AUTOMOBILE INDUSTRY
Competitor Analysis OF TATA MOTORS AND MARUTI SUZUKI
REPORT PREPARED BY:
Fakhri Kaydawala SIMSREE, MMS Batch of 2011
1
Contents Contents........................................................................................................... 2 Executive Summary..........................................................................................3 Introduction -Automobile Market in India...........................................................4 Tata Motors .....................................................................................................6 Introduction................................................................................................... 6 SWOT Analysis...............................................................................................7 PEST Analysis...............................................................................................12 Maruti Suzuki..................................................................................................22 Introduction:................................................................................................22 SWOT analysis ............................................................................................22 PEST analysis ..............................................................................................23 Marketing Strategy analysis for Maruti Suzuki.................................................24 Marketing Strategy analysis for Tata motors...................................................28 Conclusion...................................................................................................... 30 References......................................................................................................30
Executive Summary Tata Motors is a company of the Tata and Sons Group, founded by Jamshetji Tata and is currently headed by Ratan Tata who is the chairman. The company has the workforce of 22000 employees working in its three plants and other regional and zonal offices across the country. This report analyses the current market position of Tata Motors and gives details regarding the company’s plans and strategies for growth in the future. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto keicar which at the time was the only modern car available in India, its' only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti has produced over 5 Million vehicles. Marutis are sold in India and various several other countries, depending upon export orders. Cars similar to Marutis (but not manufactured by Maruti Udyog) are sold by Suzuki in Pakistan and other South Asian countries. The report captures a detailed SWOT and PEST analysis of these two Indian automobile companies and tries to arrive at a conclusion based on observations.
Introduction -Automobile Market in India The automobile industry in India, the tenth largest in the world with an annual production of approximately 2 million units, is expected to become one of the major global automotive industries in the coming years. A number of domestic companies produce automobiles in India and the growing presence of multinational investment, too, has led to an increase in overall growth. Following the economic reforms of 1991 the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions In 1953, the government of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry, which had emerged by the 1940s in a nascent form. Between 1970 to the economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to the many government restrictions. A number of Indian manufactures appeared between 1970-1980.Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies. Following the economic reforms of 1991, the automobile section underwent delicensing and opened up for 100 percent Foreign Direct Investment. A surge in economic growth rate and purchasing power led to growth in the Indian automobile industry, which grew at a rate of 17% on an average since the economic reforms of 1991. The industry provided employment to a total of 13.1 million people as of 2006-07, which includes direct and indirect employment. The export sector grew at a rate of 30% per year during early 21st century. However, the overall contribution of automobile industry in India to the world remains low as of 2007. Increased presence of multiple automobile manufacturers has led to market competitiveness and availability of options at competitive costs
India’s car market has emerged as one of the fastest growing in the world. The number of cars sold domestically is projected to double by 2010, and domestic production is skyrocketing as foreign makers are setting up their own production plants in India. The government’s 10-year plan aims to create a $145 billion auto industry by 2016. According to McKinsey, the auto sector’s drive to lower costs will push outsourcing. The auto sector could be worth $375 billion by 2015, up from $65 billion in 2002. McKinsey thinks India could capture $25 billion of this amount. Out of 400 Indian suppliers, 80 percent have the ISO 9000 certificate—the international standard for quality management
Tata Motors Introduction Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), was formed in 1954. It is the only fully integrated automobile manufacturer that now stands as India's largest and the world’s 5th largest passenger automobile and commercial vehicle manufacturing company with a product range designed to meet national and international transportation needs. Tata Motors has a wide portfolio ranging from a Tata Mercedez Benz truck to diversifying into passenger cars like Tata Sierra,Tata Estate,Tata Indigo and Indica, concept vehicles like Aria Roadster and Tata Elegante, commercial vehicles like Tata heavy trucks and military vehicles. Tata Motors was first listed on the NYSE in 2004. It created wealth of Rs. 320bn during 2001-2006 and stood among top 10 wealth creators in India. It has its manufacturing bases in Jamshedpur, Lucknow and Pune. Tata Motors has recently had a couple of important mergers and acquisitions like with JLR in UK, Daewoo in South Korea, Hispanso and a JV with Fiat.
