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The automobile industry in India is the eleventh largest in the world with an
annual production of approximately 2 million units. India is expected to overtake
China as the world's fastest growing car market in terms of the number of units
sold and the automotive industry is one of the fastest growing manufacturing
sectors in India. Because of its large market, a low base of car ownership (7 per
1,000 people) and a surging economy, India has become a huge attraction for
car manufacturers around the world.
1
KEY FACTS
The Automotive Industry in India is one of the largest industries and a key sector
of the economy.
The Indian automotive industry started from 1991with the government’s de-
licensing of the sector and subsequent opening up for 100 per cent FDI through
automatic route. Since then many large global companies have set up their
facilities in India taking the production of vehicle from 2 million in 1991 to 9.7
million in 2006.
Exports: the cumulative annual growth rate of automotive exports during the
period 2000-01 to 2005-06 was 32.92 per cent. Exports during 2006-2006 and
2007-2008 are expected to grow over 20 per cent.
Imports: Europe is the biggest importer of cars from India, while African nations
largely account for the import of buses and trucks. China is most recently making
2
inroads into this market. The South-East Asian region is the prime destination
for Indian two wheelers.
Sales:
Investment: Among the car companies that are investing in India are US
automakers General Motors and Ford, Germany's BMW and DaimlerChrysler
AG, France's Renault, Japan's Suzuki, Toyota and Honda, and South Korea's
Hyundai.
3
WHY TO INVEST IN TATA MOTORS?
This is the probably the best time to invest in Tata Motors. The year 2008
promises to be a big year for Tata Motors. It plans several launches, including
the long-awaited Rs 1 lakh car and the Alfa Romeo, Masserati and Ferrari.
Tata Motors has big plans for next year. On the cards are a revamped Tata
Indica, a smaller Indigo to compete with Maruti's Swift and a new Sumo. But that
is not all. It will unveil its Rs 1 lakh car, as well as brands like the Alfa Romeo,
Masserati and Ferrari, which Tata Motors and Fiat will jointly sell.
About two years after Tata Motors and Fiat joined hands, Fiat's Grand Punto and
Linea will roll out of Tata-Fiat's Ranjangoan facility. Besides, Tata Motors has
several commercial vehicles waiting to hit the roads.
And what could turn out to be the biggest achievement for Tata Motors would be
Ford's iconic brands-Land Rover and Jaguar, that are up for sale.
4
TATA MOTORS
INTRODUCTION
Tata Motors Limited is India's largest automobile company, with revenues of Rs.
32,426 crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial
vehicles in each segment, and the second largest in the passenger vehicles
market with winning products in the compact, midsize car and utility vehicle
segments. The company is the world's fifth largest medium and heavy
commercial vehicle manufacturer, and the world's second largest medium and
heavy bus manufacturer.
The company's 22,000 employees are guided by the vision to be "best in the
manner in which we operate best in the products we deliver and best in our value
system and ethics." Tata Motors helps its employees realize their potential
through innovative HR practices. The company's goal is to empower and provide
employees with dynamic career paths in congruence with corporate objectives.
All-round potential development and performance improvement is ensured by
regular in-house and external training. The company has won several awards
recognizing its training programmes.
LOCATIONS
Established in 1945, Tata Motors' presence indeed cuts across the length and
breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first
rolled out in 1954. The company's manufacturing base is spread across India -
Jamshedpur (Jharkhand) in the east, Pune (Maharashtra) in the west, and in the
north in Lucknow (Uttar Pradesh) and Pantnagar (Uttarakhand). A new plant is
being set up in Singur (close to Kolkata in West Bengal) to manufacture the
company's small car. The nation-wide dealership, sales, services and spare
parts network comprises over 2,000 touch points. The company also has a
5
strong auto finance operation, TML Financial Services Limited, supporting
customers to purchase Tata Motors vehicles.
MAJOR ACHIEVEMENTS
Tata Motors, the first company from India's engineering sector to be listed in the
New York Stock Exchange (September 2004), has also emerged as an
international automobile company. In 2004, it acquired the Daewoo Commercial
Vehicles Company, Korea's second largest truck maker. The rechristened Tata
Daewoo Commercial Vehicles Company has launched several new products 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% stake in
Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with an
option to acquire the remaining stake as well. Hispano's presence is being
expanded in other markets. In 2006, it formed a joint venture with the Brazil-
based Marcopolo, a global leader in body-building for buses and coaches to
manufacture fully-built buses and coaches for India and select international
markets. Tata Motors also entered into a joint venture in 2006 with Thonburi
Automotive Assembly Plant Company of Thailand to manufacture and market the
company's pickup vehicles in Thailand. In 2006, Tata Motors and Fiat Auto
formed an industrial joint venture at Ranjangaon (near Pune in Maharashtra,
India) to produce both Fiat and Tata cars and Fiat powertrains for the Indian and
overseas markets; Tata Motors already distributes and markets Fiat branded
cars in India. In 2007, Tata Motors and Fiat Auto entered into an agreement for a
Tata license to build a pick-up vehicle bearing the Fiat nameplate at Fiat Group
Automobiles' Plant at Córdoba, Argentina. The pick-up will be sold in South and
Central America and select European markets.
