2. Tata Motors Ltd.
Tata Indica
Acknowledgement
On the very outset of this report, we would like to extend our sincere &
heartfelt obligation towards all the people who have helped us in this
endeavour.
Without their active guidance, help, cooperation & encouragement, we
would not have made headway in the project.
We are indebted to Prof. Semila Fernandes for her continuous guidance and
encouragement to accomplish this assignment.
We extend our gratitude to Symbiosis Institute of Business Management,
Bengaluru for giving us this opportunity.
Akanksha Mohanty
Evelyn Joseph
Nandana S S
Prashant Patro
Siddharth Modak
Taranpreet Kaur
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Tata Indica
Table of Contents
1. The History of the Company.......................................................................................................04
2. An Analysis of the Indian Automobile Industry.................................................................10
3. Environment & Competitors.......................................................................................................17
4. Tata Indica: Segmentation, Targeting & Positioning........................................................20
5. BCG Matrix for Tata Motors……………………………...…………………………………….........24
6. SWOT Analysis for Tata Indica…………………………………………………………………......25
7. The 4 Ps: Product Strategy.........................................................................................................26
8. The 4 Ps: Pricing Strategy...........................................................................................................29
9. The 4 Ps: Promotion Strategy....................................................................................................31
10. The 4 Ps: Distribution/Place Strategy...................................................................................35
11. Tata Motor’s Financials................................................................................................................40
12. The Mind of the Customer: Survey Analysis
a. Group Analysis……………………………………………………………………………........46
b. Individual Analysis……………………………………………………………………….......56
13. The Mind of the Dealer: Survey Analysis………………………………………………….....111
14. Key Results and Findings………………………………………………………………………......115
15. Recommendations......................................................................................................................116
16. Appendices
a. Customer Questionnaire............................................................................................118
b. Dealer Questionnaire………………………………………………………………….......125
17. Bibliography...................................................................................................................................128
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4. Tata Motors Ltd.
Tata Indica
1. Introduction
Tata Motors Limited which was formerly known as TELCO (Tata Engineering and
Locomotive Company) is an Indian multinational automotive manufacturing company
which was founded by J.R.D. Tata in 1945. It is headquartered in Mumbai, Maharashtra
and is a subsidiary of the Tata Group.
It offers its customers a wide range of products which are:
Passenger cars,
Trucks,
Vans,
Coaches,
Buses,
Construction equipment
Military vehicles
It is the world's sixteenth-largest motor vehicle manufacturing company, fourth-largest
truck manufacturer and second-largest bus manufacturer by volume.
Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar,
Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa,
Thailand and the United Kingdom.
It has research and development centres in Pune, Jamshedpur, Lucknow and Dharwad,
India, and in South Korea, Spain, and the United Kingdom.
Tata Motors' principal subsidiaries include the British premium car maker Jaguar Land
and the South Korean commercial vehicle manufacturer Tata Daewoo. Tata Motors has
a bus manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo), a construction
equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction
Machinery) and a joint venture with Fiat which manufactures automotive components
and Fiat and Tata branded vehicles.
1.1 Timeline
1945
The Company was incorporated on 1st September at Mumbai to manufacture diesel
vehicles for commercial use, excavators, industrial shunter, dumpers, heavy forgings
and machine tools.
The commercial diesel vehicles which were known `Tata Mercedes Benz' (TMB) now
called `Tata' vehicles after the expiry of the collaboration agreement with Daimler-Benz
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Tata Indica
AG, West Germany. The company also used to manufacture pulp and paper making
machinery.
1946
Tata Engineering undertook manufacture of 5000 'KC' broad gauge open wagons for the
Indian Railway. The Managing Agency Tata Sons was transferred to Tata Industries on
July 1, 1946. The Managing Agency system continued till it was abolished by an act of
Parliament in 1970.
1948
Steam Road Roller introduced in collaboration with Marshal Sons (UK).
1950
Collaboration signed with M/s Krauss-Maffei, W. Germany for manufacture of steam
locomotives.
1954
Collaboration with M/s Daimler -Benz AG, W.Germany, for the manufacturing of
medium commercial vehicles, specially trucks, at Jamshedpur.
1956
Steel foundry set up in collaboration with Usines Emile Henricot of Court St. Etienne,
Belgium.
1959
Research and Development Centre set up at Jamshedpur.
1960
The company's name, which was Tata Locomotive & Engineering Company Ltd. was
changed to Tata Engineering & Locomotive Company Ltd.
1961
Collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. for manufacture of cable
type excavators and cranes.
1963
A project for the production of large press tools and complex dies was undertaken in
collaboration with Raymond. F. Thompson (Engineers) Ltd. UK.
1972
During the year company made a sale of know-how to Tata Precision Industries Pvt. Ltd
in Singapore for the design and production of machinery and tools. The company was
also appointed the technical consultants to TPIL for a period of 10 year for which the
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Company was to receive a royalty of 3.5% of net sales for seven years commencing from
the date TPL start making profit.
1974
The company entered into a joint venture with Tata Industries Sdn. Bhd. of Malaysia for
the assembly of the Telco vehicles in Malaysia.
1985
Collaboration with Niigata Engineering Co. Ltd, Japan for NC / CNC Horizontal
Machining Centers and with Nachi-Fujikoshi Corp., Japan for NC /CNC In line Machining
Centres and flexible manufacturing systems.
1988
The Tata mobile pick up entirely designed and engineered by Telco was launched in July
1988. During the year company undertook to set up a new forge shop, a high output
foundry line, a new paint shop as well as augmentation of engine and gearbox
manufacturing facilities, all at Jamshedpur.
Test facilities such as specially constructed gradient track to check the climbing
capability of vehicles and their ability to start on an incline was added to the
Engineering Research Centre atPune.
1989
The Company entered into an agreement with Cummins Engine Company Inc. USA for
forming a 50% - 50% joint venture to produce fuel efficient engines with lowcommission characteristics for powering the Company's range of Medium/heavy
vehicles. The Company was incorporated in October 1993. Its factory was established at
Jamshedpur.
1990
A new model of earthmoving equipment the TWK-3036 Tata Front End Wheel Loader
was introduced.
1991
The Company entered into a collaborative agreement with an internationally renowned
engine research and development organisation to jointly develop higher horsepower,
fuel efficient diesel and petrol engines to meet the future requirements of the company.
In the last quarter, Tata Motors launched two new passenger vehicles, the SIERRA and
the ESTATE totally designed and manufactured in India.
The company acquired a BIFR company, M/s Noduron Founders Maharashtra Ltd.
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Tata Indica
1993
During the year company introduced the Tata full forward 609 LP bus and Tata 609 SFC
semi forward version. It was proposed to introduce new four cylinder petrol engine
during mid 1995.
During the year Telco entered into an agreement with Cummins Engine Company Inc.
USA for forming a 50%-50% joint venture to produce fuel efficient engines with lowcommission characteristics for powering the Company's range of Medium/heavy
vehicles. Its factory was established at Jamshedpur for an annual output of 67,000
engines.
Tata vehicles were launched in Argentina Chill, Paraguay etc.
Joint Venture Agreement signed with Cummins Engine Co. Inc. to manufacture high
horsepower and emission-friendly diesel engines for medium and heavy commercial
vehicles.
1996
The Company launched "Tata Safari" in its Multi utility vehicle segment.
1998
The Company in its small car segment launched "Tata Indica" which evoked an
overwhelming response in the Indian market.
2002
Six new products in light, medium and heavy vehicles segments were launched on Jan
15 during Auto Expo. Tata Motors displayed its Tata Sedan car at the Geneva Motor
Show. Indica adjudged top selling B-segment car in 2002. Two new motorsport cars
(The Zero and Double Zero Pace cars) were launched. Indica sales cross two-lakh mark.
2003
Unveils Tata 207 DI in Andhra Pradesh. Telco's sedan debuts at the top of the C-segment
sales. The company brings down price of passenger car following the excise duty
reduction in the Budget. The company unveils Indigo Station Wagon at the Geneva Auto
Show. Standard & Poor's Ratings Services revises the outlook on its `BB-' rating for Tata
Engineering to stable from negative.
For the first time in the auto industry, Tata Engineering outsourced the manufacturing
activities of its special, fully-built vehicles range that includes ambulances, tippers
produced at Dharwar unit in Karnataka
Company name changed from Tata Engineering & Locomotive Company. Ltd. (Telco) to
Tata Motors Ltd. (TML) with effect from July 29, 2003.
Crosses production milestone of 3 million. Unleashes Safari's petrol version; priced at
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Tata Indica
Rs 9.35 lakh. Introduces Tata SFC 407 EX Turbo Light Commercial Vehicle (LCV). Tata
Safari ranks No 1 in MUV/SUV segment.
2004
Tata Motors launched an upgraded version Indica on January 15, 2004, in a bid to shore
up sales of the small car. Auto Expo: Tata unveils new version of Indica. Tata Motors
unveils Indica V2. Tata Motors introduces new 'Indicab' for tour operators.
The much hyped Rs one lakh passenger car project of Tata Motors was going ahead as
planned. Tata Motors buys Daewoo truck unit for Rs 465 crore. Tata Motors unveils
Tata SFC 407 EX in Kerala. Tata Motors launches new 6-tn truck. Tata Motors forays into
used truck biz with Tata Preowned
Tata Motors and Tata Africa unveiled a range of passenger cars, utility vehicles, pickups, trucks and buses for the South African market. Tata Motors has launched a face
lifted version of its multi utility vehicle, Tata Sumo HR-training division of Tata Motors
bags the prestigious and internationally recognised "Golden Peacock National Training
Award" in the category of `Large Employer'. Tata Motors launches Indigo Marina on
September 14, 2004.
Tata Motors unveils 2 new versions of Indica
2005
Tata Motors unveiled new Indica V2 Turbo with a price tag of Rs 4.10 lakh for DLG
variant and Rs 4.31 lakh for DLX. Tata Motors unveils Novus
2006
Tata Motors launches Cliffrider. Tata Motors unveils new long wheel base premium
Indigo & X-over concept at Auto Expo 2006. Indica V2 Xeta launched. Passenger
Vehicle sales in India cross one-million mark
2007
Tata Motors has been presented the Golden Peacock Global Award for Corporate Social
Responsibility (CSR) in the Large Business category by the Institute of Directors. Tata
Motors buys Nissan facility in S. Africa.
Tata Motors has got a prestigious order from the Delhi Transport Corporation (DTC)
for 500 non-AC, CNG-propelled buses.
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2011
Tata has launched Aria 4x2 range targeting the premium luxury cars segment, priced at
Rs. 11.85 lakh. Tata launched upgraded Nano at same price.
Tata Motors - Jaguar Land Rover PLC Launch of pound 1,000 million equivalent Senior
Notes offering. Tata Motors launched Nano in Nepal at Rs 5 lakh. Tata Motors launched
new version of Manza.
Tata Motors launched new Indica
2012
Automobile giant Tata Motors Ltd has launched its new Sports Utility Vehicle (SUV)
Tata Safari Storme at a starting price of Rs 9.95 lakh (ex-showroom Delhi).
