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History of TATA Motors
96 Companies
650,000 Employees
6 Continents
6th Largest commercial Vehicle Manufacturer
in the world.
2004 1st Indian manufacturing company listed
in NYSE
Manufacturing plants in India :
Jamshedpur, Pune, Lucknow
Assembly Operations across globe
Malaysia, Kenya, Bangladesh, Spain, Ukraine,
Russia and Senegal.
2004 acquired Daewoo commercial Vehicle co. Ltd. o Korea’s 2nd largest Truck manufacturer
2005 acquired 21% stake in Hispano carroccera o Spanish bus manufacturer
Indian Automobile Market
Benefited after Liberalization
2005-2006 One among the largest and fastest growing
car markets.
Best and Top manufacturers of two and four wheelers
present in India
Rapidly expanding middle class increases scope of
wide market
Questions
How would you segment the Indian
automobile market? Where is Nano likely to
have most appeals? Accordingly how should
it be positioned?
Second hand vehicle usersAuto Rickshaw MarketMiddle and lower income people
Positioned itself in the mind of people as “The people’s Car”
A news report on Nano
Tata Nano by Tata Motors will have only a marginal
impact on the sale of Maruti-800, said Maruti Suzuki
chairman RC Bhargava
Two-wheeler makers Hero Honda, Bajaj Auto and TVS
Motors, too, underplayed the anticipated impact of
Nano.
Mr Bhargava said, “Nano may impact the sale of our
entry-level model Maruti 800.
How do you evaluate Nano from the
perspective of Tata motors , perspective of
customers, and society at large?
Company Perspective
Tata Nano is a kit Car.
Innovation both in case of value for money
and comfortably
It gives margin 4-10% to dealers. 20 – 25% for
company.
Production of 350000 cars
Society Perspective
Considered the market as middle class families
and college students.
“Freedom for Four”
What are the economies of the nano for
the channel members .viz component
suppliers, manufacturers and dealers ?
Manufacturer
Production of nearly 350000 Nano
Increase in cost of material by 10%
Margin around 20-25% overall
Estimated profit of nearly 900 crore (approx)
Dealer
Less outlets so scope of buying from particular
dealer is more , increasing the sales
Pre- booking Demand of Nano was more
during the starting stage .
Should Tata’s Sales and distribution strategy
be changed for Nano? Is the planned
distribution model of local assembly feasible?
TATA NANO is using Hub and Spoke Model for
distribution
TATA has many C&F Agents (Collects Nano
from hubs and distribute it across nation)
Sales & Distribution strategy
While the Nano seemed tailor-made for rural
drivers, Tata only has dealers in major cities.
Lack of dealers in the target market i.e semi
urban cities and rural areas.
Present Issues with sales and Distribution Strategy
Tata has nearly 200 dealers in major cities.
Reputation was damaged when five of the first
30,000 cars had engine fires.
The final nail in the coffin is the price: Rising
material costs pushed the car’s price up to Rs.
1.5 lakh the same as a used Maruti 800
• Setting up exclusive showrooms for NANO• Developing Specialized Logistics Facilities
by collaboration with Specialized logistics providers
• Should Move from full range dealership to Product Based Dealership
• Financing better facilities like Tata Finance
Reinvent the
distribution strategy
Recommendations
• Dedicated Nano kiosks and Mobile display units, the company also can step up its drive through the hinterlands to spruce sales.
• Association with Retail Outlets like Vishal Mega Mart, Shoppers Shop, Pantloon etc. (Booking facilities, with promotion schemes like ‘Win Silver Coin’)
Reinvent the
distribution strategy
Recommendations
Suppose Tata wishes to go international with Nano then which countries will be suitable to enter and when?
Internationally we would like to place Tata
Nano in country like Bangladesh
Assembly plant present in the country
Cost will be low and scope is high.
Not developed country scope of selling to
middle class is High
High demand for low budgetary cars.
One more country in the list will be Thailand
More of two wheelers than four wheelers.
Some places they heavily depend on Two
wheelers even for tourism.