SWOT Analysis of Tata Motors

Introduction 

Swot analysis of Tata Motors. Tata Motors Limited is an automobile manufacturing India manufacturing company. It’s a subsidiary company of Tata Group. JRD Tata was the founder of the company, and he laid the foundation of the company is in 1945. The headquarter of the company is in Mumbai, Maharashtra, India.

Tata Motors used to be TELCO (Tata Engineering and Locomotive Company. The automobile company has manufacturing units all over the world. The company has employed more than 78,906 employees to manage its various operations worldwide.

Tata Motor’s main products and services are SUVS, Automobiles, Pickup Trucks, Luxury Vehicles, Automotive Parts, Vehicle Services, Automotive Finance, Vehicle Leasing, and Commercial Vehicles.

According to an estimate, the annual revenue of Tata Motors in 2020 was 37 billion dollars (264,041 crores). Out of which, the net income of the automotive company was -1.5 billion dollars (-10,975 crores).

However, the company’s top competitors in the automobile industry are Honda, Ford, Toyota, Volkswagen, Hyundai, BMW, Nissan, Tesla, and Suzuki.

Today, we’ll discuss the swot analysis of Tata Motors. It’s going to analyze the internal and external factors impacting the world’s leading automotive company. Here’s the swot analysis of Tata Motors;

Strengths of Tata Motors

Recognized Brand

Tata Motors is a well-recognized multinational automotive brand. In fact, the company sells its vehicles under various brand names Tata Hitachi, Tata Marcopolo, Tata Daewoo, Jaguar Land Rover, and Tata Hispano. Such acquisitions haven’t not only expanded the company’s market but have also amplified the brand value and brand image.

Strong Parent Brand

One of the main reasons behind the success of Tata Motors is the presence of strong parent brand Tata Group. The parent brand’s annual revenue in 2020 was 106 billion dollars, and approximately over 750,000 people are working for the company. Such a strong parent brand provides great support in case of expansion and launching new projects.

Product Portfolio

Tata Motors has a very large and diverse product portfolio, and it’s to targets the needs of various types of customers. For instance, it ranges from Trucks, Busses, Luxury Vehicles, Spare Parts, SUVs, and Mini Vans to Commercial vehicles.

R & D

According to an estimate, Tata Automotive spends more than 23% of its total budget on research and development of automotive engineering. It shows the brand’s dedication to growth and productivity. However, the company has established research centers in South Korea, IndiaSpain, and the UK.

International Presence

Tata Motors is operating its business in more than 125 countries across the globe. The brand has manufacturing units in countries like Thailand, the UK, South Africa, Argentina, and India.

Market Penetration

Tata Motors has penetrated the customer market through the services like rental cars and taxi cabs. It has allowed the company to diversify and reach the customers at the lowest level.

Distribution System

Tata Motors has a very large distribution network. The manufacturing units in various countries are proof of the company’s active supply chain system. They help the automotive brand to easily deliver vehicles worldwide.

Market Value

According to an estimate by Forbes, the market capitalization of Tata Motors is 4.5 billion dollars in 2021. The brand ranks at the 1037th position of the list of Global 2000 top companies in 2020.

Weaknesses of Tata Motors 

Controversies

Tata Motor launched the construction work of the Tata Nano factory in Singur, West Bengal, India back in 2008. West Bengal government jumped in and controlled the land under the Land Acquisition Act 1894, where the company was going to build the factory. It was because the West Bengal State wanted the company to establish a company within the state.

Limited International Presence

It’s no doubt Tata Motors is operating its business in over 125 countries worldwide. But the company couldn’t make a strong impact like the competitive brands like Ford, Toyota, Honda, and Volkswagen.

Opportunities available to Tata Motors 

Improving the Service & Supply Chain

Tata Motors should consider expanding its distribution network and supply chain system in its existing market. It would help the automobile company to further enlarge its market.

Merger & Acquisition

Tata Motors has already the world’s famous brands like Daewoo, Jaguar, Hitachi, Marcopolo, and launched a joint venture with Fiat Chrysler. The automotive company should keep following the same pattern of acquiring, merging, and joint venturing with other brands. It would help the company to amplify its sales and profitability.

Digital Marketing

Many world’s top brands and companies and are using social media platforms to connect with their target audience. Tata Motors should also increase the user engagements with its customers market. Their feedback would help the company to improve its product and approach new customers.

Market Expansion

Tata Motors should further expand its market by entering into new regions like South America, Europe, and East Asian countries. Market expansion is the only solution to compete with the competitors.

Autonomous Vehicle

Tata Motors has already launched an electric vehicle and the company is working on the self-driving technology Tata Elxsi. The automotive brand has a very long way ahead in electric and autonomous vehicle technology because there’s a lot of work still to be done.

Threats Tata Motors has to face 

Innovation

The competitive brand has got a lot of resources and easy access to skilled professionals. They’re competitive with innovative technology and better engineering in the automobile industry. The race of innovative technology is good for industrial growth, but it also poses a great threat to the company’s existence.

Pandemic

The pandemic of covid-19 has reduced the purchasing power of people and a lot of people lost their jobs during the pandemic month. The uncertain economic environment has made people reduce their spending only to the basic necessities. Cars and vehicles don’t fall under the category of basic needs.

Competitors

Honda, Toyota, Hyundai, Ford, Tesla, Volkswagen, BMW, and others are the main competitors of Tata Motors. Their market share growth and customers’ market expansion mean lower market share for the automotive company.

Price Competition

The competitive brands are also competing with Tata Motors on price by offering the latest advanced features and design at a lower price. It impacts the sale of the company.

Conclusion: Tata Motors Swot Analysis 

After an in-depth study of the swot analysis of Tata Motors, we have concluded that Tata Motors is indeed the world’s leading automobile manufacturing company. The competitors, tech race, controversies, price war, and uncertain economic environment are some of the main challenges. Tata Motors should utilize its resources to expand its market and address the tech and innovation challenges.