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transcript
PROJECT ON
“TATA AUTOMOBILES”
Submitted By
NEHA TAUFIQ SHAIKH
ROLL NO- 237
0f T.Y.B.COM
Submitted to
Smt. K. G. Mittal College of Arts &
Commerce,
Malad (W). Mumbai.
ACKNOWLEDGEMENT
I would like to sincerely thank University of Mumbai for
giving me the opportunity for taking up such a challenging
project which has enhanced my knowledge about “TATA
AUTOMOBILES”.
My deep gratitude goes out to my project report guide Dr. Ms.
Navnita Meghnani for giving me direction and guidance,
without whose help preparing this project would have been
very difficult.
Also thanking a very special way our librarian for his timely
and unconditional help in providing us with the required
books and other materials with ease.
Last but not least, thanking H.O.D. Prof. N.N. Singhi for his
support.
DELARATION
I NEHA TAUFIQ SHAIKH of MARWARI VIDYALAY
SANCHALIT SMT. K.G. MITTAL COLLEGE OF ARTS
& COMMERCE, MALAD (W) of T.Y.B.Com. HEREBY
DECLARE THAT I HAVE COMPLETED THIS PROJECT
ON “TATA AUTOMOBILES” DURING THE
ACADEMIC YEAR 2010-2011. THE INFORMATION
SUBMITTED IS TRUE AND ORIGINAL TO THE BEST
OF MY KNOWLEDGE.
DATE: SIGNATURE OF STUDENT
PLACE: MUMBAI
CERTIFICATE
I MS. NAVNITA MEGHNANI, HEREBY CERTIFY
THAT NEHA TAUFIQ SHAIKH OF MARWARI
VIDYALAYA SANCHALIT SMT. K.G. MITTAL
COLLEGE OF ARTS & COMMERCE, MALAD
(WEST) OF T,Y.B.COM HEREBY CERTIFY THAT HE
HAS COMPLETED THIS PROJECT ON. “TATA
AUTOMOBILES” DURING THE ACADEMIC YEAR
2010-2011 THE INFORMATION SUBMITED IS TRUE
AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.
SIGNATURE OF SIGNATURE OF THETEACHER GUIDE H.O.D. OF COMMERCE
CONTENT
SR. NO. TITLE PAGE NO
1 Introduction 1
2 objectives 3
3 Functions 5
4 Policies 9
5
6
7
8
INTRODUCTION
Tata group Established under the parent company in 1945.
Tata Motors Limited has become India’s largest automobile
company. It was the first Indian automobile company to list
on the New York Stock Exchange. Tata Motors began
manufacturing commercial vehicles in 1954 with a 15-year
collaboration agreement with Daimler Benz of Germany.
This partnership has led Tata Motors to not
only become India’s largest automobile company but also
India’s largest commercial vehicle manufacturer; the world’s
top five manufactures of medium and heavy trucks and the
world’s second largest medium and heavy bus manufacturer.
Having just entered the passenger vehicles market segment in
1991, Tata Motors now ranks second in India’s passenger
vehicle market.
Tata has enjoyed the prestige of having developed
Tata Ace, India’s first indigenous light commercial vehicle;
Tata Safari, India’s first sports utility vehicle; Tata Indica,
India’s first indigenously manufactured passenger car; and the
Nano, the world’s least expensive car.
AUTOMOBILE IN INDIA(2)
Automobile Industry in India has witnessed a tremendous growth in recent years and is all set to carry on the momentum
in the foreseeable future. Indian automobile industry has come
a long way since the first car ran on the streets of Bombay in
1898. Today, automobile sector in India is one of the key
sectors of the economy in terms of the employment.
Directly and indirectly it employs more than 10
million people and if we add the number of people employed
in auto component and auto ancillary industry then the nos.
goes even higher.
The automobile industry comprises of heavy
vehicles (trucks, buses, tempos, tractors); passenger cars, &
two-wheelers. Heavy vehicles section is dominated by tata-
Telco, Ashok Leyland, Eicher Motors, Mahindra & Mahindra,
and Bajaj. The major car manufacturers in India are Hindustan
Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd,
General Motors India Pvt. Ltd., Honda Siel General Motors
Cars India Ltd., Hyundai Motors India Ltd., and Skoda India
Private Ltd., Toyota Motors, Tata Motors etc. The dominant
players in the two-wheeler sector are Hero Honda, Bajaj, TVS
Honda Motorcycle & Scooter India (Pvt.) Ltd., Yamaha etc.