India's leading automobile maker, Tata Motors, has emerged as the most reputed
Indian company in terms of service levels, product quality, financial performance and
talent pool, as put by a survey by global research firm Nielsen.
2013
Jaguar Land Rover Automotive plc Launch of $400 million Senior Notes offering
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10. Tata Motors Ltd.
Tata Indica
2. Analysis of Automobile Industry in
India
India's automobile industry is one of the largest recipients of foreign direct investment
within the country and accounts for about 8 per cent of the economy. The industry is
not only gaining ground as a global production hub; world-leading brands are
increasingly setting up local operations to tap India's lucrative domestic market. This
has seen more activity across the entire consumer market as global luxury automobile
brands target the country's burgeoning upper-middle class and high net worth
individuals, while major international carmakers are entering the highly competitive
small car segment.
The Global turnover of the world Auto Industry was close to 2 trillion euros in 2005-06
with 50 million people employed directly or indirectly worldwide. At present it holds a
promising ninth position in the entire world with being #1 in Two-Wheelers and #4 in
Commercial vehicles. India manufactures over 17.5 million vehicles and exports 2.33
million vehicles every year.
2.1 Sales
The trend which the total car sales has followed in the last 3 years is given below :
SALES
2040000
2020000
2000000
1980000
1960000
1940000
1920000
1900000
1880000
1860000
1840000
1820000
SALES
2010-2011
2011-2012
2012-2013
We can see a slowdown in the car – sales in the last year. Several reasons can be
attributed to it like excise duty hikes, economic recession, fuel prices hike, etc. Yet India
continues to be one of the fastest growing markets as far as automobile sector is
concerned. India is expected to become the world’s third largest automobile market by
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Tata Indica
2030, behind the US and China, according to industry forecasts. This confidence is based
on drivers including low vehicle ownership within India, anticipated high levels of
economic growth, substantial government investments in infrastructure and an
increasingly upwardly mobile middle class.
2.2 Segments: The Indian Automobile Industry comprises of the following segments:
AUTOMOBILE
INDUSTRY
TWO WHEELER
THREE WHEELER
PASSENGER
VEHICLE
COMMERCIAL
VEHICLE
Market LeaderHero Honda with
market share 50%
Market LeaderMahindra &
Mahindra with
market share 42%
Market LeaderMaruti with market
share 52%
Market LeaderTata Motor with
market share 61%
SEGMENTATION OF AUTOMOBILE
INDUSTRY
4%
16%
Two Wheeler
3%
Three Wheelers
Passenger Vehicles
77%
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Commercial Vehicles
12. Tata Motors Ltd.
Tata Indica
From the figure it is clear that two wheelers form a major segment of the industry. The
passenger vehicles include luxury cars, hatchbacks, etc. It has a share of 16%. Threewheeler has the least share.
2.3 Comparison with international markets
Indian consumers are value-centric. Many carmakers, as a result, have focused their
activity within the economical hatchback segment. This contrasts with a preference for
bigger, more luxurious cars in developed countries. India's luxury car market currently
has a 3-per- cent market share and therefore exhibits strong growth potential.
Car production in Brazil, Russia, India and China grew with CAGR of 7.3 per cent, 1.9 per
cent, 17.6 per cent and 39.3 per cent respectively from 2001-10. Weak macro-economic
conditions in Brazil and India resulted in slower car sales in 2012. While China still
enjoyed attractive macro-economic conditions, sales were crimped by government
measures such as high import tariffs on automotive parts and assembled vehicles.
INDIA
Other
0%
MPV
12%
SUV
11%
Sedan
17%
Hatchback
65%
0%
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10%
20%
30%
40%
50%
60%
70%
13. Tata Motors Ltd.
Tata Indica
BRAZIL
CHINA
4% 3%
5% 1%
10%
Hatchback
18%
Hatchback
7%
Sedan
Sedan
SUV
SUV
26%
60%
MPV
66%
MPV
Other
Other
US
12%
18%
Hatchback
Sedan
18%
SUV
26%
26%
MPV
Other
2.4 The Indian Hatchback Industry
A hatchback is a car body configuration with a rear door that swings upward to provide
access to a cargo area. Hatchbacks may feature fold-down second row seating, where
the interior can be flexibly reconfigured to prioritize passenger vs. cargo volume.
Hatchbacks may feature two- or three-box design.
Hatchbacks are popular in India because of they take up little to no parking space, easy
to maneuver and has price advantage.
The Indian Hatchback is divided into three segments- A Segment, B Segment and B+
Segment.
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Tata Indica
Chevrolet
Fiat
Ford
Honda
Hyundai
Spark
Grande
Punto
Figo
Jazz
Santro
Aveo U-VA
I 10
Beat
I 20
Maruti Suzuki
Nissan
Skoda
Tata
Volswagon
800
Micra
Fabia
Nano
Polo
Alto
Indica
A-Star
Wagon R
Zen Estilo
Ritz
Swift
The A- Segment covers entry-level hatchbacks. They usually feature Sub 1 liter engines,
are less than 4 m long and are priced between 1 to 3 lakh rupees.
Key Success Factors
Keeping the vehicle well priced, for the very price-sensitive entry level, is the key
to initial success.
•Keeping the ownership costs low, in the form of maintenance, spares cost, and
efficiency is again of prime importance.
•Buyers in this segment would rather compromise on interior quality; ride comfort, and
driving pleasure, than on the price, space and the VFM factor.
•Having a well-established service network helps alleviate maintenance worries, which
are a carry forward from the 80s and 90s.
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15. Tata Motors Ltd.
Tata Indica
The B-Segment covers above entry-level hatchbacks. These cars perform best during
city drives and afford most creature comforts deemed necessary by today’s customer.
They usually feature 1 to 1.2 liter engines and are priced between 3 to 5 lakh Rupees.
Competitors- The Spark, The Beat, and The I 10, Santro, Wagon R and Tata Indica
Key Success Factors
The keys to success remain the same as with the A segment, with fuel efficiency
and reliability taking the crown.
Customers look for a few creature comforts as well, and good interiors coupled
with a stylish design can pull in the younger buyer.
Mostly these cars find use in the city, hence ease of driving and good efficiency
are a big advantage.
The general absence of diesels in this segment can be one of the ways to enter
the market. The bottleneck remains the cost of development and deployment for
small capacity diesels.
The B+ Segment covers the entire range of premium hatchbacks. These cars are just at
home on the highway as they are in the city. Most new hatchbacks are launched in this
segment. They usually feature engines above 1.2 liter and are priced between 4 to 7 lakh
Rupees. Undoubtedly, with the Indian buyer getting richer, the B+ segment is where all
the action is.
Competitors - Ritz, Swift, I 20.
The customer here is usually buying his second car, specifically for the city, or is an
experienced buyer.
With a wide range of customer audience, positioning of the vehicle vis-a-vis the right
customer bucket is essential for success.
Key Success Factors- exclusivity, premium image to practicality and reliabilit
2.5 Sales trends
Hatchbacks have been the bestselling cars in India since they were introduced in the
early 1980s. The image of small compact cars is changing from that of the ideal vehicle
for budget conscious middle-class consumers to something that is increasingly popular
with wealthier buyers, thanks to the introduction of more stylish customised models.
However, the segment has seen overall sales decline over the past few years as more
consumers opt for sedans and utility vehicles. The hatchback segment grew by only 1.5
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Tata Indica
per cent in 2011-12 compared with 5 per cent for India's passenger car market. A lack
of new hatchback models has done nothing to help the segment's lacklustre
performance, a point illustrated at Auto Expo 2012 where only one small car was
launched compared with four at the previous year's event.
Maruti continues to lead the hatchback segment with a 48-per-cent market share, about
800,000 vehicles last year, despite the company facing major internal and external
issues related to production and labour management. This is because Maruti is a
favorite with buyers as it clocks the highest sales and also it retains a strong emotional
connect with the customers. While other major players such as Hyundai and Tata lead in
terms of innovation and vehicle performance, they still lag far behind in terms of sales.
International car giants including General Motors, Honda, Toyota and Volkswagen have
entered the market but have yet to gain a foothold or compete effectively against the
dominant local brands in hatchback segment.
SALES
1650000
1600000
SALES
1550000
1500000
1450000
1400000
1350000
SALES
2010-11
2011-12
2012-13
1572000
1595500
1453500
2%
3%
4%
4%
3%
MARKET SHARE
2%
Maruti Suzuki
Hyundai
Tata Motors Ltd
48%
12%
Ford
General Motors
Honda
22%
Volkswagon
Toyota
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17. Tata Motors Ltd.
Tata Indica
3. Environment & Competitive
Landscape:
India's hatchback market comprises 12 automakers with three brands – Maruti Suzuki,
Hyundai and Tata – accounting for 80% of the market by volume. Foreign brands
account for less than 3 per cent of the market.
The Hyundai Eon was one of the most notable launches in 2011. Priced below 300,000
rupees it is looking to succeed the iconic Maruti 800 which Maruti Suzuki started
phasing out in 2010. It was seen as a challenger to the highly popular Alto which sells
more than 20,000 cars a month.
Maruti Suzuki suffered a sharp drop in sales during August 2012 when stock of the Swift
ran dry. However, other carmakers could not take advantage of the situation as the
Swift was a so popular buyer simply waited for new supply to reach the market, which
led to sudden growth from September.
Fiat, one of the oldest players in the market, finished the year with the lowest sales
figures as competing hatchbacks from other automakers were seen as being of better
quality and coming with higher levels of after sales support.
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18. Tata Motors Ltd.
Tata Indica
Sales trends for sales volume of Tata Indica with its competitors for the year 2013 are given as
follows:
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20. Tata Motors Ltd.
Tata Indica
4. STP Analysis of Tata Indica:
STP marketing is a three-step approach to building a targeted marketing plan. The "S"
stands for segmenting, the "T" for targeting and the "P" for positioning. Going through
this process allows a business owner and marketing consultants or employees to
formulate a marketing strategy that ties company, brand and product benefits to
specific customer market segments.
4.1 Segmenting:
The segmenting step is essentially a brainstorming activity. You list out all the potential
market segments you could target in a marketing campaign. Niche companies
sometimes have only one target market, while other businesses may have five or 10
possible segments, or more. Cell phone providers, for instance, often separate
customers by benefits. Some buyers want high-tech gadgetry while others want
dependable communication for travel and emergencies.
TATA MOTORS has segmented its customer in the following ways:Its market research division has segmented consumers on the basis of following:
1. Geographic variables:
The region of Tata motors is whole India with special focus on Type A and fast
growing Type B cities across India.
2. Demographic variables:
Age → anybody of age between 18 to 50 years.
Income → anybody with an income of over 4 lakh p.a.
Occupation → millennial employed as professional, managers and those who
want to buy their first car.
Social Class → Middle Class, Upper Middle, Lower Upper and Upper Upper.
