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INTRODUCTION

“A promise is promise and I kept my promise”- this is the historical statement which Mr. RATAN

TATA said when he launched his ambitious TATA NANO; the people’s car in India on 23 rd march

2009. Tata has always given value products in the Indian Car Market whether it is path breaking

recently launched TATA NANO or TATA INDICA (which created great brand into the car industry

in the diesel segment).

Not only is the passenger car, even into the heavy vehicle segment TATA is the only sole leader in

India.

TATA has created its brand value not only in India but even outside India it has created its brand by

acquiring Jaguar-Land Rover, Corus Steel during 2007-08.

TATA has been named among top 10 brand companies by Fortune Magazine in the year 2008. It has

got into top 100 companies in the survey of Standard & Poor Mody’s research in the year 2008.

Being into most valued brand in world the consumer satisfaction to its customers is very important

for TATAS and thus they are continuously working into this area where their objective is to provide

best products with full value of the money of their customers.

The TATA INDICA VISTA has been one of those products you just cannot ignore. While it got

media coverage around the world, the reactions, though mixed, flowed easily. On the one hand there

has been pride in the “World’s mid size small car” tag, as a great achievement for Indian industry.

The “World’s mid size small Car” tag has been well received with the hope that a whole new

category of people can look to buy a car now.

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1. STUDY OF THE INDUSTRY
a) Historical Background
In India there are 100 people per vehicle, while this figure is 82 in China. It is expected that

Indian automobile industry will achieve mass motorization status by 2014.

Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile

Industry of India has come a long way. During its early stages the auto industry was overlooked by

the then Government and the policies were also not favorable. The liberalization policy and various

tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian Automobile

Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has

become a hot destination for global auto players like Volvo, General Motors and Ford.

A well developed transportation system plays a key role in the development of an economy, and

India is no exception to it. With the growth of transportation system the Automotive Industry of

India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian

economy.

Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be

divided into 03 broad categories : Cars, two-wheelers and heavy vehicles.

• The first automobile in India rolled in 1897 in Bombay.

• India is being recognized as potential emerging auto market.

• Foreign players are adding to their investments in Indian auto industry.

• Within two-wheelers, motorcycles contribute 80% of the segment size.


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• Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%).

• Tata Motors dominates over 60% of the Indian commercial vehicle market.

• 2/3rd of auto component production is consumed directly by OEMs.

• India is the largest three-wheeler market in the world.

• India is the largest two-wheeler manufacturer in the world.

• India is the second largest tractor manufacturer in the world.

• India is the fifth largest commercial vehicle manufacturer in the world.

• The number one global motorcycle manufacturer is in India.

• India is the fourth largest car market in Asia - recently crossed the 1 million mark.

40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market

share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers.

Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars

and is a complete monopoly in multi purpose vehicles. In utility vehicles Mahindra holds 42% share.

In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is

also the world's fifth largest medium & heavy commercial vehicle manufacturer.

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b) Current Scenario
The growth of the Indian middle class along with the growth of the economy over the past few years

has attracted global auto majors to the Indian market. Moreover, India provides trained manpower at

competitive costs making India a favoured global manufacturing hub. The attractiveness of the

Indian markets on one hand and the stagnation of the auto sector in markets such as Europe, US and

Japan on the other have resulted in shifting of new capacities and flow of capital to the Indian

automobile industry. According to the International Yearbook of Industrial Statistics 2008 released

by United Nations Industrial Development Organisation (UNIDO), India ranks 12th in the list of the

world’s top 15 automakers.

Indian OEMs Come of Age

Indian original equipment manufacturers (OEMs) are making their mark today with Tata and

Mahindra & Mahindra as leading Indian OEMs emerging on the global scene. With increasing

competition from the global players, Indian OEMs have upgraded their technology and are

manufacturing superior-designed vehicles.

'Frugal Engineering' has become the hallmark of the Indian automotive industry, with Indian OEMs

leveraging the Indian lead in cost-effectiveness and a highly-skilled human resource pool to bring

down the product development cost. Additionally, competencies of their suppliers have also helped

to lessen costs and manufacturing time. In fact, global OEMs are now looking at benefiting from the

India advantage by using India-based design and development centres. Tata Ace, Indica and Nano,

and Mahindra's Scorpio are examples of products developed by Indian OEMs after painstaking

market research about the specific needs of the Indian consumer.

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Production

Although the sector was hit by economic slowdown, overall production (passenger vehicles,

commercial vehicles, two wheelers and three wheelers) increased from 10.85 million vehicles in

2007-08 to 11.17 million vehicles in 2008-09. Passenger vehicles increased marginally from 1.77

million to 1.83 million while two-wheelers increased from 8.02 million to 8.41 million.

In recent times, India has emerged as one of the favourite investment destinations for automotive

manufacturers.

• Volvo Buses India is eyeing 35 per cent growth in domestic sales this year at 550-600 units

as against around 440 units sold in 2008.

• Toyota Kirloskar Motor Pvt Ltd (TKML), the Indian subsidiary of Japan’s Toyota Motor

Corp, is increasing its investment by US$ 164.8 million at its manufacturing site near

Bangalore, to touch US$ 824.32 million by 2016.

• French carmaker, Renault, has completely recast its plans for India as part of a new,

aggressive approach that will see it producing cars in its Chennai plant by 2011.

• Hyundai has made India its global hub for manufacturing small cars. It will invest US$ 1

billion in its second plant in Chennai by 2013. In addition, it is also investing US$ 40 million

in its research and development (R&D) facility in Hyderabad.

• General Motors has so far invested about US$ 1 billion into its Indian operations.

• Mercedes-Benz will invest about US$ 64. 21 million in its plant at Chakan near Pune.

Domestic Market

Sales of cars and commercial vehicles have been impacted due to global economic slowdown.

However, in spite of that there has been a marginal increase in the number of vehicles sold in 2008-

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09 as compared to 2007-08. Total number of vehicles sold including passenger vehicles, commercial

vehicles, two-wheelers and three-wheelers in 2008-09 was 9.72 million as compared to 9.65 million

in 2007-08. According to an Ernst & Young analysis, passenger vehicle sales in the country will

grow at a CAGR of 12 per cent to touch 3.75 million units by 2014 as against 1.89 million units at

the end of 2008-09. While domestic market is expected to contribute 2.75 million units to the total

tally, the remaining 1 million units would contribute towards exports. Likewise, as per estimates by

CARE Research, the domestic two-wheeler sales will grow at a CAGR of 8.8 per cent by 2014 at

11.3 million units vis-a-vis 7.43 million units in 2008-09. Honda Siel Cars India (HSCI), the Indian

subsidiary of the Japanese giant Honda Motor Co, said that its sales will register double digit growth

in the current financial year. The company expects its total sales to be around 60,000-65,000 units

during the current year, up from 55,250 cars sold in 2008-09.

Exports

According to the Society of Indian Automobile Manufacturers (SIAM), automobile sales (including

passenger vehicles, commercial vehicles, two-wheelers and three-wheelers) in the overseas markets

increased to 1.53 million units in 2008-09 from 1.23 million units in 2007-08. Export of passenger

vehicles increased from 218,401 in 2007-08 to 335,739 units in 2008-09. The growth in export was

led by Hyundai Motor India, followed by others such as MSIL, Mahindra Renault, Fiat India

Automobiles, General Motors India and Honda Siel Cars India.

