Tata Group
Type
Private Conglomerat (BSE)
Founded
in 1868 by Jamshedji Tata
Headquarters
Mumba, Maharastra, IndiaKey people
Ratan Tata Chairman
Industry
EngineeringMaterialsInformation technologyCommunicationAutomotiveChemicalsEnergy
Products
SteelAutomobilesTelecommunicationsSoftwareHotelsConsumer goods
Revenue
USD 21.9 billion (Fy2005)(3.2%)
Employees
246,000 (2004)
Website
www.tata.com The Tata Group is India's largest conglomerate, with revenues in 2005-06 of Rs. 967,229 million (US $21.9 billions),he equivalent of about 2.8% of india's GDP, and a market capitalisation of US $57.6 billion now (only 28 of the 96 Tata Group companies are publicly listed). The Tata Group has operations in more than 40 countries across six continents and its companies export products and services to 140 nations. The group takes the name of its founder, Jamshedji Tata, a member of whose family has almost invariably been the chairman of the group. The current chairman of the Tata group is RatanTata, who took over from J. R. D. Tata in 1991. The company is currently in its fifth generation of family stewardship.
[1]The Tata Group comprises 96 companies in seven business sectors. 65.8% of the ownership of Tata Group is held by the charitable trust of Tata.
Contents
1 History
2 Business and values
3 Environmental Damage
4 Engineering
5 Materials
6 Energy
7 Chemicals
8 Services
9 Consumer Products
10 Information systems and communications
11 The Tata logo
12 Educational institutes opened by Tata Group
History
Jamshedji Tata came from a business family and made his fortune from cloth mills in the interior of Maharashtra. He was well travelled and went in for modern industry for India. He constructed a hotel in Bombay, the Taj Mahal Hotel, in 1903. It was the first large hotel in India, and it was rumoured to have been set up because established hotels of the time were owned by Europeans and did not allow locals. The Indian Hotels Company is a Tata group company that runs the Taj brand of hotels.
TISCO, now Tata Steel was established in 1907 to set up India's first iron and steel plant in
Jamshedpur (Named after Tata's founder, Jamshedji Tata) which is often called Tatanagar for the company's significant presence. The plant started production in 1912. It produces steel at one of the lowest costs in the world, assisted by the Group's ownership of its own raw materials (
coal and
iron), which means that its cost base is far lower than many rival steel producers. In 1910, Tata Hydro-Electric Power Supply Company was set up. In 1917, the Group entered the consumer goods industry with the
Tata Oil Mill Company being established to make soaps, detergents and cooking oils. In 1932,
Tata Airlines, now Air India, was established. In 1939,
Tata Chemicals was established.
TELCO, now Tata Motors, was established in 1945 to manufacture locomotive and engineering products.
On
January 30,
2007,
Tata Steel, part of
India's Tata Group, offered to purchase 100% stake in the Corus Group at 608 p. per share in an all cash deal, cumulatively valued at
USD 12.04 Billion. This deal was also the biggest acquisition by an Indian company.
Tata surprised the
credit default swap segment of the
derivative markets by deciding to raise $6.17 billion of debt for the deal through a new subsidiary of Corus called "Tata Steel UK", rather than by raising the debt itself. Tata's
security credit rating is
investment grade, whereas the new subsidiary may not be. The higher risk associated with raising debt through a subsidiary with a lower credit rating prompted
Fitch Ratings to downgrade its rating of the credit swap risks in the takeover to "negative". Fitch also stated that Corus' responsibility for the debt may lead to Corus' own unsecured debt rating being downgraded.
Business and valuesTata Group's aim is to improve the quality of life of the communities it serves. The Tata family of companies shares a set of five core values: integrity, understanding, excellence, unity and responsibility. Tata Group has played a pioneering role in a variety of fields after
India's independence. It is widely respected for the initiatives it has taken in different fields for the upliftment of the country. Its contribution to
India's
education,
science and
technology is widely documented and appreciated. In fact many of the renowned public sector companies in India and leading research organisations trace their history to Tata, for example Indian Institute of Science (
IISc), Tata Institute of Fundamental Research (
TIFR), Tata Institute Of Social Sciences(TISS), TERI (Tata Energy Research Institute),
Air India (Tata Airlines)
Environmental DamageOn 12 July 2007 The Independent reported that Tata Chemicals plans to build a soda ash plant on the shores of
Lake Natron, Tanzania. Such a development would destroy one of the few breeding grounds of the lesser flamingo. Chris Magin of the
RSPB said:
"The chances of lesser flamingos continuing to breed at Lake Natron in the face of such mayhem are next to zero. This development will leave lesser flamingos in east Africa facing extinction and should be stopped in its tracks and sunk in water so deep it can never be revived."
Engineering
TAL Manufacturing Solutions
Tata Autocomp Systems Ltd (TACO) is one of the newest addition to Tata Group of Industries. It is one of the fastest growing auto-components companies. TACO has established joint ventures with a number of world renowned auto-component companies.
