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Challenges Facing Tata Motors Essay

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Q 1. What were the key challenges facing Tata Motors in the process of moving to produce passenger cars from successfully producing commercial vehicles?
Ans.: There are various external and internal factors that posed the key challenges to Tata Motors in the process of moving from commercial vehicles to passenger cars.
External Factors
1. Inter industry competitions: Tata motors was trying to enter the entry segment of the Indian automobile sector. The entry segment was well occupied by Maruti 800 and the success of Maruti 800 has encouraged players like Hyundai Motors, Daewoo Motors and Fiat India to enter the segment with the offerings. At the time Tata Motors was trying to venture into the entry segment or the passenger car segment there …show more content…

Manufacturing: Tata Motors were mainly venturing into the Heavy Commercial Vehicle (Trucks), Light Commercial Vehicle (Tata 407, Tata 608 etc.) and the earthmover and excavation equipment before they proposed to enter the entry segment. The equipment requirement was different for producing the passenger cars and the category that Tata was into. That posed the challenge in front of Tata to revamp the production systems. They needed to incorporate machines that can produce at a higher rate, they required an assembly line for assembling the small cars and so on. So Tata Motors needed to make some crucial decisions to face the challenge of production systems. They also faced the dilemma of developing the production facility by themselves or outsource the production to other …show more content…

Tata Motors were not only concentrating on developing a passenger car they were trying to build a people’s car which will become a companion to the common people. So Ratan Tata walked a step further to strike an alliance with the renowned car designer IDEA to fine tune the in-house design developed by the ERC. ERC employees having an extensive exposure and knowledge of Indian roads and climate worked hand in hand with the IDEA personnel to develop a state of the art design suitable for the Indian road. They also used their alliance with IDEA to fine tune their design only which reduced the production cost to some

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