dhiraj tresury

8/7/2019 Dhiraj tresury

1/40

De-licensing in 1991 put the Indian automobile industry on a new growthtrajectory, which attracted foreign auto giants to set up their production facilities inthe country to take advantage of various benefits it offers. Large middle classpopulation, growing earning power and strong technological capability have beenboosting automobile demand for past few years. Despite economic slowdown, theIndian automobile sector is expected to see high growth in coming years,especially in passenger cars segment, said our new research report, "Indian

Automobile Sector Analysis.

The passenger vehicle market, which constitutes around 80% of automobile sales,has immense growth potential as passenger car stock stood at around 11 per 1,000people in 2008. Anticipating the future market potential, the production ofpassenger vehicle is forecasted to grow at a CAGR of around 11% from 2009-10 to2012-13.

The recent launch of Tata Nano has brought about a new revolution in thecountrys small car segment. Seeing the good initial response from consumers,many other players in the industry are chalking out their plans to launch cars in thissegment in the next few years. Our research foresees a CAGR growth of around12% in domestic volume sales of passenger vehicles during the forecast period.Other segments, such as two-wheelers, multi-purpose vehicle and light commercialvehicle, are also expected to witness fast growth in coming years.

The report covers various aspects of the Indian automobile market and gives

detailed analysis of its various segments such as passenger vehicle, commercialvehicle, utility vehicles, multi-purpose, two wheelers and three wheelers. Eachsection succinctly explains the current and future market trends, and developmentsin the Indian automobile market. There are immense opportunities for variousindustry players including automobile manufacturers and players of automobilecomponents.

Besides, we have also comprehensively analyzed the auto component industry and

its future outlook. The study has evaluated growth avenues available for theautomobile market, which include automotive design market, non-conventionalvehicle market, domestic tyre industry, India as global manufacturing hub, greencar market etc.

Market Overview


2/40

The automotive sector comprises the Original Equipment Manufacturers (OEMs)and auto component manufacturers. Globally, the automotive industry isrecognised as a key component and driver of national economy. The globalautomotive industry is in the midst of a major structural transformation

Among OEMs, global conglomerates are emerging, driven by mergers andalliances among manufacturers (eg: GM/Fiat/ Suzuki; Ford/Volvo/Mazda).

Component manufacturers, or suppliers, are getting Tierised, with Tier 1suppliers taking on the role of component

aggregation and module supply/assembly, and component suppliers beingrelegated to Tiers 2 or 3.

Relationships between OEMs and suppliers (especially Tier 1s) are becomingincreasingly collaborative.

These trends have affected the Indian auto industry as well, leading to a rapidtransformation of the industry over the last decade or so. After the end of licensingin 1993, the industry has witnessed rapid growth in volumes and capacity, and 17new ventures have come up in the last 10 years. These include global giants suchas General Motors, Ford, Toyota, Honda, Hyundai and Fiat. The industryencompasses commercial vehicles, multi-utility vehicles, passenger cars, twowheelers, three wheelers and auto components.

The domestic automobile market has been growing at 14.2 per cent CAGR over

the past 4 years (2000-01 to 2004-05), while the auto components market has beengrowing at 19.2 per cent CAGR (2000-01 to 2003-04). The industry (OEMs andsuppliers together) contributed nearly 4 per cent to the countrys GDP in 2003-04.The automotive sector also offers significant employment opportunities. It employs0.45 million people directly and around 10 million people indirectly.

The industrys capabilities in design, engineering and manufacturing have beenrecognised the world over, and most automotive majors are looking to increasingly

source auto components from India. India is emerging as one of the most attractiveautomotive markets in the world, and is poised to become a key sourcing base forauto components. The table below captures the highlights of the sector in India thatillustrates its growing significance

Indian Automobile Industry


3/40

Largest three wheeler market in the world

2nd largest two wheeler market in the world

4th largest passenger vehicle market in Asia

4th largest tractor market in the world

5th largest commercial vehicle market in the world

The industry structure spans all segments and is concentrated in regional

clusters

The India automotive sector has a presence across all vehicle segments and keycomponents. In terms of volume, two wheelers dominate the sector, with nearly 80

per cent share, followed by passenger vehicles with 13 per cent. The industry hadfew players and was protected from global competition till the 1990s. Aftergovernment lifted licensing in 1993, 17 new ventures have come up. At present,there are 12 manufacturers of passenger cars, 5 manufacturers of multi utilityvehicles (MUVs), 9 manufacturers of commercial vehicles, 12 of two wheelers and4 of three wheelers, besides 5 manufacturers of engines. With the arrival of globalplayers, the sector has become highly competitive.

Concentrated in regional clusters

Automobile manufacturing units are located all over India. These are, however,concentrated in some pockets such as Chennai and Bangalore in the south, Pune inthe west, the National Capital Region (NCR, which includes New Delhi and itssuburban districts) in the north, Jamshedpur and Kolkata in the east and Pithampurin the central region. Following global trends, the Indian automotive sector alsohas most auto suppliers located close to the manufacturing locations of OEMs,forming regional automotive clusters. Broadly, the three main clusters are centered

around Chennai, Pune and the NCR.

Auto Components sector is highly fragmented

The Indian automotive component industry is highly fragmented. There-are nearly6,400 players in the sector, of which only about 6 per cent are organised and the

remaining 94 per cent are small-scale, unorganized players. In terms of valueadded, however, the organised players account for nearly 77 per cent of the outputin the sector. The sector manufactures components across all key vehicle systems.


4/40

The break-up of the output from the organised sector, in value terms, across keyvehicle systems, is shown in the figure.

The automotive sector is growing strongly in both domestic and exports

markets

Indian automobile industry has been performing well both in the domestic and theinternational markets. Automobiles - Domestic Performance The production anddomestic sales of the automobiles in India have been growing strongly. Whileproduction increased from 4.8 million units in 2000-1 to 8.5 million units in 2004-05 (a CAGR of over 15 per cent), domestic sales during the same period have goneup from 4.6 million to 7.9 million units (CAGR 14.2 per cent).

A positive trend in the domestic market is that the growth has not been driven by

one or two segments, but is consistent across all key segments. Two wheelers,which constitute the majority of the industry volume, have been growing at a rateof 14.3 per cent, three wheelers at a rate of 14 per cent and passenger vehicles at arate of 11.3 per cent. Commercial vehicles have been growing at a higher rate ofnearly 23.5 per cent, although from a lower base.

Since nearly all macro-economic indicators GDP, infrastructure, populationdemographics, interest rates, etc. are showing a favourable trend, the domesticmarket for automobiles in India is expected to continue on its growth trajectory.

