...TATA & CORUS: A Case of Acquisition “There are not many opportunities for producers in emerging low-cost markets to gain access to the markets of Europe other than by acquiring a company like Corus,” John Quigley (Editor, Industry Publication Steel week) Thousands of Indians didn’t offer prayers for Tata Steel to clinch the deal for the AngloDutch steel maker Corus, as they have for the recovery of hospitalized Bollywood superstars. Nor did they erect 40-foot billboards of a smiling Ratan Tata, chairman of Tata Steel, after he won Corus. And the stock markets were clearly concerned about the Tata Steel’s new debt load. But despite all this, euphoria gripped the nation. Finance minister P. Chidambaram offered unspecified help, if needed, to close the deal; fellow steel magnate Lakshmi Niwas Mittal cheered the acquisition, and excited TV newsreaders gushed. India’s first Fortune 500 MNC was born. Tata acquired Corus, which is four times larger than its size and the largest steel producer in the U.K. The deal, which creates the world's fifth-largest steelmaker, is India's largest ever foreign takeover and follows Mittal Steel's $31 billion acquisition of rival Arcelor in the same year. Over the past five years, Indian companies had made global acquisitions for over $10 billion. The Tata bid almost equals this amount. Most of them have averaged $100 to 200 million. "It is a two-way street now," Kamal Nath (Commerce Minister, India) said. "Not only India is seeking foreign...
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...1. Which, if any, of the following initiatives undertaken by Ratan Tata do you think were good ideas? a) Creation of a Group Brand b) Building of equity interlocks among the Tata companies c) Sale of a part of Tata Industries Limited to the Hong Kong-based Jardine Matheson group d) Revitalisation of Tata Administrative Services 2. What do you think of some critics’ opinion that Ratan Tata was moving the group of companies in exactly the opposite direction from where it should be going? The Indian economy following the 1991 crisis swiftly moved away from central planning economy towards market-based economy with the government having less intervention and control. As a result, companies were operating in what is called emerging markets. Khanna & Palepu (1997, pp.41-2) describe emerging markets as hardly uniform that lack in providing the institutions vital for basic business operations. Companies that operate in such environment must adapt their strategies to fit their institutional context. Appendix 1 of the case study clearly shows market failures of Indian economy in mid 1990s compared to the UK and US. Some of the market failures include: information problems (e.g. limited phone lines, TVs, newspapers) capital markets problems (e.g. low bank assets, limited watchdog bodies, limited access to local capital markets and market information asymmetries) political and risk factors problems (e.g. corruption, low efficiency of judicial system, state intervention...
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...THE INDIAN AUTOMOBILE SECTOR- HPL PROJECT Introduction The term automotive was created from Greek autos (self), and Latin motivus (of motion) to represent any form of self-powered vehicle. The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy. India is emerging as one of the world's fastest growing passenger car markets and second largest two wheeler manufacturer. It is also home for the largest motor cycle manufacturer and fifth largest commercial vehicle manufacturer. The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011.[1] According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), growing 16 to 18 per cent to sell around three million units in the course of 2011-12.[2] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[3] In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the...
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...Positioning the Tata Nano Master in Management 2013/2014 Introduction Is important to consider India as a really special market. The cultural background deeply influences all the interactions between the population and with brands. The castes are a very important structure, and although this is changing, it still harder for people for desire big achievements if they are not in the right caste. Also the Tata Group deserves an introduction, being a group founded in 1868 with a trading company by Jamesetji Tata. The Tata Group is responsible for major improvements in India and follows a Code of Conduct that reflects the trust they want to inspire and also their commitment...
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...Proceedings of the 2012 International Conference on Industrial Engineering and Operations Management Istanbul, Turkey, July 3 – 6, 2012 Car Recalls: A Problem Unique to Toyota or For All Car Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques...