SWOT Analysis STRENGTHS Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures (JV): •
21% stake in Hispano Carrocera, a Spanish bus manufacturing company and introducing its high-end inter-city buses in the country.
•
Acquisition of Jaguar and Land Rover of UK, help complete its portfolio in the premium segment
•
A 70% JV with Thailand’s Thonburi (auto assembler) which will set up a plant to manufacture pick-ups and will sell them in Thailand.
•
The 25MT GVW Tata Novus launched from Daewoo’s platform (TDCV Tata Daewoo Commercial Vehicle Company).
•
51:49 JV with Brazilian based Marcopolo (bus building). This JV is to manufacture and assemble fully-built buses and coaches targeted at developing mass rapid transportation systems.
•
In 1993, it started manufacture of high horsepower and emission friendly diesel engines in an effort to reduce the pollution in the existing Tata engines and to produce more environmentally friendly engines.
•
In 2000, it launched CNG buses and filled the product line gap through the introduction of the 1109 vehicle which is an intermediate commercial vehicle and is useful for medium tonnage loads.
•
Its Ex- series vehicles have high tonnage capacity and high pick up and the LCV (207 DI) with direct ignition technology caters to the customers' requiring one and same vehicle for commercial as well as personal use.
•
Tata Motors has a high domestic exposure of ~94% in the MHCV (Medium & Heavy Commercial Vehicles) segment and ~84% in the LCV segment.
•
The latest hit of Tata Motors is its mini truck Ace which is India's first indigenously developed sub-one ton mini-truck. Ace has rapidly emerged as the first choice for transporters and single truck owners for city and rural transport.
•
The only major engine manufacturer in the world to express any formal interest in the turbulence-boosting cylinder head grooves
•
There is definite cost advantage as labor cost is 8-9 per cent of sales as against 3035 per cent of sales in developed economies.
•
Tata motors have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. Also, India is an excellent source for IT based engineering solution for products & process Integration.
WEAKNESSES •
Tata Motors' range of passenger cars is still not comprehensive by industry standards. It has a limited product portfolio which has given its key competitors (Hyundai motors, Maruti Suzuki) an extra edge.
•
Even after being in the passenger cars market for quite some time, somewhere in the minds of consumers Tata motors is still synonymous with heavy and commercial vehicle makers and not passenger car makers. Also because of this consumers may think the passenger cars can lack aesthetics and are more built for robustness.
•
According to auto experts, low cost is a stronger motive at Tata Motors that sometimes makes quality take a backseat.
•
The company is overstaffed and hence human resource utilization is sub optimal.
•
Also decision making gets a hard hit due to extensive hierarchy prevalent at Tata Motors.
•
They do not have a presence in high volume markets like America and most parts of Europe.
•
Not very high car sales volume which hampers their future plans like increasing their production and expansion.
OPPORTUNITIES •
Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time.
•
The JV with Marcopolo will be beneficial to both companies since the latter will absorb technology and expertise in chassis and aggregates from Tata Motors, and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design.
•
JV with Fiat, it is likely to gain access to Fiat’s diesel technology and to the latter’s strong overseas distribution network for its passenger cars.
•
Tata Motors may extend this relationship to other segments like pick-ups and MHCVs.
•
Launch of the global truck will mark the entry of the company into developed markets like Europe and the USA. Working with Iveco means that the designs will be in sync with the needs of sophisticated European customers.
•
GOI policy for modernizing of vehicles to arrest degradation of air quality and move toward international taxing policies linked to age of vehicles, are steps which will lead to increased sales for TATA motors Commercial vehicle division.
•
The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices
•
The need to transport higher volumes of agricultural and industrial goods.