Policy

In order to make India a power to reckon with in the automotive sector the government launched the

Automotive Mission Plan (AMP) 2006-2016. The vision of the AMP is "to emerge as the destination

of choice in the world for design and manufacture of automobiles and auto components with output

reaching a level of US$ 145 billion accounting for more than 10 per cent of the GDP and providing

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additional employment to 25 million people by 2016." As per the AMP, it is estimated that the total

turnover of the automotive industry in India would be in the order of US$ 122 billion-159 billion in

2016. It is expected that in real terms, India would continue to enjoy its eminent position of being the

largest tractor and three-wheeler manufacturers in the world and the world's second largest two-

wheeler manufacturer. By 2016, India will emerge as the world's seventh largest car producer (as

compared to the eleventh largest currently) and retain the fourth largest position in world truck

manufacturing sector. Further, by 2016, the automotive sector would double its contribution to the

country's GDP from current levels of five per cent to 10 per cent.

c)Industry Analysis
Even as recession-hit international automobile majors are struggling to maintain sustainable sales figures,car

exports from India surged by a remarkable 57 per cent year-on-year in the recently-ended. Led by Hyundai

Motor India Ltd and Maruti Suzuki India Ltd, India-based car makers shipped a record number of vehicles,

mainly to Europe. Exports grew to 331,539 cars from 211,112 a year earlier. Exports had grown by a

comparatively meagre 8.9 per cent in the previous year (2007-08), according to figures released by the the

Society of Indian Automobile Manufacturers. The country's largest exporter, Hyundai managed an export

growth rate of 63 per sent at 235,345 units, compared with 144,440 units in the year-ago period. Domestic

market leader Maruti Suzuki was a distant second, registering 32.58 per cent growth in overseas sales at

68,834 units. Maruti and Hyundai launched new models in the past year, including Maruti's A-Star and

Hyundai's i20, targeted at the European market, which is cited as one reason for the robust export numbers.

The weakness of the rupee, which fell more than 20 per cent against the dollar in the just-ended fiscal year,

also helped by making Indian cars cheaper abroad. Export growth was also robust in the two-wheeler

category, which registered 22.50 per cent rise at 1004,174 units as against 819,713 units in the previous

financial year.However, with the global economy slowing, demand from Europe may not hold up, analysts

said. Meanwhile, lending rates in India are at nearly five-year highs as banks, worried about bad loans, hold

back from financing vehicle purchases."The main concerns are availability of finance, which includes

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liquidity, and high interest rates. Domestic car sales in the year ended 31 March grew by a mere 1.3 per cent

from a year earlier to 1.21 million cars from 1.2 million in the previous year. Local car sales had climbed 12

per cent in the previous fiscal year. Domestic sales of trucks and buses fell 22 per cent to 384,122 vehicles

from 490,494. Motorcycle sales grew 1.2 per cent to 5.83 million, while scooters gained 9.1 per cent at 1.14

million. Industry executives and analysts expect measures taken by government authorities to spur lending

while the introduction of new models could slightly boost domestic vehicle sales this year.

Passenger vehicle sales remained practically flat, recording a mere 0.13 percent growth over the

previous year. Within this segment, passenger cars and multi-purpose vehicles grew by just 1.31

percent and 5.69 percent respectively during 2008-09. However, sales of utility vehicles actually

declined 7.94 percent. During the month of March itself, passenger vehicle sales dropped 1.15

percent over the same period last year. The segment that was hardest hit by the slowdown was

commercial vehicles, with truck and bus sales dropping a massive 21.69 percent during 2008-09

over the same period last year. Medium and heavy commercial vehicles declined by an even larger

33.16 percent, while the decline was less severe for light commercial vehicles, which dropped 7.10

percent. In March 2009, commercial vehicle sales fell a substantial 26.22 percent compared to

March 2008, with medium and heavy CVs dropping 43.40 percent and LCVs falling just 0.17

percent. Also, medium and heavy buses grew by a marginal 0.57 percent and light buses dropped

6.72 percent. Three-wheeler sales fell by 4.13 percent during the previous fiscal year, while

passenger carriers grew a solid 14.36 percent during 2008-09. Goods carriers declined a massive

37.52 percent due to the slowdown in economic activity. In March this year, three-wheeler sales

actually grew by 11.40 percent over the same month last year.

Two-wheeler sales also came under intense pressure in the last financial year due to the sudden

slowdown in lending to this segment by big private finance companies. This, coupled with weak

consumer sentiment, has seen the segment report a meagre 2.60 percent growth during 2008-09.

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While mopeds and scooters grew by 4.22 percent and 9.11 percent respectively, motorcycle sales

were particularly badly hit, growing just 1.16 percent. Electric two-wheelers grew by 49.48 percent,

albeit from a relatively smaller base. During March 2009, two-wheeler sales grew at a sluggish 3.65

percent over the same month last year, indicating that a sustained recovery is still sometime away.

Export of automobiles during 2008-09 grew strongly, showing an increase of 23.61 percent, with all

segments recording increases, except for commercial vehicles which were affected due to the global

economic slowdown. The export of passenger vehicles and two-wheelers grew 53.73 percent and

22.50 percent respectively, while three-wheeler exports grew 4.85 percent. However, exports of

trucks and buses declined by 27.67 percent during this period. According to Tata Motors, its

domestic sales for March 2009 were 52,686 units while total sales (including exports) were 54,485

vehicles. For the entire financial year ended March 2009, total sales were 498,581, which are 14

percent lower than the 582,390 units sold in the previous fiscal. The company believes that the

financial stimulus packages announced by the government, particularly for commercial vehicles,

have had a positive impact. However, it feels that the demand for trucks at the retail level would still

take some time to reach levels from the last fiscal. As a result, its March 2009 domestic sales were

13 percent lower than those of March 2008. Meanwhile, Mahindra said it sold 25,748 units in March

2009 in the domestic market, its highest ever monthly sales figures. This compares with the 23,128

units sold in March 2008, a solid 30 percent increase in sales for the company’s utility vehicles. This

includes the highest ever monthly sales for the Scorpio, Bolero and the Pik-Up models, which stood

at 19,973 units for March 2009 as against 15,366 units for the same period last year. The newly

launched Xylo multi-purpose vehicle also sold strongly with 3,124 units finding buyers in the Indian

market. According to Anand Mahindra, vice-chairman and managing director, Mahindra &

Mahindra, “This is a clear validation of the faith reposed in our products by customers. I am

especially pleased that our new Mahindra Xylo has changed the rules of the game with impressive

sales figures.” The Bolero model has also done very well for the company, selling a record 55,924

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units in 2008-09. According to Mahindra, this makes the Bolero the first brand in the SUV/ UV/

MPV segments to cross 50,000 units for two consecutive years.

