Tata Motors acquired Daewoo Commercial Vehicles of Korea in 2004. The acquisition gave Tata Motors access to Daewoo's advanced technology and products for heavy commercial vehicles. It also allowed Tata Motors to enter new international markets. Tata Motors worked hard to integrate Daewoo and address employees' concerns by communicating Tata's philosophy, respecting Korean culture, and keeping Daewoo executives in place. The acquisition has been successful, with Daewoo launching new products, doubling exports, and increasing market share in Korea and India.

1. Tata Motors acquisition of
Daewoo Commercial Vehicles, Korea
Feb – March 2004
Dhiraj Gaur
Manoj Agrawal
Manu Agrawal

2. “This year we will also be focusing on expanding our business internationally.
This will demand that our products and services are globally competitive
and that our enterprises operate to international standards in terms of
quality and customer service. We will need to be extremely aggressive in
the marketplace and much more proactive than we have been in the past in
order to be leaders in our fields of business. We need a change of mindsets
that break with past tradition in welcoming rather than resisting change.“
Mr. Ratan Tata, Chairman, Tata Group, January 2004
"We were keen on the Daewoo acquisition, as it would give us an opportunity
to get into a fairly advanced market. There were also tremendous synergies
between the two companies.“
Ravi Kant, Managing Director, Tata Motors

3. Daewoo Commercial Vehicles
Company
• Established by Daewoo Group in 1982 and built into the
second largest automobile and truck manufacturer in Korea
• Daewoo Group’s bankruptcy lead to the bankruptcy of
Daewoo Motors in 2000
• Car business of Daewoo Motors sold to GM in Nov 2002
• Daewoo Commercial Vehicles Company (DWCV) had an
installed capacity of 20,000 vehicles from a state-of-the-art
plant built in 1995
• Produced more than 90 truck models in the heavy
commercial vehicle range (210 –400 hp engine)
• DWCV had the second largest market share in heavy trucks
in Korea in 2003

4. Strategic Fit for Acquisition
• Opportunity to overcome cyclicality of Indian
CV market
• Enhance product portfolio through catering to
increasing demand for heavy vehicles
• Managing business in developed markets
• Access to technology and complementary
product range
• Lead a change in the domestic

5. The Challenge
• Lack of Management Support
 A Daewoo middle-level manager frankly told that he didn't
think an Indian company could help them with
technological inputs or financial resources — two things
they needed badly and which they believed, only an
American or European company could supply.
• Within 48 hours, communication material pertaining to
the Tata Group and Tata Motors was made available in
Korean and shown to the Daewoo Commercial Vehicle
employees and Daewoo management which explained
the Tata Group philosophy of trusteeship, as opposed
to ownership

6. The TATA Way – Employee Integration
• Beyond the bid price -Winning acceptance of DWCV employees
 Structured program to educate DWCV about India, Tata Group and
Tata Motors
 Communication (in Korean) to management, unions and employees
emphasizing Tata Motors capabilities and Tata Group’s reputation for
good corporate governance
 Respecting strong work ethics of Koreans through significant efforts
during the Due diligence process
 Building the psyche “TATA is more strategic partner than a venture
capitalist”
• Managing the Korean culture
 Respecting hierarchy and values
 Managing Unions

7. The TATA Way – Employee Integration
• Keep executives in place
 Instead of dispatching legions of Indians to the new company,
Tata set up a joint management board, which decides on issues
ranging from growth targets to the development of new talent.
Working groups find common goals, and managers of the
acquired company are asked to help smooth out any cultural
differences
• Key TATA employees underwent 6 month Korean
language course
• The Korean employees are now studied English,
following company president Mr Chae's announcement
that English would be the medium of communication in
TDCV after three years

8. The TATA Way - Process
Integration
• Brand Equity and Business Promotion (BEBP )Compliance Plan
• Balance Scorecard
"The Tata Group introduced BSC in TDCV. This year, we will do
the team-level BSC sheet. Next year, we will do the individual-
level BSC sheet. We have already done the company-level BSC
sheet”
Seong-Kook Kim, business excellence champion,
• TATA Business Excellence Model
• SAP Integration
• CAD and PLM Integration

9. The TATA Effect
"I was wrong in thinking that an American or European company
would have been better. With Tata Motors, we have a just
partnership. We have retained our voice; the company has grown
and employees have benefited."
Ki-Hee Won, MD, Administration Division
"Initially our people were afraid of joining the Tata Group.
Now, thanks to their international business, our export
volumes have increased. Our members feel that if we had
not joined the Tatas, our future would have been unclear.
This is the first time since 2002 , that we have made a
profit.“
Sang-Joon Lee, Deputy GM, Business Planning Team

10. Measuring success
• TDCV launched a new range of medium trucks in
2006 –first major product launch since 2000
• Doubling of exports in 2004 and 2005
accounting for 66% of heavy truck exports from
South Korea
• Launch of “Novus” in Indian market
• Increased market share in HCVs from 25% to
28% and achieved market share of 13.5% in
MCVs

11. Thank You