Tata Motors and the Automotive Industry

1. Tata Motors and the Automotive Industry The Smart People Emily Frey, Eric Harmon, Arielle Hord, Caitlin Kantosky

2. Outline • History and Product offerings • Tata Group & Corporate Responsibility • Financial Analysis • Tata’s Future & what impact, if any, for the American auto market

3. History • Started in 1945 in Mumbai, India. • Original production was on locomotives. • 1954 • First car rolled off of the assembly line. • Tata’s are a family of Indian industrialists and philanthropists. • The family founded: • Ironworks • Steelworks • cotton mills • hydroelectric-power plants • Are of their endeavors have been proved to be crucial to India's industrial development.

4. History • Tata Motors is India’s owns the largest independent company in India. • Mercedes and Tata teamed up to create a truck line. • First major business deal with another firm. • Together both companies started their commercial vehicle operations in 1960. • in 1986 the company created and sold the first LCV • LCV = light commercial vehicle • Was the Tata 407

5. History • Tata Motors decided to pursue joint ventures. • Cummins Engine Co., Inc., was the first company to jointly venture with Tata in 1993. • Manufactured a diesel engine that had high horsepower and emitted less harmful chemicals. • Began creating new lines in the late 1990’s and early 2000’s: • Compressed natural gas buses • 1109 vehicle, used for commercial purposes. • Ex-series • Newly designed LCV called the 207 DI

6. Products • Tata Indigo • Created in 2002 • Mid-sized sedan. • Different models run on either normal gasoline or diesel fuel. • Seats 5 people. • Same luxuries as American made vehicles.

7. Products • Tata Indigo SW • Station wagon version of the Indigo. • Same basic features as the Indigo. • Seats 5 people. • Different models fun on different fuels. • Different optional safety features than other vehicles.

8. Products • Tata Indica • Hatchback version of the Indigo sedan. • Easily affordable. • Smallest in the line of Tata vehicles to date. • Seats 5 people. • Same basic features as the sedan.

9. Products • Tata Safari • Mid-sized SUV. • Has a special engine called DICOR. • Direct Injection Common Rail. • Allows the engine to intercool itself. • Comes in either a 4x4 or a 4x2. • Can seat 7 passangers.

10. Products • Tata Sumo • Runs off of diesel fuel. • Seats up to 7 passengers. • Has a separate rear and front suspension for an optimal ride. • Has two separate air conditioners for the front and rear of the vehicle.

11. Tata Group • 100 companies throughout 7 business sectors • Engineering, materials, energy, chemicals, services, consumer products, information systems and communications • Tata AutoComp Systems - Automotive • Tata Steel - Materials • Tata Power - Energy • Rallis India - Chemicals • Tata Realty and Infrastructure - Service • Tata Tea - Consumer Products • Tata Technologies - Information Systems and Communications

12. Corporate Social Responsibility • “A Company that cares about the future” • Committed to corporate social responsibility • Signed the United Nations Global Compact • Plays role in community development • Environmentally-friendly products and technology

13. Corporate Social Responsibility • Two main concerns: • Reduction of pollution • Restoration of ecological balance • Implemented soil and water conservation programs • Cleaner Engines • Advanced emission-testing labs • Developing alternate fuel engines • Sewage treatment facilities • Encourages tree planting

14. Corporate Social Responsibility • India – Recycling Culture • Value in discarded products • Europe – “Throw-away” culture • European ELV Directive

15. Corporate Social Responsibility • Community Development • Community Service Division • Promote economic independence • “Self-initiated cottage industries”

16. Tata Finance: overview • Stock Trend • Growth and Expansion • Sales • assets • Financing Operations • Tata vs. American Companies

17. Tata Motors Inc. Stock • TTM • NYSE since 2004 • $15.84 as of Friday (Yahoo, 2008) • Down 8% in last year

18. Since 2004: TTM

19. Growth and Expansion • large Indian market • Familiar with market • Brand loyalty • Fuel efficiency • Mahindra & Mahindra- $1.88 billion

20. Debt vs. Equity • Debt growth: $2.3 billion  $4.1 billion • Equity growth: $1.2 billion  $2.1 billion • 55 million outstanding shares • ROE : 19% • Debt/ equity ratio: .87 • Industry average: .58 • Cash now for growth

21. Growth • Asset growth  doubled since 2005 • Acquisition of Jaguar and Land Rover from Ford • Sales: • $7.6 billion and grew 42.2% from 2006 • PROFITS!! • $.95 billion on 2005  $1.5 billion on 2007

22. Cash Management • Liquidity and solvency are good • Inventory • Improved cash management: • 12% of assets in 2005 • 4% of assets in 2007

23. Comparatively Speaking

24. Effects on U.S. Economy Slow economy High oil prices Demand for fuel efficiency Cut backs Tata’s effect

25. Jaguar and Ford • Purchase from Ford • Concerns • Changes or Plans • More Tata vehicles • Made in India • Future

26. U.S. Car Companies • $ 2 Billion in sales • GM-$50; Ford-$40; Honda- $20 • In the U.S. • Going overseas • 75% by 2017 for GM • Expanding in India

27. U.S. Car Companies • Toyota- 7.5% increase in profits • Foreign Markets • No help • 1. Can’t offset • 2. India out of reach

28. The Next Auto Capital • Detroit current auto capital • 21st century belongs to India • 2050 in India and China • Labor • Environment

29. Future of the Nano • Not for the U.S. • 3rd world countries • U.S. standards • Detroit make or buy version

30. Summary • Tata history and products • Tata Group • Tata: Social Responsibility • Tata Motors Finance • Future

31. Questions