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Study On Tata Motors Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 3623 words Published: 1st Jan 2015

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Tata Motors is a multinational corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive Company). Tata Motors has a consolidated revenue of USD 16 billion after the acquisition of British automotive brands Jaguar and Land Rover in 2008.

It is India’s largest company in the automobile and commercial vehicle sector with upwards of 70% cumulative Market share in the Domestic Commercial vehicle segment, and had a 0.81% share of the world market in 2007 according to OICA data. The OICA ranked it as the 19th largest automakers. based on figures for 2007.and the second largest manufacturer of commercial vehicles in the world. The company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer. In India Tata ranks as the leader in every commercial vehicle segment, and is in the top 3 makers of passenger cars. Tata Motors is also the designer and manufacturer of the iconic Tata Nano, which at INR 100,000 or approximately USD 2300, is the cheapest production car in the world.

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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.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 INR 320 billion.

In 2004 Tata Motors bought Daewoo’s truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. It also acquired Hispano Carrocera SA, now a fully-owned subsidiary. In March 2008, it acquired the Jaguar Land Rover (JLR) business from the Ford Motor Company, which also includes the Daimler and Lanchester brands. and the purchase was completed on 2 June 2008.

Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and Pune in India, as well as in Argentina, South Africa and Thailand.

India’s Tata Motors confronts safety issues

When it was launched less than a year ago, the $2,500 Tata Nano was promoted as a safe, ultracheap car for India’s lower classes, an alternative to the motorbikes that zoom precariously around the country.

New questions about the safety of the pint-size auto are being raised, however, since one of them burst into flames Sunday as it was being driven home from the showroom.

Software engineer Satish Sawant, his wife, and their 5-year-old son escaped from the silver Tata Nano — it still bore a celebratory garland of marigolds on the front hood — before the tiny car was engulfed by fire.

A chauffeur initially was at the wheel, but Sawant said he had taken over driving before the fire broke out.

Tata has offered Sawant a replacement Nano or a refund.

Sawant’s ordeal showed just the latest problem with the low-cost Nano as Tata Motors sets its sights on global expansion and aims to ramp up production of the car with a new factory next month.

Tata Motors spokesman Debasis Ray said the company is investigating the cause of the fire. Although Ray said the automaker believes it was “a one-off, stray incident,” he also said he did not know how the blaze began.

“It did catch fire,” Ray said. “We’re trying to figure out what may have caused it. Safety has never been an issue with Tata cars. They are one of the safest cars on Indian roads.”

The Nano has gotten rave reviews and awards, but some say the smoke and fire problems are symptomatic of pervasive quality-control issues at India’s number three carmaker.

The Nano was meant to bring automobile ownership to the impoverished masses — eventually around the world — by offering a safe car to people who could not otherwise afford one.

Ratan Tata, who heads the Tata Group empire, has said he conceived of the idea for a “people’s car” after seeing entire families crammed precariously on motorbikes. He decided they deserved a safer, all-weather transportation option.

The four-seater can travel up to 65 miles per hour and gets 55.5 miles to the gallon.

The Nano does not have air bags or antilock brakes, and air conditioning and power windows cost extra.

Tata Motors, which also owns Jaguar and Land Rover, plans to start selling versions of the Nano in Europe in 2011, and in the United States after that.

“As of today, is Tata good enough to take on the world? I would say no,” said Deepesh Rathore, an auto analyst at IHS Global Insight in New Delhi. “On quality standards, Tata barely makes the cut.”

There are fewer than 30,000 Nanos on the road, which means that, on a percentage basis, the problem rate is fairly high, Rathore said.

“The Nano is a wonderful product, but these incidents really tarnish the image of the car as well as the company,” Rathore said.

“This is the time for Tata to have a deep look at quality.”

Tata Motors investigating Nano fire incident

Satish Sawant was proudly driving his first car home from the showroom: A brand-new silver Tata Nano, draped with a celebratory garland of marigolds.