Commercial Vehicles

The commercial vehicle production in India increased from 156,706 in 2001 to350,033 in 2005. This segment can be divided into three categories heavycommercial vehicles (HCVs), medium commercial vehicles (MDVs or MCVs) andlight commercial vehicles (LCVs). Medium and heavy commercial vehiclesformed about 62 per cent of the total domestic sales of CVs in 2004. Thesesegments have also been driving growth, having grown at a CAGR of nearly 24.7per cent over the past five years. The key trends facilitating growth in this sectorare the development of ports and highways, increase in construction activities and

agricultural output. With better roads and highway corridors linking major cities,the demand for larger, multi-axle trucks is increasing in India.

Passenger Vehicles

Passenger vehicles consist of passenger cars and utility vehicles. This segment hasbeen growing at a CAGR of 11.3 per cent for the past four years.


5/40

A key trend in this segment is that with rising income levels and availability ofbetter financing options, customers are increasingly aspiring for higher-endmodels. There has been a gradual shift from entry-level models to higher-endmodels in each segment. For example, in passenger cars, till recently, the Maruti800 used to define the entry level car, and had a predominant market share. Overthe last 3-4 years, higher-end models such as Hyundai Santro, Maruti Wagon R,Alto and Tata Indica have overtaken the Maruti 800.

Another development has been the blurring of the dividing line between utilityvehicles and passenger cars, with models like Mahindra & Mahindras Scorpioattracting customers from both segments. Upper end sports utility vehicles (SUVs)attract potential luxury car buyers by offering the same level of comfort in theinteriors, coupled with on-road performance capability.

Two wheelers

The production of two wheelers in India increased from 3.76 million vehicles in2001 to 6.53 million vehicles in 2005 The domestic sales have been increasing at aCAGR of 14.3 per cent for the past 4 years. Motorcycles constituted 79.5 per centof the domestic sales of two wheelers in India and have been growing at nearly 24per cent CAGR. In thescooter segment, overall domestic sales grew by 1.3 per centCAGR, driven primarily by ungeared scooters and scooters with automatic gears.The sales of mopeds have 6declined at a CAGR of 15.9 per cent for the past four

years. The motorcycle segment clearly drives the growth of the two wheeler

segment in India.

The two wheeler segment is being shaped by changing demographics andlifestyles. An increasing number of working women and greater affluence amongcollege goers have led to an increase in demand for ungeared/auto geared scooters.As with the case of passenger vehicles, there is a rising demand for higher-endmodels that combine style and performance in this segment as well. Inmotorcycles, for example, models with higher engine capacities (125cc, 150cc or

above) are proving very popular.

Three wheelers

The three wheeler segment in India is currently small in size, but growing rapidly.The production of three wheelers in India has increased from 203,234 vehicles in2001 to 374,414 vehicles in 2005. The domestic sales have increased at a CAGR of

14 per cent for the past four years from 181,899 vehicles in 2001 to 307,887


6/40


7/40


8/40

Commercial Vehicles Tata Motors, Ashok Leyland, SwarajMazda, Mahindra & Mahindra, Bajaj Tempo, Eicher Motors

Passenger Vehicles Tata Motors, Maruti Udyog, Honda

Motors, Hyundai Motors, Toyota, Skoda, Mahindra & Mahindra, DaimlerChrysler, Hindustan Motors

Two Wheelers Hero Honda, Honda Motors, BajajAuto, TVS Motors, Yamaha, Kinetic Engineering

Three Wheelers Bajaj Auto, Piaggio India

The Indian automobile industry is highly competitive with a large number ofplayers in each industry segment. Most of the global majors are present in thepassenger vehicle and two wheeler segments. In the components industry too,global players such as Visteon, Delphi and Bosch are well established, competingwith domestic players.

The presence of global competition has led to an overall increase in capabilities ofthe Indian auto sector. Increase in competition has led to a pressure on margins,and players have become increasingly cost efficient. Quality levels have gone up,and there is an increasing focus on compliance to TPM, TQM and Six Sigmaprocesses. This has led to an increased confidence among domestic players, whoare now focusing on opportunities abroad. Key players in the components sector

like Bharat Forge and Sundaram Fasteners have become key global suppliers intheir categories.

Large market with significant potential for growth in demand

India offers a huge growth opportunity for the automobile sector the domesticmarket is large and has the potential to grow further in the future due to positivedemographic trends and the current low penetration levels.

Large target consumer base and rising income levels:

India has nearly 23 per cent of the global population and is one of the mostattractive consumer markets in the world today. Income levels across populationsegments have been growing in India. According to National Council of AppliedEconomic Research (NCAER) data, the consuming class, with an annual income ofUS$ 980or above, is growing and is expected to constitute over 80 per cent of thepopulation by 2009-10.


9/40

In addition, a large proportion of the Indian population is relatively young - in theage group of 20-59 years. This is expected to further boost the automotivedomestic market as a younger population has a higher consumption index.

The rise in income levels of the Indians and the emergence of the consuming classthat has higher propensity to spend offers great opportunities for growth tocompanies across various sectors.

Changing lifestyles, driving demand for new segments

Consumers in India are now more informed, sophisticated and demanding. Urbanconsumers have been especially exposed to western lifestyles through overseastravel For example, more than 5 million Indians travelled overseas last year andthis number is expected to increase by 15 per cent to 20 per cent per annum. An

increase in the number of working women and the prevalence of nuclear double-income families, especially in urban areas, are other trends shaping lifestyles.

These changes are driving an increased need for personal transport, especially insegments like working women, young executives and teenagers. This has led to thegrowth in demand for motorcycles, ungeared and automatic scooters and compact

cars. Across the automobile spectrum, consumer aspirations are driving demandfor upper end models in all segments.

Presence of strong industry associations and supporting industries

Industry Associations

The Indian automotive industry is well served by the two industry associations Society of Indian Automobile Manufacturers (SIAM) that represents the OEMsand Automotive Components Manufacturers Association (ACMA) that representsthe components industry. Both associations actively engage with industry,government and other stakeholders to promote the interests of the industry andimprove competitiveness.

Supplier base

Indian automobile manufacturers are well supported by the automotive componentindustry. Indian companies produce a range of automotive components like engineparts, electrical parts, equipments etc.


10/40

Ford is leveraging the large, high quality automotive supplier base of India and hasmade India a component-sourcing base. This has helped Ford reduce the cost ofmanufacturing and increase its exports. Ford India awarded the Q1 supplier statusto 10 suppliers to help them export their products to Ford worldwide.

Government Regulations and Support

The Government of India (GoI) has identified the automotive sector as a key focusarea for improving Indias global competitiveness and achieving high economicgrowth. The Government formulated the Auto Policy for India with a vision toestablish a globally competitive industry in India and to double its contribution tothe economy by 2010. It intends to promote Research & Development inautomotive industry by strengthening the efforts of industry in this direction by

providing suitable fiscal and financial incentives. Some of the policy initiatives

include:

Automatic approval for foreign equity investment upto 100 per cent ofmanufacture of automobiles and component is permitted.