These linkages will further extend Tata Motors' international footprint, established
through exports since 1961. While currently about 18% of its revenues are from
international business, the company's objective is to expand its international
6
business, both through organic and inorganic growth routes. The company's
commercial and passenger vehicles are already being marketed in several
countries in Europe, Africa, the Middle East, Australia, South East Asia and
South Asia. It has assembly operations in Malaysia, Kenya, Bangladesh,
Ukraine, Russia and Senegal.
OTHER ACHIEVEMENTS
The company set up the Tata Motors European Technical Centre (TMETC) in
2005 in the UK. TMETC is engaged in design engineering and development of
products, supporting Tata Motors' skill sets. Tata Daewoo Commercial Vehicle
Company and Hispano Carrocera also have R&D establishments at Gunsan in
South Korea and Zaragoza in Spain.
7
The pace of new product development has quickened through an organization-
wide structured New Product Introduction (NPI) process. The process with its
formal structure for introducing new vehicles in the market, brings in greater
discipline in project execution. The NPI process helped Tata Motors create a
new segment, in 2005, by launching the Tata Ace, India’s first indigenously
developed mini-truck. The years to come will see the introduction of several
other innovative vehicles, all rooted in emerging customer needs. Besides
product development, R&D is also focussing on environment-friendly
technologies in emissions and alternative fuels.
True to the tradition of the Tata Group, Tata Motors is committed in letter and
spirit to Corporate Social Responsibility. It is a signatory to the United Nations
Global Compact, and is engaged in community and social initiatives on labour
and environment standards in compliance with the principles of the Global
Compact. In accordance with this, it plays an active role in community
development, serving rural communities adjacent to its manufacturing locations.
With the foundation of its rich heritage, Tata Motors today is etching a refulgent
future.
8
MANUFACTURING UNITS IN INDIA
Tata Motors owes its leading position in the Indian automobile industry to its
strong focus on indigenization. This focus has driven the Company to set up
world-class manufacturing units with state-of-the-art technology. Every stage of
product evolution-design, development, manufacturing, assembly and quality
control, is carried out meticulously. Our manufacturing plants are situated at
Jamshedpur in the East, Pune in the West and Lucknow in the North.
Jamshedpur:
Established in1945, the Jamshedpur unit was the company's first unit and
is spread over an area of 822 acres. It consists of 4 major divisions -
Truck Factory, Engine Factory, Cab & Cowl Factories, and the Novus.
Pune:
The Pune unit is spread over 2 geographical regions- Pimpri (800 acres)
and Chinchwad (130 acres). It was established in 1966 and has a
Production Engineering Division, which has one of the most versatile tool
making facilities in the Indian sub-continent.
Lucknow:
Tata Motors Lucknow is one of the youngest production facilities among
all the Tata Motors locations and was established in 1992 to meet the
demand for Commercial Vehicles in the Indian market.
Uttarakhand:
The company has set up a plant for its mini-truck, Ace, at Pant Nagar in
Uttarakhand. The plant will begin commercial production during the
course of the year.
9
10
PRODUCTS
The company’s main product lines in the passenger vehicle segment are:
PASSENGER VEHICLE
SEGMENT
11
PASSENGER CARS:
1. INDICA V2
2. INDICA V2 DICOR
As a car that has always lived up to the promise of delivering more, the Indica
now comes equipped with the 1.4 litre, 70 PS, Direct Injection Common Rail
(DICOR) engine - the latest in diesel-engine technology that's empowering cars
12
worldwide. Offered till recently on our premium vehicles, the engine delivers
great performance, high mileage and an exhilarating driving experience in the
hatchback Indica. In keeping with its leadership position as the best selling diesel
car in the country, the Indica now offers the widest range of diesel engines -
naturally aspirated, turbo charged intercooled and now common rail. Making
technology accessible across varying needs.
3. INDICA V2 XETA
The new Indica Xeta. Its extra efficiency Torque Advantage petrol engine
delivers 12.4 kgm torque, for a smoother and more responsive drive. With instant
pick up and fewer gear changes in stop-start city traffic. The technologically
superior MPFI engine comes with a 32-bit microprocessor, and sports 12
sensors, including a knock control sensor to reduce damage from adulterated
fuel. The result? Even more enjoyable long drives, with a frugal fuel consumption
at 14 kmpl.Its spacious cabin - the biggest in its class, seats three people
comfortably in the rear, with ample elbow room and generous leg room. The
luxurious beige interiors come as a standard feature.
