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This is a presentation is about company analysis of tata motors company.
Company Analysis: Tata Motors
Industry analysis: Automotive Sector The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world. The Indian Automobile Industry manufactures over 11 million vehicles and exports about 1.5 million each year. The industry has a turnover of more than USD $35 billion and provides direct and indirect employment to over 13 million people. The overall Indian automobile industry grew by 12.12% in 2011-12 by selling 17.3 million units, majorly driven by demand for two-wheelers and light trucks. The sector witnessed sales growth of 12.46% for the period between April 2011 and February 2012. As per the 2010-11 data released by the Society of Indian Automobile Manufacturers (SIAM), domestic vehicle market is dominated by two-wheelers segment with 76% of the total market. Passenger vehicles, commercial vehicles and three-wheelers account for 16.25%, 4.36% and 3.39% of the market, respectively. Hero MotorCorp rules the two-wheeler market with 56% of the share. Maruti Suzuki maintains its leader position in passenger vehicle segment with 38% of the pie, while Hyundai follows with 15% of the share. For passenger vehicle segment, the share of the entry-compact segment (that consists of cars like the Maruti Alto, Maruti WagonR, Ford Figo, Tata Nano, Hyundai's Santro, i10 and Eon and GM's Beat) stood at 47% in 2011, while premium compacts (like Maruti Swift, Hyundai i20 and VW Polo) maintained their share of 11%. Sports-utility vehicle (SUV) segment registered the
fastest growth rate (32%) to capture over 18% of the market share, while Sedans had 19% of the market. (Source: www.globalautoindustry.com)
Key Statistics: The cumulative production for April-March 2012 registered a growth of 13.83% over AprilMarch 2011, manufacturing 20,366,432 vehicles during the period While Passenger vehicle segment grew at 4.66% during April-March 2012, overall commercial vehicle segment registered an expansion of 18.20%. Two Wheelers sales registered a growth of 14.16% during April-March 2012 wherein Mopeds, Motorcycles and Scooters grew by 11.39%, 12.01% and 24.55%, respectively The industry exported 2,910,055 units registering a growth of 25.44% in April-March 2012. Automobile exports registered a growth of 17.81% in March 2012 as against March 2011 (Source: www.siamindia.com)
PEST Analysis of Automobile Industry:
Political Factors: ? Indian government’s auto policy is aimed at promoting an integrated, phased and conductive growth of the Indian automotive industry. ? Auto Policy of government of India allows automatic approval for foreign equity investment up to 100% in the automotive.
?
It formulates an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms.
?
Puts emphasis on R&D activities carried out by companies in India by giving a tax deduction of up to 150% for in house research and R&D activities.
?
It assists development of vehicle propelled by alternate energy source.
Economical Factors: ? ? Govt. has granted concessions, such as reduced interest rates for export financing. The rate of growth of the manufacturing sector has been 8-10 % per annum in the last few years. ? Several Indian firms have partnered with global companies. While some have formed joint ventures, others have entered into technology tie ups. Social Factors: ? Changed lifestyle of people leading to increased purchase of automobiles, so automobile sector has a large customer base to serve. ? ? The average family size being 4, makes it favorable to buy a four wheeler. Indian customer group is educated and well informed. It is price sensitive and puts a lot of emphasis on value for money. ? ? Preference given to small and compact cars. Preference for fuel efficient cars with low running costs and maintenance.
Technological Factors: ? ? More and more emphasis is being laid on R & D activities. Technological solutions helping in integrating the supply chain hence reduce losses and increase profitability. ? ? Internet makes it easy to collect and analyze customer feedback. With the entry of global players with advanced technologies into the Indian market, both in product and production process have developed. ? With the development new technology, hybrid cars like Toyota Prius have already made entry into the market.
Competitor analysis:
Tata Motors has 63.94%, market share in commercial and 16.45% in passenger vehicles market. Major competitors include: Maruti Suzuki India Market share of the company in passenger vehicles market is 46.07%. Since inception in 1983, Maruti Suzuki India has produced and sold over 10 million vehicles in India and exported over 500,000 units to Europe and other countries. The company's revenue for the fiscal 2010-2011 stood over Rs 375,224 million and Profits after Tax at over Rs. 22,886 million.