Tata Motors
Contents
Background
Tata indica
Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), is
India's largest passenger
automobile and
commercial vehicle manufacturing company. It is also the world's 5th largest commercial vehicle manufacturer. It is part of the
Tata Group. Tata Motors is widely credited for putting India on the automotive map by designing and developing its own range of cars. Tata Motors date back to 1945 when they started making Trains. Tata Motors was first listed on the
NYSE in
2004. Tata Motors had created the wealth Rs 320bn during 2001-2006 and stood among top 10 wealth creators in India. It has its manufacturing base in
Jamshedpur,
Lucknow,
Pune and soon one more plant is going to established at
Singur. In 2004 it also bought
Daewoo's
truck manufacturing unit in
South Korea. In March 2005, it acquired a 21% stake in
Hispano Carrocera SA, giving it controlling rights in the company. Tata Motors and the Fiat group have signed a new memorandum of understanding (MoU) to establish a 50:50 joint venture to manufacture passenger vehicles, engines and transmission systems for both domestic and export markets
Tata Motors is a company of the Tata and Sons Group, founded by
Jamshetji Tata. It is currently headed by
Ratan Tata.
The company has the workforce of 22001 employees working in its three plants and other regional and zonal offices across the country.
Tata Motors' range of passenger cars is still not comprehensive by international standards. In commercial vehicles, Tata Motors commands an imposing 65% market share in the domestic heavy commercial market. The company is trying to modernise its range of commercial vehicles. Tata Motors hived off its vehicle finance business into a separate subsidiary, TML Financial Services (TMLFS), in September 2006.
The company plans to build a car that will cost just under Rs 1,00,000 considering that 2 wheelers in India cost Rs 50,000/-.
Time line and milestones1977-1986 Tata Motors is the largest commercial vehicle maker in India. World over it is the world's fifth largest medium and heavy commercial vehicle manufacturer. It started its journey in 1977 with the manufacturing of first commercial vehicle in Pune. It took five years for the company to begin the commercial production of heavy commercial Vehicles. Considering the road infrastructure of the country the company which does not support the heavy vehicles the company adopted a route for light commercial vehicles (LCV). It came out with its first LCV, Tata 407, in 1986.
1987-1996 Tatamobile introduced in 1989. Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures. In 1993 it signed with Cummins Engine Co., Inc., for the manufacture of high horsepower and emission friendly diesel engines. It was an effort made to reduce the pollution in the existing Tata engines and to produce more environmentally friendly engines. Furthering the trail of JVs it signed a joint venture agreement with Tata Holset Ltd., UK, for manufacturing turbochargers to be used on Cummins engines.
1997-2006 In 2000, it launched CNG buses and also filled the product line gap through the introduction of the 1109 vehicle which is an intermediate commercial vehicle and is useful for medium tonnage loads. Post 2000, the company introduced a variety of new models. It introduced the Ex- series vehicles with high tonnage capacity and high pick up and also came out with the entirely new LCV (207 DI) with direct ignition technology to cater to the customers' requiring one and same vehicle for commercial as well as personal use.
Tata – Daewoo Merger: In 2004, it acquired the Daewoo Commercial Vehicle Company of Korea.
The reasons behind the acquisition were:
Company’s global plans to reduce domestic exposure The domestic CV market is highly cyclical in nature and prone to fluctuations in the domestic economy. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the LCV segment. Since the domestic CV sales of the company are at the mercy of the structural economic factors, it is increasingly looking at the international markets. The company plans to diversify into various markets across the world in both MHCV as well as LCV segments.
To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time. This was mainly to cater to the international market and also to cater to the domestic market where a major improvement in the Road infrastructure was done through the National Highway Development Project
On its journey to make an international foot print, it continued its expansion through the introduction of new products into the market range of buses (Starbus & Globus).
JV with Hispano Carrocera: In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors acquired 21% stake in Hispano Carrocera SA, Spanish bus manufacturing company and introduced its high-end inter-city buses in the country. Tata Motors has also formed a 51:49 JV with Marcopolo, a Brazil-based global leader in bus body building. This JV is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems. The JV will absorb technology and expertise in chassis and aggregates from Tata Motors, and expertise and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design.
Tata Ace: The latest hit of Tata Motors is its mini truck Ace. Ace, India's first indigenously developed sub-one ton mini-truck, was launched in May 2005. It was an instant hit. Analysts opined that Ace had changed the dynamics of the LCV market in India by creating a new market segment termed the SCV segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, since the launch of Ace, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace.
In 2005, Tata Motors became the only major engine manufacturer in the world (aside from a
Briggs & Stratton emissions test) to express any formal interest in the turbulence-boosting
cylinder head grooves invented by
Somender Singh (
Mysore).
