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7/27/2019 A Project Report on TATA Motors
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INTRODUCTION
As India celebrates its 50 years of independence, the passenger car industry will celebrated a
centenary of its existence in India in 1998. Despite this head start, the industry has never
quite matched up to the performance of its counterparts in other parts of the world. The all-
pervasive atmosphere created by the government's license raj was primarily responsible for
this situation. The various layers of Acts sheltered the industry from external competition and
smothered the development of the Indian automobile industry. Moreover, the industry was
considered low priority as cars were considered to be an "unaffordable luxury."
With the liberalization of the Indian economy, the passenger car industry was finally
deregulated in 1993 and many companies, both Indian and foreign, announced their plans to
enter the market. The last four years have seen companies like Daewoo, Ford, GM, and
Mercedes-Benz launches their cars in India. The passenger car industry notched impressive
growth rates between 26-30% during the period FY 94-96 even though the economic
slowdown has adversely affected the industry in FY 98 with the growth rate tricking down to
1%. Nonetheless, times have changed significantly - the days of the customer chasing the
dealer to purchase poor quality cars backed by inefficient service are history. Today, the
customer dictates the terms.
The segmentation of the passenger car market in India is vastly different from that in the
developed nations. In India, the economy segment accounts for the largest share of the cars
sold, as compared to mid-range segment in the mature markets. The economy and the
premium segment face the lowest competitive threats, while the premium segment will
witness intense competition due to lower volumes.
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PROFILE OF THE ORGANIZATION
Tata motors one of India's largest private sector companies with a turnover of over Rs 80
billions, is the country's leading commercial vehicle manufacturer and has significant
presence in the multi-utility and passenger car segments.
Tata motors was established on September 1, 1945, originally for the manufacture of Steam
Locomotives at Jamshedpur. By 1954, the company had diversified into the manufacture of
commercial vehicles in collaboration with Daimler Benz, Germany. By the time their
collaboration ended in 1969, Tata motors had become an independent producer of Medium
Commercial Vehicles with a great degree of indigenization. It had also developed the
capability of designing, testing and manufacturing such vehicles.
The widely successful Tata Indica, a Euro 2 compliant vehicle, is the countrys first
indigenously designed, developed and manufactured passenger car. Tata Motors followed
that up with the Tata Indigo, a sedan that was launched in December 2002. The company also
makes several other passengers vehicles, including the Safari, Sumo and Sierra.
The companys products have received wide acceptance not only in India but also in the
Middle East, Asia, Africa, Australia, Latin America and Europe.
Areas of business
The company manufactures medium, heavy and light commercial vehicles, multi-utility
vehicles and passenger cars. In the year ending March 2001, the companys revenues from its
four manufacturing plants at three locations in India were Rs. 81.64 billion (US $ 1.73
billion). In 2000, they were Rs. 89.61 billion. (US $ 1.9 billion)
{The average exchange rate has been taken as Rs 47.0 to one US dollar.}
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In the year ended 31 March 2001, the companys total exports were worth about Rs 7.22
billion (US $ 153.6 million), against about Rs 6.09 billion (US $ 129.5 million) in the
previous year.
Locations
The companys manufacturing plants in India are at Jamshedpur, Pimpri and Chinchwad near
Pune in Maharashtra, and Lucknow in Uttar Pradesh. Land has been acquired at Dharwad
(Karnataka) to build a fifth plant.
Collaborations
The company has technical tie-ups with:
The Institute of Development in Automotive Engineering (IDEA), S.P.A., Italy, for
assistance in small car body design and styling; and
Le Moteur Moderne, France, for the development of diesel and petrol engines for passenger
cars.
Subsidiaries
Tata Construction Equipment Company Ltd. (TELCON): Its principal business is
manufacture and sale of construction, material handling and earthmoving equipment.
Tata Technologies Ltd.: It oversees the IT requirements of Tata Motors and provides
services for SAP implementation, CAD/CAM-based design, and e-commerce facilities to
customers in India and abroad.
Sheba Properties Ltd: It is an investment and finance company and a wholly-owned
subsidiary of Tata Motors since its inception. It is registered with RBI as a Non Banking
Finance company.
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Telco Dadajee Dhakjee Ltd. (TDDL): It is an investment and finance company and
proposes to undertake activities pertaining to the sales and service of Tata Motorss vehicles
and spare parts.
Minicar (India) Ltd.: Formerly known as Mazda Industrial Chemicals Ltd., this company
was incorporated on January 18, 1972 and is currently engaged in the business of automobile
sales and services.
HV Transmissions Ltd.: It was incorporated on March 13, 2000 with the objective of
acquiring the Heavy-Duty Gear Box Division of Tata Motors at Jamshedpur as a going
concern. It supplies transmissions and their parts to Tata Motors against purchase orders
raised by Tata Motors on HVTL.
HV Axles Ltd.: It was incorporated on March 13, 2000 with the objective of acquiring the
Heavy-Duty Axle Division of Tata Motors at Jamshedpur as a going concern. It supplies
axles and their parts to Tata Motors against purchase orders raised by Tata Motors on HVAL.
Telco Automation Ltd.: It was incorporated on March 13, 2000 with the objective of
acquiring the Machine Tool and Growth Divisions of Tata Motors as a going concern. As and
when required, Tata Motors sources factory automation equipment from TAL.
Tata Technologies, USA: It was incorporated on August22, 1994 and became a wholly
owned subsidiary of Tata Technologies Limited on December 22, 2000. The company is
engaged in the business of computer consultancy and related services.
Strategic alliances
Tata Motors has several joint ventures and alliances. These include:
Tata Cummins Ltd., a joint-venture with Cummins Engine Company Inc., USA; makes
fuel-efficient, low emission, environment-friendly diesel engines;
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Tata Holset Ltd., a joint-venture with Holset Engineering Company, UK, makes
turbochargers for diesel engines manufactured by Tata Cummins Ltd. and other OEMs;
Concorde Motors Ltd., a joint venture with Jardine International Motors (Mauritius) for
dealerships of passenger vehicles. Concorde has dealerships for Tata Motors passenger
vehicles in Delhi, Mumbai, Bangalore, Ludhiana, Hyderabad, Chennai and Lucknow.
Tata Precision Industries Pvt. Ltd., Singapore, for the manufacture and sale of high
precision toolings as well as electronic and plastic components for the computer industry;
Tata Motors Services Ltd., Singapore, for the sale of spare parts for Tata vehicles; and
Nita Company Ltd., Bangladesh, for the assembly and sale of Tata commercial vehicles.
.TELCO:
Currently the largest automobile company in India, Tata Motors ranks among the top 10
commercial vehicle producers in the world.
The transition of Tata Motors from being a predominantly commercial vehicle manufacturer
to a complete automobile company began in the early 1990's with the launch of the first
Sports Utility vehicle from Tata- the Sierra and later the Tata Estate. The insights gained into
customer needs in these markets led to the development of another world-class Sports Utility
Vehicle, the Tata Safari, launched in 1998.
Soon after launching the Safari, Tata Motors made an aggressive foray into the mainline
passenger car market with its small car, the Tata Indica. The Indica fulfills the Tata Group
Chairman Ratan N Tata's vision of developing and manufacturing a truly Indian car that
would use modern technology and contemporary styling of the small car genre. It went on to
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set a benchmark in terms of its value proposition in terms of best value for money in its
segment and internal spaciousness.
The overwhelming customer response that the Indica generated at its launch in early 1999 has
translated into its capturing more than 17% of the premium small car segment, and 8 % of the
entire passenger car market in India within a year.
Clearly identifying the core areas as R&D, manufacture of critical components and the final
vehicle assembly, the company continues to be open to global alliances to effectively enhance
its competitiveness in the fast globalizing Indian markets. Setting standards of corporate
governance, Tata Motors focuses on Complete Customer Satisfaction. With benchmarking
systems to sell world-class products and services, Tata Motors continues to uphold the trust
of its various stakeholders, viz. shareholders, customers, employees and business associate.
