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Transcript of automobile industry
PRESENTATION ON AUTOMOBILE INDUSTRY
RAJ GUPTAMANGESH BHOSLEKALPESH BHASAGRESANDEEP YADAVNARESH SOLANKI
UNDER THE GUIDANCE OF PROF.SEEMA LADHA
The automotive industry began in the 1890s with hundreds of manufacturers that pioneered the horseless carriage
After World War II, the U.S. produced about 75 percent of world's auto production. In 1980, the U.S. was overtaken by Japan and became world's leader again in 1994.
In 2006, Japan narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8 million units
With 19.3 million units manufactured in 2012, China almost doubled the U.S. production, with 10.3 million units, while Japan was in third place with 9.9 million units
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers.
PoliticalIn 2002, the Indian government formulated an auto policy that aimed at promoting integrated, phased, enduring and self-sustained growth of theIndian automotive industry
Allows automatic approval for foreign equity investment up to 100% in theautomotive sector and does not lay down any minimum investment criteria.
Ensure a balanced transition to open trade at minimal risk to the Indianeconomy and local industry.Promoting multi-model transportation and the implementation of mass rapid transport system
EconomicEconomic pressures on the industry are causing automobile companies toreorganize the traditional sales process.
Weighted tax deduction of up to 150% for in-house research and R & Dactivities.
Govt. has granted concessions, such as reduced interest rates for exportfinancing.Several Indian firms have partnered with global players.While some haveformed joint ventures with equity participation, other also has entered intotechnology tie-ups.
Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile sector have a large customer base to serve
Indian customers are highly discerning, educated and well informed. Theyare price sensitive and put a lot of emphasis on value for money.
Preference for fuel efficient cars with low running costs
The Government of India is promoting National Automotive Testing andR&D Infrastructure Project (NATRIP)to support the growth of the autoindustry in India
Technological solutions helps in integrating the supply chain, hence reducelosses and increase profitability
Major global players like audi, BMW Hyundai etc have setup their manufacturing units in India.
Physical infrastructure such as roads and bridges affect the use of automobiles. If there is good availability of roads or the roads are smooththen it will affect the use of automobiles
Physical conditions like environmental situation affect the use of automobiles. If the environment is pleasant then it will lead to more use of vehicles.
Legal provision relating to environmental population by automobiles.
Legal provisions relating to safety measures
Ensure a balanced transition to open trade at minimal risk to the Indianeconomy and local industry
ISSUES AND CHALLENGESCompetitive pressuresThe rapid development of the low-cost labour economies in Eastern Europe, South East Asia, China and India is putting enormous pressures on labour intensive suppliers
SustainabilityIncreasingly, environmental considerations and public opinion are driving manufacturers' decisions around the mix of materials used in manufacturing, the types of engine and the end of vehicle life (ELV)
Supply chain management and cost reductionIn the age of global trading, supply chains never stand still.Therefore, supply chain architectures must be kept under constant review in order for then to be both logistically efficient and cost effective.
Emerging marketsRapid economic developments in emerging markets, notably China and India, are providing significant opportunities to increase sales and reduce costs
Tata Motors Limited (formerly TELCO, short for "Tata Engineering and Locomotive Company") is an Indian multinational automotive manufacturing company
Its products include passenger cars, trucks, vans, coaches, buses and military vehicles. It is the world's eighteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume.
Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations.
Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom. It has research and development centres in Pune, Jamshedpur, Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom
Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969
MISSIONTo be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally.
VISIONMost admired by our customers, employees, business partners and shareholders for the experience and value they enjoy from being with us.
• Tata Power Delhi Distribution by winning hearts and changing mindsets, and through technology and commercial savvy
• transformed a loss-making government entity into an efficient and profitable operation that has become a benchmark for public-private partnerships
R&D STRATEGY• Tata Group companies cumulatively spend Rs.12,500 crore on research &
development.• knowledge-based engineering application software from Tata Technologies
that speeds up results.• An engine ‘start-stop’ technology developed by Jaguar Land Rover that stops
an engine when the vehicle isn't moving, thus saving on fuel;• High performance rail steel that saved £150,000 over five years was
developed by Tata Steel Europe• High standard steel for safer and fuel efficient vehicles from Tata Steel
Europe • The world's cheapest car, Nano, an innovation from Group company Tata
Motors, launched in April 2009, has 37 patents,• Swach, the cheapest water filter from Tata Chemicals, has 14. • Tata Steel, which acquired British company Corus in 2007, meanwhile, files
around 50 patents each year.