•
The cut in tariff on petroleum and diesel from 8 per cent to 6 per cent will make commercial vehicles more competitive in the export market.
•
Development of the national highway development program will increase TATA sales in the long run.
•
Tata has developed a car it aims to sell for about $2,500 USD, which would be considered the cheapest vehicle ever made in real terms.
•
There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. There are favorable Government polices and regulations to boost the auto industry i.e. Incentive for R&D.
THREATS WITHIN THE INDUSTRY There are a lot of new competitions coming up in the commercial vehicles segment which threaten the huge market share which Tata Motors has garnered. Some of the new Joint Ventures and competitions have been listed below: •
M&M has formed a 51:49 JV called Mahindra International with ITEC, USA, (parent NAVISTAR), to manufacture commercial vehicles. ITEC is the leader in medium and heavy trucks and buses in North America, and is the world's largest manufacturer of medium-duty diesel engines.
•
Force Motors: JV with MAN for manufacturing high-tonnage vehicles Force Motors has paired up with MAN in a 70:30 JV to manufacture high-tonnage and specialty vehicles. Further, the two companies have formed another JV to manufacture buses in India from end-2007.
•
Ashok Leyland: Acquisition of Czech Republic-based Avia Ashok Leyland (ALL) recently acquired the truck unit of Czech Republic-based Avia.
•
Volvo, a leading manufacturer of trucks, buses, cars, construction equipment, and aero engines has a main focus in the area of fully built buses. In India, it has focused on providing economical transport solutions in consonance with its values
of safety, quality, and environmental care. Its trucks are reputed for their performance and economy and are the flag bearers in their production activities in India.
THREATS OUTSIDE THE INDUSTRY •
Farmers are agitating against the land acquired by the firm in Singur for its ambitious Rs 1, 00,000 car project. The protest is being lead by Mamta Banerjee of the Trinamool Congress. Farmers are protesting that the land is fertile land and the government acquired the land without their consent. Presently this matter is lying in the court of law and is still a contentious issue.
•
An Indian cabinet panel will soon consider a new automobile policy that aims to set fresh investment guidelines for foreign firms wishing to manufacture vehicles in the country. The policies adopted by Government will increase competition in domestic market, motivate many foreign CV manufactures to set up shops in India.
•
Increased interest rates have a potential to hit the sales. Auto loans have become costly causing customers to defer their purchase which has impacted the sales of Tata Motors.
•
The strengthening of the rupee against the dollar has made their cars less attractive in the foreign market.
PEST Analysis Political Assessment:
the auto policy of Government which has direct
I-
implications on Tata MotorsA brief overviewAuto policy of Government of India envisions to establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. GOI policy has rightly recognized the need for modernizing of vehicles. The Auto Policy has spelt out the direction of growth for the auto sector in India and addresses most concerns of the automobile sector, including•
Promotion of R&D in the automotive sector to ensure continuous technology upgradation, building better designing capacities to remain competitive.
•
Impetus to Alternative Fuel Vehicles through appropriate long term fiscal structure to facilitate their acceptance.
•
Emphasis on low emission fuel auto technologies and availability of appropriate auto fuels and encouragement to construction of safer bus/truck bodies - subjecting unorganized sector also to 16% excise duty on body building activity.