13
4. INDIGO
The Indigo became a success story right from the day of its launch. Within
months, it became the category leader. Competition soon resorted to price-offs
and offers to arrest falling market shares. Discounts on brands ranged from
between Rs.70,000 to Rs. 1,00,000. The objective was to build on the existing
equity and strengthen the proposition. Indigo very clearly stands for Comfort and
Luxury. The Indigo became the top seller in its segment continuously for the first
two years and the fastest to cross the 50,000 sales milestone.
5. INDIGO MARINA
The Indigo Marina story started two years back with the launch of the luxury
sedan from Tata Motors, the Tata Indigo. Owners of the Indigo were very
impressed with its performance and build quality. In fact in a matter of two years,
50,000 Tata Indigos were on the road. There were however, a select group of
people who wanted everything that came with the Indigo plus a
little more space. So, we developed the Indigo Marina.
14
6. INDIGO CS
The world's first sub four-metre sedan, the Tata Indigo CS is positioned as the
first car for young professionals. It carries forward the cabin seating comfort and
space package, that is now closely associated with the Indigo range and a
capacious 380 litre boot. Clever and efficient design has made it possible to
encapsulate this entire package within the four metre length, making this car a
complete package to address the combined demands of space and
maneuverability in our congested cities. The Indigo CS sports a stylish new tail
light cluster in the rear embedded in a smart new rear profile completed with a
new, trimmer rear bumper. The front of the car has also been visually
differentiated with a new front grille and new headlamps.
15
UTILITY VEHICLES
Slick city maneuvers or fast lane driving, Tata Safari handles both with aplomb.
Propelled by a powerful engine, that takes care of the adrenaline surge. And
impeccable styling that takes of the wow factor.
2. TATA SUMO
Think big. Think Tata Sumo. It is spacious enough to accommodate your family
and friends. Not to mention extra luggage. Muscular yet stylish, it glides over
rugged roads and potholes with effortless ease.
16
The company’s main product lines in the commercial vehicle segment are:
COMMERCIAL
VEHICLE
SEGMENT
TRUCKS BUSES
TRUCKS:
17
Intermediate Commercial Vehicles: This section includes just
two models. LPT 1109 Turbo Truck and LP 1109 Turbo Truck.
18
Small Commercial Vehicles: A new revolution in transport,
which is set to change the competitive landscape of the small
commercial vehicle segment. Tata Ace - the small, big machine.
BUSES:
19
The Tata Starbus Range
The Tata Starbus is available in a comprehensive range of variants, with seating
capacities from 16 to 67 seats. Designed on the concept of optimum functionality
and comfort, these fully-built buses also offer unparalleled economy to the
operators. The Starbus range includes Standard, Deluxe, Low Floor and School
bus options - each with a customized set of features.
OTHER BUSES:
20
PRODUCTION COMPONENTS
Automobile-
Light, Medium
& Heavy 29,211.0
Numbers 96,000 98,227.00 580,280.00
Commercial, 4
Jeep,
Passenger Car
21
For Vehicles
Castings &
NA NA NA 284.14
Forgings
Scrap NA NA NA 111.29
Engines
Diesel For
Industrial & NA 8,498.00 8,587.00 69.89
Marine
Applications
Export
NA NA NA 58.97
Incentives
Income from
General NA NA NA 44.00
Services
Proximity
NA NA NA 0.00
Switches
192,282,00 34,407,625.0
Power KWH NA 0.00
0 0
Generation
Printed Circuit
NA NA NA 0.00
Motors
SG Castings
(Semies) By
Metric
Continous 3,600 NA NA 0.00
Tonnes
Casting
Process
22
Controller For
Machine Tools
Spot Welding
NA NA NA 0.00
Guns
Numerical
Control Of NA NA NA 0.00
Machine Tools
Motor
Vehicles For
Numbers 586,000 486,559.00 NA 0.00
Transport Of
Goods
Automobile-
NA NA NA 0.00
Cars
Castings (S G Metric
12,000 14,505.00 NA 0.00
Iron) Tonnes
Electrical
Copy NA NA NA 0.00
Machining
Electronic
Comparator,
Electr
NA NA NA 0.00
Weighing
Inst., Crane
Weighing Inst
Hoists (250
NA NA NA 0.00
kgs)
Linear
Position
NA NA NA 0.00
Encoder &
Readout
Manufactured
Components NA 444.91 NA 0.00
For Sale
23
Metal Cutting
& Grinding NA NA NA 0.00
Machine
Total
31,089.69
FINANCIAL ANALYSIS
24
PROFIT AND LOSS ACCOUNT FOR THE LAST 5 YEARS
