CASE STUDY ON TATA MOTORS
Authors:- Chandra Kanth P(Reg No.:- 17BEC0090) and Venugopal P(Faculty Advisor )
Vellore Institute of Technology, Vellore
Abstract -This case study on Tata Motors
has been done to understand the industry
profile and the performance of the
company, the current position of the
company has been understood, the
problems and decision dilemma of the
company has been analysed. A service and overall cost of ownership. In this
comprehensive solution for the
development of the company has been
given.
OCCURRENCE
Tata Motors is an Indian automobile
pioneer who, at their peak achieved 17
percent of the passenger vehicle market in
India during 2004-2005, has deliberately
dropped market share to its competitors and
currently holds only 4 percent of the
passenger vehicle market. This decay can be
attributed to sick market positioning, bad
customer service, dull R&D, failure to
include new models and aggressive
competition from rivals who rolled out
products with better value for money with
supplementary features and innovation.
Tata motors are currently intending
to become one among the top three
passenger automotive companies in India, to
accomplish it has to come up with a
completely new fleet of high-quality cars,
with safety standards, functional features,
tremendous fuel efficiency and value for
money, but increase in sales is still not
sufficient to achieve the title due to customer
stigma attached with Tata motors that the
cars are outmoded and their track record of
having weak customer service and after-
sales service of their products.
The marketing dilemma here is that
how Tata should aggressively market either
on emphasizing on the positioning and value
of their cars (features, safety certifications,
fuel efficiency, value for money, styling etc)
or emphasize on their improved after-sales
case study, we will explore the industry
profile of passenger automotive vehicles
(passenger cars) and the company profile of
Tata Motors with their legacy issues that
continue to haunt them now and alternative
solutions to tackle them. 
INDUSTRY PROFILE
Automobile sales in India had feeble
growth owing to licensing limitations,
extended waiting times, lower consumer
interest as the economy was weak till the
late 1980s. There were very restrained
domestic options such as HM Ambassador,
Fiat Premier and Padmini, etc. and imported
vehicles were rare and heavily taxed.
External players such as Suzuki entered the
Indian market in the late 1980s.
The period after the liberalisation of
the Indian Economy is generally observed as
the second wave of FDI in the sector, which
played a vital role in producing dynamism,
diversification, and intense competition in
the industry. Many companies started
operating at a significant scale in the market
and started operations in the midsize car
segment. Indian companies such as Tata
Motors introduced special purpose vehicles
and platforms to enter the passenger car
segment. This period saw the creation of
wide networks, as many companies had full
technology and competence in producing
state-of-the-art models of vehicles and had
contractual arrangements with their
component suppliers.
In recent years many players such as
FIAT, GM exited the market due to poor
sales volumes attributed to poor product
positioning in terms of value, service
network, total cost of ownership to the
customer and lack of newer models and
features. The intense competition from home
grown rivals such as Mahindra and
Mahindra and other Asian players forced the
European and American companies out as
their products simply couldn’t compete with
their competitions frugal engineering and
well positioned products.
New markets in south East Asia are seeing
tremendous growth in the four-wheeler
passenger vehicle market such as
Philippines, Indonesia, and Vietnam etc. Big
American vehicles which are fuel inefficient
are unable to compete with the frugally
engineered and reliable Japanese and Korean
cars in these cost sensitive markets. China is
in a normalisation phase in recent years after
years of double-digit growth, and in
European and US market the growth is
almost saturated and stagnant.
As the purchasing power of the Indian
consumer increases where cars are
considered as a status symbol rather than a
utility in India, the consumer now expects
stylized, well positioned premium but
affordable cars. This can be attributed to the
immediate success of new entrants such as
KIA motors and MG motors in India where
they are registering immense growth in
CAGR.
COMPANY PROFILE
Tata Motors Cars is a division of
Tata motors which is part of the Tata Group
which is an Indian multination conglomerate
with companies spanning from consumer
goods to consultancy services with a
combined annual revenue of $113 billion.
Tata motors cars was created after the Indian
commercial vehicle manufacturer’s entry
into the passenger vehicle market with the
TATA Sierra in 1988. It was multi utility
vehicle which was followed by the highly
successful TATA Sumo by 1994.
In 2008, Tata Motors made a bold
purchase. It acquired the struggling UK
luxury car-maker, Jaguar Land Rover (JLR)
by stripping out  ₹10,000 crores and pledged
to turn it around. JLR soon started beating
out big profits because of Tata Motors’
interference. JLR is the principal revenue
driver for the company.
 JLR sold diesel cars. In fact, 90% of
all cars sold in the EU were diesel variants.
But after the Volkswagen emission scandal
rocked the European Union, governments
began to disincentivize the use of highly
polluting fuels (including diesel) by ramping
up taxes. This meant, JLR had to switch
things up rather quickly. They began
destocking diesel vehicles by offering
massive discounts and made substantial
investments in a bid to produce and
promote more eco-friendly variants. And
while this move was critical to their long
term vision, it did weigh heavily on the
company’s bottom line.
Elsewhere, JLR was having trouble
with quality control. Consider China. For a
population that craved for expensive luxury
vehicles, JLR was a godsend in many ways.
And in 2014, the company started local
production through a joint venture with
Chery Automobiles. The idea was to modify
the cars slightly to pander to local tastes
while simultaneously avoiding the 25% tariff
on imported vehicles.  Motors. The 138,455 cars the company sold
The move did wonders. China sales
surged from ~100,000 in 2015 to ~150,000
in 2017. But with increasing volumes,
customer complaints became more frequent.
Product quality was a constant source of
concern.
“In 2017 alone, JLR carried out 13 recalls
in China for defects with components
ranging from engines, instrument panels
and airbags to batteries. The recalls
covered some 106,000 vehicles, which was
equivalent to more than 70 % of its local
sales during the year.”
And eventually, the carmaker lost its
sheen. While once China contributed almost
a third of JLR's sales, today its contribution
has reduced to a meager 10%.
All of this culminated in wasteful
investments that failed to translate into
meaningful opportunities. In 2018, JLR
wrote off ₹27,000 crores in assets. That’s
the company telling you these assets hold no
real value and ought to be written off as a
loss. Meanwhile, the company’s debt burden
was spiraling out of control — from
~₹33,000 crores in FY11 to ₹1.2 lakh
crore in FY20.
It has been a lost decade for Tata
in India in 2013- 14 are close to the number
it clocked in 2003-04, even as the car market
almost tripled during the period, from
902,096 to 2.5 million units. While car
industry sales have grown, although slowly
of late, Tata Motors’ market share has fallen
from a peak of 16.9 per cent in 2004-05 to
5.5 per cent 2016.
Currently since 2016, Tata has come up with
a new line up of newly designed cars, which
has better safety standards, features and well
balanced cost positioning, despite this the
automaker has struggled to improve growth
until now.
 build quality and safety alone cannot help
them break and capture the market. Dynamic
response to the changing market demands
along with customer centric approach should
be adopted. Clear highlight on addressing
the legacy issues that have caused the
inherent bias in consumers should be the
focus of their product positioning and
marketing strategy.