The customs duty on inputs and raw materials has been reduced from 20 per cent

to 15 per cent. The peak rate of customs duty on parts and components of battery-operated vehicles have been reduced from 20 per cent to 10 per cent. These newregulations would strengthen Indias commitment to globalisation. Apart from this,custom duty has been reduced from 105 per cent to 100 per cent on second hand

cars and motorcycles.

National Automotive Fuel Policy has been announced, which envisages a phasedprogramme for introducing Euro emission and fuel regulations by 2010.

Tractors of engine capacity more than 1800 cc for semi-trailers will now attractexcise duty at the rate of 16 per cent.

Excise duty is being reduced on tyres, tubes and flaps from 24 per cent to 16 percent. Customs duty on lead is 5 per cent.

A package of fiscal incentives including benefits of double taxation treaty is nowavailable. These government policies reflect the priority government accords tothe automobile sector. A liberalised overall policy regime, with specific incentives,provides a very conducive environment for investments and exports in the sector.

Key Domestic & Foreign Players


11/40

Profile of Domestic Players

The outlook for Indias automotive sector appears bright

The outlook for Indias automotive sector is highly promising. In view of current

growth trends and prospect of continuous economic growth of over 5 per cent, allsegments of the auto industry are likely to see continued growth. Large

infrastructure development projects underway in India combined with favorable

government policies will also drive automotive growth in the next few years. Easy

availability of finance and moderate cost of financing facilitated by double income

families will drive sales in the next few years.

India is also emerging as an outsourcing hub for global majors. Companies like

GM, Ford, Toyota and Hyundai are implementing their expansion plans in the

current year. While Ford and Toyota continue to leverage India as a source ofcomponents, Hyundai and Suzuki have identified India as a global source for

specific small car models.

At the same time, Indian players are likely to increasingly venture overseas, both

for organic growth as well as acquisitions. The automotive sector in India is poised

to become significant, both in the domestic market as well as globally.

Automobiles[Key Points | Financial Year '10 | Prospects | Sector

Do's and Dont's]The Indian automobile segment can be divided into several

segments viz. two-wheelers (motorcycles, geared and ungearedscooters and mopeds), three wheelers, commercial vehicles(light, medium and heavy), passenger cars, utility vehicles

(UVs) and tractors.

Demand is linked to economic growth and rise in income levels.Per capita penetration at around nine cars per thousand people isamong the lowest in the world (including other developingeconomies like Pakistan in segments like cars).

While the industry is highly capital intensive in nature in case o


12/40

four-wheelers, capital intensity is a lot less for two-wheelers.Though three-wheelers and tractors have low barriers to entry interms of technology, four wheelers is technology intensive.Costs involved in branding, distribution network and spare partsavailability increase entry barriers. With the Indian marketmoving towards complying with global standards, capitalexpenditure will rise to take into account future safety

regulations.

As compared to their global counterparts, both the two-wheeleras well as four wheeler segments are relatively lesserfragmented. However, things are changing, especially on thepassenger cars front as many foreign majors are eyeing theIndian market. As a result, pricing power is likely to diminish

going forward.

Automobile majors increase profitability by selling more units.As number of units sold increases, average cost of selling anincremental unit comes down. This is because the industry has ahigh fixed cost component. This is the key reason why operatingefficiency through increased localization of components andmaximizing output per employee is of significance.

Financial Year'10

A total of 9.4 m two-wheelers were sold in India in FY10, a growth of a strong27% over the previous year. Motorcycles accounted for 78% of the total twowheelers sold. Although economic growth came in much below than 9%, lowinterest rate, availability of credit and a low based effect helped two wheelersales to grow strongly. The scooters (geared & ungeared) improved their salesconsiderably, largely due to improved performance of the ungeared scootersegment. The 3-wheeler segment also performed well as domestic volumes

improved 26% YoY, led by 31% growth in passenger carriers. The goodssegment on the other hand grew more than 11%.

The medium and heavy commercial vehicles (M/HCVs) segment saw itsvolumes grow by a huge 34%. This came on the back of 37% drop in volumesin the previous year, the industrys second in eight years. High cost ofborrowings and economic slowdown affected growth in FY09, the reversal of


13/40

these factors helped growth in FY10. LCVs on the other hand, outperformedtheir HCV peers as volumes increased at an even better rate of 43%. Thegrowth in the segment was largely propelled by low tonnage vehicles of thelikes of Ace, the sub one tonner from Tata Motors and a couple of similar

launches by competition.

The tractor industry, the worlds largest also logged in impressive growth inFY10. Domestic volumes grew by 32% as against a marginal growth in the

previous year. After suffering a marginal decline in FY09, sales of passengervehicles increased by 26% in FY10, primarily due to availability of finance andlow interest rates. Utility Vehicles also logged in a strong growth of 21% inFY10.

TOP

ProspectsThe government spending on infrastructure in roads and airports and higherGDP growth in the future will benefit the auto sectorin general. We expect aslew of launches in the Segment 'B' and Segment 'C' of passenger cars. Utilityvehicle segment is expected to grow at around 8% to 9% in the long-term.

In the 2-wheeler segment, motorcycles are expected to witness a flurry of newmodel launches. Though the market size is expected to grow by 10% to 12%,competitive pressure could keep prices and margins under control. TVS, Hondaand Hero Honda are poised to benefit from higher demand for ungeared scooters

in the urban and rural markets.

Riding the wave of structural changes taking place in the country, the tractorindustry has registered good growth in FY10 despite sub-par monsoons.However, while fiscal FY09 saw volumes grow marginally, the same roaredback in FY10, witnessing a growth of 32%. While good monsoon is a positivefor the sector, given the fact that non farm incomes have continued to climb up,volumes should still hold up pretty well despite a year or two of poor monsoons.The longer-term picture is impressive in light of poor mechanisation levels in the

countrys farm sector and the thrust of the government on improving ruralinfrastructure.

With an estimated 40% of CVs plying on the roads 10 years old, demand forHCVs is expected to grow by 7% to 8% over the long term. While the industryis going through cyclical hiccups currently, we expect this factor to weaken inthe future on account of strong structural tailwinds. The privatisation of select


14/40

state transport undertakings bodes well for the bus segment.

Introduction:

During early 60s & 70s, automobiles came largely in twos.

In scooters, you had a Lambretta or a Vespa.

In motorcycles, you had a Bullet or a Java.

In cars, you had to choose between an Ambassador and a Fiat.

In trucks, it was either an Ashok Leyland or a Tata.

In tractors, it was between a Swaraj and a Mahindra.

