INDUSTRY AND

COMPANY
ANALYSIS
Industry: Automobile
Company: TATA Motors Ltd.
Submitted By:
Mohit Manwani
211510015961
 PESTEL Analysis of Automobile industry

P E S T E L
Political
• Grant of 1 billion
dollar to the Indian
manufacturers of
semiconductor
Economic
•Reliance on China
for import of
autoparts
•Weighted tax
Social
•Low production
due to annual
maintenance
shutdowns and
Technological
•Focus shifting on
Electrical Vehicles
to reduce
emissions
•With the
Environmental
•Issue of carbon
emissions has
gained global
attention
•Advent of
Legal
•Copyright
infringement by
competitors
•Motor Vehicles
chips deduction of up to sporadic lockdowns (Amendment) Act
•Enforcement of 150% for in-house •Rise in middle evolution of Electrical Vehicles 2019 was passed
safety standards research and R&D class income and alternate fuels, due to to introduce
• Restrictions in activities. young population hybrid cars and environmental safety measures
import of cheaper •Low production will result in strong flex-engines have concerns. to suit the
auto parts from due to chip growth made entry into •Introduction of present
China shortage •EV industry likely the market alternative biofuels environment.
•Approval of 100% •Investment of US$ to create 5 crore •Advance of self •Vehicle scrappage •Volunary Vehicle
FDI 8-10 billion jobs by 2030 driving technology policy is likely to Scrappage policy
•Automotive expected by 2023. •Availability of •Improved safety remove old unfit incorporated in
mission plan •Low cost steel skilled labour at low and security vehicles Union Budget
2016-26 for production cost standards •Initiative of Delhi 2021-22 to
development of •Almost 85% of all •Indian families are •Robust R&D government to set phase out old
the industry new car sales are becoming centers up vehicle battery unfit vehicles
•The Union backed by auto increasingly •Deployment of AI charging points •Zero taxes for
Cabinet outlaid finance nuclear and ML •Uninformed the investors
Rs. 57,042 crore •Cut throat •Access to real consumers shipping cars to
for automobiles & competition among time data and contribute to 80 per other countries
auto components major players in the predictive cent of the from their
sector in PLI market analytics. pollution generated manufacturing
scheme  •Use of internet to by automobile bases in India
place customized companies on road
orders
 SWOT-TOWS Analysis of Tata Motors Ltd.

OPPORTUNITIES THREATS

1. Huge Market 1. Competition

2. Demand for smaller cars 2. Perception
3. Brand Value 3. Price rises
4. Environment Concerns
5. Focus on fuel efficiency
6. Global presence

STRENGTHS
1. Vast Product Portfolio
2. Global Presence
3. Research & Development
Activities
4. Management
5. Lower Cost-People’s Car
SO Strategy
1. Cater to the growing demand.
2. Introduction of fuel efficient compact
cars.
3. Greater R & D for environment friendly
transport alternatives.
4. Low cost cars -NANO
ST Strategy
1. Expansion strategy through M & As. &
create unconsolidated marker space.
2. Make competition irrelevant- Retailing
at little more than a motorbike.
3. Globalization for sustainability as low
cost producer in market
4. Emerge as a low cost leader

WEAKNESSES WT Strategy
1. Increase R & D & keep innovating.
WO Strategy
2. Strengthen product & service quality by
1. Product quality & services 1. Introduction of newer technology to
continuing improvement to capitalise
2. Limited Product Portfolio compete in the passenger segment.
brand value.
3. Safety concerns 2. Enter into luxury segment through
3. Continue expansion of distribution
4. Distribution network Jaguar Land Rover
networks to prevent reduction of market
3. M & A for sustainability &
share.
environmentalism.
4. Improve quality standards & safety
norms & raising safety standards.
 Value Chain Analysis of TATA Motors Ltd.

Inbound Outbound Marketing P

Operations Services R
Logistics Logistics and Sales
O
F
Firm Infrastructure Human Resource management I
T
Technology development Procurement

Product Differentiation Strategies:

Operations:
•Make manufacturing system flexible
•Increase product range to meet diverse customer demands
•Improve product appearance
•Prevent product pre-mature failures
•Respond quickly to unique specifications
•Improve customer satisfaction through lower defect rate
•Improve product performance with conformance to technical
specifications
Marketing & Sales
•Improve relationships with suppliers and customers
•Enhance communication with customers by offering high
quality information.
•Develop product awareness with extensive and effective
advertising.
•Coordinate effectively among product, research and
marketing departments.
•Ensure wider sales force coverage.

