Tata Motors Case Write-up
The Current Situation
In May 2005, Tata Motors launched a revolutionary product, Tata Ace, a four-wheel auto vehicle with a successful sale. The Key Problem
Despite the decent sale of Tata Ace, Tata Motors has to figure out some way to further gain their market share. Alternative Solutions and Reasoning
1. Targeting the three-wheeled cargo vehicle market in India This means that Tata Motors to modify the Tata Ace to suit for the three-wheeled cargo market in India, which will hopefully help selling 67,500-70,000 pieces with a relatively low profit margin in this segment. 2. Targeting the four-wheeled passenger market
The four-wheeled passenger market segment seems to be under-estimated, therefore if Tata Motors can endeavor into this field, it will take a smooth lead position, which helps selling 57,700-60,000 pieces with relatively higher profit margin compared to the three-wheeled cargo vehicle. 3. Targeting the remaining regional Indian four-wheeled cargo market Tata Ace is now sold in only 25% of the India region, and a expand to the whole Indian market will gain 60,000 more pieces sold, with a high profit margin, but low risk, and the product do not need a modification, which is best recommended. The Current Situation
The three-wheel and four-wheel auto vehicles are the major part of the Indian commercial vehicle sector. And Tata Motors is the market leader of the four-wheel segment with a market share of 51% in the year of 2005, after the release of its revolutionary product, the Tata Ace. India is long a less developed country with poor coverage of highway, low per capital GDP, and limited personal budget for vehicles and fuel, etc. all leading to a commercial transportation market need for a vehicle which is easy to maneuver, cheap to operate, and capable for overloading. And Tata Ace, rolled all these requirements into one, sells unexpectedly good after its release. Generally, the Tata Ace is a value...
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