Tata Motors in 2004: Going Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:			Price:
Case Code	:	BSTA035	Electronic Format: Rs. 500; courier (within India): Rs. 25 Extra Themes -
Case Length	:	21 Pages
Period	:	1868 - 2004
Organization	:	Tata Motors
Pub Date	:	2004
Teaching Note	:	Not Available
Countries	:	India
Industry	:	Automobile

Abstract:

Tata Motors, earlier called Telco (Tata Engineering and Locomotive Company) is upbeat, after a spectacular comeback in the past two years. Following a whopping Rs 500 crore loss (in 2001), its stock price had fallen from Rs 564 in 1996 to Rs 59 in 2001.

The company now plans to expand capacity at its Pune factory from 1.5 lakh cars to 2.5 lakh cars by December 2004, to meet the growing domestic and international demand for its products. This is perhaps the first major capital investment by the company since 1999, when it had invested Rs 1,800 crore to design and manufacture its small car, the Indica. Just three years back, not many analysts had believed such a transformation could take place.

The recovery has been led by the remarkable success of the small car, Indica. The larger and more recently introduced Indigo also seems to be faring well. The Tatas have made major forays into global markets. The acquisition of Daewoo''s commercial vehicles division in Korea for $102 million, is an indicator of the company's global intentions. There is also heavy speculation that Tata Motors is ready to develop a new car that will take on Suzuki's highly successful small car, the Maruti 800, which dominates the Indian roads. Do the Tatas have the capabilities and resources needed to implement such ambitious plans? That is the question uppermost in the minds of analysts in mid-2004, notwithstanding the optimism of chairman Ratan Tata and his colleagues.

Keywords:

Tata Motors, Tata Engineering and Locomotive Company (TELCO), IRD Tata, Jamsetji Nusserwanji Tata, Tata Group, Ratan Tata, Restructuring, Commercial Vehicle Business Unit (CVBU), Globalisation, Indigo, Indica, Daewoo acquisition, Rajiv Dubey

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