Institute) CoRE-
BCSD (Corporate roundtable on development of strategies for sustainable development and
environment-business council for sustainable development) corporate social responsibility
(CSR) awards for '01-02. Unleashes Safari's petrol version; priced at Rs 9.35 lakh.

The year 2003- Tata Unveils CityRover .Tata Motors Ltd signed a binding Memorandum of
Understanding (MoU) with Deawoo Commercial Vehicle Company Ltd (DWCV), Korea for
the acquisition of this company. It introduces Tata SFC 407 EX Turbo Light Commercial
Vehicle (LCV). The Company changed from 'TELCO ' to 'TATAMOTORS' w.e.f December
24, 2003. In the same year Tata Safari ranks No 1 in MUV/SUV segment.

2004:- The year of glory. Tata Motors launch an upgraded version Indica on January 15,
2004, in a bid to shore up sales of the small car.

Auto Expo: Tata unveils new version of Indica. Tata Motors unveils Indica V2. Tata Motors
launches new Indica V2 in Kerala. Tata Motors introduces new 'Indicab' for tour operators.
The much hyped Rs one lakh passenger car project of Tata Motors was going ahead as
planned. Tata Motors enters agreement with Ukraine bus building firm. Tata Motors enters
into agreement with Etalon. In a move to consolidate its presence in the light commercial
vehicles segment, Tata Motors has launched a new variant of its 407 series with increased
pay load capacity called SFC 407EX. Tata Motors buys Daewoo truck unit for Rs 465 crore.
Tata Motors unveils Tata SFC 407 EX. Tata Motors inks agreement with Austrian, French
companies. Acquires Daewoo Commercial Vehicle Company Ltd (DWCV), Korea. Tata
Motors launches most anticipated new 6-tn truck in India.

Tata Motors, the country's largest commercial vehicles manufacturer unveiled the new LPT
909EX Turbo Truck in Tamil Nadu. Tata Motors and Tata Africa unveiled a range of
passenger cars, utility vehicles, pick-ups, trucks and buses for the South African market. Tata
Motors has launched a face lifted version of its multiutility vehicle, Tata Sumo. Tata motors
rolls out Tata SFC 407EX BS II turbo light commercial vehicle.
Tata Motors unveils Tata Safari DICOR in Kerala market on August 11, 2005. Tata Motors
rolls out 2 luxury variants of Indigo. Tata Motors unveiled new Indica V2 Turbo with a price
tag of Rs 4.10 lakh for DLG variant and Rs 4.31 lakh for DLX. Tata Motors ropes in CVTech
to make parts for its small car. Tata Daewoo inks pact with Pakistan co.

Tata Motors has been presented the Golden Peacock Global Award for Corporate Social
Responsibility (CSR) in the Large Business category by the Institute of Directors in 2007.
Tata Motors buys Nissan facility in S. Africa. Tata Motors has got a prestigious order from
the Delhi Transport Corporation (DTC) for 500 non-AC, CNG-propelled buses. Tata Motors
Ltd has appointed Mr. P M Telang as Executive Director (Commercial Vehicles).

Growth of the organization

The Tata Motors Group global sales, comprising of Tata, Tata Daewoo and Hispano
Carrocera range of commercial vehicles, Tata passenger vehicles along with distributed
brands in India, and Jaguar and Land Rover, were 101,712 nos. in March 2010, a growth of
39% over March 2009. Cumulative sales for the fiscal (April 2009 – March 2010) are
872,951 higher by 19% compared to the corresponding period in 2008-09.

Sales of all commercial vehicles were 47,936 nos. in March 2010, a growth of 53%.
Cumulative sales for the fiscal are 413,057 nos., a growth of 37%. Sales of all passenger
vehicles were 53,776 nos. in March 2010, a growth of 28%. Cumulative sales for the fiscal
are 459,894 nos., a growth of 6%. Tata passenger vehicle sales, including those distributed,
were 30,238 nos. for the month, a growth of 18%. Cumulative sales for the fiscal are 265,912
nos., a growth of 24%.

Jaguar Land Rover global sales in March 2010 were 23,538 vehicles, higher by 43%. Jaguar
sales for the month were 4,642, higher by 8%, while Land Rover sales were 18,896, higher
by 55%. Cumulative sales of Jaguar Land Rover for the fiscal are 193,982 nos., lower by
11%. Cumulative sales of Jaguar are 47,418 nos., lower by 24%, while cumulative sales of
Land Rover are 146,564 nos., lower by 6%.