2007 onwards: Tata Motors, through its JV with Fiat, is likely to gain access to Fiat’s diesel technology and to the latter’s strong overseas distribution network for its passenger cars. Tata Motors is looking to extend this relationship to other segments like pick-ups and MHCVs. The company also plans to expand its global footprint with the launch of ‘Global Truck’ and ‘Global Pick-up’ in domestic and international markets by 2007-08. Tata Motors plans to launch the new pick-up in India, Southeast Asia, Europe, South Africa, Turkey and Saudi Arabia. The launch of the global truck will mark the entry of the company into developed markets like Europe and the USA. The project was initially a collaboration between Tata Motors and its subsidiary Tata Daewoo Commercial Vehicles, but later Tata Motors decided to work with Iveco as Daewoo’s design was not in sync with the needs of sophisticated European customers. The company has formed a JV with Thailand’s Thonburi,( Exhibit-1) an independent auto assembler, in which Tata Motors will hold a 70% stake. The JV will set up a plant with capacity to manufacture pick-ups a year and will sell them in Thailand, the second largest pick-up market in the world, and in other regional markets. The JV product is likely to be a part of Tata Motors’ ‘Global pick-up’ plans.
Auto policy of Government of India envisions to establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. GOI policy has rightly recognized the need for modernizing of vehicles to arrest degradation of air quality. The terminal life policy for commercial vehicles and move toward international taxing policies linked to age of vehicles, are steps in the right direction which will lead to increased sales for TATA motors Commercial vehicle division.
Effect of Government Policy on TATA Motors CV Division Commercial Vehicles segment sector has been at the forefront of the strong showing by the automotive industry over the past few years. Following factors have led to growth in sales:
The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices
The attractive financing offers and freebies enabled by low interest rate policies by Government
the need to transport higher volumes of agricultural and industrial goods
Low interest rates
Impact of Indian Budget on Auto Sector The auto industry an engine of growth in India in the past five years has not received direct mention. The mildly positive news concerning automobiles is the cut in tariff on petroleum and diesel from 8 per cent to 6 per cent which has made commercial vehicles more competitive in the export market The government has announced indirect benefits in education and training of the workforce and extension of the benefit of 150 per cent weighted deduction on in-house R&D by another five years. Another indirect benefit to the auto is in provision for the national highway development program. Thus budget will have mild positive effect on commercial vehicles division at TATA Motors, although Government could have done lot more to increase competitiveness of CVD like the industry had expected excise duty on larger passenger vehicles to be cut to 16 per cent from 24 per cent and customs duty on auto parts would be cut to 5 per cent from 12.5 per cent.
Union Budget Highlights on Auto Sector • Setting up of Investment Commission to invite domestic and foreign business to invest in India • Setting up of National Manufacturing Competitiveness Council to provide sector/industry specific policy initiatives to enhance competitiveness. • Announcement of Introduction of VAT from 1st April 2005. A Technical Experts Committee to assists States in VAT implementation. • 2% education cess levied on Income Tax, Corporate Tax, Customs Duty, Excise Duty, Service Tax. • Rs 10,135 crore additional Plan expenditure • No change in rate of interest
Direct Taxes • Requirement of capacity expansion reduced from 25% to 10% to get benefit of additional depreciation of 15% u/s 32 (1) (iia) for capital investment • Benefit of 150% deduction under section 35(2ab) of Income Tax Act extended to the Automobile Industry.
Indirect Taxes Customs • Reduction in Customs Duty on Alloy Steel, Copper, Lead & Zinc from 20% to 15%. Duty on all primary, Semi- finished and finished form of Iron & Steel like Ingots & Billets, Sponge Iron, Hot Rolled & Cold Rolled bars/ Rods /Coils of non-alloy steel reduced from 15% to 10%. • Customs Duty on catalysts (3815) has been reduced from 20% to 15% Excise Duty • Increase in Excise duty on Steel from 8% to 12% • Tractors exempted from Excise Duty. Parts captively used in the manufacture of tractors have been exempted from Excise Duty.
New auto policy considered by GOI India last announced an automobile policy in December 1997. The policy required majority-owned subsidiaries of foreign car firms to invest at least $50 million in equity if they wished to set up manufacturing projects in India. It also forced them to take on export obligations to fund their auto part imports and required them to submit to a schedule for increasing the share of locally made parts in their cars. Mere car assembling operations were not welcomed.
An Indian cabinet panel will soon consider a new automobile policy that aims to set fresh investment guidelines for foreign firms wishing to manufacture vehicles in the country. Investments in making auto parts by a foreign vehicle maker will also be considered a part of the minimum foreign investment made by it in an auto-making subsidiary in India. The move is aimed at helping India emerge as a hub for global manufacturing and sourcing for auto parts. The policy sets an export target of $1 billion by 2005 and $2.7 billion by 2010. The policies adopted by Government will increase competition in domestic market, motivate many foreign CV manufactures to set up shops in India, whom will make India as a production hub and export to nearest market. Thus TATA Motors CV will have to face tough competition in near future, which might affect its growth negatively.
Tata is developing a car it aims to sell in 2008 for about $2,500 USD, which would be considered the cheapest vehicle ever made in real terms.
Global Competition
Tata Motors have some distinct advantages in comparison to other MNC competitors. There is definite cost advantage as labor cost is 8-9 per cent of sales as against 30-35 per cent of sales in developed economies. Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. India is an excellent source for IT based engineering solution for products & process Integration. There are strong supporting industries i.e. auto component industry has world class capabilities. There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. There are favorable Government polices and regulations to boost the auto industry i.e. Incentive for R&D.
