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 peoples 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 Modys 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 Worlds mid size small car tag, as a great achievement for Indian industry. The Worlds 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.

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. 2

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.

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 worlds 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.

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 Japans 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-

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 6

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 twowheeler 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

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. 8

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 companys 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 9

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. 10

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)(Companys 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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