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sources of funds
Owner's fund
Equity share capital 385.41 382.87 361.79 353.00 319.83
Share application money - - - 3.83 -
Preference share capital - - - - -
Reserves & surplus 6,458.39 5,127.81 3,749.60 3,236.77 2,277.33
Loan funds
Secured loans 2,022.04 822.76 489.81 942.65 1,037.32
Unsecured loans 1,987.10 2,114.08 2,005.61 317.12 420.99
Total 10,852.94 8,447.52 6,606.81 4,853.37 4,055.47
Uses of funds
Fixed assets
Gross block 8,775.80 7,971.55 6,611.95 5,985.40 5,860.10
Less : revaluation reserve 25.95 26.39 - - -
Less : accumulated
4,894.54 4,401.51 3,454.28 3,023.69 2,710.45
depreciation
Net block 3,855.31 3,543.65 3,157.67 2,961.71 3,149.65
Capital work-in-progress 2,513.32 951.19 538.84 286.09 156.93
Investments 2,477.00 2,015.15 2,912.06 3,056.77 1,195.98
Net current assets
Current assets, loans &
10,318.42 9,812.06 7,248.88 3,835.78 3,024.54
advances
Less : current liabilities &
8,321.20 7,888.65 7,268.80 5,309.17 3,563.18
provisions
Total net current assets 1,997.22 1,923.41 -19.92 -1,473.39 -538.64
Miscellaneous expenses not
10.09 14.12 18.16 22.19 91.55
written
Total 10,852.94 8,447.52 6,606.81 4,853.37 4,055.47
Notes:
Book value of unquoted
2,117.86 1,648.57 2,480.15 2,778.87 920.28
investments
Market value of quoted
1,323.08 1,550.00 1,260.05 732.76 270.89
investments
Contingent liabilities 5,196.07 2,185.63 1,450.32 896.07 1,135.42
Number of equity
3853.74 3828.34 3617.52 3529.58 3197.84
sharesoutstanding (Lacs)
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Income:
Operating income 26,664.25 20,088.63 17,199.17 13,028.17 8,956.87
Expenses
Material consumed 19,529.88 14,376.11 12,101.28 8,720.10 5,779.95
Manufacturing expenses 1,200.36 929.82 830.45 628.73 664.26
25
Personnel expenses 1,367.83 1,143.13 1,039.34 882.49 720.37
Selling expenses 1,068.56 759.54 598.75 455.56 409.62
Adminstrative expenses 1,488.16 1,042.52 911.73 758.90 489.73
Expenses capitalised -577.05 -308.85 -282.43 -144.89 -156.46
Cost of sales 24,077.74 17,942.27 15,199.12 11,300.89 7,907.47
Operating profit 2,586.51 2,146.36 2,000.05 1,727.28 1,049.40
Other recurring income 887.23 685.18 399.94 235.65 144.69
Adjusted PBDIT 3,473.74 2,831.54 2,399.99 1,962.93 1,194.09
Financial expenses 455.75 350.24 234.30 225.96 312.55
Depreciation 586.29 520.94 450.16 382.60 359.51
Other write offs 85.02 73.78 67.12 51.64 2.62
Adjusted PBT 2,346.68 1,886.58 1,648.41 1,302.73 519.41
Tax charges 660.37 524.93 415.50 482.55 210.58
Adjusted PAT 1,686.31 1,361.65 1,232.91 820.18 308.83
Non recurring items 227.15 167.23 4.04 -6.82 0.38
Other non cash adjustments -0.07 - -1.54 -3.02 -9.10
Reported net profit 1,913.39 1,528.88 1,235.41 810.34 300.11
Earnigs before appropriation 2,690.15 2,094.54 1,601.21 934.05 300.11
Equity dividend 578.07 497.94 452.19 282.11 127.91
Preference dividend - - - - -
Dividend tax 98.25 69.84 63.42 36.14 16.39
Retained earnings 2,013.83 1,526.76 1,085.60 615.80 155.81
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
26
Net cash flow-operating activity 2,210.13 -221.03 1,249.82 2,717.53 1,311.40
Net cash used in fin. activity 303.58 -855.27 940.67 -149.20 -1,208.75
PRODUCTION
2007- 2006-
Category DEC'08 DEC'07 DEC'06 08 07 2005-06
M& HCV 14942 16,209 11,161 12035 131,391 93,362
27
8
12276
LCV* 14570 11,643 9,237 8 109,321 74,658
UTILITY 3282 3,622 2,511 32372 32,551 26,054
12886
CARS 9900 11,035 7,006 4 137,201 116,122
40436
TOTAL 42694 42509 29915 2 410464 310196
SALES
28
TATA MOTORS COMPETITORS
TATA MOTORS
COMMERCIAL VEHICLE
PASSENGER VEHICLE
SEGMENT
SEGMENT
29
MARUTI SUZUKI
Maruti Suzuki India Ltd formerly known as Maruti Udyog Limited. The Group's
principal activity is to manufacture, purchase and sale of Motor Vehicles and
Spare parts. The Group is a subsidiary of Suzuki Motor Corporation. The other
activities of the Group comprises of facilitation of Pre-Owned Car Sales, Fleet
Management and Car Financing. The Group also provides services like framing
of customized car policies, economical leasing of cars, maintenance
management, registration and insurance management, emergency assistance
and accident management. The product range includes ten basic models with
more than 50 variants. The Group has operations in over 312 cities with more
than 500 outlets and also exports cars to other countries.