Hyundai Motor India registered a 1.8 percent decline in cumulative sales during March 2009. While

its domestic sales dropped 15.8 percent, exports grew by 21.6 percent, thanks to higher exports of

i10 and i20 models to Europe. Total March 2009 sales were 46,160 units against 47,001 units in

March 2008. The Indian market accounted for 24,754 units compared to 29,401 units for the same

month last year, while the exports totaled 21,406 units in March, 2009 against 17,600 units of

March, 2008. According to Arvind Saxena, senior vice- president - Marketing and Sales, “As we

have stated earlier, the industry is far from seeing a turnaround at this moment. If we look at the

February and March 2009 sales combined and compare them to 2008 for the same period, then we

have registered a growth of 4.5 percent, whereas March 2009 sales over February 2009 have grown

by 16.7 percent.” Maruti also claimed a sales record in March 2009 with its Alto model reporting its

highest ever monthly sales of 23,569 units, a jump of 20.98 percent over the corresponding period

last year. Honda has also reported strong numbers, thanks to the overwhelming popularity of its New

City, which sold 6,040 units during March 2009. This is a particularly remarkable feat, given the

difficult market conditions prevailing at the current time. Total sales for the Japanese carmaker

during the month grew 32 percent with 7,368 units being sold in March 2009 against 5,579 units

sold in February 2009. SIAM has projected that Indian passenger car sales during 2009-10 would

grow around five percent, driven by demand from rural and semi-urban markets. Commercial

vehicle sales are estimated to rise by as much as seven to 10 percent during the current fiscal, while

two-wheelers are expected to grow by five percent in 2009-10, thanks to the growth in credit

availability. Growth in demand for passenger vehicles would, according to SIAM, be driven by the

availability of several new small cars including the Tata Nano, Maruti Ritz, Honda Jazz and VW

Polo. Other positives for the sector are the upcoming vehicle repossession guidelines from the

Reserve Bank of India and falling interest rates.

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Sales of commercial vehicles will start picking up this year, due to the extension of the 50 percent

depreciation benefit given to truck owners from March '09 to June '09. Increased infrastructure

spending by the government should also give a boost to vehicle demand in 2009-10. The growth in

light commercial vehicles like the Tata Ace is also expected to continue. Some carmakers, however,

disagree with these projections saying that they are overly optimistic.

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2. COMPANY STUDY
a) HISTORY OF TATA MOTORS

1)(Company’s profile)

The Company was incorporated on 1st September 1945 at Mumbai to manufacture

diesel vehicles for commercial use, excavators, industrial shunter, dumpers, heavy

forgings and machine tools. The commercial diesel vehicles which were known `Tata

Mercedes Benz' (TMB) are now called `Tata' vehicles after the expiry of the

collaboration agreement with Daimler-Benz AG, West Germany. The company also

used to manufacture pulp and paper making machinery. In 1960 the company's name,

which was Tata Locomotive & Engineering Company Ltd. was changed to Tata

Engineering & Locomotive Company Ltd. In the year 1987 the company undertook to

set up a new forge shop, a high output foundry line, a new paint shop as well as

augmentation of engine and gearbox manufacturing facilities, all at Jamshedpur

In 1991 During the year the company entered into a collaborative agreement with an

internationally renowned engine research and development organisation to jointly

develop higher horsepower, fuel efficient diesel and petrol engines to meet the future

requirements of the company. The last quarter saw the company launching two new

passenger vehicles, the SIERRA and the ESTATE totally designed and manufactured

in India. The company acquired a BIFR company, M/s Noduron Founders


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Maharashtra Ltd. The total cost for Telco worked out to Rs.18 crores as against setting

up of similar critical castings foundry. During the year company launched a new earth

moving equipment TWK-3036 Tata Front End Wheel Loader. Two new models in the

EX series of hydraulic excavators were launched. A 10 tonne pick and carry

articulated crane, designed and developed in-house was also introducedDuring the

year company entered into an agreement with Nachi-Fujikoshi Corporation, Japan to

manufacture arc and spot welding robots suitable for automobile manufacturing

applications. During the year, company undertook to set up a joint venture with Asian

Glass Co. Ltd., Japan to manufacture float glass to be used as wind shields for

automobiles. ACC along with Tata Exports Ltd., participated in the joint venture. The

joint venture named as Floathlass India Ltd., the Company would have a stake of

16.33%. Tata Cummins Ltd., Mercedes-Benz (India) Ltd., Tata Holset Ltd., Tata

Precision Industires, Singapore and Nita Company Ltd., are the joint Ventures of the

Company

Taking advantage of the broad banding policy announced by the Government of

India, the Company entered into a collaboration agreement with Honda Motor Co.

Ltd., Japan, for the manufacture of their `ACCORD' model of cars in India.

On 22nd April, an agreement was entered into between Daimler-Benz AG and

Mercedes Benz AG, Germany to setup a joint venture company Mercedez-Benz India

to manufacture `E' class paneyer cans and engines in India.

During the year 1995 a new double pick-up and Army Version of various Telco

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Vehicles were developed. A new petro engine and turbo diesel engine, an up-graded

709 LCV, new sports utility vehicle Safari expected to be launched shortly. A 25

tonne 6 X 2 truck and a bus with cummins engine were launched.

Tata Engineering and Locomotive Company (TELCO), has acquired a second hand

paint shop, machine line and cylinders from the Australian unit of the Japanese auto

giant, Nissan. TELCO is believed to have picked up the unit for Rs. 70 crore. The

total cost of import duty would be Rs 100 crore. During the year a machine tool

division was expanded so as to double its machine building capacity and significantly

reduce production times.

The Company has launched "TATA SAFARI" in its Multi utility vehicle segment.

Tata Holset's turbo charger plant inaugurated on November 25, 1996.

In 1997, the Tata Engineering and Locomotive Company Ltd. (TELCO) has emerged

as numero uno in the Review 200 survey conducted by the Far Eastern Economic

Review in association with Citi Bank. The Company introduced a 9-tonne vehicle

which was well received in the market. A 40 tonne tractor trailer powered by a Tata

Cummins Engineering was introduced. The Company developed a low floor bus

chassis to meet the specific needs of urban transport. The Company signed a new

agreement with Hitachi for manufacture of upgraded versions of existing range of

excavators.

The year 1998- Tata Engineering and Locomotive Company Ltd (Telco) announced a

tie-up with Tata Finance Ltd and ANZ Grindlays Banks as the official financiers for

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its small car "Indica" to be launched in December. Tata Engineering Locomotive

Company Ltd (Telco) sold its construction equipment business into a new subsidiary

company, Telco Construction Equipment Company Ltd. The Company in its small car

segment has launched "Tata Indica" which evoked an overwhelming response in the

Indian market. A new range of cummins engine powered vehicle which include a 35

tonne and a 40 tonne articulated truck and two variants of buses.

To make substantial improvement in the quality of bus bodies available with TATA

vehicles, the Company encouraged collaboration between Fuji Heavy Industries of

Japan and the Automobile Corporation of Goa. The new project undertakes production

of bodies on TATA chassis, conforming to the most exacting international standards.

Concorde Motors Ltd., a Joint Venture between Tata Engineering 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.

The year 1999-Telco became the first Indian manufacturer to offer commercial

vehicles meeting euro-I emission norms, a year before they are due to be introduced in

the country. It is proposed to make TCECL a one-stop shop for construction

equipment and earthmoving machinery. 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. SKF Bearings India

Ltd has signed an agreement with Telco to supply hub bearings for its latest model

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Tata Indica.

2000 saw the Company working towards introducing two new petrol-driven variants

of its small car Indica, powered by a multi-point fuel injection engine. The Company

launched the Indica 2000, the Euro II Complaint, 75 BHP multi-point fuel injection

(MPFI) version of Indica. The Company has won the National Technology Award

for indigenous development and commercialization of the Tata Indica car. The

Company has launched its new hi-tech Indica 2000 car with MPFI petro engine in

Guwahati.

