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PREPARED & SUBMITTED BY: SAMEER (ROLL#7) SOHAIL (ROLL#18) SANKAR (ROLL#30) HIMANSHU (ROLL#42) ARUN V M (ROLL#54)
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Executive Summary
The report talks about the Indian automobile industry in general and Indian automobile giant TATA Motors in particular. We have analyzed Indian automobile industry using Porters 5 forces model & its performance in the recent past.
Particularly we have tried to track the path of TATA Motors expansion of international business in the recent past, at present as well as its future plans. We have also discussed the impact of current financial meltdown on the recent international ventures of the company.
The company is rapidly increasing its global footprint and is aiming to match the standards of international automobile manufacturers in next 3 to 5 years. This rise to the level of a world-class automotive manufacturer would involve a large quantifiable increase in revenues from outside India with a focus on certain foreign markets. Currently international business contributes 18.4% to companys revenues. Company is aiming to increase it by 200% in near future to reduce its dependence on one single economy and one single business cycle. This ambition of the company has led to numerous joint ventures and increased activity in countries like the U.K., South Africa, South Korea, Thailand, Brazil and Spain, as well as the company is listing on the NYSE.
With the recent acquisition of Jaguar Land Rover (JLR) from the Ford Motor company in early 2008, the company has entered into the world of high-end luxury brands. Customers of highend luxury brands value image and exclusivity factors, while image and exclusivity conflict with the proposition of TMLs other recent venture, the inexpensive Nano. In this manner, the decision to compete in both the high-end luxury and low-end economy markets certainly creates a big and audacious task ahead for TML. If proven successful, this strategy would provide the company with high margin (JLR) as well as high volume (Nano) revenues. These two revenue streams, if proven compatible, could mitigate each others risks.
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Table of Contents
Executive Summary ........................................................................................................................ Indian Automobile Industry ............................................................................................................ Porters Five Forces Analysis of Indian Automobile Sector .................................................. TATA GROUP ............................................................................................................................... TATA MOTORS ............................................................................................................................ SWOT Analysis ...................................................................................................................... BCG Matrix for Tata Motors ................................................................................................ TATA Motors- Making Waves Internationally ............................................................................ Impact of Current Global Slowdown on TATA-JLR Deal........................................................... Recommendations......................................................................................................................... References..................................................................................................................................... 2 4 5 8 9 9 11 12 18 21 22
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July09 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 M&M Xylo. 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 world's 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
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TATA Motors-International Business Porters Five Forces Analysis of Indian Automobile Sector
Industry Rivalry
Threat of Substitutes
1. Industry Rivalry
Industry Concentration:
The Concentration Ratio (CR) indicates the percent of market share held by a company. A high concentration ratio indicates that a high concentration of market share is held by the largest firms - the industry is concentrated. With only a few firms holding a large market share, the market is less competitive (closer to a monopoly). A low concentration ratio indicates that the industry is characterized by many rivals, none of which has a significant market share. These fragmented markets are said to be competitive. If rivalry among firms in an industry is low, the industry is considered to be disciplined
Slow market growth In growing market, firms can improve their economies. Though the market growth has been impressive in the last few years (about 8 to 15%), it takes a beat in even slight economic disturbances as it involves a luxury good. Aggressive pricing is needed to sustain growth in such situations Diversity of rivals: Industry becomes unstable as the diversification increases. In this case the diversity of rivals is moderate as most offer products which are close to standard versions and the competitors are also mostly similar in strength
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Economies of scale: The Minimum Efficient Scale (MES) is the point at which unit costs are minimized. The greater the difference between the MES and the entry unit cost, greater is the barrier. Economies of scale are becoming increasingly important as competition is driving the profit margins to lower levels. Also being a capital intensive industry economies of scale have important consequence Government policies: o Automobile Industry was delicensed in July 1991 with the announcement of the New Industrial Policy o The passenger car industry was delicensed in 1993. No industrial licence is required for setting up of any unit for manufacture of automobiles except in some special cases