•
The Foreign Direct Investment policy of India has undergone significant liberalization. A new auto policy has been announced which provides automatic
approval for foreign equity investment up to 100% for manufacture of automobiles and components. Effects of government policies on Tata motors In the past effect of Government Policy on TATA Motors CV Division Commercial Vehicles segment sector has been at the forefront of the strong showing by the automotive industry over the past few years. Following factors have led to growth in sales: •
The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices
•
The attractive financing offers and freebies enabled by low interest rate policies by Government
•
The need to transport higher volumes of industrial goods
•
Uttarakhand plant enjoys an exemption of excise duty (otherwise – 16%) for initial 10 years
•
II-
Singur plant enjoys exemption from income tax for initial 5 years
LABOUR REFORMS
Labour reform is a very sensitive subject in the Indian context, given the ground realities of poverty, illiteracy, diseases, deprivation, exploitation, low per-capita income, etc. This means that whatever is taken up in the name of labour reforms, be it in the sphere of employment, welfare or human resources, needs careful handling. Tata motors’ view on labour reforms The Tatas were the pioneers in introducing a number of ‘firsts’ in the field of labour welfare. The group felt that unless a worker’s welfare needs were met, there would be no profits for industry and no progress for the nation. Well ahead of any Indian legislation on
this front, several benefits — the eight-hour working day, free medical aid, provident fund, gratuity, leave with pay, maternity leave, accident compensation, etc — were incorporated by the Tatas into their workplace culture.
ConsiderationThe Tatas are now considering labour reforms very carefully, with a view to ease the social burden of their employees and at the same time preserve the equilibrium of job security. It is worth noting that labour reforms in India are discussed mostly in the context of organized labour, and this constitutes merely 8 per cent of the country’s total labour force. It shows that a majority of the labour force exists as unorganized.
Economic Assessment: Favorable factors: 1. High domestic demand: There is huge demand in domestic markets due to infrastructure developments and Tata Motors is able to leverage its knowledge of Indian market. The Indian vehicle market expanded by 23.7% in the financial year ending in March 2007, according to data released by the Society of Automobile Manufacturers 2. High economic growth: Indian economy has expanded by more than 9% during the financial year ending in March 2007. This results in prosperity and creates demand for Tata Motors’ products 3. Reduction in taxes: The cut in tariff on petroleum and diesel from 8 per cent to 6 per cent will make commercial vehicles more economical
4. Tapping new markets: Tata is developing a car that aims to sell in 2008-09 for about $3,000 USD will result in huge demand and increased profitability of the company 5. Labour cost advantage: Cost advantage as labor cost is 8-9 per cent of sales as against 30-35 per cent of sales in developed economies. This results in lower production cost and higher margins for Tata motors’ products 6. Increase in disposable income: According World Development Indicators database, India's purchasing power parity per capita income was $3,100 in 2004.These leads to increase in disposable income and consumption.
Concerns: 1. Rupee appreciation against the dollar: The strengthening of the rupee against the dollar has made Tata motors less attractive to export. India witnessed appreciation in its currency of 8.35% against the dollar between January and June 2007. 2. Increasing auto loan interest rates: Increased interest rates have a potential to hit the sales. Auto loans have become costly causing customers to defer their purchase which has impacted the sales of Tata Motors. Interest rates on car loans have witnessed a surge of at least 3.0 percent points from December 2005 to June 2007 3. Spiraling inflation: Rising materials and labour cost due to inflation increases manufacturing cost. Therefore profitability reduces. According Reserve Bank of India, Inflation on a year-on-year basis, is 5.9% at end-March 2007 4. Globalization : •
Competition in foreign markets by M & M and Ashok Leyland
•
Competition in Indian market by Hyundai and Volvo
Social Assessment:
Favorable factors: 1) Employment Generation: It employs a total of approximately 22349 people according to March 31st 2007. It’s the largest automobile company in India. 2) Attitude to Work: The employees at People committed to the five integral values that are the keystones of Tata Motors policies a) Integrity b) Excellence c) Understanding d) Unity e) Responsibility. This results in greater productivity and more revenue for the company. 3) Environmental Responsibility: Tata Motors has led the Indian automobile industry's anti-pollution efforts through a series of initiatives in effluent and emission control. The company introduced emission control engines in its vehicles in India before the norm was made statutory. All its products meet required emission standards in the relevant geographies. Modern effluent treatment facilities, soil and water conservation programs and tree plantation drives at its plant locations contribute to the protection of the environment and the creation of green belts. 4) Social Image: Tata Motors has bagged a number of awards in certain categories which show that the society’s image of it is very favorable. a) Tata Motors has been chosen as India's Most Trusted Brand in cars in a Readers DigestAC Nielsen consumer survey in 2006. b) Tata Motors' mini-truck, Ace, which has created an all-new category in the commercial vehicles market, received the BBC-Top Gear' Design of the Year 2006. The company's Starbus low-floor city bus and the Novus heavy truck were adjudged second and third respectively.