3. Psychographic:
Personality → Dreamers, those who want to achieve big, ambitious, price
conscious, took their first step towards success and value driven.
4. Behavioural:
Benefits → Quality, Style.
User Status → Potential users and first time users.
Readiness Stage → those who are aware, informed, interested and intending to
bye.
The research team of Tata Indica spend time in
Understanding needs and preferences of consumers:
-- Having housing, infrastructure, and commercial construction, as demand drivers, the
company analyze the needs and preferences of consumers in these sectors.
Grouping customers based on their needs and preferences:
-- Customers with similar needs and preferences are included in this segment.
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Targeting the segment that the company can best meet the needs and preferences :
- The Company targets the customers, of which it can meet the needs and preferences.
I.e. customer needs higher- strength or low price.
Branding the commodity:
-- Though being a commodity product, branding is important for a company. The
company positions its brand among Architects and Builders rather than household
individuals.
4.2 Targeting:
When you have multiple, distinct market segments, you typically need to customize
marketing campaigns that appeal to each. As you go through the STP process, you select
which segment to target with your upcoming campaign. Using the cell phone example,
you might decide to launch a new campaign to promote advanced mobile features,
media, apps and texting tools to younger, tech-savvy audiences. For this campaign, you
would develop messages and use media tailored to that market.
Its customer base represents the masses of India.
Individual homebuilders in small towns, rural and semi-urban India.
The company targets on the important projects like dams, roads in the country
It targets the Manufacturing companies like L&T etc
It Targets Indian Railways.
It targets an individual building his home(Retail Marketing)
Act of developing measures of segment attractiveness.
Involves evaluating various market segments.
It targets different segments of population of all categories of age groups.
Also targets the population outside India.
Tata Motors has full market coverage in vehicle market as they covers
market through Differentiated Marketing. So Tata Motors typically creates more total
sales. However it also increases the cost of doing business. That’s why they lead to both
higher sales and higher costs.
4.3 Positioning:
Positioning is how you align your brand or products in the target market. The goal is to
offer something that is bigger, better or more valuable than your competitors to a
particular market segment. For example, Apple attempts to position itself as an
innovative, cutting-edge technology provider to discerning tech buyers who want topquality solutions. Your positioning serves as your big-picture guide in building your
marketing campaign.
A good brand positioning help guide marketing strategy by clarifying the brand’s
essence but goals it help the consumer achieve and how it does so in a unique way. The
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22. Tata Motors Ltd.
Tata Indica
result of the positioning is the successful creation of a customer focused
value proposition, a cogent reason why the target market should buy the product.
Tata Motors positions itself as:
India’s largest company.
TATA MOTORS is market capital and no.5 in sales and profit.
TATA MOTORS is the market leader.
They are the highest contributor in revenue.
Tata Indica Positions itself as:
Slogan - "The Big... Small Car" and "More car per car”
Positioned as an affordable car.
As the First passenger car developed in India.
As a cab
as a fuel efficient car providing a comfortable drive
STP
Segment
Hatchback for families and taxi segment
Targeted towards the families belonging to middle
class segment, Aiming to take benefit of consumer
up-gradations from lower-end cars
Target Group
Cab Operators
Positioned as a fuel efficient car providing a
comfortable drive.
Slogan - "The Big... Small Car" and "More car per car”
Positioned as an affordable car.
As the First passenger car developed in India.
Positioning
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As a cab
24. Tata Motors Ltd.
Tata Indica
5.
BCG matrix of Tata motors:
Indica / Vista: Indica was one of the first Indian hatchbacks to provide space, comfort
and economy in one package. It had the monopoly in the diesel segment; this coupled
with the low maintenance cost resulted in making the car preferred choice of taxi
operators. Tata motors buoyed by the success of Indica never bothered to care about
the image which was being carved in the market.
The Tata Indica is a milestone model in Tata's journey in the Indian automotive
industry. It might have grown old and a large chunk of buyers might use it for ferrying
tourists across India but it still sells strong! This very car started it all for Telco and on
this very important day, as Tata tries to regain the lost share in the market, the Indica is
given an update eV2 in 2013.
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25. Tata Motors Ltd.
Tata Indica
6.
SWOT Analysis of Tata Indica:
SWOT Analysis
1. Fuel efficient and good performance
2. Good presence in the Taxi segment
Strength
3. Available in a wide range of variants in color & engine
4. Strong distribution and service network
5. Strong backing by the Tata brand
Weakness
1. No strong product differentiation when compared to competitors
2. Brand dilution due to strong presence taxi segment
1. Expanding automobile market and available space
2. Increasing per capita income and purchasing capability of potential
customer base
Opportunity
3. Leveraging the wide distribution to acquire newer customers
4. Increasing the customer engagement programs
5. Augmenting the distribution and service network in various
countries
6. Leveraging the presence in Taxi segment to extend brand
1. Increasing fuel costs
Threats
2. Competition from other big automobile giants
3. Competitive products offering same level features at a lesser price
4. Product innovations and frugal engineering by competitors
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Tata Indica
7.
The 4 Ps: Product Strategy
Until 1998, India was no different from other less developed countries in one crucial
aspect: it had not designed and produced a car indigenously. India’s case was even more
curious: the country had sent missiles into space but had not been able to produce an
indigenous car.
That situation changed with the launch of the Tata Indica in December 1998.
The story began in 1993, when Mr. Ratan Tata put forth the idea of an Asian car to be
produced as a collaborative effort by the Indian automobile industry. The response of
the industry, Mr Tata recalled, was a mix of skepticism and cynicism.
Tata Engineering then decided it would attempt to produce the car on its own. In taking
this decision, it was emboldened by two factors:
1. The company’s record of having developed its own products. In the early '80s,
Tata Engineering had developed a range of commercial vehicles — the popular
407 and 709 series — followed by the Tata Estate and Sierra and later by the
Sumo and the Safari.
2. Mr Tata's faith in the capabilities of the company's engineers, particularly its
300-odd young engineers, whose talent and skills, he said, are symptomatic of
India’s spirit of wanting to dare.
7.1 The Vision
The basic concepts of the car were set out in 1995. The car
should, it was decided, be designed around the specific needs of the Indian car owner
and would have:
The inside space of an Ambassador (which is considered to offer the optimum
space for the typical Indian family) and the external dimensions of a Zen.
Easy entry and exit for passengers; this meant a higher suspension and raised
back seats.
World-class standards of safety.
The economy of diesel.
Price approximating the Maruti 800.
Contemporary design.
With these as the specs, the company's designers at its Engineering Research Centre
(ERC) created some renderings (see illustrations alongside) of the car which were
refined and finalised in association with the famous Milan-based design house, IDEA.
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27. Tata Motors Ltd.
Tata Indica
Some of the details of the project to give some idea of its magnitude:
Total number of engineers who worked on the Indica project: 700
Time taken from conception to completion: 31 months
Number of components specially developed for the Indica: 3,885
Number of dies specially manufactured for the Indica: 740
Number of production fixtures created for the Indica: 4,010
Cost of the project: Rs1,700 crore, sub-divided into: development Rs206 crore,
tooling Rs74 crore, and plant Rs1,420 crore
The other initiative that Tata Engineering took was to involve its vendors in the
development of the car in a major way — right from the concept stage. Eventually, over
300 vendors supplied some 1,360 parts of the Indica to Tata Engineering, comprising 77
per cent of the vehicle's cost. In doing all this, Mr Tata told the audience, the vendors
have created some 12,000 jobs.
7.2 The Journey
It has been 15 years since Tata Indica was launched for the first time in December,
1998. Over the years the product has gone through several modifications. The evolution
of the car as whole can be described by dividing the time span into the following two
generations – one from 1997-2008 and the second from 2008 to present.
Early adopters of the cars complained that the car did not deliver on its early promises
of horse power and mileage. Reacting to the complaints of the customers Tata, moved
swiftly to bring in a new variant called Tata Indica V2, which solved most of the
problems and emerged as the most sought after car in the Indian car market. Tata had
applied styling updates to the new model as well.
Originally offered with 1.4L petrol and diesel engines, a turbocharged diesel engine was
introduced in October 2005; a 1.2L petrol engine in November 2006 and a DiCOR
(Direct Injection Common Rail) diesel version of Indica V2 was launched in January
2007. It featured 16 valves, double overhead camshafts, a variable geometry
turbocharger and an intercooler.
As sales started to decline in 2008, Tata reinvented the product by changing the
dynamics of the car. Tata Indica Vista was launched as the new face of Tata Indica in
2009. The car was not only a facelift of the original Indica, but was built with completely
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28. Tata Motors Ltd.
Tata Indica
different specifications. The new car was much bigger in size and with a more powerful
1.4L engine, available in both petrol and diesel variants.
7.3 Technical Specifications
Body and chassis
Body style
5-door hatchback
Related
Tata Indigo
Rover CityRover
Powertrain
Engine
1.2 L I4 (petrol)
1.4 L I4 (petrol)
1.4 L I4 (diesel)
Transmission 5-speed manual
Dimensions
Wheelbase
2,400 mm (94.5 in)
Length
3,690 mm (145.3 in)
Base: 3,675 mm (144.7 in)
Width
1,665 mm (65.6 in)
Top Version: 1,485 mm
(58.5 in)
Height
1,485 mm (58.5 in)
Top Version: 1,500 mm
(59.1 in)
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29. Tata Motors Ltd.
Tata Indica
8.
The 4 Ps: Pricing Strategy
Tata Motors have always followed a strategy of value based pricing in the Indian car
segment. All the cars that Tata Motors has in its stable are priced keeping in mind the
value offered by the car and the exact target audience in mind.
The prices are fixed keeping in mind a number of factors. Prices have to be at par with
the prices of the competitors. Tata Motors give a relative price advantage as compares
to its competitors. The various determinants of price are
i.
ii.
iii.
iv.
Market Condition
Costs incurred
Profit percentage desired by the Co.
Dealer Profit
The Company does not allow any alterations to any of the features of the product. If
there is an alteration which affects the performance of the engine, then the warranty
becomes void. However, there may be alterations in the accessories, if desired by the
customer.
Discounts are decided by the Co. every month. Any further discounts made from the
profits of the dealer. However, the Co. may compensate the dealer for the discounts
allowed to a certain extent.
6.1 Pricing of the variants
Tata follows the same strategy for Tata Indica as well. Different variants of the model
are priced suitably, keeping the above factors in mind. Below we will take a look at how
the different variants of Tata Indica are priced.
The Indica brand portfolio consists now of three sub-brands V2, Vista and Xeta.
At the pricing also, Tata Motors consciously raised the Vista brand to a higher level . The
Vista is pricier than the original V2 thus reducing the attractiveness of the brand to the
Taxi segment. At a price range of Rs 4 - Rs 5 Lakh, Indica Vista is not a cheap diesel car.
It was an upward stretch by the brand.