o The norms for Foreign Investment and import of technology have been progressively liberalized over the years for manufacture of vehicles including passenger cars in order to make this sector globally competitive
o At present 100% Foreign Direct Investment (FDI) is permissible under automatic route in this sector including passenger car segment. The import of technology/technological upgradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is allowed under automatic route in this sector o The automotive industry comprising of the automobile and the auto component sectors has made rapid strides since delicensing and opening up of the sector to FDI in 1991
o The industry had an investment of about Rs. 50,000 crore in 2002-03 which has gone up to Rs. 80,000 crore by the year 2007. The automotive industry has already attained a turnover of Rs. 1,65,000 crore (34 billion USD)
o The industry provides direct and indirect employment to 1.31 crore people. The contribution of the automotive industry to GDP has risen from 2.77% in 1992-93 to 5% in 2006-07. The industry is making a contribution of 17% to the kitty of indirect taxes of the Government
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3. Threat of Substitutes
The replacement market is characterized by the presence of several small-scale suppliers who score over the organized players in terms of excise duty exemptions and lower overheads. A products price elasticity is affected by the presence of substitutes as its demand is affected by the change in the substitutes prices The cost of the automobiles along with their operating costs was driving customers to look for alternative transportation options The new technologies available also affect the demand of the product
e.g.: In case of Marutis products, the threat of substitutes is high. The competition is intense as several players have products in the categories given by Maruti. However, in the 800cc range it is the market leader and the threat of substitute products is low. Price performance comparison favors heavily towards Maruti in most product categories. Also the high availability and quality of services offered by Maruti gives the customer a better trade-off
Steel is a major input in this industry and so steel prices have a sharp and immediate impact on the product price The industry being capital intensive switching costs of suppliers is high, other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with lower cost
It specifies the impact of customers on the product When buyer power is strong, the buyer is the one who sets the price in the market. Here there is purchases of large volumes There is prevalence of alternative options
Price sensitive customers were some of the factors that determined the extent of
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TATA GROUP
TATA Group is more than 150 years old. In terms of market capitalization and revenues, Tata Group is the largest private corporate group in India and has been recognized as one of the most respected groups in the world. It has interests in steel, automobiles, information technology, communication, power, tea and hospitality. The Tata Group has operations in more than 85 countries across six continents and its companies export products and services to 80 nations. In the past few years, the TATA group has led the growing appetite among Indian companies to acquire businesses overseas in Europe, the United States, Australia and Africa - some even several times larger - in a bid to consolidate operations and emerge as the new age multinationals.
The TATA group is 11th most reputable company in the world according to Forbes.
At home in the world Anchored in India and committed to its traditional values of leadership with trust, the Tata group is spreading its footprint globally through excellence and innovation The Tata groups revenues for 2007-08 from its international operations were $38.3 billion, which constitutes 61 per cent of its total revenues.
Each operating company in the group develops its international business as an integral element in an overall strategy, depending on the competitive dynamics of the industry in which it operates. Exports from India remain the cornerstone of the Tata groups international business, but different Tata companies are increasingly investing in assets overseas through greenfield projects (such as in South Africa, Bangladesh and Iran), joint ventures (in South Africa, Morocco and China) and acquisitions.
Acquisitions are a crucial component of the global expansion of Tata enterprises. Over the past eight years the group has made overseas acquisitions of $18 billion. Among the bigger deals on this front have been Tetley, Brunner Mond, Corus, Jaguar and Land Rover in the UK, Daewoo Commercial Vehicles in South Korea, NatSteel in Singapore, and Tyco Global Network and General Chemical in the US.
Priority markets
While individual Tata companies have differing geographical imperatives, the Tata group is focusing on a clutch of priority countries, which are expected to be of strategic importance in the years ahead. The regions are North America, UK, China, the Netherlands, Germany, South Africa, members of the Gulf Cooperation Council, Brazil, Vietnam, Thailand and Sri Lanka. Ratan Tata, Chairman, Tata Sons, sums up the Tata groups efforts to internationalize its operations thus: I hope that a hundred years from now we will spread our wings far beyond India, that we become a global group, operating in many countries, an Indian business conglomerate that is at home in the world, carrying the same sense of trust that we do today.