Hyundai Motor India The company has a market share of 14.15% in passenger vehicles market. Hyundai Motor presently markets 49 variants of passenger cars across segments. These include the Santro, i10, the premium hatchback i20, Accent and Verna in the C segment, the Sonata Transform in the E segment. Mahindra & Mahindra The company has interests across range of vehicle segments. It has share of 10.01% in commercial vehicles sector, 6.50% in passenger vehicles and 1.31% in three wheelers. Mahindra & Mahindra is mainly associated with the Multi Utility Vehicle and Three Wheeler segments directly. The latest SUV brought in the market XUV500 was a major success. The company operates in the Light Commercial Vehicle segment through its joint venture subsidiary Mahindra Navistar Automotives Limited. Company has recently acquired Korea based Ssangyong Motors. Ashok Leyland The company has a market share 22% in Commercial Vehicles segment. Turnover of the company was US $ 2.5 billion in 2011-12. Company has a Joint Venture (JV) with Nissan Motor Company (Japan) for Light Commercial Vehicles and John Deere (USA) for construction equipment.
SWOT Analysis for automotive industry:
Strengths: ? ? Large domestic market available Advantage of low labor cost
?
Government incentives for manufacturing plants
Weaknesses: ? ? ? Low labor productivity Various forms of taxes increase production costs Low investment in R&D
Opportunities: ? ? ? Due to increase in income levels, more people can afford cars Rising rural demand Cuts in excise duties
Threats: ? ? ? Rising raw material costs Increasing interest rates Cut throat competition
COMPANY DESCRIPTION: TATA MOTORS Founded by Jamsetji Tata in 1868, the Tata group is one of the oldest groups of industries in India with history of more than 140 years. The group comprises over 100 operating companies in seven business sectors: engineering, materials, communications and information technology, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. Tata Motors is headquartered in Mumbai, Maharashtra, India. It is the eighteenth largest motor vehicle manufacturing company in the world by volume. Tata Motors has been ranked 314th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012. The company manufactured its first commercial vehicle in 1954 in collaboration with DaimlerBenz AG. Tata Motors has produced and sold over 6.5 million vehicles in India since 1954. It has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune, India, as well as in Argentina, South Africa, Thailand and the United Kingdom. The company has its presence over 129 countries in the world. The company currently employs 59,759 people across the globe. Top Management: The company is led by Mr. Ratan N. Tata as chairman of the group and Mr. Ravi Kant ViceChairman of Tata Motors. Other key management personnel are Mr. R Pisharody who acts as the Executive Director (Commercial Vehicles), Mr. S B Borwankar as the Executive Director (Quality, Vendor Development & Strategic Sourcing), and Mr. C Ramakrishnan as Chief Financial Officer. Financial Performance: Following are the figures as stated in Annual Report FY2011-12 of Tata Motors Group which consists of 64 subsidiaries (9 in India and 55 abroad).
Sales: The Company sold ? ? ? ? 207,086 units of Heavy and Medium Commercial Vehicles 323,118 units of Light Commercial Vehicles 333,044 units of Passenger Cars 863,248 units in total in FY2011-12
Segment wise performance: ? ? ? ? H&MCV: market share of 59.4% showing a growth rate of 5.3% LCV: market share of 59.4% showing a growth rate of 23.5%. Passenger Cars: market share of 13.1% showing a growth rate of 4.0% Total market share of 25.2% and a growth rate of 10.9%.
Current Assets: The Company owns total assets worth Rs. 1, 45,382.64 crores as on 31st March 2012 as compared to Rs. 1, 01,014.18 crores as on 31st March 2011. Revenue: Gross revenue for the year 2011-12 was Rs. 170,677.58 crores. Net profit: Net profit for the year 2011-12 was declared Rs. 13,516.50 crores.
SWOT Analysis of Tata Motors:
Strengths ? With acquisition of Jaguar and Land Rover brands of UK Tata Motors entered in the premium segment. ? 51:49 Joint Venture with Brazil based Marcopolo to manufacture and assemble fullybuilt buses and coaches currently used for urban transportation. ? Tata Motors has launched CNG buses which are very fuel efficient and are used in urban areas. ? Mini truck Ace is the latest hit of Tata Motors which is country’s first indigenously developed one ton mini-truck. Ace has become quite popular among transporters and single truck owners for city and rural transport. Weaknesses: ? Very limited models in passenger car segment which gives competitors like Maruti and Hyundai an edge. ? It is a prevalent impression among customers that Tata cars are not very aesthetic and built for robust performance. ? ? ? ? Low cost cars are a priority at Tata Motors than quality according to some auto experts. The company is overstaffed. Extensive hierarchy prevalent at Tata Motors which makes decision making difficult. Low presence in high volume markets like Americas and parts of Europe.