Tata Engineering & Locomotive Co. is renamed as Tata Engineering Ltd. It replaced

its three-shift production line with a one-shift daily schedule starting from 26th June.

In the same year FICCI-SEDF- Businessworld-Compaq award for social

responsiveness was awarded to the company. The Central Pollution Control Board for

Environmental Technology award has been presented to Tata Engineering in

recognition of its contribution towards efforts to conserve the environment. TATA

Engineering on September 10 announced the addition of MPFI petrol version to the

Indica V2 range.

In year 2002 Foreign Institutional Investors (FII) hike stake in the company to 13.34%

Launches six new products in light, medium and heavy vehicles segments on Jan 15

during Auto Expo . Announces financial restructuring . Displays its Tata Sedan car at

the Geneva Motor Show . Indica adjudged top selling B-segment car in

2002.Launches two new motorsport cars (The Zero and Double Zero Pace cars). High

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Court Approves Tata Engineering's Financial Restructuring. Tata Engg, BPCL tie up

to market co-branded lubricants.Tata Steel's investment in Tata Engineering has been

hiked to Rs 117.98 crore over the last year. Telco names Sedan as Tata

Indigo.Unveils 'EX' series of medium and heavy commercial vehicles. Indica sales

cross two-lakh mark .Collaborates with Nippon-Arcelor for technical knowhow on CR

steel. Receives Teri's (The Energy and Resources Institute) CoRE-BCSD (Corporate

roundtable on development of strategies for sustainable development and

environment-business council for sustainable development) corporate social

responsibility (CSR) awards for '01-02. Unleashes Safari's petrol version; priced at Rs

9.35 lakh.

The year 2003- Tata Unveils CityRover .Tata Motors Ltd signed a binding

Memorandum of Understanding (MoU) with Deawoo Commercial Vehicle Company

Ltd (DWCV), Korea for the acquisition of this company. It introduces Tata SFC 407

EX Turbo Light Commercial Vehicle (LCV). The Company changed from 'TELCO '

to 'TATAMOTORS' w.e.f December 24, 2003. In the same year Tata Safari ranks No

1 in MUV/SUV segment.

2004:- The year of glory. Tata Motors launch an upgraded version Indica on January

15, 2004, in a bid to shore up sales of the small car.

Auto Expo: Tata unveils new version of Indica. Tata Motors unveils Indica V2. Tata

Motors launches new Indica V2 in Kerala. Tata Motors introduces new 'Indicab' for

tour operators. The much hyped Rs one lakh passenger car project of Tata Motors was

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going ahead as planned. Tata Motors enters agreement with Ukraine bus building

firm. Tata Motors enters into agreement with Etalon. In a move to consolidate its

presence in the light commercial vehicles segment, Tata Motors has launched a new

variant of its 407 series with increased pay load capacity called SFC 407EX. Tata

Motors buys Daewoo truck unit for Rs 465 crore. Tata Motors unveils Tata SFC 407

EX. Tata Motors inks agreement with Austrian, French companies. Acquires Daewoo

Commercial Vehicle Company Ltd (DWCV), Korea. Tata Motors launches most

anticipated new 6-tn truck in India.

Tata Motors, the country's largest commercial vehicles manufacturer unveiled the new

LPT 909EX Turbo Truck in Tamil Nadu. Tata Motors and Tata Africa unveiled a

range of passenger cars, utility vehicles, pick-ups, trucks and buses for the South

African market. Tata Motors has launched a face lifted version of its multiutility

vehicle, Tata Sumo. Tata mototrs rolls out Tata SFC 407EX BS II turbo light

commercial vehicle.

Tata Motors unveils Tata Safari DICOR in Kerala market on August 11, 2005. Tata

Motors rolls out 2 luxury variants of Indigo. Tata Motors unveiled new Indica V2

Turbo with a price tag of Rs 4.10 lakh for DLG variant and Rs 4.31 lakh for DLX.

Tata Motors ropes in CVTech to make parts for its small car. Tata Daewoo inks pact

with Pakistan co.

Tata Motors has been presented the Golden Peacock Global Award for Corporate

Social Responsibility (CSR) in the Large Business category by the Institute of

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Directors in 2007. Tata Motors buys Nissan facility in S. Africa. Tata Motors has got

a prestigious order from the Delhi Transport Corporation (DTC) for 500 non-AC,

CNG-propelled buses. Tata Motors Ltd has appointed Mr. P M Telang as Executive

Director (Commercial Vehicles).

2)Current Scenario

PERFORMANCE OF COMPANY DURING 2008-09

Company Performance in Domestic CV Segment

Q4 FY08- Q4 FY07- Change FY08-09 FY07-08 change


09 08
M/HCVs 17,971 43,882 (59.0)% 86,704 112,440 (22.9)%
LCVs 31,575 38,686 (18.4)% 108,488 102,873 5.5%
Total CVs 49,546 82,568 (40.0)% 195,192 215,313 (9.3)%

Impacted by severe liquidity crunch and slowing economy CV domestic sales

volumes decreased by 40% y-o-y to 49,546 units in Q4FY2008-09 as compared to

82,568 units in Q4FY2007-08.

CV market share increased by 420 basis point at 67.0% for the quarter; from 62.8% in

Q4FY2007-08.

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CV industry registered a substantial volume decline of 43.9% during Q4FY2008-09.

In a challenging environment of non-availability of vehicle financing, high interest

rates and, lower industrial growth and contraction of freight traffic, MHCV market

recorded a decline of 61.3% y-o-y during the quarter and LCV’s declined by 24.3%.

Truck market recorded a decline in sales in Q4FY2008-09 over corresponding period

of last year. The industry volumes in the MHCV truck segment declined by 65.2% y-

o-y, while industry volumes in the LCV truck segment declined by 31.7% y-o-y

during Q4FY2008-09.

TML’s volume in MHCV truck market declined by 62.8% during the quarter (Oct-

Dec’08) compared to the corresponding period in the previous year. However TML’s

market share in the MHCV truck market increased from 65.6% in Q4 FY2007-08 to

69.9% Q4 FY2008-09.

TML performance in MHCV bus market saw a decline of 19.0% in Q3FY09;

however, on the other hand LCV bus market saw growth of 44.9% in Q3FY09

compared to corresponding period last year driven by the success of ACE Magic and

Winger. Tata Motors’ market share increased substantially from 68.5% in Q4FY2007-

08 to 86.3% in Q4FY2008-09 in LCV passenger carrier segment.

During an extremely challenging quarter Tata Motors has improved its market share

position across every CV category on the back of its product network strength as well

as the financing support of TMF and Tata Capital.