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TATA MOTORS
TATA Motors is the flagship company of the TATA group & is India's largest automobile player, with revenues of $7.2 billion in 2006-07. With over 4 million TATA vehicles plying in India, it is the leader in commercial vehicles and the second largest in passenger vehicles.
Previously TATA Engineering and Locomotive Company (Telco), TATA Motors is listed on the New York Stock Exchange in 2004. Competition at Home TATA Motors is vulnerable to greater competition at home. Foreign vehicle makers including Daimler, Nissan Motor, Volvo and MAN AG have struck local alliances for a bigger presence. TATA Motors, which has a joint venture with Fiat for cars, engines and transmissions in India, is also facing heat from top car maker Maruti Suzuki India Ltd, Hyundai Motor, Renault and Volkswagen.
NANO will mark the advent of India as a global centre for small-car production
International praise came from Standard & Poors, which in December 2006 expressed the view that the policy to support its companies and the improved financial profile of its entities also enhances the overall financial flexibility of TATA Motors.
SWOT Analysis STRENGTHS Strong domestic player Steady revenue growth R&D Activities WEAKNESSES Decline in vehicle sales
Employee Productivity Image of low quality makers
SWOT
OPPORTUNITIES
International Growth New Product Lines Acquisition of JLR brands
THREATS
Competition from Global players Global Economic Factors Environmental Regulations
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Steady revenue growth: The company recorded strong revenue growth during 2004-08. During this time, the revenues of the company grew at a CAGR of 27.1% to reach INR365,230.6 million (approximately $9,072.3 million) in FY2008 from INR139,696 million (approximately $3,096 million) in 2004. The strong revenue growth of the company has contributed to its market dominance.
Research and development activities: Tata Motor has strong research and development (R&D) capability. The company incurred large expenditure for its R&D activities. The companys R&D activities focus on product development, environmental technologies and vehicle safety through its Engineering Research Centre (ERC). The ERC is one of the few government recognized inhouse automotive R&D centers in India. In the recent period, the ERC developed the Tata Nano, an affordable family car. The strong R&D capability enables the company to build a broad range of vehicle portfolio and improves its competitive strength in the automotive industry.
Weaknesses
Decline in vehicle sales:
Tata Motors recorded decline or marginal growth in its vehicle sales in the last financial year. The company recorded a sale of 585,649 vehicles, a growth of 0.9% over last year. During the same time, the automotive industry in India recorded a growth of 10.4% to reach the total vehicle sales to 2,309,324 units. The overall market share of the company stood at 25.4% in 2008 as compared to a market share of 27.8% in 2007. The decline in sales would further affect the companys market share, and erode investors confidence.
Employee productivity: Tata Motors posted weak revenues in proportion to the total number of its employees. The revenue per employee of the group stood at INR10 million (approximately $0.24 million), significantly lower when compared to its global competitors such as Toyota Motor ($.73 million), and Nissan Motor ($.53 million). The weak revenue per employee of the company compared to the global auto majors indicates its weaker productivity and operational inefficiency.
Opportunities
Product launches: Tata Motors has launched various new products during the last two year period (200708). For instance in December 2007, Tata Motors introduced its new range of Medium and Heavy Commercial Vehicles. In March 2008, Tata Motors (Thailand) launched the Tata Xenon 1-ton pickup truck at the annual Bangkok International Motor Show. In FY2008, the
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Threats
Increasing competition: Tata Motors face intense competition from its domestic as well as foreign competitors including General Motors, Honda Motor, Maruti Udyog, Mitsubishi Motors, Fiat, Ford and so on. Competition is expected to intensify further as Indian automotive 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.