Present Global ChallengeVolvo, a leading manufacturer of trucks, buses, cars, construction equipment, and aero engines, has entered in India in 1998. Its main focus is in the area of fully built buses. In India, it has focused on providing economical transport solutions in consonance with its values of safety, quality, and environmental care. Its competitive advantage is its high technology which makes the vehicle a very comfortable option to travel through. Its trucks are reputed for their performance and economy and are the flag bearers in their production activities in India. It is still operating in the niche market of high end buses where the TATA compete through its Spanish buses.
Future Challenges
M
ahindra and Mahindra: JV with ITEC, North American leader in heavy trucks. M&M has formed a 51:49 JV called Mahindra International with ITEC, USA, (parent NAVISTAR), to manufacture commercial vehicles and to bolster its position in the CV business. ITEC is the leader in medium and heavy trucks and buses in North America, and is the world's largest manufacturer of medium-duty diesel engines. Mahindra International aims to have a presence across the CV market (6-35 tonnes GVW) with variants of passenger transport, cargo and specialised load applications and is likely to start producing medium/heavy commercial vehicles from FY09.
Force Motors: JV with MAN for manufacturing high-tonnage vehicles Force Motors has paired up with MAN in a 70:30 JV to manufacture high-tonnage and specialty vehicles, such as long-haul trucks, tippers, tractor trailers and multi-axle vehicles in the 16-32 tonne range at its Pithampur plant, with an initial capacity of 24,000 units per annum and at an investment of Rs7bn. The JV plans to sell nearly half of its production in the domestic market, while the rest is to be exported to the Middle East, Turkey, Russia, Asia and Africa. Further, the two companies have formed another JV to manufacture buses in India from end-2007.
Ashok Leyland: Acquisition of Czech Republic-based Avia Ashok Leyland (ALL) recently acquired the truck unit of Czech Republic-based Avia for US$35m. Avia manufactures 6-9 tonne LCVs and has a capacity of 20,000 units per annum. The acquisition has given ALL direct access to an entire range of Avia trucks, Avia’s press shop with dies and tools, welding lines, state-of-the-art paint shop and R&D facilities. ALL has also entered into technology agreements with Hino Motors of Japan and ZF of Germany to complement its in-house R&D efforts and developing complementary components and aggregates.
Products Passenger cars and utility vehiclesTata concept car
Tata SierraTata EstateTata Sumo/SpacioTata SafariTata IndicaTata IndigoTata Indigo MarinaConcept vehicles2000
Aria Roadster2001
Aria Coupe2002
Tata Indiva2004
Tata Indigo Advent2005
Tata Xover2006
Tata Cliffrider2007
Tata EleganteCommercial vehiclesTata heavy trucks in
Ladakh, India
Tata AceTata TL/Telcoline/207 DI Pickup Truck
Tata 407
Tata 709 E
Tata 1109 (Intermediate truck)
Tata 1510/1512 (Medium bus)
Tata 1610/1616 (Heavy bus)
Tata 1613/1615 (Medium truck)
Tata 2515/2516 (Medium truck)
Tata 3015 (Heavy truck)
Tata 3516 (Heavy truck)
Tata Novus (Heavy truck designed by
Tata Daewoo)
Military vehiclesTata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions
Tata LPTA 713 TC (4x4)
Tata LPT 709 E
Tata SD 1015 TC (4x4)
Tata LPTA 1615 TC (4x4)
Tata LPTA 1621 TC (6x6)
Tata LPTA 1615 TC (4x2)
Tata Motors SubsidiariesTelco Construction Equipmentis a joint venture between Tata Motors and Hitachi, which focuses on excavators and other construction equipment.
HV Transmission (HVTL) and HV Axles (HVAL): HVAL and HVTL are 100% subsidiary companies of Tata Motors engaged in the business of manufacture of gear boxes and axles for heavy and medium commercial vehicles, with production facilities and infrastructure based at Jamshedpur. The combined revenue of the two companies rose 38.7% yoy for 9MFY07 while the combined PAT rose 50.9%. Tata Motors plans a capex of Rs2bn each for HVAL & HVTL and plans to raise funds for the same, most probably by way of a strategic sale to a technical collaborator. The strategic sale of either HVAL or HVTL or both is likely to be completed in the next one or two quarters.
Tata Technologies Limited (TTL): TTL provides Engineering and Design (E&D) solutions to the Automotive Industry. Tata Motors holds 86.91% of TTL’s share capital. TTL is based in Pune (Hinjawadi) and operates in the US and Europe through its wholly owned subsidiaries in Detroit and London respectively. It also has a presence in Thailand. Tata Technologies is a software service provider in the IT services and BPO space. Its global client list includes Ford, General Motors, Toyota and Honda, to name a few. It bought over the British engineering and design services company, Incat International Plc for Rs4b in August 2005. Incat specializes in engineering & design services and product lifecycle management in the international automotive, aerospace and engineering markets. With this acquisition, Tata Motors will have closer proximity to its global customers and be able to provide a wider range of services.