REFRENCES
[1] https://www.business-
standard.com/article/companies/lost-decade-
Tata Motors registers record jump in 2020.
for-tata-motors- 114050600957_1.html
It now has 7.23 percent of Indian passenger
vehicle shares as opposed to 3.63 percent
[2] https://www.tatamotors.com/media-
share in September last year. This is the
press-coverage/tata-motors-looks-to-move-
highest market share increase reported by
beyond- expensive-nano-failure/
any car maker last month. It is also to be
noted that Tata Motors retailed 21,200 cars
[3] https://ukdiss.com/examples/tata-motors-
last month as compared to 8,097 units in
company-analysis.php 5.
September 2019. This was Tata’s best
https://www.ibef.org/industry/automobiles-
monthly sales performance in eight years of
presentation
162%.

SOLUTION

The customer service of TATA’s

competitors especially Suzuki, M&M etc.
was simply unmatched and the consumer
was no longer just inclined on the car, but
also the entire experience of owning the car.
This came to bite them back in the future as
newer high quality and affordable cars were
launched since 2016, which were built with
various crash protection and safety standards
on par with European counterparts but still
consumers had an inhibition to buy them due
to the poor after sales service and network
even though they offered a better value
proposition of affordable, safe, high fuel
efficiency and latest features and styling.

Currently Tata is the sole Indian car

manufacturer that is in the global top 100 car
makers that spend on R&D list. The
marketing of a car in R&D features, superior