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P.D.M.COLLEGE OF ENGINEERING
Maharshi Dayanand University, Rohtak2011
Sales and Distribution for Tata Motors and Fiat in India
DECLARATION
Sales and Distribution for Tata Motors and Fiat in India
CERTIFICATE
Sales and Distribution for Tata Motors and Fiat in India
ACKNOWLEDGEMENT
I would also like to thank the entire team of Grover Motors, for the constant support and
help in the successful completion of my project.
Contents
Declaration
Acknowledgement
Executive Summary
PAGE NO.
Chapter 1. INTRODUCTION 7
1.1. Objectives
1.2. Industry Profile
1.3. Company Profile
Chapter 5. Conclusion 77
5.1 Conclusion and Recommendations
5.2 Learning from the Internship
References 80
EXECUTIVE SUMMARY
My Study will be limited to speedometers with reference to Sales and Distribution for
Tata Motors in India. To analyze the sales and distribution of TATA motors, I had taken
a dealership as a case study. By working in a dealership I came to know about the
distribution channel of the company.
The main purpose of pursuing my Summer Internship at Tata Motors was to get a better
understanding of the Indian Automobile Industry. Also, I wanted to specifically get an
overview of Tata Motor’s business group- the kind of customers it caters to, the attributes
which influence the sales of cars; and the strategies which may improve the sales of the
same.
The research started by conducting a small pilot study on a few respondents- this
process easily detects the errors in the questionnaire which may otherwise be overlooked.
I applied the tool of Questionnaires to collect data. I conducted the survey on the existing
customers of the company towards the sales and service of the vehicles. Consumers, from
eclectic age groups, were also surveyed to get a broader picture of their preferences.
Sales and Distribution for Tata Motors and Fiat in India
INTRODUCTION
1.1 Objectives
To study the distribution channel of Tata motors.
To conduct sales of cars of Tata Motors.
To analyze the customer's satisfaction by conducting a research.
Sales and Distribution for Tata Motors and Fiat in India
every moth with a new model to offer. Keeping in mind the comfort of the people and
their choice the models are prepared. Performance of vehicle is increasing day by day, its
fuel efficiency and reliability has no match with others around the globe.
Inspite of having manufacturing of major foreign automakers based in India our Indian
Domestic Automobile Companies are leading in the Market. Tata Motors is the largest
commercial vehicle company, Maruti Suzuki is the largest passenger vehicle company &
Hero Honda is the largest motorcycle company in India. Mahindra & Mahindra, Ashok
Leyland and Bajaj Auto are some more leading automobile manufacturers.
Maruti Udyog Ltd, the biggest car maker of the country, selling 2, 93,536 vehicles
as against 2,43,211 in the corresponding year last year. having a growth rate of
about 20.7 per cent during April-August,2009
Mahindra & Mahindra Ltd's (M&M) cumulative sales with exports were 1,06,094
units compared to 78,144 units in the corresponding period last fiscal during the
April-September having a growth rate of about 35.8 per cent
Honda Siel Cars India Ltd. (HSCI), leading manufacturer of premium cars in
India, selling 41,638 units against 35,853 units. having a growth of 16.1 % in
cumulative sales for the period January to August, 2009.
DaimlerChrysler sold 1,681 units in India from January to August, growth of over
22 per cent from a year ago.
Sales and Distribution for Tata Motors and Fiat in India
Ambassador
Fiat Palio
Hyundai Santro, Getz
Rs. 3-5 Lakhs Chevrolet Opel Corsa
Maruti Zen, Wagon R, Versa, Esteem, Gypsy
Ford Icon & Fiesta
Tata Indica, Indigo XL, Indigo Marina
Mahindra Bolero
Hyundai Sonata Embera
Toyota Corolla
Ford Mondeo & Endeavour
Rs. 10-15 Lakhs Chevrolet Forester
Skoda Octavia & Combi
Honda Civic
Honda CR-V
Maruti Suzuki Grand Vitara
Terracan & Tucson, Captiva
Mitsubishi Pajero
Rs. 15-30 Lakh
Audi A4
Opel Vectra
Honda Accord
Mercedes C Class
Toyota Camry
Major Companies
List of automobile manufacturers in India
Indian companies
Force Motors
Force Motors was formerly known as Bajaj Tempo Ltd. Founded in 1958, it is located in
Akurdi, a Pimpri-Chinchwad neighbourhood of Pune, India. They manufacture three
wheelers, multi utility and cross country vehicles, light commercial vehicles, tractors and
now heavy commercial vehicles.
Gama, Cruiser
Trax, Toofan, Challenger
Sales and Distribution for Tata Motors and Fiat in India
Ashok Leyland
Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India.
In 1948, Ashok Motors was set up in what was then Madras, for the assembly of Austin
Cars. The Company's destiny and name changed soon with equity participation by British
Leyland and Ashok Leyland commenced manufacture of commercial vehicles in 1955.
For over five decades, Ashok Leyland has been the technology leader in India's
commercial vehicle industry, moulding the country's commercial vehicle profile by
introducing technologies and product ideas that have gone on to become industry norms.
