Annexure-V-Cover Page for Academic Tasks

Course Code: MKT5557 Course Title: Marketing Decision Models

Course Instructor: Mr. Ashwani Panesar Student’s Name: Nikhil Kumar

Academic Task no: 2 Academic Task Title: Analysis of Tata Motors

Student’s Roll no: B47 Student’s Reg. No: 11806932

Date of Submission: 21-02-2018 Date of Allotment: 16-04-2019

Evaluation Parameters:

Learning Outcomes (Student to write briefly about learnings obtained from the academic
task):

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made explicitly
in the text, nor has any part been written for me by any other person.

Student’s Signature: Nikhil Kumar

Evaluator’s comments (For Instructor’s use only)

General Observations in Suggestions for Best part of the Assignment

Assignment Improvement

Evaluator’s Signature and Date:

Marks Obtained: ……………………. Max Marks: ………………………….

 TATA MOTORS
INTRODUCTION:

Part of the USD100 billion Tata group founded by Jamsedji Tata in 1868, Tata Motors is among
the world’s leading manufacturers of automobiles. They believe in ‘Connecting aspirations’, by
offering innovative mobility solutions that are in line with customers' aspirations. They are
India's largest automobile manufacturer, and they continue to take the lead in shaping the
Indian commercial vehicle landscape, with the introduction of leading-edge powertrains and
electric solutions packaged for power performances and user comfort at the lowest life-cycle
costs. Their new passenger cars and utility vehicles are based on Impact Design and offer a
superior blend of performance, driveability and connectivity.

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is an
Indian multinational automotive manufacturing company headquartered in Mumbai. It is a
subsidiary of Tata Group, an Indian conglomerate. Its products include passenger cars, trucks, vans,
coaches, buses, sports cars, construction equipment and military vehicles.

Tata Motors' principal subsidiaries purchased the English premium car maker Jaguar Land Rover (the
maker of Jaguar and Land Rover cars) and the South Korean commercial vehicle manufacturer Tata
Daewoo. Tata Motors has a bus-manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo),
a construction-equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction
Machinery), and a joint venture with Fiat Chrysler which manufactures automotive components and
Fiat Chrysler and Tata branded vehicles. As per 2018, its revenue stands at $43.910 billion.

A BRIEF INTRODUCTION ABOUT ITS COMPETITORS:

EICHER MOTORS LTD.:

Eicher Motors Limited (EML) is the flagship company of the Eicher Group, which was a catalyst
in the green revolution in India with the production of India’s first agricultural tractor in 1959.
EML is now a leading player in the Indian automotive space. Eicher Motors owns the iconic
Royal Enfield motorcycle business, which leads the premium motorcycle segment in India. The
oldest motorcycle brand in continuous production world-wide, Royal Enfield has witnessed a
huge surge in demand in the recent past, and is charting its course to be the leading player in
the mid-sized motorcycle segment globally. EML’s joint venture with the Volvo group, VE
Commercial Vehicles Limited, designs, manufactures and markets reliable, fuel-efficient trucks
and buses; and is leading the path in driving modernization in commercial transportation in
India and other developing markets. EML’s joint venture with US based Polaris Industries Inc
formed in 2012, Eicher Polaris Private Ltd. (EPPL) launched the Multix, a new 3-in-1 vehicle
purpose built for the independent businessman in June 2015. For the fifteen months ended
March 2016, Eicher Motors recorded its highest ever total income of INR 15,689 crores (USD 2.4
billion) and is listed on the Bombay and National Stock Exchanges. As of April 1st 2016, Eicher
Motors Limited became a part of the Nifty 50 Index.
ASHOK LEYLAND:

