Tata Motors and the Automotive Industry  The Smart People AKHILESH SHUKLA, IMRAN KHAN, ANNURAJ SINGH, SANJEEV KUMAR
Outline History and Product offerings Tata Group & Corporate Responsibility Financial Analysis Tata’s Future & what impact, if any, for the American auto market
History Started in 1945 in Mumbai, India.  Original production was on locomotives. 1954 First car rolled off of the assembly line. Tata’s are a family of Indian industrialists and philanthropists. The family founded: Ironworks Steelworks cotton mills hydroelectric-power plants  Are of their endeavors have been proved to be crucial to India's industrial development.
History Tata Motors is India’s owns the largest independent company in India. Mercedes and Tata teamed up to create a truck line. First major business deal with another firm. Together both companies started their commercial vehicle operations in 1960. in 1986 the company created and sold the first LCV LCV = light commercial vehicle  Was the Tata 407
History Tata Motors decided to pursue joint ventures. Cummins Engine Co., Inc., was the first company to jointly venture with Tata in 1993. Manufactured a diesel engine that had high horsepower and emitted less harmful chemicals. Began creating new lines in the late 1990’s and early 2000’s: Compressed natural gas buses 1109 vehicle, used for commercial purposes. Ex-series Newly designed LCV called the 207 DI
Products Tata Indigo Created in 2002 Mid-sized sedan. Different models run on either normal gasoline or diesel fuel. Seats 5 people. Same luxuries as American made vehicles.
Products Tata Indigo SW Station wagon version of the Indigo. Same basic features as the Indigo. Seats 5 people. Different models fun on different fuels. Different optional safety features than other vehicles.
Products Tata Indica Hatchback version of the Indigo sedan. Easily affordable. Smallest in the line of Tata vehicles to date.  Seats 5 people. Same basic features as the sedan.
Products Tata Safari Mid-sized SUV. Has a special engine called DICOR. Direct Injection Common Rail. Allows the engine to intercool itself. Comes in either a 4x4 or a 4x2. Can seat 7 passangers.
Products Tata Sumo Runs off of diesel fuel. Seats up to 7 passengers. Has a separate rear and front suspension for an optimal ride. Has two separate air conditioners for the front and rear of the vehicle.
Tata Group 100 companies throughout 7 business sectors Engineering, materials, energy, chemicals, services, consumer products, information systems and communications Tata AutoComp Systems - Automotive Tata Steel - Materials Tata Power - Energy Rallis India - Chemicals Tata Realty and Infrastructure - Service Tata Tea - Consumer Products Tata Technologies - Information Systems and Communications
Corporate Social Responsibility “ A Company that cares about the future” Committed to corporate social responsibility Signed the United Nations Global Compact Plays role in community development Environmentally-friendly products and technology
Corporate Social Responsibility Two main concerns: Reduction of pollution Restoration of ecological balance Implemented  soil and water conservation programs Cleaner Engines Advanced emission-testing labs Developing alternate fuel engines Sewage treatment facilities Encourages tree planting
Corporate Social Responsibility India – Recycling Culture Value in discarded products Europe – “Throw-away” culture European ELV Directive
Corporate Social Responsibility Community Development Community Service Division Promote economic independence “ Self-initiated cottage industries”
Tata Finance: overview Stock Trend Growth and Expansion Sales assets Financing Operations Tata vs. American Companies
Tata Motors Inc. Stock TTM NYSE since 2004 $15.84 as of Friday (Yahoo, 2008) Down 8% in last year
Since 2004: TTM
Growth and Expansion large Indian market Familiar with market Brand loyalty Fuel efficiency  Mahindra & Mahindra- $1.88 billion
Debt vs. Equity Debt growth: $2.3 billion    $4.1 billion Equity growth: $1.2 billion    $2.1 billion 55 million outstanding shares ROE : 19% Debt/ equity ratio: .87  Industry average: .58 Cash now for growth
Growth Asset growth    doubled since 2005 Acquisition of Jaguar and Land Rover from Ford Sales: $7.6 billion and grew 42.2% from 2006 PROFITS!! $.95 billion on 2005    $1.5 billion on 2007
Cash Management Liquidity and solvency are good Inventory Improved cash management: 12% of assets in 2005 4% of assets in 2007
Comparatively Speaking Brand: Tata Ford GM Sales: $7.6 billion $172 billion $181 billion # of employees 33,900 246,000 266,000 Profit Margin 20% 17% 6.7%
Effects on U.S. Economy Slow economy High oil prices Demand for fuel efficiency Cut backs Tata’s effect
Jaguar and Ford Purchase from Ford Concerns Changes or Plans More Tata vehicles Made in India Future
U.S. Car Companies $ 2 Billion in sales GM-$50; Ford-$40; Honda- $20 In the U.S. Going overseas 75% by 2017 for GM Expanding in India
U.S. Car Companies Toyota- 7.5% increase in profits Foreign Markets No help 1. Can’t offset 2. India out of reach
The Next Auto Capital Detroit current auto capital 21 st  century belongs to India 2050 in India and China Labor Environment
Future of the Nano Not for the U.S. 3 rd  world countries U.S. standards Detroit make or buy version
Summary Tata history and products Tata Group Tata: Social Responsibility Tata Motors Finance Future
Questions

Presentation slides

  • 1.
    Tata Motors andthe Automotive Industry The Smart People AKHILESH SHUKLA, IMRAN KHAN, ANNURAJ SINGH, SANJEEV KUMAR
  • 2.