Business Sector
The Tata Group runs businesses in seven key industrial sectors, namely, Materials, Energy,
Chemicals, Consumer Products, Engineering, Communications and Information Systems, and
Services. TELCO is Tatas flagship company in the Engineering sector.
Business Models
TELCO is primarily a Business-to-Consumer Company (B2C), serving various needs of
a number of its customers. It also practices the Business-to-Business (B2B) Model,
though at a much lower scale.
Business
TELCO is into the business of manufacturing and selling medium, heavy and light
commercial vehicles, multi utility vehicles and passenger cars.
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Its major product line can be basically classified into three broad categories. There are
various sub-brands and products in these categories:
Passenger Cars
Utility Vehicles
Commercial Vehicles
TELCO currently has three products in its Passenger Car division namely,
Tata Indica
Tata Indigo
Tata Safari
It is in the process of coming out with another member in the passenger car family, the all-
new Indica Sedan, set out to storm the Indian Mid-Size Passenger car segment, which would
be launched in the last quarter of 2002.
Confirming to International standards all these vehicles are available with various features
such as petrol & diesel versions, 2-wheel and 4-wheel drives etc.
TELCO currently has three products in its Multi-Utility vehicle division namely,
Tata Sumo
Telco Sport
Telcoline Pickup Vans
All these vehicles come only in diesel-engine versions and are quite popular on the Indian
roads, especially on the highways and in the rural areas. They are known for their build
quality, reliability, ruggedness, and the various uses that they can be put at.
They are used as people carriers, as emergency vans, goods carriers, pick-up vehicles and so
many more uses.
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The utility pick-up vans of Tata International are made for all kind of terrains and are
facilitated with features like 2 & 4 wheel drive, single & crew cabs etc.
TELCO is the undisputed leader as regards the Commercial Vehicle segment. It has a large
number of products in this segments classified as various types namely,
Buses
Small Buses (4 models)
Big Buses (4 models)
Trucks
Light Trucks (5 models)
Medium/Heavy Trucks (9 models)
Tippers (3 models)
Tractors (3 models)
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STRATEGIC GROUP MAPS
INTERNAL ANALYSIS
The basic premise is the Customer. So whenever a new product development plan comes into
picture, the idea is to look for ways to offer the customer the best value for his money. And
the way we define value, the word covers all the possible
and not so possible ways to customer satisfaction.
STRATEGIC INTENT
Leadership with Trust
Purpose
being a part of the Tata Group, TELCOs corporate purpose is to improve the quality of life
of the communities that it serves, through leadership in sectors of national economic
significance, to which the group brings a unique set of capabilities. This requires aggressive
growth in its focused areas of business.
The Tata Groups heritage of returning to society what it earns evokes trust among
consumers, employees, shareholders and the community. Formalizing the high standards of
behavior expected from employees and companies continuously enriches this heritage.
The Tata name is a unique asset representing leadership with trust. Leveraging this asset to
enhance group synergy and becoming globally competitive is the route to its sustained
growth and long-term success.
5 Core Values
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The Tata Group has always sought to be a value-driven organization. These values continue
to direct the group's growth and businesses. The five core Tata values underpinning the way
it does business are:
Integrity - we must conduct our business fairly, with honesty and transparency. Everything
we do must stand the test of public scrutiny.
Understanding - we must be caring, show respect, compassion and humanity for our
colleagues and customers around the world and always work for the benefit of India.
Excellence - we must constantly strive to achieve the highest possible standards in our day-
to-day work and in the quality of the goods and services we provide.
Unity - we must work cohesively with our colleagues across the group and with our
customers and partners around the world, building strong relationships based on tolerance,
understanding and mutual cooperation.
Responsibility - we must continue to be responsible, sensitive to the countries, communities
and environments in which we work, always ensuring that what comes from the people goes
back to the people many times over.
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Definition of Value at TELCO
Tata Motors constantly looks for ways to offer customers the best value for money. And our
definition of value covers all facets of customer satisfaction. Be it in the area of product
safety, reliability, utility or aesthetics. We believe in creating lasting relationships with our
customers and business partners.
A Chronology of Important Milestones of the Company
TABLE: 3.1
1946 Tata Engineering undertook manufacture of 5000 'KC' broad gauge open
wagons for the Indian Railway.
The Managing Agency Tata Sons was transferred to Tata Industries on July
1, 1946. The Managing Agency system continued till it was abolished by an
act of Parliament in 1970.
1947 Manufacture of boilers for imported locomotives commenced. This line was
discontinued in April 1958.
In true Tata tradition, which lays emphasis on worker benefits, 129 houses
were built for employees in Jamshedpur.
1948Steam Road Roller introduced in collaboration with
Marshal Sons (UK)
1945
Tata Sons purchased the shops from the Government of India on June 1,
1945 for Rs. 25.39 lakhs with the aim of immediately manufacturing steam
locomotive boilers. Later it planned to manufacture complete locomotives
and other engineering products.
Tata Motors was established on September 1.
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1950 Collaboration signed with M/s Krauss-Maffei, W. Germany for manufacture
of steam locomotives
1954 Collaboration with M/s Daimler -Benz AG, W.Germany, for the manufacture
of medium commercial vehicles at Jamshedpur. First commercial vehicle
produced within six months of agreement.
1956 Steel foundry set up in collaboration with Usines Emile Henricot of Court St.
Etienne, Belgium.
1959 Research and Development Center set up at Jamshedpur.
1960 The company's name, which was Tata Locomotive & Engineering Company
Ltd., was changed to Tata Motors & Locomotive Company Ltd.
1961 Collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. for
manufacture of cable type excavators and cranes. First crane produced in the
same year.
Commencement of exports - first truck exported to Ceylon, now, Sri Lanka.
1964
Manufacture of popular 1210 vehicle model (with 7.5 T payload)
commenced
1966
Acquisition of Investa Machine Tool Co.
Setting up of Machine Tools Division at Pune.
Engineering Research Centre set up at Pune to cater to automobile research
and development.
1967 Press Tool Division set up at Pune.
Vehicle manufacture facilities steadily built up at Pune
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1968 Collaboration with M/s Hueller Hille Gmbh, W. Germany, for the
manufacture of unit construction special purpose machines.
1969 The "T" replaces the three-pointed Mercedes Star.
1970 Last locomotive produced. (Cumulative production 1155 nos.)
971DI engines introduced.
977 First commercial vehicle produced at Pune.
983 HCVs, including articulated vehicles, introduced.
984 Collaboration with M/s Hitachi Construction Machinery Co. Ltd., Japan, for
manufacture of hydraulic excavators.
Expansion of capacity at Pune.985 First hydraulic excavator produced under Hitachi collaboration.
Broad banding of licence (to manufacture only commercial vehicles above 8 Ton
GVW) to include manufacture of all medium, heavy and light commercial vehicles,
jeep type vehicles and passenger cars.
Broad banding of excavator licence to manufacture all types of earthmoving
machinery.
Broad banding of machine tool licence to manufacture all types of machine tools.
Collaboration with Niigata Engineering Co. Ltd, Japan
for NC / CNC Horizontal Machining Centers and with Nachi-Fujikoshi Corp.,
Japan for NC /CNC In line Machining centers and flexible manufacturing systems.
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TABLE: 3.2
1986-90
1986 First Light Commercial Vehicle - TATA 407 produced. This was a
completely indigenous design with minimal import content. Also met fuel
efficiency norms specified by the government
1987 Second model of completely indigenously designed LCV - TATA 608
produced.
LPT 2416 a multi-axled vehicle introduced
1989Third model of LCV Tatamobile 206 produced
Collaboration with M/s Kloth-Senking Metalligessari, Gmbh, W.Germany,
for know-how of manufacturing aluminum castings.Collaboration with
Hitachi, Japan, for manufacture of a new generation EX
series hydraulic excavator.
