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

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

History Started in 1945 in Mumbai, India. Original production was on locomotives – 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.

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 in 1986 the company created and sold the first LCV – LCV = light commercial vehicle – Was the Tata 407

History Tata Motors decided to pursue joint ventures. – Cummins Engine Co., Inc., was the first company to jointly venture with Tata in – 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

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.

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.

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.

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.

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.

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

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

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

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

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

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

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

Since 2004: TTM

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

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

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

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

Comparatively Speaking Brand:TataFordGM Sales:$7.6 billion$172 billion$181 billion # of employees33,900246,000266,000 Profit Margin20%17%6.7%

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

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

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

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

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

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

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

Questions