• P2 or pollution prevention is a proactive strategy that uses fewer or smarter resources to begin requiring lesser cleanup at the final disposal.
• It is done by reducing or eliminating waste at the source by modifying production processes, promoting the use of non-toxic or less-toxic substances, implementing conservation techniques, and re-using materials rather than putting them into the waste stream.
• It assumes no waste will occur. It is an effective ‘getting more from less’ strategy.
• Reducing packaging material by either using sustainable packaging (replacing wood with metal) or reusing existing packaging (recycling wood).
• The company recycles close to 69 percent of the wood packaging thus eliminating use of fresh wood.
• The company aims to source 60% of its components from the park thereby increasing its resource efficiency and reducing its emissions due to reduction in logistics and transportation.
R2 STRATEGIES• This is a ‘getting more from the same’ strategy where
otherwise wasted resources are recovered by way of proper disposal – recycling or reconditioning.
• Increasing life of aggregates – ‘Recon’ business• In 2010-11 a total of 13,788 engines and 8,690 other
parts were reconditioned.• Other resource conservation techniques like reusing
engine oil for multiple testing cycles has been employed. • A 200 litre engine oil barrel can now be used to test 170
engines instead of 85.
• Reusing paint sludge and thinner
• Last year, approximately 390 tonnes of hazardous paint sludge was converted to a low quality paint suitable for floor painting.
• Tata Motors has also developed a process to convert the incinerator ash to pavement bricks that can be used in walkways within the plant.
• This model has been very successful and has significantly reduced the amount of hazardous incinerated ash sent to landfills.
• CONSOLIDATED net profits of Rs 1988.73crores for the quarter ended June30, 2010 on
the back of strong sales in the domestic market and a good show of J&LR.
• A strong faith of Indian people in Tata brands.
• A group global sale grows by 36% at 90,646 vehicles in July 2010.
• Market leader in commercial vehicles.
• largest car seller in passenger car vehicles.
•largest truck manufacturer.
•largest bus manufacturer.
• Cases of fire in Nano Cars.
• Image of Taxi for Tata Indica.
• Less no of service station as comparison to Maruti Suzuki.
OPPORTUNITIES:• Fastest growing market for small cars in India.
• Positive business outlook for both commercials and passengers vehicles in the Indian
market would give a boost to Tata Motors ‘Indian operation.
• Crisil raised its long term debt rating to AA-.• Reflecting an improvement in the ability of the Auto Major to repay loa
• Entries of foreign players in Indian automobile sector.
• Stiff competition from Maruti Suzuki and Hyundai.
Value Chain & Value System of TATA motors
Operations Marketing ServiceOutbound
Suppliers , Contractors
SAP , VCM
SAP , CRM - DMS
Transporters, Convoy Drivers Association
Dealer Network, Marketing Research Firms, Vehicle
Regional Warehouses, Dealer Workshops, Distributors, TASS
Inbound Logistics Long term contract with service provider’s – transporters and agents. Personnel at regional offices for over seeing the smooth transit of goods. Transparency and monitoring through deployment of IT – all transactions through SAP. DTL (daily transport logistics) supplies for critical high value items. Efficient storage facilities – easy storage and retrieval.
Operations Capital Equipment Manufacturing division – tooling development capabilities
of global standard.
Apprentice Trainee Course – ensuring stable source of skilled manpower.
Kaizen & TPM(total productive management) team – continuous drive to
Automated manufacturing processes.
Distributed manufacturing – Assembly units at South Africa, Thailand,
Bangladesh, Brazil etc.
Maintenance – technical competence.
Capacity Utilization – Mercedes Benz cars make use of Tata Motors paint shop
Outbound Logistics Stockyards, all across the country.
Long term contracts with transporter’s – higher volume of
business to transporters ensures competitive price.
Regional Sales Office and Vehicle Dispatch Section linked through
Efficient security system for prevention of any kind of pilferage.
Marketing & Sales Structured approach to understanding the requirements of individual customers conducted at regular intervals. Clear identification of product requirements, leading to development of innovative products – Tata 207 DI, Tata Ace Pan India presence and global footprint. Independent teams for addressing the requirements of institutional customers – Defense, State Transport Units Helping to augment the scarce resources – Fiat selling vehicles through Tata dealerships, in return Tata has access to Fiat’s technology and unutilized capacity. Quick assessment of the changing market dynamics and consumer preferences – Tata 407 LCV Large network of dealers – use of technology (CRM-DMS).