c) For the second consecutive year, Tata Motors was rated by Auto Monitor as the 'Commercial Vehicle Manufacturer of the Year' for 2006. d) The Commercial Vehicle Business Unit won the CII-Exim Bank Award for 2005 for Business Excellence, for being a role model of excellence in management. The award particularly recognises excellence in the management of quality as a fundamental process. e) The two divisions of the company also won the Tata Group's JRD QV Awards for Business Excellence in 2005. f) The Jamshedpur plant and the car plant at Pune received the Union Ministry of Power's National Energy Conservation Award, which recognise significant initiatives to reduce energy intensity and improve energy efficiency. The Jamshedpur plant won the award for the fourth year in a row. The Commercial Vehicle Business Unit and the Passenger Car Business Unit also received the CII's National Award for excellence in energy management. The Foundry Division at the Pune plant received the Gargi Huttenes Albertus Green Foundry of the Year Award
Concerns: 1. Farmers are agitating against the land acquired by the firm in Singur for its ambitious Rs. 100000 car project. The protest is being lead by Mamta Banerjee, the Trinamool Congress. Farmers are protesting that the land is fertile land and the government acquired the land without their consent. This has led to wide unrest among the people and has adversely affected the brand image
2. Unfavorable press and media opinion on the forceful acquisition of land in Singur. Though the media continues to talk about the mergers and acquisitions of the group positively, the Singur project continues to be the canker in the heart
Technological Assessment: Opportunities: 1) One lakh car: - Tata Motors' new small car project to make India's first car to be priced at around Rs. 1 lakh was launched in early 2008. The company was keen to explore the possibility of making cars from engineered plastics made by General Electric. It is part of our Endeavour to make a car that is cheap to operate and maintain. The addressable market for such a car will be around one million vehicles annually at a mature stage which would really propel Tata motors to the league of the top automobile companies in India. 2) Impact of technology transfer: a) Alliance with Fiat: Tata motors have aligned with fiat to develop the one lakh car. The alignment will include Fiat introducing its other successful vehicles in the Indian market like Alfa Romeo, Maserati and Ferrari. The strategic alliance would explore opportunities for mutual benefit, including possible sourcing of technologies, power trains and major aggregates from Fiat, sharing of common vehicle platforms between the two companies and even possible joint development of models which could be batched and sold by both companies in different geographies. b) Alliance with Cummins Inc: Cummins Inc. and Tata Motors has a new agreement that will allow their joint venture, Tata Cummins Ltd. (TCL), to begin manufacturing the ISB engine. The expansion will increase the number of engines produced by the joint venture
from approximately 69,000 to 120,000 units beyond that time. The engines produced by TCL will meet Euro 2, Euro 3 and Euro 4 Indian and European standards for diesel emissions. c) Alliance with MDI of France: India's largest automaker, Tata Motors, announced that it will partner up with MDI of France, a technology invention company, to develop engines powered by compressed air. This agreement envisages Tata's supporting further development and refinement of the technology, and its application and licensing for India. 3) Research and development: Tata Motors has a long history of investment in R&D. it has a passenger car business unit and Engineering Research Centre (ERC). It has lead to a very large number of business successes. Most of these innovations have been, over the years, incorporated into automobiles, ensuring driver and passenger safety. The facilities in the ERC have been repeatedly identified as benchmarks for the Indian industry. Today ERC takes pride in having in its service more than 900 scientists and engineers, besides a host of unique facilities, including the only crash test facility and 'hemi-anechoic noise and vibration test chamber. Some of the other technologies that are part of Tata Motors’ arsenal are those that offer improved electronic controls for engine systems, aimed at improving emission standards, and other vehicle drive-train and chassis systems, besides fuel efficiency. Many of the obstacles the company faced two decades ago in acquiring technology have been substantially reduced through tier-1 suppliers and through access to specialist consultants. 