V2 is the most economical of the lot and is the original Indica. This product is retained
because there is still huge demand for V2 at that price point. Within the V2 range, there
are three variants which includes the Indicab which is for the Taxi segment. Price of this
sub-brand
ranges
from
Rs
3,50,000
Rs
3,95,000
Next sub-brand is the Vista. Vista is the new generation Indica and Tata Motors would
like this brand to take over the leadership position from V2 in future. The brand is
targeting the discerning Indian consumer with its value proposition and good looks.
Vista has lot of variants satisfying the various needs of the customer. The Indica Vista
Aura is the premium range that sports many goodies that premium brands claim like
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30. Tata Motors Ltd.
Tata Indica
ABS, Airbags etc. Vista also comes in Petrol version sporting the Saphire engine. Prices
range from Rs 3,90,000 - Rs 4,90,000 (approx). Within the Vista range, customers are
given
lot
of
engine
option
including
engines
from
Fiat.
Xeta is the petrol variant of Indica V2. The petrol segment is heavily competitive and
compared to Maruti and Hyundai, Indica Xeta's value proposition is not that attractive
as the diesel option. Prices range from Rs 2,72,000- Rs 3,00,000).
A comparison of Tata Indica’s prices with other cars in the segment is given below:Car Brand
Tata Indica
Maruti WagonR
Honda Brio
Hyundai i10
Chevrolet Beat
Maruti Astar
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Ex-showroom Price
Rs. 4,54,500
Rs. 4,22,000
Rs. 4,16,000
Rs. 4,28,000
Rs. 3,95,000
Rs. 4,45,500
31. Tata Motors Ltd.
Tata Indica
9. The 4 Ps: Promotion Strategy
The automotive industry is facing new and pressing challenges. Globalization,
individualisation, digitalisation and increasing competition are pressing issues that the
industry faces today. In addition, increasing safety requirements and voluntary
environmental commitments have also contributed to bringing about change. Size is no
longer a guarantee of success. Companies must find new ways to create value for
customers in order to prosper.
7.1. Introduction
The automobile industry is subject to a number of factors that are increasing complexity
and influencing the economic options available to manufacturers. These include:
1. Globalisation and market convergence:
Due to the effects of liberalisation, national markets are increasingly globalised. This
gives companies a chance to expand into new markets, but also increases the threat of
new entrants or increased competition in traditional markets.
2. Increasingly diversified consumer aggregate patterns of behaviour:
Consumers no longer accept standard products, but want products that satisfy their
individual requirements. Target groups thus have to be downsized by companies so
customers will be attracted by products on offer. However, because of the increased
global competition with a stronger focus on focus and not brand loyalty, consumers
generally do not reward companies for their more individualised products. As a result,
auto manufacturers have more demanding requirements than ever before.
3. Accelerated modification and diversification of the product portfolio:
Companies have to shorten product life cycles in order to react to the expectations of
individualised and fast changing consumer demands with innovative products. In the
past, an average product lifecycle in the automotive industry was eight years; today,
lifecycles are much shorter, or at least the product’s design is often modified after just
two or three years on the market. With development costs for a new model remaining
on the same level or even increasing, this concurrently means a shortening of
amortization time for the OEM and, potentially, lower profits.
4. Pervasion of automobiles with digital technology:
The integration of hardware and software into automobiles represents the predominant
accelerator of increased functionality coupled with increasing complexity. This
complexity results in overstrained car development departments, product failures; cost
explosion with respect to guarantee & warrantee costs, and impact on customer
satisfaction.
5. Increased pressure for innovation and flexibility in development and manufacturing:
Development departments are not just overburdened by the complexity of digital
technology, but also by the shortening of product lifecycles. Another aspect is the
increasing number of parallel development projects since companies develop more and
more niche models for special target groups. This certainly requires the use of new
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32. Tata Motors Ltd.
Tata Indica
development techniques such as virtual reality. For example, this technique enabled
BMW to shorten the development time of its Z4 model to just 30 months.
7.2. Enabling Adaptive Behaviour
A car manufacturer has seven major strategic levers to enable adaptive behaviour:
• Brand management – Brand management strategies help make companies more
focused and able to differentiate its products from the competition.
• Customer relationship management – Customer relationship management (CRM) helps
a company become focused on customer requirements and wishes and responsive to
changes in aggregate patterns of customer behavior.
• Core competency management – Core competency management allows a company to
focus on its internal strengths and become more variable and resilience by entering into
strategic partnerships with suppliers with competencies in new technologies or niche
operations.
• Software management – Software management is a key to making a company focused
on software standardization and strategic partnerships, which, in turn, help the
company to become variable and resilient.
• Quality management – Quality management (QM) will, by becoming a cross functional
and cross-company concept over the whole value-add chain; help ensure that
companies grow their maturity in resilience.
• Product development management – Managing product development together with a
focus on broadening competencies in new technologies will help enable organization to
become more variable by the optimization of collaborative engineering. Increased
resilience can be achieved by standardized processes and the extended use of virtual
testing. Decentralized and regionalized development activities will help to increase
responsiveness to customers’
desires.
• Expansion management –
Management of expansion into
new geographies and cultures
require that are focused on the
requirements in these new
markets and responsive to
changing market conditions and
requirements.
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33. Tata Motors Ltd.
Tata Indica
Fig. 7.1 Integration of Seven Levers
7.3. Consumers are feeling the Pinch
Vehicle purchase decisions appear to be driven more by hard-headed financial factors
than a desire to be green. In today’s scenario, customers rate fuel efficiency as the
number one priority over the next 5 years, reflecting the rising cost of filling the tanks of
their cars. Although growing in importance, environmental friendliness is only ranked
fourth. The proportion of buyers seeking an enhanced vehicle lifespan has also jumped
for the third, which is a further sign of prudent belt-tightening from buyers.
Drivers from all over the world have rising expectations of safety and are demanding
more comfortable, ergonomically advanced vehicles. And with vehicle styling becoming
less critical, it seems that pragmatism is winning the day over design and luxury.
Interestingly, Indian consumers consider comfort to be an important factor, indicating
an aspiration/desire to trade up from basic cars.
Vehiclebound
Use of
internet
Environm
Safety Ergonomi
alternativ Enhanced
connectiv
Fuel
Vehicle
ental
e fuel
innovatio cs &
vehicle
friendline styling
ity and
efficiency
n
comfort
technolog lifespan
ss
built-in
ies
technolog
ies
Plug-in
Telematic
solutions
s/persona
for
l
mobile
assistance
internet
services
devices
2011
91%
82%
70%
74%
76%
55%
40%
57%
42%
56%
2012
76%
64%
61%
66%
64%
53%
49%
49%
48%
42%
2013
92%
78%
77%
71%
64%
62%
62%
59%
59%
49%
Fig. 7.2Top Consume Purchase Issues
7.4. Keeping the Tata Indica Brand Updated
Indica is a brand that is an epitome of persistence. Tata Motors through Indica has
demonstrated how to manage product lifecycle effectively. The brand which was
launched in 1998 has passed through many hurdles. The brand successfully
transcended the initial flaws, bad customer /expert reviews and brickbats to become
one of the largest selling cars in the Indian auto industry. The brand survived and
thrived because of the constant focus of Tata Motors to improve the product
continuously. More than the product innovation, it was the value proposition that forced
customers to choose Indica despite all those nagging troubles. You can see lot of Indica
customers cribbing about the bad service and constant trip to the service centers but
sticking to the brand because of the value proposition. You cannot get a diesel car with
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34. Tata Motors Ltd.
Tata Indica
that much space at the price at which Indica is selling (so far).
Tata Motors has been continuously tweaking the brand over these years sometimes
making quantum leap in the quality and refinement of the product. A snapshot of the
brand's evolution is given below
1998 - Indica announced
2001 - Indica V2
2004 - Rejuvenated Indica V2
2005- Indica V2 Turbo Diesel
2006- Indica Xeta
2008 - Indica Vista
The brand made a quantum leap in 2008 with the launch of Indica Vista. The entire
brand personality changed with the launch of Vista. The product's looks and feel had
changed completely and it was a rebirth for Indica. The changes in the product were not
limited to exteriors. Indica began sporting different types of engines from Fiat which
gave a new perception of quality to the brand.
At the pricing also, Tata Motors consciously raised the Vista brand to a higher level. The
Vista is pricier than the original V2 thus reducing the attractiveness of the brand to the
Taxi segment. At a price range of Rs 4 - Rs 5 Lakh, Indica Vista is not a cheap diesel car.
It was an upward stretch by the brand.
The positioning across the brand portfolio remains the same. All the brands focus on the
value proposition. But these sub- brands sports different taglines
Indica V2- More car per car
Indica Vista- Changes Everything (Surprise Yourself is the new tagline)
Indica Xeta - Makes much more car sense.
Vista recently re-launched itself with Drivetech 4 technology and is now sporting a new
tagline, Surprise Yourself.
Indica in a way is an example of good marketing practice. The brand continues to evolve
and is a pleasure to watch.
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35. Tata Motors Ltd.
Tata Indica
10. The 4 Ps: Place/Distribution
Strategy
8.1. How Dealers are adapting
The dealership of the future is likely to look very different, with a stronger online
presence and a growth in multi-brand availability. Dealers are also likely to be touchpoints for a wider range of products, such as mobility services, financial services and car
servicing. Captive financial service arms present an increasingly attractive option to
OEMs, especially in emerging markets.
The way we buy our cars is changing, and dealers are adapting to these new needs in
several ways. An online presence is vital for any business, and more and more
consumers are using the internet to help choose their cars. Auto execs from all over the
world predict that online activity will increase for both dealerships and intermediaries.
It is likely that OEMs will want to gain more control over online sales to maintain their
position as brand custodians, with a flagship store in major cities to support this
strategy – following in the path of consumer giants such as Nike or Apple.
However, traditional dealership models will remain important, either as independents
and/ or multi-brand outlets. There is a rapid expansion into our country’s western
provinces, to exploit the next wave of growth from Tier three and four cities in these
regions. Service is moving up the agenda as customer expectations rise, while retail
models and subsequent store environments, are adapting to changing consumer tastes
and behaviour – which is heavily influenced by the growth of the internet. Dealers also
have to cope with increasing competition and a fast-growing used car market.
Automotive companies have to respond in innovative ways to such pressures and
opportunities. Dealerships will have to evolve their range and mix of services in order to
thrive in the future. Additional services are rated as the most important offering,
particularly in the BRIC markets (like India), where dealerships are relatively new and
service stations less prevalent. Three-quarters of auto executives from Indian markets
see great potential for such developments. Maintenance and repairs have been
excellent, high margin business for dealers in the past, yet with the growth of e-vehicles
and improvements in reliability, this source of income may decline.
In the more established markets in particular, there is broad acknowledgement that the
conventional dealership model is declining, with only 54 percent of respondents from
TRIAD countries believing that the existing format is vital to future success. Again, the
relatively underdeveloped BRIC dealer markets still appear to hold greater promise for
traditional approaches, due to the lack of comprehensive dealer networks in these
regions. Dealerships are starting to embrace other new industry concepts, such as
mobility services (via car sharing and rental) and online purchasing, where consumers
may start the process on their laptop or iPad™ and complete the transaction in the
actual location, by picking up their new/used car or dropping it off for service.