20
Government’s fiscal stimulus package, RBI’s easy monetary policy and the diesel

price reduction are expected to moderately help demand generation

Passenger Vehicle Segment


Q4 Q4 Change FY2008- FY2007- change
FY2008- FY2007- 09 08
09 08
Small Car 25,273 31,643 -20.1% 74,829 100,110 -25.3%
Entry 9,765 5,746 69.9% 36,453 20,059 81.7%
Mid-size
Car
UV 6138 11,269 -45.5% 27,821 30,967 -10.2%
Fiat 1,011 626 61.5% 3,404 2,339 45.5%
Total PV 42,187 49,284 -14.4% 142,507 153,475 -7.1%

Passenger Vehicle Market Shares (India)

Q4 FY2008-09 Q4 FY2007-08 FY2008-09 FY2007-08


Small Car 12.6% 13.6% 11.8% 15.2%
Entry-level 29.6% 29.9% 34.3% 30.4%
Mid-size Car
UV 15.8% 18.6% 17.3% 18.2%
Total PV 13.2% 12.9% 13.2% 13.9%

Domestic passenger vehicle sales stood at 42,187 (including 1,011 Fiat vehicles)
during Q4FY2008-09; down by 14.4% y-o-y. Market share of Tata Motors vehicles
stood at 12.9% in Q4FY2008-09. The passenger vehicle industry registered a volume
decline of 16.5% during Q4FY2008-09, primarily due to, unavailability of finance,
and high interest rates and high fuel prices. Utility vehicle segment declined the most
by 35.8%, Impacted by the ad-hoc duty imposed on this segment in July. In this
21
scenario the Company tried to arrest the decline through new products and increased
support of the captive financing entity. In Passenger vehicle industry, Tata Motors’
(including FIAT) market share increased
from 12.9% in Q4 FY2007-08 to 13.2% in Q4FY2008-09 In the Small car segment,
following the successful launch of Indica Vista in August FY2008-09 and increasing
sales of FIAT vehicles, Tata Motors’ (including FIAT) market share improved from
11.4% in H1 FY2008-09 to 12.6% in Q3. However, TML growth in this segment was
limited by the ramp up capability of production. The entry-mid size car segment
continued to clock a healthy growth. TML maintained its strong market position due
to continued positive response to Indigo CS and TATA INDICA VISTA.
In the Utility Vehicle segment, Tata Motors market share declined from 18.6% in
Q4FY2007-08 to 15.8% in Q4FY2008-09 due to competitive pressures. Fiat volumes
for FY2008-09 were 3,404 a growth of about 45.5%. Combined Tata-Fiat market
share in the overall PV industry stood at 13.2% for the nine month period Apr-
Dec’08. Tata Motors celebrated the 10th anniversary of the launch of the Indica on
December 30, 2008. To mark this milestone, a 10th Anniversary Limited Edition
Indica Vista was launched.

22
Porter's five forces analysis is a framework for the industry analysis and business

strategy .It uses concepts developed in Industrial Organization economics to derive

five forces, which determine the competitive intensity and therefore attractiveness of a

market.

The Five Forces:

1.The threat of substitute products-As we know the Indian customers

choices range from mileage, pick-up, power steering to various other things

so substitute is very important aspect in this industry as other product

available in the market may act as the substitute to the brands own existing

product.

2.The threat of t5he entry of new competitors-New completion from the

new entrant or from existing company is also highly potent force which a

company must have to take care of for its market share and growth.

3.The intensity of competitive rivalry-The very effective way of putting

competitor out of track is pitching new vibrant products in the market so a

company must be aware of this tactics by its rival company so that it can

cater the effect.

4.The bargaining power of customers-Another important aspect for a car or

23
auto company where they have to manage the pricing control of their

product to spurt the sales in the market.

5.The bargaining power of suppliers- The distribution channel is very

important in country like India where the demand is highly different with

all across its dimension so, supply is very much required in the industry for

a company.

24
4) Organization Structure

The Board: No separate office is maintained for the Non-Executive Chairman. Being the Group

Chairman, the Company does not reimburse expenses incurred by the Non-Executive Chairman for

maintenance of a separate Chairman’s office.

No specific tenure has been specified for the Independent Directors. Mr Setna and Mr S A Naik,

Independent directors, have tenures, in the aggregate, exceeding a period of nine years.

25
Remuneration Committee: Details are given under the heading ‘Remuneration Committee’.

Shareholder Rights: A half yearly declaration of financial performance, including summary of

significant events in the last six months, is sent to all the shareholders. The Financial Results are also

put up on the Company’s website, besides being available on the SEBI’s website www.sebiedifar.nic

Audit Qualifications: During the year under review, there was no audit qualification in the

Company’s financial statements. The Company continues to adopt best practices to ensure a regime

of unqualified financial statements.

Training of Board Members: The Directors interact with the management in a very free and open

manner on information that may be required by them on orientation and factory visits. The

independent Directors are encouraged to attend training programmes that may be of relevance and

interest to the Directors in discharging their responsibilities to the Company’s stakeholders under the

emerging business environment.

Mechanism for evaluation of non-executive Board members: The performance evaluation of

non-executive members is done by the Board annually based on criteria of attendance and

contributions at Board/ Committee Meetings as also role played/ contributions other than at

Meetings.

Whistle Blower Mechanism: The Audit Committee had, at its Meeting held on August 9, 2004,

framed a Whistle-Blower Policy and the same was reviewed and amended by the Audit Committee

on January 19,2009. The Policy provides a formal mechanism for all employees of the Company to

approach the Management of the Company (Audit Committee in case where the concern involves

the Senior Management) and make protective disclosures to the Management about unethical

behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics

policy. The Whistle Blower Policy is an extension of the Tata Code of Conduct, which requires

every employee to promptly report to the Management any actual or possible violation of the Code

or an event he becomes aware of that could affect the business or reputation of the Company.

26
THE CODE OF CONDUCT FOR THE DIRECTORS IN TATA MOTORS

The Company expects all Directors to exercise good judgment, to ensure the interests, safety and

welfare of customers, employees, and other stakeholders and to maintain a cooperative, efficient,

positive, harmonious and productive work environment and business organization. The Directors

while discharging duties of their office must act honestly and with due diligence. They are expected

to act with that amount of utmost care and prudence, which an ordinary person is expected to take in

his/her own business. These standards need to be applied while working in the premises of the

Company, at offsite locations where the business is being conducted whether in India or abroad, at

Company-sponsored business and social events, or at any other place where they act as

representatives of the Company.

A. adherence to the highest standards of honest and ethical conduct, including proper and ethical

procedures in dealing with actual or apparent conflicts of interest between personal and professional

relationships.

B. full, fair, accurate, timely and meaningful disclosures in the periodic reports required to be filed

by the Company with government and regulatory agencies.

C. Compliance with applicable laws, rules and regulations.

D. To address misuse or misapplication of the Company's assets and resources.

E. The highest level of confidentiality and fair dealing within and outside the Company.

27
CORPORATE GOVERNANCE OF TATA WITH CERTAIN RULES:-

In TATA the corporate governance is managed very well with certain rules which are given below

and there are some people assigned to address the issue, so overall the corporate governance in

TATA is in very sound position as their disclosures during annual report or quarterly report and very

clear to the share-holders and investors also, provided their codes of ethics are also very strong.

1. Any employee/business associate who becomes aware of a suspected wrongful conduct is

encouraged to send his/her observations/concrete facts to the Direct Touch Team either through

phone or written communication complete with related evidence (to the extent possible) without fear

of reprisal or retaliation of any kind.

2. The information on suspected wrongful conduct is such information which the

Employees/business associates in good faith, believe, evidences:

a. A violation of any law or regulation, including but not limited to corruption,

bribery, theft, fraud, coercion and willful omission

b. Pass back of Commissions/benefits or conflict of interest

c. Procurement frauds

d. Mismanagement, Gross wastage or misappropriation of company funds/assets

e. Manipulation of Company data/records

f. Stealing cash/company assets; leaking confidential or proprietary information

g. Unofficial use of Company’s material/human assets

h. Activities violating Company policies including Code of Ethics and Conduct

i. A substantial and specific danger to public health and safety

j. An abuse of authority

k. An act of discrimination or sexual harassmen

28
THE CODE OF ETHICS IN TATA MOTORS

Commitment to ethical professional conduct is a MUST for every employee at TATA- in all of its

businesses/ units/ subsidiaries. The code is intended to serve as a basis for ethical decision-making in

the conduct of professional work.