This situation reflected the India of yester years. Economic reforms andderegulation have transformed that scene. Automobile industry has written anew inspirational tale. It is a tale of exciting multiplicity, unparalleled growthand amusing consumer experience - all within a few years. India has already

become one of the fastest growing automobile markets in the world. This is atribute to leaders and managers in the industry and, equally to policy planners.

The automobile industry has the opportunity to go beyond this remarkableachievement. It is standing on the doorsteps of a quantum leap.

The Indian automobile industry is going through a technological change whereeach firm is engaged in changing its processes and technologies to maintain thecompetitive advantage and provide customers with the optimized products andservices. Starting from the two wheelers, trucks, and tractors to the multi utilityvehicles, commercial vehicles and the luxury vehicles, the Indian automobile

industry has achieved splendid achievement in the recent years.

"The opportunity is staring in your face. It comes only once. If you miss it, youwill not get it again"

On the canvas of the Indian economy, auto industry maintains a high-flyingplace. Due to its deep frontward and rearward linkages with several key


15/40


16/40

crossed rupees 9000 crore and an export of one half size of this figure.

Eye-Catching FDI Destination - INDIA!

India is on the peak of the Foreign Direct Investment wave. FDI flows into Indiatrebled from $6 billion in 2004-05 to $19 billion in 2006-07 and are expected toquadruple to $25 billion in 2007-08. By AT Kearney's FDI Confidence Index

2006, India is the second most attractive FDI destination after China, pushingthe US to the third position. It is commonly believed that soon India will catchup with China. This may also happen as China attempts to cool the economy andits protectionism measures that are eclipsing the Middle Kingdom'sattractiveness. With rising wages and high land prices in the eastern regions,China may be losing its edge as a low-cost manufacturing hub. India seems to bethe natural choice.

India is up-and-coming a significant manufacturer, especially of electrical and

electronic equipment, automobiles and auto-parts. During 2000-2005 of the totalFDI inflow, electrical and electronic (including computer software) andautomobile accounted for 13.7 per cent and 8.4 per cent respectively.

In services sectors, the lead players are the US, Singapore and the UK. During2000-2005, the total investment from these three countries accounted for about40 per cent of the FDI in the services sector. In automobiles, the key player isJapan. During 2000-2005, Japan accounted for about 41 per cent of the total FDI

in automobile, surpassing all its competitors by a big margin.India's vast domestic market and the large pool of technically skilled manpower

were the magnetism for the foreign investors. Hitherto, known for knowledge-based industries, India is emerging a powerhouse of conventional manufacturingtoo. The manufacturing sector in the Index for Industrial Production has grownat an annual rate of over 9 per cent over the last three years.Korean auto-makers think India is a better destination than China. Though Chinaprovides a bigger market for automobiles, India offers a potential for highergrowth. Clearly, manufacturing and service-led growth and the increasing

consumerisation makes India one of the most important destinations for FDI.

Automotive Mission Plan 2016

The bumper-to-bumper traffic of global automobile biggies on the passage toIndia has finally made government sit up and take notice. In a bid to drivegreater investments into the sector, ministry of heavy industries has decided to


17/40

put together a 10-year mission plan to make India a global hub for automotiveindustry.

"The ten year mission plan will also set the roadmap for budgetary fiscal

incentives"The Government of India is drawing up an Automotive Mission Plan 2016 thataims to make India a global automotive hub. The idea is to draw an innovativeplan of action with full participation of the stakeholders and to implement it inmission mode to meet the challenges coming in the way of growth of industry.Through this Automotive Mission Plan, Government also wants to provide a

level playing field to the players in the sector and to lay a predictable futuredirection of growth to enable the manufacturers in making a more informedinvestment decision.

Major players in the automobile sector are:

o Tata

o Mahindra

o Ashok Leyland

o Bajaj

o Hero Honda

o Daimler Chrysler

o Suzuki

o Ford

o Fiat

o Hyundai

o General Motors

o Volvo


18/40

o Yamaha

o Mazda

Foreign Companies in the Indian auto-sector

Until the mid-1990s, automobile industry in India consisted of just a handful oflocal companies with small capacities and obsolete technologies. Nevertheless,after the sector was thrown open to foreign direct investment in 1996, some ofthe global majors moved in and, by 2002, Hyundai, Honda, Toyota, GeneralMotors, Ford and Mitsubishi set up their manufacturing bases.

Over the past four to five years, the country has seen the launch of several

domestic and foreign models of passenger cars, multi-utility vehicles (MUVs),

commercial vehicles and two-wheelers and a robust growth in the production ofall kinds of vehicles. Moreover, owing to its low-cost, high-qualitymanufacturing, India has also emerged as a significant outsourcing hub for autocomponents and auto engineering design, rivaling Thailand. German auto-makerVolkswagen AG, too, is looking to enter India.

India is expected to be the small car hub for Japanese major Toyota. The car, ahot hatch like the Swift or Getz is likely to be exported to markets like Braziland other Asian countries. This global car is crucial for Toyota, which is looking

to improve its sales in the BRIC (Brazil, Russia, India, China) markets.

Two multi-national car majors -- Suzuki Motor Corporation of Japan andHyundai Motor Company of Korea -- have indicated that their manufacturingfacilities will be used as a global source for small cars. The spurt in in-houseproduct development skills and the uniquely high concentration of small carswill influence the country's ability to become a sourcing hub for sub-compactcars.

A heartening feature of the changing automobile scene in India over the past fiveyears is the newfound success and confidence of domestic manufacturers. They

are no longer afraid of competition from the international auto majors.

For instance, today, Tata Motor's Indigo leads the popular customer category,while its Indica is neck-to-neck with Hyundai's Santro in the race for the top-slotin the B category. Meanwhile M&M's Scorpio has beaten back the challenge

from Toyota's Qualis to lead the SUV segment.


19/40

Similarly, a few Indian winners have emerged in the motorbike market -- the150 and 180 cc Pulsar from Bajaj and 110 cc Victor from the TVS stable. The 93cc Bike from Bajaj and 110 cc Freedom bike from LML have also emerged aswinners.

Evidently, Indian players have learnt from past mistakes and developed the skillsto build cheaper automobiles using `appropriate' technologies. TVS, for instance,paid an overseas source $100,000 to fine-tune home-grown engines rather than$1.5 million to import the entire engine. Similarly, M&M adapted availablesystems and off-the-shelf components from global suppliers to keep costs down

and go for aggressive pricing. True, Indian players are still lacking in scale ofoperation. While economies of scale no doubt play an important role in the autosector, a few Indian manufacturers relied on innovation rather than scale ofoperation for competitive advantage. For instance, Sundram Fasteners was able

to achieve the feat of directly supplying radiator caps to General Motors purelyon the strength of innovation in product quality. The domestic tooling industrybagged the order for the Toyota Kirloskar transmission plant in the face of stiffcompetition from multinational corporations. The cost of the entire job turnedout to be only a fraction of the original estimate.

