Tata Motors: The journey of a global brand

In December 2021, Tata Motors overtook Hyundai Motor India to become the second-largest seller of passenger vehicles in the domestic market for the first time in close to a decade in December 2021.

So, let us take a look at how this successful journey started.

For the unversed, Tata Motors Limited is a leading global automobile manufacturer and is currently a $34 billion organization. According to Tata Motors’ official website, its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. Tata Motors is one of India’s largest original equipment manufacturers. It offers an extensive range of integrated, smart and e-mobility solutions.

The inception:

Tata Motors Limited, which was previously known as Tata Engineering and Locomotive Company (TELCO) was founded in the pre-independence era of 1945. After 9+ years of successfully dabbling in the locomotive section, Tata motors, in collaboration with Daimler-Benz AG, manufactured its first ever commercial vehicle in history.

Picture credit: https://www.tatamotors.com/about-us/company-profile/

Evolution of their car making journey:

By the year of 1991, Tata Motors was a very successful brand name in the commercial vehicle space and it wasn’t long before they decided to foray into the passenger vehicle market. The first ever passenger vehicle (PV) Tata Sierra.

In 1992, the organization introduced the Tata Estate followed by its iconic Tata Sumo in 1994 and Tata Safari in the year of 1998. This is also when Tata’s first ever passenger vehicle manufactured entirely in India, was launched. This car was none other than the Tata Indica. In the year of 2002, Tata Indigo was launched and it gained tremendous name and fame as India’s first ever sedan car model.  In the year of 2004, Tata’s Indigo Marina was launched followed by 2009’s extremely popular Tata Nano – India’s lowest priced car that was launched at a base price of just Rs. 100000/-!

Several other cars followed suit after Tata Nano, namely the Tata Manza, Tata Aria, Tata Safari Storme, Tata Zest, Tata Bolt, Tata Tiago and Tata Hexa. However, the initiative that deserves special mention in this context is the launch of TAMO – a Tata Motor’s sub-brand that was launched for the purpose of manufacturing rather futuristic vehicles. This was the brand name under which Tata Motors unveiled their first ever sportscar – the RaceMo in 2017. Besides this, it was also in 2017 that India’s safest car, Tata Nexon was launched.

Picture credit: https://www.carwale.com/tata-cars/nexon/

This was followed by the Tata Harrier in the year of 2019.

                                                                                                                                                                                                  

Mergers and acquisitions:

The foremost acquisition that draws attention (and requires elaborate discussion) is Tata Motors’ acquisition of two very acclaimed British brands: Jaguar and Land Rover (JLR). On June 02, 2008, Tata Motors completed the acquisition of the two iconic brands from US based Ford Motor company for USD 2.3 billion on a debt-free cash-free basis. JLR at that time was a part of Ford’s Premier Automotive group. This acquisition went hand in hand with Tata Motor’s long-term strategy of cementing its position in the domestic Indian market and expanding its international reach by leveraging on internal capabilities and strengths and also through strategic mergers/acquisitions and collaborations.

Picture credit: https://www.slideshare.net/JayeshBudhani/tata-jaguar-landrover-acquisition

Constituting this 100% acquisition was JLR’s manufacturing plants, two advanced design centres in the UK, national sales firms set up across the globe coupled with the licenses of IPRs! However, this surfaced as a badly timed decision. Although the acquisition might have helped Tata become a globally recognized name, the costs that came along with this recognition were not meagre. Tata Motors had to incur a huge capital because it planned to invest an addition USD 1 billion in JLR, in addition to the $2.3 billion at which they acquired the same. This cost, coupled with their regular manufacturing costs impacted their profitability.

Cut to May 2021, according to the BBC news report, Tata Motors announced a quarterly loss of more than $1 billion. This came up as they wrote off $2.1 billion debt related to its revamp of JLR. This, coupled with the severity of the pandemic and a global shortage of semiconductors had severely impacted Tata Motor’s long-term plans even as JLR’s sales in some parts of the world recorded an exponential increase.

Besides the JLR acquisition, Tata Motors have several other international acquisitions in its kitty- which includes Tetley, South Korea-based Daewoo’s commercial vehicle unit and Anglo Dutch Steel maker, Corus.

Recent news:

According to a Jan 01 2022 Economic Times report, Tata motors in addition to surpassing Hyundai Motor India to emerge as the second largest seller of passenger vehicles, has also made a record of posting its highest ever monthly sales in December 2021, highest ever quarterly sales from October 2021 to December 2021 and the highest annual sales since its inception. In addition to this, the company has also registered a record sales turnover of its electric vehicles.

Picture credit: https://www.tatatrusts.org/about-tatatrusts/ratan-n-tata

As a note of conclusion, it can thus be said that Tata Motors or TELCO as it was known previously had started out with a long-term vision and mission and it is safe enough to state that they will be here to stay for a quite a time now. As Ratan N. Tata had once stated, “I don’t believe in taking the right decisions. I take decisions and then make them right” I too believe that to sustain in the world of business, you need to take risks. You need to be a go-getter. Business and entrepreneurship are not meant for the faint-hearted. Do you have it in you to make it big in the entrepreneurial space?