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...Ans-1 The global commercial vehicle industry witnessed negative growth during 2006-2011; however, over 2012-2017, it is forecast to experience moderate growth and is estimated to reach $521.5 billion by 2017.The global commercial vehicle industry consists of the production of light commercial vehicles (LCVs), heavy trucks, and buses and coaches. It focuses on the freight and Transportation sector as its major customers. India will become the third largest market in the world after China and the US for light vehicles, including passenger cars and light commercial vehicles (LCVs), by 2020, according to market research firm JD Power Asia Pacific. The country, however, will have to improve its infrastructure, as well as resolve component supply chain issues, in order to realise its huge potential. “Our forecast is that by 2020, India will become the third biggest market for light vehicles, that includes passenger cars and LCVs, with total sales of nearly 12 million units,” the JD Power Asia-Pacific Executive Director, Mr Mohit Arora, told PTI. In a report — ‘India Automotive 2020: The Next Giant from Asia’ — the firm said India would have jumped from sixth place at present to be slotted after China and the US by 2020, with total sales of 11.9 million light vehicles. In 2010, 2.7 million light vehicles were sold in India, up from just 700,000 light vehicles in 2000. By 2020, China’s light vehicles market is expected to reach 35 million units, while that of the US will rise to 17...
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...Marketing Management Tata Ace Case Study Solution 1. Analyze the Commercial Vehicle Industry at both Global and Indian scenario? Which are the top 5 countries for CV Industry. Indian Scenario- Indian Commercial Vehicle industry can be mainly segmented into * LCV and * M&HCV industry. LCV consist of three wheelers and four wheelers up to 1 ton capacity. Tata, Bajaj, Mahindra, Force motors and Piaggio are the major players of LCV industry. M&HCV consist of four wheelers such as medium sized pickups, single axle and multi axle buses and trucks. Tata, Mahindra & Mahindra, Eicher, Volvo and Swaraj Mazda are major the players of M&HCV industry. Also, two wheelers, passenger cars and SUV’s were also used for freight transport. Non motorized vehicle sector included bullock carts, bicycle rickshaw, horse drawn carriages, and manual pull carts. The size of the non motorized section was large but undocumented. After many successful years, In India commercial vehicle industry is going through a bad patch due to following reasons- • Economic slowdown • Delay in infrastructure facilities i.e.-Roads Medium and high commercial vehicle industry has seen significant slowdown while LCV industry is still experiencing growth. To overcome the slowdown OEMs have started investing in more research in technology, design, innovation, increasing the reach and increasing the standard of aftersales service instead of investing in expansion of output facilities...
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...from 5.3 million units in 2001-02 to 10.8 million units in 2007-08. India has become the second largest manufacturer of two wheelers and the ninth largest car manufacturer in the world. It is one of the world’s fastest growing passenger car markets and is expected to become the third largest automobile market in the world. Major Players While the passenger car segment has been dominated by three vendors – Maruti Suzuki, Hyundai and Tata Motors (which together accounted for 70 percent of passenger car sales in 2009-10) – the two wheeler segment is dominated by Hero Honda, Bajaj and TVS Motors (which together accounted for more than 80 percent of two-wheeler sales in 2009-10). Honda, Volvo Group, Jaguar Land Rover (JLR), Hero MotoCorp, Mahindra & Mahindra (M&M) are set to make huge investments. Domestically, some consolidation or alliances might be expected, driven by the need for access to better technology, manufacturing facilities, service and distribution networks. In the recent past we have seen M&As/JVs between Ashok Leyland & Nissan, Tata & JLR, VW & Suzuki, Volvo & Eicher, M&M with SsangYong, Renault and Kinetic. Growth...