As the automobile industry has matured over the past decade, the autocomponents industry has also grown at a rapid pace and is fast achieving globalcompetitiveness both in terms of cost and quality.

In fact, industry observers believe that while the automobile market will grow ata measured pace, the components industry is poised for a take-off. For it isamong the handful of industries where India has a distinct competitiveadvantage. International automobile majors, such as Hyundai, Ford, Toyota andGM, which set up their bases in India in the 1990s, persuaded some of their

overseas component suppliers to set up manufacturing facilities in India.

Consequently, the value of cumulative output of the auto components industryrose rapidly to Rs 30,640 crore at end-2003-04 from just Rs 11,475 crore in

1996-97. Foreign companies such as Delphi, which followed General Motors in1995, and Visteon, that followed Ford Motors in 1998, soon realised thesubstantial cost advantage of manufacturing components in India.

Finding the cost lower by about 30 per cent, they began exploring the possibilityof exporting back these low-cost, high-quality components to their globalfactories and, thus, reducing their overall costs. Not surprisingly, the industry's


20/40

exports registered a more than four-fold jump to Rs 4,800 crore in 2003-04 fromust Rs 1,033 crore in 1996-97.

Automobile majors such as Maruti Udyog, Toyota, Hyundai have now finalised

their plans to invest in some of the critical auto components. According to theAutomotive Component Manufacturers Association of India (ACMA) officials,auto component manufacturers are expected to invest about Rs 10,000 crore overthe next five years at the rate of Rs 2,000 crore per annum.

According to analysts, the auto component industry could emerge as the nextsuccess story after software, pharmaceuticals, BPO and textiles. The size of theglobal auto component industry is estimated at $1 trillion and is set to growfurther. Against this backdrop, McKinsey's latest report has estimated that thesector has the potential of increasing its exports to $25 billion by 2015 from $1.1

billion in 2004.

Threat to the Dream!

India's expedition to become a global auto manufacturing hub could be seriouslychallenged by its inability to uphold its low-cost production base. A surveyconducted by the research, KMPMG firm reveals that the Indian auto componentmanufacturers are increasingly becoming skeptical about sustaining the low-costbase as overheads including labour costs and complex tax regime are constantlyrising.

The survey said many executives believe that India's cost advantage is grindingdown fast as labour costs are constantly increasing and retaining employees isbecoming more and more difficult. Increased presence of global automotivecompanies in the country was cited as one of the reasons for the high erosionrate.

Indian auto businesses will only flourish if they boost investments in

automation. In the longer term, cost advantage will only be retained if Indiancapital can be used to develop low-cost automation in manufacturing. This is theway to preserve our low cost.

Global auto majors are also cynical about India's low cost manufacturing base.India taxation remains a big disadvantage. This is not about tax rates it is justabout unnecessary complexity. But some companies also believe there is scope


21/40

for reducing the cost of doing business.

In spite of this there are opportunities to exploit lower costs right across theboard. It's true that labour costs are definitely increasing but they are still five

per cent of the total operational costs. The labour costs can be further reduced ifcompanies are successful in bringing down other costs like reducing powercosts. Low-cost base can never last long. The company said Indian industry hastill now relied on very labour intensive model but it would have to switch to amore capital intensive model now.

Maruti Udyog Ltd. (MUL) is the first automobile company in the world to behonoured with an ISO 9000:2000 certificate. The company has a joint venturewith Suzuki Motor Corporation of Japan. It is said that the company takes only14 hours to make a car. Few of the popular models of MUL are Alto, Baleno,Swift, Wagon-R and Zen.

Maruti Suzuki India Limited (Hindi: ) a partial

subsidiary ofSuzuki Motor Corporation ofJapan, is India's largest passenger carcompany, accounting for over 45% of the domestic car market. The company

offers a complete range of cars from entry level Maruti 800 and Alto, to stylish

hatchbackRitz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and

Sports Utility vehicleGrand Vitara.[2]

It was the first company in India to mass-produce and sell more than a million

cars. It is largely credited for having brought in an automobile revolution to

India. It is the market leader in India and on 17 September 2007, Maruti Udyog

Limited was renamed Maruti Suzuki India Limited. The company'sheadquarters are located in Delhi.

Contents


22/40

[hide]

1 Profile

2 Partner for the joint venture

3 Joint venture related issues

4 Industrial relations

5 Services offered

o 5.1 Current sales of automobiles 5.1.1 Manufactured locally 5.1.2 Imported

o 5.2 Discontinued car modelso 5.3 Manufacturing facilities

5.3.1 Gurgaon Manufacturing Facility 5.3.2 Manesar Manufacturing Facility

o 5.4 Sales and service networko 5.5 Maruti Insuranceo 5.6 Maruti Financeo 5.7 Maruti TrueValueo 5.8 N2N Fleet Managemento 5.9 Accessorieso 5.10 Maruti Driving School

6 Issues and problems

7 Exports

8 See also

9 References and notes

10 External links

[edit]Profile


23/40

Maruti 800 in Nainital hill

The old logo of Maruti Suzuki India Limited. Later the logo of Suzuki Motor

Corp. was also added to it

'To Munsiyari on a Maruti 800',UttarakhandHimalayas


24/40

Maruti Suzuki plant in Gurgaon

Maruti Suzuki is India's number one leading automobile manufacturer and the

market leader in the car segment, both in terms of volume of vehicles sold andrevenue earned. Until recently, 18.28% of the company was owned by the Indian

government, and 54.2% by SuzukiofJapan. The BJP-led government held

an initial public offering of 25% of the company in June 2003. As of 10 May

2007, Govt. of India sold its complete share to Indian financial institutions. With

this, Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the

actual production commenced in 1983 with the Maruti 800, based on the Suzuki

Altokei carwhich at the time was the only modern car available in India, itsonly competitors- the Hindustan Ambassadorand Premier Padmini were both

around 25 years out of date at that point. Through 2004, Maruti Suzuki has

produced over 5 Million vehicles. Maruti Suzukis are sold in India and various

several other countries, depending upon export orders. Models similar to Maruti

Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor

Corporation and manufactured in Pakistan and otherSouth Asian countries.

The company annually exports more than 50,000 cars and has an extremely large

domestic market in India selling over 730,000 cars annually. Maruti 800, till

2004, was the India's largest selling compact car ever since it was launched in

1983. More than a million units of this car have been sold worldwide so far.

Currently, Maruti Suzuki Alto tops the sales charts and Maruti Suzuki Swift is

the largest selling in A2 segment.

Due to the large number of Maruti 800s sold in the Indian market, the term

"Maruti" is commonly used to refer to this compact car model ("Maruti" is

another name of the Hindu god, Hanuman).

