Globalization: III phase -early 2000 GLOBAL AUTOMOBILE CONSOLIDATION!!!!!

More than 50 Major Brands are Available in Global Automobile Industry and so nearly all are in India as well

Industry classified in Three phases 1) Protection I phase till mid80s. 2) Liberalization- II phase post 1990. 3) Globalization: III phase -early 2000.

Major Policy Initiatives for the Automotive Industry after 1991 Tata Motors - 2010 Market Performance

The effect of liberisation was evident from the number of foreign companies coming to India since 1991. 1945 -Tata Motors 1947- Mahindra & Mahindra Ltd. 1948 -Ashok Motors 1948- Standard Motors 1974 -Sipani Motors 1981 -Maruti Suzuki 1994 -Rover Company 1994 -Mercedes-Benz 1994 -General Motors India-Opel 1995 -Ford Motor Company 1995- Honda Siel Cars India 1995 -REVA Electric Car Company 1995 -Daewoo Motors 1996 -Hyundai Motor Company 1997 -Toyota Kirloskar Motors 1997 -Fiat Motors (Re-Entry) 1998 -San Motors 1998 -Mitsubishi Motors 2001 -koda Auto 2003 -General Motors India - Chevrolet 2005 -BMW 2007 -Audi 2009- Land Rover and Jaguar

Five Phases of TATA MOTORS Phase 1 Entry into passenger vehicle Phase 2 Launch of Indica Phase 3 Launch of Indica V2 Phase 4 New Launches Phase 5 Tatas Ambitious Project

Phase 1: TATA MOTORS After years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. After the launch of three more vehicles, Tata Estate (1992, a station wagon design based on the earlier 'Tata Mobile' (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first sports utility vehicle). Phase 2 Launch of Indica Entry into the compact Car segment with Launch of Indias first indigenously developed car TATA INDICA. It was launched in 1998. It was the first fully indigenous passenger car of India. Though the car was initially panned by auto-analysts, the car's excellent fuel economy, powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry Phase 3: Tata Indica V2. Failure of Indica and subsequent launch and success of Tata Indica V2. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favorite. Phase 4 : New Launches Tata Ace, India's first indigenously developed sub-one ton mini-truck was launched in May 2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had changed the dynamics of the light commercial vehicle (LCV) market in the country by creating a new market segment termed the small commercial vehicle (SCV) segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace.

GLOBAL OPERATIONS: The Tata Safari DiCOR is one of Tata's bestselling vehicles in India and also has been fairly successful in the Mediterranean and Eastern Europe.

Tata has tried to revamp all its models in order to satisfy the consumer

The purchase of Jaguar and Land Rover is expected to help give Tata Motors gain a foothold in the European an American markets.

Tata relies on its subsidiaries for sales outside India.

Tata Xenon is Tata's bestselling vehicle in Europe.

Phase 5 Tatas Ambitious Project

Acquisitions Tata Motors, the first Company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain. In 2004 Tata Motors acquired Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. In 2005, Tata Motors acquired 21% of Aragonese Hispano Carrocera giving it controlling rights of the company. Then in 2007, Tata Motors formed a joint venture with Marcopolo of Brazil and introduced low-floor buses in the Indian Market. The biggest acquisitions happened in 2008, when Tata Motors acquired British Jaguar Land Rover (JLR), which includes the Daimler and Lanchester brand

names. On October 16, 2009, the Company has acquired 79% shares in Tata Hispano Motors Carrocera S.A. by way of exercise of the existing call option, through mutual agreement with the other share-holder, Investalia S.A., Spain. Consequently, Tata Hispano Motors Carrocera S.A. has become a 100% subsidiary of the Company. In 2010, Tata Motors acquired 80% stake in Italy-based design and engineering company Trilix for a consideration of 1.85 million. The acquisition is in line with the companys objective to enhance its styling/design capabilities to global standards Tata Motors - 2010 Market Performance The FY 2009-10 witnessed the highest sale of Tata Motors vehicles registering at 642,686 units. In March 2010, Tata Motors' total sales were recorded at 75,151 against 54,452 units vended in March2009.Collective sales of Tata Motors commercial vehicles in the Indian market for 2010 are 373,615 units. The company registered a growth of 41% considering its previous year's sales while the collective sales of Tata Motors passenger vehicles for 2010 are 234,930 units and are estimated the highest ever for the firm. The firm's trade from exports for March 2010 was at 4,105 units against 1,799 units in the previous fiscal