Ashok Leyland has six manufacturing plants - the mother plant at Ennore near Chennai,
two plants at Hosur (called Hosur I and Hosur II, along with a Press shop), the assembly
plants at Alwar and Bhandara.
From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage
vehicles, from numerous special application vehicles to diesel engines for industrial,
marine and genset applications, Ashok Leyland offers a wide range of products.
Hindustan Motors
Hindustan Ambassador
Hindustan Motors is one of the oldest Indian car manufacturers. It is best known for the
Ambassador which has been virtually unchanged for about 30 years. It is still very
popular as a taxi and is widely used by Indian politicians. Many people have come to
associate India with Ambassador and is a prominent part of the Indian landscape.
Trekker (Discontinued)
Landmaster (Discontinued)
Contessa (Discontinued) - 5th Generation Vauxhall Victor
Ambassador - a version of the 1950s Morris Oxford
Mahindra & Mahindra Limited
Mahindra Classic
The automotive section of Mahindra started off when a first batch of seventy five Utility
Vehicles (UVs) was imported in CKD condition from Willys in 1947. It has come a long
way, not just manufacturing Jeeps but also agricultural equipment and light trucks.
Armada (Discontinued)
Sales and Distribution for Tata Motors and Fiat in India
Voyager Discontinued)
Bolero
Commander
CL
MaXX
Scorpio
Mahindra and Mahindra Classic This was an open jeep with good off roading
capabilities, a 4*4 and 4*2 option, huge headlamps and roof mounted lights. ==
Maruti Suzuki
Maruti 800
Maruti Gypsy
Maruti Udyog was formed as a partnership between the Government of India and Suzuki
of Japan. It brought India its first "affordable" car, the Maruti 800. It is the biggest car
manufacturer in India and especially dominant in the small car sector. Then it brought out
The Maruti 1000, made by Maruti Udyog was the first ever contemporary sedan-type car
launched in India. The car (which Suzuki sold in other countries as the Cultus/Swift/Geo
Metro with a 1.3 L or 1.6 L engine) was introduced in October, 1990. Sold at Rs. 3.81
lakh, it was back then the costliest car released in the Indian market. Then the company
replaced it with Esteem and from that days on a line of Suzuki cars rolled out in the
Indian market.
800
Omni
1000 (Discontinued)
Maruti Zen (Discontinued, but revived and re-branded as the Zen Estilo)
Alto
Esteem(Discontinued)
Baleno - (Discontinued)
Baleno Altutra - (Discontinued)
Gypsy
Sales and Distribution for Tata Motors and Fiat in India
Swift
SX4
WagonR
Versa
Zen Estilo - First Generation Suzuki MR Wagon
Grand Vitara - First Generation Suzuki Grand Vitara
Eigo
Multi-national companies
BMW
BMW is manufacturer of prestigious sport sedans that are known for their nimble
handling. BMW enjoys good brand recognition in India, thanks to Indian movies and the
rich who have been importing these cars for decades. It has set up a plant in Chennai,
Tamil Nadu, to manufacture cars locally exclusively for the local market with no plans
for export. It set up the plant to circumvent high import duties.
3 Series
5 Series
7 Series
Fiat
Fiat India has struggled in India since its inception. The Fiat Uno was one of the first
products to be introduced. The Fiat Palio was later introduced and was initially a big hit
with its style and ride comfort coupled with solid build but has slowly lost its sheen due
to low fuel efficiency. Other models were introduced such as the Palio Weekend and
Siena. Fiat tried re-branding of the Fiat Siena to Fiat Petra without much success. It roped
in Sachin Tendulkar as one of its brand ambassadors. Even Michael Schumacher
appeared in an ad for the Palio. It has entered now into an alliance with Tata Motors to
jointly manufacture cars at its plant in Ranjangaon, near Pune. The facility will enable the
two companies to make about 200,000 cars per annum, and also house an engine
manufacturing unit with a capacity of 250,000 units per annum. The alliance will also see
Tata Motors use Fiat's diesel technology - the 1.3 litre multijet diesel engine - for its own
vehicles. The two companies also have a distribution and service partnership.
Sales and Distribution for Tata Motors and Fiat in India
Uno(Discontinued)
Palio
Palio Stile
Siena(Discontinued)
Siena Weekend (Discontinued)
Petra(Discontinued)
Adventure
Punto
Linea
Ford Motors
Ford entered India in collaboration with Mahindra & Mahindra in 1995 with a major
plant in Tamil Nadu. The first model was the Escort.
Escort (Discontinued) - It was offered with a 1.3 Liter petrol termed Alpha and
1.5 Liter Diesel engine termed Orion, and at a time when the car wars in India had
just begun. The diesel version was fancied by many due to the fact that diesel was
available at half the price of petrol(gasoline/gas) in India at that time. Among the
famous owners of the Ford Escort was Azim Premji who drove a black one for
almost eight years until he traded it for a Toyota Corolla. The Ford Escort 1.8 was
ranked the highest in the J.D. Power and Associates 1997 Indian Customer
Satisfaction Study. It was also voted the Best Quality Car in the J.D. Power India
Initial Quality Study.