Contribute to society and human well-being

This principle concerning the quality of life of all people affirms an obligation to protect

fundamental human rights and to respect the diversity of all cultures. So employee in TATA

attempts to ensure that the products of their efforts will be used in socially responsible ways, will

meet social needs and will avoid harmful effects to health and welfare of others.

In addition to a safe social environment, human well-being includes a safe natural environment.

Therefore, all who are accountable for the design, development, manufacture and promotion of

TATA products, must be alert to, and make others aware of, any potential damage to the local or

global environment.

Avoid harm to others

"Harm" means injury or negative consequences, such as loss of property, property damage or

unwanted health and environmental impacts. This principle prohibits use of men, material and

technology in ways that result in harm to our consumers, employees and the general public.

Well-intended actions, including those that accomplish assigned duties, may lead to harm

unexpectedly. In such an event, the responsible person or persons are obligated to undo or mitigate

the negative consequences as much as possible.

29
Be honest and trustworthy:

Honesty is an essential component of trust. Without trust an organization cannot function effectively.

So they are expected not to make deliberately false or deceptive claims about their products/

systems, but instead provide full disclosure of all pertinent limitations and problems

Be fair and take action not to discriminate

The values of equality, tolerance, respect for others, and the principles of equal justice govern this

imperative. Discrimination on the basis of race, sex, religion, age, disability, national origin, or other

such factors is an explicit violation of this code.

Practice integrity in our inter-personal relationships

In their relationships with colleagues, all should treat them with respect and in good faith; in the

same way we ourselves would expect them to treat us. The principle to be adopted to guard against

loose talk or in its worst form- character assassination- is not to say anything behind one’s back and

never utter something, which cannot be put in writing.

Honor confidentiality

The principle of honesty extends to issues of confidentiality of information. The ethical concern is to

respect all obligations of confidentiality to all stakeholders unless discharged from such obligations

by requirements of the law or other principles of this code.

SPECIFIC PROFESSTIONAL RESPONSIBILITY

Ownership

This is our company. We accept personal responsibility and accountability to meet business needs.

Passion for winning

30
We all are leaders in our area of responsibility with a deep commitment to deliver results. We are

determined to be the best at doing what matters most.

People development

People are our most important asset. We add value through result driven training and we encourage

& reward excellence.

Consumer focus

We have superior understanding of consumer needs and develop products to fulfill them better.

Teamwork

We work together on the principle of mutual trust and transparency in a boundary less organization.

We are intellectually honest in advocating proposals, including recognizing risks.

Innovation

Continuous innovation in products and processes is the basis of our success.

Integrity

We are committed to the achievement of business success with integrity. We are honest with

consumers, with business partners and with each

C) Latest Auditors Report


Annual
results
in
details

Mar ' 09 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Other income 925.97 245.19 289.11 166.09 58.90
Stock adjustment 238.04 -349.68 -256.91 -144.00 141.98
Raw material 16,218.62 19,374.93 14,263.86 11,929.48 8,341.39
Power and fuel - - - - -
Employee expenses 1,551.39 1,367.83 1,143.13 1,039.34 882.49
Excise - 4,349.45 3,401.92 3,063.44 2,270.30
Admin and selling expenses - - - - -
Research and development
- - - - -
expenses
Expenses capitalised -916.02 - - - -
Other expenses 6,867.49 3,913.46 2,946.21 2,490.34 2,027.20
31
Mar ' 09 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Provisions made - - - - -
Depreciation 874.54 586.29 520.94 450.16 382.60
Taxation 12.50 659.72 524.50 414.95 482.00
Net profit / loss 1,001.26 1,913.46 1,528.88 1,236.95 810.34
Extra ordinary item -65.26 -1.35 5.65 -13.85 -52.86
Prior year adjustments - - - - -
Equity capital 514.05 385.41 382.87 361.79 356.83
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 2031.75 2142.52 2539.98 2447.18 2352.40
Agg.of non promotoHolding (%) 45.17 55.60 66.35 67.65 66.65
OPM (%) 6.63 10.13 10.44 10.27 11.81
GPM (%) 7.35 9.84 10.57 10.25 11.11
NPM (%) 3.77 5.96 6.29 5.99 5.21

Cash
flow

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Profit before tax 1,001.26 2,028.92 1,913.46 1,528.88 1,236.95
Net cashflow-operating activity 1,295.02 6,174.50 2,210.13 -221.03 1,249.82
Net cash used in investing activity -10,644.67 -5,721.86 -2,805.10 -1.06 -956.57
Netcash used in fin. activity 8,104.70 1,132.46 303.58 -855.27 940.67
Net inc/dec in cash and equivlnt -1,244.95 1,585.10 -291.39 -1,077.36 1,233.92
Cash and equivalnt begin of year 2,386.77 806.21 1,118.15 2,196.79 771.12
Cash and equivalnt end of year 1,141.82 2,391.31 826.76 1,119.43 2,005.04
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Per
share
ratios

Adjusted EPS (Rs) 17.93 42.91 43.76 35.57 34.08
Adjusted cash EPS (Rs) 35.94 61.50 61.18 51.10 48.38
Reported EPS (Rs) 19.48 52.63 49.65 39.94 34.19
Reported cash EPS (Rs) 37.49 71.22 67.07 55.47 48.49
Dividend per share 12.50 15.00 15.00 13.00 12.50
Operating profit per share (Rs) 33.52 78.61 67.12 56.06 55.29
Book value (excl rev res) per share (Rs) 2.61 7.76 177.33 143.58 113.15
Book value (incl rev res) per share (Rs.) 2.61 7.77 178.00 144.26 113.15
Net operating income per share (Rs) 499.23 746.24 691.91 524.73 475.44
32
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Free reserves per share (Rs) 217.77 182.38 157.16 123.34 93.85

Profitability
ratios

Operating margin (%) 6.71 10.53 9.70 10.68 11.62
Gross profit margin (%) 3.30 8.26 7.50 8.09 9.01
Net profit margin (%) 3.77 6.96 6.94 7.35 7.02
Adjusted cash margin (%) 6.97 8.13 8.55 9.41 9.94
Adjusted return on net worth (%) 7.45 21.18 24.67 24.77 30.12
Reported return on net worth (%) 8.09 25.98 28.00 27.81 30.21
Return on long term funds (%) 8.89 22.85 31.18 28.65 28.72

Leverage
ratios

Long term debt / Equity 0.49 0.49 0.31 0.41 0.59
Total debt/equity 1.06 0.80 0.58 0.53 0.60
Owners fund as % of total source 48.44 55.43 63.05 65.23 62.22
Fixed assets turnover ratio 1.88 2.69 3.08 2.55 2.62

Liquidity
ratios

Current ratio 0.84 0.89 1.24 1.24 0.99
Current ratio (inc. st loans) 0.43 0.64 0.85 1.07 0.98
Quick ratio 0.58 0.66 0.91 0.96 0.76
Inventory turnover ratio 13.47 14.44 13.26 12.63 14.06