8.2. Maintaining Dealer Margins
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36. Tata Motors Ltd.
Tata Indica
’Location, location, location’ still appears to be the biggest factor for a profitable
dealership, with dealers in the more mature markets especially concerned about being
in the right place. However, this is likely to change as online activity becomes popular.
In the emerging countries, on the other hand, dealerships place more emphasis on
organizational structure and reward schemes that motivate employees to sell
effectively. The rise of the internet has empowered consumers to quickly and easily
compare prices and service among dealers, yet must most dealers feel that brand is still
a major influence on buyer behaviour. And dealers appear to be less worried about
financing costs and equity structure, as most are backed by the financial service arms of
a powerful OEM.
The issue that most divides dealerships, is the management of pricing and supply. In the
BRICs countries like India this is a very high priority, whereas in Western Europe and
North America it ranks far lower. Customers have become accustomed to different ways
of buying cars in different parts of the world. In the US it is traditional to walk into the
showroom and choose immediately from a wide selection, whereas in Germany a buyer
will order a car in advance and wait for delivery. These variations have implications all
the way up the supply chain. The US has historically relied on mass production in its
factories, accompanied by aggressive selling in the showrooms, with little incidence of
build-to-order and less cooperation in OEM-dealer relationships. In Japan and India, on
the other hand, 60 percent of retail sales are customized to meet a customer order,
which reduces inventory levels, meaning that the average dealer turns over its stock
every 21 days compared to 66 days in the US. In an age of economic uncertainty,
customization can help cut costs for both automakers and dealers.
Dealers over the world
Dealers in India
100%
90%
89%
86%
78%
78%
Good dealership
Brand
locations
performance &
multiBranding
80%
76% 78%
Motivational
Effective
organisation
controls and
structure and
dealer
sales Incentives management
System
Fig. 8.1 Factors Affecting the Profitability of Dealers
8.3. Consumer Vehicle Purchasing Decisions
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75%
Managing
pricing and
supply
70% 67%
60% 56%
Continuous cost Financing costs
and working
and equity
capital
structure
management
37. Tata Motors Ltd.
Tata Indica
With the recession continuing to bite in many parts of the world, competitive financing
has leapt to the top of consumers’ demands, as they struggle to find the funding to buy
new or used vehicles. Finance is the most important value-added service. Interestingly,
buyers in the Indian markets appear to attach more importance to service quality than
their counterparts in more developed regions. Customers feel this is a major influence
on their decision to buy, which shows the increasing sophistication of the new and
growing middle classes. Financing of e-components is still of less interest, but
nevertheless steadily increasing in a world where electric vehicles have yet to reach
mass-market status.
82%
80%
80%
74%
69%
77%
70% 68%
74%
68% 68%
60%
65%
58%
63%
35% 36%
26%
Competitive
Service quality Servicing options Warranty Options
Quick and
Financing Options
during the
during the vehicle
conscientious
purchase
lifespan
response to
transition
product recalls
2011
2012
Financing of ecomponents
2013
Fig. 8.2 Factors Affecting the Consumer Vehicle Purchasing Decisions
8.4. Tata Motors’ Efforts
In a trend setting move in 2008, Tata Motors, India's largest automobile firm at that
time, hived off its sales and distribution operations into a separate entity, as part of a
restructuring exercise. The development came as the company was readying itself to
launch the world’s most inexpensive car, the Tata Nano.
The new entity, TML Distribution Company, a wholly owned subsidiary of Tata Motors,
took on the operations of sales, logistics and distribution of both commercial vehicles
and passenger vehicles to its 200 odd dealers across the country. Tata Motors is
transferred approximately 100 people to TDCL, which started operations soon after the
press announcements. Many factors led Tata Motors to realign its business structure. It
was looking to curtail its costs and one way to do that is through tierisation. Logistics
requires specialized skills and greater attention; a separate entity also helps in
unlocking value in the future. TDCL was formed with a capital of Rs 25 crore.
Tata Motors' product portfolio, which already includes large volume vehicles, was
further expanded. Simultaneously new plants were set up at Pant Nagar, Singur, and
Dharwad, while capacities were added at Pune, Jamshedpur and Lucknow. The
dealership network itself is being expanded. In line with the growth, breadth and reach
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38. Tata Motors Ltd.
Tata Indica
required for the product portfolio and multi-locational operations, it is necessary to
bring focus and greater efficiency in the selling and distribution operations and
processes.
It was a smart move to help improve planning, inventory management, transport
management, on-time delivery, while harnessing cost synergies. Tata Motors and this
subsidiary worked together for sales plans, with the subsidiary procuring vehicles and
selling them to dealers as per their orders.
2011-12 witnessed a surge in terms of pan-India Tata Motors Service Centres.
Workshops were added across the nation to improve customer reach. They also
connected with customers through various contact programmes organised at channel
partners to improve customer satisfaction. Additionally, Tata Service Centres are
located every 50-70 km along major highways. Continued commitment to the customers
has resulted in the establishment of Tata Alert, a 24x7 call centre. This allowed the
company to provide spot service within one hour of a call from a stranded Tata
customer.
The 'EXCEED' (Exceeding Customer Expectations through Enablement of Distribution
Network) programme has a three-step strategy to engage dealers, who in turn impact
customer delight. The first step is to promote a partnership with the dealer. Tata Motors
then works to ensure dealer profitability. Customer feedback is continuously fed back
into the process, while a dealer scorecard highlights areas of excellence and addresses
areas of concern in the dealer-customer engagement process. Together, these initiatives
create a robust process and ensure enduring customer delight.
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39. Tata Motors Ltd.
Tata Indica
11. Tata Motors Financials
The rupee is at its weakest point in history. And the Indian economy continued its
downward slide throughout FY 2012-13, recording a lower GDP growth of 5%
compared to 6.5% for FY 2011-12. This has forced the Indian auto industry to go
through a prolonged phase of slow demand, as a result of which fortunes of prominent
companies have taken a hit. Recently, in November 2013, Tata Motors has released its
sales figures. According to this figure Tata Motors has registered a 39 percent decline in
the total sales, which stood 40863 units; it’s lowest in total in last three years. Tata
Motors, being one of the largest automaker in the country, such a performance is
certainly the indication of adversities faced by Indian economy in current scenario.
During November 2012, sales figure inclusive of exports was 66500 units while the
same in 2011 November was 76823 units. Furthermore, domestic sales of Tata Motors
were even worse as this year in November, the demand further fell by over 40 per cent
to 37192 units. Statistics suggest that the same figure was 62354 units in the
corresponding period last year. Notably, even exports failed to register growth in
November as sales declined to 3671 units as compared to 4146 units sold a year earlier.
Tata Motors, in a statement, said “The sales of commercial vehicles in November, 2013
in the domestic market were 26816 units, Light Commercial Vehicle (LCV) sales were
19993 units while Medium & Heavy Commercial Vehicle sales stood at 6823 units." As
far as the passenger vehicles are concerned, Tata Motors sold 10376 units during
November 2013. The main drive for demand in passenger car segment were Nano,
Indica and Indigo, which accounted for 7910 units while the same for Sumo, Safari, Aria
and Venture was 2466 units.
9.1 Industry Financials:
Consequent to the macro economic factors as explained above, the Indian automobile
industry posted growth of 1.1% in FY 2012-13, as compared to 7.2% in the last fiscal.
The commercial vehicles grew by 1.7% (last year 19.2%) and passenger vehicles by
0.9% (last year 3.6%). The industry performance in the domestic market during FY
2o12-13 and the Company’s market share are given below:
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40. Tata Motors Ltd.
Tata Indica
9.2 Trends in Sales of Passenger Vehicles:
During FY 2012-13, the domestic passenger vehicle industry continued its downward
momentum, recording a lower growth of less than 1% as compared to 3.6% for the last
year. The demand was mainly affected by high interest rates, hike in fuel prices and
reduction in discretionary spends.
One of the notable features during the year has been shift in demand for Utility vehicles
(UV), which recorded 21.8% contribution of the total industry, representing an all-time
high in India, and registered a healthy growth of 51.5%, with every other segment
registering a significant decline.
The demand was also driven by a host of new launches in this segment, creating a
customer class for car-like, soft roader UV’s and emphasizing traditional rugged SUV
offerings.
The domestic industry performance and the Company’s performance in the passenger
vehicle segment are given below:
9.3 Company Financials:
The negative growth in the industry in segments the Company operates in, and lack of
an appropriate soft roader offering in the growth segment, contributed significantly to
the less than market performance of the Company.
During the year, the Company recorded sales of 229,325 vehicles (including Jaguar Land
Rover) in the domestic market; a decline of 31.1% over last year. The overall market
share was lower at 8.9% as compared to 13.0% during the last fiscal year.
The Company introduced a host of new products in the year. The new Safari Storme, the
Manza Club class and the Vista D90, drove volumes in their respective segments. The
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41. Tata Motors Ltd.
Tata Indica
new launches focused on enhancing the Brand positioning, while making it relevant for
the younger buyer.
The Company also worked on improving the décor and ambience of its showrooms to
make them world class. This effort has been completed at pilot dealerships and
workshops in Mumbai and Delhi, with encouraging results, and the initiative will now
be carried forward to other setups across the country.
The Company's sales in the mid-size segment suffered as competitive activity intensified
with multiple new launches from competition in this segment.
9.4 Financial Analysis:
9.4.1 Market Analysis:
Market price data - monthly high/low of the closing price and trading volumes on
BSE/NSE depicting liquidity of the Company’s Ordinary Shares and ‘A’ Ordinary Shares
on the said exchanges is given hereunder:-
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42. Tata Motors Ltd.
Tata Indica
9.4.2 Company Balance Sheet and Income Statement:
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44. Tata Motors Ltd.
Tata Indica
9.4.3 Trends in the sales, profit and market share:
The total turnover trend for the company for last 10 years is given as below. The overall
trend in turnover has increased dramatically in last few years, but the trends in profit
do not seem to be healthy. The reason may be increase in fuel prices, current economic
downturn etc.
The volume growth chart shown below is for last five years which shows a radical
decline in the number of vehicles sold in the domestic market. The trend does not seem
to be encouraging for passenger vehicles (PV). The market share is also going drastically
down for the same.
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45. Tata Motors Ltd.
Tata Indica
9.4.5 Some major trends in the last 10 years financial data is given for the
company.
Amount (in Rs Lakh)
250000
7.00%
6.00%
200000
5.00%
150000
4.00%
100000
3.00%
2.00%
50000
0
1.00%
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Net Income
81034
123695
152888
191346
202892
100126
224008
181182
124223
30181
Profit Margin
5.20%
6.00%
6.30%
6.00%
6.00%
3.40%
5.60%
3.50%
2.50%
0.60%
45 | P a g e
0.00%
46. Tata Motors Ltd.
Tata Indica
12. Group Analysis of the Customer
Survey
1. SEC Classification:
SEC Classification
No of Respondents
87
30
2
A1
A2
3
A3
B1
87 of the 122 respondents belonged to the A1 SEC classification, 30 belonged to A2
category, 2 from A3 and 3 in B1.