Ikon - Was launched to phase out the Escort, known for the Rocam engine,
available with a choice of petrol and diesel version, the car did well. Ford is
known for launching new versions with some minor cosmetic changes every now
and then.
Mondeo (Discontinued) - Was Ford's offering to the D segment in India in 2001,
was brought in as a CBU from Belgium with Ghia being the only trim version
available. It was available with both 2.0L Duratorq diesel and 142 bhp 2.0L petrol
Duratec engines. It was the first car to be offered with Xenon HID headlamps in
India. It is alleged that the Mondeo performed better than the 2.3 L Accord
Sales and Distribution for Tata Motors and Fiat in India
available in India at that time. But buyers stayed away as it was more expensive
than the Accord. The diesel version was phased out in 2003.
Endeavour - Sold as the Ford Everest in other parts of Asia and based on the
Ranger pickup, it was offered in both 4X4 and 4X2 options but with only a 2.5 L,
4 Cylinder In-line, Turbocharged & Inter cooled Diesel Engine and manual
transmission.
Fusion - was launched as an Urban Activity Vehicle available with a 1.6 L , 4 cyl
101 bhp (75 kW/102 PS) engine with 5 speed manual transmission. In 2007 a
diesel version was launched which has the same 1.4 L 68 bhp (51 kW/69 PS)
engine as the Fiesta.
Fiesta - Launched in November 2005 and was Ford's fifth model in India, and is
available in 1.6 L petrol and 1.4 L diesel engines. Bill Ford made a personal visit
to launch the car in India.
General Motors
Chevrolet has been one of the most recognized brands in India for several decades. They
were made popular as the vehicle of choice of the heroes in Bollywood movies. The
model lineup consists of vehicles from cheaper sister brands like Daewoo. General
Motors initially entered India with the Opel brand, but the Opel brand was dropped in
March 2006 because sales were at an all time low due to high prices and General Motors
wanted to focus more on their Chevrolet brand. Since the Chevrolet brand was introduced
in India, there have been no new Opel products.
GM's Indian operations were originally a JV between Hindustan Motors and GM, with
most of GM's vehicles assembled at Hindustan's plant in Halol, Gujarat. Since then, GM
India is now wholly owned by GM.
Cars from Chevrolet are:
Tavera - Rebadged Isuzu Panther
Forester - (Discontinued) Rebadged First Generation Subaru Forester
Aveo - Second Generation Daewoo Kalos sedan
Aveo UV-A - First Generation Daewoo Kalos hatchback
Optra - Rebadged Daewoo Lacetti
Sales and Distribution for Tata Motors and Fiat in India
CR-V - It was introduced in India along with the Accord. It was and is still
offered with a 2.4 liter i-VTEC engine producing 152 bhp (113 kW/154 PS).
Hyundai
When Hyundai entered India, the brand was virtually unknown in the Indian market.
They signed up Bollywood actor Shah Rukh Khan and their excellent advertising
campaign made Hyundai a household name and helped it reach the second place behind
market leader Maruti Suzuki.
Santro - second generation Hyundai Atos
Accent - second generation Hyundai Accent sedan
Sonata - sold as the Sonata Embera
Verna - third generation Hyundai Accent sedan
Getz - sold as the Getz Prime
Elantra - 3rd generation Hyundai Elantra sedan
Terracan (discontinued)
Tucson
i10 - brand new small car, global launch in India in 2007.
I20
Renault-Nissan
Logan In partnership with Mahindra and Mahindra
Mercedes-Benz
M-Class
S-Class
E-Class
C-Class
Mercedes-Benz has had to cater to the ever growning luxury segment in India, in a much
better fashion now, especially after the arrival of the other luxury German manufacturers.
Now, Mercedes-Benz cars are launched in India soon after the worldwide launch and
Sales and Distribution for Tata Motors and Fiat in India
Tata Motors was established in 1945, when the company began making trains. Tata
Motors was first listed on the NYSE in 2004. Tata Motors gained Rs. 320 billion during
2001-2006 which was among the top 10 corporate profits in India. In 2004 it also bought
Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in
South Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving it
controlling rights in the company. On 10 January 2008, Tata Motors launched their much
Sales and Distribution for Tata Motors and Fiat in India
awaited Tata Nano, noted for its Rs 100,000 price-tag, at Auto Expo 2008 in Pragati
Maidan, Delhi.
Tata Motors commences distribution of Fiat Cars across India
Tata Motors and Fiat India Private Limited announced the commencement of the new
Tata-Fiat dealer network to sell both Tata and Fiat branded cars, along with service and
sales of spare parts, in 11 cities across India.
The Tata-Fiat dealer network comprises 25 existing Tata Motors Passenger Vehicles
dealers and 3 existing Fiat India dealers. The 28 Tata-Fiat dealers will sell the Fiat Palio
(1.2 EL PS, 1.2 ELX, 1.6 Sports) and the Fiat Adventure (1.6 Sports), and all Tata
Motors Passenger Vehicles - the Tata Indica, the Tata Indigo, the Tata Indigo Marina, the
Tata Sumo and the Tata Safari.