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...CONTENTS CORPORATE OVERVIEW (1-31) Board of Directors Senior Management Corporate Information Chairman’s Statement Designed to Deliver Product Range Global Presence Milestones Winners From Tata Motors Customer Satisfaction Green Mobility Human Resources Corporate Social Responsibility FINANCIAL HIGHLIGHTS (32-45) Pace in Performance Summarised Balance Sheet and Statement of Profit and Loss (Standalone & Consolidated) Fund Flow Statement Subsidiary Companies: Financial Highlights Financial Statistics STATUTORY REPORTS (46-122) Notice Directors’ Report Management Discussion and Analysis Report on Corporate Governance Awards and Achievements FINANCIALS Standalone Financials (123-168) Auditors’ Report Balance Sheet Profit and Loss Statement Cash Flow Statement Notes to Accounts Consolidated Financials (169-206) Auditors’ Report Balance Sheet Profit and Loss Statement Cash Flow Statement Notes to Accounts Attendance Slip and Proxy Form ANNUAL GENERAL MEETING Date: Friday, August 10, 2012 Time: 3.00 p.m. Venue: Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai 400 020. 2 6 7 8 12 14 16 18 20 22 24 26 28 Tata Motors began operations in 1945. Since that time, we have remained committed to our values and our stakeholders. We have maintained a consistent focus on strengthening our organisation, and expanding our presence. Today, through our subsidiaries and associate companies, we already operate in the UK, South Korea, Thailand, Spain and South Africa. Our forays...
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... South Korea, and Thailand. (Reason: More demand and lower interest rates on automobile loans) * India's major car manufacturing industry is based in and around Chennai, also known as the "Detroit of India" .Chennai accounts for 60 per cent of the country's automotive exports. NOTE: The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Key automobile manufactures in India: * Maruti Udyog * General Motors * Ford India Limited * Bajaj Auto * Mahindra & Mahindra * Hyundai Motors India Limited Research on Tata Motors Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Research on TM: Tata Motors Limited is a multinational automotive corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO. It was established in 1950 as a locomotive manufacturing unit and later expanded its operations to commercial vehicle sector. In 1998...
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...price of the product/services is the single most defining factor that influences the customer's buy decision. Hence to maintain low cost, companies consistently has to make manufacturing improvements to keep the business competitive. This requires additional capital expenditure which tends to eat up company's earning. On the other hand if no one else can provide products/ services the way you do you have a monopoly. Lets try to explore these points in more detail. Look at the current senario, the small car market in India is very competitive with players like Maruti Suzuki, Tata Motors, Huyndai etc. which was preety much dominated by Maruti. But with launch of Nano the 1 lakh car the whole momentum of the market has shifted. Now to be competitive in market other companies have to either slash rates of their existing model or have to go back to the drawing board and build again. Now look it from Tata Motor's perspective what price they had to pay to gain such advantage. Building new production plant, raw material & equiptments, labor etc. which accounts to huge capital...
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...following global accepted quality measures at a lower cost. This makes it a perfect destination for production-outsourcing of automobiles. 4. The availability large talent pool at cheap prices. 5. Availability of cheap R&D; IITs be deemed as centers of excellence for automobile research and access to latest technology. WEAKNESS The biggest and probably the only weakness of Indian automobile Industry is its slow growth in Research and Development most companies (barring TATA and M&M) do not have adequate spending on R&D in comparison to their turnover. Maruti for instance is completely dependent upon Suzuki for any new technology all of the successful cars sold by it were developed by Suzuki; Swift, A-Star (which replaced alto in other markets as New Alto), SX4, Ritz etc. This weakness will soon become history as Indian companies are catching fast in R&D and are showing strong signs of success e.g.: M&M Scorpio Hybrid, TATA Nano. Besides R&D the other weakness is political hostility (TATA Nano Singur plant) but is only a regional problem of less developed states or pro-communist states, states like Gujarat, Maharashtra are proving to be a haven for Industries.12 Page 26 - http://www.planningcommission.nic.in/aboutus/committee/wrkgrp11/wg11_automaive.pdfPage | 31 • 33. OPPOURTINITES 1. India has a large pool of cheap talent which can be utilized in decreasing the R&D expenses. 2. India has potential to become manufacturing and export hub with it cheap labor availability...
