Hbr Case- Tata Ace

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Q1 Sketch the Indian and Global scenario of Light Commercial Vehicle Industry? Ans.:
In the light commercial vehicle industry, India was dominated by three wheelers and four wheeled vehicles with carrying capacity of 0.5 to 1.5 tons. Vehicles like passenger cars and SUVs are also being used a mode of transport to carry goods from one place to another. Rural areas are still dominated by conventional mode of transport like bullock carts, bicycle rikshaws, horse driven carriages and manual pull carts. The majority being the three wheelers segment, India had largest sales in three wheelers for carrying cargo. Lately, four wheeled vehicles were introduced in Indian markets which had a carrying capacity of 7 tons. The four wheeled vehicles were already being used at a global scale. Realising the needs of Indian consumers, Tata came up with its four wheeled vehicle named Tata Ace. Q2 Justify the logic behind launching a product like Tata Ace by Tata Motors? Justify the gap that existed in the market based on the research outcome as explained in the case. Ans.: Tata Motors suffered a huge loss in 2001 due to downturn in commercial vehicle segment and economic recession. After a research the company realized that there was a huge gap between larger (greater than 45 ton) and smaller (sub two-ton) vehicles in its product portfolio. After a strategic review session the idea of a cheap, sturdy and reliable vehicle emerged. The research proved the requirement of such a vehicle. The research revealed after interviewing more than 4000 truck and three wheeler operators that there was a gap between heavy vehicles and light commercial vehicles. Also there were personal and emotional values attached with the decision of using the vehicle. People were growing uncomfortable using three wheeled vehicle and wanted a four wheeled vehicle which would also reflect their status. Also there were safety concerns among the users about the three wheeled vehicles. Tata...
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