Then there was smoke. And then there was fire. Minutes after the software engineer’s wife and five-year-old son clambered out of the back seat, smoke from the engine, located in the Nano’s rear, erupted into flames that engulfed the tiny car.

His ordeal showed just the latest problem with the low-cost Nano _ raising fresh questions about safety and quality as top Indian carmaker Tata Motors sets its sights on global expansion and aims to ramp up production of the Nano with a new factory next month.

“My wife now doesn’t want to buy any car,” Sawant said by phone from his home in northern Mumbai on Thursday. “She doesn’t even want to go for a Mercedes.”

Starting around $2,500, the Nano has been heralded as the world’s cheapest car, and was meant to usher in a safety revolution, which would get millions of families off dangerous motorbikes and into the cool comfort of an affordable car.

Tata Motors, which also owns Jaguar and Land Rover, plans to start selling versions of the Nano in Europe in 2011, and later, in America.

Tata Motors spokesman Debasis Ray said the company is investigating the incident but believes it to be a one-off problem rather than the result of faulty design or manufacture.

“We believe it was a one-off stray incident,” he said. “It did catch fire. We’re trying to figure out what may have caused it.”

This is not the first time there have been customer complaints about the Nano, which has been feted with rave reviews and awards since its launch a year ago.

Last fall, three customers in India complained that their Nanos started smoking.

Tata Motors attributed that to a faulty electrical switch and said it had changed suppliers and done additional tests to rule out a recall or redesign.

Ray said Thursday that the incidents are not related. The switch problem, he said, “has been comprehensively addressed.”

“Safety has never been an issue with Tata cars,” he added. “They are one of the safest cars on Indian roads.”

But some say the Nano’s smoke and fire problems are symptomatic of pervasive quality control issues at India’s number three carmaker, which must be addressed before Tata can successfully take its brand global _ especially in the wake of Toyota’s massive recalls, which have left car buyers jittery about safety standards.

“As of today, is Tata good enough to take on the world? I would say no,” said Deepesh Rathore, an auto analyst at IHS Global Insight in New Delhi. “On quality standards, Tata barely makes the cut.”

There are fewer than 30,000 Nanos on the road today, which means on a percentage basis the problem rate is fairly high, he said.

“The Nano is a wonderful product, but these incidents really tarnish the image of the car as well as the company,” Rathore said. “This is the time for Tata to have a deep look at quality.”

He said the recent addition of Carl-Peter Forster, former head of General Motors in Europe, as group chief executive is a step in the right direction.

“They’ve got a guy running the show now who knows how the industry should work,” he said. “How soon will the effects be seen across the Tata product range? Well, that will take time.”

Tata singur problem

TATA MOTORS is facing a big problem from the singur farmers.The main problem in this case is that the TATA MOTORS wants to set up the manufacturing plant for the production of the world’s cheapest car TATA NANO.but the singur farmers are not ready to give their land even they ready to give the compensation of about Rs8 lacs per acre of land to the farmers but still the farmers are not ready to give their land

and the people from trinamol congress have threatened TATA officials and people working in a small plant setup there to physically prevent from entering plant and TATA has decided to move out its 800 employees out of singur plant.


Tata Motors sells 20 percent stake in Telcon to Hitachi

Tue, Mar 30 03:48 PM

New Delhi, March 30 (IANS) India’s largest commercial vehicle manufacturer Tata Motors Tuesday signed an agreement to sell its 20 percent stake in Telco Construction Equipment Company Ltd (Telcon) to Japanese partner Hitachi for Rs.1,159 crore.

‘Tata Motors, Hitachi Construction Machinery and Telcon, a 60:40 joint venture company between Tata Motors and Hitachi, signed an agreement under which Tata Motors has sold a further 20 percent stake in Telcon in favour of Hitachi for a consideration of Rs.1,159 crore,’ the Indian auto company said in a statement.

With this, Hitachi becomes the majority stakeholder in Telcon.

For the transaction, Standard Chartered Bank is the financial advisor and AZB Partners is legal advisor, the statement added.