Maruti Suzuki has been the leader of the Indian car market for over two decades.Its manufacturing facilities are located at two

facilities Gurgaon and Manesarsouth ofDelhi. Maruti Suzukis Gurgaon facility

has an installed capacity of 350,000 units per annum. The Manesar facilities,

launched in February 2007 comprise a vehicle assembly plant with a capacity of

100,000 units per year and a Diesel Engine plant with an annual capacity of


25/40

100,000 engines and transmissions. Manesar and Gurgaon facilities have a

combined capability to produce over 700,000 units annually.

More than half the cars sold in India are Maruti Suzuki cars. The company is a

subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of

Maruti Suzuki. The rest is owned by public and financial institutions. It is listed

on the Bombay Stock Exchange and National Stock Exchange in India.

During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were

exported. In all, over six million Maruti Suzuki cars are on Indian roads since

the first car was rolled out on 14 December 1983.

Maruti Suzuki offers 15 models, Maruti 800, Alto, WagonR, Estilo, A-

star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara. Swift,

Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara isimported from Japan as a completely built unit (CBU), remaining all models are

manufactured in Maruti Suzuki's Gurgaon Plant.

Suzuki Motor Corporation, the parent company, is a global leader in mini and

compact cars for three decades. Suzukis technical superiority lies in its ability to

pack power and performance into a compact, lightweight engine that is clean and

fuel efficient.

Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It

has been rated first in customer satisfaction among all car makers in India from1999 to 2009 by J D Power Asia Pacific.

[3]

Further information: Timeline of Maruti Suzuki

[edit]Partner for the joint venture

Sanjay Gandhi owned the Maruti Technical Services Limited, which ran into

trouble and was liquidated. After the death of Sanjay Gandhi, the Indira Gandhi

government assigned a delegation of Indian technocrats to hunt for a

collaborator for the project. Initial rounds of discussion were held with the giants

of the automobile industry in Japan including Toyota, Nissan and Honda. Suzuki

Motor Corporation was at that time a small player in the four wheeler

automobile sector and had major share in the two wheeler segment. Suzuki's bid

was considered negligible.

While the major companies were personally represented in the initial rounds of


26/40

discussion, Osamu Suzuki, Chairman and CEO of the company ensured that he

was present in all the rounds of discussion. Osamu in an article writes that it

subtly massaged their (Indian delegation's) egos and also convinced them about

the sincerity of Suzuki's bid. Suzuki in return received a lot of help from the

government in such matters as import clearances for manufacturing equipment

(against the wishes of the Indian machine tool industry then and its own

socialistic ideology), land purchase at government prices for setting up the

factory Gurgaon and reduced or removal of excise tariffs. This ensured that

Suzuki conscientiously nursed Maruti Suzuki through its infancy to become one

of its flagship ventures.[4]

[edit]Joint venture related issues

Maruti Suzuki's A-Starvehicle during its unveiling in Pragati Maidan,

Delhi. A-Star, Suzuki's fifth global car model, was designed and is made

only in India.[5]

Besides being Suzuki's largest subsidiary in terms of car

sales, Maruti Suzuki is also Suzuki's leading research and development

arm outside Japan

Relationship between the Government ofIndia, under the United Front

(India) coalition and Suzuki Motor Corporation over the joint venturewas a point

of heated debate in the Indian media till Suzuki Motor Corporation gained the

controlling stake. This highly profitable joint venture that had a nearmonopolistic trade in the Indian automobilemarket and the nature of the

partnership built up till then was the underlying reason for most issues. The

success of the joint venture led Suzuki to increase its equity from 26% to 40% in

1987, and further to 50% in 1992. In 1982 both the venture partners had entered

into an agreement to nominate their candidate for the post of Managing Director


27/40

and every Managing Director will have a tenure of five years[6]

Initially R.C.Bhargava, was the managing director of the company since the

inception of the joint venture. Till today he is regarded as instrumental for the

success of Maruti Suzuki. Joining in 1982 he held several key positions in the

company before heading the company as Managing Director. Currently he is on

the Board of Directors.[7]

After completing his five year tenure, Mr. Bhargava

later assumed the office of Part-Time Chairman. The Government nominated

Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr.

Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the

Public sector undertaking Bharat Heavy Electricals Limited as General Manager.

Later in 1987 he was promoted as Chief General Manager, 1988 as Director,

Productions and Projects, 1989 Director, Materials and in 1993 as Joint

Managing Director.

Suzuki Motor Corporation didn't attend the Annual General Meeting of the

Board with the reason of it being called on a short notice.[8]

Later Suzuki Motor

Corporation went on record to state that Mr. Bhaskarudu was "incompetent" and

wanted someone else. However, the Ministry of Industries, Government of India

refuted the charges. Media stated from the Maruti Suzuki sources that

Bhaskarudu was interested to indigenise most of components for the models

including gear boxes especially forMaruti 800. Suzuki also felt that Bhaskarudu

was a proxy for the Government and would not let it increase its stake in theventure.

[9]If Maruti Suzuki would have been able to indigenise gear boxes then

Maruti Suzuki would have been able to manufacture all the models without the

technical assistance from Suzuki. Till today the issue of localization of gear

boxes is highlighted in the press.[10]

The relation strained when Suzuki Motor Corporation moved to Delhi High

Court to bring a stay order against the appointment of Mr. Bhaskarudu. The

issue was resolved in an out-of-court settlement and both the parties agreed that

R S S L N Bhaskarudu would serve up to 31 December 1999, and from 1January 2000, Jagdish Khattar, Executive Director of Maruti Udyog Limited

would assume charges as the Managing Director.[11]

Many politicians believed,

and had stated in parliament that the Suzuki Motor Corporation is unwilling to

localize manufacturing and reduce imports. This remains true, even today the

gear boxes are still imported from Japan and are assembled at the Gurgaon


28/40

facility.

[edit]Industrial relations

For most of its history, Maruti Udyog Limited had relatively few problems with

its labour force. Its emphasis of a Japanese work culture and the modernmanufacturing process, first instituted in Japan in the 1970s, was accepted by the

workforce of the company without any difficulty. But with the change in

management in 1997, when it became predominantly government controlled for

a while, and the conflict between the United Front Government and Suzuki may

have been the cause of unrest among employees. A major row broke out in

September 2000 when employees of Maruti Udyog Ltd (MUL) went on an

indefinite strike, demanding among other things, revision of the incentive

scheme offered and implementation of a pension scheme. Employees struck

work for six hours in October 2000, irked over the suspension of nine

employees, going on a six-hour tools-down strike at its Gurgaon plant,

demanding revision of the incentive-linked pay and threatened to fast to death if

the suspended employees were not reinstated. About this time, the NDA

government, following a disinvestments policy, proposed to sell part of its stake

in Maruti Suzuki in a public offering. The Staff union opposed this sell-off plan

on the grounds that the company will lose a major business advantage of being

subsidised by the Government.

