Tata Motors and the Automotive Industry The Smart People Emily Frey, Eric Harmon, Arielle Hord, Caitlin Kantosky

OutlineHistory and Product offeringsTata Group & Corporate ResponsibilityFinancial AnalysisTatas Future & what impact, if any, for the American auto market

HistoryStarted in 1945 in Mumbai, India. Original production was on locomotives.1954First car rolled off of the assembly line.Tatas are a family of Indian industrialists and philanthropists.The family founded:IronworksSteelworkscotton mills hydroelectric-power plants Are of their endeavors have been proved to be crucial to India's industrial development.

HistoryTata Motors is Indias owns the largest independent company in India.Mercedes and Tata teamed up to create a truck line.First major business deal with another firm.

Together both companies started their commercial vehicle operations in 1960.in 1986 the company created and sold the first LCVLCV = light commercial vehicle Was the Tata 407

HistoryTata Motors decided to pursue joint ventures. Cummins Engine Co., Inc., was the first company to jointly venture with Tata in 1993.Manufactured a diesel engine that had high horsepower and emitted less harmful chemicals.Began creating new lines in the late 1990s and early 2000s:Compressed natural gas buses1109 vehicle, used for commercial purposes.Ex-seriesNewly designed LCV called the 207 DI

ProductsTata IndigoCreated in 2002Mid-sized sedan.Different models run on either normal gasoline or diesel fuel.Seats 5 people.Same luxuries as American made vehicles.

ProductsTata Indigo SWStation wagon version of the Indigo.Same basic features as the Indigo.Seats 5 people.Different models fun on different fuels.Different optional safety features than other vehicles.

ProductsTata IndicaHatchback version of the Indigo sedan.Easily affordable.Smallest in the line of Tata vehicles to date. Seats 5 people.Same basic features as the sedan.

ProductsTata SafariMid-sized SUV.Has a special engine called DICOR.Direct Injection Common Rail. Allows the engine to intercool itself.Comes in either a 4x4 or a 4x2.Can seat 7 passangers.

ProductsTata SumoRuns off of diesel fuel.Seats up to 7 passengers.Has a separate rear and front suspension for an optimal ride.Has two separate air conditioners for the front and rear of the vehicle.

Tata Group 100 companies throughout 7 business sectorsEngineering, materials, energy, chemicals, services, consumer products, information systems and communicationsTata AutoComp Systems - AutomotiveTata Steel - MaterialsTata Power - EnergyRallis India - ChemicalsTata Realty and Infrastructure - ServiceTata Tea - Consumer ProductsTata Technologies - Information Systems and Communications

Corporate Social ResponsibilityA Company that cares about the futureCommitted to corporate social responsibilitySigned the United Nations Global CompactPlays role in community developmentEnvironmentally-friendly products and technology

Corporate Social ResponsibilityTwo main concerns:Reduction of pollutionRestoration of ecological balanceImplemented soil and water conservation programsCleaner EnginesAdvanced emission-testing labsDeveloping alternate fuel enginesSewage treatment facilitiesEncourages tree planting

Corporate Social ResponsibilityIndia Recycling CultureValue in discarded productsEurope Throw-away cultureEuropean ELV Directive

Corporate Social ResponsibilityCommunity DevelopmentCommunity Service DivisionPromote economic independenceSelf-initiated cottage industries

Tata Finance: overviewStock TrendGrowth and ExpansionSalesassetsFinancing OperationsTata vs. American Companies

Tata Motors Inc. StockTTMNYSE since 2004$15.84 as of Friday (Yahoo, 2008)Down 8% in last year

Since 2004: TTM

Growth and Expansionlarge Indian marketFamiliar with marketBrand loyaltyFuel efficiency Mahindra & Mahindra- $1.88 billion

Debt vs. EquityDebt growth: $2.3 billion $4.1 billionEquity growth: $1.2 billion $2.1 billion55 million outstanding sharesROE : 19%Debt/ equity ratio: .87 Industry average: .58Cash now for growth

GrowthAsset growth doubled since 2005Acquisition of Jaguar and Land Rover from FordSales:$7.6 billion and grew 42.2% from 2006PROFITS!!$.95 billion on 2005 $1.5 billion on 2007

Cash ManagementLiquidity and solvency are goodInventoryImproved cash management:12% of assets in 20054% of assets in 2007

Comparatively Speaking

Brand:TataFordGMSales:$7.6 billion$172 billion$181 billion# of employees33,900246,000266,000Profit Margin20%17%6.7%

Effects on U.S. EconomySlow economyHigh oil pricesDemand for fuel efficiencyCut backsTatas effect

Jaguar and FordPurchase from FordConcerns

Changes or PlansMore Tata vehiclesMade in IndiaFuture

U.S. Car Companies$ 2 Billion in sales

GM-$50; Ford-$40; Honda- $20

In the U.S.

Going overseas75% by 2017 for GM

Expanding in India

U.S. Car CompaniesToyota- 7.5% increase in profits

Foreign MarketsNo help1. Cant offset2. India out of reach

The Next Auto CapitalDetroit current auto capital

21st century belongs to India

2050 in India and ChinaLaborEnvironment

Future of the NanoNot for the U.S.3rd world countriesU.S. standards

Detroit make or buy version

SummaryTata history and productsTata GroupTata: Social ResponsibilityTata Motors FinanceFuture

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