2. Gender:
42% of respondents are female, and 58% are male. The comparable size of the number
of male and women respondents shows the increase of women drivers. It is also a
reflection of the fact that women now play a bigger role in purchase decisions of family
vehicles. As we have collected data from a number of Indian cities, this also shows that
the trend is catching on all over the country, and not just in a Tier 1 city like Bengaluru.
46 | P a g e
47. Tata Motors Ltd.
Tata Indica
3. AGE:
Age: 78% of the respondents fall in the age bracket of 20-30 years. This age group
comprises of people just starting their career, who have purchased their first car. As per
their salary structure, they would find it more economical to buy smaller vehicles such
as hatchbacks rather than SUVs or MUVs. This makes the Tata Indica an attractive
choice for a first car.
4. Do you own a car:
76% of the respondents owned a car registered either in their name/ their family
name whereas 4 % had the car registered under their companys name. As a
significant number of the population surveyed owned a car, the suggestions and
insights provided are reliable.
5. Procedures Participated In:
17% of respondents consider budget as an important component in the purchase
decision of a new car. This also illustrates the fact that younger customers are very
price-conscious due to their lower incomes.
Other activities engaged in include collecting information about various brands,
contacting dealers and test-driving prospective purchases. This shows that customers
do not indulge in impulsive purchases, because vehicles are considered as long-term
purchases, and mistakes are not easily rectifiable.
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48. Tata Motors Ltd.
Tata Indica
6. The Car is used by:
Most respondents use their cars themselves; other main users include parents and
spouses, suggesting that the 2-car per family culture is not very common in India. There
is one car for the whole family, therefore purchase decisions are also taken by
consulting with the whole family.
7. Purchase decision influence:
Purchase decision is influenced by friends/family the most, suggesting that users like to
consult the opinions of people that they trust when it comes to large purchases such as
cars. Celebrities are not as effective in influencing purchases, because only 3% of
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49. Tata Motors Ltd.
Tata Indica
respondents have listed celebrities as an option. A significant number of people (31%)
also rely on their own choice.
8. Major Factors influencing the purchase decision of a car:
Factors Influencing Purchase decisions
Very Unimportant
Exterior and Interior Design
Unimportant
2%
4%
Neutral
Important
Very Important
13%
51%
30%
11%
10%
Resale Value
25%
20%
1%
Equipment & Interior
4%
35%
20%
49%
26%
Size
2%
3%
17%
55%
23%
2%
Colour
6%
32%
22%
Technology
Performance
Speed
2%
1%
21%
38%
32%
2%
2%
3%
33%
2%
2%
22%
Price
Brand
1%
2%
10%
2%
2%
4%
1%
2%
22%
66%
34%
12%
35%
49 | P a g e
61%
48%
27%
Safety
43%
58%
50%
50. Tata Motors Ltd.
Tata Indica
Respondents feel that safety, performance and price are the major factors influencing
purchase decisions. This implies that they prefer reliable, value for money cars over
style and design. Resale value was listed as the least important factor, suggesting that
users invest so much into taking the right decision with their purchase that they do not
see the need for having to sell it off in the near future.
9. Style:
Style
5
4
9%
3
2
1
14%
Honda Brio
20%
32%
25%
11%
18%
Chevrolet Beat
24%
21%
26%
26%
27%
Tata Indica
7%
6%
8%
13%
Hyundai i-10
30%
26%
35%
20%
8%
Maruti Suzuki Swift
10%
25%
35%
22%
On a scale of 1 to 5 with 1 being the highest, 53% of the consumers’ surveyed rated Tata
Indica negatively in terms of style. Amongst its peers, Honda Brio and Maruti Suzuki
Swift received much higher rating suggesting that respondents find them more visually
appealing than Tata Indica.
10. Mileage:
Mileage
5
Honda Brio
3%
5%
Chevrolet Beat
5%
Tata Indica
Hyundai i-11
Maruti Suzuki Swift
50 | P a g e
4
2%
2%
3
2
1
16%
33%
11%
12%
12%
39%
30%
15%
37%
20%
22%
40%
11%
11%
32%
13%
16%
26%
44%
42%
51. Tata Motors Ltd.
Tata Indica
On a scale of 1 to 5 with 1 being the highest, 62 % of the consumers surveyed rated Tata
Indica very highly in terms of mileage. Amongst its peers, Hyundai 1-10 and Maruti
Suzuki Swift received similar ratings 55 % and 58% respectively suggesting that
respondents find them comparable to Tata Indica.
11. Engine Performance:
Engine Performance
5
4%
4
3
2
1
14%
Honda Brio
35%
35%
11%
4%
10%
Chevrolet Beat
39%
37%
10%
7%
20%
Tata Indica
25%
18%
7%
Hyundai i-12
11%
30%
23%
45%
14%
4%
11%
Maruti Suzuki Swift
25%
39%
20%
In terms of Engine Performance, the respondents rated Tata Indica much lower (48%)
than its peers- Hyundai i10 and Maruti Suzuki Swift (both being 59%).
12. Handling:
Handling
5
Honda Brio
Chevrolet Beat
Tata Indica
3
2%
2
1
20%
30%
13%
3%
16%
20%
7%
6%
12%
12%
42%
39%
23%
20%
12%
34%
28%
11%
6%
Hyundai i-13
Maruti Suzuki Swift
4
22%
21%
25%
35%
39%
In terms of Handling, the respondents rated Tata Indica much lower (35%) than its
peers- Hyundai i10 and Maruti Suzuki Swift (55 % and 60% respectively).
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52. Tata Motors Ltd.
Tata Indica
13. After Sales Services:
After Sales Service
5
4
3
7%
2
1
19%
Honda Brio
42%
23%
10%
4%
17%
Chevrolet Beat
45%
27%
7%
9%
26%
Tata Indica
10%
3%
36%
19%
15%
Hyundai i-14
32%
11%
6%
Maruti Suzuki Swift
11%
30%
14%
39%
40%
In terms of after sales service, most respondents remained neutral. However Tata indica
was rated the lowest suggesting that consumers perceive the after sales service of Tata
motors to be poor. Another finding was that consumers perceived the after sales service
of maruti Suzuki to be very good. This might be because of Maruti’s strong distribution
network all over India.
14. Respondent’s view about the price of Tata Indica:
Respondents View about Tata
Indica's Price
17%
3% 9%
Very High
High
Competitive
Low
71%
71% of the respondents feel that Tata Indica is priced competitively in the market.
When compared to the other players in the hatchback market, Tata Indica is reasonably
priced. 17% feel that the price of Tata Indica is low as compared to its competitors.
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53. Tata Motors Ltd.
Tata Indica
15. Respondents View about Tata’ promotions:
Respondents view about Tata's
Promotions
Percentage
55%
45%
Yes
No
It is observed that 55% of the respondents felt that there was a need for Tata Indicato
undertake promotional activities. This might be because of the strong presence of
competition in the market from other hatchbacks like Honda Brio, Hyundai i10, and
Swift. These brands undertake huge promotional activities in the form of
advertisements, campaigns and schemes. This is not seen in the case of Tata Indica.
16. Consumer suggestions:
These were the major consumer suggestions for Tata Indica.
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54. Tata Motors Ltd.
Tata Indica
17. Word Cloud for the question – What word comes to your mind when you
hear the word Tata Indica:
When asked about “the first word that comes to your mind, when you hear the name Tata
Indica”; most of the respondents reverted with the word Taxi. This is because of good
mileage and good trunk space. Also Tata Indica has low maintenance costs, which is an
added bonus for the taxi service providers.
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55. Tata Motors Ltd.
Tata Indica
18. Areas of Improvement:
Area of Improvement
No of respondents
104
55
49
34
Promotions
Styling
Performance
Customer service
104 respondents are of the opinion that Styling is the main area of improvement in Tata
Indica. This is because most of the respondents feel that for a hatchback, Tata Indica is very
bulky, mundane, heavy and was compared to an elephant by a few respondents. These
attributes along with the consumer’s preference of styling to be an important factor in cars
contribute to the above finding.
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56. Tata Motors Ltd.
Tata Indica
Individual Analysis of the Consumer
Survey
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57. Tata Motors Ltd.
Tata Indica
Analysis by: Akanksha Mohanty
Sample Surveyed: 20
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58. Tata Motors Ltd.
Tata Indica
1. Gender:
Gender
No. Of Respondents
10
10
Male
Female
It is observed that the respondents are equal in number on the basis of gender. As the
percentage is equal, we can say that even the women are equally aware about the
automobile sector and they play an important role in the decision related to cars in their
families.
2. Ownership Status
Ownership Status
No. of respondents
Yes, registered under my company's
name
No
Yes, registered under my name/my family
name
0
6
14
Most of the respondents (14) of the total 20 respondents observed own a car which is
either registered under their name or their family. We can infer from this data that most
of the respondents are financially capable of affording a car whereas only 6 respondents
are there who don’t own a car. These 6 respondents can be the people who belong to
lower sections of the society who cannot afford a car.
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59. Tata Motors Ltd.
Tata Indica
3. Major processes where customer do participate while buying a car:
Not Applicable (I
do not own a car),
Final decision on
3
maker and model,
5
Price bargaining, 2
Purchase decision
of a new car, 11
Testdrive, 10
Decision of the
budget, 13
Collecting
information about
the brands and
models Оr Visit
dealers, 11
Initial choices of
brands and
models, 14
Contact car
dealers, 4
Here, it is seen that most of the respondents (around 14%) are responsible for making
the initial choices such as brands and models. These can be the people younger
members of a family who are more inclined towards the brand and model than the
actual price.
Around 13% of the respondents play an important role in deciding the budget of the car.
These respondents can be the chief earners of the family as the final payment has to be
made by them. This is followed by the respondents who make the final decision and
who collect all the information related to car ( around 11%).
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Tata Indica
4. Major factors influencing the purchase decision:
Major factors influencing the purchase decision
Very Unimportant
Unimportant
0%
Exterior and Interior Design
5%
Neutral
Important
Very Important
15%
70%
10%
5%
15%
Resale Value
30%
15%
Equipment & Interior
0%
0%
35%
25%
70%
5%
0%
Size
5%
30%
45%
20%
0%
10%
Colour
35%
15%
Technology
0%
0%
40%
15%
50%
35%
Performance
Speed
0%
0%
5%
40%
0%
0%
55%
30%
50%
20%
0%
Safety
Price
Brand
0%
0%
0%
0%
5%
15%
15%
65%
5%
45%
15%
30%
50%
55%
The graph shows the major factors for influencing the purchase decision. It can be seen
that 65% of the respondents consider safety as a very important factor influencing
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61. Tata Motors Ltd.
Tata Indica
purchasing decision. 70% of the respondents consider exterior and interior design &
equipment and interior; this is followed by brand which constitutes 55% of the
responses. This shows that today customers consider many factors before making a
decision. Only 5% of the respondents have attributed resale value as not a very
important factor. This shows a mixed bag of responses.
