Success During a Downturn
The Road to Tata Motors’ Many Achievements
By Tina Safi – Feb 1, 2011
Interviewed by Mike Nur (See Interview Below)
The automotive industry is one of the biggest businesses in the world today, designing, developing, manufacturing, marketing and selling motor vehicles. While in the past, North America and Japan have been strongholds in this industry, over the last few years, markets in China, Russia, Brazil and India have seen the most growth. In comparison to this rapid expansion, then, the markets in the United States and Japan have seemed stagnant.
The numbers say it all: About 250 million vehicles are driven in the United States, while in the rest of the world, there are around 806 million cars. These figures stand to change, however, especially in China and India. While critics blast transportation systems based solely around cars, calling them over-consuming, unsustainable, unhealthy and in general, declining, the fact remains that the automotive industry is a power player in the business market.
Modern problems plague this industry, like many others. In 2008, drastically increasing oil prices greatly affected the industry, as did the fact that consumers are revaluating how exactly they spend their money. As people rethink whether or not they need a third private, family car, the industry is forced to cut jobs, as evidenced by the fact that around half of the U.S.'s vehicle plants are expected to permanently close in the next few years.
However, looking at this disheartening information in combination with the growth in China and India proves a completely new point: On the world stage, as far as the automotive industry is concerned, two new leaders have surfaced: China and India.
One Indian manufacturer, Tata Motors, has a success story as large as its many acquisitions. As India’s largest automobile company, Tata Motors Limited had consolidated revenues of around 16 Billion USD in 2008/2009. The leader in commercial vehicles and in the top three for passenger vehicle production, the company is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer.
JRD Tata established Tata Motors in 1945 with a uniting slogan: “Be the best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." The first Tata vehicle paved way on Indian roads in 1954 and today, the company has established a presence in the country that far surpasses only city centers. Manufacturing bases are spread across Jamshedpur, Pune , Lucknow, Pantnagar and Dharwad.
Furthering their success, in 2005, Tata Motors entered into an alliance with Fiat Group Automobiles. More bases are being established and currently, Tata Motors distributes and markets Fiats in India. Business-wise, this smart move put Tata Motors even more distinctly on the map, although as the first company in India's engineering sector to be listed in the New York Stock Exchange in 2004, Tata Motors had already emerged as an international presence.
With acquired operations in England, South Korea, Thailand and Spain, Tata Motors runs JaguarLand Rover, two extremely British symbols. From South Korea, Tata Motors acquired the Daewoo Commercial Vehicles Company and in 2009, Tata Motors acquired all of Hispano Carrocera, a Spanish bus and coach manufacturer. So, as far as international presence goes, Tata Motors is continuously increasing and improving.
The biggest accomplishment of Tata Motors has been, of course, with its cars. The Light Commercial Vehicle was India’s first Sports Utility Vehicle (SUV) and Tata Indica, released in 1998, was the country’s first fully indigenous passenger car. In 2005, Tata Ace became India’s first indigenously developed mini-truck. The greatest success and notoriety, however, came with the unveiling of the Tata Nano, nicknamed the “People’s Car,” in 2008. Indians and the rest of the world had been anticipating this car since its announcement, which gave hundreds of thousands of people the belief that a car was within their reach.
The family-targeted car can comfortably fit four people and safety performance exceeds requirements. It has a low pollution level, a minimal weight, high fuel efficiency and most importantly, the Tata Nano is affordable, costing around $2,000 USD.
Tata Motors has established itself as a clear leader in the automotive field. While the rest of the world, business and otherwise, continues to feel the effects of the recession and economic downturn, the company is doing its best to carve out a new niche in the industry. Affordable, sustainable cars are the future, and Tata Motors is clearly the paver of the road that will lead to it.
As is the case with many other large, international companies, the public is often interested in what goes on behind the scenes. Here, Why Not? Magazine offers an exclusive look into the workings of Tata Motors, through the words of a senior official spokesperson at TATA Motors headquarters in India:
(INTERVIEW)
What kind of business philosophy does TATA Motors follow in their operations, which have ensured its success since its establishment in 1945?
The foundation of the company’s growth over the last 50 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D.
We have all heard of TATA’s recent iconic car, NANO. What, in your opinion, makes NANO so special? And how does it fit in today’s overall environment?