Payout
ratios

Dividend payout ratio (net profit) 34.52 32.51 35.34 37.13 41.68
Dividend payout ratio (cash profit) 17.94 24.02 26.16 26.73 29.39
Earning retention ratio 62.49 60.13 59.90 58.31 58.18
Cash earnings retention ratio 81.29 72.18 71.32 70.98 70.54

Coverage
ratios

Adjusted cash flow time total debt 7.13 2.65 1.70 1.50 1.43
Financial charges coverage ratio 3.64 7.19 7.62 8.08 10.24
Fin. charges cov.ratio (post tax) 3.73 6.82 6.67 7.06 8.49

Component
ratios

Material cost component (% earnings) 73.26 72.62 74.55 72.84 71.19
Selling cost Component 4.77 4.09 4.00 3.78 3.48
Exports as percent of total sales 9.49 9.88 10.18 11.87 8.70
Import comp. in raw mat. consumed 5.82 4.60 3.88 4.64 2.30
33
THE FINANCIAL ANANALYSIS OF TATA MOTORS

In the October-December quarter of the Financial Year 2008-09, the automotive sector

in India suffered severe contraction in demand, arising from major financial and other

market upheavals. This exacerbated the lack of liquidity and unavailability of

consumer finance. This, along with contraction in freight movement in many

segments of the industry, led to a massive drop in the M&HCV segment demand.

High interest rates and peak commodity prices also affected the industry and the

supply chain. The overall CV industry declined by 43.9% while TML’s Commercial

vehicle business declined by 40.0% supported by a diversified product portfolio.

Consequently Tata Motors gained substantial market share both in MHCV and LCV

segments. While the passenger vehicle industry declined by 16.5% affected by high

interest rate and restricted credit availability, TML’s Passenger vehicle business

declined by a lower 14.4%. The rate of decline was arrested due to encouraging

response to new products introduced – Indigo CS and Indica Vista. Going ahead

ramping up of the capacity of Indica Vista would help the company to arrest decline

in small car market share. The export volumes of the Company registered a decline of

44.9%% during FY09, due to global economic slowdown and credit crunch, especially

in prime markets which witnessed adverse impact on automotive demand.

Tata Motors celebrated the 10th anniversary of the launch of the Indica on December

30, 2008. To mark this milestone, a 10th Anniversary Limited Edition Indica Vista

34
was launched. In the first decade, close to 940,000 Indicas had been produced and the

platform has spawned off close to 1.2 million vehicles. The Indica has remained a

bestseller throughout in the industry figuring in the top 3 selling list of cars for most

of the years. It achieved a peak sale of 144,690 in 2006-07 and the new generation

Indica Vista was launched in August this year to a continuing pull even in today’s

depressed market conditions.

35
3) SWOT ANALYSIS
STRENGTH:

1.Strong Presence in the Marketplace:-Tata Motors is the only company in India with

a broadbased presence across the industry, in all segments of the commercial vehicles market –

heavy and medium commercial vehicles, light commercial vehicles, pick-ups, sub one-tonne

mini-trucks - and key segments - compact, midsize car and utility vehicle segments - of the

passenger vehicles market.

2.Unique Understanding of Customer Need:- With 50 years’ presence in the automotive

business,Tata Motors understands customer needs and develops products that meet their needs.To

consider a few examples, as early as 1980s, the company launched Light Commercial Vehicles,

amidst Japanese competition, in which it today strongly leads. In the 1990s, anticipating the need for

an affordable family car, it launched the now famous Tata Indica, which occupies a leading position

among compact cars.

3.Skill Base Developed Over the Last 40 Years:-Tata Motors is also very well-placed on

technology capability.The company had set up its Engineering Research Centre as early as

1966.With 1400 scientists and engineers and state-of-the-art development, testing and validation

facilities, it is this technology capability which has, allowed Tata Motors, over the decades, to offer

indigenouslydeveloped products.This strength has been accentuated, with the inclusion of

TMETC,TDCV and Hispano Carrocera in the R&D network, besides several other specialist

external agencies.The company no longer needs to develop every necessity itself.Today it just has to

36
manage the process of product creation, drawing upon already available R&D and skills from

different sources.

4.People Strength:- The company’s key strength is its people.The over

22,000 employees comprise a very broad talent base, with the required skills in every aspect of the

industry.With increasing international initiatives by the company, this talent base is now getting

enriched with the necessary competencies to respond to meet world-class standards of

quality and cost. The company will achieve this by developing and marketing relevant products,

on its existing platforms and new ones, which delight consumers in every market they are

introduced in.

5.Tata Motors’ linkages in Europe through Subsidiary Companies:- In October 2005,Tata

Technologies Ltd, a 100 per cent subsidiary of Tata Motors, acquired a 94.3 per cent stake in INCAT

International Limited. INCAT is a supplier of engineering & design,

product lifecycle management and product-centric IT services to the automotive, aerospace and

durable goods industries.

6.Tata Motors R&D in Europe:- Deepening its engagement with the European

R&D space, in September 2005,Tata Motors set up the Tata Motors European Technical Centre,

a 100 per cent subsidiary, in the UK. It is engaged in design engineering and development

of products for the automotive industry.Working synergistically,TMETC provides the company with

design engineering support and development services, complementing and strengthening the

company’s skill sets and providing European standards of delivery to the company’s passenger

vehicles.

7. Engineering:-The Tata group has a robust presence in engineering, with operations in

automobiles and auto components and a variety of other engineering products and services.

8.Materials:- The Tata group is among the global leaders in this business sector, with operations in

steel and composites.

37
9.Services: The Tata group has widespread interests in the hospitality business, as also in insurance,

realty and financial and other services.

10. Energy: The Tata group is a significant player in power generation and is also involved in the oil

and gas segment.

11.Chemicals: The Tata group is one of the largest producers of soda ash in the world. Additionally,

it has interests in fertilisers and in the pharmaceuticals business.

OPPURTUNITIES:

1. India’s huge geographic spread-This is one aspect where the company is looking for and its

diversified range of cars suits very much this area of car or say auto industry in country.

2. Easier finance schemes- The current fiscal stimulus and easy loan will surely guide the

company to post good sales as the current trend shows the cars sales has been boosted by

easy loan norms in the country.

3. Replacement of aging four wheelers-One of very important reason where the car industry

and commercial vehicle can take advantage in coming days.

4. Increasing Road Development, Golden Quadrilateral-as we all know the infrastructure

will surely boost the auto industry as it is directly related to the this industry and the

government policy in spending the money ion infrastructure will create good demand.

5. Increasing dispensable income of rural agri sector-Some how this year the rural demand

was very enthusiastic than the urban market which drive the auto industry so, the

development of rural infrastructure and condition will create handsome demand from the

rural area.

6. Higher GDP growth-With standing tall during the slowdown our economy has shown the

industry that demands will gain momentum in near future very soon.

38
7. Increasing disposable income with the service sector-As the consumers have money in

their hand definitely there will be demand from their side so, this is also very good

opportunity for this sector.

8. Graduating from Two wheeler to Four wheeler-The dream of “NANO” will boost demand

for four wheeler in the auto industry.

THREAT:

1. Indian is lacking in proper infrastructure this is slowing the pace of growth of auto industry

2. Global crisis- this really hurts the Indian growing industry and not only the auto but tyre

industry went for toss.

3. High competition from foreign players-As the giants like GM, Audi, MERC etc are trying

to capture the high segment market it is one of the very effective threat to the company.