The beginning of operations of the Tata-Fiat dealer network follows the agreement,
announced by the Fiat Group and Tata Motors on January 13, 2006, to cooperate on
dealer network sharing. The execution of the distribution arrangement is the first
initiative post the signature of the Memorandum of Understanding signed between the
Fiat Group and Tata Motors in September 2005. Discussions are on to explore other
areas of co-operation, on which specific announcements can be expected once their
feasibility is established.
Commenting on the commencement of the Tata-Fiat dealer network, Mr. Rajiv Dube, Sr.
Vice-President (Manufacturing & Commercial - Passenger Cars Business Unit), Tata
Motors, said, “Tata Motors is delighted to be partnering Fiat India in bringing a larger
portfolio of products under a single roof at our joint dealerships. Between the Tata and
Fiat brands, the company is in a position to offer one of the widest product offerings in
the Indian market with the promise of several exciting options to come.”
Mr. Giovanni de Filippis, Managing Director of Fiat India Private Limited, said, “The
coming together of Tata and Fiat through the dealer network sharing signifies better
service, after sales support and more convenience to Fiat customers. Our customers have
always been delighted with the superior build quality of our cars. The after sales support
that comes with the Tata trust will complement this, and Fiat is confident of serving its
customers better.”
Sales and Distribution for Tata Motors and Fiat in India
Existing Fiat dealers will continue to retail the full range of Fiat offerings, including the
Fiat Petra.
About Fiat
One of the pioneer companies in the automobile industry, Fiat has produced more than 85
million passenger cars and light commercial vehicles, including no less than 400 models,
since 1899, when the company was founded in Turin, Italy. Some of them have
represented milestones in the automotive industry. The Fiat Group’s Automobiles Sector
operates world-wide with the following brands: Fiat, celebrated for value, economy, and
innovation and whose mass produced cars are distributed over almost the entire price
class spectrum; Lancia (acquired in 1969) means prestige cars noted for their elegant
styling, and comfort; Alfa Romeo (acquired in 1986) is famous as a maker of sport and
luxury vehicles of style and distinction; Maserati (acquired in 1992) represents a
landmark in the history of the automobile; Ferrari (acquired in 1969), well renowned for
unsurpassed design, performance, and luxury, is a legendary automobile that imparts
special cachet to its owner.
Fiat India Private Limited, with its renewed brand strategy for the Indian market, is
focused on the premium end of the B & C category in the growing automobile sector.
Fiat Adventure Sport is the latest offering targeted at the new generation of customers
who enthusiastically seek out the latest trends in style, safety, engine and performance.
Sales and Distribution for Tata Motors and Fiat in India
Fiat’s superiority in design and technology has been re-emphasized from the fact that its
1.3-multi jet has been chosen as the “Engine of the Year 2005” in the 1 to 1.4 litres by the
Jury of the “International Engine of the Year” award.
Sales and Distribution for Tata Motors and Fiat in India
b. Historical analysis
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 24000 employees working in its four 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.
Time line and milestones
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).
Joint ventures
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 joint venture with Marcopolo S.A., a Brazil-based
global leader in bus body building. This joint venture is to manufacture and assemble
fully-built buses and coaches targeted at developing mass rapid 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.
A venture with British carmaker MG Rover saw the launch of the CityRover in 2003.
This car was based on the Tata Indica and built alongside it in India, but sales were not
strong and production finished in April 2005 when MG Rover went bankrupt. MG Rover
was purchased by Nanjing Automobile of China three months later, but when car
production resumed in 2007, the City Rover was not part of the production plans.
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 light commercial vehicle
(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
Sales and Distribution for Tata Motors and Fiat in India
grown by 36.6 percent to 28,537 units due to the rising demand for Ace. The Ace was
[3]
built with a load body produced by Autoline Industries. By 2005, Autoline was
producing 300 load bodies per day for Tata Motors. Autoline
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
Tata Indigo
Tata Motors, through its joint venture with Fiat, gained access to Fiat’s diesel engine
technology and is likely to gain access 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 United States. 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 joint venture with Thailand’s Thonburi,( Exhibit-1) an independent auto
assembler, in which Tata Motors will hold a 70% stake. The joint venture 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 joint
venture product is likely to be a part of Tata Motors’ ‘Global pick-up’ plans.
Sales and Distribution for Tata Motors and Fiat in India
2008 onwards
On January 3rd, 2008, The Hindu Business Line reported that Ford Motor Company (US)
named Tata Motors the "preferred bidder for Ford's British marquees Jaguar and Land
Rover ... but a final decision for the sale was yet to be taken".
Auto policy of Government of India (GOI) 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
Tata Xover
New auto policy considered by Government of 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.
Sales and Distribution for Tata Motors and Fiat 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 commercial vehicle 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
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 percent of sales as against 30-35
percent 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.
c. SWOT
SWOT Analysis - Tata Motors Limited
The company began in 1945 and has produced more than 4 million vehicles. Tata Motors
Limited is the largest car producer in India. It manufactures commercial and passenger
vehicles, and employs in excess of 23,000 people.
Strengths
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
Sales and Distribution for Tata Motors and Fiat in India
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.