The standoff with the management continued to December with a proposal by

the management to end the two-month long agitation rejected with a demand for

reinstatement of 92 dismissed workers, with four MUL employees going on a

fast-unto-death. In December the company's shareholders met in New Delhi in

an AGM that lasted 30 minutes. At the same time around 1500 plant workers

from the MUL's Gurgaon facility were agitating outside the company's corporate

office demanding commencement of production linked incentives, a better

pension scheme and other benefits. The management has refused to pass on the

benefits citing increased competition and lower margins.[12]

Tata motars

Tata Motors Ltd (NSE: TATAMOTORS, BSE: 500570, NYSE: TTM) is

a multinational corporation headquartered in Mumbai, India. Part of the Tata

Group, it was formerly known as TELCO (TATA Engineering and Locomotive


29/40

Company).

Tata Motors is Indias largest automobile company, with consolidated revenues

of USD 20 billion in 2009-10. It is the leader incommercial vehicles and among

the top three in passenger vehicles. Tata Motors has products in the compact,

midsize car and utility vehicle segments. The company is the world's fourth

largest truck manufacturer, the world's second largest bus manufacturer, and

employs 24,000 workers. Since first rolled out in 1954, Tata Motors has

produced and sold over 4 million vehicles in India.[2]

Established in 1945, when the company began manufacturing locomotives, the

company manufactured its first commercial vehicle in 1954 in a collaboration

with Daimler-Benz AG, which ended in 1969.[3]

Tata Motors is a dual-listed

company traded on both the Bombay Stock Exchange, as well as on the New

York Stock Exchange. Tata Motors in 2005, was ranked among the top 10

corporations in India with an annual revenue exceeding INR320 billion. In

2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most

valuable brand' in a annual survey conducted by Brand Finance and The

Economic Times.[4]

Tata Motors has auto manufacturing and assembly plants

in Jamshedpur, Pantnagar, Lucknow, Ahmedabad, Sanand,Dharwad and Punein

India, as well as in Argentina, South Africa and Thailand.

Contents

[hide]

1 History

2 Acquisitions

3 Expansion

4 Subsidiary brands

o 4.1 Tata Daewoo Commercial Vehicleo 4.2 Hispano Carrocerao 4.3 Jaguar Cars and Land Rovero 4.4 Joint ventures

5 Important developments


30/40

o 5.1 Tata Nanoo 5.2 Tata Aceo 5.3 Compressed air car

6 Electric vehicles7 Operations

o 7.1 Tata in Indiao 7.2 Tata's global operations

8 Products

o 8.1 Passenger cars and utility vehicleso 8.2 Concept vehicleso 8.3 Commercial vehicleso 8.4 Military vehicles

9 Tata Motors technology and design subsidiaries

o 9.1 Telco Construction Equipment (TELCON)o 9.2 HV Transmission (HVTL) and HV Axles (HVAL)o 9.3 Tata Technologies Limited (TTL)o 9.4 Tata Motor European Technical Centre

10 References

11 External links

[edit]History

Tata Motors is a part of the Tata Group manages its share-holding through Tata

Sons. The company was established in 1945 as a locomotive manufacturing unit

and later expanded its operations to commercial vehicle sector in 1954 after

forming a joint venture with Daimler-Benz AG of Germany. Despite the success

of its commercial vehicles, Tata realized his company had to diversify and he

began to look at other products. Based on consumerdemand, he decided that

building a small car would be the most practical new venture. So in 1998 it

launched Tata Indica, India's first fully indigenous passenger car. Designed to beinexpensive and simple to build and maintain, the Indica became a hit in the

Indian market. It was also exported to Europe, especially the UK and Italy.

[edit]Acquisitions

In 2004 Tata Motors acquired Daewoo's truck manufacturing unit, now


31/40

known as Tata Daewoo Commercial Vehicle, in South Korea.[5]

In 2005, Tata Motors acquired 21% ofAragoneseHispano Carrocera givingit controlling rights of the company.

In 2007, Formed a joint venture with Marcopolo of Brazil and introducedlow-floor buses in the Indian Market.[6] In 2008, Tata Motors acquired British Jaguar Land Rover (JLR), which

includes the Daimler and Lanchester brand names.[7][8][9][10]

In 2010, Tata Motors acquired 80% stake in Italy-based design andengineering company Trilix for a consideration of 1.85 million. The

acquisition is in line with the companys objective to enhance its

styling/design capabilities to global standards.[11]

[edit]Expansion

The FIRST generation Tata Indica V2's excellent fuel economy, powerfulengine and aggressive marketing strategy made it one of the best selling

cars in the history of the Indian automobile industry.

After years of dominating the commercial vehicle market in India, Tata Motors

entered the passenger vehicle market in 1991 by launching theTata Sierra, a

multi utility vehicle. After the launch of three more vehicles, Tata Estate (1992,

a stationwagon design based on the earlier 'TataMobile' (1989), a light

commercial vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first

sports utility vehicle). Tata launched the Indica in 1998, the first fully

indigenous passenger car of India. Though the car was initially panned by auto-

analysts, the car's excellent fuel economy, powerful engine and aggressive

marketing strategy made it one of the best selling cars in the history of the Indian

automobile industry. A newer version of the car, named Indica V2, was a major

improvement over the previous version and quickly became a mass-favourite.

Tata Motors also successfully exported large quantities of the car to South


32/40

Africa.The success of Indica in many ways marked the rise of Tata Motors.[12]

[edit]Subsidiary brands

Jaguar Tata commercia

l trucks.

Hispano at the

2008 FIAA

in Madrid

Land Rover

[edit]Tata Daewoo Commercial Vehicle

Main article: Tata Daewoo Commercial Vehicle

Tata Motors aimed to increase its presence worldwide. In 2004, it acquired the

Daewoo Commercial Vehicle Company of South Korea. The reasons behind the

acquisition were:

Company's global plans to reduce domestic exposure. The domesticcommercial vehicle market is highly cyclical in nature and prone to

fluctuations in the domestic economy. Tata Motors has a high domestic

exposure of ~94% in the MHCV segment and ~84% in the light commercial

vehicle (LCV) segment. Since the domestic commercial vehicle sales of the

company are at the mercy of the structural economic factors, it is increasingly

looking at the international markets. The company plans to diversify intovarious markets across the world in both MHCV as well as LCV segments.

To expand the product portfolio Tata Motors recently introduced the 25MTGVW Tata Novus from Daewoos (South Korea) (TDCV) platform. Tata

plans to leverage on the strong presence of TDCV in the heavy-tonnage range

and introduce products in India at an appropriate time. This was mainly to


33/40

cater to the international market and also to cater to the domestic market

where a major improvement in the Road infrastructure was done through

the National Highway Development Project.

