Integrated Report & Annual Accounts 2018-19 | 74th year
Risks and opportunities
FUTURE PROOFING
KEY RISK CATEGORIES WHAT ARE THE RISKS WHAT ARE WE DOING ABOUT IT
Global Tata Motors Group's expanding global The Group continues to maintain its international
economic and presence increases its exposure to global manufacturing footprint and a balanced retail sales
geo-political economic, geopolitical and other external profile across its key regions. It also continues
environment factors (BREXIT, China, political instability, to closely monitor and assess the risk of global
rising protectionism, wars, terrorism and developments and implement mitigation plans
natural disasters) that may negatively where appropriate.
impact its business
Competitive Delivering on operational efficiency With the launch of Turnaround 2.0, TML intends to
business objectives is key to sustaining profitable drive its journey towards Competitive, Consistent
efficiency growth. Uncertainty relating to the and Cash-accretive growth, successfully navigating
achievement of the projected benefits needs the headwinds in the Indian automotive market.
to be managed to a minimum. The broader objectives of the plan include: ‘Win
Decisively’ in CV, ‘Win Sustainably’ in PV, ‘Win
Proactively’ in EV and ‘Embed the turnaround
culture’. JLR has launched Project Charge and
Project Accelerate to conserve cash, reduce costs
and increase operational efficiency. From 2020,
JLR will be introducing its next-generation modular
architecture, which will streamline
engineering and manufacturing
processes and reduce complexity
with the aim to reduce costs
and improve quality.
Brand Brand positioning is becoming increasingly Recent successful model launches (like Harrier,
positioning challenging, as the dynamics of the Nexon, Tiago, Tigor EV, Jaguar I-PACE, Jaguar
automotive market (like automated driving, E-PACE, Range Rover Velar and Range Rover
electrification and digital connectivity) and Evoque) have broadened the Group's product range
the competitive pressures from existing to existing and new customers in established and
automotive manufacturers and new emerging segments. In addition, the Group regularly
disruptive entrants evolve. monitors the perception of its brands to quickly
identify and address uncertainties that may arise
to inform how it articulates brand values to its
customers.
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The strong fundamentals (6-43)
INTEGRATED REPORT (1-77)
6 CAPITALS
Financial Manufactured Intellectual Social and Human Natural
Capital Capital Capital Relationship Capital Capital
Capital
WHERE DO WE SEE THE OPPORTUNITIES CAPITALS IMPACTED
Global economic growth in developed and emerging markets presents
opportunities to increase sales. Global growth and rising incomes create
STATUTORY REPORTS (78-195)
opportunities in both new and existing geographical markets as well as new and
existing segments.
Enhanced overall business efficiency will yield sustainable financial results and
greater opportunities for growth and continued investment in the Group's product
portfolio and new technologies.
FINANCIAL STATEMENTS (196-395)
The Group continue to strengthen its brands by creating greater brand association
imbibing innovation, technological advancement and customer trends and feedback
into its expanding and evolving product portfolio and services.
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Integrated Report & Annual Accounts 2018-19 | 74th year
Risks and opportunities
KEY RISK CATEGORIES WHAT ARE THE RISKS WHAT ARE WE DOING ABOUT IT
Environmental The Group is subject to a rapidly evolving The Group is committed to offering its customers
regulations regulatory landscape with associated laws, a wide range of clean, sustainable propulsion
and compliance regulations and policies that impact the technologies – whether petrol, diesel, plug-in and
vehicles it produces and its manufacturing mild hybrids or EVs. TML has achieved the BS VI
facilities (like CO2 emissions, fuel economy engine certification milestone with intense design and
and noxious/air quality emissions). development focus, leveraging in-house capabilities
Continued adverse public perception of and those of the technology partners. TML is also
diesel-powered vehicles, largely driven by leveraging synergies across
the media and government policy, could Tata group companies to drive electrification.
sustain declining diesel sales and customer EVs have been strongly positioned to address
uncertainty, primarily in the UK and Europe. tailpipe emission concerns. JLR has invested
substantially in the development of its next-gen
modular architecture, the in-house manufacture
and continued refinement of its internal combustion
engines and electrification technologies. JLR retains
an EU derogation permitting alternative fleet average
CO2 targets. The continued refinement of its internal
combustion engines and production flexibility within
its EMC remains a priority.
Rapid The fast pace of technological development The Group continue to invest in R&D and also
technology together with the scarcity of specialist continues its strategic focus on key technology
change resources could result in a significant areas, including ACES, with the aim of launching
change in the automotive industry and pioneering products ahead of its competition.
increases the risk of delivering superior
products demanded by current and future
customers.
Product liability Potential defects and quality deficiencies Enact swift management of recalls to minimise
and recalls could increase the Group's exposure to risks customer impact and subsequent warranty costs.
associated with product liability. Proactively issue technical updates to dealer
network to efficiently manage potential defects.
For details of all the risks, please refer to the Management Discussion and Analysis on Page 116.
36
The strong fundamentals (6-43)
INTEGRATED REPORT (1-77)
6 CAPITALS
Financial Manufactured Intellectual Social and Human Natural
Capital Capital Capital Relationship Capital Capital
Capital
WHERE DO WE SEE THE OPPORTUNITIES CAPITALS IMPACTED
TML is the first OEM in India to achieve BS VI certification for a naturally aspirated
Compressed Natural Gas (CNG) engine for CVs. TML is pioneering India's EV transition
and driving the shift towards sustainable mobility solutions by leveraging subsidies
STATUTORY REPORTS (78-195)
to drive the initial EV push, while building other ecosystem pillars. JLR was the first
premium manufacturer to introduce a battery EV into mainstream production with
the Jaguar I-Pace and has introduced the Range Rover and Range Rover Sport PHEV
models as well. From 2020, JLR will offer an electrified option for each of its models.
JLR's diesel engines are as clean as its petrol engines, with significantly reduced
CO2 and NOx emissions in real-world usage and 20 to 30% better fuel consumption
and CO2 emissions. JLR's new D150 engine meets RDE2 standards in advance of the
2021 requirement. This presents opportunity for tax incentives in the UK and a solid
platform for further refinements.
FINANCIAL STATEMENTS (196-395)
Substantial changes to the market (like ACES) enables the Group to focus on
launching industry-defining products and services ahead of its competition as well as
strengthening partnerships with global technological organisations.
Enhanced use of vehicle connectivity and digital capability to analyse potential failure
modes and to implement corrections.
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