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TATA ACEPRESENTED BY GROUP 7
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OVERVIEW OF INDIAN COMMERCIALVEHICHLES
Three wheeler Largest three wheeler market
Compound annual growth 14% Usage
Cargo (44% of sales)
Passenger (56% of sales)
Price range Rs 1,00,000 to 2,00,000
Weight handling - 0.5 to 1 Ton
Mileage 18 to 30 Km/L ,
Top Speed 50 Km/Hr
51%
26%
8%
7%8%
MARKET SHARE - 3 WHEELER
BAJAJ PIAGGIO FORCE MOTORS M&M OTHERS
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LCVs
Compound annual growth 22%
Usage
Cargo (83% of sales)
Passenger (17% of sales)
Price range started from Rs 3,50,000
Weight handling 1.2 to 7.5 Ton
Mileage 9 to 10 Km/L ,
Top Speed 100 Km/Hr
51%
33%
5%5%6%
MARKET SHARE - 4 WHEELER
TATA MOTORS M&M SWARAJ MAZDA
EICHER MOTORS OTHERS
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Tata Ace
Light commercial goods carrier
A smaller 4 wheeled vehicle
Launched by Tata Motors in May 2005
Entirely new product category
Pay load capacity of 0.75 ton
Priced at Rs 2,25,000
Annual Target 30,000 - 25 % product availability across country
Niche vehicle satisfying unique demands of Indian Transportation with a
comparatively low price than auto rickshaws
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Need for change
Truck penetration to increase due to :
Growth in road infrastructure
Highways connecting major cities
Secondary road networks within state
All weather tertiary road network connecting rural towns
72% India's population
Threat to core business due to absence of
> 45 ton vehicle
< 2 ton vehicle
Leading to the idea for Ace Cheap , nasty, rugged vehicle for India
Market research to gain insights of potential customers
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Market Research - findings
No additional demand in three wheeler segment
Need for a four wheeler with:
price, fuel efficiency and maneuverability of a three wheeler
Safety, durability, additional payload and comfort of a wheeled truck
Four wheelers viewed as higher status vehicle
Price range of Rs 1,00,000 to 2,00,000
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Segmentation
Functional Market segmentation based on the functional needs
Manual rickshaws and Carts 175 Kg 5km
Free segment Tata ace (750 kg 1500 kg over a distance of 100 to 200 km)
Pick up trucks 2500 kg 300 Km
Target Market : 45 % potential 3 wheeler buyer
15 % potential 4 wheeler buyer
40 % first time buyer
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Segmentation- cont.
Customer market segmentation
Divided into 4 categories
Performance sensitive 7 %
Performance and Brand Image
Balanced Perspective 25 %
Convenience, ROI, $ wheeler above budget ROI sensitive 55 %
ROI, Lowest cost per mile
Acquisition price constrained 13 %
Lacking financial means
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Challenges faced
Budget
Overloading Capability
Engine Selection
Safety, comfort and Aesthetic consideration
Sourcing and Production
Marketing
Distribution
Consumer Finance
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Distribution of Ace
Phased introduction approach
Dealership format 1S
Only sales (no service and spares)
400 sq. ft. showroom
1-2 vehicles
Each dealer to set up 8 to 20 - 1S centers Rented sites with 1- 2 years contract Low risk and cost for dealers
Suvidham :
trained rural mechanics on maintenance procedures on ace for free
Free tool kits to mechanics
Mobile work shops
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How does one identify the needs of
developing ones dealers ?
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Alternate method available for developing the
dealer
Define criteria for appointment of channel partners
Document channel objectives for sales people and channel partners
Define the profile of the customers to be serviced
List down all the customer service outputs in detail
List the task in sequence which will drive the service outputs
Get benchmark of good practices from knowledge of competition
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Define channel structure and channel partners who constitute it
Allocate the task among the channel partners
Work out cost of delivering CS outputs and prepare a budget
Advice the channel partners on the task and their benefits
Define channel partner performance appraisal system and share it
List down reports records and frequency from each channel partner
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what factors lead to the success or
failures in dealer development ?
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Break Even Unit Volume = Fixed costs
Unit Contribution
Unit contribution = Selling price Variable costs
Target Volume= Fixed Cost + Profit
Unit Contribution
Pay back period= Initial Investment
Annual Profit
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The way forward
Build a new manufacturing plant in the north.
Plan to introduce the TATA Nano
Meeting production requirements of Tata Nano
Common parts and facility can be used to manufacture both Nano and Ace
Both products are low cost products on similar platform
Help in bring down cost. Export opportunities
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