Weaknesses
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 (see opportunities below); Tat
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).
Opportunities
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.
Sales and Distribution for Tata Motors and Fiat in India
include Ford, Honda and Toyota. In fact the entire Indian market has become a
target for other global competitors including Maruti Udyog, 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.
Sales and Distribution for Tata Motors and Fiat in India
1. In this type of channel the company uses its sales representatives to deal with the
dealers directly. The dealers place the order through the sales representatives who visit
them periodically, and the products are delivered directly from the company.
Some companies appoint Direct Dealers who act as their Franchisee Outlets or their
Exclusive showrooms.
4. In this channel the company appoints a C&F agent who acts on behalf of the
company. The C&F agent is totally responsible for appointment of Distributors and
Direct Dealers. He sells to both the Distributors and the Direct Dealers at the same rates.
Sales and Distribution for Tata Motors and Fiat in India
TATA MOTORS
TIER I
VOLUME
TIER I
RESELLE
rR
Distributors
System
Integrators
Own sales force
Value Resellers
Resellers
CUSTOMER
Sales and Distribution for Tata Motors and Fiat in India
CHANNEL STRUCTURE
Scenario 1 Scenario 2
Company’s warehouse Customer
(Placing
Order (Direct billing)
Directly)
Customer
To save the consumer from paying extra amount in the form of taxes and duties a
consumer can directly place an order with the Tata Motors warehouse is a pictorial
representation of the same, also there maybe a case where all the 4 or any one of the
national Dealers have warehouses in Singapore and consumer places order with these
distributor then in that case these distributors will place the order to Tata Motors which
will have direct billing with the distributors and distributors will have direct billing with
the consumer.
How do the finished products of your company move from your end to
consumer’s end?
CONSUMER RESELLER
In this distribution network a customer with the small requirement reaches the reseller
who buys the product from the big distributors like Ingram, Redington,Tech pacific and
iris.
How the finished products moves from Tata Motors end to consumer’s
end:
CONSUMER RESELLER
Sales and Distribution for Tata Motors and Fiat in India
In this distribution network a customer with the small requirement reaches the reseller
who buys the product from the big distributors like Ingram, Redington, Tech pacific and
iris.
SALES
FORCE Tata
VALUE Motors
BUSINESS RESELLER
This model is drawn to show that for named accounts or big business opportunities it is
the companies’ own sales force and system integrators (value resellers), which hunts
down the prospective business.
Distribution Channels
Channel Structure
1. Outside Pune Tata Motor
Organization
C&F
Distributer
Retailer
Consumer
Sales and Distribution for Tata Motors and Fiat in India
2. There are 17 C&F and 50 distributors who directly deal with Tata Motor.
Functions performed by different channel member
1. The main functions of different channel members are to supply goods, to achieve
targets and to increase sales.
2. One of the main functions of C&F is to achieve the targets assigned to them. They are
responsible for all the activities of their areas.
3. The sale of other goods including the sale of its entire outlet is around 150 crores.
Selection of Channel members: -
Channels members are selected if the following facilities are available:-
1. Godown Facilities
2. Experience sale persons.
3. Van, truck, three-wheelers for transportation.
4. Registered office.
5. Proper computer facility of maintaining accounts.
6. Financially strong.
Financial terms and conditions
Tata Motor takes the full payment in advance from the distributor and C&F. Most
probably it takes Cheque if it is local payment and Demand Drafts if it is central
payment. From some distributors Tata Motor also take cash also but always try to avoid
it. No credit facilities are given to any distributor or C&F.
Tata Motor keep some blank cheques from some distributor and C&F even before taking
the order and use the cheque after delivering the goods.
Distributor and C&F mostly sale goods on credit basis which varies from one to another.
Tata Motor give 6-7% discount to C&F and distributor. No margin is given to them. But
they give margin of 10-12% to retailers.
Tata Motor is responsible if any goods spoiled or leak on the way in its transport.
Tata Motor also give 1-2% discount that takes responsibility of spoiled goods. Mainly
these options are given to those who are very far from Raipur and occurred heavy
expense of transport to return back the goods.
To promote sale Tata Motor give extra discount of 2-3 % where the sale is low.
Sales and Distribution for Tata Motors and Fiat in India
Order processing
Sale persons of C&F and distributors go to the retailers of their areas and bring the order
daily. After that they give order in the Corporate Office of Tata Motor in Raipur to the
general manager. From corporate office general manager give order in the factory.
the order is ready to deliver and confirming from the corporate office, the goods are
delivered in the trucks.
Order within Raipur and the places near Raipur delivered within 24 hours.
Order outside Raipur delivered according to the distance. It takes from 24 hours to 72
hours.
Every distributor and C&F has a fixed day in a week to give order.
Warehousing
Tata Motor has its own warehouse, which is manage by its own staff. The order of Tata
Motor is delivered by truck. Tata Motors pay expenses for transportation from which the
Tata Motor deals directly.
Sales functioning: -
Factors taken into account while assigning targets and territories
Population of the area.
Income of the consumers in that area.
Sales during festival seasons.
Area cover.