Tata Daewoo CV Ltd(TDCV): TDCV is a 100% subsidiary of the Tata Motors based in South Korea, which was acquired in March 2004. TDCV is in the business of manufacture and sale of heavy commercial vehicles.Tata Daewoo is Tata Motors’ 100% subsidiary in Korea, with a market share of 30%.Tata Motors will use the Daewoo technology to introduce higher tonnage trucks in the Indian market and use Tata Daewoo for exports globally. In line with this strategy, it has already introduced the Novus, a high-end tipper developed by Tata Daewoo for the Indian market.
ControversiesFarmers are agitating against the land acquired by the firm in Singur for its ambitious Rs 1,00,000 car project. The protest is being lead by
Mamta Banerjee of the
Trinamool Congress. Farmers are protesting that the land is fertile land and the government acquired the land without their consent.
(formerly Tata Engineering and Locomotives Ltd (TELCO)) is a company of Tata group of companies which produces automobiles for the Indian Market. Its products range for goods and passenger
transport. Seven out of ten medium and heavy commercial vehicles in India bear the Tata mark, widely trusted in India. The
Indica V2 – India's only fully indigenously designed and manufactured passenger car – has been a great commercial success.
Contents[
hide]
1 Background2 Time line and milestones3 Global Competition4 Present Global Challenge5 Future Challenges6 Products6.1 Passenger cars and utility vehicles6.2 Concept vehicles6.3 Commercial vehicles6.4 Military vehicles7 Tata Motors SubsidiariesBackground
Image:Tata indica.jpgTata indica
Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), is
India's largest passenger
automobile and
commercial vehicle manufacturing company. It is also the world's 5th largest commercial vehicle manufacturer. It is part of the
Tata Group. Tata Motors is widely credited for putting India on the automotive map by designing and developing its own range of cars. Tata Motors date back to 1945 when they started making Trains. Tata Motors was first listed on the
NYSE in
2004. Tata Motors had created the wealth Rs 320bn during 2001-2006 and stood among top 10 wealth creators in India. It has its manufacturing base in
Jamshedpur,
Lucknow,
Pune and soon one more plant is going to established at
Singur. In 2004 it also bought
Daewoo's
truck manufacturing unit in
South Korea. In March 2005, it acquired a 21% stake in
Hispano Carrocera SA, giving it controlling rights in the company. Tata Motors and the Fiat group have signed a new memorandum of understanding (MoU) to establish a 50:50 joint venture to manufacture passenger vehicles, engines and transmission systems for both domestic and export markets
Tata Motors is a company of the Tata and Sons Group, founded by
Jamshetji Tata. It is currently headed by
Ratan Tata.
The company has the workforce of 22001 employees working in its three plants and other regional and zonal offices across the country.
Tata Motors' range of passenger cars is still not comprehensive by international standards. In commercial vehicles, Tata Motors commands an imposing 65% market share in the domestic heavy commercial market. The company is trying to modernise its range of commercial vehicles. Tata Motors hived off its vehicle finance business into a separate subsidiary, TML Financial Services (TMLFS), in September 2006.
The company plans to build a car that will cost just under Rs 1,00,000 considering that 2 wheelers in India cost Rs 50,000/-.
Time line and milestones1977-1986 Tata Motors is the largest commercial vehicle maker in India. World over it is the world's fifth largest medium and heavy commercial vehicle manufacturer. It started its journey in 1977 with the manufacturing of first commercial vehicle in Pune. It took five years for the company to begin the commercial production of heavy commercial Vehicles. Considering the road infrastructure of the country the company which does not support the heavy vehicles the company adopted a route for light commercial vehicles (LCV). It came out with its first LCV, Tata 407, in 1986.
1987-1996 Tatamobile introduced in 1989. Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures. In 1993 it signed with Cummins Engine Co., Inc., for the manufacture of high horsepower and emission friendly diesel engines. It was an effort made to reduce the pollution in the existing Tata engines and to produce more environmentally friendly engines. Furthering the trail of JVs it signed a joint venture agreement with Tata Holset Ltd., UK, for manufacturing turbochargers to be used on Cummins engines.
1997-2006 In 2000, it launched CNG buses and also filled the product line gap through the introduction of the 1109 vehicle which is an intermediate commercial vehicle and is useful for medium tonnage loads. Post 2000, the company introduced a variety of new models. It introduced the Ex- series vehicles with high tonnage capacity and high pick up and also came out with the entirely new LCV (207 DI) with direct ignition technology to cater to the customers' requiring one and same vehicle for commercial as well as personal use.
Tata – Daewoo Merger: In 2004, it acquired the Daewoo Commercial Vehicle Company of Korea.
The reasons behind the acquisition were:
Company’s global plans to reduce domestic exposure The domestic CV market is highly cyclical in nature and prone to fluctuations in the domestic economy. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the LCV segment. Since the domestic CV sales of the company are at the mercy of the structural economic factors, it is increasingly looking at the international markets. The company plans to diversify into various markets across the world in both MHCV as well as LCV segments.