1990 First EX model hydraulic excavator produced.
Indigenously designed front-end wheel loader - TWL 3036 introduced.
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TABLE: 3.3
1991-94
1991 Introduction of indigenously designed passenger cars - Tata Sierra and Tata
Estate.
TAC 20 crane produced.
One-millionth vehicle rolled out.
1992 Production of MCV's commenced at Lucknow.
LPT 2213 - a multi-axled vehicle launched.
Collaboration with Nachi-Fujikoshi Corp., Japan, for manufacture of robots.
1993 Joint Venture Agreement signed with Cummins Engine Co. Inc.
to manufacture high horsepower and emission-friendly diesel engines for
medium and heavy commercial vehicles.
Tata Cummins Private Limited incorporated in Jamshedpur, Bihar, on
0ctober 20, 1993.
1994 Tata Sumo - a multi-utility vehicle launched.
LPT 709 - a full forward control, light commercial vehicle launched.
Joint Venture Agreement signed with M/s Daimler - Benz / Mercedes - Benz
for manufacture of Mercedes Benz passenger cars in India.
Joint Venture Agreement signed with Tata Holset Ltd., U.K. for
manufacturing turbochargers to be used on Cummins engines.
Mercedes-Benz (India) Ltd. incorporated in Pune, Maharashtra, on
November 22, 1994.
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Tata Holed Pvt. Ltd. incorporated in Dewas, Madhya Pradesh, on December
20, 1994.
Collaboration with Shads Maschinenbau GmbH, for manufacturing CNC
cylindrical grinding machines.
The Company was restructured into two Strategic Business Units
Automobile Business Unit (ABU), and Construction Equipment Business
Unit (CEBU).
TABLE: 3.4
1995 Collaboration with Hitachi, Japan, for the manufacture of mini excavator
models EX 40 and EX 60.
Production of robots in collaboration with Nachi-Fujikoshi Corp., Japan
commenced.
Mercedes Benz car E220 (W124) launched.
Tata Cummins engine plant inaugurated
1996 First engine produced by Tata Cummins in January 1996.
LPT 2516 vehicle fitted with Tata Cummins engine launched on March 4,
1996.
Tata Sumo Deluxe launched.
Tata Holset's turbo charger plant inaugurated on November 25, 1996.
688 acres of land at Dharwad (Karnataka) were allotted for Auto and CEBU
Units, in Dec 1996.
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Concorde Motors Ltd., a Joint Venture was established between Tata Motors
and Jardine International Motors (Mauritius) Ltd.
1997-98
TABLE: 3.5
1997 Industrial Entrepreneurs Memorandum was filed for taking up manufacture
of special purpose vehicles and construction equipment at Dharwad in Jan
1997.
Management Services Division of the Company was transferred to the
wholly owned subsidiary of Tata Motors - Tata Technologies (I) Ltd, in Apr
1997.
Tata Sierra Turbo launched.
100,000th Tata Sumo rolled out.
The commercial vehicle, LPT 909 introduced.
1998 Tata Safari - India's first Sports Utility vehicle launched in Jan 1998.
Concorde Motors Ltd., a Joint Venture between Tata Motors and Jardine
International Motors (Mauritius) Ltd. was appointed as dealer for the
Company's passenger cars in several cities across the country, in Feb 1998.
Two millionth vehicles rolled out.
Collaboration with Hitachi, Japan, for manufacture of Series V excavators to
replace Series I & III machines, in Mar 1998.
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Indica, India's first fully indigenous car, launched in Dec 1998.
Telco Construction Equipment Company Ltd. (TELCON) came into being as
a subsidiary of Tata Motors, in Dec 1998.
TABEL: 3.6
1999 An overwhelming 115,000 bookings for Indica were made against full
payment within a week, in Jan 1999.
New TATA Logo unveiled.The company would hereafter be called " Tata
Motors ".
Commercial production of Indica begins and first car is sold.
Construction Equipment Business Unit is transferred to TELCON.
In Oct 1999, the Company won the National award for R&D Efforts in
Development of Indigenous Technology in the Mechanical Engineering
Industries Sector instituted by Department of Scientific and Industrial
Research, Ministry of Science and Technology for the year 1999.
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MANUFACTURING UNITS OF TELCO
Tata Motors owes its leading position in the Indian automobile industry to its strong focus on
indigenization. This focus has driven the company to set up world-class manufacturing units
with state-of-the-art technology. Every stage of product evolution - design, development,
manufacturing, assembly and quality control, is carried out meticulously. Its manufacturing
plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North.
Jamshedpur:
This was the first unit of the company established in 1945 and is spread over a area of 822
acres. It consists of 3 divisions - Truck, Engine (including the Gear Box division) and Axle.
The divestments in March 2000 hived off the Axle and Engine plants into independent
subsidiaries. The Truck Division boasts of two assembly lines. The main assembly line,
measuring 180 metres in length, has 20 stations with a vehicle rolling out every 8 minutes
while the other line is dedicated to Special Purpose Vehicles (SPVs). State-of-the-art
facilities like a Centralized Paint and Press Shop with a set-up of a 5000 tonns Siempelkamp
press line and a cut-to-length line for strip preparation purchased from M/s. Kohler of
Germany makes it a fairly advanced production outfit.
This is supported by a fully equipped Foundry which supplies high-grade SG Iron castings
for automobile components and excavators and is rated as one of the cleaner, better and
highly automated foundries in the world. The Foundry has a sophisticated Kunkel Wagner
high pressure moulding line, which has a rated production capacity of 90 pairs of moulds
every hour. The Foundry has its own melting shop, core shop and sand plant. Other advanced
facilities include Channel Furnaces, Computerized Testing Equipment etc. In 1993, the
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Foundry was ISO 9002 certified by the Bureau Veritas Quality International and later
followed it up with the more stringent QS 9000 certification from the BVQI in the year 2000.
The unit is also equipped with a semi-automated forging line, with 40,000 mkg Beche
hammer and state-of-the art presses from Kurimoto of Japan and is one of the most modern
forging set-ups in the country. It produces critical forging like crankshafts, front axle beams
and steering parts for the automobile plant. The new forging line, installed on April 20, 1984,
has the capability to forge front axle beams at 90 sec per piece and crankshafts at 120 sec per
piece. Mechanical presses help produce a variety of heavy forging. The sophisticated FIDIA
Digit 165 CC graphite milling machine links shop floor machines to the design workstation.
The Forge has been certified as ISO 9002 and QS 9000 by the BVQI.
Pune:
The Pune unit is spread over 2 geographical regions Pimpri and Chinchwad and has a
combined area of around 510 acres. It was established in 1966 and has a Production
Engineering Division, which has one of the most versatile tools making facilities in the
Indian sub-continent. It houses a Vehicle manufacturing complex which is one of the most
integrated automotive manufacturing centers in the country producing a large variety of
individual items and aggregates. It is engaged in the design and manufacture of sophisticated
press tools, jigs, fixtures, gauges, metal pattern and special tools, as well as models for the
development of new ranges of automobile products. Its capabilities have enabled Tata Motors
to introduce new products and improve existing ones without resorting to imports of dies or
fixtures.
Over the years, this division has developed expertise in design and manufacture of automated
dies, fixtures and welding equipment. Its large design group is fully conversant with state-of-
the-art CAD facilities and manufacturing facilities comprising of light and heavy CNC
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machine shops, jigs boring room, plastic template shop, wood pattern and model pattern
shop, five axis precision machine tools and laser control machines. To cope with such a
diverse range, four assembly lines have been established, one each for MCVs and HCVs,
LCVs, multi-utility vehicles and one for Passenger Cars (Indica).
The Passenger Car Division in 'K' block executes the entire process of car manufacture over
five shops - the engine shop, the transmission shop, press and body shops, paint shop and the
trim and final assembly shop. The shops are fully automated ensuring that there is minimal
chance for error in the manufacturing processes. After the car is completely assembled, it
goes through several checks like wheel alignment, side slip test, brake test, shower test, and a
short test run before it is ready for dispatch.