Ashok Leyland is an Indian automobile company headquartered in Chennai, India. It is owned

by the Hinduja Group. Founded in 1948, it is the second largest commercial vehicle
manufacturer in India, fourth largest manufacturer of buses in the world and 10th largest
manufacturer of trucks globally. Operating nine plants, Ashok Leyland also makes spare parts
and engines for industrial and marine applications. It sold approximately 140,000 vehicles
(M&HCV + LCV) in FY 2016. It is the second largest commercial vehicle company in India in the
medium and heavy commercial vehicle (M&HCV) segment, with a market share of 32.1% (FY
2016). With passenger transportation options ranging from 10 seaters to 74 seaters (M&HCV =
LCV), Ashok Leyland is a market leader in the bus segment. In the trucks segment Ashok
Leyland primarily concentrates on the 16 to 25-ton range. However, Ashok Leyland has a
presence in the entire truck range, from 7.5 to 49 tons.

REGRESSION:
Regression allows one to investigate the relationship between variables. But more than that, it
allows us to model the relationship between variables, which enables us to make predictions
about what one variable will do based on the scores of some other variables.

The variable you want to predict is called the outcome variable (or DV)

The variables you base your prediction on are called the predictor variables (or IVs)

COMPARATIVE ANALYSIS OF TATA MOTORS WITH ITS COMPETITORS;

EICHER MOTORS LTD. & ASHOK LEYLAND USING REGRESSION
ANALYSIS FOR THEIR PROFIT AND LOSS ACCOUNTS:

ON THE BASIS OF MODEL SUMMARY:

It displays information about how the two variables relate to one another. This tells you the
number of the model being reported.

R: R is the square root of R-Squared and is the correlation between the observed and predicted
values of dependent variable. It tells you the strength of the relationship between the outcome
variable (DV) and all of the predictor variables (or IVs) combined.

R-Square – This is the proportion of variance in the dependent variable which can be explained
by the independent variables. This is an overall measure of the strength of association and does
not reflect the extent to which any particular independent variable is associated with the
dependent variable.
TATA MOTORS:

Model Summaryb

Change Statistics
Std. Error
Mod R Adjusted R of the R Square F Sig. F Durbin-
el R Square Square Estimate Change Change df1 df2 Change Watson

1 .917a .841 .285 4.33702 .841 1.513 7 2 .454 3.392

a. Predictors: (Constant), Pre_operative_expenses, Selling_administration_expenses,

Miscellaneous_expenses, Raw_materials, Other_maufacturing_expenses, Power_fuel_cost,
Employee_cost

b. Dependent Variable: Reported_net_profit

In this case R = 0.917, which is a strong relationship. This suggests our model is a
relatively good predictor of the outcome.
Our R square is 0.841, which is great as it shows our model fits the data very well.

EICHER MOTORS:

Model Summaryb

Std. Change Statistics

Error of
Adjust the R F
R ed R Estimat Square Chang Sig. F Durbin-
Model R Square Square e Change e df1 df2 Change Watson

1 .97
.953 .788 2.14239 .953 5.776 7 2 .155 3.530
6a
a. Predictors: (Constant), Pre_operative_expenses, Miscellaneous_expenses,
Raw_materials, Power_fuel_cost, Other_maufacturing_expenses, Employee_cost,
Selling_administration_expenses
b. Dependent Variable:
Reported_net_profit
In this case R = 0.976, which is a strong relationship. This suggests our model is a
relatively good predictor of the outcome.
Our R square is 0.953, which is great as it shows our model fits the data very well.

ASHOK LEYLAND:

Model Summaryb

Std. Change Statistics

R Error of F
Mo Squar Adjusted the R Square Chang Sig. F Durbin-
del R e R Square Estimate Change e df1 df2 Change Watson

1 .970a .941 .733 .95427 .941 4.524 7 2 .193 2.889

a. Predictors: (Constant), Pre_operative_expenses, Other_maufacturing_expenses,
Miscellaneous_expenses, Raw_materials, Employee_cost,
Selling_administration_expenses, Power_fuel_cost
b. Dependent Variable:
Reported_net_profit

In this case R = 0.970, which is a strong relationship. This suggests our model is a
relatively good predictor of the outcome.
Our R square is 0.941, which is great as it shows our model fits the data very well.