WEAKNESS:

1.The current financial situation of its recently acquired firms like “Corus” and “Land

Rover-Jaguar” is very big headache for the company and it should be back to the track in

the near future.

2. The high ratio of debt equity ratio is also weakness of the company.

3. The small car segment is still not good for the company due to “maruti-suzuki” so, it need

to tap this section also.

4.The CV segment is becoming highly competitive by new player like Volvo,and rival M

&M are coming with new products to cater the TATA in the market as the rural area has

given thumps up to M&M during this year.

39
4) LEARNING EXPERIENCE
The training has helped me a lot in understanding the realities of the outside
world. I also came to know the real meaning of the word marketing. There are both positive
and negative experiences of the training, some of which are :

 Real experience of the corporate world which helped me a lot in understanding how

really a corporate world functions.

 Learned how to deal with the customers.

 It helped me in improving my communication skill, presentation skill and how to

behave in front of corporate executives.

 I can relate the theories, which I learned in college with practical experience.

 Learning different things like how to coordinate with team members and

management.

 Learning many things regarding marketing strategies.

 Learning how to maintain balance in personal and professional life.

40
PROBLEM AND RESEARCH METHODOLOGY

STATEMENT OF THE PROBLEM

In the event of a company does not adopt a fair measure of the potential market ,It will

have a direct impact on the sales of the product, and the company may have to pay

heavy price in maintenance of the business .If the critical markets are not accorded

adequate attention, it may be the determinant of an unsuccessful product.

PURPOSE OF THIS RESEARCH IN TO “ STUDY OF BUYING BEHAVIOUR OF


CUSTOMERS FOR TATA INDICA VISTA”

OBJECTIVE: The objective is to study those factors which can accelerate the
marketability of the TATA VISTA compared to its competitors.
 To understand the market potentiality for VISTA.

 To determine the acceptable price of the product.

 To determine the requirements and needs of the potential customers.

STUDY POPULATION:

Sample size- 30

AREA CONSIDERED FOR THIS STUDY ARE:


 Automobile history
 Industry investment
 Industry growth
 Vehicle production
 Auto export
 Auto companies

41
LIMITATIONS OF THE STUDY

 Study is restricted to Allahabad and naini industrial areas only.

 Continuous and reliable information was not available.

 Some of the information was confidential so much information was not

revealed.

 The time span of the survey was short and hence only major aspects were

considered.

 Information provided by the respondent in terms of their fuel usage and their

expense could not be very accurate.

 Availability of the respondents amidst their busy schedule did not permit

detailed study.

METHODOLOGY OF THE STUDY

Method of Analysis:

An analytical research was carried out to gain insight and proper understanding of the

market. This was done through the questionnaire and personal interaction with the

42
managers and supervisors of industries. This was followed by comparative study

analysis. Several graph and tables were prepared for better analysis of the market.

Research Instruments:

The research was based on the collection of primary data. Since product is new to the

Allahabad market secondary data is not advised.

Primary Data:

 Primary data was collected through a structured questionnaire.

 Personal interaction with the company managers and supervisors.

 Interaction with industry experts in Allahabad.

43
5.Analysis of data
a) Sale according to survey
VISTA AQUA 9 30%
VISTA AURA 8 26.67%
VISTA TERRA 6 20%
OTHERS 7 23.33%
30 100%

TOTAL

b) Sample of 30 customers, according to their income.

Salary No. of people


>1lakh 5
1lakh-3lakh 17
3-lakh-5lakh 6
< 5lakh 2

44
c) Car customers

No. of people
First time user 13
More than once 17

45
d) customer satisfacton from tata cars.

Customer No. of people


satisfaction
Satisfied 11
Not satisfied 19

46
e) Tele media creates a brand appeal.

T.V. ads appeal No. of people

Yes 7
No 23

47
f) Tata Passenger Cars, Creating brand value.

Brand value NO. OF PEOPLE


Yes 15
No 5

48
g) Factors affecting buying of customers

Features No. of people


Power steering 4
Mileage 9
Price 15
Others 2

49
6) FINDINGS & SUGESSTIONS

FINDINGS

1) TATA MOTORS, is number three in passenger car market after maruti-suzuki & hyundai.

1) Majority of the customers see TATA MOTORS with savings.

2) Most of the customers spend large sum of money

3) Out of the samples, people are highly convinced that TATA MOTORS will

yield them better results

4) As the sales of Maruti grows as well as Hundai’s santro is still doing well in

mid size and small size segment so the INDICA VISTA may be a good options

for the company in this term for sustaining sales in long run as well as in the

current situations.

5) Product will have a gradual progress. Because most industries would wait for

the response about the product from other Company.

6) Customers were educated by me, about fuel efficient cars by TATA MOTORS

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SUGGESTIONS

Based on the findings from the analysis the following suggestions could be made:

 Demo of the product should be made available to Customers, since most of the

purchase decisions are based on it.

 Technical details should be made available to the customers in the most

accurate numerical form.

 The Indica has remained a bestseller throughout in the industry figuring in the

top 3 selling list of cars for most of the years.

 The distribution channel should be more efficient to cater the demand during

peak seasons like during dassraa, diwali etc .

The city like Allahabad is mostly dominated by the working class like people
employed in high court, AG office( accountant general office) and government school
employees who this year are getting more pay due to the recommendations made by
the sixth pay commission so , the sales for mid size car can be enhanced in this
scenario.

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7) CONCLUSION

The study was conducted to measure,” THE CUSTOMER BEHAVIOR in purchasing

INDICA VISTA. The study was conducted on 30 Customers. A questionnaire was

designed to understand the market and create awareness about TATA MOTORS.

Based on the questionnaire, data was collected and analyzed and it was found that the

customers are willing to buy the Cars. However they are also skeptic about it.

Suggestions are provided based on customer requirements and market situation. An

earnest attempt has been made to make the study realistic and suggestive, but it is not

claimed that the findings and suggestions in the report are perfect.

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8) ANNEXURE

QUESTIONNAIRE

1. WHAT IS YOUR SALARY?


< 1 LAC 1 LAKH -3 LAKH 3LAKH-5LAKH < 5LAKH

2. WHICH VEHICLE DO YOU OWN?


__________________________
3. DID YOU RIDE SOME OTHER VEHICLE BEFORE THIS?
YES NO

4. WHAT IS YOUR EXPERIENCE FROM THE PREVOIUS VEHICLE?


SATISFIED NOT SATISFIED

5. WHICH IS THE MOST ESSENTIAL THING YOU PREFER WHILE BYING


VEHICLE?
PRICE MILEAGE POWER STEERING OTHERS

6. DOES TV AD APPEAL YOU?


YES NO

7. DO YOU LIKE TV PROGRAMMES ON CAR?


YES NO

8. DOES BRAND VALUE AFFECT YOUR DECISION ON BUYING


VEHICLE?
YES NO

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9) BIBLIOGRAPHY

BOOKS:
• KOTLER PHILIP AND ARMSTRONG, GARY MARKETING
MANAGEMENT
• MARKETING RESEARCH by R Nandagopal & K Arul Rajan

MAGAZINES:
• MONEY TODAY
• BUSSINESS WORLD
• OUTLOOK PROFIT
• INDIA TODAY

WEBSITES:
Tatamotors.com
Yahoofinance.com
Valuereseacrhonline.com

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