Tata Ace case Analysis

1. Group – 2
FT 12113 Anuja
FT 12102 Abhay
FT 12189 Pramod
FT 12127 Harendra
FT 12168 Tushar
FT 12104 Abhilash

2.  In 2001, Tata motors posted loss of Rs. 5
billion
 The growth of better highway systems and
secondary road networks
 The construction of an all-weather tertiary
road network connecting rural towns
 Absence of larger and smaller commercial
vehicle

4.  Scaled down version of TATA 407
 Being 4 wheeler; gives higher-status
 Safer than 3-wheelers and comfortable
 Capacity of750kgs to 1500kgs
 Cost of Rs. 6.70 to transport 1 ton a distance of 1
km
 3-wheelers were not allowed on highways.
Additional advantage of being 4-wheeler
 Easily travel in rural areas
 Innovative 2-cylinder diesel engine which can give
speed upto 100kms/hr

5. Core benefit product -Light
commercial vehicle
Generic Level - 4-wheeler
Expected Level – 2
lakhs, safer, powerful, convenience
Augmented Level – High Status, 30%
extra overload
Potential level – run on LPG, CNG,
A.C. cabin

6.  40% of Ace parts were shared in other Tata
motors; bringing economies of scale
 Price was targeted at 2 lakhs – whereas price
of 3-wheelers range from 1 to 2 lakhs
 Financing through its own financing arm –
5yrs comparison to 3yrs for 3-wheelers.
Thus, monthly payments for Ace were lower
than 3-wheelers

7.  Produced in existing plant in Pune
 Started with 5 places from western and
southern India – as high demand of 3-
wheelers (estimated 70% demand)
 1S dealership (rented)– 400sq feet building –
8 to 20 in a region

8.  Targeted
◦ People planning to buy 3-wheelers
◦ Light commercial vehicle purchasers
◦ First time commercial vehicle purchasers
◦ Performance sensitive, balanced perspective, ROI
sensitive, acquisition price constrained
 “Feeling good about your job”
 “India’s first mini-truck”
 “Small is Big”
 For south-India – “Chinna Annai”