All systems such as materials management, maintenance and other activities are
computerized, enabling smooth operations and minimum inventory needs.
The Electronics Division is engaged in the production of a wide variety of Machine Tool
Controllers, PLCs, and Test rig instrumentation, Servomotors, Proximity Switches. In
addition, it has developed a number of components such as flashers, horns, timers that are
used in Tata Motors vehicles.
Industry experts rate the fully automated Foundry at Chinchwad among the best, worldwide.
The Iron Foundry produces 16,000 tonnes of high precision castings per year with the help of
450 employees. These include Cylinder Blocks, Cylinder Heads, Gear Box Housing, etc. To
dispense with the need for outsourcing, an Aluminium Foundry with an annual capacity of
700 tonnes has also been established.
Lucknow:
Lucknow Plant is the latest in Tata Motors's manufacturing facilities. Established in 1991 and
covering an area of 600 acres, it was primarily started to assemble Medium Commercial
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Vehicles (MCVs) to meet the demand in the Northern Indian market. However, in 1995, the
unit started manufacturing bus chassis of Light Commercial Vehicles (LCVs) and SUMO's.
The unit is equipped with facilities to manufacture spare parts. Subsequently, G-16 and G-18
Gear Parts were added in 1998. The plant started to assemble G -16 GearBoxes in 2000 to
meet the in-house requirement for SUMO vehicles.
PASSENGER CARS SEGMENTATION
The segmentation of the passenger car market in India is vastly different from that in the
developed nations. In India, the economy segment accounts for the largest share of the cars
sold, as compared to mid-range segment in the mature markets. The economy and the
premium segment face the lowest competitive threats, while the premium segment will
witness intense competition due to lower volumes.
Segment-Wise Classification of the Indian Car Market Segment
Range Price ('000 Rs.) ModelsEconomy Maruti 800, Maruti Omni, Premier,
Ambassdor, Hyundai Santro
Mid-range 350-450 Uno, Zen, Ford Ikon, Fiat Palio
Premium 450 - 1,000 Esteem, Opel Astra, Ford Escort, Mitsubishi
Lancer, Hyundai Accent
Luxury > 1,000 Opel Vectra, Rover Montego, Mercedes benz
TABLE: 3.8
Key Demand Drivers
Traditionally, disposable income was perceived as the one critical factor that drove passenger
car demand. However, household income is no longer the single most important factor in
determining the demand for vehicles. Other critical factors are the mobility needs of people
and the availability of cheap finance. The top three income groups - middle, upper middle,
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and high - have grown from 10% in 1986 to 17% of the population and covers over 52
million families. The number of high-income households is growing very rapidly, more so in
the rural areas. These findings have revolutionary implications for the passenger car market.
The development of the used car market will also play a major role, as the customers will be
encouraged to trade in their old cars. The key to the growth of future markets is to make
maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels and
lubricants so as to reduce vehicle-operating costs.
pricing
In any business, nothing is more dangerous than using money as the magnet for attracting
customsers. It kills loyalty, mangles margins, and encourages defections. But it is the Unique
Selling Price the only road to success in the intensely competitive automobiles business?
Those in the race for winning over the Rs. 7,500-crore small cars market seem to believe so.
In the small car segment, the only P that, suddenly, seemed to matter was the second in the
Product-Price-Promotion-Place marketing-mix.
Evidently, features, technology, and service are secondary. And the only warhead is price.
According to the Research Analyst, Morgan Stanley, Price is the most important P in this
market because it is pyramidal in structure, with a huge base and a narrow apex.
Everything else remaining constant, the purchase decision of the first-time buyer is
influenced by the 4 factors: Price, Price, Price and Price. The first is the price of acquisition.
The second is the price of finance, or the rate of interest on a loan to buy a car. Third is the
price of maintenance, which includes the cost of fuel, service, and spare parts. And the fourth
is the price of disposal, or the re-sale value of the car. The typical Indian car-buyer is
obsessed with post-purchase pricing. Which is,in effect, the cost of maintenance and the
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possible re-sale value. And obviously, the lower the selling price of a second hand model, the
less is the purchasers incentive to opt for it.
However, not every company plays the price-card. Instead of cutting the price of Santro,
Hyundai Motors has launched an enhanced version with product features like power steering,
and product-plus features like better service and customer-care. Hyundai arrived at the
pricing strategy after a careful analysis. It does not believe in knee-jerk reactions to rival
moves. It also believes that when features are the USP, second P Marketing cannot help
reinforce that position. Strategic price marketing is a corporate weapon that must be applied
in the context of an entire portfolio of cars. Attempting to sell the lowest priced car in every
segment will not enable a company to survive.
Sure, the lower price will be an attraction to the first-time buyer who is, essentially, stretching
his budget to buy personal transportation. The less the stretch, the more is the likelihood of
actually buying a car instead of, say, a two-wheeler. So, even a drop of Rs.1000 in the small
cars segment could expand its size.
Go beyond the entry level and the price-value equation will kick in immediately. Only if all
other things are perceived to be equal between competing brands will price be a decider.
Once incomes start rising again, there will emerge increasing numbers of upgrades as well as
first-time buyers who will not necessarily start at the lowest price-level. Thus, price will
become less important. Applied as a brand-level strategy, price may help the auto-marketers
win over only the entry-level customer.
However, only the lowest priced player will milk this segment. The rest of the low-price
aspirants will have to offer additional features as value to convince the budget-buyer to spend
more. As a corporate strategy, leading the charge through price may have a better pay-off. A
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low priced product will enable new entrants to gain entry into the consumers garage. The
threat, however, is that of a dangerous dilution of image.
Thus price can be a selling proposition for only one segment of customers. But a company
that seeks life-long customers, who progressively move up its product ladder, cannot rely on
price alone for success.
The main purpose of this section is to have an insight into TELCOs external environment.
Here, we shall be briefly looking at the factors influencing its external environment, its
competitors and the kind of competition it faces.
Competition
Competition leads to improvement on all fronts. If healthy, it brings the best out of an
industry. Newer and better technology, innovative and much better products and processes,
user-friendly and economical products providing maximum value to customers, and other
such advantages, all arise out of competition.
TELCO faces stiff competition in almost all its business segments but has emerged as the
winner when it comes to market success. Out of its three business segments namely, the
Passenger Car division, Utility vehicle division and the Commercial vehicle division, the
Passenger Car division is the area, which is seeing a lot of activity in the current period. And
this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half
of the current year.
TELCO currently has two products in the passenger car segment- the Indica and the Safari.
It faces direct competition from almost all the major automobile players in the passenger
segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota.
S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car
segment in India into further sub segments on the basis of their length,
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Small Car segment (B segment)
Entry-level Mid Size segment (lower C segment)
Premium Mid Size segment (upper C segment)
Luxury Segment (D segment)
TELCO currently has one offering in the Small Car segment- The Indica, and one offering in
the Sports Utility Vehicle segment - The Safari. The proposed offering, christened the TATA
Sedan shall compete in the entry-level Mid-Size Car segment.
TELCO also has plans to introduce another offering in the Luxury car segment code-named
Magna. The Magna shall be launched some time during the later half of next year in 2003.
TELCO currently is tight-lipped about the Magna and has divulged no details regarding the
car but according to group Chairman Mr. Ratan Tata, the Magna shall be TELCOs answer to
the Luxury Segment in India, which shall force the competitors to revamp their strategies.
And if the success of the Indica and the Safari is to be believed, these words are sure to see
light in the near future.
The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the
game by launching the all-new Indica V2, which has met with huge success in the recent
months. It has earned a lot of respect among all the small car manufacturers because of its
quality and value delivered to the customer, truly fulfilling its promise ofmore CarPerCar.
TELCO, for the year 2002 had promised a product of great pedigree, and the Indica V2 has
just delivered that.
The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the
Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo.