Environmental regulations: The company is subjected to extensive governmental regulations regarding vehicle emission levels, noise, safety and levels of pollutants generated by its production facilities. These regulations are likely to become more stringent in the near future. In addition, Jaguar Land Rover has significant operations in the US and Europe which have stringent regulations relating to vehicular emissions. The proposed tightening of vehicle emissions regulations will require significant costs for the company.
TML Passenger Vehicle Segment Light Commercial Vehicles (e.g.ACE) TML Heavy & Light Commercial Vehicles
None HIGH
Relative Position (Market Share)
LOW
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global plans to reduce domestic exposure. The domestic commercial vehicle 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 light commercial vehicle (LCV) segment. Since the domestic commercial vehicle sales of the company are at the mercy of the structural econo mic 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. b) To expand the product portfolio TATA Motors introduced the 25MT GVW TATA Novus from Daewoos (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. TATA Motors has jointly worked with TATA Daewoo to develop trucks such as Novus and World Truck.
2. Hispano Carrocera- In 2005, sensing the huge opportunity in the fully built bus segment, TATA Motors acquired 21% stake in Hispano Carrocera SA, Aragonese bus manufacturing company with an option to acquire 100% holding. Hispano Carrocera is an established and reputed bus and coach manufacturer in Spain enjoying excellent reputation for developing high quality vehicles. It operates in two manufacturing locations namely, Zaragoza in Spain and Casablanca in Morocco, North Africa. Hispano has proven competence in
development of buses and coaches. With this deal Tata Motors acquired the license for technology and brand rights from Hispano. The total deal consisting of equity, debt and technology licensing amounted to about Rs 70 crore to Tatas. This partnership gives both
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3. TATA Marcopolo (TMML) - TATA Motors has formed a 51:49 joint venture in bus body building with Marcopolo of Brazil. This joint venture is to manufacture and assemble fully-built buses and coaches targeted at developing mass r apid transportation systems. The joint venture will absorb technology and expertise in
chassis and aggregates from TATA Motors, and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design. TATA and Marcopolo have launched a low-floor city bus which is widely used by Delhi, Mumbai and Bangalore Transport Corporations. TMML JVs first assignment in India was to supply 500 premium class low floor buses for Delhi Transport Corporation. Joint venture has started its operations at Dharwad, Karnataka & Lucknow, U.P.
Future Plans:
TMML has plans to set up the worlds biggest bus plant at Dharwad. It is aiming to cater to the fully built bus requirements of Indian mass as well as luxury markets. To compete in high volume, low cost market a vendor park has been established in Dharwad itself. The company plans to make 20,000 buses a year at its full capacity.
4. TATA Xenon- TATA Xenon was released in late 2007. It was first displayed at the 2006 Bologna Motor Show. The car is assembled in Thailand by TataThonburi JV and in Argentina by Tata-Fiat JV. The Xenon has been well received in Europe especially in Spain and Italy.
SPRINT was the code name of the Project for development of Tata's World Pick-up (truck). World Pick-up market (other than USA) is dominated by Japanese Auto majors like Toyota, Isuzu, Mitsubishi, Nissan. As per the study conducted by Tata Motors, there is a big opportunity for TML to grab substantial market share of world Pick-up market. Tata initiated
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crash timeline by overlapping maximum possible key activities. The team delivered project in 17 monthsfrom styling freeze in Dec 05 to SOP ( Start of Production) in May 7. Bologna Motor Show 2006 (Dec) was the occasion when Xenon was unveiled for public display and later in March 2007, it was also displayed at Geneva Motor Show 2007. Till date Xenon has been launched in 14 countries in Europe, Middle East, Africa and SE Asia.
Tata Motors signed a joint venture with Thonburi Automotive Assembly Plant Co. (Thonburi), the Thailand-based independent assembler of automobiles to manufacture, assemble and market pickup trucks in Dec06. The joint venture, in which Tata Motors holds 70% of the equity and Thonburi 30%, gets vehicles manufactured in Thonburis manufacturing facility.
The joint venture facilitated Tata Motors address the Thailand market, the second largest pickup market in the world after the US. Both partners jointly manage the operations.