Opportunities: ? Tata Motors will infuse Rs 800 crore - Rs 1000 crore over 2012-2015 to build a plant in Dharwar, Karnataka. The facility that would be exclusively dedicated to manufacture the Tata Ace Zip and Magic Iris. It will have an annual capacity of 90,000 units. It is anticipated that the plant would reach its full capacity by the end of fiscal 2012-13. ? With the Joint Venture with Fiat, Tata Motors is likely to gain access to Fiat’s diesel technology and strong overseas distribution network. ? Tata Nano also called as 1 lakh car is considered the cheapest vehicle ever made in real terms and has vast market of middle class. Threats: ? Passenger car makers like Maruti and Hyundai pose a threat to Tata’s Indica brand by introducing many vehicles in that segment like Swift, Ritz, i10, i20 etc. ? Mahindra & Mahindra with its successful and competitively priced SUV brands Scorpio and XUV500 compete directly with the Safari brand. M&M is also planning to introduce another SUV Rexton to Indian market. ? Volvo, a leading manufacturer of trucks, buses, cars and aero engines has a main focus in the area of fully built buses. It presence is already conspicuous in India with its buses being used for intercity transportation on a large scale.
Major acquisitions and JVs in recent times:
? Tata Motors sells Fiat cars in India since 2006 through a 50/50 joint venture Fiat Automobiles India Limited. Tata has also formed several JV's with many small companies in various countries around the world. ? In 2007, Tata formed a joint venture with Marcopolo of Brazil and introduced low-floor buses in the Indian Market which are currently being used in urban areas. ? 2008-09 1. Jaguar Land Rover acquisition Tata Motors Acquired British icon brands Jaguar and Land Rover in 2008. After the acquisition of JLR brand, which also includes the Daimler, Lanchester and Rover brands, Tata Motors became a major player in the international market. On 27 March 2008, Tata Motors reached an agreement with Ford to purchase their Jaguar Land Rover operations for US$2.3 billion. Tata Motors also gained access to two design centers and two plants in UK. The key acquisition would be of the intellectual property rights related to the technologies. ? 2010-11 1. Remaining 79% stake in Hispano which makes Hispano a fully owned subsidiary of Tata. 2. 80% stake acquisition in Trilix Srl. In 2010, Tata Motors acquired 80% stake in Italy-based design and engineering company Trilix for €1.85 million. The objective behind this acquisition was to take styling and designing to a global level.
doc_307589334.docx
This is a presentation is about company analysis of tata motors company.
Company Analysis: Tata Motors
Industry analysis: Automotive Sector The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world. The Indian Automobile Industry manufactures over 11 million vehicles and exports about 1.5 million each year. The industry has a turnover of more than USD $35 billion and provides direct and indirect employment to over 13 million people. The overall Indian automobile industry grew by 12.12% in 2011-12 by selling 17.3 million units, majorly driven by demand for two-wheelers and light trucks. The sector witnessed sales growth of 12.46% for the period between April 2011 and February 2012. As per the 2010-11 data released by the Society of Indian Automobile Manufacturers (SIAM), domestic vehicle market is dominated by two-wheelers segment with 76% of the total market. Passenger vehicles, commercial vehicles and three-wheelers account for 16.25%, 4.36% and 3.39% of the market, respectively. Hero MotorCorp rules the two-wheeler market with 56% of the share. Maruti Suzuki maintains its leader position in passenger vehicle segment with 38% of the pie, while Hyundai follows with 15% of the share. For passenger vehicle segment, the share of the entry-compact segment (that consists of cars like the Maruti Alto, Maruti WagonR, Ford Figo, Tata Nano, Hyundai's Santro, i10 and Eon and GM's Beat) stood at 47% in 2011, while premium compacts (like Maruti Swift, Hyundai i20 and VW Polo) maintained their share of 11%. Sports-utility vehicle (SUV) segment registered the
fastest growth rate (32%) to capture over 18% of the market share, while Sedans had 19% of the market. (Source: www.globalautoindustry.com)
Key Statistics: The cumulative production for April-March 2012 registered a growth of 13.83% over AprilMarch 2011, manufacturing 20,366,432 vehicles during the period While Passenger vehicle segment grew at 4.66% during April-March 2012, overall commercial vehicle segment registered an expansion of 18.20%. Two Wheelers sales registered a growth of 14.16% during April-March 2012 wherein Mopeds, Motorcycles and Scooters grew by 11.39%, 12.01% and 24.55%, respectively The industry exported 2,910,055 units registering a growth of 25.44% in April-March 2012. Automobile exports registered a growth of 17.81% in March 2012 as against March 2011 (Source: www.siamindia.com)
PEST Analysis of Automobile Industry:
Political Factors: ? Indian government’s auto policy is aimed at promoting an integrated, phased and conductive growth of the Indian automotive industry. ? Auto Policy of government of India allows automatic approval for foreign equity investment up to 100% in the automotive.