Tata remains India's largest heavy commercial vehicle manufacturer and Tata

Daewoo is the 2nd largest heavy commercial vehicle manufacturer in South

Korea. Tata Motors has jointly worked with Tata Daewoo to develop trucks such

as Novus and World Truck and buses namely, GloBus and StarBus.

[edit]Hispano Carrocera

Main article: Hispano Carrocera

In 2005, sensing an opportunity in the fully-built bus segment, Tata Motors

acquired a 21% stake in Hispano Carrocera SA,[13]

the leading European bus and

coach cabin maker. In 2009, the company picked up the remaining 79% stake inHispano Carrocera SA for an undisclosed sum, making it a fully-owned

subsidiary.

[edit]Jaguar Cars and Land Rover

Main articles: Jaguar Cars andLand Rover

After the acquisition of the British Jaguar Land Rover(JLR) business, which

also includes the Daimler, Lanchesterand Roverbrands,[14]

Tata Motors became

a major player in the international automobile market. On 27 March 2008, Tata

Motors reached an agreement with Ford to purchase their Jaguar Land Roveroperations forUS$2.3 billion. The sale was completed on 2 June 2008.

[10]

In addition to the brands, Tata Motors has also gained access to two design

centres and two plants in UK. The key acquisition would be of the intellectual

property rights related to the technologies.

[edit]Joint ventures


34/40

Tata MarcoPolo released this low-floor bus in India and now it is widely used

as public transport in Delhi, Mumbai, Chennai ,Bangalore and Lucknow

Tata Motors has formed a 51:49 joint venture in bus body buildingwith Marcopolo of Brazil. This joint venture is to manufacture and assemble

fully-built buses and coaches targeted at developing mass rapid transportation

systems. The joint venture will absorb technology and expertise in chassis and

aggregates from Tata Motors, and Marcopolo will provide know-how in

processes and systems for bodybuilding and bus body design. Tata and

Marcopolo have launched a low-floor city bus which is widely used by Chennai,

Delhi, Mumbai, Lucknow and Banglore transport corporations. It's

manufacturing facility is based in Dharwad.

Tata Motors also formed a joint venture with Fiat and gained access to

Fiats diesel engine technology.[15]

Tata Motors sells Fiat cars in India through a

50/50 joint venture Fiat Automobiles India Limited, and is looking to extend its

relationship with Fiat and Iveco to other segments. Tata has also formed several

JV's with many small companies in various countries around the world.

[edit]Important developments

[edit]Tata Nano

Main article: Tata Nano

Tata Nano

In January 2008, Tata Motors launched Tata Nano, the least expensive

production car in the world at about 120,000 (US $3000).[16]

The city carwas


35/40

unveiled during the Auto Expo 2008 exhibition in Pragati Maidan, New

Delhi.[17]

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 mass

motorization 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.

[edit]T

ata AceMain article: 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 (LCV) market in the country by creating a new market segment termed

the small commercial vehicle (SCV) segment. 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 28,537units due to the rising demand for Ace. The Ace was built with a load body

produced by Autoline Industries.[18]

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).[19]


36/40

Ace has also been exported to several European, South American and African

countries and all-electric models are sold through Chrysler'sGlobal Electric

Motorcars division.[20]

[edit]Compressed air car

Main article: Tata OneCAT

Tata OneCAT

Motor Development International ofFrance has developed the world's first

prototype of a compressed air car, named OneCAT.[21]

In 2007, MDI owner Guy

Negre was reported to have "the backing of Tata".[21]

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.[22] There are no gasoline costs and nofossil fuel emissions from the vehicle when run in town, but "the compressed air

driving the pistons can be boosted by a fuel burner".[22]

OneCAT is a five seat vehicle with a 200-litre (7.1 cu ft) trunk. With full tanks it

is said to run at 100 km/h (62 mph) for 90 kilometres (56 mi) 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.[23]

[edit]Electric vehicles

Tata Motors unveiled the electric versions of passenger carTata Indica and

commercial vehicle Tata Ace. Both run on lithium batteries. The company has

indicated that the electric Indica would be launched locally in India in about

2010, without disclosing the price. The vehicle would be launched in Norway in


37/40

2009.[24]

Tata Motors' UK subsidiary, Tata Motors European Technical Centre, has

bought a 50.3% holding in electric vehicle technology firm Miljbil

Grenland/Innovasjon of Norway for US$1.93 M, which specialises in the

development of innovative solutions for electric vehicles, and plans to launch the

electric Indica hatchback in Europe next year.[25][26][27]

On 17 Sept 2010 Tata

motors presented to the DTC [ Delhi Transport corporation] Four CNG - Electric

Hybrid lowfloored Starbuses to be used for commonwealth games. These will be

the first Environmentally friendly buses to be used for public transportation in

India.

[edit]Operations

This article is written like an advertisement.

Please help rewrite this article from a neutral

point of view. Forblatant advertising that would

require a fundamental rewrite to become

encyclopedic, use {{db-spam}} to mark

forspeedy deletion. (May 2010)

The Tata Safari DiCOR is one of Tata's best selling vehicles in India and

also has been fairly successful in the Mediterranean and Eastern Europe


38/40

Tata has tried to revamp all its models in order to satisfy the consumer

The purchase of Jaguar and Land Rover is expected to help give Tata Motors

gain a foothold in the European and American markets.

Tata relies on its subsidiaries for sales outside India. Seen here is the Range

Rover Sport.


39/40


40/40

[edit]Tata's global operations

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 Vehicles Company, South Koreas second largest truck maker. The

rebranded 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% controlling stake in Hispano Carrocera, a Spanish bus and coach

manufacturer,[13]

. Tata Motors continued its market area expansion through theintroduction of new products such as buses (Starbus & Globus, jointly developed

with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with

subsidiary Tata Daewoo). In May, 2009 Tata unveiled the Tata World Truck

range jointly developed with Tata Daewoo[29]

Debuting in South Korea, South

Africa, the SAARC countries and the Middle-East by the end of 2009[29]

In

2006, Tata formed a joint venture with the Brazil-based Marcopolo to

manufacture fully-built buses and coaches for India and other international

markets.[30]

Tata Motors has expanded its production and assembly operations to

several other countries including South Korea, Thailand, South Africa and

Argentina and is planning to set up plants inTurkey, Indonesia and Eastern

Europe.[28]

Tata also has franchisee/joint venture assembly operations in Kenya,

Bangladesh, Ukraine, Russia and Senegal.[31]

Tata has dealerships in 26

countries across 4 continents.[32]

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.

dhiraj tresury

Documents