5. TATA Fiat- The TATAs and Italian car giant Fiat kicked off their partnership with the former marketing Fiat cars since Mar06. Fiat branded cars are distributed by Tata through the Tata-Fiat dealer network. The partnership took off to the next level in Dec06 with both the sides announcing the formation of a joint venture with aggregate investments of over Rs 4000 crore (over euro 665 million) in a phased manner to manufacture vehicles for the Indian and overseas markets. The 50:50 joint venture enabled Fiat plant at Ranjangaon, Pune with capacities to produce in excess of 200,000 cars and 300,000 engines and transmissions yearly, at steady state. The JV may be expanded to produce trucks as well. This strategic alliance with Fiat enables the two companies jointly to present a wider range of product offerings to the Indian market. It enables Tata Motors to access world-class powertrains from Fiat for its next generation car offerings while enhancing the model line at its dealerships. Fiats Ranjangaon manufacturing facility is benchmarked against the global car manufacturers units in Turkey and Brazil. It compares well as the lowest-cost manufacturer, and Fiat will eventually source right-hand drive Linea cars from here for the
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Rover corporate nose and revised suspension settings, the buying public was not impressed by the 7,000 starting price. Along with the rest of the MG Rover range, production of the City Rover ended in April 2005 when the company went into receivership, the last vehicles brought into the UK being purchased and sold on by a non-franchised discount dealer group. Although MG Rover was bought by Nanjing Automobile of China in July 2005, the company's new owners did not include the City Rover or indeed any direct successor in their plans for a new model range. This was one of the unsuccessful attempts of Tata Motors to go global.
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8. World Truck- TATA Motors unveiled its World Truck range, developed jointly with TATA Daewoo Commercial Vehicles of South Korea in May09. The developing infrastructure in India makes it possible for
transporters to reap the benefit of trucks with higher power, speed and carrying capacity. The new range from Tata Motors will meet those needs. It will also help it penetrate international markets more effectively and competitively.
Future Plans:
The commercial launch of these trucks in India is scheduled during July-September09. They will debut in South Korea, South Africa, the
SAARC countries and the Middle-East by the end of the fiscal. The trucks will be made at the Jamshedpur facility and at Gunsan in South Korea. The company expects international volumes to be at par with numbers in India.
9. TATA Nano- Conceived in 2003, Tata Motors had launched the much- hyped 'cheapest' car in India in Mar09. The car has cost over Rs 2,000 crore to the company. The car is expected to boost the Indian economy, create entrepreneurial-opportunities across India, as well as expand the Indian car market by 65%. The car was envisioned by Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly "people's car". For the first time, thanks to Tata's Nano, India has been established as an
A Promise is a Promise
R&D leader, and not just a low-cost hub known for cheap labor. It has shown to the world that India can
be a technology leader. It is a great innovation, because innovation is all about thinking of the next decade and not the next quarter.
The Tata Nano will certainly find big takers in India. However, it can have a market in the US, as well. If the car is enriched with high technology functions to make it an intelligent car, many in the US will look forward to own it. An intelligent car at $3000 would be a good
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Future Plans:
Tata Motors will be launching it in Nigeria within the next year and a half. In Nigeria, the Nano will cost 357,480 NGN (Rs 1.16 lakh), almost the same as its cost in India, making it cheaper than even used cars in the country. According to TATA Motors officials, Nano will greatly benefit Nigerians as there is no proper public transport system in the country. Company is yet to decide whether the car would be assembled in Nigeria itself or if it would be made available as a Completely Built Unit (CBU). The company is planning to market Nano in other countries, but timelines, modes and countries are yet to be finalized. Earlier this year, the Tata Nano Europa (the European version of the Nano) was unveiled at the Geneva Auto Show. The Nano Europa will be launched in 2011. 10. TATA-JLR: TATA Motors bought the iconic Jaguar and Land Rover operations from Ford for 1.15 billion pounds in Mar-Apr08. Tata gained the rights to the Daimler, Lanchester, and Rover brand names. In addition to the brands, Tata Motors also gained access to 2 design centers and 3 plants in UK. The key acquisition would be of the intellectual property rights related to the technologies.