?
It formulates an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms.
?
Puts emphasis on R&D activities carried out by companies in India by giving a tax deduction of up to 150% for in house research and R&D activities.
?
It assists development of vehicle propelled by alternate energy source.
Economical Factors: ? ? Govt. has granted concessions, such as reduced interest rates for export financing. The rate of growth of the manufacturing sector has been 8-10 % per annum in the last few years. ? Several Indian firms have partnered with global companies. While some have formed joint ventures, others have entered into technology tie ups. Social Factors: ? Changed lifestyle of people leading to increased purchase of automobiles, so automobile sector has a large customer base to serve. ? ? The average family size being 4, makes it favorable to buy a four wheeler. Indian customer group is educated and well informed. It is price sensitive and puts a lot of emphasis on value for money. ? ? Preference given to small and compact cars. Preference for fuel efficient cars with low running costs and maintenance.
Technological Factors: ? ? More and more emphasis is being laid on R & D activities. Technological solutions helping in integrating the supply chain hence reduce losses and increase profitability. ? ? Internet makes it easy to collect and analyze customer feedback. With the entry of global players with advanced technologies into the Indian market, both in product and production process have developed. ? With the development new technology, hybrid cars like Toyota Prius have already made entry into the market.
Competitor analysis:
Tata Motors has 63.94%, market share in commercial and 16.45% in passenger vehicles market. Major competitors include: Maruti Suzuki India Market share of the company in passenger vehicles market is 46.07%. Since inception in 1983, Maruti Suzuki India has produced and sold over 10 million vehicles in India and exported over 500,000 units to Europe and other countries. The company's revenue for the fiscal 2010-2011 stood over Rs 375,224 million and Profits after Tax at over Rs. 22,886 million.
Hyundai Motor India The company has a market share of 14.15% in passenger vehicles market. Hyundai Motor presently markets 49 variants of passenger cars across segments. These include the Santro, i10, the premium hatchback i20, Accent and Verna in the C segment, the Sonata Transform in the E segment. Mahindra & Mahindra The company has interests across range of vehicle segments. It has share of 10.01% in commercial vehicles sector, 6.50% in passenger vehicles and 1.31% in three wheelers. Mahindra & Mahindra is mainly associated with the Multi Utility Vehicle and Three Wheeler segments directly. The latest SUV brought in the market XUV500 was a major success. The company operates in the Light Commercial Vehicle segment through its joint venture subsidiary Mahindra Navistar Automotives Limited. Company has recently acquired Korea based Ssangyong Motors. Ashok Leyland The company has a market share 22% in Commercial Vehicles segment. Turnover of the company was US $ 2.5 billion in 2011-12. Company has a Joint Venture (JV) with Nissan Motor Company (Japan) for Light Commercial Vehicles and John Deere (USA) for construction equipment.
SWOT Analysis for automotive industry:
Strengths: ? ? Large domestic market available Advantage of low labor cost
?
Government incentives for manufacturing plants
Weaknesses: ? ? ? Low labor productivity Various forms of taxes increase production costs Low investment in R&D
Opportunities: ? ? ? Due to increase in income levels, more people can afford cars Rising rural demand Cuts in excise duties
Threats: ? ? ? Rising raw material costs Increasing interest rates Cut throat competition
COMPANY DESCRIPTION: TATA MOTORS Founded by Jamsetji Tata in 1868, the Tata group is one of the oldest groups of industries in India with history of more than 140 years. The group comprises over 100 operating companies in seven business sectors: engineering, materials, communications and information technology, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. Tata Motors is headquartered in Mumbai, Maharashtra, India. It is the eighteenth largest motor vehicle manufacturing company in the world by volume. Tata Motors has been ranked 314th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012. The company manufactured its first commercial vehicle in 1954 in collaboration with DaimlerBenz AG. Tata Motors has produced and sold over 6.5 million vehicles in India since 1954. It has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune, India, as well as in Argentina, South Africa, Thailand and the United Kingdom. The company has its presence over 129 countries in the world. The company currently employs 59,759 people across the globe. Top Management: The company is led by Mr. Ratan N. Tata as chairman of the group and Mr. Ravi Kant ViceChairman of Tata Motors. Other key management personnel are Mr. R Pisharody who acts as the Executive Director (Commercial Vehicles), Mr. S B Borwankar as the Executive Director (Quality, Vendor Development & Strategic Sourcing), and Mr. C Ramakrishnan as Chief Financial Officer. Financial Performance: Following are the figures as stated in Annual Report FY2011-12 of Tata Motors Group which consists of 64 subsidiaries (9 in India and 55 abroad).
