TATA MOTORS

'Tata Motors Limited', formerly known as 'TELCO' (TATA Engineering and Locomotive Company), is India's largest passenger automobile and commercial vehicle manufacturing company. It is also the world's 5th largest commercial vehicle manufacturer. It is part of the Tata Group, and is headquartered in Mumbai.
Tata Motors is widely credited for putting India on the automotive map by designing and developing its own range of cars. Tata Motors was established in 1945, when the company began making trains. Tata Motors was first listed on the NYSE in 2004. Tata Motors had created the wealth Rs. 320 billion during 2001-2006 and stood among top 10 wealth creators in India. It has its manufacturing base in Jamshedpur, Lucknow, Pune and soon one more plant is going to established at Singur, West Bengal. In 2004 it also bought Daewoo's truck manufacturing unit in South Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving it controlling rights in the company.

Background

Tata Motors is a company of the Tata and Sons Group, founded by Jamshetji Tata. It is currently headed by Ratan Tata.
The company has the workforce of 22001 employees working in its three plants and other regional and zonal offices across the country.
Tata Motors' range of passenger cars is still not comprehensive by international standards. In commercial vehicles, Tata Motors commands an imposing 65% market share in the domestic heavy commercial market. The company is trying to modernise its range of commercial vehicles. Tata Motors hived off its vehicle finance business into a separate subsidiary, TML Financial Services (TMLFS), in September 2006.
The company plans to build a car that will cost just under Rs 1,00,000 considering that 2 wheelers in India cost Rs 50,000/-.

Time line and milestones

1977-1986

Tata Motors is the largest commercial vehicle maker in India. World over it is the world's fifth largest medium and heavy commercial vehicle manufacturer. It started its journey in 1977 with the manufacturing of first commercial vehicle in Pune. It took five years for the company to begin the commercial production of heavy commercial Vehicles. Considering the road infrastructure of the country the company which does not support the heavy vehicles the company adopted a route for light commercial vehicles (LCV). It came out with its first LCV, Tata 407, in 1986.

1987-1996

Tatamobile introduced in 1989. Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures. In 1993 it signed with Cummins Engine Co., Inc., for the manufacture of high horsepower and emission friendly diesel engines. It was an effort made to reduce the pollution in the existing Tata engines and to produce more environmentally friendly engines. Furthering the trail of JVs it signed a joint venture agreement with Tata Holset Ltd., UK, for manufacturing turbochargers to be used on Cummins engines.

1997-2006

In 2000, it launched CNG buses and also filled the product line gap through the introduction of the 1109 vehicle which is an intermediate commercial vehicle and is useful for medium tonnage loads. Post 2000, the company introduced a variety of new models. It introduced the Ex- series vehicles with high tonnage capacity and high pick up and also came out with the entirely new LCV (207 DI) with direct ignition technology to cater to the customers' requiring one and same vehicle for commercial as well as personal use.

Tata–Daewoo merger

In 2004, it acquired the Daewoo Commercial Vehicle Company of Korea. The reasons behind the acquisition were:

★ Company’s global plans to reduce domestic exposure The domestic CV 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 LCV segment. Since the domestic CV 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
On its 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).

JV with Hispano Carrocera

In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors acquired 21% stake in Hispano Carrocera SA, Spanish bus manufacturing company and introduced its high-end inter-city buses in the country. Tata Motors has also formed a 51:49 JV with Marcopolo, a Brazil-based global leader in bus body building. This JV is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems. The JV will absorb technology and expertise in chassis and aggregates from Tata Motors, and expertise and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design.

Tata Ace

The latest hit of Tata Motors is its mini truck Ace. Ace, India's first indigenously developed sub-one ton mini-truck, was launched in May 2005. It was an instant hit. Analysts opined that Ace had changed the dynamics of the LCV market in India by creating a new market segment termed the SCV segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, since the launch of Ace, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace.
In 2005, Tata Motors became the only major engine manufacturer in the world (aside from a Briggs & Stratton emissions test) to express any formal interest in the turbulence-boosting cylinder head grooves invented by Somender Singh (Mysore).