    Outline History andProduct offerings Tata Group & Corporate Responsibility Financial Analysis Tata’s Future & what impact, if any, for the American auto market
  • 3.
    History Started in1945 in Mumbai, India. Original production was on locomotives. 1954 First car rolled off of the assembly line. Tata’s are a family of Indian industrialists and philanthropists. The family founded: Ironworks Steelworks cotton mills hydroelectric-power plants Are of their endeavors have been proved to be crucial to India's industrial development.
  • 4.
    History Tata Motorsis India’s owns the largest independent company in India. Mercedes and Tata teamed up to create a truck line. First major business deal with another firm. Together both companies started their commercial vehicle operations in 1960. in 1986 the company created and sold the first LCV LCV = light commercial vehicle Was the Tata 407
  • 5.
    History Tata Motorsdecided to pursue joint ventures. Cummins Engine Co., Inc., was the first company to jointly venture with Tata in 1993. Manufactured a diesel engine that had high horsepower and emitted less harmful chemicals. Began creating new lines in the late 1990’s and early 2000’s: Compressed natural gas buses 1109 vehicle, used for commercial purposes. Ex-series Newly designed LCV called the 207 DI
  • 6.
    Products Tata IndigoCreated in 2002 Mid-sized sedan. Different models run on either normal gasoline or diesel fuel. Seats 5 people. Same luxuries as American made vehicles.
  • 7.
    Products Tata IndigoSW Station wagon version of the Indigo. Same basic features as the Indigo. Seats 5 people. Different models fun on different fuels. Different optional safety features than other vehicles.
  • 8.
    Products Tata IndicaHatchback version of the Indigo sedan. Easily affordable. Smallest in the line of Tata vehicles to date. Seats 5 people. Same basic features as the sedan.
  • 9.
    Products Tata SafariMid-sized SUV. Has a special engine called DICOR. Direct Injection Common Rail. Allows the engine to intercool itself. Comes in either a 4x4 or a 4x2. Can seat 7 passangers.
  • 10.
    Products Tata SumoRuns off of diesel fuel. Seats up to 7 passengers. Has a separate rear and front suspension for an optimal ride. Has two separate air conditioners for the front and rear of the vehicle.
  • 11.
    Tata Group 100companies throughout 7 business sectors Engineering, materials, energy, chemicals, services, consumer products, information systems and communications Tata AutoComp Systems - Automotive Tata Steel - Materials Tata Power - Energy Rallis India - Chemicals Tata Realty and Infrastructure - Service Tata Tea - Consumer Products Tata Technologies - Information Systems and Communications
  • 12.
    Corporate Social Responsibility“ A Company that cares about the future” Committed to corporate social responsibility Signed the United Nations Global Compact Plays role in community development Environmentally-friendly products and technology
  • 13.
    Corporate Social ResponsibilityTwo main concerns: Reduction of pollution Restoration of ecological balance Implemented soil and water conservation programs Cleaner Engines Advanced emission-testing labs Developing alternate fuel engines Sewage treatment facilities Encourages tree planting
  • 14.
    Corporate Social ResponsibilityIndia – Recycling Culture Value in discarded products Europe – “Throw-away” culture European ELV Directive
  • 15.
    Corporate Social ResponsibilityCommunity Development Community Service Division Promote economic independence “ Self-initiated cottage industries”
  • 16.
    Tata Finance: overviewStock Trend Growth and Expansion Sales assets Financing Operations Tata vs. American Companies
  • 17.
    Tata Motors Inc.Stock TTM NYSE since 2004 $15.84 as of Friday (Yahoo, 2008) Down 8% in last year
  • 18.
  • 19.
    Growth and Expansionlarge Indian market Familiar with market Brand loyalty Fuel efficiency Mahindra & Mahindra- $1.88 billion
  • 20.
    Debt vs. EquityDebt growth: $2.3 billion  $4.1 billion Equity growth: $1.2 billion  $2.1 billion 55 million outstanding shares ROE : 19% Debt/ equity ratio: .87 Industry average: .58 Cash now for growth
  • 21.
    Growth Asset growth  doubled since 2005 Acquisition of Jaguar and Land Rover from Ford Sales: $7.6 billion and grew 42.2% from 2006 PROFITS!! $.95 billion on 2005  $1.5 billion on 2007
  • 22.
    Cash Management Liquidityand solvency are good Inventory Improved cash management: 12% of assets in 2005 4% of assets in 2007
  • 23.
    Comparatively Speaking Brand:Tata Ford GM Sales: $7.6 billion $172 billion $181 billion # of employees 33,900 246,000 266,000 Profit Margin 20% 17% 6.7%
  • 24.
    Effects on U.S.Economy Slow economy High oil prices Demand for fuel efficiency Cut backs Tata’s effect
  • 25.
    Jaguar and FordPurchase from Ford Concerns Changes or Plans More Tata vehicles Made in India Future
  • 26.
    U.S. Car Companies$ 2 Billion in sales GM-$50; Ford-$40; Honda- $20 In the U.S. Going overseas 75% by 2017 for GM Expanding in India
  • 27.
    U.S. Car CompaniesToyota- 7.5% increase in profits Foreign Markets No help 1. Can’t offset 2. India out of reach
  • 28.
    The Next AutoCapital Detroit current auto capital 21 st century belongs to India 2050 in India and China Labor Environment
  • 29.
    Future of theNano Not for the U.S. 3 rd world countries U.S. standards Detroit make or buy version
  • 30.
    Summary Tata historyand products Tata Group Tata: Social Responsibility Tata Motors Finance Future
  • 31.