The wave of liberalization, privatization and globalization, which started sweeping India since the early 1990s, gave Tata Motors (established in 1945) a new direction in the path of globalization. The Tata Motors firstly, realized that if it wants to grow then it cannot afford to keep its business connected solely to the fortunes of one country. Secondly, with the dismantling of import restrictions in the near future or it the rupee begins to gain ground then India may not continue to have the low-cost manufacturing advantage which it has enjoyed so far. In that scenario, a transnational presence across countries that could offer greater cost advantages for manufacturing, will pay off. Thirdly, the automotive business is highly competitive and the competitiveness depends on economies of scale, quality and efficiency which could directly improve if the organization enters the foreign markets.
The question that came in the minds of the senior management at Tata Motors was— “Should we remain an exporter of vehicles, which we have been doing since 1961 or should we venture into the international automobile market as a company that can match the best in the business?” The answer was to widen its foreign campaign to more than just exports. As a result, recognizing the need to integrate its international strategy with its domestic one, the company split its previously independent international business arm into the two business units—the Passenger Car Business Unit (PCBU) and the Commercial Vehicle Business Unit (CVBU).
The company’s passenger car range comprises the hatchback Indica, the Indigo Sedan and the Marina, its station wagon variant, in petrol and diesel versions. The Tata Sumo, its rural variant, the Spacio and the Tata Safari (the country’s first sports utility vehicle) are the company’s multi-utility offerings.
The company’s Commercial Vehicle Business Unit (CVBU) has over 130 models of light, medium and heavy...