5. Style
Style
5
1
4
3
2
3
3
Honda Brio
7
6
1
Chevrolet Beat
1
4
5
8
2
0
Tata Indica
5
1
3
0
Hyundai i10
5
3
2
Maruti Suzuki Swift
0
11
6
6
3
7
8
The above graph shows how various cars have been rated on a scale of one to five on
the feature – Style, with 1 being the lowest and 5 being the highest. We can see that,
Maruti Swift has scored the lowest followed by Chevrolet Beat. This shows that these
cares need to spend some more effort on the styling aspect of the car.
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62. Tata Motors Ltd.
Tata Indica
6. Mileage
Mileage
5
4
0
3
2
1
4
Honda Brio
7
1
2
2
Chevrolet Beat
8
4
4
0
Tata Indica
8
1
8
0
0
4
Hyundai i10
1
1
6
4
Maruti Suzuki Swift
11
9
7
7
1
As can be seen from the survey results that Chevrolet Beat and Maruti Suzuki Swift
scores high in mileage. The company should focus on improving this aspect for cars that
score low on this eg Chevrolet Beat.
7. Engine Performance
Engine Performance
5
1
Honda Brio
Chevrolet Beat
Tata Indica
Hyundai i10
Maruti Suzuki Swift
4
0
0
1
1
1
3
4
1
6
2
7
10
7
3
4
2
3
3
11
5
1
1
2
6
6
7
8
It can be seen here that, Maruti Suzuki Swift and Hyundai I 10 has scored the highest on
engine performance. These cars have a robust engine which gives good power and
durability. The company should focus on this aspect further.
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63. Tata Motors Ltd.
Tata Indica
8. Handling
Handling
5
Honda Brio
Hyundai i10
Maruti Suzuki Swift
3
0
0
0
2
1
7
7
5
1
1
Chevrolet Beat
Tata Indica
4
4
6
1
3
9
7
1
1
8
4
4
2
2
7
5
5
10
9. After Sales Service
From the graph it can be inferred that tata Indica, honda brio and Chevrolet Beat scores
the least on this parameter. This calls for the respective companies to improve on this
aspect.
After Sales Service
5
2
2
Honda Brio
Chevrolet Beat
Tata Indica
Hyundai i10
Maruti Suzuki Swift
4
1
1
3
2
5
4
3
1
7
1
1
4
10
4
4
2
10
4
2
3
3
4
5
8
5
5
This shows that Maruti Suzuki Swift is poorly rated on this aspect. The company needs
to focus on this aspect not only with respect to this care but other cars in the hatchback
segment.
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64. Tata Motors Ltd.
Tata Indica
10. Perception of Price by Consumers:
Perception of Price by Consumers
Very High
High
Competitive
Low
5% 5% 5%
85%
85% of the consumers feel that the price of Tata Indica is competitive. This may be
because that under the hatchback segment, Tata Indica offers all the features at rates
equal or almost equal to that of the other players in the hatchback segment. Its feature
of fuel efficiency available at competitive prices can be beneficial to customers. Thus the
consumers would benefit because of competitive prices.
It is interesting to note that 5% of population has a perception of prices as high, low and
very high each. This maybe because either the customers might be unaware of the
existing prices in the market or might be brand loyal. There is also a possibility of
rigidity or negative bias towards a particular brand.
11. Word Association:
When the respondents were asked –“the first word that came to their mind on hearing
the name Tata Indica”, it was observed that most of the people responded by using the
word taxi/cab (around 11 respondents). This might be because of the fact that Tata
Indica offers good mileage and trunk space; plus its cost of maintenance is also low.
Thereby making it a preferred car for taxi or cab servives.
The other responses included words like affordable. This signifies its competitive
pricing parameter along with the fact that Tata Indica has low maintenance costs.
Thereby making it an affordable car.
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65. Tata Motors Ltd.
Tata Indica
12. Areas of Improvement:
Areas of improvement
20
18
16
14
12
10
8
6
4
2
0
No. of respondents
Styling
Performance Customer
service
Promotions
When the respondents were asked what are the areas where Tata Indica can improve,
maximum number replied by selecting the Styling option. Most of the respondents
correlated the styling of the car to that of something that is heavy, bulky, and mundane.
Here 18 respondents felt that styling had to be worked upon. The other responses
correspond to changes in performance, customer service and promotions. The former
two have an equal number of responses.
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66. Tata Motors Ltd.
Tata Indica
Analysis by: Evelyn Josheph
Sample Surveyed: 19
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67. Tata Motors Ltd.
Tata Indica
Respondents by Gender
Male
No of
Respondents
Female
8
11
It is interesting to note that of the respondents surveyed, 11 are females and 8 are
males. This data illustrates the trend of an increasing number of Indian women drivers.
What this also suggests is that women play an important part in the purchase decisions,
often adopting the role of the influencers with respect to large purchases such as cars.
This trend is observed both in tier 1 and tier 2 cities, as the respondents are from
locations such as Delhi, Bengaluru and Cochin.
Ownership of Vehicle
Yes, registered under my
company's name
No
Yes, registered under my
name/my family name
Yes, registered
under my
name/my family
name
No of Respondents
15
No
Yes, registered
under my
company's name
2
2
15 respondents recorded owning a car in their family name. There are equal numbers of
people (2 each) who own a car under their company name and who don’t own a car. It
can be inferred that most of the respondents are financially capable of affording a car.
The respondents who do not own a car can be in one of 4 different situations:
1.
2.
3.
4.
Financially dependent on someone else, such as their parents;
Not financially sound enough to purchase a car, and have no sponsors
Are considering purchasing a car in the near future
Do not stay in one location long enough to purchase a car, and therefore avail
rental services
67 | P a g e
68. Key Purchase Drivers
Very Unimportant
0%
Exterior and Interior Design
Unimportant
5%
Neutral
11%
32%
0%
Equipment & Interior
5%
37%
11%
37%
0%
Size
5%
16%
Colour
5%
37%
37%
21%
Technology
0%
0%
0%
Speed
37%
16%
Performance
47%
5%
5%
26%
0%
0%
63%
32%
32%
Safety
Price
Brand
0%
0%
0%
0%
0%
0%
47%
47%
32%
0%
37%
16%
16%
5%
Very Important
42%
42%
11%
11%
11%
Resale Value
Important
68%
16%
79%
21%
32%
47%
Respondents rated price as the most important factor in a purchase decision, followed
closely by safety and performance. It is clear from this customers require value for
money and safety as important in a vehicle. Respondents also perceived resale value as
important, this could be because they hoped to sell off their first car for a better model
sometime in the future. This graph also illustrates how price-conscious are when people
are considering large value purchases such as family cars. Safety and performance could
69. Tata Motors Ltd.
Tata Indica
also be important factors as majority of Tata Indica users are drivers, who require good
speed and the guarantee of safe travel. Reliability is preferred over style and design.
Not Applicable (I
do not own a
Final decision car), 2
on maker
Price
and model, 9 bagaining, 0
Purchase
decision of a
new car, 10
Decision of
the budget, 6
Testdrive, 13
Collecting
information
about the
brands and
models Оr Visit
dealers, 11
Initial choices of
brands and
models, 12
Contact car
dealers, 5
When the respondents were asked about the procedures they followed while
purchasing a car and making a brand choice, 19% of them selected test-drive. This was
closely followed by choice and collection of information of brands and models (18% &
16% respectively).
This suggests that because consumers feel vehicle purchases are long-term, permanent
decisions, they tend to invest more time and effort into collecting information and
trying out the prospective models. Customers will often conduct a detailed study of the
brand along with weighing it against parameters like test-driving the vehicle before
making a decision.
They may also desire to be perceived as savvy customers by their peer group, and as a
result, fear committing a mistake by not researching as much as possible about the
vehicle, Also, in this age of the internet, when information is at one’s fingertips, it is very
easy for customers to unearth large volumes of information about the car model they
are looking at. Hence there is a tendency to collect information and contact dealers
before making a purchase.
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70. Tata Motors Ltd.
Tata Indica
Perception of Price
0%
5%
Very high
42%
High
Competitive
53%
Low
A sizable 53% of respondents felt that Tata Indica is competitively priced, suggesting
that its price is comparable with other vehicles of other manufacturers offering similar
features and qualities. This also illustrates that Tata Indica is not viewed as a premium
car, but rather an inexpensive and affordable option.
Suggestions for Improvement
Styling
No of Respondents
70 | P a g e
Performance
Customer
Services
Promotions
16
10
5
6
71. Tata Motors Ltd.
Tata Indica
Style
5
4
3
2
3
3
Honda Brio
Mileage
1
4
1
4
Tata Indica
4
0
0
0
Hyundai i-10
2
0
2
2
2
3
3
0
6
7
5
6
1
10
2
2
Tata Indica
5
3
10
6
1
4
Chevrolet Beat
4
Maruti Suzuki Swift
3
2
5
3
4
Honda Brio
7
2
Chevrolet Beat
5
Hyundai i-10
4
5
6
4
13
2
Maruti Suzuki Swift
9
0
0
7
0
0
5
5
9
A majority of respondents felt that more emphasis must be given to Tata Indica’s
styling, followed by performance. This is obvious from the low rating that Tata Indica
was given on the design quotient. 10 respondents gave it the lowest rating of 5 on style.
The takeaway for the company is that the Tata Indica must be given a new, modern look
in order for customers to start taking notice of it again. This will also help it move away
from the taxi image that it now possesses.
However, there seems to be no doubt in the mind of the customers regarding Tata
Indica’s mileage. Since its release the car has been known for the excellent fuel
efficiency that it offers, and this is the main reason that it is the vehicle of choice for taxi
drivers.
When asked what came to mind when they thought of Tata Indica., most respondents
answered taxi, As it failed to evolve with the changing customer demand for sleeker,
more modern looking cars, the Tata Indica has been left behind as a family car. Tata
Motors can reposition the brand as a safe, efficient family vehicle to remove the image
that it has built up for itself.
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72. Tata Motors Ltd.
Tata Indica
After Sales Services
5
4
3
2
1
2
Honda Brio
6
6
4
1
0
Chevrolet Beat
7
4
6
2
6
Tata Indica
2
1
1
Hyundai i-10
3
2
5
3
Maruti Suzuki Swift
0
7
8
1
4
4
10
Tata Indica also scored poorly in after sales service, and this may be because customers
had bad experiences with Tata Customer Care and it has biased their opinion towards
the Indica permanently. Maruti Suzuki scored very high in after sales, and this may be
attributed to the well-established distribution network that Maruti has in India.