2001- 2002 Crisis Ten years ago, after a decade of strong revenue and margin growth, Tata Motors plunged into an crisis when the demand for its trucks suddenly collapsed. The lost sales compounded by heavy investment for its entry into the passenger car business, the cost of complying with new emissions standards, and an increasing threat from overseas competitors caused Tata Motors to shock the markets with a loss of Rs. 500 crores for the fiscal year ending March 2001. During this period for the first time since 1956 Tata motors didn't declare a dividend. Average share price of TML dropped from Rs. 217 in 1999-2000 to Rs. 102 in 2001-02.Over the next two years, the company shaved around 8 billion rupees from its cost base and nursed itself back to corporate health. The company count not show positive figures for PAT in 2001-02and didn't declare a dividend in that year. Average share prices fell to Rs 90 in 2001-02Today Tata Motors ranks as the world's fifth-largest manufacturer of medium and heavy trucks. Even while keeping a tight grip on costs, Tata Motors moved to the offensive by refocusing its investments on less cyclical products, including light commercial vehicles, buses, and spare parts; making a successful entry into passenger cars; and responding to opportunities presented by favourable social and economic trends. 2008 - 2009 Crisis TMs original core business in the passenger car division (small cars in India) was mildly influenced by the crisis as TMs passenger car sales decreased by only 5%. The company was much more negatively affected by the decline in sales of its commercial vehicle division which represented not yet taking into account the JLR acquisition some 2/3 of its turnover. However, the financial crisis had a much more serious impact [in the last quarter of 2008 and the first quarters of 2009] because of the burden of two major strategic initiatives. The shift of the production site and postponement of the full Nano launch which was originally scheduled for launch in March 2008 by two years led to unexpected resource needs (new manufacturing site) and a shortfall of otherwise expected 2008-09 revenues. While this burden was not caused or much exacerbated by the crisis in the global car industry, the acquisition of JLR only few months before the onset of the crisis actually affected TM much more: the dramatic decrease in JLRs sales (JLR being fully exposed to European and US

markets) significantly increased the heavy losses of the new combined company in FY 2008/09; even more importantly, the refinancing of the short term bridging loan of $ 3 billion for the acquisition became much more complicated and costly in a situation of dried up capital markets. The refinancing difficulties and increasing financing cost contributed to a serious debt overload of TM which might have led to bankruptcy (and a take-over)if the TM would have been a stand-alone company and would not have been protected and supported by its affiliation to the Tata group and its well-connected chairman. While it is no surprise that the crisis caused (temporary) problems and challenges for TMs business it seems much more remarkable how little effect it had on the companys strategy. TM steered through the crisis without much change in its path-changing (Nano) as well as its path-breaking(JLR) strategy initiatives. The constancy of purpose as well as a continuous and consistent execution of strategic plans was maintained despite highly skeptical capital market markets which had temporarily withdrawn support from TM. The unwavering pursuit of a transformational strategy of TM in the face of the financial crisis can be ultimately explained only by the affiliation of the company to a very strong and supportive conglomerate with a particular mode of operation: TM is one of the few strategic companies of the Tata group; it is guided personally by the Chairman of the Tata Group who has committed the group to a course of globalization and innovation while relying on Indias comparative location advantages; it allows the company to sustain long periods of low profitability and significant investments in resource and capability accumulation; TM profits from the value and attraction of the TATA brand in its dealings with suppliers, customers and the Government, as well as in attracting talented staff; it also profits from various group support services like the groups excellence model, its acquisition and finance expertise and its training efforts. This inherent affiliation strength enabled TM to even use the crisis as an accelerator for the implementation of its strategies by legitimizing a more swift course towards cost cutting in the JLR operations (announced closure of one plant and shift of significant supply sources to India). It may also have facilitated the farreaching changes in TMs top management as experienced top managers were available due to the crisis and a change of top management seemed to be justified in view of TMs difficulties and temporary low performance. It can therefore be concluded that the financial crisis has not much affected TMs transformational change or even reinforced and accelerated it.

REFERENCES 1.http://business.mapsofindia.com/automobile/car-manufacturers/tatamotors.html 2.http://imaginmor.com/automobileindustryindia.html 3. http://world.honda.com/news/2010/c100309Motorcycle-Production-PlantIndia