Tata motors - A threat to US auto industry

[rahul_intlad]

Tata motors is drawing the attention of a very unlikely canidate,the US auto industry.
The article clearly states that tata motors is not a threat right now,but it has all the ingredients to become a global player and even become a threat to the US auto industry.

Parts of the article:

What would happen if the US auto industry had to compete against India in its neverending turf war? The long and hard truth is that for now the US market is probably safe as far as competition from India, but Tata Motors is growing in India and throughout Asia and ultimately could make more of a dent in world auto sales. It also sells in Australia, Europe, and the Middle East.

Many of the cars and vehicles just don't look like they would sell in the US, but some would.

The $2 Billion equivalent in sales is small in comparison to an average $50 Billion in quarterly sales out of General Motors (GM-NYSE), $40 Billion out of Ford (F-NYSE), or even $20+ Billion out of Honda (HMC-NYSE). This isn't exactly a threat to the US auto industry, not yet anyway. But look out a decade when the rest of the emerging markets are growing and the US auto industry is potentially still facing many of the same issues as today. The fact that Tata Motors is part of the larger group of companies, the Tata Group, makes this even more probable since the rest of the group is in steel, chemicals, IT, hotels, and financial services.

Source:
24/7 Wall St.: Tata Motors: A Longer-Term Threat to US Autos?

[himanshugoswami]

dunno whether this will turn out true or not, but makes one feel proud of Tata Motors, nonetheless!

[zenx]

Consider their recent acquisitions in Korea, Spain and South Africa. Consider the expanding product portfolio, and rapid engine development. And their involvement in racing - both F1 and the tata racing work. Consider their boldness in participating in the best shows there are - call it foolishness if you will but it shows a strong desire to play and win on a larger stage.

Yes there's a lot of ground to cover, but the strides are big. If anyone in India can, Tata Motors is the one. They've learn a lot about packaging. They've learnt about branding. They need to learn tons about ***. The fit n finish etc are related to costs, vendors etc which again needs to be made more consistent. They've already tasted success in SA, India.

Its a very timely article. One that the GMs of the world should not ignore. Very rare auto companies are making the kind of margins TAMO manages, anyway

[doctorkats]

you know i seriously thought this thread was a joke........
my apologies.

[dadu]

It will still be few years (10-20) before they can compete with these majors and with global aquisitions they will get to learn all about quality and consumer's taste and faster than the existing pace.

[AshOnTheRocks]

Originally Posted by doctorkats

you know i seriously thought this thread was a joke........
my apologies.

Yeah, thats what even I thought..almost fell from my chair

[swathyd]

Ultimately a global auto player from india.

[MaserQ]

Remember, even Toyota took a few decades and a couple of generations of their cars to get their act together. Tata are still a comparitively new car maker. Give them time. You will see an american drive a Tata in downtown New York.

[risga]

I guess this is evolution. The Koreans learnt from the Japanese and look how Hyundai and Daewoo (before its collapse) made rapid strides. Now, its the turn of companies from India - Tata Motors and Bajaj (on 2 wheelers). Ofcourse, a lot of ground to be covered.

If you recall, in the 80s, we had Nissan, Toyota etc. launch LCVs. Tata developed the 407 and trounced the Japanese manufacturers straight. This started with trucks, extended into cars, all due to vision to spend money on R&D. The latest innovation has been the ACE. Its an amazing product concept.

For Tata, it makes sence to diversify into other markets to reduce volatility in their earnings. Also, product development expenses can be reduced if they are spread over larger markets.

[Zappo]

As a feel good factor it is a nice read. Substance-wise it is all bull. The GMs and Fords of this world see such dopey articles and research work by the dozens everyday. They do not even scratch their ears when they read these. Neither will you if you were in their position.

Just consider this. $40 billion quarterly sales vis-a-vis $2 billion in annual sales. What will you do? You would rather worry about the cow jumping over the moon. In a dynamic world order anything can happen but that's only when you do something that dynamic. Tomorrow if Tatas go ahead and take over an ailing chrystler or make an audacious bid for some other european marquee, maybe yes. The motoring world will take a serious note of it. Otherwise it will be eons before Tatas reach anywhere near that 40billion a quarter figure...

[theMAG]

Those suited gentlemen are nervous, what ?! Nice.

[iraghava]

Originally Posted by MaserQ

Remember, even Toyota took a few decades and a couple of generations of their cars to get their act together.

Actually Toyota started producing cars in 1936 and became a force to reckon with in the late 70's/early 80's. So effectively it took them over 4 decades to come upto the level of the established players. Similarly Hyundai/Kia etc. also started production properly in the '70's & are now in the process of becoming major players internationally after 3 decades or so.

Hence, I would say that article is nothing much but hot air for the biggies like Toyota, GM, Ford etc. Tata needs atleast another 2 decades or so to have internationally competitive products going at the current rate of progress.

[v1p3r]

In 20 years, maybe. But Tata Motors is largely the work of one man, Ratan Tata. He needs to be around for that long.

[rr_zen]

Originally Posted by doctorkats

you know i seriously thought this thread was a joke........
my apologies.

Me too. No offense but I am afraid but I have little choice but to take this with a pinch of salt.

[wizardofid]

Originally Posted by v1p3r

In 20 years, maybe. But Tata Motors is largely the work of one man, Ratan Tata. He needs to be around for that long.

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