To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time. This was mainly to cater to the international market and also to cater to the domestic market where a major improvement in the Road infrastructure was done through the National Highway Development Project
On its journey to make an international foot print, it continued its expansion through the introduction of new products into the market range of buses (Starbus & Globus).
JV with Hispano Carrocera: In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors acquired 21% stake in Hispano Carrocera SA, Spanish bus manufacturing company and introduced its high-end inter-city buses in the country. Tata Motors has also formed a 51:49 JV with Marcopolo, a Brazil-based global leader in bus body building. This JV is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems. The JV will absorb technology and expertise in chassis and aggregates from Tata Motors, and expertise and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design.
Tata Ace: The latest hit of Tata Motors is its mini truck Ace. Ace, India's first indigenously developed sub-one ton mini-truck, was launched in May 2005. It was an instant hit. Analysts opined that Ace had changed the dynamics of the LCV market in India by creating a new market segment termed the SCV segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, since the launch of Ace, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace.
I
n 2005, Tata Motors became the only major engine manufacturer in the world (aside from a
Briggs & Stratton emissions test) to express any formal interest in the turbulence-boosting
cylinder head grooves invented by
Somender Singh (Mysore).
2007 onwards: Tata Motors, through its JV with Fiat, is likely to gain access to Fiat’s diesel technology and to the latter’s strong overseas distribution network for its passenger cars. Tata Motors is looking to extend this relationship to other segments like pick-ups and MHCVs. The company also plans to expand its global footprint with the launch of ‘Global Truck’ and ‘Global Pick-up’ in domestic and international markets by 2007-08. Tata Motors plans to launch the new pick-up in India, Southeast Asia, Europe, South Africa, Turkey and Saudi Arabia. The launch of the global truck will mark the entry of the company into developed markets like Europe and the USA. The project was initially a collaboration between Tata Motors and its subsidiary Tata Daewoo Commercial Vehicles, but later Tata Motors decided to work with Iveco as Daewoo’s design was not in sync with the needs of sophisticated European customers. The company has formed a JV with Thailand’s Thonburi,( Exhibit-1) an independent auto assembler, in which Tata Motors will hold a 70% stake. The JV will set up a plant with capacity to manufacture pick-ups a year and will sell them in Thailand, the second largest pick-up market in the world, and in other regional markets. The JV product is likely to be a part of Tata Motors’ ‘Global pick-up’ plans.
Auto policy of Government of India envisions to establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. GOI policy has rightly recognized the need for modernizing of vehicles to arrest degradation of air quality. The terminal life policy for commercial vehicles and move toward international taxing policies linked to age of vehicles, are steps in the right direction which will lead to increased sales for TATA motors Commercial vehicle division.
Effect of Government Policy on TATA Motors CV Division Commercial Vehicles segment sector has been at the forefront of the strong showing by the automotive industry over the past few years.
Following factors have led to growth in sales:
The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices
The attractive financing offers and freebies enabled by low interest rate policies by Government
the need to transport higher volumes of agricultural and industrial goods
Low interest rates
Impact of Indian Budget on Auto Sector The auto industry an engine of growth in India in the past five years has not received direct mention. The mildly positive news concerning automobiles is the cut in tariff on petroleum and diesel from 8 per cent to 6 per cent which has made commercial vehicles more competitive in the export market The government has announced indirect benefits in education and training of the workforce and extension of the benefit of 150 per cent weighted deduction on in-house R&D by another five years. Another indirect benefit to the auto is in provision for the national highway development program. Thus budget will have mild positive effect on commercial vehicles division at TATA Motors, although Government could have done lot more to increase competitiveness of CVD like the industry had expected excise duty on larger passenger vehicles to be cut to 16 per cent from 24 per cent and customs duty on auto parts would be cut to 5 per cent from 12.5 per cent.
Union Budget Highlights on Auto Sector • Setting up of Investment Commission to invite domestic and foreign business to invest in India • Setting up of National Manufacturing Competitiveness Council to provide sector/industry specific policy initiatives to enhance competitiveness. • Announcement of Introduction of VAT from 1st April 2005. A Technical Experts Committee to assists States in VAT implementation. • 2% education cess levied on Income Tax, Corporate Tax, Customs Duty, Excise Duty, Service Tax. • Rs 10,135 crore additional Plan expenditure • No change in rate of interest
Direct Taxes • Requirement of capacity expansion reduced from 25% to 10% to get benefit of additional depreciation of 15% u/s 32 (1) (iia) for capital investment • Benefit of 150% deduction under section 35(2ab) of Income Tax Act extended to the Automobile Industry.
Indirect Taxes Customs • Reduction in Customs Duty on Alloy Steel, Copper, Lead & Zinc from 20% to 15%. Duty on all primary, Semi- finished and finished form of Iron & Steel like Ingots & Billets, Sponge Iron, Hot Rolled & Cold Rolled bars/ Rods /Coils of non-alloy steel reduced from 15% to 10%. • Customs Duty on catalysts (3815) has been reduced from 20% to 15% Excise Duty • Increase in Excise duty on Steel from 8% to 12% • Tractors exempted from Excise Duty. Parts captively used in the manufacture of tractors have been exempted from Excise Duty.
