Tata Motors Limited
- Pages: 21
- Word count: 5231
- Category: Corporation
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Tata Motors Limited is an Indian multinational automotive corporation headquartered in Mumbai , India. It is the eighteenth largest motor vehicle manufacturing company in the world by volume. Part of the Tata Group , it was formerly known as TELCO (TATA Engineering and Locomotive Company). Its products include passenger cars, trucks, vans and coaches. Tata Motors is South Asia’s largest automobile company; it is the leader in commercial vehicles and among the top three in passenger vehicles. Worldwide it is the world’s fourth-largest truck manufacturer and second-largest bus manufacturer. Tata Motors is a cross-listed company ; its stock trades on the Bombay Stock Exchange and the New York Stock Exchange .
Tata Motors Limited, India’s largest automobile company, is the leader by far in commercial vehicles in each segment, and the second largest in the passenger vehicles market with winning products in the compact, mid-size car and utility vehicle segments. The company is the world’s fifth largest medium and heavy commercial vehicle manufacturer.Established in 1945, Tata Motors’ presence indeed cuts across the length and breadth of India. Close to 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company’s manufacturing base is spread across Jamshedpur, Pune and Lucknow, supported by a nation-wide dealership, sales, services and spare parts network comprising over 2,000 touch points. Their annual turnover last year was Rs. 27,000 crores. The company’s 24,000 employees are guided by the vision to be best in the manner in which they operate, best in the products they deliver, and best in their value system and ethics.
Tata Motors Limited Type : Public company
Industry Automotive Founded: 1945
Founder(s): JRD Tata
Headquarters: Mumbai , Maharashtra, India
Key people: P. M. Telang ,(MD)
Products: Automobiles, Commercial vehicles
Revenue: US$ 27.629 billion (2011)
Profit : US$ 1.653 billion (2011)
Total assets : US$ 23.131 billion (2011)
Total equity : US$ 4.683 billion (2011)
Employees: 53,151 (2011)
This report is a brief SWOT and STEEPLED analysis of TATA motors. TATA motors is the leading automobile company of India, and alsohaving a major share outside the country. To make any company successful it’svery much required to analyse different factors those can influence company’sperformance. SWOT and STEEPLED covers most of the factors from amanager’s point of view. Through this report we are trying to show the strength and weaknesses that are present in the company. What are the opportunities the companies have? And what are the threats to the company? Again we are showing the different factors like politics, economy, legal, technology etc. which are having influence on the company as well as environment, social, ethical, demographical etc. influence of the company. We have also covered the actions taken by TATA motors to improve some of the fields.
Introduction Established under the parent company, Tata Group, in 1945, Tata Motors Limited hasbecome India’s largest automobile company. It was the first Indian automobile company to list on the New York Stock Exchange. Tata Motors began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany. This partnership has led Tata Motors to not only become India’s largest automobile company but also India’s largest commercial vehicle manufacturer; the world’s top five manufactures of medium and heavy trucks and the world’s second largest medium and heavy bus manufacturer. Having just entered the passenger vehicles market segment in 1991, Tata Motors now ranks second in India’s passenger vehicle market. Tata has enjoyed the prestige of having developed Tata Ace, India’s first indigenous light commercial vehicle; Tata Safari, India’s first sports utility vehicle; Tata Indica, India’sfirst indigenously manufactured passenger car; and the Nano, the world’s least expensive car.
SWOT analysis of TATA motors:
SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project andidentifying the internal and external factors that are favorable and unfavorable to achievethat objective.
Strengths Well known brand with good reputation . Planned and smart international strategy . Smart approach in responding to the market demand . It is the eighteenth largest motor vehicle manufacturing company in the world. Fast product development ability. Strong customer base. The following are the strengths of Tata motors-
Strong Domestic player (Indian market): Tata has a strong presence in India and is a key manufacturer of commercial vehicles. It is a market share of ~64% which has almost remained constant. Also, Tata Motors is India‟s largest automobile manufacturer by revenue .Tata Motors Limited is India’s largest automobile company, with revenues of `1,23,133.30crore in 2010–11. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles in India with products in the compact, midsize car and utility vehicle segments. Tata vehicles are sold primarily in India, and over 4 million Tata vehicles have been produced domestically since the first Tata vehicle was assembled in 1954. It is a demand driven, and customer-oriented, taking care of customers‟ preferences and taste. Long list of portfolios: Its products include passenger cars, trucks, vans and coaches. It is world‟s 4th biggest truck producer, it is also world‟s second biggest bus producer.5|Page
Global Presence Tata Motors has been in the process of acquiring foreign brands to increase its global presence. Through acquisition, Tata has operations in the UK, South Korea, Thailand and Spain. Among these acquisitions is Jaguar Land Rover, a business comprising two struggling iconic British brands that was acquired from the Ford Motor Company in 2008. In 2004, Tata acquired the Daewoo Commercial Vehicles Company, South Korea‟s second largest truck maker.
Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. 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 has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal. Tata has dealerships in 26 countries across 4 continents.
Dealership, Sales and Service Access: The Company‟s dealership, sales, services and spare parts network comprises over 3500 touch points.
Research and Development Activities: Tata motors is known as an innovative global leader. The company has a very strong R&D having over 3000 engineers and scientists. The Engineering Research Centre (ERC) in Pune was setup in 1966 and is among the finest in the country. It has been honoured with two prestigious awards – The DSIR National Award for R&D Effort in Industry – 1999 and National Award for Successful Commercialisation of Indigenous Technology by an Industrial Concern – 2000. Tata Nano was a recent outcome from the ERC .
The internationalisation 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.
Low level of infrastructure . Lack of experience in certain new sectors . The company’s passenger car products are based upon 3rd and 4th generation. Despite buying the Jaguar and Land Rover brands Tata has not got a foothold in the luxury car segment One weakness which is often not recognised is that in English the word ‘ tata ‘ means rubbish. The following are the weaknesses of tata motors –
Return on Investment on TATA motors shares in low. Tata motors products are not considered as luxurious. The products are generally targeted for economy class rather than for luxury. Hence, the company lacks a strong footprint in the sector of luxury products. Safety standards are not maintained/ often ignored. This has led to diminish of public image of the TATA automobiles (eg Tata Nano). FRIDAY, APRIL 9, 2010: TATA NANO caught fire Limited consumer base
Though Tata is present in many countries it has only managed to create a large consumer base in the Indian Subcontinent, namely India, Bangladesh, Bhutan, Sri Lanka and Nepal. Tata has a growing consumer base in Italy, Spain and South Africa. Relatively smaller proportion of market share in Passenger vehicles in India. One weakness which is often not recognized is that in English the word tat means rubbish. Would the brand sensitive British consumer ever buy into such a brand? The companys passenger car products are based upon 3rd and 4th generation platforms, which put Tata Motors Limited at a disadvantage with competing car manufacturers. 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; Tata 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 (see opportunities and strengths).
Two of the World’s luxury car brand land rover and jaguar have been added to its portfolio of brands. Nano is the cheapest car in the World – retailing at little more than a motorbike. New long awaited products . Govt. support . Emerging high market demand for passenger cars at low cost . The company has put in place a very proactive Corporate Social Responsibility (CSR). In the summer of 2008 Tata Motors announced that it had successfully purchased the Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the Worlds 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 Motors 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 World 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%. 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 World’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 World 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%.
High level of competition .Sustainability and environmentalism. Down turn of world economy . Oil rising prices . 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. Environmental Regulation: 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. Intense competition: 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 MarutiUdyog, General Motors, Ford and others.
Presently, Tata Motors face intense competition from its domestic as well as foreign competitors including General Motors, Honda Motor, MarutiUdyog, Mitsubishi Motors, Fiat, Ford and so on. Competition is expected to intensify further as Indian automobile manufacturers obtain greater access to debt and equity financing in the international capital markets or gain access to more advanced technology through alliances. Additionally, in recent years, the government of India has permitted automatic approvals for foreign equity ownership of up to 100% in entities manufacturing vehicles and components in India. Rising cost of manufacturing: Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. The price of steel and aluminum is increasing putting pressure on the costs of production.
Many of Tatas products run on Diesel fuel which is becoming expensive globally and within its traditional home market. Low safety standards can hamper the public trusts it has already attained which may prove fatal to its domestic market. . Sustainability and environmentalism could mean extra costs for this low-cost producer. This could impact its underpinning competitive advantage. Obviously, as Tata globalises 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 MarutiUdyog, 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.
STEEPLED analysis of TATA motors.
STEEPLED is abbreviation for Social, Technological, Education, Ethnic, Political, Legal, Economic and Demographic factors. STEEPLED analysis is a means of conducting a scan of an organization’s external environment, with particular reference to the future and any changes that may come about. The purpose of STEEPLED is to identify factors that may impact on the services, customers (or Patients),products, markets, staff, profitability, etc. of the organisation.
Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demandfor a company’s products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labour). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a company will affect how well a company performs. This includes every stakeholder from the CEO and President, down to the line-workers who screw the door panel into place, from the investor to the customer, the culture and attitude of all these people will ultimately determine the future of a company and whether they will be profitable or not. For this reason, Tata Motors tends to use an integration and rarely separation technique with foreign companies they acquire. On the other hand, some economic issues that Tata Motors face must also be looked at from a more localized perspective.
