TATA MOTORS
Company Background
Set up in 1945,Tata Motors is India's largest
automobile company.With close to 4 million
Tata vehicles plying in India, since the first roll out
in 1954, it is the leader in commercial vehicles and
the second largest in passenger vehicles. It is also
the world's fifth largest medium and heavy truck
manufacturer and the second largest heavy bus
manufacturer. In India, the company has
manufacturing facilities in Pune (Maharashtra –
western India), Jamshedpur (Jharkhand – eastern
India) and Lucknow (Uttar Pradesh – northern
India), and a nation-wide dealership, sales, services
and spare parts network comprising over 2,000
touchpoints.The company employs over 22,000
people.Tata cars, buses and trucks are being
marketed in several countries in Europe, Africa, the
Middle East, South Asia, and South East Asia and in
Australia.Tata Motors has research centres in
India, the UK, and in its subsidiary and associate
companies in South Korea and Spain.
In the financial year 2005-06, it earned net revenue
of USD 4.65 billion, compared to USD 3.98 billion
in 2004-05, a growth of 16.8 per cent. For 2005-06,
the company’s exports rose to USD 496 million, as
compared to USD 332 million in 2004-05,
representing an increase of 49 per cent.
Tata Motors links with Europe
Tata Motors’ is present in Europe in various
dimensions.The company, on its own, markets its
products in select European countries. It has
associate and subsidiary companies, operating in
Europe. It is leveraging Europe’s experienced talent
base in automobile research and development.
In 2005,Tata Motors also entered into a
Memorandum of Understanding with Fiat, the
first outputs of which have been distribution
of Fiat-branded cars in India by Tata Motors, and
a proposal to set up a joint venture in India to
manufacture passenger cars, engines and
transmissions for the Indian and overseas markets.
Tata Motors in European Markets
Tata Motors began exports of its vehicles to
Europe in 1992 with the Tata Telcoline 1- tonne
pick-up truck.
At present,Tata Motors exports the Tata Safari
Sports Utility Vehicle, the Tata pick-up and the Tata
Indica range of passenger cars to Italy, Spain,Turkey,
Portugal and Malta through its established
distributors in these markets.The response has
been encouraging. For example, in Italy,Tata Motors
is already the 4th largest player in pick-ups, while
in Turkey it is the third largest player.
Today, around 50,000 Tata vehicles are already on
European roads and bear testimony to Tata Motors'
capabilities to address stringent country norms and
sophisticated consumer needs in highly competitive
markets.
This European presence of Tata Motors enables
the company to remain well ahead of Indian
111
regulations with regard to exhaust, emission and
safety norms.
Tata Motors’ linkages in Europe
through Associate Companies
In March 2005,Tata Motors took a 21% stake in
Hispano Carrocera, one of the largest bus and
coach bodybuilders of Europe with manufacturing
facilities at Zaragoza and Casablanca (Morocco).
The company has the option to acquire the
remaining equity too.
This partnership provides both companies with the
opportunity to use their complementary strengths
to create high-class transport solutions for
intra-city and intercity mass transportation in
countries around the world. For example, soon
after this partnership, Hispano Maghreb, the fully
owned subsidiary of Hispano Carrocera, bagged
its largest-ever single contract to supply 800 urban
buses to Casablanca’s urban transport operator,
M’Dina Bus.This large fleet renewal is part of
Morocco’s largest project to modernise public
transportation.
Hispano Carrocera, Tata Motors, and the
company’s 100% subsidiary, Tata Daewoo
Commercial Vehicle Company Ltd. (Tata Motors
acquired it in 2004) are now collaborating in
developing commercial vehicle platforms which
can be used in several countries.
Tata Motors’ linkages in Europe
through Subsidiary Companies
112
Similarly, 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.
INCAT operates in the EU through its subsidiaries
all over Europe. Its main subsidiaries include
INCAT GmbH, Germany, INCAT Limited, UK,
and INCAT SAS, France.The company has other
subsidiaries in the Netherlands and Ireland and
a global workforce of 3000.
In January 2006, INCAT acquired CEDIS
Mechanical GmbH, Germany, a provider of
automotive engineering and design services.
This acquisition has provided the company with
proven competency and CATIA support, and
provided it with the means to expand its presence
in Germany in particular and in Europe as a whole.
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.
Factors of Success
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.
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.This keen sense of
the customer pulse led the company to launch in
2005, the Tata Ace, India’s first sub one tonne
mini-truck, as a last-mile distribution vehicle once
again creating a new market. Going forward,Tata
Motors has anticipated that non-car owning
families, at the bottom of the pyramid, will look for
an extremely affordable vehicle, providing
exceptional value and this small car will be
launched in 2008.
the company, this talent base is now getting
enriched with the necessary competencies to
respond to meet world-class standards of
quality and cost.
Future Plans
Tata Motors’ goal is to enhance its leadership in
India, and establish meaningful presence in select
international markets.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.
www.tata.co.uk
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 manage the
process of product creation, drawing upon already
available R&D and skills from different sources.
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
113