PRODUCTS
Some of their popular products are as follows:
Maruti 800: Launched 1983. Largest selling car in India, until 2004.
Maruti Omni: Launched 1984.
Maruti Gypsy: Launched 1985.
Esteem: Launched 1994.Production ended in 2007.Will be shortly
replaced by new Suzuki Swift Sedan
Maruti Wagon-R: Launched 1999 Modified 2006
Suzuki SX4: Launched 2007
Maruti Alto: Launched 2000. Currently the largest selling car in India
Maruti Grand Vitara:Launched 2003
Maruti Versa: Launched 2003
Maruti Swift: Launched 2005
Maruti Zen Estilo: Launched in 2006
30
ASHOK LEYLAND
PRODUCTS
31
COMPARISON OF TATA MOTORS V/S MARUTI SUZUKI
&ASHOK LEYLAND
TATA MARUTI ASHOK
PARTICULARS
MOTORS SUZUKI LEYLAND
Profit and loss (Rs . in CR.)
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
TATA MOTORS MARUTI SUZUKI ASHOKLEYLND
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
TATA MOTORS MARUTI SUZUKI ASHOK LEYLND
32
2,000.00
1,500.00
1,000.00
500.00
0.00
TATA MOTORS MARUTI SUZUKI ASHOKLEYLAND
4000
3000
2000
1000
0
TATA MOTORS MARUTI SUZUKI ASHOK LEYLAND
33
7000
6000
5000
4000
3000
2000
1000
0
TATA MOTORS MARUTI SUZUKI ASHOKLEYLAND
3500
3000
2500
2000
1500
1000
500
0
TATA MOTORS MARUTI SUZUKI ASHOKLEYLAND
34
2000
1500
1000
500
0
TATA MOTORS MARUTI SUZUKI ASHOKLEYLAND
Ratio
Debt-Equity Ratio 5.83:1 1.15:1 0.33:1
Current Ratio 0.46:1 0.57:1 0.85:1
Return On Capital
34.02% 33.05% 31.05%
Employed
Per share data (annualized)
Shares in issue
3,853.74 2,889.10 13,238.70
(lakhs)
Earning Per Share 49.65 65.13 3.46
TATA MOTOR
MARUTI SUZUKI
ASHOK LEYLAND
0 10 20 30 40 50 60 70
35
TATA MOTOR
MARUTI SUZUKI
ASHOKLEYLAND
TATAMOTOR
MARUTI SUZUKI
ASHOKLEYLAND
0 2 4 6 8 10 12 14 16
36
CUSTOMER RELATIONSHIP MANAGEMENT
37
customer-facing business processes companywide, laying the foundation for
stronger dealer relationships, improved operational efficiency and effectiveness,
and a better customer experience. This posed numerous challenges, as it
involved working with 500 dealer organizations and more than 1,600 locations
staffed with more than 10,000 salespeople across India.
Phased approach
The company took a phased approach to the implementation, with the goal of
achieving success in each phase before moving forward. Phase I, currently
under way, focuses on capturing customer and vehicle data and automating
routine tasks. Phase II will focus on leveraging data to improve customer
interactions and streamlining product development and planning. Phase III will
focus on tuning the system and delivering additional value-added services to
customers.
Siebel Automotive has been closely integrated with a wide array of SAP back-
office applications, including applications inventory management, fulfillment, and
parts location. Pricing and tax calculations are adjusted for each dealer's
requirements. In addition, comprehensive sales and reporting functionality built
into Siebel Automotive enabled Tata to distribute sales targets to its dealers and
roll up sales numbers across the country.
38
sales force. Covering a country with an area of 3.3 mn sq km also required an
innovative communications solution.
Overall, Siebel Automotive has transformed our organization and made it truly
customer-centric. We've overcome the challenges of relying on disparate
sources of information, as well as having inconsistent business processes.
Today, our employees and dealers are much more responsive and can serve
customers more efficiently and effectively-drawing upon real-time, centralized
customer and vehicle data. The solution helped dealers respond to customer
queries regarding vehicles that aren't in a dealer's stock, but which can be
ordered directly from Tata Motors.
EMPLOYEE RELATIONS
The Tata Group's relationship with its employees has changed from the
patriarchal to the practical, but this is a bond that continues to be nourished with
compassion and care
39
"What exercise is to the body, employment is to the mind and morals," said
American writer and thinker Henry David Thoreau. With some 289,500 members
in its diverse and widespread family, the Tata Group touches and moulds the
everyday lives of more people than any private-sector employer in the country.
The richness of this relationship, fashioned by a tradition of benevolence and
empathy, represents a workplace culture that goes way beyond work.