With the acquisition of Jaguar and Land Rover (JLR), Tata Motors killed several birds with one stroke. The acquisition paves the way for the companys entry into the European car market and gives the company a comprehensive range of models ranging from the luxury Jaguar to the $2,500 Nano. It provides an
entry point into Indias growing luxury car market which gives new impetus to the companys development program as well and provides a captive customer base for the component companies of the Tatas. In the long-run TATA Group and TATA Motors footprint in South-East Asia should help Jaguar/Land Rover diversify their geographic dependence from US (30% of volumes) and Western Europe (55% of volume). Analysts
believe that TATAs ownership of JLR will open doors for outsourcing of parts from India, particularly from the current pool of suppliers who service TATA Motors in India.
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Why JLR? Long term strategic commitment to automotive sector Opportunity to participate in two fast growing auto segments Increased business diversity across markets and products Land rover provides a natural fit for TMLs SUV segment
Jaguar offers a range of performance/luxury vehicles to broaden the brand portfolio
Benefits from component sourcing, design services and low cost engineering
In FY 2008-09, Tata Motors Ltd posted its first annual loss in at least eight years after sales at the luxury units, Jaguar and Land Rover plunged amid the global recession. The consolidated net loss was Rs 2,500 crore in the year ended 31 March, 2009 compared with a net income of Rs 2,200 crore billion a year ago. Ratan Tata is slashing investments by as much as 38% in the year to March on slow economic growth.
At the time of acquisition of JLR by TATA Motors, there were some who called for caution. They pointed out that buying into an automobile major when the market for automobiles was set for a downturn might not reflect good business sense. Moreover, post acquisition, debt at the level of both parent and the United Kingdom subsidiaries in the TATA group was slated to rise sharply.
Unfortunately for Tatas, the worst fear of the skeptics has come to pass. Within months of the acquisition, the world witnessed the onset of a financial crisis that triggered a credit crunch and precipitated a real economy recession. Industries such as steel and automobiles were among the worst affected. This had two implications. First, the sales and revenues of JLR were far short of
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for loans that they plan to seek from the UK banks to bail out JLR. The British government has been reluctant to provide these loan guarantees so far. If the UK governments help does not come soon, Tata Motors will have to cut down its investment plans for Jaguar Land Rover (JLR) with possible job losses and plant closures.
While Tata looks to sustain JLR through the downturn, the UK government's support is crucial as JLR wants it to guarantee a pound 340 million European Investment Bank loan sanctioned in April. Although JLR has the option of getting guarantees from private banks, it may work out to be an expensive proposition. To get the government's help, Tata may have part with some equity interest in JLR, besides giving board representation. According to a recent report in The Economic Times, the company is negotiating at the moment and if there was a large financial package from the UK government to the company then there would be a commensurate level of representation on the board.
Despite the challenges, there have been some good news, the companys 14,000-odd workers agreed to a two-year pay freeze on condition of no compulsory layoffs. This is expected to save the company up to 68 million a year. The company also bagged a significant order from China for supplying 13,000 cars worth 600 million over the next three years. More recently, the UK
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The two ways firms compete are by either a differentiation strategy or a low cost strategy. However, as we've seen the route TML has taken involves competing on both strategies. While the Nano targets the price conscious common man, the Jaguar Land Rover deal shows us that TML is now targeting brand conscious, high-end consumers. TML needs to have a similar differentiated strategies focusing separately on these brands.
TMLs vision is to be best in the manner in which we operate, best in the products we deliver and best in our value systems and ethics. TML has come to be known as an innovator in the passenger car segment not just in manufacturing but along multiple areas along the value chain. The Tata Indica and Tata Nano are prime examples of the companys innovation capabilities and bear testimony to the strength of the companys R&D efforts. This innovation fuelled growth coupled with strategic acquisitions is expected to catapult the company to a preeminent position internationally.
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