Service Easy availability of spare parts.
Efficient collection of data from field and communication to the
Pan India presence, as well as global presence.
Large network of workshops – Dealer workshops and TASS.
Training facilities – for dealer end and TASS personnel.
Threat of new entrants is influenced by
Overall Rating: LOWFactors Tata NANO Advantages Threat of new
entrantsEntry Deterring Price Yes, The Price is Rs
Retaliation by TATA in case of competition
Yes, because of large resources.
High Entry Costs Yes,TATA spent Rs 17oo* crore as initial investment + 4 years on research
Medium because of reverse engineering process and availability of resources.
Experience HIGH because of its parent experience(TATA Motor)
Other Cost advantages Yes** Low
Bargaining Power of Buyers is influenced by
Overall Rating: LOWFactors Tata NANO Advantages Buyer Power
Differentiation Price , Durability , Brand equity
Concentration Large number of consumers
Profitability Easy Availability of loans
Quality •Car has passed the full frontal crash and side impact crash•Passed Govt. Test of emission,noise and vibration
Bargaining Power of Suppliers is influenced by
Factors Supplier Power
Concentration High Low
Switching Costs Low Low
Organization/cartel No Low
Diversification of supplier products
Overall Rating: LOW
Threat of Substitute product is influenced by
Factors Threat of substitute
Availability Same category -NO low
Other Category substitutes
Yes, but, minimal extent e,g. High end bikes and other car models like Reva,Alto
Time Lag in availability of same category product
Quality of substitute Quality influences the customer.
Low in short term
Overall Rating Low
Rivalry among Existing competitors is influenced by
Factors Rivalry among existing competitors
Brand Image Brand equity influences the customer
Low among same category
No.of Competitos Negligible in short term
Size of payoff Depends on Volume Low
Switching costs Medium as customers can switch to other products
Origin of competitors
Overall Rating Mediu
BCG MATRIX OF TATA MOTORS
ARTICLES OF TATA MOTORS
Tata Motors hit record high as Jaguar Land Rover reports good sales in AugustSep 11, 2013, 03.59AM IST MUMBAI: India's largest truck and bus maker Tata Motors hit its record high beating analysts price targets fuelled by its British subsidiary Jaguar Rand Rover's (JLR) reported record sales in August, its plan to sell vehicles in Indonesia and its marketing alliance with Malaysian conglomerate DRB-HICOM for distribution and assembly of its commercial vehicles in that country.
Investors should start buying Tata Motors on decline, say analystsSep 11, 2013, 12.43PM IST
MUMBAI: Tata Motors surprised the street following a sharp rally of over 17 per cent in the month of September. The major upside was seen yesterday as it rallied over 10 per cent after its subsidiary Jaguar Land Rover (JLR) reported strong sales for the month of August.According to analysts, while there may be more upside for the stock on hopes of better sales from JLR, it has run up sharply and investors should use correction to start accumulating.
JLR to invest £1.5 bn in new tech, create 1,700 UK jobs
Tata Motors -owned Jaguar Land Rover (JLR) has announced a major investment boost of £1.5 billion to introduce a technologically advanced aluminium vehicle architecture in a new range of models
The company will create as many as 1,700 new jobs IN England to meet the requirements of the enhanced product portfolio.
Sep 10, 2013, 10.38 AM IST
TATA MOTORS TO LAUNCH DIESEL NANO September 4, 2013
NEW DELHI: Tata Motors will launch a diesel-powered version of its ultra-cheap Nano by the end of March 2014, its managing director said, hoping to kick-start demand for the model after years of disappointing sales. Launched to great fanfare in 2009 as the world's cheapest car, the Nano has been dogged by poor sales, which slumped 27 percent in the company's financial year that ended on March 31. Asked when the diesel-powered Nano would go on sale, Karl Slym told...
Tata Motors launches the brand new-look high-tech showroom in Bangalore
Tata Motors' new format showroom brings luxury segment type customer experience The best-in-class showroom offers:Video walls highlight key car features Wi-Fi connected, luxurious customer lounge area Specially trained staff for customer careBranded accessories and lifestyle merchandisingCafé corner Tata Motors today opened its new look, stylish, tech-savvy, best-in-class showroom, for superior customer experience in Bangalore. The new showroom offers a contemporary-styled, single-point hub for 3- S (Sales, Service and Spare Parts) facility.
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