Handling
5
4
3
Engine Performance
2
1
1
4
Honda Brio
3
0
0
10
Maruti Suzuki Swift
11
Tata Indica
8
3
0
0
9
5
3
3
Hyundai i-10
10
6
7
4
7
2
0
1
5
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2
5
4
2
0
4
1
5
3
3
Hyundai i-10
2
2
Chevrolet Beat
7
5
5
2
2
Tata Indica
3
0
0
4
Chevrolet Beat
4
Honda Brio
8
3
3
0
5
5
Maruti Suzuki Swift
1
6
7
73. Tata Motors Ltd.
Tata Indica
Tata Indica has been rated very well in terms of handing and engine performance,
suggesting that consumers are quite satisfied with the on-road performance of the car.
However, in the dealer analysis we conducted, dealers claim that most car complaints
come from product malfunctioning, implying that maintenance costs might be on the
higher side as the car ages. The Hyundai i10 being a smaller, more compact car, is much
easier to handle, and the Chevrolet Beat & the Honda Brio give the Tata Indica some
fierce competition in engine performance.
Overall one can conclude that consumers perceive the Tata Indica to be an aging brand,
and Tata Motors should focus its investment efforts into projecting the brand as up-todate and technologically forward. Tata should also focus expanding the distribution
network and improving the after sales service to keep existing customers happy.
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74. Tata Motors Ltd.
Tata Indica
Analysis by: Nandana SS
Sample Surveyed: 21
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75. Tata Motors Ltd.
Tata Indica
1. SEC Classification:
We used the new SEC system which is based on two variables:
•
•
Education of chief earner
Number of “consumer durables” (from a predefined list)- owned by the family.
15 out of the 21 respondents fell under the A1 grade, 6 fell under A2 grade and 1 under
B1 grade. So the respondents were all affluent to afford a car and hence the insights
obtained are highly reliable.
2. Gender:
Female
4
Male
17
0
2
4
6
8
10
12
14
16
18
No. Of Respondents
17 respondents were male and the number of female respondents was 4. The women
now play a bigger role in purchase decisions of family vehicles than before and hence
the insights from the 4 women surveyed were highly useful.
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76. Tata Motors Ltd.
Tata Indica
3. Ownership status:
Yes, registered
under my
company's name, 0
No, 8
Yes, registered
under my name/my
family name, 13
It can be clearly observed here that 13 respondents out of the 21 owned a car. But here,
around 8 respondents did not own a car which is a large number in the sample size of
21. Among the 8 respondents who did not own a car, 6 of them fell under the A2 SEC
classification who can afford a car and therefore are the prospective customers or the
target market of Tata Indica. So the insights from them are highly useful to derive the
features they look in a car and also their views about Tata Indica.
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77. Tata Motors Ltd.
Tata Indica
4. Procedures participated in(respondents could choose multiple options):
Not Applicable (I do
not own a car), 8
Not Applicable (I do not own a car)
Final decision on maker and model
4
Price bargaining
2
Testdrive
7
Collecting information about the brands and
models Оr Visit dealers
8
Contact car dealers
3
Initial choices of brands and models
6
Decision of the budget
10
Purchase decision of a new car
8
0
2
4
6
8
10
12
Responses
It is observed that around 10 of the respondents are the chief decision makers in terms
of budget while purchasing a car followed by the people who are responsible for
collecting all the information related to a car and people who take the final decision of
buying a car. This shows that customers do not indulge in impulsive purchases, because
vehicles are considered as long-term purchases, and mistakes are not easily rectifiable.
It is also seen that most of them are involved in at least a few procedures that are
involved in the purchasing of a car.
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78. Tata Motors Ltd.
Tata Indica
5. Major factors influencing the purchase decision(respondents could choose
multiple options):
Major factors influencing the purchase decision
Very Unimportant
Unimportant
0%
10%
Exterior and Interior Design
0%
Neutral
14%
29%
38%
24%
0%
Equipment & Interior
5%
Very Important
38%
38%
10%
Resale Value
Important
10%
67%
19%
0%
Size
5%
19%
62%
14%
5%
Colour
10%
33%
14%
5%
5%
Technology
Performance
0%
0%
Safety
0%
Price
0%
0%
Brand
29%
48%
5%
5%
19%
5%
5%
Speed
14%
38%
71%
14%
5%
5%
38%
38%
24%
67%
5%
43%
5%
14%
38%
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43%
52%
79. Tata Motors Ltd.
Tata Indica
Price, Performance and Safety were rated the most influencing factors with 95%, 91%
and 90% of the respondents respectively.
76 % responded saying Exterior and Interior Design is either important or very
important. 62 % responded saying Resale value is either important or very important.
76% responded saying Size is either important or very important. 77% responded
saying Technology is either important or very important. Speed and Brand were rated
either important or very important by 76 % and 81 % of the respondents respectively.
Hence we can see that almost all the factors are taken into consideration before the
purchase of the car . However Price, Performance and Safety become the top 3
influencing factors in the purchase decision of a car.
6. Style:
Style
5
1
4
3
2
1
3
Honda Brio
7
3
6
1
Chevrolet Beat
4
5
8
2
0
Tata Indica
5
1
3
0
Hyundai i10
5
3
2
Maruti Suzuki Swift
0
11
6
6
3
7
8
On a scale of 1 to 5 with 1 being the highest, 16 out of 21 of the consumers surveyed
rated Tata Indica negatively in terms of style. Amongst its peers, Honda Brio and
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80. Tata Motors Ltd.
Tata Indica
Chevrolet Beat and Hyundai i10 received a much higher rating suggesting that the
respondents find them more visually appealing than Tata Indica. This also suggests that
Tata Motors should consider channelling their investments more in improving the
styling and design of Tata Indica which would increase the sales.
7. Mileage:
Mileage
5
0
4
3
2
1
4
Honda Brio
7
1
2
2
Chevrolet Beat
8
4
4
0
Tata Indica
8
1
8
11
0
0
4
Hyundai i10
6
9
1
1
Maruti Suzuki Swift
1
4
7
7
On a scale of 1 to 5 with 1 being the highest, 11 of the consumers surveyed rated Tata
Indica very highly in terms of mileage. Amongst its peers, none of them got such high
ratings in the mileage category. This suggests that Tata Indica should be promoted more
by stressing on the fact that it gives a better mileage than any of its competitors.
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81. Tata Motors Ltd.
Tata Indica
8. Engine performance:
Engine Performance
5
4
3
2
1
1
4
Honda Brio
6
7
2
1
1
Chevrolet Beat
10
7
1
0
3
Tata Indica
11
5
1
0
4
Hyundai i10
6
7
3
2
1
Maruti Suzuki Swift
6
8
3
On a scale of 1 to 5 with 1 being the highest, 6 of the consumers surveyed rated Tata
Indica very highly in terms of engine performance. Amongst its peers, Hyundai i10 and
Maruti Suzuki Swift got high ratings. This suggests that Tata Indica should concentrate
more on improving the engine performance.
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82. Tata Motors Ltd.
Tata Indica
9. Handling:
Handling
5
4
3
2
1
0
7
Honda Brio
5
7
1
1
4
Chevrolet Beat
6
8
1
0
3
Tata Indica
9
7
1
0
4
Hyundai i10
7
5
4
1
2
Maruti Suzuki Swift
5
10
2
On a scale of 1 to 5 with 1 being the highest, 8 of the consumers surveyed rated Tata
Indica very highly in terms of handling. Amongst its peers, Hyundai i10 and Maruti
Suzuki Swift were rated high, though not a huge difference , by more respondents(9 and
12 respectively) . This suggests that Tata Indica should concentrate more on Handling.
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83. Tata Motors Ltd.
Tata Indica
10. After sales service:
After Sales Service
5
4
3
2
1
2
5
Honda Brio
7
2
4
1
3
Chevrolet Beat
10
4
2
1
4
Tata Indica
10
4
1
1
4
Hyundai i10
8
5
2
3
3
Maruti Suzuki Swift
5
5
4
On a scale of 1 to 5 with 1 being the highest, only 5 of the consumers surveyed rated
Tata Indica very highly in terms of after sales service. Amongst its peers, Hyundai i10
and Maruti Suzuki Swift were rated high by more respondents(7 and 9 respectively) .
This suggests that Tata Indica should concentrate on improving their after sales service
by establishing a wider distribution network and service stations.
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84. Tata Motors Ltd.
Tata Indica
11. Customers’ perception of tata indica’s price:
Low
1
Competitive
14
High
4
Very High
1
0
2
4
6
8
10
12
14
16
No. of respondents
14 respondents felt that Tata Indica is competitively priced which is a very significant
number in the sample size of 21. So Tata motors need not worry about their Pricing
strategy as customers perceive it to be competitive with other brands in the market.
12. AREAS OF IMPROVEMENT(respondents could choose multiple options):
Areas of improvement
20
18
16
14
12
10
No. of respondents
8
6
4
2
0
Styling
84 | P a g e
Performance
Customer service
Promotions
85. Tata Motors Ltd.
Tata Indica
18 out of 21 respondents believed that styling is an area that Tata Indica should
improve upon. 9, 9 and 10 respondents respectively felt that the other three areas –
Performance , customer Service and Promotions needed improvement.
13. What word comes to your mind when you hear the word tata indica:
When asked the question of which word comes to your mind when you hear the word
Tata Indica, the responses are shown below:
Taxi
Reliable
Tata
product
Tours and
travel car
Moderate
design
CDMA sim
(tata
indicom)
Taxi
Failure
Car
Experience
Affordable
Niggles
Cab
Yuck
A car
Over
valued
Deals with
cars
Faulty
Taxi
Taxi
Comfortabl
e
Taxi
Most of the respondents reverted with the word Taxi. This is because of good mileage and
good trunk space. Also Tata Indica has low maintenance costs, which is an added bonus for
the taxi service providers.
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86. Tata Motors Ltd.
Tata Indica
Key findings:
1. Instead they should channel their investments more in improving the styling and
design of Tata Indica.
2. As the respondents feel that safety, performance and price are the major factors
influencing purchase decisions, Tata motors should promote Indica as a safe and
reliable car. Also it was found that resale value was listed as the least important
factor.
3. The consumers widely perceive Tata Indica as a taxi and this image is something
Tata motors should strive to change. This can be attributed to the fact that Tata
Indica provides very high mileage. Over the years Tata Indica has moved from
being a family car to a taxi/cab.
4. As the respondents have rated Tata Indica lower in terms of Handling, Engine
performance and after sales service, we feel that these are the three key areas
Tata Motors should concentrate on.
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87. Tata Motors Ltd.
Tata Indica
Analysis by: Prashant Patro
Sample Surveyed: 19
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88. Tata Motors Ltd.
Tata Indica
1. Gender
All the respondents belong to A1 category according to SEC classification Here it
can be seen that out of the total respondents surveyed, 13 are males and 6 are
females. This data talks about the presence of more number of male drivers than
the female drivers.
Gender
No of Respondents
13
6
Male
Female
2. Ownership Status:
From the graph it can be inferred that 18 respondents own a car, which is
registered under their name or under the family name, one respondent owns a
car registered under the company’s name and zero respondents don’t own a car.
The sample is well to do and is financially capable of affording a car.
Ownership Status
No of Respondents
Yes, registered under my company's name
No
Yes, registered under my name/my family name
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1
0
18
