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Old 26th May 2007, 07:31   #16
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Default Cost factor!!

what about sales...does TATA sell more vehicles than any of the US ones do
if we are just comparing the annual or quarterly turnovers

a Indica base model which costs around 3.25L will just cost around $7386 in the US.
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Old 26th May 2007, 07:51   #17
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Quote:
Originally Posted by always_dui View Post
what about sales...does TATA sell more vehicles than any of the US ones do
if we are just comparing the annual or quarterly turnovers

a Indica base model which costs around 3.25L will just cost around $7386 in the US.
Tata is nowhere in the sales comparison. For eg. GM alone sold over 9 miliion vehicles last year, whereas our total market is for 1.5 million passenger vehicles!!

Plus, Tata costs are low because they manufacture their products in India & secondly, their current quality would never be accepted in the US market. It's too downmarket for them. So no point of doing a Dollar to Rupee conversion. To sell their products in the US market they would need new designs, engines, drivetrains, interiors, refinement & reliability levels etc. In short everything would have to be redone keeping global emission & safety standards in mind.

Also another factor is that if TATA introduces under-developed vehicles in the States or any developed markets for that matter and expect to improve them by customer feedback like they currently do in our market they'll be in trouble with consumers filing law suits against them claiming poor quality & known lapse on part of the company in releasing under developed priducts in the market. This will be a huge problem both monetarily & image wise.

Developing & Selling a car in a developed market is easier said than done & I'm sure Tata knows these pitfalls well after it's ill-fated Rover experience.
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Old 26th May 2007, 11:05   #18
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May be the phobia of Indian IT industry is causing the US analysts to take a look at other Indian industries as well. Being an India it feels good to read the article but that's where it ends. There is no substance in this one. It will be another decade or two before Tata products become refined enough to compete in US market. GM and Ford have their hands full with Toyota and other Japanese companies and Tata wouldn't be worth a minute of their time as of now.

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Originally Posted by wizardofid View Post
Very true. I'd think he is also the reason why they mess up. It would appear that there isnt anyone else in the Co who can take a market-defining decision. And Good Ole Mr.Tata is obviously not available all the time for TaMo. So the designers and engineers just wait till a decision is made, realise that they are too close to the release date, and cut corners till production. Everything that they do seems too shortterm
Do you know this from personal experience or is this just a conjecture ? It seems highly improbable. Whatever said and done, Ratan Tata is very smart businessman and businesses are not run the way you have mentioned above.
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Old 26th May 2007, 11:25   #19
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Funny article considering that TATA doesn't have any plans to enter US market in the near future while Mahindra is already an established player in Tractor marktet and gunning for the SUV market now.
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Old 26th May 2007, 11:39   #20
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TaMo improved the Indica and Safari not because Mr R personally suggested improvements, but becuase the hired a couple of really smart guys - one of them ex GM. Ratan Tata thinks really long term, and so does the current team at Bombay House. How Corus was bought as a culmination of a long plan which included TCS going partly public is a fascinating study. Daewoo trucks, Nissan's SA plant and Hispano have already helped a medium term leapfrog possible. The 2Bill size is small, but the battle will be in the smaller, growing markets. The entire sales of the US market will not really matter wrt this, and in fact given profitability and margins, might actually turn out to be a liability for the big boys. Wait, and watch...
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Old 26th May 2007, 11:58   #21
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Quote:
what about sales...does TATA sell more vehicles than any of the US ones do
That is precisely what the article is trying to say,Tata motors is beginning to show its presence in other markets than India as well.It may very well expand to other parts and because it is backed by tata house it could very well make a very big acquisition which may very well leapfrog it amongst the big boys.

In south africa it has already started creating ripples and is competing well and I think is the leader in some segment[think it is light trucks] where toyota,nissan are also invoved and is outselling all of them.
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Old 26th May 2007, 12:51   #22
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Tata Motors nett worth of $5.5 bn is not currently sufficient for larger foreign automakers to worry abt right now. While Tata Steel did pull of a David on Corus, foreign automakers need have nothing to worry abt till Tata Motors nett crosses $25 bn
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Old 26th May 2007, 13:00   #23
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stock sale of TCS will fund acquisitions not tatamotors market cap just like in corus case. tata's hold 81.65% in TCS as on march 2007.
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Old 26th May 2007, 14:35   #24
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Originally Posted by iraghava View Post
In short everything would have to be redone keeping global emission & safety standards in mind.
I agree on all counts but to say that Indian manufacturers need to meet global emission is a little condescending. I think all current manufacturers meet very high emission standards mandated by law. If my memory serves me right, Harley Davidson could not enter India as their bikes did not meet the emission standards here, that's where the big Alphonso for Harley trade set in this year.
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Old 26th May 2007, 14:43   #25
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While at this point TAMO is not anywhere near to being a blip on the US motorspace radars IMO the pointers look promising from a long term perspective. Tatas have started getting into offshore markets like SA. They pickup valuable experience from these markets. Most of the auto biggies are present in these markets, so they are effectively competing against them.

