Tata Indica: The Making of the Small Car

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Case Details:

Case Code : OPER002
Case Length : 08 Pages
Period : 1990 - 2001
Organization : Telco
Pub Date : 2003
Teaching Note : Available
Countries : India
Industry : Automobile

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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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"Telco's Indica not only has a new plant and a new set of people manning the plant, but also new manufacturing philosophies, new systems and new processes in place, as it gets ready to take on its competition in the millennium to come."

- Business India, March 22, 1999.

Background Note

The history of Telco, India's leading automobile manufacturer dates back to the early 1920s. The location of the Telco plant originally belonged to Peninsular Locomotive Company (Peninsular), which was established in Tatanagar, Jamshedpur in 1923.

In 1927, Peninsular was taken over by East India Railway to manufacture passenger carriage underframes for the Indian Railways. In 1945, Tata Sons purchased the plant from the Government of India for manufacturing steam locomotive boilers and other engineering products, under the name Tata Locomotive & Engineering Company. Initially the company manufactured broad gauge open wagons for the Indian Railways. By 1947, it started producing boilers for imported locomotives. The company also entered into collaborations with Marshal Sons (UK) to manufacture steam road roller, and with Krauss Maffei (West Germany) to manufacture steam locomotives.

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In 1954, the company entered into a technical collaboration with Daimler-Benz to manufacture automotive vehicles. The association with Daimler-Benz helped the company build up a strong in-house R&D center (Engineering Research Center - ERC) at Pune, Maharashtra.

In 1960, company's name was changed to Tata Engineering & Locomotive Company Ltd. By 1961, it was manufacturing construction equipments. Over the years, the company acquired technology from several collaborations and co-operation agreements with international companies (Refer Table I).

In 1961, Telco produced its first crane in collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. In 1966, it acquired Investa Machine Tools Co and set up a machine tools division at Pune. In the same year, it started its Press Tool Division and vehicle manufacture facilities at Pimpri and Chinchwad (Pune).

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