Tata Motors

Tata Motors an Indian Multinational automotive manufacturing company which is part of the Tata
Group has 296,917 crores in 2019. It has a market cap of around 41,562 cr. Tata Motors provides
mobility solutions to over 175 countries. The different ranges under it include cars, trucks, buses,
utility vehicles. It is the largest market player in the automobile sector in India.

Tata motors ply on the Indian roads, over 4 million automobiles of this company take to the road.
The headquarters of Tata Motors is present in Mumbai, Maharashtra.

PRODUCTION:

In India, Tata Motors has its assembly and auto manufacturing plants in six major areas, namely
Jamshedpur, Patnagar, Lucknow, Pune, Sanand, and Dharwad. The production of Tata Motors is
constituted to around 175 countries of the world. An overall 8.5 million Tata branded vehicles run on
the roads globally. When it comes to production, Tata Motors has manufactured electric buses for 6
states namely, Guwahati, Indore, Jammu, Jaipur, Kolkata And Lucknow. The production for the same
has been for 255 buses, which was 62 % of the total bus order.

Each division of the manufacturing plant executes the production process over five shops, these
shops are fully automated ensuring a minimal chance of error. After the complete assembly of the
car, several checks are made which typically include wheel alignment, brake test, shower test and a
short test run. Before it is ready for dispatch all systems such as the materials management,
maintenance are computerized to enable a smooth operations and minimum inventory needs.

The product portfolio of Tata motors is vast and, they successfully produce automobiles for each to
reach the demand of the consumers and other players. Before the pandemic the company produced
or manufactured 56826 units. With the pandemic taking the World by storm the current production
of the company has taken a hit of 34.42 %. In the year 2019, the production of their compact
segment cars, namely Zest, Tiago, Tiger and the new launch Altroz was 10,184 units in February 2019
which took a hit to 7714 units because of the COVID-19. Similar trends can be seen in their other
products too. Tata Motors is still the major player in the automobile industry.

DISTRIBUTION:

Tata Motors has always conducted the distribution process through is subsidiary company TDCL-
TML distribution company. TML managed about 6600 touch points of commercial and passenger
vehicle sales across India. TDCL provides the logistics and distribution for the distribution of Tata
Motors product throughout India. The subsidiary had a share capital of INR 225 crores, and has a
revenue of 3389 in the financial year 2018-2019.

The TDCL has been an important touch point for Tata Motors in maintaining efficiency of the
distribution done by Tata Motors. TDCL has further helped Tata Motors to improve planning,
managing inventory, transport management and maintaining delivery timing. Tata Motors owns a
robust set of dealer’s networks.

A substantial number of vehicles are sold directly to the dealers from the sales offices. Cash
incentives are given to better performing dealers. Tata Motors sells government and Military
vehicles as well. Small number of vehicles are also sold directly to the customers.

The limited products sold by Tata Motors are serviced through a huge network of dealers who are
authorized and with the network of service centres in the domestic market. The company further
monitors the performance of the distributors and their dealers to provide them with necessary
support and increase efficiency.

SUPPLY CHAIN:

In any automobile industry there are two types of components namely the Direct Material suppliers
which include the auto components that are fit on the vehicles and, the Indirect Material suppliers
that include the consumables such as paint, treatment gases and things used in the manufacturing.

There are third party suppliers involved to get hold of the raw materials needed for TML.

A key component of the supply chain includes the sales and marketing strategy along with the post
purchase services. Tata motors maintains a very healthy relationship with their suppliers as well as
dealers to enhance the customer satisfaction.

Tata Motors is focused on the supply chain to meet the price expectations. The cost cutting strategy
of Tata Motors is through their distribution channel- Hub and spoke. The hub and spoke organization
design are a model that arranges service delivery assets, through a network of point to point transit
systems, in which each point has a direct route to every point. At Tata Motors the city dealers form
the hubs and their reach to the semi urban and the rural areas are spokes.

Tata Motors builds long term personal relationships with vendors and, conducts innovation in
manufacturing processes locally to avoid the extra costs involved.

To cut costs, Tata Motors has also tried innovative techniques like zero based costing. The
company’s engineers reworked the entire cost components to successfully cut costs. With the
pandemic in check the company is called out a cost savings program of 1500 crores and a program
for cash improvement of 6000 crores.

VALUE CHAIN:

The value chain includes the following components:

- Inbound logistics- which includes the suppliers and contractors

INBOUND LOGISTICS

It is very important for Tata Motors to develop strong relationships with their suppliers for the
proper support to receive, distribute and store their products. Tata Motors will be in a tough spot if
they do not analyse their relationships with the suppliers. Tata motors further has a lot of programs
to maintain this relationship with their suppliers and contractors.

OPERATIONS

The operations of Tata Motors include the manufacturing and the service operations as mentioned
above. The company keeps a constant check on the activities of packing, assembling and testing to
reduce the errors. A single error can cause a lot of problem for a multinational like Tata Motors.
OUTBOUND LOGISTICS:

These are the activities that involve the product delivery to the customers after passing through
different intermediaries. As we already saw TML has a wide network of dealers and service centres
to avoid mishaps in the delivery of the product to the customers. Optimal costs and product delivery
process are of utmost importance. Customer satisfaction and high level of demand are created
through the chain of outbound logistics.

MARKETING AND SALES:

Tata Motors does not follow a single marketing approach; they create a brand to give value to the
customers. The brand not only targets the urban market but also touches the rural markets with this
wide product portfolio.

Tata Motors serves as a huge competition to the other major players in the country for the
automobile industry. It offers brand low-cost labour base. Each of the products they offer follows a
different marketing plan to attract the right set of segments for the product. One of the major fails of
marketing by Tata Motors is the marketing of their low-cost model Tata Nano, which caused them a
huge loss.

Tata is further a trusted brand and hence they use the same in their advertising communication to
tap the consumers. They also focus on being the prime sponsors in events which has created a brand
awareness especially of their product Tata Tiago. There is a wide used of different channels by Tata
Motors. During these difficult times, Tata Motors is staying in touch with consumers using the digital
platforms, by engaging with potential buyers over WhatsApp video calls, messages and working
towards maintaining the relationship with them.

SERVICE

The pre-sale and post-sale offered by Tata Motors is one of the best in the country. They play an
important role in maintaining the brand name of Tata Motors. TML prides itself in the legacy of
carrying a well-known trusted brand image in the minds of consumers and, in they have a large base
of call centres and, have service centres to maintain their services.

DEMAND MANAGEMENT-

Industry sales of communication vehicles increased by 3.2 % in the year 2017 from the year 2016. In
the financial year 2019, Tata Motors witnessed growth crossing 3.3 million. The customer is the main
focus of Tata Motors and, hence demand is on the upside. The market cap of Tata Motors reached
37345.69 crores on the 23rd of August, 2020.

During the period of April 2019 to January 2020, even before the pandemic Tata Motors passenger
vehicles saw a decline of 37 % to 1.2 Lakh units, which led to the market share dropping to 5 percent
from the 7 percent they held.

The company announced a sale in domestic markets for the Q1 FY21 to around 24845 which is in a
negative 82 percent since the Q1 FY20. They further faced a drop of 90 percent for the domestic sale
of wholesale vehicles. The passenger vehicles faced a hit of 67 percent compared to the last year.
The company has further cash and cash equivalents amounting to 5000 crores.
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