Indian automobile industry has matured
In last few year offers differentiated products for different
Segment of the society. It is currently making inroads into the
Rural middle class market after its inroads into the urban
Market and rural rich.
In the recent years Indian automobile
Sector has witnessed a slew of investments. India is on every
Major global automobile player's radar. Indian automobile
Industry is also fast becoming an outsourcing hub for auto-
Mobile companies worldwide, as indicated by the zooming
automobile exports from the country. Today, Hyundai,
Honda, Toyota, GM, Ford and Mitsubishi have set up their
manufacturing bases in India.
Due to rapid economic growth and
higher disposable income it is believed that the success
story of the Indian automobile industry is not going to end
soon.
FEATURE’s OF AUTOMOBILE(3)
Second largest two-wheeler market in the world.
Fourth largest commercial vehicle market in the world.
11th largest passenger car market in the world.
Expected to become the world's third largest auto-
mobile market by 2030, behind only China & US.
RESEARCH AND DEVELOPMENT(4)
Tata Motors invests up to 1.3 per cent of its annual turnover
on research and development. It has set up two in-house
engineering research centers, including India's only certified
crash-test facility. The company has been implementing
several environmentally sensitive technologies in
manufacturing processes, and uses some of the world's most
advanced equipment for emission checking and control.
PRODUCT DEVELOPMENT:
Tata motors group continuously assesses customer need to
develop new and innovative product which deliver better
value to its customer. In pursuance of its strategy, the
company has develop significant product profile rich and
market expectation. TDC received the grand prize of 2009
Good design.
The new range of buses have launch. Tata
hispano has develop a new intercity coach the xerus and a
new suburban bus , the Intea and is working on developing a
range of other buses.
In small commercial vehicles, the ace
platform is being exploited to introduce variants to address
various market segment. The ace EX and the super ace have
been launched and the company will introduce the multi-
purpose vehicle, venture, iris and the motor truck. Variant of
the Nano, to suit specific need of the domestic and interna-
tional market are being developed.
Increase thrust have being made to
explore opportunities for launch of the tata indica vista had
the indigo manza in various international market. In july 2009
jaguar land rover launched to the world , the beginning of its
response to environ-mental and C02 challenges with more
compact and efficient vehicle.
The new XJ launched early 2010-2011,
feature’s the next generation jaguar aerospace inspired
aluminium body
IMPORTANT DEVELOPMENT:
Tata Nano:
In January 2008, Tata Motors launched Tata Nano, the least
expensive production car in the world at about Rs. 120,000
(US $3000). The city car was unveiled during the Auto expo
2008 exhibition in Pragati Maidan, New Delhi.
Tata has faced controversy over developing
the nano as some environmentalists are concerned that the
launch of such a low priced car could lead to tata momoteri-
zation in India with adverse effects on pollution and global
warming. Tata has set up a factory in Sanand, Gujarat
and the first Nanos are to roll out summer 2009. Tata Nano
Europa has been developed for sale in developed economies
and is to hit markets in 2010 while the normal
Nano should hit markets in South Africa, Kenya and countries
in Asia and Africa by late 2009. A battery version is also
planned.
Tata Ace:
Tata Ace was India's first mini truck
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
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. The Ace
was built with a load body produced by Autoline Industries
By 2005, Autoline was producing 300 load bodies
per day for Tata Motors. Tata Ace Apka Pyaara Chota Hathi.
Ace is still a top seller for TML with 5M units sold to date
(June 2010).
Compressed air car:
Tata One CAT
Motor development international of france has developed the
world's first proto type of a compressed air car, named
One CAT. In 2007, MDI owner Guy Negre was reported to
have "the backing of Tata".
It has airtanks that can be filled in 4 hours by plugging the car
into a standard electrical plug. In 2008 MDI planned to also
design a gas station compressor, which would fill the tanks in
3 minutes. There are no gasoline costs and no fossil fuel
emissions from the vehicle when run in town, but "the
compressed air driving the pistons can be boosted by a fuel
burner".
OneCAT is a five seat vehicle with a trunk. With full tanks it
is said to run at for range in urban cycle.
There are severe physical arguments pleading against those
figures. In December 2009 Tata's vice president of
engineering systems confirmed that the limited range and low
engine temperatures were causing difficulties.
