SWOT analysis of Tata Motors
This is a detailed SWOT analysis of Tata Motors. It aims to examine the strengths and the weaknesses of Tata Motors. It also examines the opportunities the company should explore and the threats it should address with appropriate strategies. Tata Motors is an Indian multinational automobile manufacturing company, headquartered in Mumbai, India. It is a part of the world-renowned, $100 billion worth Tata Group, an Indian conglomerate.
Strengths of Tata Motors
Tata Motors was established in 1945. It has accumulated a lot of industry experience over the years. It has a number of manufacturing and assembly plants in India, Argentina, South Africa, the UK, Indonesia, Austria, Slovakia, and Thailand. Its R&D centres are in India, the UK, Spain, and South Korea. Having the manufacturing plants and R&D centres in different continents help Tata Motors understand both local and international needs and trends and manufacture vehicles accordingly. This approach is also cost-effective as it reduces the transportation costs of the vehicles.
Tata Motors takes pride in its diverse portfolio, which is full of extensive range of cars, sports utility vehicles, trucks, vans, buses, coaches, and defence vehicles (Tata Motors, 2020). It also takes pride in its global network of subsidiaries and associate partners. Some of the notable subsidiaries are Jaguar Land Rover (the UK), Concorde Motors Limited (India), Tata Daewoo (South Korea) and Trilix Srl (Italy). This strong alliance has helped Tata Motors enhance its product portfolio.
Tata Motors has won a number of awards over the years e.g. Best Learning Organization of Asia (2011-12), Business Today’s Best Companies to Work for Award (2017), and T3 Awards for Make in India (2015) to name but a few. Its CSR initiatives on education, employability skills, drinking water, and environmental awareness in India and beyond have also been noteworthy.
As of January 2020, the worth of Tata Motors is $45 billion. The company has commenced a cost-saving programme dubbed as Project Charge to save £2.5 billion (The Economic Times, 2020). This tighter control of expenses should help the company stay on course in the face of the economic slowdown in some markets.
Weaknesses of Tata Motors
Tata Motors’ recent performance has been poor. For instance, it made a consolidated loss of Rs 216.5 crore for the quarter through September 2019. The company also reported a sharp decline in sales of both commercial vehicles and cars in the home market, India (The Economics Time, 2020).
Though Tata Motors is a multinational company, its brand image is not as great as global names such as Toyota, Volkswagen, General Motors, Nissan, and Ford. In fact, it is far behind any of these global brands.
Opportunities for Tata Motors
Tata Motors can grow further in its home market. As the economic development is spreading across the country, a growing number of potential buyers is out there in the rural areas. Tata Motors can easily tap into this potential market segment. Likewise, further growth is also possible in many of its overseas markets.
Electric cars are the way forward where all the automobile giants are concentrating on. Tata Motors has already announced its position in this battle. It unveiled Nexon EV, its first electric car for personal buyers in December 2019 (James, 2019). It is very optimistic about this nascent electric car market.
Threats to Tata Motors
Tata Motors faces a number of competitors in its domestic and overseas markets. Its main competitors are Honda, Toyota, Maruti Suzuki, Hyundai, Volkswagen, Ford, Mahindra, Nissan, Mitsubishi, Ashok Leyland, Volvo, Skoda Auto, and Chevrolet.
There are some other threats that need to be taken into account. For instance, the increasing price of raw materials such as steel and aluminium may badly impact on the cost of production, potentially resulting in lower profit margin.
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Last update: 01 January 2020
James, N. (2019) Tata Motors bullish on electric vehicle market, available at: https://www.thehindubusinessline.com/companies/tata-motors-bullish-on-electric-vehicle-market-says-top-official/article30359453.ece (accessed 26 December 2019)
Tata Motors (2020) About us, available at: https://www.tatamotors.com/about-us/ (accessed 01 January 2020)
The Economic Times (2020) Cost-cuts help Tata Motors reduce loss in Q2, available at: https://economictimes.indiatimes.com/markets/stocks/earnings/cost-cuts-help-tata-motors-reduce-loss-in-q2/articleshow/71770247.cms?from=mdr (accessed 01 January, 2020)
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Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.