SWOT Analysis of Tata Motors

Tata Motors Ltd formerly known as TELCO (TATA Engineering and Locomotive Company) is the largest automobile company of India. Established in 1945, Tata Motors is the part of Tata Group and it’s headquarter is located in India. Commercial vehicles, utility vehicles and passenger cars are the important segments of the company. The overall position of the Tata Motors can be analyzed with the help of SWOT analysis.

 

Strengths

 

  1. Tata Motors Limited is India’s biggest automobile corporation, with combine revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10.
  2. Tata motor is the leader in commercial vehicles almost in each segment, and amongst the top three in traveler vehicles with attractive products in the dense, midsize car and service vehicle segments.
  3. It is the world’s fourth biggest truck producer, and the world’s second biggest bus producer.
  4. It is a demand driven, and customer-oriented, taking care of customers preferences and taste.
  5. Tata Motors is known as innovative global leader. The company has a very strong research and development having over 3,000 engineers and Scientist. Similarly it has  Engineering Research Centre which has facilitated pioneering technologies and products.
  6. The Company has Achieved economies of scale and economies of scope.
  7. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954.
  8. Tata motors has strong strategic alliances and joint-ventures with foreign corporation to make presence in different parts of the world and it has operations in the UK, South Korea, Thailand and Spain. 
  9. Tata Motors is  the 1st corporation from India’s engineering division to be listed in the New York Stock Exchange (2004). The company is emerged as a global automobile corporation.
  10. Nowadays two-thirds of heavy commercial automobile exports out of South Korea are from Tata Daewoo.
  11. Tata motors is the one of the largest global manufacturer of commercial and passenger vehicle having strong presence and operation in many parts of the world such as: Europe, the Middle East, South East Asia, Africa, South Asia and South America. It has franchisee/joint venture assemblage operations in, Ukraine, Russia, Senegal and South Africa, Kenya, Bangladesh.
  12. Tata motor is the social responsible environment friendly, producer of world’s cheapest
    car.

 

Weaknesses

 

  1. Tata motors is the symbol of the cheapest and economy car in the local markets and is not considered as luxurious.
  2. Tata Motors stagger under a harsh business and financial crisis. Tata’s Commercial Vehicles Business Unit (CVBU) experienced its first loss in its more than 50 years history. This loss was enormous It was Rs. 108.62 Million.
  3. Tata motors recently acquired Land Rover and Jaguar from the Ford Motors for $ 2.3 billion in 2008. To finance this acquisition, they borrowed bridge loan of $ 3 billion from a group of banks. Until the end of the January 2009, they are unable to pay the loan; the remaining loan is 2 billion.  
  4. Jaguar and Rover need more investment to run its operations too quickly, and Tata Motors image has decreased due to remaining loan.
  5. Tata’s Nano car needed much more time than predictable.
  6. Tata is unable to understand the impact of macroeconomic factors to the company.
     

 

Opportunities

 

  1. Engineering is a diverse sector with a quantity of segments. A corporation from this sector can be a power equipment producer (like transformers and boilers), a niche competitor (like providing environment friendly solutions). It can be non-electrical and electrical machinery and still tools producer too.
  2. Whereas the sector can drift of cost cutting throughout falling debt and reorganization process and manpower explanation, increasing input costs and employee’s costs pared the enhancement in profitability.
  3. Opportunities to fight in terms of pricing, experience in specific field, product differentiation and timely completion of projects.
  4. Export opportunities to the developing countries and price-conscious countries such as Pakistan, Nepal, etc.
  5. Global economy is recovering after the worlds worst crises ever.
  6. Indian GDP is about 6%; which indicate a better economy and infrastructure in Indian rural sides which can sustain growth and improvement of poverty in economy.
  7. Indian government’s proposal to bring clearness to the power division improvement is a welcome sign for the sector. More management between the Centre and states for infrastructure progress is a step in the right .
  8. India’s nuclear contract with the US goes off as designed. It will mean big commerce for corporation preparation to go into nuclear accordingly power equipment manufacturing and power generation.
  9. If the government unlock up the defense sector to additional contribution from private company, this will provide additional opportunity for definite big firms in the division.

 

 

Threats

 

  1. Instability in costs of steel and crude on the back of erratic global demand is the major obstacle  in profit enlargement.
  2. The crash of the macroeconomic factors on the business engineering sector is increasing.
  3. Recent development in the international economy is very slow due to the ongoing sub-prime crisis and the resultant global financial turmoil.
  4. The effects of global economic slowdown are very strong which means no soon revival of global automobile industry.
  5. Indian economy viewing no symbols of renewal soon, there appeared to be no immediate opportunity of an enlargement in domestic demand.

Like this Article? Subscribe to Our Feed!

6 responses to SWOT Analysis of Tata Motors

Leave a Reply