TATA MOTORS LAUNCH NEW PRODUCT
(9)
Multi-national tata motors is planning to introduce a new fuel
efficient car and hybrid vehicle in emerging market and
looking at way to raise sales of luxury brands jaguar and land
rover in china and in India.
In India, the company plan to launch a new
cross-over vehicle, two new passenger vehicle and a new
range of heavy trucks, tata motors chairman Ratan tata said.
China has emerged as the third-largest global market for land
range rover and studies are underway to consider options incr-
ease market penetration in china, India and other marketing
development.
In India total passenger car sales increased
24.5 percent to 1.9 million unit in the fiscal year ending march
Tata motors posted a 41 percent growth selling 67,799 vehicle
in july 2010 as against 48,054 vehicle in the like period of
2009. this include the company export project. In the domestic
market , it logged a 39 per cent growth at 63,558 unit which
includes both passenger and commercial vehicles a against the
45,599 unit solding the same time last year.
The company also plan to revamp its entire
range rover portfolio and promises “the new range rover
‘EVAQUE’ will have to be bold design evolution in sports
utility vehicle (SUVs). “tata motor whose products include the
worlds cheapest car, Nano had brought the Britain –based
jaguar and land rover brands from ford in 2008.
China demand for cars has fuelled a rise in
bottom lines of many a car maker, as sales grew almost
48 percent in 2009. it include the company export project,
the company in the annual report ,also announced that its
holding firm tata sons director R. Gopalkrishna, will be
stepping down from the board. Gopal Krishna was a
director in group of companies like tata motors and tata power
and also held the post of chairmanin tata auto comp system,
and vice chairman in tata chemical , among other important
positions.
RESULT AND PROFITS
(7)
After the economic downturn and difficult market condition
in the automotive sector globally in 2008-2009, during the
year, economies across the world (with a few expectation)
showed signs of recovery and growth.
The Indian economy bounced back
quickly and strongly growing at 7.2% in 2009-2010. the
automotive sector in India started the year steadily, gathered
momentum in different of the second half of the year and
ended the year with a record growth and performance.
The company turn-over ,in this back-
ground and with a strong portfolio coupled with successful
launch of new product and variants in commercial vehicle and
passenger vehicle, was Rs 38,364 crores , a growth of 34.3%
over the previous year. The volume growth coupled with
other action on pricing and cost reduction enabled the
company to achieve significant improvement in EBEIDTA
margin to 11.7% (6.8% in 2008-09). The profit before tax of
Rs 2,830 crores and a profit after tax of Rs 2,240 crores also
grow significantly over the previous year by 179.1% and
123.7% respectively.
The performance of the company and its
subsidiaries is elaborated in the management discussion and
analysis report which form a part of this annual report.
The tata motor, group turnover was Rs
95,567 crores a growth of 29% over previous year contributed
mainly by market recovery, improved realization & successful
launch of new product. Consolidated profit before tax was
Rs.3,523 crores (loss of Rs.2,129 crores in 2008-09) and
consolidated profit for the year was Rs.2,571 crores (loss of
Rs.2,505 crores in 2008-09).
FINANCIAL POSITION
(8)
Tata Motors have increased its earnings over the year through
their various acquisitions and joint ventures with truck manu-
facturers in Southeast Asia.
Gross profit in the year 2006 was 1,160.9
million and increased to 1,510.1 million in the year 2007.
Earnings after taxes also increased significantly between 2006
and 2007 increasing from 336.6 million to 405.5 million in
2007.
After a large drop in revenues from 2004 to
2005 when the company first went on public the NYSE(stock
prices, from May 1-22, 2008 can be found in Appendix C), it
has been increasing revenues greatly annually, from 4,422.0
million in 2005 to 7,354.0 in 2007.
Tata Motors income statement, balance sheet
and statement of cash flows along with other key stastistics
can be found in Appendix D.
CURRENT SITUATION
COMPANY OVERVIEW:
Tata Motors has diversified in to a range of activities all
related to the automobile industry. Through its subsidiaries,
the company is involved in engineering and automotive
products, construction equipment manufacturing, automotive
vehicle component manufacturing and supply chain activities,
machine tools and factory automation products, high precision
tooling, electronic components for automotive and computer
applications, and automotive retailing and service operations.
The Tata Motors group is a passenger and
commercial vehicle manufacturer based in India. The motor
group was established in 1945 as part of the larger Tata
Group. They have long been known for their commercial
vehicles and in the past ten years entered into the passenger
car market.