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Core Competencies
The Core Competencies of is there capability to make the Indica globally competitive in
terms of cost. If Telco can find markets to sell 20,000 or 30,000 more Indicas, then they are
looking at a very interesting set of numbers. If you add variants to those numbers, youre
looking at very reasonable numbers. Then you are in the niche. And if you focus on that
niche, invest in technologies required to give that one platform all the variants and changes
that you need, you survive.
Telco has a design and engineering capabilities that are unmatched by its competitors in the
Indian market and the company also possesses an unmatched ability to create and integrate it.
This gives it the capability to compete with firms in the world market.
It also has a World-Class dealer base and alliances with these suppliers; this ensures the right
Inputs for the company and also helps to manage the Just In Time systems.
Smaller auto companies (globally) will have to look for market niches to operate. In the case of Tata
Motors, the niche may be the lower end car. The unfortunate part is that the lower end market does
not offer much by way of margins. But you need volumes and that kind of scale and production
processes that will give you those advantages. That is what Telco has to look for and there they can
even stand on their own if they find markets beyond the shores of India. All that would come from
having a niche product that is globally competitive
But there is still a long way to go before the company is able to make a mark in the world
market and compete with the worlds leading companies in well-developed markets like
Europe, The United States and Japan. For that to happen, it will take a more focused
approach from the company towards quality and developing R&D and experience in such
project .Though its efforts towards Total Quality Management seem to be helping the
company.
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Key Factors For Success
Having the right resources is very important for a company to succeed in any industry.
The resources which are most vital for success in an industry are called Key
factors for success in an industry, the key factors for the industries that Telco
Operates in are:
High Quality Management
The LCV & M&HCV segment are highly complicated sectors; the management not only
have to manage all the resources available to the company properly, but also have to be
highly professional in their approach.
R&D and Knowledge
The technological changes as per WTO specifications and Euro Emission norms need
to be followed for a company like Telco to sustain growth and Telco has been able to
achieve all this in all its products and services.
Human Resource
Industries like Telco have a high human element, it is very important for a company
to have High quality human resources
High and Standard Quality
For industries like Telco, which manufacture equipment's that serve the infrastructure
industry, it is very important to have high standards in quality.
Managing Cost
It is becoming more and more important for companies to achieve competitive costs, the
company is planning to continue with is cost reduction program. Most of this would come
from reducing fixed costs, operational efficiency an outsourcing.
Resources
The resources of the company are similar for all the industries; many of the resources are
common for all the industries. But the Core Values like management capabilities
are shared by the entire organization.
Some of the major resources that Telco has are
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Human Resource
Telco possesses a great Human Resource base; its in all its business is people
oriented operation. The company takes great care to ensure that it has a good supply
of HR, the values and efforts to ensure the HR departments of each SBU share good
Human Resources.
Management
The management of the company has gained the reputation of being one of the most
professionally managed companies in India. The management of each SBU has a
strong work ethic with an aggressive approach to managing the company.
R&D and Know-how
The company is known for its high level of sophistication when it comes to
technology. And it has great experience in projects with high levels of sophistication,
which is very important in a knowledge-based industry. It has a great R&D base, it
invests a high amount every year (compared to the average spent in the industry) on it
for each department. The R&D departments of each SBU have helped each other, for
E.g. the revival of Indica is a success story.
High Quality
The company has extremely high standards in quality; almost all Strategic Business
Units are technology leaders in their field of operation.
Thus it is clear that Telco has most of the resources that companies require to be
successful in the industries it operates in. Cost is the only resource that sometimes
hampers its progress.
Value Chain
A large number of Telco's operations are different activities on the value chain for
E.g. LCV., Utility Vehicles, HCV or others are used in different sectors, but all the
vehicles have been the leaders in their own segment.
This aspect not only allows the company to it to deliver tailor made products for other
divisions in the company, but also gives some divisions of the company a lot of
business. And the company is able to achieve lower costs than its competitors by
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procuring facilities from other departments within the company, thus giving it an edge
over the competition.
Synergy
The activities of the company give synergy to the company as a whole; this is due not
only because of the value chain, but also because the R&D from one division helps in
the others. For E.g. the R&D from the Engineering division helps the Production
division. And in the future the company wants to have synergy in all its activities to
be highly successful.
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Pest analsis Identification of change drivers
The PEST(Political, Economic, socio-cultural and Technological) analysis for TATA motors
and Locomotive Company Ltd. (TELCO):
Political
The political environment has been highly unstable over the past few years, but recently it has
settled down somewhat. As we know that Telco is the leader in the commercial
vehicle segment with 54% market share in Light Commercial Vehicle (LCV) and
63% market share in Medium & Heavy Commercial (M & HCV). Telco has a market
share of 221% in utility vehicle segment. The company has also garnered a 9%
market share in the passenger car industry in a very short span. The decision of the
government to ban diesel buses and give licenses to CNG buses has been a boon for
TELCO as it is the major supplier of buses to all State Transport Corporations.
Though only few state governments are stern in implementing this order but TELCO
will remain one of the major suppliers of buses and hence can plan expansion.
Economic
The availability of freight depends on the economic activity in the country. Therefore an
increase in economic activity broadly represented by growth in GDP helps in increasing the
freight availability. The GOI policy towards depreciation norms and excise duty etc will have
a bearing demand for MUVs and CVs. The implementation of infrastructure projects will
have a positive impact on demand of CVs and MUVs as they are extensively used in
transportation of material and people requirement of projects. The freight rates determine the
revenue component of fleet owners. The improvement in freight rates consistently over this
period will add to business of TELCO. Though oil prices have gone up but the shift in the oil
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sector companies towards a positive pricing strategy will not affect Telcos business plans &
performance.
Socio-Cultural
In order to boost sales passenger car companies often look for a general upbeat environment.
The sales during festival times perk up because the environment all round is joyous and
upbeat. Another effect is because of is that of good monsoons which translates into a higher
rural demand especially for the MUVs. Thus socio-cultural factors do not affect the
Engineering business too much; it does have an impact indirectly. Though the metropolitans
have become over-crowded and but Telcos Indica V2 sales have picked up.
Technological
The Company vigorously pursued a programme of product innovation in commercial vehicle
with a view to regaining and improving its market share. The company had already added to
its range Euro 1 Compliant Cummins Engine Powered Vehicle with a view to regaining and
improving its market share. Major innovation in the current year include a 25 Tones Truck
and a30 Tone Tractor Trailer; Fuel Efficient M&HCV Truck and Busses Powered by
Companys Euro 1 Compliant 697 Engines; a Cost Effective 11 Tones Vehicle in both bus
and truck version to meet the growing demand in this segment; and a Fur Tones LCV fitted
with an internally developed Turbo charged Engine.
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STRATEGY IMPLEMENTATION
SEVEN S FRAMEWORK
The Boston Consultancy Group in the 1970s developed the Seven S Framework. It was
designed to build a cohesive strategy, and in turn integrate the 7S, these 7S are inter-related
and inter-dependent.
For the success of an organization the Seven S cannot work in isolation, they have to be
brought together.
For the Strategies to work at Telco, it is important that the company employs the framework.
To implement the framework the company should consider the following aspects-
Strategy
The strategies that the company needs to employ have been discussed in the previous section.
The strategies differ on the various levels, i.e. different for Corporate, Business, Operational
and International Levels. These strategies have to be aligned with the following elements.
Structure
When the company undertook the restructuring exercise, it was the first major restructuring
the Tata group had undertaken. The first phase of restructuring required some basic
foundation building. The group developed a common corporate identity for all group
companies leveraging the strengths of the Tata brand. The group companies were required to
sign an agreement to use the Tata brand, which entailed the compliance with the quality
standards and business ethics that we codified at that time. The company developed the Tata
Business Excellence Model to measure the quality and corporate performance of our
companies, andrequired them to achieve the specified level of performance in order to
continue the Tata Brand.