Targets
Targets are decided by the owner of the Tata Motor for every distributor and C&F. Every
year targets are increased by 10-15%. All the Distributor and C&F have to achieve
minimum 90 % of its targets monthly and remaining has to adjust with the next month
target. There is a meeting held every month of C&F and distributors with the General
Manager of Tata Motor where they find reasons for not achieving the targets and how
they overcome by this problem. In this meeting extra benefits are also given for achieving
the targets.
Responsibilities of the sales person
To supply goods.
Sales and Distribution for Tata Motors and Fiat in India
Transport Facilities
Godown available.
Financial terms: -
In Raipur the Sales of Tata Motor India is done mainly on credit basis. The credit
time is not same for the entire distributor. The Finance department of the
company decides the credit period of the Distributor after consulting by sale
manager.
Outside Raipur the payment is received at the time of delivered of goods.
Maximum 15 days allowed paying the payment.
Extra benefit of 1-2% given to distributors who have achieved their annual target.
Order processing
From the main office the order is passed in the factory where production manager
note down the order and report back to the office when the order is ready.
Order within Raipur and the places delivered within 24 hours.
Order outside Raipur delivered according to the distance. It takes from 24 hours to
72 hours.
Warehousing:-
Tata Motor India has its own warehouse, which is manage by its own staff.
Sales Distributions
Factors taken into account while assigning targets and territories
Targets achieve last year.
Area covered by the Distributors.
Sale made during Festivals seasons.
Locations (for outlets).
Targets
The sales manager decides targets of the distributors. There is an increase in target of 5-
10% annually both for distributor. The targets of both are checked quarterly by the sales
manager and if the target are not seen to be achieve then Tata Motor India sent their own
sales person and try to increase the sales.
Responsibilities of the sales person
Sales and Distribution for Tata Motors and Fiat in India
Research Methodology
Based on the objectives of the study, there are two types of Research:
Pilot Study
After constructing the questionnaire, the pilot survey was conducted among 6 individuals
from the sales force of the company to find out the errors, if any.
Sales and Distribution for Tata Motors and Fiat in India
Questionnaire
The questionnaire method has come to the more widely used and economical means of
data collection. The common factor in all varieties of the questionnaire method is its
reliance on verbal responses to questions, written or oral. The researchers found it
essential to make sure the questionnaire was easy to read and understand to all spectrums
of people in the sample. It was also important as researchers to respect the samples time
and energy hence the questionnaire was designed in such a way, that its administration
would not exceed 4-5 minutes. The questionnaires were personally administered. As far
as possible, the questionnaires were filled by me and not given to the respondents.
Field work
Field work is a general descriptive term for the collection of raw data direct from the
consumers, as opposed to secondary research. It plays an important role in collecting the
data. My sample size was 157. In my research, I had to take the feedback from the
existing customers of Tata Motors to know about their satisfaction level and the areas in
which the company was lagging.
Some important points which I kept in mind while doing the fieldwork-
Making the respondents comfortable before questioning them by introducing
ourselves as students of Amity Business School and ensuring the respondent that
all information collected is only for academic purpose and will be kept absolutely
confidential.
Ensuring that we fill the questionnaires ourselves.
Not leading a person into any preconceived notion.
Not influencing the respondents’ answers in any way/form.
Using simple language, so that the technical language does not intimidate the
respondent.
Sales and Distribution for Tata Motors and Fiat in India
Primary data
Pilot Study
Questionnaire
Secondary data
It refers to the already existing data. I collected them by following methods –
Internet
Books
Published Articles
Journals
Newspaper Articles
Q 1)
Cumulative
Frequency Percent Valid Percent Percent
From this we interpret that most of the customers in that area are business people
Sales and Distribution for Tata Motors and Fiat in India
followed by service class. The housewives do not come to the showroom for the service
or purchase of cars.
Q2)
Cumulative
Frequency Percent Valid Percent Percent
The customers look for performance and looks& style in a car before purchasing it.
Brand name does not play a vital rule in it.
Q3)
Q4)
Which company's car do you possess
Q 5)
If rebuying would you select Tata of Fiat
The customers are satisfied with their cars . this is the reason they can rebuy this
company’s car .
Sales and Distribution for Tata Motors and Fiat in India
Q 6)
What parameter important for rebuying
Of all the customers of TATA motors , most of them consider mileage of the car as an
important parameter for rebuying decision.
Q7a)
rate tata motors on following parameter knowledgeable sales person
Q7 b)
employees spend enough time with you before sales
The customers feel that the employees spend sufficient time before the sales
Q7b)
employees spend enough time with you after sales
The customers also feel that the employees spend good enough time even after sales is
conducted.
Sales and Distribution for Tata Motors and Fiat in India
Q7 c)
Spare parts availability
The customer has a mixed opinion to the availability of the spare parts at the service
center .But still the majority has a positive view to it that the spare parts are readily
available.
Q7d)
Is the Vehicle in good condition at the time of delivery
The vehicle delivered at the time of ownership and after sales is presented in good
condition. Representation of anything is an important feature. It leaves a positive
impression on the customers.