For instance, the market in India for cars is much different than the market for cars in Italy. For one, India has over one billion more people than Italy does, thus the market is much larger or not as limited. Second, you must also take into effect the demographics and the average income of each market. Italians have a higher average income per capita than Indians and Italian citizens tend to drive larger and fancier cars. For this reason, the Tata Nano might not do so well in the Italian market. In summation, Tata Motors views the economy from a global perspective with operations across the entire globe. However, they must also maintain a local market understanding and knowledge when it comes to product positioning and placement throughout the different markets Tata conducts business in. In 2004, Tata Motors acquired Daewoo Commercial Vehicles Company, which was at the time Korea’s second largest truck maker. Rather than using de-culturation or assimilating Daewoo,Tata took an integrated approach, and continued building and marketing Daewoo’s current models as well as introducing a few new models globally just as it had been done under Korean management.
With the new acquisition of Jaguar and Land Rover, Tata will have to be careful with how theyhandle the acquisition. While Land Rover is thriving while under the helm of Ford, Jaguar was moreof the trouble child. “Jaguar cost Ford some $10 billion during its 18-year stewardship and its saleswere in headlong decline, especially in America, its most important market. Industry analysts alsostruggled to see what value Tata could add that had eluded Ford, and what synergies there could be between a maker of trucks and basic cars and two luxury marquees”. Separation could be a good approach for the immediate future to keep the name of Jaguar and Land Rover distinguishable and associated with the luxury automobile market. Overall, Tata does a good job of integrating some aspects of their large multi-national conglomerate into new acquisitions; however, the company must also understand that separation from the name Tata can be valuable in some social areas.
Safety has been a concern for Tata Motors and the Company is taking steps to reduce the injuries and accidents. All Tata Motors manufacturing units, including the new manufacturing unit atUttarakhand are certified under Occupational Health and Safety Standards 18801 (OHSAS 18001,2007 version). OHSAS 18001 is an Occupation Health and Safety Assessment Series for health and safety management systems. It is intended to help an organization to control occupational health and safety risks. It was developed by the Government of India in response to widespread demand for a recognized standard against which to be certified and assessed. In addition, Tata Motors manufacturing unit at Pune has been certified Social Accountability 8000compliant. Clause No. 3 of the SA 8000 pertains to occupational health and safety. A Zero Accident Plan was launched in 2007-08, wherein area ownership was developed by teams comprising of management and supervisory grade workers called Bay Owners. The Bay Owners met twice a week and conducted cross audits and organized awareness building programmes.
Tata Motors and its parent company, the Tata Group, are ahead of the game in the technology field.The Tata Group as a whole has over 20 publicly listed enterprises and operates in more than 80countries world-wide. This equates to Tata Motors having lots of experience and resources to draw from for research and development purposes. Ratan Tata says that “The foundation of the company’sgrowth 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”.Employing 1,400 scientists and engineers, Tata Motors‟ Research and Development team is ahead of the pack in India’s market and right with the rest of the field internationally. Among Tata’s firsts are“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,” as well as the increasingly famous Tata Nano, which is projected to be the world’s cheapest production car.
In the automotive industry, it is becoming increasingly crucial for manufacturers to stay on top of the technology curve with new problems always rising such as escalating gas prices and pollution problems recognizes this and dedicates lots of resources and time into research and development to be evenwith or preferably ahead of other competitors, global trends, and changing economies. In all, an automobile manufacturer must change, adapt, and evolve to stay competitive in the automotive game, and this is exactly what Tata is doing with their rapid growth, and extensive research anddevelopment.India’s only certified crash test facility for cars and hemi anechoic chamber for testing of noise and vibration is owned by Tata motors. Tata Motors European Technical Centre (TMETC) was set up in2005, which is primarily involved in design engineering and development of products, supporting Tata Motors skill sets. Approximately 2% of the annual profits of the company invested in research and development.
Tata established extensive prototype building and testing facilities in each plant. On May 11th of every year, “Technology Day” organized across all Tata plant locations. Tata Motors has the only world-class crash facility in Asia outside Korea and Japan. It has developed an A-ECU(Electronic Control Unit) and low-cost accessories that would effectively manage critical engine and vehicle systems without calling for a full-fledged and expensive conventional ECU. The company is striding towards new emission standards. It is planning to equip vehicles of the future with technologies for improving communication, navigation and entertainment. One-CAT [Compressed Air Technology] conceptual car with fibre glass is powered by air and it is emission free, which is an example of Tata’s technological research. Another example is “Tata Nano”, which is a city car manufactured by Tata Motors. It was a result of aiming at “Production of more from less investment for more people”.