COMPARISON:
Now if we compare all the companies, EICHER Motors is having the strongest
relationship and its model is the best predictor of the outcome amongst all the
competitors.
EICHER Motors is having the best R^2, which means its model fits the data the best.
ON THE BASIS OF ANOVA:

TATA MOTORS:
ANOVAb

Sum of Mean
Model Squares Df Square F Sig.

1 Regression 199.157 7 28.451 1.513 .454a

Residual 37.619 2 18.810

Total 236.776 9
a. Predictors: (Constant), Pre_operative_expenses,
Selling_administration_expenses, Miscellaneous_expenses, Raw_materials,
Other_maufacturing_expenses, Power_fuel_cost, Employee_cost
b. Dependent Variable:
Reported_net_profit

This box in the output tells us whether or not our model is a significant predictor of the
outcome variable. This is tested using Analysis of Variance.
As the significance value is more than p=0.05, we can say that the regression model
does not significantly predicts Net profit.

The results indicated that the model was not a significant predictor of Net profit,
F(7,2) = 28.451, p = .454.

EICHER MOTORS:

ANOVAb

Sum of Mean
Model Squares df Square F Sig.

1 Regression 185.591 7 26.513 5.776 .155a

Residual 9.180 2 4.590

Total 194.770 9
a. Predictors: (Constant), Pre_operative_expenses, Miscellaneous_expenses,
Raw_materials, Power_fuel_cost, Other_maufacturing_expenses,
Employee_cost, Selling_administration_expenses
b. Dependent Variable:
Reported_net_profit

As the significance value is more than p=0.05, we can say that the regression model
does not significantly predicts Net profit.

The results indicated that the model was not a significant predictor of Net profit,
F(7,2) = 26.513, p = .155.

ASHOK LEYLAND:

ANOVAb

Sum of Mean
Model Squares df Square F Sig.

1 Regression 28.839 7 4.120 4.524 .193a

Residual 1.821 2 .911

Total 30.661 9
a. Predictors: (Constant), Pre_operative_expenses,
Other_maufacturing_expenses, Miscellaneous_expenses, Raw_materials,
Employee_cost, Selling_administration_expenses, Power_fuel_cost
b. Dependent Variable:
Reported_net_profit

As the significance value is more than p=0.05, we can say that the regression model
does not significantly predicts Net profit.

The results indicated that the model was not a significant predictor of Net profit,
F(7,2) = 4.120, p = .193.
COMPARISON:
So, here in the case, although none of the company’s model is the significant predictor of
the Net profit but again EICHER Motors is performing considerably well than its
competitors.

ON THE BASIS OF COEFFICIENTS:

TATA MOTORS:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) -4.008 62.296 -.064 .955

Raw_materials -.186 .808 -.098 -.230 .839

Power_fuel_cost 57.580 54.376 .669 1.059 .401

Employee_cost -1.292 3.092 -.346 -.418 .717

Other_maufacturing_e
-.423 2.147 -.084 -.197 .862
xpenses

Selling_administration
-3.304 4.725 -.501 -.699 .557
_expenses

Miscellaneous_expens
.296 1.375 .115 .215 .849
es

Pre_operative_expens
-5.952 6.320 -.679 -.942 .446
es
a. Dependent Variable:
Reported_net_profit

This table shows Standardized & Unstandardized Coefficients, Standard errors, t stat
and significance value for the different predictors that we are considering.
P-value and coefficient in regression analysis work together to tell you which
relationships in your model is statistically significant and the nature of those
relationships. The coefficients describe the mathematical relationship between
each independent variable and the dependent variable. The p-values or significance
value for the coefficients indicate whether these relationships are statistically
significant.
From the above data we can have our multiple regression equation as follows –

Y = -4.008 – X1(0.186) + X2 (57.580) – X3 (1.292) – X4 (0.423) –X5 (3.304) + X6 (0.296)

–X7 (5.952)
So, Here as we can see each of the variables i.e. Raw materials, Power & Fuel cost,
Employee cost, Other manufacturing expenses, Selling & administration expenses,
Miscellaneous expenses & Pre operative expenses are contributing to the Net Profit of
the organization as (P-value/significance value > 0.05).
Other manufacturing expenses is having the highest impact on Net profit.