As any 'Tata person' will tell you, there's something positively distinctive,
something less than completely explainable, about working for the group — the
experience is cast in a hue quite different from the ordinary. This view continues
to hold despite the changes that have altered the way the Tatas interact with
their people, moving from the paternalistic philosophy of yore to bring the group
in line with ever-evolving human-resource methodologies.
The transition from then to now has not eroded what remains a central theme
with the group: providing its employees more than mere jobs. Workers and their
welfare were of utmost importance to group founder Jamsetji Tata, who, writing
to his son Dorab Tata in 1902, five years before a site for his proposed steel
enterprise had been decided, stated: "Be sure to lay wide streets planted with
shady trees, every other of a quick-growing variety. Be sure that there is plenty
of space for lawns and gardens. Reserve large areas for football, hockey and
parks. Earmark areas for Hindu temples, Mohammedan mosques and Christian
churches." It was but natural that the city built on this munificence came to be
called Jamshedpur.
To understand the dynamics of the present, it is necessary to peep into the past.
The Tatas pioneered a slew of employee benefits that would later be mandated
through legislation in India and elsewhere in the world. The eight-hour working
day, free medical aid, welfare departments, grievance cells, leave with pay,
provident fund, accident compensation, training institutes, maternity benefits,
bonus and gratuity — all of these and more were introduced by the group before
any legal rules were framed on them. To give but one example of how far ahead
40
of the times the Tatas were, while its first provident fund scheme was started in
1920, the government regulation on this issue came into force in 1952.
Driving every one of the group's initiatives in the wide sphere of employee
relations is a value system that, slowly but surely, percolates to each person
looking to craft a career in the Tatas. The induction and training programmes
give new employees an opportunity to understand the history and background of
the Group. The second forum comprises the physical structures such as the Tata
archives in Jamshedpur and Pune. The third is the books, magazines and other
publications that detail the Tata heritage.
The specifics of the Tata engagement with its employees differ from factory floor
to management enclave. But there are some commonalities, nowhere more so
then on the vexed subject of voluntary retirement schemes (VRS). The realities
41
of modern business have forced the group, like many others, to float and
implement what would have been unthinkable for it in days gone by. The prime
consideration for the Tatas on this issue has been to minimise the inevitable
suffering it brings to people who have served a group company for long.
The thought and care that accompanies all Tata VRS initiatives finds an echo in
the many volunteering programmes that group employees undertake. These
range from helping underprivileged folks in big cities to uplifting rural
communities in the Indian outback. Tata Chemicals, Tata Steel, Voltas, Tata
Consultancy Services, Rallis, Indian Hotels — all of them are deeply involved in
volunteering work. The numbers are staggering, in terms of time invested, the
range of activities, and the spread of geographies. We see volunteerism as
shaping the minds of our employees as well as giving back to the communities in
which we operate."
Change management is another area where the Tata Group has invested plenty
of effort. The smooth transition that companies such as VSNL and CMC have
made, from being public-sector entities to becoming members of the Tata family,
bears testimony to the patience and skills the group has brought to the
challenging task of reforming the mindsets and attitudes of employees coming
into its fold from a different work environment.
The Tatas have progressed with the times and have endeavoured to offer more
to their employees today, including the opportunity to progress within and across
group companies. Programmes such as the Tata Administrative Service and
institutions like the Tata Management Training Centre have been revamped and
reengineered to reflect the requirements of the present. These and other
measures enable achievers in the group to progress further and faster than was
the case in years gone by. It has group mobility processes that facilitate
movement across functions and domains of knowledge. It has over the last three
years consistently moved an average of 50 people a year, at the managerial
level and above, across companies.
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If all of this suggests the Tatas are some kind of model employer. James R.
Uffelman, an American businessman, once said: "The only way I can compete …
is to treat my employees better, move them up faster, give them more money
and put mirrors in the bathrooms."
The Nano will be launched in India later in 2008. The car will be available in both
standard and deluxe versions. Both versions will offer a wide range of body
colours and other accessories so that the car can be customized to an
individual's preferences.
Stylish, comfortable
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Designed with a family in mind, the Nano has a roomy passenger
compartment with generous leg space and head room.
Can comfortably seat four persons. Four doors with high seating position
make ingress and egress easy.
With a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres,
with adequate ground clearance, it can effortlessly maneuver on busy
roads in cities as well as in rural areas.
Its mono-volume design, with wheels at the corners and the powertrain at
the rear, enables it to uniquely combine both space and maneuverability,
which will set a new benchmark among small cars.
Fuel-efficient engine
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Environment-friendly
WHY NANO?
The name 'Nano' was chosen as it denotes high technology and small size.
