Tata Motors - Innovation Strategy

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INNOVATION STRATEGY _________________ OCTOBER 2010 ------------------------------------------------- TABLE OF CONTENTS 1. EXECUTIVE SUMMARY3 2. TATA NANO: LESSONS FROM AN INNOVATOR4 History of Tata Motors4 The Indian Automotive Industry 5 The Origin of the Nano 7 Tata’s Unique Business Model 8 Activities at Tata Motors 11 Effects on India’s Ecology and Economy 12 Risk of Imitation 13 Sustaining Competitive Advantage 13 3. REFERENCES16 4. EXHIBIT 117 1. ------------------------------------------------- EXECUTIVE SUMMARY After years of research and development, Tata Motors stunned the worldwide automotive industry by manufacturing a USD 2.500 car, against expectations of market participants and consumers who argued that a…show more content…
In conjunction with this statistic, the twin factors of low car penetration and rising incomes are likely to trigger increased demand for automobiles in coming years in India (Indian Business News). Table 1. Number of motor vehicles per 1,000 people, by country Country | Motor vehicles per 1,000 | United States | 765 | Australia | 619 | Canada | 563 | Germany | 546 | Japan | 543 | United Kingdom | 426 | India | 12 | China | 10 | Source: UN World Statistics Pocketbook and Statistical Yearbook, 2007 (cited in Farres et al. 2009) The low car penetration and high demand of the Indian new middle class is the focus of different global companies like General Motors, Honda Motor, Mitsubishi Motors, Fiat, Ford and Maruti Udyog (See table 2). Competition is expected to intensify further as Indian automotive manufacturers obtain greater access to debt and equity financing in the international capital markets or gain access to more advanced technology through alliances. Table 2. Major players in Indias’ passenger-vehicle market, 2008 | Passenger vehicles | % of Market Share | Maruti Udyog | 52.2 | Hyundai Motors India Ltd. | 19.2 | Tata Motors | 16.6 | Honda Siel Cars India Ltd. | 4.4 | Ford India Pvt. Ltd. | 1.9 | Source: http://Automobileindia.com (cited in Farres et al. 2009) | 3.3. ------------------------------------------------- The Origin of the Nano Around 70% of India’s population cannot afford to buy cars at the normal price (Kripalani, 2004).

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