EICHER MOTORS:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 38.789 8.757 4.429 .047

Raw_materials -.358 .210 -.446 -1.702 .231

Power_fuel_cost 1.362 11.203 .066 .122 .914

Employee_cost 1.468 1.769 .335 .830 .494

Other_maufacturing_e
-.610 3.204 -.059 -.190 .867
xpenses

Selling_administration
-1.492 .689 -.915 -2.166 .163
_expenses

Miscellaneous_expens
.051 1.032 .013 .049 .965
es

Pre_operative_expens
-92.772 59.579 -.267 -1.557 .260
es
Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 38.789 8.757 4.429 .047

Raw_materials -.358 .210 -.446 -1.702 .231

Power_fuel_cost 1.362 11.203 .066 .122 .914

Employee_cost 1.468 1.769 .335 .830 .494

Other_maufacturing_e
-.610 3.204 -.059 -.190 .867
xpenses

Selling_administration
-1.492 .689 -.915 -2.166 .163
_expenses

Miscellaneous_expens
.051 1.032 .013 .049 .965
es

Pre_operative_expens
-92.772 59.579 -.267 -1.557 .260
es
a. Dependent Variable:
Reported_net_profit
From the above data we can have our multiple regression equation as follows –
Y = 38.789 – X1(0.358) + X2 (1.362) + X3 (1.468) – X4 (0.610) –X5 (1.492) + X6 (0.051)
–X7 (92.772)

So, Here as we can see each of the variables i.e. Raw materials, Power & Fuel cost,
Employee cost, Other manufacturing expenses, Selling & administration expenses,
Miscellaneous expenses & Pre operative expenses are contributing to the Net Profit of
the organization as (P-value/significance value > 0.05).
Miscellaneous expense is having the highest impact on Net profit.
ASHOK LEYLAND:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) -77.358 56.506 -1.369 .304

Raw_materials 1.244 .728 1.033 1.710 .229

Power_fuel_cost 16.957 14.900 .992 1.138 .373

Employee_cost -2.062 .833 -.979 -2.476 .132

Other_maufacturing_e
.555 3.674 .043 .151 .894
xpenses

Selling_administration
.791 .659 .704 1.201 .353
_expenses

Miscellaneous_expens
-1.917 1.033 -1.538 -1.856 .205
es

Pre_operative_expens
-5.645 11.175 -.401 -.505 .664
es
a. Dependent Variable:
Reported_net_profit

From the above data we can have our multiple regression equation as follows –
Y = -77.358 + X1(1.244) + X2 (16.957) - X3 (2.062) + X4 (0.555) + X5 (0.791) - X6
(1.917) –X7 (5.645)

So, Here as we can see each of the variables i.e. Raw materials, Power & Fuel cost,
Employee cost, Other manufacturing expenses, Selling & administration expenses,
Miscellaneous expenses & Pre operative expenses are contributing to the Net Profit of
the organization as (P-value/significance value > 0.05).
Other Manufacturing Expense is having the highest impact on Net profit.
COMPARISON:
So, if we compare all the three companies, all the independent variables are having an
impact on the dependent variable i.e. Net Profit in everyone’s case.
Also, Other Manufacturing Expense is having the highest impact on the Net profit in
TATA MOTORS and ASHOK LEYLAND.

