The Indian Automobile industry
The automotive sector is one of the core industries of the Indian economy, Continuous economic liberalization over the years by the government of India has resulted in making India as one of the prime business destination for many global automotive players. The automotive sector in India is growing at around 18 per cent per annum. The cumulative annual growth rate of production of the automotive industry from the year 2000-2001 to 2005-2006 was 17 per cent. The cumulative annual growth rate of exports during the period 2000-01 to 2005-06 was 32.92 per cent. The production of the automotive industry is expected to achieve a growth rate of over 20 per cent in 2006-07 and about 15 per cent in 2007-08. The export during the same period is expected to grow over 20 per cent.
FDI in India
India is on the peak of the Foreign Direct Investment wave. FDI flows into India trebled from $6 billion in 2004-05 to $19 billion in 2006-07 and are to quadruple to $25 billion in 2007-08. By AT Kearney's FDI Confidence Index 2006, India is the second most attractive FDI destination after China, pushing the US to the third position.
Tata motors is the flag bearer of the Indian manufacturing industry , being the first Indian manufacturing company to have its own indigenously manufactured passenger car and being the first to make forays into the global market . It is a showcase for the whole industry with world class process management techniques being incorporated . But inspite of all this Tata motors have not been able to make a dent in the global market , neither in the passenger car market and nor in the heavy commercial vehicles market. Although it holds the 2nd position in the passenger car market in India, its increasingly feeling the heat from global competitors like Hyundai , Suzuki etc.in the domestic market too.
Strategies followed by Tata Motors
Tata motors since inception has been growing organically and inorganically. They first collaborate with collaborated with Germany’s Daimler Benz in 1954 for 15 years to manufacture commercial vehicles and they opened there first R & D centre in the year in Jamshedpur in 1954 so they can innovate and produce the products that are cheap and suitable for the Indian roads, they also first one to start exports to the neighboring countries they then move to the heavy commercial vehicle in the year 1983 and light commercial vehicles in the 90’s.They have various tie-ups with the different companies in its different stages of the life like start from Daimler to the latest acquisition of the Land rover and Jaguar. All the deals gave the tata motors edge with technology or the market access to the Tata motors . It was the experience gain by the Daimler in the 1950’s that they give the Tata motors the contract to manufacture its high end cars for the Indian subcontinents that gave the great boost for the tata motors as a revenue generation. In 2004, Tata signed an investment agreement with Daewoo Commercial Vehicle Co. Ltd. and later acquired the company which opens the door of the Korean market. The new Tata Daewoo Company launched a heavy duty truck ‘Novus’ in Korean markets. It was also in 2004, that Tata Motors entered the US stock Markets. The also India’s first mini-truck, the Tata Ace was launched in 2005.
Host country linkages
The Tata motors being the true Indian company has been expanding its manufacturing and the R&D division in the country itself they are having manufacturing units in the different part of country and they are making the best of the cheap labor and the network they are having in the country so they can produce the product at the least possible cost and export the products from India itself it also. Tata motor being the leading automobile industry in India bagged the Golden Peacock Award for the year 2004 for its valuable contribution towards economic, community developmeny and Corporate Social...