It is the smallest as well as lowest powered (624cc) cars in the World; it was designed to be the cheapest car in India aimed mainly at the lowest price segment in the Indian domesticmarket. Tata motors has strategic partnership with Motor Development International (a French company designing compressed air car prototypes marketed under the title “the Air car”), and Ford for performing research to develop new automotive technologies. Furthermore, they will have to come up with hybrid and electric cars to compete with the already strong competition of the market. There are already some big players, among them Chevrolet, which will be releasing its Chevrolet Spark in the future, with hybrid and all-electric models. Tata motors should give more importance toR&D in order to develop highly efficient automotive technology at an optimal cost. The new product introduction [NPI] process followed by Tata motors for developing a new product and releasing into market can be seen in the below figure. The pace of new product development has quickened through this organization wide structured New Product Introduction (NPI) process. The process with its formal structure for introducing new vehicles in the market brings in greater discipline in project execution. The NPI process helped Tata Motors create a new segment by launching the Tata Ace, India’s first mini-truck.
Operating in numerous countries across the world, Tata Motors functions with a global economic perspective while focusing on each individual market. Because Tata is in a rapid growth period, expanding or forming a joint venture in over five countries world-wide since 2004, a global approach enables Tata Motors to adapt and learn from the many different regions within the whole automotive industry. They have experience and resources from five continents across the globe, thus when any variable changes in the market they can gather information and resources from all over the world to address any issues. For instance, if the price of the Aluminiumrequired to make engine blocks goes up in Kenya, Tata has the option to get the aluminium from other suppliers in Europe or Asia who they would normally get from for production in Ukraine or Russia. Tata Motors also has to pay close attention to shifts in currency rates throughout the world. Currency fluctuations can equate to higher or lower demands for Tata vehicles which in turn affect profitability.
It can also mean a rise in costs or a drop in returns. But they also have to pay attention to not just the domestic currency, the rupee, but also to the dollar, euro and pound, to just name a few. Attention to currency is important because it influences where capital investment will develop and prosper. In the case of Tata Motors, and the creation of the Nano and One CAT [Compressed Air technology]from a line of service and military vehicles provide a variety of different ways for other companies as well as other industries to capitalize on the success that Tata has realized. Tata Motors integrates the management, programs, and knowledge of the businesses it buys out. Tata Motors places heavy investment into research and development. Tata has succeeded in growing, profiting, and reducing costs in developing markets for over half a century. Over 6.5 million Tata vehicles ply on Indian roads, since the first rolled out in 1954.
The company manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow(Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka). Following astrategic 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. Thecompany’s dealership, sales, services and spare parts network comprises over 3,500 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, Spain and South Africa. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. JLR supports two state of the art engineering and design facilities and three manufacturing plants (Solihull, Castle Bromwich &Halewood) in the UK.
In 2004, Tata Motors acquired the Daewoo Commercial Vehicles Company, South Koreas 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. Hispresence 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 in2008. Tata Motors (SA) (Proprietary) Ltd., Tata Motors joint venture with Tata Africa Holding (Pty)Ltd., has its assembly plant in South Africa at Rosslyn, north of Pretoria, in the Gauteng province of South Africa. The plant can assemble, from semi knocked down (SKD) kits, light, medium and heavy commercial vehicles ranging from 4 – 50 tons. Tata Motors is also expanding its international footprint, established through exports since 1961. Thecompany’s commercial and passenger vehicles are already being marketed in several countries all over the world. It has franchisee/joint venture assembly operations in Bangladesh, Ukraine, and Senegal.Tata will have to adapt its strategy on the economic level, from the point of view of the consumers, but also internally. They will have to deal with exchange rates, inflation, and GDP trends.
For example, with the recent economic crisis, there has been a significant decrease in car retail. When theGDP is low and belts are being tightened, it is probably not be the best time to enter a new market. However, since they have an important competitive advantage with its pricing strategy, it could help them and could be the best choice for American consumers with lower budget. In the same trend, alow GDP brings unemployment, thus Tata might want to set up a factory and employ former autoworkers who have been laid off. These auto workers have experience and are asking for more jobs in their industry. This environment could create a win-win situation for both Tata and the workers. Tata Motors, like its parent company Tata Group, has much knowledge and understanding in working in developing markets and countries. Companies considering expanding into developing markets should consider forming a joint venture or partnership with any of Tata Group’s numerous industries. The knowledge transfer can save time and money and further ensure a more successful expansion.