Telcon, a leading provider of mining, infrastructure, construction and agricultural equipment and services, was set up in 1999 as a wholly-owned subsidiary of Tata Motors on the spin-off of the construction equipment business unit of the auto major.

Subsequently, in 2000 and 2005, Tata Motors inducted Hitachi into Telcon by divesting 20 percent each of its shareholding. It enabled Telcon to have access to newer technologies and processes.

Telcon has manufacturing facilities at Jamshedpur, Dharwad and Kharagpur, and it exports to countries in Asia and Africa.

Case study

Tata Motors in Trouble

Abstract:The case highlights the problems faced by Tata Motors, the largest automobile company in India. In late January 2009, Tata Motors was reeling under a severe business and financial crisis. The company had acquired Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion in June 2008. To finance the acquisition, Tata Motors raised a bridge loan of US$ 3 billion from a consortium of banks. By the end of January 2009, Tata Motors was yet to pay around US$ 2 billion towards the bridge loan. Moreover, JLR needed further investments, that too quickly, to keep the operations running. Besides this, the commercial launch of Tata Motor’s small car Nano required much more time than anticipated.

With the Indian economy showing no signs of revival soon, there seemed to be no immediate possibility of an increase in domestic demand. The Managing Director of the Tata Motors was left wondering if the worst was over for Tata Motors and what he should do to revive the company’s performance.


» Understand the impact of macroeconomic factors on the business.

» Analyze the recent developments in the global economy due to the ongoing sub-prime crisis and the resultant global financial turmoil.

» Study the effects of global economic slowdown and its impact on the global automobile industry.

» Critically analyze the problems faced by Tata Motors and suggest probable solutions.


Tata Motors should have been given more land: Sen

TATA MOTORS should have been given more land at Singur for the small car project. This is what has been openly claimed by the West Bengal Industry Minister Nirupam Sen while opposing the logic of the Trinamool Congress leader Mamata Banerjee that the state government in collusion with Communist Party of India – Marxist (CPI-M) has gifted the Tata Motors 400 acres of extra land than what they actually required.

The statement has given a new momentum to the long standing debate over the allotment and is expected to give rise to a fresh political furore to the already agitated Singur issue.

In the CPI(M) organ Ganashakti, Sen has written an article today questioning the opposition’s movement against the Tata Motor’s project.

Trinamool Congress has been continuously claiming that Tata Motors should have been given lesser quantity of land because no car project requires 1000 acres of land. They agitated that the land has been allotted due to underhand dealings with the CPI(M) at the cost of poor farmers.

Sen has rather justified that the land allotment should have been more and Tata Motors has been given lesser quantity of land than what they require. The article says that the National Automotive and Research and Development Infrastructure Project (NATRIP) recommends 450 acres of land for a factory producing one lakh cars annually. For further one lakh cars, a factory requires 25 per cent land more. The land for plants for producing spare parts is not included in this requirement. “Tata Motors will be producing 3, 50,000 cars and they require more land. But we have given them only 645 acres of land for the factory and 290 acres have been allotted for the ancillary units,” he said.

Referring the land being used by the Maruti for producing their small cars Sen said that Maruti has 1250 acres of land – 650 for the main factory and 600 acres for 55 ancillary units. Comparatively, Tata Motors have been given much less of land.

On the question of giving back the land to the farmers unwilling to sell, Sen has very clearly stated that no land which has been acquired, can be given back to the owners because of legal bindings. Explaining in detail he has said that the total land that has been acquired amounts to 997.11 acres. So far 11, 000 land owners, who were holding 690.79 acres of land, have accepted the price. More than 1500 land owners are yet to accept the price of 306.32 acres of land. They have not done so mostly for different contradictions and problems among the owners. These lands cannot be given back because a Supreme Court verdict is very specific on such issue that says that once acquired land cannot be given back to its owner even for the purpose for which the land was acquired. The land then can be used for some other public interest project. And even if the land is sold away by the government that acquired it, it can do so only by following the rules and process of calling open tender at the highest price. Sen added that giving back the land to the unwilling farmers is also not practically possible because already the concrete structures have come up on the land, making the land unusable. Putting up the ethical point, Sen said that the only way out is to exchange the land between the unwilling and willing farmers, “but ethically this will not be a reasonable proposition because this would amount to injustice to the farmers who have given up the ownership for a good cause.”

