Tata Indica-Product Analysis

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Tata Indica-Product Analysis

  1. 1. Tata Indica Product Analysis Report Group # 6 – Section B
  2. 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 2|P ag e
  3. 3. Tata Motors Ltd. 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 3|P ag e
  4. 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 4|P ag e
  5. 5. Tata Motors Ltd. 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 5|P ag e
  6. 6. Tata Motors Ltd. Tata Indica 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. 6|P ag e
  7. 7. Tata Motors Ltd. 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 7|P ag e
  8. 8. Tata Motors Ltd. 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. 8|P ag e
  9. 9. Tata Motors Ltd. Tata Indica 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 9|P ag e
  10. 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 10 | P a g e
  11. 11. Tata Motors Ltd. 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% 11 | P a g e Commercial Vehicles
  12. 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% 12 | P a g e 10% 20% 30% 40% 50% 60% 70%
  13. 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. 13 | P a g e
  14. 14. Tata Motors Ltd. 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. 14 | P a g e
  15. 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 15 | P a g e
  16. 16. Tata Motors Ltd. 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 16 | P a g e
  17. 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. 17 | P a g e
  18. 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: 18 | P a g e
  19. 19. Tata Motors Ltd. Tata Indica 19 | P a g e
  20. 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. 20 | P a g e
  21. 21. Tata Motors Ltd. Tata Indica  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 21 | P a g e
  22. 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 22 | P a g e  As a cab
  23. 23. Tata Motors Ltd. Tata Indica 23 | P a g e
  24. 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. 24 | P a g e
  25. 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 25 | P a g e
  26. 26. Tata Motors Ltd. 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. 26 | P a g e
  27. 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 27 | P a g e
  28. 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) 28 | P a g e
  29. 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 29 | P a g e
  30. 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 30 | P a g e 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. 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 31 | P a g e
  32. 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. 32 | P a g e
  33. 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 33 | P a g e
  34. 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. 34 | P a g e
  35. 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 35 | P a g e
  36. 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 36 | P a g e 75% Managing pricing and supply 70% 67% 60% 56% Continuous cost Financing costs and working and equity capital structure management
  37. 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 37 | P a g e
  38. 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. 38 | P a g e
  39. 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: 39 | P a g e
  40. 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 40 | P a g e
  41. 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:- 41 | P a g e
  42. 42. Tata Motors Ltd. Tata Indica 9.4.2 Company Balance Sheet and Income Statement: 42 | P a g e
  43. 43. Tata Motors Ltd. Tata Indica 43 | P a g e
  44. 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. 44 | P a g e
  45. 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. 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. 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. 47 | P a g e
  48. 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 48 | P a g e
  49. 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. 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. 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). 51 | P a g e
  52. 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. 52 | P a g e
  53. 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. 53 | P a g e
  54. 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. 54 | P a g e
  55. 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. 55 | P a g e
  56. 56. Tata Motors Ltd. Tata Indica Individual Analysis of the Consumer Survey 56 | P a g e
  57. 57. Tata Motors Ltd. Tata Indica Analysis by: Akanksha Mohanty Sample Surveyed: 20 57 | P a g e
  58. 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. 58 | P a g e
  59. 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%). 59 | P a g e
  60. 60. Tata Motors Ltd. 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 60 | P a g e
  61. 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. 61 | P a g e
  62. 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. 62 | P a g e
  63. 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. 63 | P a g e
  64. 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. 64 | P a g e
  65. 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. 65 | P a g e
  66. 66. Tata Motors Ltd. Tata Indica Analysis by: Evelyn Josheph Sample Surveyed: 19 66 | P a g e
  67. 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. 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. 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. 69 | P a g e
  70. 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. 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. 71 | P a g e
  72. 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 72 | P a g e 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. 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. 73 | P a g e
  74. 74. Tata Motors Ltd. Tata Indica Analysis by: Nandana SS Sample Surveyed: 21 74 | P a g e
  75. 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. 75 | P a g e
  76. 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. 76 | P a g e
  77. 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. 77 | P a g e
  78. 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% 78 | P a g e 43% 52%
  79. 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 79 | P a g e
  80. 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. 80 | P a g e
  81. 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. 81 | P a g e
  82. 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. 82 | P a g e
  83. 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. 83 | P a g e
  84. 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. 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. 85 | P a g e
  86. 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. 86 | P a g e
  87. 87. Tata Motors Ltd. Tata Indica Analysis by: Prashant Patro Sample Surveyed: 19 87 | P a g e
  88. 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 88 | P a g e 1 0 18

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