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...Introduction Ford Australia is the subsidiary of Ford Motor Company, founded in Geelong, Victoria, in 1925. This sales forecast will present the expected sales of ford vehicles in 2012 as a result of research and current trends. Australia’s Auto-mobile Market’s Key Trends 1. Weakening of Car sales Since the global financial crisis, new vehicle sales within Australia have been severely crippled. In 2008 December, sales were recorded at76,510 dropped from earlier year’s sale of 86,250 . The 11.3% drop is a direct result of unfortunate consumer confidence which Australia’s index of consumer sentiment was recorded at -6 in 2008 January (Trading Economics). Although sales continued to be poor in 2009, sales regain its market strength in 2010 with the aid of increased sales of SVUs and private sales of cars, increasing sales by 11.8% compared with 2009 (Sydney Morning Herald). Despite strong buoyance in 2010, the car market again began to weakened again with the total new car sales slipped by 1.5% where sport car sales dropped by 5.6% (The Age). 2. Movement Towards Small Vehicles In 2011 the nationwide trend for all car companies has been customers moving from purchasing larger sedans to small and light cars. Small and light vehicles made up 38.9% of total car sales in October, up from 35.1% in 2010 (Federal Chamber of Automotive Industries, 2011). This is a trend that will have an impact on our sales forecast for Ford with customer’s preferring the smaller Ford vehicles...
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...problem for India’s biggest conglomerate – Tata Group. Ratan Tata joined the company after college and took over his late uncle’s business 16 years ago. He is involved in more issues than he should be. The authoritarian Tata is the chairman of key units including Tata Motors and Tata Steel and is involved in all major deals and making all the key decision. 2. SECONDARY PROBLEMS 2.1 Short Term A bid for Jaguar and Land Rover might present an even more daunting challenge for Ratan Tata. It would be an uphill climb to restore Jaguar’s luxury cachet, which was damaged by sharing basic designs with Ford. As the organization gets bigger and more diverse, talent and retaining the value system will pose the biggest challenge in Tata Group (Engardio and Lakshman 2007) 2.2 Long Term Succession “is a problem”. Ratan Tata is 69 years old, not married and has two dogs at his beachfront home he designed himself. He commands most Tata companies, which makes his failure to designate a successor all the more disconcerting. In Asian culture, the eldest son will take over the family business, however Tata is not married therefore he does not have any family members to take over his empire. Ratan, who is single and childless, could be the last Tata to oversee the group. His younger brother and three half-sisters aren’t involved in Tata business; his reclusive half-brother is unclear whether he’s tycoon timber (Engardio and Lakshman 2007). Ratan Tata public listed his companies, which also...
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...Introduction The Indian economy and the importance of family-owned groups The Economy of India is the ninth largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP)[1]. The country is one of the G-20 major economies and a member of BRICS. The country's per capita GDP (PPP) was $3,408 (IMF, 129th in the world) in 2010, making it a lower-middle income economy[2]. As a result of the financial crisis of 2007–2010, coupled with a poor monsoon, India's gross domestic product (GDP) growth rate significantly slowed to 6.7% in 2008–09, but subsequently recovered to 7.4% in 2009–10, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period[3]. India’s current account deficit surged to 4.1% of GDP during Q2 FY11 against 3.2% the previous quarter. The unemployment rate for 2009–2010, according to the state Labour Bureau, was 9.4% nationwide[4]. As of 2010, India's public debt stood at 71.84% of GDP which is highest among BRIC nations. The latest GDP growth figure slipped to 6.9% and industrial production numbers just released, on December 12th, showed a decline of 5.1% compared with the previous period[5]. Inflation and capital flight are two clear factors that have hurt the Indian economy. First, inflation has stayed over 9% since December 2010, and wage inflation is also on the rise. The Reserve Bank of India (RBI), the country's central bank has been hiking interest rates since March 2010 to curb inflation[6]. Family owned...
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