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Government intervention

Workers’ Rights

The Left Front government has firmly defended the trade union rights of the workers. It has also taken important steps to provide social security to workers like introducing a provident fund scheme for unorganised sector workers for the first time in the country (nearly 7.9 lakh workers have already joined the scheme so far), providing financial assistance of Rs. 750 per month to workers of closed factories and tea gardens and providing social security to the construction workers.

Another important development in West Bengal in the recent years from the point of view of employment generation is the phenomenal growth of Self-Help Groups (SHGs). The total number of SHGs in West Bengal reached 3.8 lakhs in 2005-06, involving nearly 38 lakh persons, 90% of whom are women. This has opened up new possibilities for self-employment and women’s empowerment. When the seventh Left Front government assumed office in 2006, a dedicated Ministry to provide policy support to these SHGs was created.

Minority Welfare

The Left Front government has also taken positive initiatives to uplift the Muslim minorities, who comprise over 26% of the State’s population and are socio-economically backward. The West Bengal Minority Development Finance Corporation (WBMFDC), which was formed in 1996 following the passage of an Act in the State Assembly, provides training as well as soft loans for self-employment and scholarships for meritorious students among Muslims. The WBMFDC ranks second, both in terms of cumulative disbursement of funds (from 1994-95 to 2005-06) as well as the number of beneficiaries, among all the State level minority development corporations. It has disbursed Rs.10751 crore to 28904 beneficiaries over this period. If the fact that the Uttar Pradesh MFDC started disbursing funds from 1994-95 (i.e. two years before the WBMFDC started disbursing funds) is taken into account, then the performance of the WBMFDC clearly emerges as the best in the country.

ILO conventions

1. Each Member or employee may accept the obligations of this Convention in respect of any one or more of the following branches of social security for which it has in effective operation legislation covering its own nationals within its own territory:

(a) medical care;

(b) sickness benefit;

(c) maternity benefit;

(d) invalidity benefit;

(e) old-age benefit;

(f) survivors’ benefit;

(g) employment injury benefit;

(h) unemployment benefit; and

(i) family benefit.

2. Each Member or employee for which this Convention is in force shall comply with its provisions in respect of the branch or branches of social security for which it has accepted the obligations of the Convention.

3. Each Member or employee shall specify in its ratification in respect of which branch or branches of social security it accepts the obligations of this Convention.

4. Each Member or employee which has ratified this Convention may subsequently notify the Director-General of the International Labour Office that it accepts the obligations of the Convention in respect of one or more branches of social security not already specified in its ratification.

5. The undertakings referred to in paragraph 4 of this Article shall be deemed to be an integral part of the ratification and to have the force of ratification as from the date of notification.

6. For the purpose of the application of this Convention, each Member accepting the obligations thereof in respect of any branch of social security which has legislation providing for benefits of the type indicated in clause (a) or (b) below shall communicate to the Director-General of the International Labour Office a statement indicating the benefits provided for by its legislation which it considers to be–

(a) benefits other than those the grant of which depends either on direct financial participation by the persons protected or their employer, or on a qualifying period of occupational activity; or

(b) benefits granted under transitional schemes.

7. The communication referred to in paragraph 6 of this Article shall be made at the time of ratification or at the time of notification in accordance with paragraph 4 of this Article; as regards any legislation adopted subsequently, the communication shall be made within three months of the date of the adoption of such legislation.


From the whole study I conclude that the tata motors is the India’s largest company in the automobile industries and having the strong financial position in the whole world

They are providing some of the social security schemes and benefits provided to the employees which are helpful to the employees for doing the job in effective and efficient manners and which are motivating them to increase their performance and efficiencies.


I just recommended that each and every company should be giving all the benefits to the employees like medical benefits,education facilities,provident funds and all the insurance and retirement benefits so the employees can secure our fufure.






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