4) Impact of technology training: The growth of Tata Motors and the quality of its products are anchored securely in the skills that have been built in its employees. The training schools run by Tata Motors are acknowledged as being the best training establishments in the engineering industry in India. By giving the highest priority to training, the Company has created an invaluable source of skilled craftsmen, who are periodically retrained, so that their skills are never obsolete. Tata Motors has a pool of
highly qualified engineers, whose innovativeness gives the Company its distinct competitive edge 5) Impact of emerging technologies: Tata Motors has established its own technical engineering centre in Europe. Tata Motors is also investigating hydrogen, ethanol, biodiesel and other alternative fuels. Alternate fuels would be the way to go in the future because of the exhaustible nature of oil. Tata motors can take a very good lead in this field with the research it is doing. The question is whether Tata Motors should invest in fuel cells, which are probably 20 years away from production or invest in direct hydrogen combustion. 10 to 20 per cent hydrogen-enriched gasoline can give significant benefits too in the longer run. 6) Impact of technology helping in the manufacturing: Through technology the manufacturing has been made simpler and cheaper. Nowadays a single platform is used to manufacture different types of vehicles. The robust 207 platform serves as the basis for a number of vehicles like the Tata mobile, the Sierra, the Estate, the Sumo, the Safari and the 207 DI. The platform (X1), is used for the Indigo and the Indica.
Shortcomings of technology:1) Substitutions of cars: Because of technology a lot of new options and different types of car have been introduced. The relatively new idea of a luxury car, a family car, an economy car has well established itself in the bymind of the Indian consumer. The differentiation on the basis of styling and features is also integral part of the new age buyer. The process of substitution is now faster and is clearly guided by the above principles. The wide range of, cars and other vehicles make substitution a great threat. 2) Technological challenges: The Tata Motors challenge is to maintain its cost base but catch up with technology and overtake the competition given by European, American and Japanese automakers.
Maruti Suzuki Introduction: Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The Indian government held an initial public offering of 25% of the company in June 2003. As of May 10, 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog.
The company annually exports more than 30,000 cars and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the sales charts.
SWOT analysis Strengths:
Established distribution and after sales networks
Understanding of the Indian market and ability to liaison with the government.
Ability to design products with differentiating features
Brand image
Experience and know-how in technology
Weaknesses
Lack of experience with foreign market
Heavy import tariffs
Opportunities
Government subsidies
Tax benefits
Foreign collaboration
Increased purchasing power of Indian middleclass category
Threats
Threats from Chinese manufacturers
Indian as well as foreign competitors.
PEST analysis Political Assessment: •
The auto policy of Government which has direct implications on Tata Motors
•
Labour reforms
Economic Assessment:
•
High domestic demand
•
High economic growth
•
Reduction in taxes
•
Tapping new markets
•
Labour cost advantage
•
Increase in disposable income
Social Assessment: •
Employment Generation
•
Attitude to Work
•
Environmental Responsibility
•
Social Image
Technological Assessment: •
Threat from One lakh car
•
Impact of technology transfer: -
•
Alliances and joint ventures
•
Research and development
Marketing Strategy analysis for Maruti Suzuki Strengths (Internal Environment) Maruti Suzuki Ltd. (MUL) •
MARUTI is in a leadership position in the market.
•
Major strength of MARUTI is having largest network of dealers and after sales service caters in the country.