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The company instituted the business review committees (BRCS), which constituted the
formal interface between the group and the holding company. The BRCS reviews the
strategic direction of each company, and the executive committee of each board reviews the
operations and the budget of the company.
To oversee the entire restructuring exercise, the group created a central group, which they
called the Group Executive Office (GEO). Its primary task was to look at the strategic
direction of each of our companies, in the process of which it set some tasks for our company
in terms of bottom-line and top-line growth based on historical growth trends, as industry
leadership in terms of being number one, two, or three. Ultimately, the GEO takes a view on
the figment of companies within our group.
Telco has also decided to restructure its operations by reducing its level of vertical
integration. Towards this, the company has decided to hive off three of its ancillary divisions
in Pune and Jamshedpur. The company is at present on the look out for suitable alliances with
international majors.
The company has set up an independent retailing network for cars and also for other utility
vehicles. The strength of dealership for these now stands at 118.
Systems
Systems are the procedures that make the organization follow for everything from top-level
decision making to board meetings, from employee training and hiring to transportation. All
the companys activities should have a particular system particular to the company.
The GEO as mentioned above has put in place certain important hooks such as a central HR
and central financial coordination with a view to standardize the MIS systems of Telco for
financial reporting to the holding company. The net result of all these initiatives has been that
Telco now operates more as a group than what they did in the past, but what this really meant
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was that each company had the stamp of its own CEO and went its own way, and if you
remove the name o the enterprise you could be looking at different companies with no
connection to the Tatas.
Style
Every company has its own management style, style also consists of the way a company
operates its business.
As mentioned above the company instituted the business review committees (BRCS), which
constituted the formal interface between the group and the holding company. The BRCS
reviews the strategic direction of each company, and the executive committee of each board
reviews the operations and the budget of the company.
Staff
This aspect concerns itself with the pool of people who need to be developed.
Telco takes a lot of efforts to ensure the best trainee level talent, through campus recruitment
from the top institutes of the country. It then gives them the proper training and development,
giving them the opportunity to grow and improve.
The current chairman of the company Mr. Ratan Tata is a prime example, in the way he
started at the middle level management, and then made it to the top of the company
Skills
This aspect considers the fact that every organization needs certain skills for its success, but
its not just enough to haveskills, an organization must have the right combination of skills
that complement each other.
The company works hard to ensure that it has the necessary skills to ensure its success. It
trains its employees, through a set of carefully designed programs, to give them the desired
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skills. Plus it has also entered into a number of alliances with anumber of companies, which
help it to gain the necessary experience and which can also help it improve its R&D.
Super-ordinate Goals
These are goals on which the other elements and other goals of the organization should
depend upon. These are reflected in the thinking of the organization.
These are Tatas Diktat:
Globalize: With economies opening up, Tata companies are aiming for global benchmarks to
compete.
Be Skill Intensive: With manufacturing ceasing to be India s advantage, the thrust is on
knowledge based industries.
Build brands: Shift from selling commodities to marketing branded products and services that
not just differentiate but fetch a premium.
Leadership: To justify shareholder interest, Tata companies must be among the top three in
their industries.
Enhance Performance: Executives must pull their weight, and the best of them must get
opportunities across functions and group companies.
LEADERSHIP
Leadership is defined as The art or the process of influencing people so that they will strive
willingly and enthusiastically towards achievement of the groups mission. Leadership is
something that greatly affects any companys philosophy, culture, and in-turn the overall
health of the company.
Telco always has had a tradition of great leadership. One of its founders Jamshedji Tata has
been a hallmark of leadership.
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That surge of electricity not unnoticed by merchant bankers, now crawling all over Bombay
House, the group headquarters is in fact the spark that the group is looking for to rocket
itself into a new orbit of growth. In 1991, when a shy and reclusive Ratan Tata took over the
chairmanship of the group from uncleJ.R.D Tata, his priority was not new businesses or even
growth. It was something much more immediate and arduous. It was to turn a loose
confederation of companies, controlled powerfully by powerful satraps, into a group that
thought and acted like one. The challenge however wasnt merely of ousting powerful
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Problems of the organization
Given the city conditions, the consumers needed a very good overall performance of cars,
small cars taking less space has no parking problems, easy derivability in heavy traffic
conditions, easy gear shifts and good fuel efficiency. The small car owners being mostly the
professional class or the upper middle class were very cost conscious and due to their busy
life styles preferred low maintenance in their cars.
Irrespective of these above aspects there is one more thing, which also needs attention is
customer satisfaction. Customer satisfaction is abroad term, which includes many things like
post sale service satisfaction, dealership locality towards customers, way of treatment at these
dealerships and service stations, solving the customers problems and concerns to their full
satisfaction and so on.
The occurrence of single problem is a source of dissatisfaction for customers. Problem
experience is not always something broken or loose. Many a times it is a function of
customers expectation of how a feature or a vehicle system should look or perform and any
performance short of this expectation is perceived as a problem.
Competition information
The main purpose of this section is to have an insight into TELCOs external environment.
Here, we shall be briefly looking at the factors influencing its external environment, its
competitors and the kind of competition it faces.
Competition leads to improvement on all fronts. If healthy, it brings the best out of an
industry. Newer and better technology, innovative and much better products and processes,
user-friendly and economical products providing maximum value to customers, and other
such advantages, all arise out of competition.
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TELCO faces stiff competition in almost all its business segments but has emerged as the
winner when it comes to market success. Out of its three business segments namely, the
Passenger Car division, Utility vehicle division and the Commercial vehicle division, the
Passenger Car division is the area, which is seeing a lot of activity in the current period. And
this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half
of the current year.
TELCO currently has two products in the passenger car segment- the Indica and the Safari.
It faces direct competition from almost all the major automobile players in the passenger
segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota.
S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car
segment in India into further sub segments on the basis of their length,
Small Car segment (B segment)
Entry-level Mid Size segment (lower C segment)
Premium Mid Size segment (upper C segment)
Luxury Segment (D segment)
TELCO currently has one offering in the Small Car segment- The Indica, and one offering in
the Sports Utility Vehicle segment - The Safari. The proposed offering, christened the TATA
Sedan shall compete in the entry-level Mid-Size Car segment.
TELCO also has plans to introduce another offering in the Luxury car segment code-named
Magna. The Magna shall be launched some time during the later half of next year in 2003.
TELCO currently is tight-lipped about the Magna and has divulged no details regarding the
car but according to group Chairman Mr. Ratan Tata, the Magna shall be TELCOs answer to
the Luxury Segment in India, which shall force the competitors to revamp their strategies.
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And if the success of the Indica and the Safari is to be believed, these words are sure to see
light in the near future.
The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the
game by launching the all-new Indica V2, which has met with huge success in the recent
months. It has earned a lot of respect among all the small car manufacturers because of its
quality and value delivered to the customer, truly fulfilling its promise ofMore Cars per Car.
TELCO, for the year 2002 had promised a product of great pedigree, and the Indica V2 has
just delivered that.
The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the
Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo.
The segmentation of the passenger car market in India is vastly different from that in the
developed nations. In India, the economy segment accounts for the largest share of the cars
sold, as compared to mid-range segment in the mature markets. The economy and the
premium segment face the lowest competitive threats, while the premium segment will
witness intense competition due to lower volumes.
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TABLE: 1.1
Traditionally, disposable income was perceived as the one critical factor that drove
passenger car demand. However, household income is no longer the single most important
factor in determining the demand for vehicles. Other critical factors are the mobility needs of
people and the availability of cheap finance. The top three income groups - middle, upper
middle, and high - have grown from 10% in 1986 to 17% of the population and covers over
52 million families. The number of high-income households is growing very rapidly, more so
in the rural areas. These findings have revolutionary implications for the passenger car
market. The development of the used car market will also play a major role, as the customers
will be encouraged to trade in their old cars. The key to the growth of future markets is to
make maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels
and lubricants so as to reduce vehicle-operating costs.