New auto policy considered by GOI India last announced an automobile policy in December 1997. The policy required majority-owned subsidiaries of foreign car firms to invest at least $50 million in equity if they wished to set up manufacturing projects in India. It also forced them to take on export obligations to fund their auto part imports and required them to submit to a schedule for increasing the share of locally made parts in their cars. Mere car assembling operations were not welcomed.
An Indian cabinet panel will soon consider a new automobile policy that aims to set fresh investment guidelines for foreign firms wishing to manufacture vehicles in the country. Investments in making auto parts by a foreign vehicle maker will also be considered a part of the minimum foreign investment made by it in an auto-making subsidiary in India. The move is aimed at helping India emerge as a hub for global manufacturing and sourcing for auto parts. The policy sets an export target of $1 billion by 2005 and $2.7 billion by 2010. The policies adopted by Government will increase competition in domestic market, motivate many foreign CV manufactures to set up shops in India, whom will make India as a production hub and export to nearest market. Thus TATA Motors CV will have to face tough competition in near future, which might affect its growth negatively.
Tata is developing a car it aims to sell in 2008 for about $2,500 USD, which would be considered the cheapest vehicle ever made in real terms
Global Competition
Tata Motors have some distinct advantages in comparison to other MNC competitors. There is definite cost advantage as labor cost is 8-9 per cent of sales as against 30-35 per cent of sales in developed economies. Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. India is an excellent source for IT based engineering solution for products & process Integration. There are strong supporting industries i.e. auto component industry has world class capabilities. There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. There are favorable Government polices and regulations to boost the auto industry i.e. Incentive for R&D.
Present Global Challenge
Volvo, a leading manufacturer of trucks, buses, cars, construction equipment, and aero engines, has entered in India in 1998. Its main focus is in the area of fully built buses. In India, it has focused on providing economical transport solutions in consonance with its values of safety, quality, and environmental care. Its competitive advantage is its high technology which makes the vehicle a very comfortable option to travel through. Its trucks are reputed for their performance and economy and are the flag bearers in their production activities in India. It is still operating in the niche market of high end buses where the TATA compete through its Spanish buses.
Future ChallengesMahindra and Mahindra: JV with ITEC, North American leader in heavy trucks. M&M has formed a 51:49 JV called Mahindra International with ITEC, USA, (parent NAVISTAR), to manufacture commercial vehicles and to bolster its position in the CV business. ITEC is the leader in medium and heavy trucks and buses in North America, and is the world's largest manufacturer of medium-duty diesel engines. Mahindra International aims to have a presence across the CV market (6-35 tonnes GVW) with variants of passenger transport, cargo and specialised load applications and is likely to start producing medium/heavy commercial vehicles from FY09.
Force Motors: JV with MAN for manufacturing high-tonnage vehicles Force Motors has paired up with MAN in a 70:30 JV to manufacture high-tonnage and specialty vehicles, such as long-haul trucks, tippers, tractor trailers and multi-axle vehicles in the 16-32 tonne range at its Pithampur plant, with an initial capacity of 24,000 units per annum and at an investment of Rs7bn. The JV plans to sell nearly half of its production in the domestic market, while the rest is to be exported to the Middle East, Turkey, Russia, Asia and Africa. Further, the two companies have formed another JV to manufacture buses in India from end-2007.
Ashok Leyland: Acquisition of Czech Republic-based Avia Ashok Leyland (ALL) recently acquired the truck unit of Czech Republic-based Avia for US$35m. Avia manufactures 6-9 tonne LCVs and has a capacity of 20,000 units per annum. The acquisition has given ALL direct access to an entire range of Avia trucks, Avia’s press shop with dies and tools, welding lines, state-of-the-art paint shop and R&D facilities. ALL has also entered into technology agreements with Hino Motors of Japan and ZF of Germany to complement its in-house R&D efforts and developing complementary components and aggregates.
Products
Passenger cars and utility vehicles
Tata concept car
Tata Sierra
Tata Estate
Tata Sumo/Spacio
Tata Safari
Tata Indica
Tata Indigo
Tata Indigo Marina
Concept vehicles2000 Aria Roadster
2001 Aria Coupe
2002 Tata Indiva
2004 Tata Indigo Advent
2005 Tata Xover
2006 Tata Cliffrider
2007 Tata Elegante
Commercial vehicles
Tata heavy trucks in Ladakh, India
Tata Ace
Tata TL/Telcoline/207 DI Pickup Truck
Tata 407
Tata 709 E
Tata 1109 (Intermediate truck)
Tata 1510/1512 (Medium bus)
Tata 1610/1616 (Heavy bus)
Tata 1613/1615 (Medium truck)
Tata 2515/2516 (Medium truck)
Tata 3015 (Heavy truck)
Tata 3516 (Heavy truck)
Tata Novus (Heavy truck designed by Tata Daewoo)
Military vehiclesTata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions
Tata LPTA 713 TC (4x4)
Tata LPT 709 E
Tata SD 1015 TC (4x4)
Tata LPTA 1615 TC (4x4)
Tata LPTA 1621 TC (6x6)
Tata LPTA 1615 TC (4x2)
Tata Motors Subsidiaries
Telco Construction Equipment is a joint venture between Tata Motors and
Hitachi, which focuses on excavators and other construction equipment.