2007 onwards

Tata Motors, through its JV with Fiat, is likely to gain access to Fiat’s diesel technology and to the latter’s strong overseas distribution network for its passenger cars. Tata Motors is looking to extend this relationship to other segments like pick-ups and MHCVs. The company also plans to expand its global footprint with the launch of ‘Global Truck’ and ‘Global Pick-up’ in domestic and international markets by 2007-08. Tata Motors plans to launch the new pick-up in India, Southeast Asia, Europe, South Africa, Turkey and Saudi Arabia. The launch of the global truck will mark the entry of the company into developed markets like Europe and the USA. The project was initially a 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 JV with Thailand’s Thonburi,( Exhibit-1) an independent auto assembler, in which Tata Motors will hold a 70% stake. The JV will set up a plant with capacity to manufacture pick-ups a year and will sell them in Thailand, the second largest pick-up market in the world, and in other regional markets. The JV product is likely to be a part of Tata Motors’ ‘Global pick-up’ plans.
Auto policy of Government of India envisions to establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. GOI policy has rightly recognized the need for modernizing of vehicles to arrest degradation of air quality. The terminal life policy for commercial vehicles and move toward international taxing policies linked to age of vehicles, are steps in the right direction which will lead to increased sales for TATA motors Commercial vehicle division.
Effect of Government Policy on TATA Motors CV Division Commercial Vehicles segment sector has been at the forefront of the strong showing by the automotive industry over the past few years. Following factors have led to growth in sales:

★ The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices

★ The attractive financing offers and freebies enabled by low interest rate policies by Government

★ the need to transport higher volumes of agricultural and industrial goods

★ Low interest rates
Impact of Indian Budget on Auto Sector The auto industry an engine of growth in India in the past five years has not received direct mention. The mildly positive news concerning automobiles is the cut in tariff on petroleum and diesel from 8 per cent to 6 per cent which has made commercial vehicles more competitive in the export market The government has announced indirect benefits in education and training of the workforce and extension of the benefit of 150 per cent weighted deduction on in-house R&D by another five years. Another indirect benefit to the auto is in provision for the national highway development program. Thus budget will have mild positive effect on commercial vehicles division at TATA Motors, although Government could have done lot more to increase competitiveness of CVD like the industry had expected excise duty on larger passenger vehicles to be cut to 16 per cent from 24 per cent and customs duty on auto parts would be cut to 5 per cent from 12.5 per cent.
Union Budget Highlights on Auto Sector • Setting up of Investment Commission to invite domestic and foreign business to invest in India • Setting up of National Manufacturing Competitiveness Council to provide sector/industry specific policy initiatives to enhance competitiveness. • Announcement of Introduction of VAT from 1st April 2005. A Technical Experts Committee to assists States in VAT implementation. • 2% education cess levied on Income Tax, Corporate Tax, Customs Duty, Excise Duty, Service Tax. • Rs 10,135 crore additional Plan expenditure • No change in rate of interest
Direct Taxes • Requirement of capacity expansion reduced from 25% to 10% to get benefit of additional depreciation of 15% u/s 32 (1) (iia) for capital investment • Benefit of 150% deduction under section 35(2ab) of Income Tax Act extended to the Automobile Industry.
Indirect Taxes Customs • Reduction in Customs Duty on Alloy Steel, Copper, Lead & Zinc from 20% to 15%. Duty on all primary, Semi- finished and finished form of Iron & Steel like Ingots & Billets, Sponge Iron, Hot Rolled & Cold Rolled bars/ Rods /Coils of non-alloy steel reduced from 15% to 10%. • Customs Duty on catalysts (3815) has been reduced from 20% to 15% Excise Duty • Increase in Excise duty on Steel from 8% to 12% • Tractors exempted from Excise Duty. Parts captively used in the manufacture of tractors have been exempted from Excise Duty.
New auto policy considered by GOI India last announced an automobile policy in December 1997. The policy required majority-owned subsidiaries of foreign car firms to invest at least $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 subsidiary 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 $2.7 billion by 2010. The policies adopted by Government will increase competition in domestic market, motivate many foreign CV 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.
Tata is developing a car it aims to sell in 2008 for about $2,500 USD, which would be considered the cheapest vehicle ever made in real terms.[2]

Global competition

Tata Motors have some distinct advantages in comparison to other MNC competitors. There is definite cost advantage as labor cost is 8-9 per cent of sales as against 30-35 per cent of sales in developed economies. Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. India is an excellent source for IT based engineering solution for products & process Integration. There are strong supporting industries i.e. auto component industry has world class capabilities. There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. There are favorable Government polices and regulations to boost the auto industry i.e. Incentive for R&D.