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Range Price ('000 Rs.) Models
Economy Maruti 800, Maruti
Omni, Premier, Ambassador,
Hyundai Santro
Mid-range 350-450 Uno, Zen, Ford Ikon, Fiat Palio
Premium 450 - 1,000 Esteem, Opel Astra, Ford Escort,
Mitsubishi Lancer, Hyundai Accent
Luxury > 1,000 Opel Vectra, Rover Montego,
Mercedes benz
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NEED OF THE STUDY
We know that customer taste change after a period thats why its important for company
perspective to implement his strategy and policies according to his customer:
The need of the study is to analyze the strategies generally opted by dealers and to
focus on the Marketing mix of TATA Motors.
To know about the company strategy which they formulate for their customer to
make a better relationship with them.
To know the strength and weakness and to assess the profitability of the company.
To know the strategy which will help to know the needs and wants of the customer.
To know the buying behavior of car owners.
To know the strength and weakness and to assess the profitability of the company
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SCOPE OF THE STUDY
Today, for any organization or firm to survive in this competitive world depends on
its abilityo be dynamic and be different from the competition to be unique
in the industry:
The research aims at finding the attitude of people towards the different brands of
cars, a conclusive research was conducted.
The data collection form was designed in the form of a standard questionnaire
because it is more reliable than unstructured format industry
Customer satisfaction helps every organization to keep the existing customer and to
build new customer.
The information gathered through this research can be used by the company to
improve its services and became more customers friendly.
This can increase the goodwill of the company and its overall performance.
This study is aimed to provide the management with some knowledge about its status
in market both in terms of sales and customer awareness.
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OBJECTIVE OF STUDY
To examine the psychographics of small size car customers.
To probe the buying behavior of car owners.
To know the strategy which will help to know the needs and wants of the customer.
To find people expectations or satisfaction regarding the small cars.
To judge the awareness level of small cars.
To know the factors which play important role before making purchase decesion.
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Part II
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Chapter II
Research Methodology
Limitations
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RESEARCH METHODOLOGY
A research design is the arrangement of condition for collection and analysis of data in a
manner that to, combine relevance to research purpose with economy in procedure.Research
Design is conceptual structure within which research is conducted. It conStitutes
the blue print of collection, measurement and analysis of date. Research Design is
needed because it facilitates the smooth sailing of various research operations,
thereby making research as efficient as possible yielding maximum information
with minimum time, effort and money. Research Design stands for advance
planning of methods to be used for collec ting relevant da ta and techniques to be
used in the analysis .The design helps researcher to organize his ideas whereby it
will be possible for him to look for flaws and inadequacies.
Sources of Primary and Secondary data:
The major aim of the project was to analyze the Strategies of TELCO and to study the
consumer-buying behavior for small car customers.
For the first part secondary data was collected from various sources that included website of
TELCO and trade journal that were collected from TELCOs Delhi Office.
By reducing the chance or the sample to influence results through different questions and
through different judgment of answers and what to record, the structured questionnaire
produces more reliable results i.e. if the research project is repeated in the same manner,
similar results will be obtained.
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Most of the questions asked in the questionnaire were closed ended with a few open-ended
questions also, to know consumers general views. Some questions are designed for
the purpose of cross checking the sample genuineness in filling the questionnaire.
For the purpose of analysis, ranking scale is used to rank the preferences of attributes of the
customers. (Semantic differential scale is used to understand the images of brands of
cars as perceived by the consumers. This scale is used because it permits the
development of descriptive profiles that facilitates the comparison of competitive
items.)
Universe: The universe is entire group of items the researchers wish to study and about
which they plan to generalize. For this, the universe consists of people of Delhi who
own small car. Selecting the sample for this project, a probability sampling method is
used. Probability sampling method is those in which every item in the universe has a
known chance of being chosen in the sample. Here the sample size consists of 60
residents of Delhi. The probability sampling is preferred because:
It is the only sampling method that provides essentially unbiased estimates having
measurable precision. If the investigator requires this level of objectivity, then some
variant of probability sampling is essential.
The probability sampling permits the researchers to evaluate in quantitative terms, the
relative efficiency of alternate sampling techniques in a given situation. Usually this is not
possible in non-probability sampling.
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LIMITATIONS
The time for which the project was conducted was very short.
The sample size was restricted to 60 only.
The scope of study was also restricted to the study of awareness about the consumer
preferences.
As there are many competitors of Tata motors in the pvt.sector only 3 of its
competitors products were analyzed in detail.
The area from where the sample population was selected was Delhi only.
Other cities and moreover rural area was not covered under the study.
The preferences of marketing agents were not considered which would have helped to
evaluate the preferable commission sale which helps to boost product sale.
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Chapter III
DESCRIPTIVE WORK ON SUBTOPIC
OF STUDY
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MARKETING MIX
Tata Motors Ltd is a multinational corporation headquartered in Mumbai, India. Part of the
Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive
Company). Tata Motors is Indias largest automobile company, with consolidated revenues
of USD 20 billion in 2009-10. It is the leader in commercial vehicles and among the top three
in passenger vehicles. Tata Motors has products in the compact, midsize car and utility
vehicle segments. The company is the world's fourth largest truck manufacturer, the world's
second largest bus manufacturer, and employs 24,000 workers. Since first rolled out in 1954,
Tata Motors has produced and sold over 4 million vehicles in India.
Established in 1945, when the company began manufacturing locomotives, the company
manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG,
which ended in 1969. Tata Motors is a dual-listed company traded on both the Bombay Stock
Exchange, as well as on the New York Stock Exchange. Tata Motors in 2005, was ranked
among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In
2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand'
in a annual survey conducted by Brand Finance and The Economic Times. Tata Motors has
auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Ahmedabad,
Sanand and Pune in India, as well as in Argentina, South Africa and Thailand.
1. Product: Tata has a very wide range of products it has passenger cars, utility vehicles,
Trucks, Commercial passenger Carriers And Defence Vehicles
Passenger cars
UtilityVehicles Trucks Commercial Passenger Carriers
Indica vista Safari Dicor Tata Novas Buses
Indigo XL Sumo Grande TL 44 Winger
Nano Sumo Magic
Fiat cars Xenon XT
2. Price: The prices of Tata motors are generally affordable acceptable by the general public
at large. Tata always have something for the lower class people with Nano being their trump
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card. Giving discount every month and special promotion for certain type of vehicle also one
of the strong strategy use by Tata Motors. Discount can be made from Companys profit or
from dealers profit at certain range.
3. Place: Tata Motors has an extensive dealer network covering Indian and International
markets. Wherever you are, there is a Tata Motors Sales and Service dealership close to you.
The channel of distribution, physical location, and dealership method of distribution and sales
is generally adopted. The distribution of vehicle must be in a very systematic way, from the
plant to dealership and to end user. This is not only in India itself but also to the world-wide
dealership.
4. Promotion: Tata motors promote their products via Advetising and after sales services
5. People: Tata Motors owe our success to the highly motivated and talented staff. Our
recruitment division picks the crme-de-la-crme from premier universities, management and
engineering institutes in India. they put them through rigorous training programmes to hone
their entrepreneurial skills and impart comprehensive product knowledge.
6. Processes: Tata motors follow Balanced Scorecard Collaborative, Inc for achieving
excellence in overall Company performance.
7. Physical Evidence: The management of the company has managed to keep their hopes
alive even in this recession and hopes that the worse is behind Tata Motors recently launched
the most awaited car of the year, Tata Nano and the company has already received 203,000
booking that are fully paid and 70 percent of the applicants are ready to wait till the end of
2010 for the car to be manufactured.
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MARKETING STRATEGY AND MARKETING PLAN
A MARKETING STRATEGY in general sets a target market and a marketing mix. It is a
"big picture" of what a company will do in some market in order to gain a competitive
advantage. A MARKETING PLAN is a detailed breakdown of your marketing strategy. It is
a written statement of a marketing strategy with the time - related details as well as the
marketing budget for carrying out the strategy.