HV Transmission (HVTL) and HV Axles (HVAL): HVAL and HVTL are 100% subsidiary companies of Tata Motors engaged in the business of manufacture of gear boxes and axles for heavy and medium commercial vehicles, with production facilities and infrastructure based at Jamshedpur. The combined revenue of the two companies rose 38.7% yoy for 9MFY07 while the combined PAT rose 50.9%. Tata Motors plans a capex of Rs2bn each for HVAL & HVTL and plans to raise funds for the same, most probably by way of a strategic sale to a technical collaborator. The strategic sale of either HVAL or HVTL or both is likely to be completed in the next one or two quarters.
Tata Technologies Limited (TTL): TTL provides Engineering and Design (E&D) solutions to the Automotive Industry. Tata Motors holds 86.91% of TTL’s share capital. TTL is based in Pune (Hinjawadi) and operates in the US and Europe through its wholly owned subsidiaries in Detroit and London respectively. It also has a presence in Thailand. Tata Technologies is a software service provider in the IT services and BPO space. Its global client list includes Ford, General Motors, Toyota and Honda, to name a few. It bought over the British engineering and design services company, Incat International Plc for Rs4b in August 2005. Incat specializes in engineering & design services and product lifecycle management in the international automotive, aerospace and engineering markets. With this acquisition, Tata Motors will have closer proximity to its global customers and be able to provide a wider range of services.
Tata Daewoo CV Ltd(TDCV): TDCV is a 100% subsidiary of the Tata Motors based in South Korea, which was acquired in March 2004. TDCV is in the business of manufacture and sale of heavy commercial vehicles.Tata Daewoo is Tata Motors’ 100% subsidiary in Korea, with a market share of 30%.Tata Motors will use the Daewoo technology to introduce higher tonnage trucks in the Indian market and use Tata Daewoo for exports globally. In line with this strategy, it has already introduced the Novus, a high-end tipper developed by Tata Daewoo for the Indian market.
Tata Projects
TCE Consulting Engineers
Telco Construction Equipment Company
TRF
Voltas
Materials
Tata Advanced Materials
Tata Steel (formerly TISCO, Tata Iron and Steel Company Ltd) is India's first private Iron and Steel Company, and also the first company founded by J.N. Tata (the founder of the Tata Group). Its works are located at
Jamshedpur, with headquarters at
Mumbai.
On January 30, 2007 the Tata Steel clinched a deal to buy the UK based
Corus Group Plc., one of the world's leading steel and aluminium producers, for £6.7 billion, beating CSN in a fast-paced auction to create the world’s fifth largest steelmaker. The company emerged victorious with a bid of 608p a share, topping a 603p a share offer from Brazil’s Companhia Siderurgica Nacional (CSN), after an unprecedented nine rounds of bidding overseen by the UK’s Takeover Panel. The £6.7 billion deal includes £500 million of debt.
The acquisition of Corus steel is recognized as the biggest ever acquisition involving an Indian company.
Tata Tinplate is the most profitably run tinning line in India with a state of the art facilities.
EnergyTata Power is one of the largest private sector power companies. It supplies power to Mumbai, the commercial capital of India and parts of New Delhi.
Chemicals
Rallis India
Tata ChemicalsTata Pigments
Services
The Indian Hotels CompanyTHDC
Tata-AIG General Insurance
Tata-AIG Life Insurance
Tata Asset Management
Tata Economic Consultancy Services
Tata Financial Services
Tata Investment Corporation
Tata Quality Management Services
Tata Share Registry
Tata Strategic Management Group (TSMG) is one of the largest consulting firms in South Asia.
Tata Services
Consumer Products
Tata Ceramics
Tata McGraw Hill Publishing Company
Tata Tea Limited is the world's second largest manufacturer of packaged tea and tea products. It also owns the
Tetley brand of tea sold primarily in Europe.
Titan Industries manufacturers of
Titan (watches)Trent (Westside)Tata SkyInformation systems and communicationsComputational Research Laboratories (CRL)
INCAT
Nelco
Nelito Systems
SerWizSol
Tata Consultancy Services Ltd. (TCS) is Asia's largest software company with 2005-06 revenues being over US$ 2.97 bn. Merged with Tata Infotech.
Tata Elxsi is another Software and Industrial design company of the Tata stable. Based in Bangalore. One of the leading companies in the animation industry of India.
Tata Interactive SystemsTata Technologies LimitedTata Teleservices
Tatanet
VSNL, the Indian telecom giant, was acquired in
2002. Tata-owned VSNL acquired Bermuda-based (former Canadian crown corporation and Montreal-based)
Teleglobe in
2005The Tata logoThe now ubiquitous blue-coloured Tata logo was designed by the
Wolff Olins consultancy. The logo was meant to signify fluidity; it may also be seen as a fountain of knowledge, also as a tree of trust under which people can take refuge.