•
Complementary product range in small car segment o Maruti 800 o Omni o Alto o Zen o Wagon R
•
Good promotional strategy is adopted by MARUTI to transform concepts to products
•
Baleno: “Missed the flight catch Baleno” The most comfortable Car even in long drives
•
Esteem: “My Daddy’s Big Car” Affordable mid size car
•
Alto: “Lets Go” The fuel efficient and affordable car
•
After Sales Service “Kya yanha Maruti Service Station hai”. Availability of service stations even in the remotest place in the country.
•
Refurbished Cars: MARUTI has also entered into second hand car market with a brand name “Maruti True Value”.
•
Loyal Customer Base is another big strength of MARUTI. In JD Power survey, MARUTI has been awarded consequently 5th year for best customer satisfaction.
•
Strong Brand Value
•
Availability of raw material
Weakness (Internal Environment) •
Lack of having products in mid size car segment could result in shifting of loyal
customers who has a desire to upgrade their cars.
•
Low interior quality in cars.
•
Labour Laws and Labour Unions are not conducive to growth
•
Government intervention due to having share in MARUTI.
Opportunity (External Environment) •
MARUTI may encash the opportunity to enter again into the diesel segment of the cars to compete its nearest competitor TATA in diesel segment of small cars. Though MARUTI launched Zen in diesel version but it was not successful.
•
MARUTI has launched its LPG version of Wagon R and it was a good move simultaneously MARUTI can start R&D on electric cars for a much better substitute of the fuel.
•
Economic growth of the country is sound and promising in future.
•
Liberal policies of GOI.
•
Big Market: Domestic and Abroad
Threat (External Environment) •
Tata Motors’s Nano with a price tag of Rs. 1 Lac and that could give a big impact on sales of MARUTI
•
TATA MOTORS is a challenger and trying hard to achieve number one position in the market.
•
China may give a good competition as they are also planning to enter into car segment.
Marketing Strategy analysis for Tata motors Strengths (Internal Environment) •
In few years of operation, Tata Motors has secured a challenger position in the car segment being second largest car manufacturer of India.
•
Product line in all sizes of cars.
•
Presence in diesel segment of cars.
•
Option available to customer to upgrade their cars being with the company.
•
Good Promotional strategy
•
Strong Brand Value.
•
Availability of raw material
Weakness (Internal Environment) •
Less number of dealers and service stations
•
Not able to transfer its car specialty as Maruti is doing rather more relied on its brand name. Though endorsing celebrities was successful initially but at the same time company needs to transfer the thoughts by telling better qualities of the car to its customer as MUL is doing
•
No celebrity endorsing the brand
Opportunity (External Environment) •
Tata Motors may also enter into the diesel segment for Nano. The company lauched its mid size cars in diesel segment with CRDI engines and it was very successful. Tata Motors has a faster and better go-to-market strategy than its competitor Maruti.
•
R&D on fuel substitution has become must to sustain longer in future.
•
Economic growth of the country is sound and promising in future.
•
Liberal policies of GOI.
•
Big Market: Domestic and Abroad
Threat (External Environment) o Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could give a big impact on sales of other products of Tata Motors. It could also lead to price wars with its competitors o Maruti is very fast in reaction to developments made by Tata Motors to retain its leadership position. o China may give a good competition as they are also planning to enter into car segment.
Conclusion Maruti Suzuki has a good marketing strategy and it is showing good results however, the lack of having the complete product line may cause customer loyalty in a long run. It is seen that the first entry of Maruti in diesel segment was not that good and successful it should try to come up with better diesel engines along with new versions of cars. The government intervention due to having partial ownership in Maruti may cause problems in due course if the political situations are adverse.
Tata Motors has got a very good response due to its brand name association with Tata. It needs endorsement by celebrities with its products and needs create a good image of its products by transferring the technical know-how and brand equity from heavy vehicles category. Tata Motors has a good track record of having successful diesel mid size cars in its portfolio and it should encash the same opportunity to launch the diesel versions of Nano to future increase their competitive advantage.
References •
Annual report of Tata motors
•
Annual report of Marati Udyog
•
www.wikipedia.com