It should spell out the following in detail: -
What marketing mix will be offered?
To who (target market);
For how long;
What company resources will be needed at what rate;
What results are expected (sales and profits).
1.1Develop a Marketing Strategy
By now you should already:
have decided on the nature of your business and you know that your business idea is
Feasible;
have also identified your market and decided on your target market;
know what the needs of your customers are and you have identified and assessed your
Competition.
Now you need to decide on:
The Product and Service to offer your customers;
How you will make your Products available to customers;
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How you will communicate the benefits of your Products and persuade customers to
buy them
The price you will charge.
These four decision variables are the ingredients of the so-called marketing mix. Your task is
to create these elements effectively in order to market your product/service to the target
market in an optimal way.
1.2Types of Marketing Strategy
1. Social Marketing:
It refers to the design, implementation and control of programs to increase the acceptability
of a social cause or practice among people e.g. No Smoking campaign in Delhi University,
publicity campaign for casting vote.
2. Augmented Marketing:
It refers to providing additional services by way of innovative offerings and benefits to the
customers to increase his level of satisfaction e.g. free home delivery service by
Supermarkets.
3. Direct Marketing:
Marketing through various advertising media that interact directly with consumers, generally
calling for the consumer to make a direct response, e.g. Catalogue Selling, Mail-order, Tele-
calling and TV shopping.
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4. Relationship Marketing:
Marketing through creating, maintaining and enhancing strong long-term relationships with
customers in order to win his loyalty e.g. a restaurant can build relationships with customers
by sending him wishes and discount offers on his birthdays.
5. Services Marketing:
It is applying the concepts, tools and techniques of marketing to services like banking,
insurance, retailing, educational etc.
6. Person Marketing:
It consists of activities undertaken to create, maintain or change attitudes or behavior towards
particular people like politicians, sports stars, film stars, professionals to promote their
careers and income.
7. Organisation Marketing:
It consists of activities undertaken to create, maintain or change attitudes and behavior of
target audiences towards an organisation.
8.Place Marketing:
Place marketing involves activities undertaken to create, maintain, or change attitudes and
behaviour towards particular places e.g. tourism marketing.
9. Differential Marketing:
A market-coverage strategy in which a firm decides to target different markets through
different strategies or offers e.g. Hindustan Unilever offers different types and qualities soaps
for different markets and customers.
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10. Synchro marketing:
It refers to balancing the fluctuations in irregular demand for a product due to seasons,
timings etc, through flexible pricing, promotion and other incentives e.g. heavy off-seasondiscount on woollens may increase its demand to some extent.
11. Concentrated Marketing:
A market-coverage strategy in which a firm focuses on only one or few markets.
12. De-marketing:
Marketing strategies to reduce demand temporarily or permanently, not to destroy demand
but only to shift it e.g. Super stores may offer no discounts on Saturdays, Sundays and
holidays to reduce overcrowd.
1.4 The Marketing Strategy Process
Having a strong marketing strategy process in place helps to ensure that your marketing
activities remain aligned with your business goals, maximizing the business return from your
marketing efforts.
The picture shows the process for
developing and aligning marketing
strategy.
These are the steps you should follow tocreate and execute a winning marketing
strategy.
For help in following this 7-step
marketing strategy program, check out
our newly released eBook "The 7-Step
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Easy Marketing Strategy Process."
Ill briefly review each step in turn:
1. Understand Your Customer
Develop a clear picture of your target customer using market research and analysis.
Understand their pain points and the benefits of your solution.
2. Analyze the Market
Some basic market research should allow you to find market data such as total available
market, market growth (historical numbers and projections), market trends, etc.
3. Analyze the Competition
Ask yourself what other choices your target customers have to solve their pain point.
Research and assess the strengths and weaknesses of each. Take a look at this article for
more info on competitive marketing strategy.
4. Research Distribution Channels
What is the best way to deliver your product or service to your target customers? This will
impact your sales strategy and your financials, as well as your marketing mix.
5. Define Your Marketing Mix
Check out this article about defining your marketing mix: Product, Price, Place and
Promotion.
6. Analyze the Financials
Put together your marketing budget and evaluate projected marketing ROI, customeracquisition costs, etc.
7. Review and Revise
8. Continuously evaluate the effectiveness of your marketing strategy, and revise or
extend as needed.
1.5 Create an Effective Marketing
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The MARKETING MIX consists of all the controllable variables the company puts together
to satisfy its target market. A typical MARKETING MIX includes decisions regarding the
product, the price of the product, how to promote the product and how to get the product to
the right customer at the right time and place.
All these variables are controllable elements in the marketing mix and can be reduced to four
basic ones, each starting with a P (also known as the four Ps):
Product.
Place.
Price.
Promotion.
The four Ps are those factors that you can control directly, for example, you develop your
product, you decide how to get it to the customer, you determine the price and you choose the
promotion mix. The four Ps are, as you will realize now, with the selection of your target
market are the basic ingredients of your marketing strategy.
All four Ps are needed in a marketing mix and should therefore be tied together. When a
marketing mix is developed, all final decisions about the P's should be made. All four Ps
should be in harmony and aimed at satisfying the customer's needs in an optimum way.
You do have control over the marketing mix and can vary it to suit the needs of your
customers and the resources of your business. Customers are continuously matching their
needs with the products offered by you and your competitors.
You should now know your target market and the needs of your potential customers. From
analyzing your competitors, you can identify what they offer the target consumer through
their marketing mixes. This determines what your marketing mix and your competitive
advantage will be. All of the marketing mix elements must reinforce the image of the product
or service that the business portrays to the potential customer.
Lets discuss each P in the marketing mix in more detail.
1.6 Focus on the product
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This area is concerned with developing the right product for the target market. This offering
may involve a physical product, a service, or a blend of both. Remember that a product is not
limited to a physical good. The important thing is that your product and/or service should
satisfy a specific customer need.
At the most fundamental level we normally talk about the core product. The core product
answers the question "what is the buyer really buying?" The woman buying a camera is not
buying a mechanical box, she is buying the opportunity to take photo's, when she want to
have and keep forms of "immortality" or precious moments. The marketers' job is to sell
these core benefits of the product or service.
Branding means the use of a name, term, symbol, design, or a combination of these, to
identify a product. It includes the use of brand names, trademarks, and practically all other
means of product identification. A brand name is a word, letter, or a group of words or letters.
Examples include Nike, IBM, and Kellogg's. Trademark is a legal term and includes only
those words, symbols, or marks that are legally registered for use by a single company.
Brand promotion has advantages for sellers as well as for customers. A good brand name
speeds up shopping for the customer, if the customer can immediately recognize the product,
and it will reduce the seller's selling time and effort. When customers repeatedly buy by
brand, the seller is protected against competition from other companies. Good brands can
improve the company's image, and thus speed up acceptance of new products marketed under
the same company name.
Packaging involves promoting and protecting the product. This can be important to both
sellers and customers. It can make a product more convenient to use or store. It can prevent
spoiling or damage. Good packaging makes products easier to identify and promotes the
brand at the point of sale and even in use.
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In addition to branding and packaging if the formal product is a physical object, the market
may recognize it as having characteristics like a quality feel, specific features, as well as
styling. If it is a service, it may have some or all of these facets in an analogous manner.
The total product can also consist of elements like free delivery, installation, warranties,
services, maintenance systems, customer advice, financing and other things that customers
perceived to be of value.
INTERNATIONAL STRATEGIES
INVEST HEAVILY IN R&D- the main area where Telco can improve in its efforts to make
an impact in the global marketplace is by improving its R&D base and bringing it up to world
standards. Also Telco can get into strategic alliance with a international car manufacturer for
R&D support.
STRATEGIC TIE-UPS- the company should attempt to tie up with some Strategic Partners,
to help it gain entry into foreign markets. These partners should have competencies in the area
of cost management or R&D, or these companies might be suppliers who provide inputs in the
projects taken up by the company
Consumers of small cars are seeking a very good overall perform