Tata Motors Company Analysis
Tata Motors Company Analysis
Company Overview
Its product portfolio covers passenger cars, trucks, vans, coaches, buses,
military vehicles and construction equipment. In terms of volume, it is the
world’s 17th largest motor vehicle manufacturing company, 4th largest truck
manufacturer and 2nd largest bus manufacturer.
Shareholding Pattern
Competitor Analysis
Name Market Cap. Sales Net Profit Total Assets
Turnover
Competitor Profiles
1. Eicher Motors
It was ranked as the 10th most trusted brand in India (by The Brand Trust
Report India Study 2014).
3. Ashok Leyland
It is the 2nd largest commercial vehicle manufacturer in India, 4th largest
manufacturer of buses in the world and 16th largest manufacturer of
trucks globally.
4. Force Motors
5. SML Isuzu
SML Isuzu Limited was formed in 2010 from the Swaraj Mazda company
(incorporated in 1983) after Mazda pulled out of the venture and the
Swaraj name was sold to Mahindra when the tractor division Punjab
Tractors was sold off.
SWOT Analysis
Key Financials
(in INR crores) (in INR crores)
The above graph shows that consolidated Operating Profit Margin has remained
fairly constant over the last four years. However, the stand-alone Operating
Profit Margin has been decreasing consistently over the last four years – from
11.4% in FY’10 to -2.65% FY’14. Similarly, the Net Profit Margin has
decreased from 6.26% to 0.97% from FY’10 to FY’14.
The consolidated current ratio has been consistently below 1 which indicates
that company could face difficulties in future meeting its short term financial
obligations. However, its overall increasing trend is an encouraging sign.
Barring FY’11, the consolidated Earnings per Share have not varied a lot and
Tata Motors would like to increase the EPS, if possible, to enhance shareholder
interest.
New Developments
1. Tata Motors has outlined three priorities for the business: put
winning and cost-effective products to the market fast, institutionalize a
culture of collaborative and disciplined product development and improve
quality and customer experience.
2. Tata Motors has been working on a voluntary retirement scheme
(VRS) for workmen across its plants and managerial staff aged above 40
as part of a drive to improve competitiveness and cut costs.
3. Tata Motors appointed former Maruti Suzuki Chief Operating
Officer (Marketing & Sales) Mayank Pareek as President of its Passenger
Vehicle Business Unit (PVBU) last year. He has brought about a strategic
shift. After focusing on selling to fleets and taxis, Tata Motors is now
targeting a new set of customers — the young consumers and
professionals. Hence dealers have started recruiting a new sales force;
training them on soft skills to attract the new target customer base.
4. Tata Motors recently announced its association with tyre
manufacturer CEAT Ltd. and mobile commerce platform Paytm who
would be new partners in Tata Motors Loyalty Programs – Tata Delight
and Tata Emperor. These programs are designed to offer loyalty benefits
for their members from across multiple product segments. The
partnership will enable the customers to accumulate and redeem points on
purchase of every CEAT tyre, transactions made on Paytm, as also on the
offerings of TATA and other loyalty program partners
Conclusion
Tata Motors is one of the undisputed market leaders in the commercial vehicles
industry in India and is gradually emerging as one of the key players
internationally. It has been surging ahead on a number of fronts in an attempt to
further entrench its position as a market leader. However,sustaining and
increasingthis success is far from easy. Apart from product reliability, the most
important determinant of future success would be the company’s ability to
enhance its support framework. The future presents challenges and
opportunities for the company in equal measure, both domestic as well as
overseas. Given its renewed focus, Tata Motors looks well positioned to
capitalize on these opportunities and take on the world.