ON THE BASIS OF NET SALES:

TATA MOTORS:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 33.142 6.204 5.342 .033

Raw_materials 1.023 .080 1.084 12.709 .006

Power_fuel_cost 4.370 5.415 .102 .807 .504

Employee_cost .858 .308 .460 2.786 .108

Other_maufacturing_exp
-1.751 .214 -.696 -8.191 .015
enses

Selling_administration_e
-1.207 .471 -.366 -2.564 .124
xpenses

Miscellaneous_expenses .414 .137 .322 3.027 .094

Pre_operative_expenses -2.493 .629 -.569 -3.961 .058

a. Dependent Variable: Net_sales

In TATA MOTOR’s case, only a few variables are affecting Net sales of the company and Power &
fuel cost is having the major impact.
EICHER MOTORS:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

(Constant) 87.517 4.297 20.369 .002

Raw_materials .000 .103 -.002 -.010 .993

Power_fuel_cost 7.195 5.497 .621 1.309 .321

Employee_cost -.685 .868 -.278 -.790 .512

Other_maufacturing_exp
.829 1.572 .142 .527 .651
enses

Selling_administration_e
-.799 .338 -.869 -2.363 .142
xpenses

Miscellaneous_expenses 2.956 .506 1.386 5.840 .028

Pre_operative_expenses -71.478 29.233 -.365 -2.445 .134

a. Dependent Variable: Net_sales

So, here in this case, as we can see, Net sales is actually affected the most by Raw
Materials.

ASHOK LEYLAND:

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 225.599 121.177 1.862 .204

Raw_materials -1.684 1.561 -1.106 -1.079 .393

 Power_fuel_cost -33.655 31.952 -1.557 -1.053 .403

Employee_cost .662 1.786 .248 .371 .746

Other_maufacturing_exp
-8.163 7.879 -.501 -1.036 .409
enses

Selling_administration_e
-.308 1.413 -.217 -.218 .848
xpenses

Miscellaneous_expenses 2.320 2.215 1.472 1.048 .405

Pre_operative_expenses 31.410 23.964 1.763 1.311 .320

a. Dependent Variable: Net_sales

In this case, Selling & Administration expense is having the highest impact on the Net
sales.

PROJECTION OF THE VARIABLES OF TATA MOTORS FOR THE NEXT 5

YEARS:

Forecast

Model 2019 2020 2021 2022 2023

Net_sales-Model_1 Forecast 92.65 92.65 92.65 92.65 92.65

UCL 98.92 99.05 99.18 99.31 99.43

LCL 86.38 86.25 86.12 86.00 85.87

Raw_materials-Model_2 Forecast 67.03 67.03 67.03 67.03 67.03

UCL 73.69 73.75 73.81 73.87 73.92

LCL 60.37 60.32 60.26 60.20 60.14

Power_fuel_cost- Forecast .96 .96 .96 .96 .96

Model_3
UCL 1.11 1.11 1.11 1.11 1.11

LCL .82 .82 .82 .82 .82

Employee_cost-Model_4 Forecast 6.65 6.65 6.65 6.65 6.65

UCL 8.99 9.96 10.70 11.33 11.88

LCL 4.31 3.34 2.60 1.97 1.42

Other_maufacturing_exp Forecast 4.48 4.48 4.48 4.48 4.48

enses-Model_5
UCL 6.87 7.51 8.04 8.49 8.91

LCL 2.08 1.44 .92 .46 .05

Selling_administration_e Forecast 6.08 6.08 6.08 6.08 6.08

xpenses-Model_6
UCL 7.86 7.95 8.04 8.13 8.21

LCL 4.30 4.21 4.12 4.03 3.95

For each model, forecasts start after the last non-missing in the range of the requested
estimation period, and end at the last period for which non-missing values of all the
predictors are available or at the end date of the requested forecast period, whichever is
earlier.

So, here in this case, we have the forecast of the variables with their UCL and LCL for the
next 5 years using Time Series analysis.