Currently, Tata Motors has a line of five
passenger vehicles and a large line of commercial vehicles
producing pickups, trucks, tractor trailers, tippers, and buses.
Both product lines of the Tata Motors group have seen
success, but much of this has been built upon the more
deeply established commercial vehicle product line.
Tata Motors commercial line has been
established for several years in many market segments such as
Europe, Africa, The Middle East, Australia, Southeast Asia, &
South Asia. Tata Motors has expanded their business and
market share around the world through a series of acquisition.
In 2004, they acquired Daewoo commercial vehicle Company
in South Korea which was South Korea’s second largest truck
manufacturer. This acquisition gave Tata Motors a significant
presence in the Korean market.
They have also entered into joint ventures
with companies such as Thonburi Automotive in 2006, which
allowed them to manufacture and market pickup trucks in
Thailand. “We think it makes sense for Tata to expand
through acquisition (as it did in tea and steel) than spend a
decade to build the business”(Lehman Brothers).
Tata Motors have been making global headlines in the auto
industry lately; the largest news being their acquisition of
Jaguar and Land Rover from Ford. “Tata paid 2.3 billion
dollars to Ford for the two brands that cost Ford 5.3 billion”
(Carty, USA Today). This is a major step for the company
because it catapults them into the luxury car business which
they are not known for at this time. Tata, like many new
business it acquires, is allowing this new segment of the
business to be run by previous management since they have
more experience in the luxury automotive business.
Tata will give us some space. They want
us to run our business, be a premium British car company”
(Mike O’ Driscoll, managing director of Jaguar). This is yet
another large acquisition for the Tata Motors group and could
create great success for the company in the near future.
TATA ASSOCIATE COMPANIES
AS ON 31, MARCH, 2010, THE COMPANY HAD THE
FOLLOWING ASSOCIATE COMPANIES:
Tata cumins limited (TCL) in which the company has a 50%
share holding, with cumins engine co. Inc., USA holding the
balance .
Tata auto comp system limited (TACO) is holding a company
for promoting domestic and foreign joint ventures in auto
components and system. The share holding in TACO is 26%.
Nita co. ltd. Bangladesh in which the company holds 40%
equity, is engaged in the assembly of tata vehicle for bangla-
desh market.
Tata precision industries pre.ltd, Singapore, in which the
company has 49.99% share holding, is engaged in the manu-
facture and sales of high precision tooling and equipment for
the computer and electronics industry.
Telco construction equipment co. ltd (telco) ,in which the co.
divested a further 20% stake during the year in favour of
Hitachi is engaged in the business of development, manufac-
ture and sale of construction. Consequently is owned 60% by
Hitachi and 40% by tata motors.
Auto-mobile corporation of goa ltd. (ACGL) a company in
which tata motors ltd has a 42.37% share holding, was incor-
poration in 1980, jointly with EDC limited.
PROFILE
Tata Motors is India's foremost, and only fully integrated,
automobile manufacturer. Established in 1945 as the Tata
Engineering and Locomotive Company to manufacture
locomotives and other engineering products, the company
Is today among the world's top 10 producers of commercial
vehicles.
Tata Motors, previously known as Tata
Engineering, is one of the biggest and most prominent
companie in the Tata Group, with an annual turnover of US$
1.8 billion in 2001-02.
Areas of business :
Tata Motors' product range covers passenger cars, multi-
utility vehicles and light, medium and heavy commercial
vehicles for goods and passenger transport. Seven out of 10
medium and heavy commercial vehicles in India bear the
trusted Tata mark.
The Indica V2 — India's first indigenously designed and
manufactured passenger car — has been a phenomenal
success, standing testimony to the company's research and
engineering expertise. Tata Motors followed this up with the
launch in 2002 of the Indigo, a sedan.
The company enjoys a significant demand in export markets
such as Europe, Australia, South East Asia, the Middle East
and Africa. Tata Motors vehicles currently sell in over 70
countries.
Tata Motors is India's foremost, and only fully integrated,
automobile manufacturer. Established in 1945 as the Tata
Engineering and Locomotive Company to manufacture
locomotives and other engineering products, the company is
today among the world's top 10 producers of commercial
vehicles.
Tata Motors, previously known as Tata Engineering,
is one of the biggest and most prominent companies in the
Tata Group, with an annual turnover of US$ 1.8 billion in
2001-02. vehicles in India bear the trusted Tata mark.