Across the world, personal mobility is a fundamental aspiration. It is also so in India . The Tata Nano makes a passenger car more affordable, thereby making it possible for families to enjoy the safety and comfort of a four-wheeler rather than having to travel, often under dangerous circumstances, on two-wheelers.
With a fuel efficiency of 23.6 km per liter (the highest for a petrol car in India), as certified by ARAI, and CO2 emission of 101 gm/km (the lowest for any car in India), the Nano provides families who would otherwise have bought a car with lesser fuel efficiency and higher CO2 emission, a car that would be beneficial for the country's fuel consumption and environment protection.
2009 was a difficult year for the automotive industry around the world. To what extent has it impacted TATA Motors, and what are some of the measures that TATA undertook in such a challenging situation?
Last year , every auto company had to do a lot of introspection in terms of costs & margins. Tata Motors, like other companies, also had to do its share of introspection and has undertaken various cost reduction measures.
What are your general expectations of the automotive industry in 2010, financially?
We do not provide estimates.
TATA Motors has always been one of the pioneers in innovative technologies and designs; are we going to see more of this in the coming three to five years? And under what big headings (will they be in terms of fuel efficiency, environment, or alternative fuels, etc.)
Tata Motors is focused on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation.
In your opinion, have customer needs for passenger cars changed compared to what they were five years ago? And in what sense?
In the light of the developments during the global downturn from 2008 through 2009, it is our belief that customer preference has shifted towards small, fuel-efficient and environment-friendly vehicles.
We know that TATA Motors has global operations in many parts of the world. Do you have plans to enter more markets in the future, such as the US, for small-sized passenger cars? Potentially, what advantages over American competitors can TATA Motors offer to the American people?
The Jaguar Land Rover business of Tata Motors is already marketing the full range of Jaguar & Land Rover cars in the US. Tata Motors is also developing a Nano variant for the US, the time frame for which is three years.
The Middle East region is known to be one of your primary markets. Will we see a heavier presence in that region?
The Middle East is a focus market for Tata Motors.
What in your opinion are some inventions that may revolutionize the auto industry in 15-20 years? (Auto-pilot passenger cars on the roads, “flying cars,” or solar cars ,etc)
We believe that the future of the auto mobile industry will be influenced by fuel- efficiency and environmental friendliness.
The Road to Tata Motors’ Many Achievements
By Tina Safi – Feb 1, 2011
Interviewed by Mike Nur (See Interview Below)
The automotive industry is one of the biggest businesses in the world today, designing, developing, manufacturing, marketing and selling motor vehicles. While in the past, North America and Japan have been strongholds in this industry, over the last few years, markets in China, Russia, Brazil and India have seen the most growth. In comparison to this rapid expansion, then, the markets in the United States and Japan have seemed stagnant.
The numbers say it all: About 250 million vehicles are driven in the United States, while in the rest of the world, there are around 806 million cars. These figures stand to change, however, especially in China and India. While critics blast transportation systems based solely around cars, calling them over-consuming, unsustainable, unhealthy and in general, declining, the fact remains that the automotive industry is a power player in the business market.
Modern problems plague this industry, like many others. In 2008, drastically increasing oil prices greatly affected the industry, as did the fact that consumers are revaluating how exactly they spend their money. As people rethink whether or not they need a third private, family car, the industry is forced to cut jobs, as evidenced by the fact that around half of the U.S.'s vehicle plants are expected to permanently close in the next few years.
However, looking at this disheartening information in combination with the growth in China and India proves a completely new point: On the world stage, as far as the automotive industry is concerned, two new leaders have surfaced: China and India.
One Indian manufacturer, Tata Motors, has a success story as large as its many acquisitions. As India’s largest automobile company, Tata Motors Limited had consolidated revenues of around 16 Billion USD in 2008/2009. The leader in commercial vehicles and in the top three for passenger vehicle production, the company is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer.
JRD Tata established Tata Motors in 1945 with a uniting slogan: “Be the best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." The first Tata vehicle paved way on Indian roads in 1954 and today, the company has established a presence in the country that far surpasses only city centers. Manufacturing bases are spread across Jamshedpur, Pune , Lucknow, Pantnagar and Dharwad.
Furthering their success, in 2005, Tata Motors entered into an alliance with Fiat Group Automobiles. More bases are being established and currently, Tata Motors distributes and markets Fiats in India. Business-wise, this smart move put Tata Motors even more distinctly on the map, although as the first company in India's engineering sector to be listed in the New York Stock Exchange in 2004, Tata Motors had already emerged as an international presence.
