Tata Motors has pursued a strategy of joint ventures to expand its operations internationally. This includes partnerships to manufacture buses, commercial vehicles, and premium cars in countries like Spain, Thailand, Brazil, and the UK. At home, Tata has a wide domestic presence and was the first company to develop an indigenous mini-truck. However, its passenger car portfolio remains limited compared to competitors and it lacks a presence in major markets like the US and Europe. While labor costs provide an advantage, Tata also faces challenges like overstaffing and a lengthy decision-making hierarchy.
Tata Motors has pursued a strategy of joint ventures to expand its operations internationally. This includes partnerships to manufacture buses, commercial vehicles, and premium cars in countries like Spain, Thailand, Brazil, and the UK. At home, Tata has a wide domestic presence and was the first company to develop an indigenous mini-truck. However, its passenger car portfolio remains limited compared to competitors and it lacks a presence in major markets like the US and Europe. While labor costs provide an advantage, Tata also faces challenges like overstaffing and a lengthy decision-making hierarchy.
Tata Motors has pursued a strategy of joint ventures to expand its operations internationally. This includes partnerships to manufacture buses, commercial vehicles, and premium cars in countries like Spain, Thailand, Brazil, and the UK. At home, Tata has a wide domestic presence and was the first company to develop an indigenous mini-truck. However, its passenger car portfolio remains limited compared to competitors and it lacks a presence in major markets like the US and Europe. While labor costs provide an advantage, Tata also faces challenges like overstaffing and a lengthy decision-making hierarchy.
Tata Motors has pursued a strategy of joint ventures to expand its operations internationally. This includes partnerships to manufacture buses, commercial vehicles, and premium cars in countries like Spain, Thailand, Brazil, and the UK. At home, Tata has a wide domestic presence and was the first company to develop an indigenous mini-truck. However, its passenger car portfolio remains limited compared to competitors and it lacks a presence in major markets like the US and Europe. While labor costs provide an advantage, Tata also faces challenges like overstaffing and a lengthy decision-making hierarchy.
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STRENGTHS
Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures (JV):
21% stake in Hispano Carrocera, a Spanish bus manufacturing company and
introducing its high-end inter-city buses in the country. Acquisition of Jaguar and Land Rover of UK, help complete its portfolio in the premium segment A 70% JV with Thailand’s Thonburi (auto assembler) which will set up a plant to manufacture pick-ups and will sell them in Thailand. The 25MT GVW Tata Novus launched from Daewoo’s platform (TDCV Tata Daewoo Commercial Vehicle Company). 51:49 JV with Brazilian based Marcopolo (bus building). This JV is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems. In 1993, it started manufacture of high horsepower and emission friendly diesel engines in an effort to reduce the pollution in the existing Tata engines and to produce more environmentally friendly engines. In 2000, it launched CNG buses and filled the product line gap through the introduction of the 1109 vehicle which is an intermediate commercial vehicle and is useful for medium tonnage loads. Its Ex- series vehicles have high tonnage capacity and high pick up and the LCV (207 DI) with direct ignition technology caters to the customers' requiring one and same vehicle for commercial as well as personal use. Tata Motors has a high domestic exposure of ~94% in the MHCV (Medium & Heavy Commercial Vehicles) segment and ~84% in the LCV segment. The latest hit of Tata Motors is its mini truck Ace which is India's first indigenously developed sub-one ton mini-truck. Ace has rapidly emerged as the first choice for transporters and single truck owners for city and rural transport.
The only major engine manufacturer in the world to express any formal interest in the turbulence-boosting cylinder head grooves There is definite cost advantage as labor cost is 8-9 per cent of sales as against 30-35 per cent of sales in developed economies. Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. Also, India is an excellent source for IT based engineering solution for products & process Integration.
WEAKNESSES
Tata Motors' range of passenger cars is still not comprehensive by industry
standards. It has a limited product portfolio which has given its key competitors (Hyundai motors, Maruti Suzuki) an extra edge. Even after being in the passenger cars market for quite some time, somewhere in the minds of consumers Tata motors is still synonymous with heavy and commercial vehicle makers and not passenger car makers. Also because of this consumers may think the passenger cars can lack aesthetics and are more built for robustness. According to auto experts, low cost is a stronger motive at Tata Motors that sometimes makes quality take a backseat. The company is overstaffed and hence human resource utilization is sub optimal. Also decision making gets a hard hit due to extensive hierarchy prevalent at Tata Motors. They do not have a presence in high volume markets like America and most parts of Europe. Not very high car sales volume which hampers their future plans like increasing their production and expansion. Marketing Strategy analysis for Tata motors
Strengths (Internal Environment)
In few years of operation, Tata Motors has secured a challenger position in the car segment being second largest car manufacturer of India. Product line in all sizes of cars. Presence in diesel segment of cars. Option available to customer to upgrade their cars being with the company. Good Promotional strategy Strong Brand Value. Availability of raw material
Weakness (Internal Environment)
Less number of dealers and service stations
Not able to transfer its car specialty as Maruti is doing rather more relied on its brand name. Though endorsing celebrities was successful initially but at the same time company needs to transfer the thoughts by telling better qualities of the car to its customer as MUL is doing No celebrity endorsing the brand Opportunity (External Environment)
Tata Motors may also enter into the diesel segment for Nano. The company lauched its mid size cars in diesel segment with CRDI engines and it was very successful. Tata Motors has a faster and better go-to-market strategy than its competitor Maruti. R&D on fuel substitution has become must to sustain longer in future. Economic growth of the country is sound and promising in future. Liberal policies of GOI. Big Market: Domestic and Abroad
Threat (External Environment)
o Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could give a big impact on sales of other products of Tata Motors. It could also lead to price wars with its competitors o Maruti is very fast in reaction to developments made by Tata Motors to retain its leadership position. o China may give a good competition as they are also planning to enter into car segment.