Sales and Distribution for Tata Motors and Fiat in India
Q7e)
Are the prices affordable
The prices of the service, spare parts are rendered affordable by the customers. It is an
important parameter because all the other companies charge high values on spare parts.
The customers become hesitant in getting their cars serviced at the authorized service
center. They rather look for cheaper options elsewhere.
Q7f)
Are there any attractive discounts offered
This analysis states that there are less attractive discounts offered by the company. This
happens in a condition when a company is following low pricing strategy. The company
has not much scope to offer discounts. This sometimes can even go against you. There is
Sales and Distribution for Tata Motors and Fiat in India
tendency among people to cherish the discounts that is offered to them. But in the long
run the strategy is beneficial.
Q7g)
Is the décor of the waiting area pleasing
This is the point that the company should improve on. The customers perceive the décor
of the waiting area not up to the standards. The company should give a serious thought on
improving this .After giving the car for service the customers wait for their cars in the
waiting lounge.
Q7h)
Is post sale follow ups done regularly
Post sales follow up is done on regular basis as seen from the analysis
Q7i)
Are the complaints responded quickly
Cumulative
Frequency Percent Valid Percent Percent
The complaints are duly attended and responded quickly by the employees. The mean
value of the sample is 3.63 which is above average .
Q7 j)
Is the service at Tata Motors excellent
Cumulative
Frequency Percent Valid Percent Percent
When the vehicle is given for servicing, the customers feel that their vehicles have been
properly taken care of. All the complaints have been looked after. The mean value comes
to be 3.75
Q7k)
Are all the commitments fulfilled
Cumulative
Frequency Percent Valid Percent Percent
The mean value is 3.6. Majority of the customers perceive that the commitments by the
company are fulfilled.
Q7 l)
Do you find the car value for money
Cumulative
Frequency Percent Valid Percent Percent
The customers’ satisfaction is perceived by the parameter whether they find their car
value for money. If this is not the case then the customer is dissatisfied and does not
Sales and Distribution for Tata Motors and Fiat in India
consider the car for re-buying. But this is not case with the cars of Tata motors, the
customers find the car value for money. The mean is 3.96
Q 8)
payment procedure preference
Cumulative
Frequency Percent Valid Percent Percent
Most of the customers prefer purchasing a car by the method of finance. So the company
should have links with various finance companies at their respective dealership
showroom for the convenience of customers. The easy the method of financing, more
customers are attracted to the company than their competitors. It gives the company an
edge over its competitors.
Q 9)
Cumulative
Frequency Percent Valid Percent Percent
There are various extra facilities that are provided to the customers for extra benefits and
convenience. One of them is Tata Motors Insurance. It is a cashless insurance in which
during the time of claim, the customer does not have to pay cash and latter get it
reimbursed. The majority of the customers were aware of this facility which means that
sales force of the company is efficient .
Extended warranty
Cumulative
Frequency Percent Valid Percent Percent
Here a complete sample knew about the extended warranty facility offered by the
company which is a good sign.
Sales and Distribution for Tata Motors and Fiat in India
True value
Cumulative
Frequency Percent Valid Percent Percent
This was the facility primarily started in the market by Maruti company. The customers
used to face various problems while selling off their cars. So to provide convenience to
the customers the true value concept came into existence. It was a one stop solution for
the customers to get the best value for their used cars. The customers have a confidence
that he will not be cheated. This adds to extra benefits offered by the company to keep the
customers. They give good exchange offers also if you purchase another car of the same
company. The majority of the customers knew about it.
Tata finance
Cumulative
Frequency Percent Valid Percent Percent
The company also introduced the finance counter for the customers to avail car loans at
the dealership showroom. Everything is at customer’s convenience. Customer does not
has to run here and there for getting the financing done. The customers were aware of it.
Sales and Distribution for Tata Motors and Fiat in India
Autocard
Cumulative
Frequency Percent Valid Percent Percent
It is a facility in which a customer get points for every 100 rupees spent with the
company . These points can later be redeemed. These are also applicable for various
offers during the year. The customers were not aware about this facility of Tata Motors.
The company should make an extra effort to familiarize this facility to the customers.
Genuine accessories
Cumulative
Frequency Percent Valid Percent Percent
The customers should use genuine accessories. There are many duplicate product that are
available in the market. People use them to save cost. But the customers be made aware
about the negative effects that these duplicate products have on the efficiency of the car.
These lead to early wear and tear. It can also prove fatal. The customers were aware of
the fact to use genuine accessories.
Sales and Distribution for Tata Motors and Fiat in India
Q 10)
Overall opinion of tata motors
Cumulative
Frequency Percent Valid Percent Percent
One-Sample Test
Test Value = 3
The mean value is 3.77. The opinion of customers on Tata motors is towards the positive
side. In t-test we have seen the mean difference to be .771. The customers are happy with
their car and have a good experience.
Sales and Distribution for Tata Motors and Fiat in India
Q 11)
would you recommend tata motors to anybody else
Cumulative
Frequency Percent Valid Percent Percent
Most of the customers are ready to take responsibility and recommend the cars to their
family and friends. This is the best method of advertisement i.e. the word of mouth. It
does not cost the company and is most influential. So having such customers is
advantageous to the company. The company should not loose such customers by
Sales and Distribution for Tata Motors and Fiat in India
dissatisfying them. The company has an advantage by having a great deal of these type of
customers.