Tata Nano
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Manufacturer Tata Motors
Predecessor None
Layout RR layout
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Width 1500 mm (59.1 in)[1]
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Technical specifications
According to Tata Group's Chairman Ratan Tata, the Nano is a 33 PS
(33 hp/24 kW) car with a 623 cc rear engine and rear wheel drive, and has a fuel
economy of 4.55 L/100 km (21.97 km/L, 51.7 mpg (US), 62 mpg (UK)) under city
road conditions, and 3.85 L/100 km on highways (25.97 km/L, 61.1 mpg (US),
73.3 mpg (UK)). It is the first time a two-cylinder non-opposed petrol engine will
be used in a car with a single balancer shaft.[21] Tata Motors has reportedly filed
34 patents related to the innovations in the design of Nano, with powertrain
accounting for over half of them.[22] The head of Tata Motors' Engineering
Research Centre, Girish Wagh has been credited with being one of the brains
behind Nano's design.[22][23]
According to Tata, the Nano complies with Bharat Stage-III and Euro-IV emission
standards. Ratan Tata also said, 'The car has passed the full-frontal crash and
the side impact crash'. Tata Nano passed the required 'homologation’ tests with
Pune-based Automotive Research Association of India (ARAI).This means that
the car has met all the specified criteria for roadworthiness laid out by the
government including emissions or noise & vibration and can now ply on Indian
roads. Tata Nano managed to score around 24 km per litre during its
‘homologation’ tests with ARAI. This makes Tata Nano the most fuel efficient car
in India. Nano will be the first car in India to display the actual fuel mileage
figures it recorded at ARAI’s tests on its windshield. According to ARAI it
conforms to Euro IV emission standards which will come into effect in India in
2010.
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Tata is also reported to be contemplating offering a compressed air engine as an
option
Supplier Product
GKN Driveshafts
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Johnson Controls Seating
Mahle Camshafts, spin-on oil filters, fuel filters and air cleaners
Saint-Gobain Glazing
Ceekay
Clutch sets
Daikin/Valeo
ZF Friedrichshafen
Chassis components, including tie rods
AG
People world over were keen to see what Tata Motors' People's Car looked like,
and know more about it. The Tata Motors website saw nearly 7.9 million hits on
January 10 (the day the Nano was unveiled), while the Tata Nano website saw 4
million hits in 30 hours, making these sites among the busiest in the world.
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The entire portal has been built on open source technologies, involving minimum
investment, following the essence of the Nano - low cost, but high technology.
The high fuel efficiency also ensures that the car has low carbon dioxide
emissions, thereby providing the twin benefits of an affordable transportation
solution with a low carbon footprint.
The two sides, which have been in exclusive talks since the beginning of the
year, are expected to sign a deal worth up to two billion dollars (one billion
pound) on 12th of March.its online edition on Thursday.
According to the report, Ford is expected to seal the sale of Jaguar and Land
Rover to Tata, next week after the American car-maker recently agreed to pump
hundreds of millions of pounds into the pension fund to smooth the process.
On January 3, Ford had named Tata as the preferred bidder for Jaguar and Land
Rover.
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Other Current Issues
Singur car factory land dispute arose as Tata's planned manufacturing unit for
the car in Singur, West Bengal, where the state government of West Bengal had
allocated 997 acres (4.03 km2) to Tata Motors. The construction of the car factory
on that tract of land began in January 2007 on fertile agricultural land and the
expropriation and eviction of approximately 15,000 peasants and agricultural
workers. The affected farmers have fears that they will receive inadequate or no
compensation and therefore lose their livelihoods.
Activists near Kolkata, where Tata's manufacturing unit is located, burnt the car
effigy. In New Delhi, a group of six women protested wearing T-shirts bearing
slogans that said, "The Rs 1 lakh car has Singur people's blood on it." The
Trinamool Congress alleged that Tata motors usurped the agrarian land for the
construction site and have threatened to stall the manufacture of the car.
With the Tata Nano project in jeapordy in West Bengal, there is now a race
between other Indian States to become the new location for the Tata Nano
project, with each state trying to entice the Tata Motors Group to their particular
location..
On 2 Sep 2008, Tata Motors officialy announced that they were pulling the Tata
Nano project out of Singur and " 'evaluating alternate options' and considering
relocating the plant and machinery"(i.e. to another state). Thus, Ratan Tata came
through with his threats that he would rather pull out of Singur than expose his
staff and machinery to attacks..
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Suicide
“ Tata Motors today moved Calcutta High Court against the State
Information Commission to prevent it from releasing “secret” sections of
the commercial agreement signed between the company and the West
Bengal government to set up the Nano factory at Singur, 40 km from
here.
A few days ago, the commission and the state government had released
the basic part of the contract that had revealed that Tata Motors had
received a Rs 200-crore loan at 1 per cent, tax breaks and subsidised
land and electricity and had been promised refund of VAT and central
sales tax on the car.
The opposition Trinamool Congress (TC) had been alleging for weeks
that the “secret” portion of the contract contained a list of further benefits
that had been promised by the state government to Tata Motors.
“The Tata action in the Calcutta High Court supports our worst fears,” a
TC leader told Business Standard.