Sales: The Company sold ? ? ? ? 207,086 units of Heavy and Medium Commercial Vehicles 323,118 units of Light Commercial Vehicles 333,044 units of Passenger Cars 863,248 units in total in FY2011-12
Segment wise performance: ? ? ? ? H&MCV: market share of 59.4% showing a growth rate of 5.3% LCV: market share of 59.4% showing a growth rate of 23.5%. Passenger Cars: market share of 13.1% showing a growth rate of 4.0% Total market share of 25.2% and a growth rate of 10.9%.
Current Assets: The Company owns total assets worth Rs. 1, 45,382.64 crores as on 31st March 2012 as compared to Rs. 1, 01,014.18 crores as on 31st March 2011. Revenue: Gross revenue for the year 2011-12 was Rs. 170,677.58 crores. Net profit: Net profit for the year 2011-12 was declared Rs. 13,516.50 crores.
SWOT Analysis of Tata Motors:
Strengths ? With acquisition of Jaguar and Land Rover brands of UK Tata Motors entered in the premium segment. ? 51:49 Joint Venture with Brazil based Marcopolo to manufacture and assemble fullybuilt buses and coaches currently used for urban transportation. ? Tata Motors has launched CNG buses which are very fuel efficient and are used in urban areas. ? Mini truck Ace is the latest hit of Tata Motors which is country’s first indigenously developed one ton mini-truck. Ace has become quite popular among transporters and single truck owners for city and rural transport. Weaknesses: ? Very limited models in passenger car segment which gives competitors like Maruti and Hyundai an edge. ? It is a prevalent impression among customers that Tata cars are not very aesthetic and built for robust performance. ? ? ? ? Low cost cars are a priority at Tata Motors than quality according to some auto experts. The company is overstaffed. Extensive hierarchy prevalent at Tata Motors which makes decision making difficult. Low presence in high volume markets like Americas and parts of Europe.
Opportunities: ? Tata Motors will infuse Rs 800 crore - Rs 1000 crore over 2012-2015 to build a plant in Dharwar, Karnataka. The facility that would be exclusively dedicated to manufacture the Tata Ace Zip and Magic Iris. It will have an annual capacity of 90,000 units. It is anticipated that the plant would reach its full capacity by the end of fiscal 2012-13. ? With the Joint Venture with Fiat, Tata Motors is likely to gain access to Fiat’s diesel technology and strong overseas distribution network. ? Tata Nano also called as 1 lakh car is considered the cheapest vehicle ever made in real terms and has vast market of middle class. Threats: ? Passenger car makers like Maruti and Hyundai pose a threat to Tata’s Indica brand by introducing many vehicles in that segment like Swift, Ritz, i10, i20 etc. ? Mahindra & Mahindra with its successful and competitively priced SUV brands Scorpio and XUV500 compete directly with the Safari brand. M&M is also planning to introduce another SUV Rexton to Indian market. ? Volvo, a leading manufacturer of trucks, buses, cars and aero engines has a main focus in the area of fully built buses. It presence is already conspicuous in India with its buses being used for intercity transportation on a large scale.
Major acquisitions and JVs in recent times:
? Tata Motors sells Fiat cars in India since 2006 through a 50/50 joint venture Fiat Automobiles India Limited. Tata has also formed several JV's with many small companies in various countries around the world. ? In 2007, Tata formed a joint venture with Marcopolo of Brazil and introduced low-floor buses in the Indian Market which are currently being used in urban areas. ? 2008-09 1. Jaguar Land Rover acquisition Tata Motors Acquired British icon brands Jaguar and Land Rover in 2008. After the acquisition of JLR brand, which also includes the Daimler, Lanchester and Rover brands, Tata Motors became a major player in the international market. On 27 March 2008, Tata Motors reached an agreement with Ford to purchase their Jaguar Land Rover operations for US$2.3 billion. Tata Motors also gained access to two design centers and two plants in UK. The key acquisition would be of the intellectual property rights related to the technologies. ? 2010-11 1. Remaining 79% stake in Hispano which makes Hispano a fully owned subsidiary of Tata. 2. 80% stake acquisition in Trilix Srl. In 2010, Tata Motors acquired 80% stake in Italy-based design and engineering company Trilix for €1.85 million. The objective behind this acquisition was to take styling and designing to a global level.
doc_307589334.docx