With acquired operations in England, South Korea, Thailand and Spain, Tata Motors runs JaguarLand Rover, two extremely British symbols. From South Korea, Tata Motors acquired the Daewoo Commercial Vehicles Company and in 2009, Tata Motors acquired all of Hispano Carrocera, a Spanish bus and coach manufacturer. So, as far as international presence goes, Tata Motors is continuously increasing and improving.
The biggest accomplishment of Tata Motors has been, of course, with its cars. The Light Commercial Vehicle was India’s first Sports Utility Vehicle (SUV) and Tata Indica, released in 1998, was the country’s first fully indigenous passenger car. In 2005, Tata Ace became India’s first indigenously developed mini-truck. The greatest success and notoriety, however, came with the unveiling of the Tata Nano, nicknamed the “People’s Car,” in 2008. Indians and the rest of the world had been anticipating this car since its announcement, which gave hundreds of thousands of people the belief that a car was within their reach.
The family-targeted car can comfortably fit four people and safety performance exceeds requirements. It has a low pollution level, a minimal weight, high fuel efficiency and most importantly, the Tata Nano is affordable, costing around $2,000 USD.
Tata Motors has established itself as a clear leader in the automotive field. While the rest of the world, business and otherwise, continues to feel the effects of the recession and economic downturn, the company is doing its best to carve out a new niche in the industry. Affordable, sustainable cars are the future, and Tata Motors is clearly the paver of the road that will lead to it.
As is the case with many other large, international companies, the public is often interested in what goes on behind the scenes. Here, Why Not? Magazine offers an exclusive look into the workings of Tata Motors, through the words of a senior official spokesperson at TATA Motors headquarters in India:
(INTERVIEW)
What kind of business philosophy does TATA Motors follow in their operations, which have ensured its success since its establishment in 1945?
The foundation of the company’s growth over the last 50 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D.
We have all heard of TATA’s recent iconic car, NANO. What, in your opinion, makes NANO so special? And how does it fit in today’s overall environment?
Across the world, personal mobility is a fundamental aspiration. It is also so in India . The Tata Nano makes a passenger car more affordable, thereby making it possible for families to enjoy the safety and comfort of a four-wheeler rather than having to travel, often under dangerous circumstances, on two-wheelers.
With a fuel efficiency of 23.6 km per liter (the highest for a petrol car in India), as certified by ARAI, and CO2 emission of 101 gm/km (the lowest for any car in India), the Nano provides families who would otherwise have bought a car with lesser fuel efficiency and higher CO2 emission, a car that would be beneficial for the country's fuel consumption and environment protection.
2009 was a difficult year for the automotive industry around the world. To what extent has it impacted TATA Motors, and what are some of the measures that TATA undertook in such a challenging situation?
Last year , every auto company had to do a lot of introspection in terms of costs & margins. Tata Motors, like other companies, also had to do its share of introspection and has undertaken various cost reduction measures.
What are your general expectations of the automotive industry in 2010, financially?
We do not provide estimates.
TATA Motors has always been one of the pioneers in innovative technologies and designs; are we going to see more of this in the coming three to five years? And under what big headings (will they be in terms of fuel efficiency, environment, or alternative fuels, etc.)
Tata Motors is focused on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation.
In your opinion, have customer needs for passenger cars changed compared to what they were five years ago? And in what sense?
In the light of the developments during the global downturn from 2008 through 2009, it is our belief that customer preference has shifted towards small, fuel-efficient and environment-friendly vehicles.
We know that TATA Motors has global operations in many parts of the world. Do you have plans to enter more markets in the future, such as the US, for small-sized passenger cars? Potentially, what advantages over American competitors can TATA Motors offer to the American people?
The Jaguar Land Rover business of Tata Motors is already marketing the full range of Jaguar & Land Rover cars in the US. Tata Motors is also developing a Nano variant for the US, the time frame for which is three years.
The Middle East region is known to be one of your primary markets. Will we see a heavier presence in that region?
The Middle East is a focus market for Tata Motors.
What in your opinion are some inventions that may revolutionize the auto industry in 15-20 years? (Auto-pilot passenger cars on the roads, “flying cars,” or solar cars ,etc)
We believe that the future of the auto mobile industry will be influenced by fuel- efficiency and environmental friendliness.