TATA’S GLOBAL OPERATION
Tata Motors has been in the process of acquiring foreign
brands to increase its global presence. Through acquisition,
Tata has operations in the UK, South Korea, Thailand and
Spain. Among these acquisitions is Jaguar Land Rover, a
business comprising two struggling iconic British brands that
was acquired from the Ford Motor Company in 2008.
In 2004 Tata acquired the Daewoo Commercial
Vehicle company at South Korea’s second largest truck maker
The rebranded tata Daewoo commercial vehicle company
has launched several New product in the Korean market,
while also exporting these products to several international
markets. Today two-thirds of heavy commercial vehicle
exports out of South Korea are from Tata Daewoo.
In 2005, Tata Motors acquired a 21%
controlling stake in Hispano Carrocera, a Spanish bus and
coach manufacture. Tata Motors continued its market area
expansion Through the Introduction of new products such
as Trucks. (Novus, jointly developed with subsidiary Tata
Daewoo on 1st May, 2009 Tata unveiled the Tata World Truck
developed with Tata Daewoo Debuting in South Korea, south
Africa, the SAARC countries and the Middle-East by the end
Of the year 2009.
In 2006, Tata formed a joint venture with the
Brazil based Marcopolo to manufacture fully-built buses and
Coach for India and other international markets. Tata motors
has expanded its production and assembly operation to several
other countries including South Korea, Thailand, South Africa
and Argentina and is planning to set up plants in Turkey, and
Indonesia plants up in and Eastern Europe.
Tata also has franchisee joint venture assembly
Operatiion in Kenya, Bangladesh, Ukraine, Russia & Senegal.
Tata has dealerships in 26 countries across 4 continents.
Though Tata is present in many countries it has only managed
to create a large consumer base in the Indian Subcontinent,
namely India, Bangladesh, Bhutan, Sri Lanka and Nepal. Tata
has a growing consumer base in Italy, Spain and South Africa.
CORPORATE GOVERNANCE:
Since Tata Motors is a part of a large
conglomerate company it needs to have a strong corporate
governance to ensure that its employees act ethically and the
business continues to run smoothly especially during the ever
changing and dynamic global economy.
“Tata Group’s corporate governance is
founded upon a rich legacy of fair, ethical, and transparent
governance practices” (tatacarsworldwide.com). One of the
more important parts of this is the transparency of the com-
pany people have a right to know what the company is doing
not only to ensure ethical practices, but for the insurance of
their many shareholders whom have a right to know the inner
workings of the company. A full list of top management is
visible in Appendix B.
Tata has created some models for employees
to guide themselves through everyday business practices to
ensure that corporate governance is continuously being
upheld. The Tata business excellence model is upheld by Tata
quality management services. Quality management is an in-
house group dedicated to helping the various Tata companies
achieve their business objectives through specific processes.
The two main processes that the quality
management services employees focus on are business
excellence and business ethics. These two objectives have
helped build Tata into the strong, direction.
ORGANIZATION LOCATION:
Tata Motors is located in the developing
country of India. This location has been and will continue to
be vital to Tata’s success. In India, Tata can take advantage of
the fact that manufacturing labour cost is only 8 to 9 percent
of sales, compared to 30 to 35 percent of sales in developed
countries.
In addition, India is one of the world’s
largest producers of automotive components which give Tata
Motors direct access to many of these components. Tata has
higher bargaining power with suppliers because it is a local,
not foreign, car manufacturer.
Tata Motors is able to leverage Indian
automotive market because the current increase in demand
due to the improvements in infrastructure and growth of
population and disposable incomes in India. The Society of
Indian Auto-mobile Manufacturers stated, “India, where some
1.4 million new cars are sold each year, is also a hugely
attractive market for dozens of car companies and most of
them can’t risk ignoring what appears now be a potent
competitive advantage for Tata Motors.
India’s car market is expected to touch 2.2
million units a year by 2010. additionally, the India govern
ment has made protectionist polices and regulations that are
extremely favorable to Tata. In December 1997, the Indian
government put in place policies that require foreign car
makers to invest at least 50 million dollars in equity to set up
manufacturing operations in India.
This means that Tata Motors is able to take
advantage of the low cost of labor, land assets, and overall
investment practices without having to implement this 50
million dollar investment. Finally, Tata Motors largest
competitive.