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Tata Motors and the Automotive Industry The Smart People Emily Frey, Eric Harmon, Arielle Hord, Caitlin Kantosky
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Outline History and Product offerings Tata Group & Corporate Responsibility Financial Analysis Tata’s Future & what impact, if any, for the American auto market
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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.
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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
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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
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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.
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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.
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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.
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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.
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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.
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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
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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
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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
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Corporate Social Responsibility India – Recycling Culture Value in discarded products Europe – “Throw-away” culture European ELV Directive
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Corporate Social Responsibility Community Development Community Service Division Promote economic independence “Self-initiated cottage industries”
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Tata Finance: overview Stock Trend Growth and Expansion – Sales – assets Financing Operations Tata vs. American Companies
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Tata Motors Inc. Stock TTM NYSE since 2004 $15.84 as of Friday (Yahoo, 2008) Down 8% in last year
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Since 2004: TTM
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Growth and Expansion large Indian market – Familiar with market – Brand loyalty Fuel efficiency Mahindra & Mahindra- $1.88 billion
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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
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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
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Cash Management Liquidity and solvency are good Inventory Improved cash management: – 12% of assets in 2005 – 4% of assets in 2007
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Comparatively Speaking Brand:TataFordGM Sales:$7.6 billion$172 billion$181 billion # of employees33,900246,000266,000 Profit Margin20%17%6.7%
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Effects on U.S. Economy Slow economy –High oil prices –Demand for fuel efficiency –Cut backs Tata’s effect
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Jaguar and Ford Purchase from Ford – Concerns Changes or Plans – More Tata vehicles – Made in India Future
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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
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U.S. Car Companies Toyota- 7.5% increase in profits Foreign Markets – No help – 1. Can’t offset – 2. India out of reach
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The Next Auto Capital Detroit current auto capital 21 st century belongs to India 2050 in India and China – Labor – Environment
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Future of the Nano Not for the U.S. – 3 rd world countries – U.S. standards Detroit make or buy version
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Summary Tata history and products Tata Group Tata: Social Responsibility Tata Motors Finance Future
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Questions
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