Q 12)
Gender
Cumulative
Frequency Percent Valid Percent Percent
Most of the customers that come to the showroom are males. Even if the cars are being
bought for females, the males come on their behalf.
Q 13)
Age
Cumulative
Frequency Percent Valid Percent Percent
People of all age groups come to the showroom but the majority are
of age group 26-35 followed by 36-50 age group .
Q 14)
Income group (in lacs)
Cumulative
Frequency Percent Valid Percent Percent
People of all income groups come to purchase cars. It has become a necessity rather than
luxury. There are all segments of cars available according to the need.
Count
female 4 8 12
From this we can state that males prefer buying the car of Tata whereas female prefer
buying car of FIAT.
Count
Female 0 3 9 12
Total 19 69 69 157
Sales and Distribution for Tata Motors and Fiat in India
Males look for performance as a parameter in their decision making to purchase cars
where as female prefer looks and style of the car as a parameter before purchasing.
Count
female 6 3 3 12
Total 43 68 46 157
Sales and Distribution for Tata Motors and Fiat in India
Males prefer mileage as a parameter for re-buying followed by maintenance cost and then
post sales service where as females look for post sales service as an important parameter
for making re-buying decision.
Which of the following best describes your line of work? * Which company's car do you
possess Crosstabulation
Count
student 17 10 27
Taxi services 25 3 28
Which of the following best describes your line of work? * What parameter important for rebuying
Crosstabulation
Count
student 9 3 15 27
Taxi services 3 19 6 28
Total 43 68 46 157
Sales and Distribution for Tata Motors and Fiat in India
Customers of service class give more importance to mileage than maintenance cost
followed by post sales service.
Customers from business class have an almost equal weightage for mileage and post sales
service but mileage has an upper hand. The least important parameter as maintenance
cost.
In case of students, maintenance cost is the prime parameter followed by post sales
service and mileage.
In case of taxi, mileage plays an important role followed by maintenance cost.
Sales and Distribution for Tata Motors and Fiat in India
Count
Age 18-25 0 6 30 36
26-35 7 33 27 67
36-50 12 27 9 48
Above 51 0 3 3 6
Total 19 69 69 157
Customers from the age group 18-25 goes for looks & style of the car for buying it.
From the age group 26 and above, they give more importance to performance of the car.
Sales and Distribution for Tata Motors and Fiat in India
Count
Age 18-25 12 3 21 36
26-35 13 41 13 67
36-50 15 21 12 48
Above 51 3 3 0 6
Total 43 68 46 157
In making their re-purchase decision, customers from age group 18-25 give importance to
maintenance cost than post sales service and lastly to mileage.
Sales and Distribution for Tata Motors and Fiat in India
Where as all the customers from other age groups give preference to mileage in rebuying.
Which of the following best describes your line of work? * payment procedure preference
Crosstabulation
Count
student 0 0 27 27
Taxi services 0 0 28 28
Customers from service sector, students and taxi service providers prefer finance as a
mode of payment for the purchase of cars. Where as business class prefer payment to be
made either by cash or cheque.
Sales and Distribution for Tata Motors and Fiat in India
Count
2 3 4 5 Total
Total 15 39 84 19 157
Customers of Tata have given higher rating to the availability of the spare parts than that
of FIAT. The spare parts of FIAT were not available at all times.
Sales and Distribution for Tata Motors and Fiat in India
Count
3-6 0 3 25 28
6-9 21 6 36 63
9-12 9 10 8 27
Above 12 0 9 0 9
Total 30 28 99 157
Sales and Distribution for Tata Motors and Fiat in India
Customers below the income of 3 lacs finance their vehicles. From 3-6 lacs also
customers go for financing scheme. In the group 6-9 lacs financing is still the majority
but a great deal of rise in cash mode of payment is seen. In 9-12 lacs cash and cheque
mode of payment is seen. Customers above the income group of 12 lacs prefer making
the payment by cheque and do not prefer financing their vehicles.
Sales Man
Sales and Distribution for Tata Motors and Fiat in India
help him in taking timely action, which will save the matters from aggravating
further.
Sales and Distribution for Tata Motors and Fiat in India
REFERENCES
ANNEXURE
Q.3) How long have you been associated with TATA Motors?
a) 0-1 Year b) 1-3 Year c) 3-5 Year d) More than 5 yrs
Q.5) If you need to buy a new or another car, would you again select the Tata or Fiat
Brand?
a) Yes b) No
Q.7) How would you rate TATA Motors on the following parameter?
1 2 3 4 5
i) Are the sales person knowledgeable
Q.9) Are you aware of the following facilities provided by Tata Motors?
FACILITIES Yes No
i) Tata Motors insurance
Gender:
Male Female
Age:
a) Below 18 b) 18-25 c) 26-35 d) 36-50 e)51&above
Name: _____________________________
Address: ____________________________________________________