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.