Services Technology development

•Offer superior service quality •Quick new product development
•Provide high quality technical assistance •Innovation integration in product designing
•Ensure reliable and quick repair/maintenance service •Innovative product features with patented technology

Cost advantage: •Interrelationships

Tata Motors Ltd can control following drivers to reduce cost. •Capacity utilisation
•Organizational policies •Learning and Spillover
•Forward and Backward Integration However, it is important to note that costs can be reduced only
•Product timing to some extent. It is important to consider the customers’
•Economies of scale perceived value that may justify the higher price charged by
•Linkages the company compared to competitors.
 Strategic Evaluation of TATA Motors Ltd.

Win decisively in CV
•Business Continuity Plan (BCP) development and
deployment across all channel partners and TML
subsidiaries Strategic Focus
•Enhanced customer engagement to identify growth Areas
pockets and increase focus on the non-vehicle
business
•Extensive stakeholder collaboration to understand
their concerns and explain the BSVI portfolio
•Rigorous reduction of direct and indirect costs as
well as cash conservation, and increased quality
focus
•Support for temporary workforce and stranded
drivers through channel network
•Training and upskilling of employees and dealers
Win Win
EBITDA margin EBIT breakeven Win decisively sustainably in proactively in
5.3% reduced in CV PV EV
(↑130 bps) 25%

Sales touchpoints Service touchpoints

1553 2892

Net promoter score Recommendation

MHCV market share
68
58.1% •Increase operational efficiency
(11 pts improvement in 3
(↑70 bps) •Key focus on production cost optimization
years)
•Ensure tighter emission regulation
Dealer •Pace up electrification
satisfaction index •Offer better after sales services
722 •Explore new opportunities of connectivity and
alternate powertrains
 Win sustainably in PV
•Drive sales to achieve double-digit market share on the back
of strong products, while strengthening margins
•Strengthen operating cash flow by bringing structural
corrections in variable and fixed costs
•Expand and strengthen product portfolio for growth with
internal accruals and potential partnership
•Create highly energised retail focused sales and dealerships
team
•Drive the twin objectives of growth and network profitability by
redefining dealer systems and HR practices
•Continue offering a refreshed portfolio to remain relevant and
competitive in the market
•Digitally transform the front end to enhance user experience,
customer connect and reach
•Lead with exemplary after-sales customer experience
•Strengthen the Tata Motors brand positioning to make it
aspirational for our customers
Win proactively in EV
•Launched an EV ecosystem, the Tata UniEVerse, to closely
leverage the strengths and experience of other Tata group
companies to create a viable environment to drive the
adoption of EVs in India.
•Partnered with Tata Power to proactively address the
challenge of charging.
•Collaborated with Tata Chemicals for manufacturing lithium-
ion battery cells, exploring active chemicals manufacturing
and battery recycling.
•Collaborated with Tata AutoComp for the localisation of
battery pack assembly and motor assembly.
•Partnered with Tata Motors Finance and Tata Capital to
introduce affordable financing solutions.
•Tata Croma stores are hosting a store-in-store concept to
provide an immersive digital experience for the Nexon EV.

Market Coverage Highest ever Highest Market share Volume growth Nexon EV sales
absolute EBITDA in sales in 8 71.4% 218% since launch
63% 4,000
last 10 years years
Captive charging
EBITDA points AC chargers
Chargers 3000+
2.2% 100+
Volume growth Service (Public Charging
Sales touchpoints (against industry touchpoints Service touchpoints Network) Sale touchpoints
906 decline of 2%) 608 97 355+ 93
69%
Recommendations Recommendations
•Structurally improve margins and strengthen profitability •Widen portfolio offering with different body styles and focus
•Leverage existing assets to cater to increasing demand on driving ranges
•Consistently increase brand health indicators •India specific product specifications with a differentiated value
•Smart product intervention with timely refreshes proposition
•Extensive use of digital technology for seamless and best-in- •Transitioning toward a modular multi-energy platform
class experience •Driving higher penetration in micro markets
 THANK YOU!
References:
https://www2.bartleby.com/essay/Political-Factors-Affecting-Automobile-Industry-FCCJNPAZLE6
https://www.financialexpress.com/auto/industry/fears-of-third-wave-cast-a-shadow-on-auto-sector/2270377
https://www.ibef.org/industry/india-automobiles.aspx
https://www.eletimes.com/indian-automotive-industry-technology-to-take-the-front-seat
https://www.cseindia.org/is-the-indian-automobile-sector-as-environmentally-conscious-as-best-in-the-world-
287
https://www.indiatoday.in/information/story/amendment-to-motor-vehicle-act-from-here-s-all-you-need-to-kno
w-about-the-changes-1727239-2020-10-01#:~:text=Some%20major%20changes%20have%20been,and%2
0other%20documents%20while%20driving
.
https://www.tatamotors.com/
https://www.tatamotors.com/wp-content/uploads/2020/08/03045333/annual-report-2019-2020.pdf
https://www.tatamotors.com/wp-content/uploads/2021/06/28075755/annual-report-2020-21.pdf