Present global challenge

Volvo, a leading manufacturer of trucks, buses, cars, construction equipment, and aero engines, has entered in India in 1998. Its main focus is in the area of fully built buses. In India, it has focused on providing economical transport solutions in consonance with its values of safety, quality, and environmental care. Its competitive advantage is its high technology which makes the vehicle a very comfortable option to travel through. Its trucks are reputed for their performance and economy and are the flag bearers in their production activities in India. It is still operating in the niche market of high end buses where the TATA compete through its Spanish buses.

Future challenges

Plastic Car Production- Tata plans on producing a car that is made of nearly 100% plastic.

★ 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), 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: 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.

Products

Passenger cars and utility vehicles

Tata concept car

★ Tata Sierra

★ Tata Estate

★ Tata Sumo/Spacio

★ Tata Safari

★ Tata Indica

★ Tata Indigo

★ Tata Indigo Marina

Concept vehicles

★ 2000 Aria Roadster

★ 2001 Aria Coupe

★ 2002 Tata Indiva

★ 2004 Tata Indigo Advent

★ 2005 Tata Xover

★ 2006 Tata Cliffrider

★ 2007 Tata Elegante

Commercial vehicles

Tata heavy trucks in Ladakh, India

★ Tata Ace

★ Tata TL/Telcoline/207 DI Pickup Truck

★ Tata 407

★ Tata 709 E

★ 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 3015 (Heavy truck)

★ Tata 3516 (Heavy truck)

★ Tata Novus (Heavy truck designed by Tata Daewoo)

Military vehicles

★ 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 TC (4x2)

Tata Motors Subsidiaries

★ Telco Construction Equipment is a joint venture between Tata Motors and Hitachi, which focuses on excavators and other construction equipment.
'HV Transmission (HVTL) and HV Axles (HVAL):'
HVAL and HVTL are 100% subsidiary companies of Tata Motors engaged in the business of manufacture of gear boxes and axles for heavy and medium commercial vehicles, with production facilities and infrastructure based at Jamshedpur. The combined revenue of the two companies rose 38.7% yoy for 9MFY07 while the combined PAT rose 50.9%. Tata Motors plans a capex of Rs2bn each for HVAL & HVTL and plans to raise funds for the same, most probably by way of a strategic sale to a technical collaborator. The strategic sale of either HVAL or HVTL or both is likely to be completed in the next one or two quarters.
'Tata Technologies Limited (TTL):'
TTL provides Engineering and Design (E&D) solutions to the Automotive Industry. Tata Motors holds 86.91% of TTL’s share capital. TTL is based in Pune (Hinjawadi) and operates in the US and Europe through its wholly owned subsidiaries in Detroit and London respectively. It also has a presence in Thailand. Tata Technologies is a software service provider in the IT services and BPO space. Its global client list includes Ford, General Motors, Toyota and Honda, to name a few. It bought over the British engineering and design services company, Incat International Plc for Rs4b in August 2005. Incat specializes in engineering & design services and product lifecycle management in the international automotive, aerospace and engineering markets. With this acquisition, Tata Motors will have closer proximity to its global customers and be able to provide a wider range of services.
'Tata Daewoo CV Ltd(TDCV):'
TDCV is a 100% subsidiary of the Tata Motors based in South Korea, which was acquired in March 2004. TDCV is in the business of manufacture and sale of heavy commercial vehicles.Tata Daewoo is Tata Motors’ 100% subsidiary in Korea, with a market share of 30%.Tata Motors will use the Daewoo technology to introduce higher tonnage trucks in the Indian market and use Tata Daewoo for exports globally. In line with this strategy, it has already introduced the Novus, a high-end tipper developed by Tata Daewoo for the Indian market.

Controversies

Farmers are agitating against the land acquired by the firm in Singur for its ambitious Rs 1,00,000 car project. The protest is being lead by Mamta Banerjee of the Trinamool Congress. Farmers are protesting that the land is fertile land and the government acquired the land without their consent.

Forbes Global 2000 Ranking - 2005

The Forbes Global 2000 list for the year 2005 ranked Tata Motors at '1215' ^[1].

References

1. [3]

This article provided by Wikipedia. To edit the contents of this article, click here for original source.

psst.. try this: add to faves

	Hotel Valley Ho (Caf� ZuZu, VH Spa)
	Scottsdale CVB
	Interpro Travel Services Inc.
	traverse jamaica
	Pelican Executive Suites
	Time Out for Touring Inc.
	Travelonly - Dave Corless
	Travelonly - Allan Jenkins
	Heavenly Paradise Getaways
	Temptation Resort Spa Cancun