April 28, 2010 Team Sam Allin, Prakash Hari, Georgina Javor, Federico Ochoa, Gordon Zheng

 India’s largest automobile company  World’s 4 th largest truck, 2 nd largest bus manufacturer  Cars, light to heavy commercial vehicles & engines  Tata Group  Interests in steel, autos, IT, communications, power generation  Financials  Gross revenues - $6.04 billion - Growth of 46%  Equity - $1 billion  Sales - 30% growth from 2005 to 2009  Cash flow - $845 million in last 4 years  Global expansion AcquisitionJoint Venture

 Political  Historically unstable, but stable and thriving economy since 2002  President Lula da Silva  Economic  GDP - $1.48 trillion ($ 10,514 per capita - PPP adjusted )  Import Substitution  Export-Oriented Model  Inflation < 4.2%  1USD = 1.8 Real; 1 Real = 25 Rupee; as of 2010  Social  Population million  Uneven wealth distribution - Top 20% has 65% wealth  Regressive tax system  Technological  Major industries : Textiles, chemicals, aircraft & motor vehicles  Investment in bio-fuel technology, consumes 54% ethanol vs 46% petrol

 Tata Nano  Cheapest car in the world - India MSRP is $2,500 USD  Fuel efficiency - 61 mpg / 52 mpg  Variants: Diesel, electric, hybrid  Brazil Car Market  4 th Largest producer and consumer of automobiles in the world  Cheapest new car for the Brazilian market: Fiat Millie USD $11,000  Export oriented, with 35% import tariff  1 out of 7 people own a car in Brazil Fiat Millie

 Joint Venture with Fiat  Model on the successful joint venture in India  Tata Motors will own the manufacturing plant  Distribute via Fiat’s existing dealership network  Fiat: 25% market share and strong brand in Brazil  Financial Analysis  Future access to Latin American Markets  Mercosur Trade Agreement - Latin America  Min. 60% indigenous manufacture  Traded duty free in the region Selling Price$3,750 Cost of Manufacturing Plant$500 million Profit per Car$172 Return on Investment17.15% (At full capacity)

RisksMitigating Factors Financial/currencyMost expenses are up front; eventually, both revenues and expenses will be in Reais (ROI risk remains). Central bank independence. SuppliersSource parts from suppliers both in India and Brazil Joint ventureRelationship with Fiat has been mutually beneficial since 2006 Market/BrandFiat’s support together with Tata’s reputation in India CompetitionFirst mover advantage PoliticalStable political environment over the last 10 years (democracy, checks and balances)

PROFIT ANALYZISSOURCES OF FUNDS Price $ 3,750Cash equity from Tata motors $ 250,000,000 Bank financing $ 300,000,000 Production $ 2,200Total sources of funds $ 550,000,000 Ethanol increase 10% of production $ 220 Fiat commission $ 188USES OF FUNDS Total variable costs $ 2,608Manufacturing plant in Brazil $ 500,000,000 **Other expenses $ 50,000,000 Contribution margin $ 1,143Total uses of funds $ 550,000,000 fixed cost per car $ 971 Profit per car $ 172 Expected number of cars to be sold250,000 Total profit $ 42,875,000ROI42,875,000/250,000,000=17.15%