“The benefits promised under the portion of the contract already released
prove that the state government was subsidising the Rs 1-lakh car to the
extent of more than a quarter of its cost,” the leader alleged without
substantiating on the calculation system used by the TC.
While "secret" subsidies and tax breaks have been provided and some (including
landloser or penniless farmers) may consider this unethical, yet there's nothing
illegal about it as this has been done through a proper legal-contract.
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Moreover, this subsidy, or more subsidies, are good for the consumers as it will
reduce the price of the Nano further, though at the cost of the state-government
and being a burden on the state-exchequer, which is good. Yet, this is better use
of the state-funds as many of the so-called "state-funds" in India are embezzled
before being spent for the good of the public due to the high-level of Corruption
in India or spent on feeding excessive, unneeded, and burdensome red-tape and
bureaucracy.
Failure of talks
"The talks between West Bengal Chief Minister Buddhadeb Bhattacharjee and
Trinamool Congress chief Mamata Banerjee on Friday evening to settle the
Singur imbroglio failed to bring out any positive results," Economic Times
reported and others reported.
Reactions
Whilst Indian business community is upset about the whole episode and has
advised the Tatas to either relocate to Pantnagar or a nearby facility in Uttar
Pradesh as requested by Amar Singh in 2006[49], Lakshmi Mittal of ArcelorMittal
said: "Whilst India has been a big part of my past, it is sure to be a big part of all
our futures. It does not give us nightmares. And we will not revisit our plan in
India because of Singur episode."
Solutions
It is widely believed that due to these increasing disputes, in which one or more
land-loser farmer(s) committed suicide even (including a 65-year-old farmer who
committed suicide by swallowing pesticide), and Tata's recent stand, Nano might
well come out of either:
Mr. Ratan Tata might well take such land-marks steps to avoid the harm being
caused to Tata's reputation and brand-image at Singur.
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Uttar Pradesh
Amar Singh, then Chairman of the Uttar Pradesh state’s Industrial Development
Council had even invited Tata in 2006 "offering to accommodate the small-car
plant in Uttar Pradesh". "I admit that as chairman of the Uttar Pradesh
development council, I had invited Tata Motors to set up the Nano factory there,”
Amar told
Safety-issues
“ India has 8 per cent of the world’s vehicle fatalities and less than 1 per
cent of its cars, with more than 90,000 people killed on the country’s
roads every year. Introducing a million Nanos into the mix may bring
more – and unwelcome – headlines.
Tata, which has the only crash-test facility in the country, said that the
Nano “exceeds current regulatory requirements”. And while it is not a
deathtrap – it has crumple zones, seat belts and strong seat anchors – it
is worth bearing in mind that total vehicle crash testing (rather than just
frontal impact), airbags and antilock braking systems are not mandatory.
Without these, the Nano would not even be considered for approval in
Britain. Adding them would double its price in India, which is why they
have been omitted. ”
It's believed that Tata will offer a version of the Nano with these safety-features,
including an airbag system in its electric version.
As the Nano was conceived and designed around introducing the automobile to
a sector of the population who are currently using eco-friendly bicycles and
motorcycles, environmentalists are concerned that its extraordinarily low price
might lead to mass motorization in countries like India and therefore possibly
aggravate pollution and global warming as well as increase the demand for oil.
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Rajendra Pachauri, an Indian and chairman of the Intergovernmental Panel on
Climate Change, said he was "having nightmares" because of this car and added
that the car represents bankruptcy of India's environmental policy. The ecology
focused German newspaper die tageszeitung feels that such concerns are
"inappropriate" as the Tata Nano has lower emissions compared to the average
Volkswagen, and that developing countries shouldn't be denied the right to
motorized mobility when industrialized countries should be looking to reduce
their emissions and usage of cars. Die Welt reports that the car conforms with
environmental protection, and will have the lowest emissions in India.
In crowded metropolitan cities like Mumbai, Ratan Tata has conceived a scheme
to only offer the Nano to those individuals who do not have an automobile
already. The Nano will also replace many overloaded and worn-out two-stroke
polluting vehicles, both two and three-wheeled. In the current policy and
regulatory framework, Centre for Science and Environment consider that the
economy cars will be disastrous.
Solutions
This can change if renewable energies are used. Steps which Tata Motors is
already taking:
Compressed-air fuel
Tata Motors is working with a French firm on using compressed air as fuel which
is eco-friendly and revolutionary in itself for a car of such large-scale.
The Nano is alleged to have severely affected the used car market in India, as
many Indians opt to wait for the Nano's release rather than buying used cars,
such as the Maruti 800 (a rebadged Suzuki Alto), which is considered as the
Nano's nearest competitor. Sales of new Maruti 800s have dropped by 20%, and
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used ones by 30% following the unveiling of the Nano. As one automotive
journalist summarises; “People are asking themselves – and us - why they
should pay, say, 250,000 Rupees for a Maruti Alto, when they can wait and get a
brand new Nano for less in a few months’ time, a car that is actually bigger”.
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