Also look at the steps like TAMO getting into F1 sponsorship. TCS has started working in F1 space as well (for Ferrari). All these are very well thought out steps. F1 space has been the breeding ground for many a cutting edge technology innovations. Tatas are trying to get ready for the big fight one day. That day may still be far off but the preparations have definitely begun. And analysts are definitely picking up these early warning signals.
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Old 26th May 2007, 17:36   #26
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Originally Posted by Zappo View Post
While at this point TAMO is not anywhere near to being a blip on the US motorspace radars IMO the pointers look promising from a long term perspective. Tatas have started getting into offshore markets like SA. They pickup valuable experience from these markets. Most of the auto biggies are present in these markets, so they are effectively competing against them.
Good points Zappo. This experience will definitely come in handy. They are doing all the right things. I guess, it just boils down to the time that they need to put in, to mature in terms of quality and refinement.
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Old 27th May 2007, 11:01   #27
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Until and unless TATA get rid of the 'bania' mentality, and actually invest and set up a proper R&D centre, preferably abroad, where they develop the core components themselves for their range of vehicles, they are a threat to no one but themselves.

Forget Toyota, Honda etc. You would imagine that by now someone at TATA would have studied how a company like Hyundai became what it is, today. Sadly, nothing TATA has *ever* done seems to suggest that they have a clue.

TATA's issues are not of capital or resources. It is the rotten bania mentality.

PS: It is laughable to look at histories of Toyota etc and compare them to TATA's sheer ineptitude. Completely different eras in terms of how much not only the automobile has developed, but the tools and resources to manufacture the said automobile have developed too.

While the modern automobile has far more components with finer tolerances and better performance, the support from suppliers and the availability of a specialized pool of human resources (worldwide!) is not something you had in those times. The biggest issue is of hiring competent engineering workforce and managing them as you first develop a product and then refine over the following generations.

All 'respected' automobile manufacturers know how to do this. TATA don't.
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Old 27th May 2007, 11:50   #28
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Originally Posted by SuperSyn View Post
Until and unless TATA get rid of the 'bania' mentality, and actually invest and set up a proper R&D centre, preferably abroad, where they develop the core components themselves for their range of vehicles, they are a threat to no one but themselves.

Forget Toyota, Honda etc. You would imagine that by now someone at TATA would have studied how a company like Hyundai became what it is, today. Sadly, nothing TATA has *ever* done seems to suggest that they have a clue.

TATA's issues are not of capital or resources. It is the rotten bania mentality.
I have no idea what bania mentality you're talking about. The Tatas are Parsis, to begin with, unless I'm very much mistaken. And then again, if I'm right, the Indica has sold more units than the Santro has overall.

If Tata were themselves so bad at R&D, they wouldn't be making their own engines. It is a well known fact that most of the early generation Korean engines were Japanese ripoffs. You don't see that with the present bunch of Tata engines.

Yes, their interior quality is not up to the mark. It takes time for someone who has been making trucks for 40 years to come to grips with the passenger car market, and that's the sad fact of the matter. But I can assure you their engine and drivetrain quality is far better than their closest competitor, Mahindra. I have seen Scorpios blow their engines and leak oil from their diffs, and cannot say the same about any Tata products.
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Old 27th May 2007, 14:00   #29
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Maybe SuperSyn buddy you can actually give some idea to the people what is this bania mentality that you are talking about.

Ok, so the Toyota is the 'god' of the auto world and Tatas are scraping the bottom. So that is because of Tata's 'bania mentality' you say? How so?
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Old 27th May 2007, 15:25   #30
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To many this may seem like a joke, and that is because we as a people are not used to assessing Long Term Threats and Vulnerabilities. We're too caught up in the present, and if we happen to do passably well in something we tend to believe that we're the best and thats all there is to be done. You can see this in every facet of our life.

The Western people, organizations and industries, however, are a lot more proactive in their thinking. They do serious research on what could happen 10, 20, 50 or even a 100 years down the line - they dont rest on their laurels.

So if the Wall Street Journal says that Tata Motors is a long-term threat, take it seriously. VERY Seriously.



Quote:
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Until and unless TATA get rid of the 'bania' mentality, and actually invest and set up a proper R&D centre, preferably abroad, where they develop the core components themselves for their range of vehicles, they are a threat to no one but themselves.
Errr...whats this Bania mentality you're talking about?

Plus, you're probably not aware that Tata Motors is the only manufacturer to have a proper R&D and Test centre? Ever heard of the ERC?


The reason Tata Motors is a threat is not just because they're an automaker. Its because its an automaker backed by an industrial house - so the resources they have access to are not merely based on their performance in the auto industry. They could be a 2 billion player in the auto industry, but that does not mean that they are not capable of buying a 25 billion player and catapulting themselves to the top few.

Let us not forget that this group contains one of the largest steelmakers in the world, the largest producer and retailer of coffee in the world, the largest distributor of tea in the world, and like many of you know a very large software business, and they control one of the (if not THE) largest submarine telecommunications network in the world that carries 50% of the world's telecom traffic.

Tea to Telecom, Salt to Software, Coffee to Cars. The game is much bigger than the battered Indicab or Sumo that drives you to your IT Sweatshop.

They realize this - the question is, do we?

Last edited by Steeroid : 27th May 2007 at 15:26.
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