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Subject:  Tata Motors Date:  2/18/2006  10:12 AM
Author:  pencils2 Number:  7 of 23

Tata Motors Ltd. (TTM)

Market Cap: 6.06B

Recent Share Price: $17.82

The Business

Tata Motors is India's largest automobile company. Tata leads commercial sales in all segments, and is the second largest in the compact, midsize car and utility vehicle segments. 1400 engineers and scientists devolop Tata's leading products. Tata has had increasing vehicle sales year-over-year, they are an experienced company, and have little institutional ownership with great insider ownership. Tata Motors takes part in the design, manufacturing, assembly, and sales of their vehicles. India has increasing needs and wants for cars as their economy grows. Only eight in 1000 Indians own a car, that shows major growth opportunity! But Tata has also starting to expand to East Asia, Western Europe and parts of Africa. Tata Motors bought South-Korean truck maker in Daewoo Commercial Vehicle in March 2004, and last year acquired 21% stake of Spanish bus and coach maker Hispano Carrocera.

In 1945 Tata Locomotive and Engineering Company Limited was the name of the newly incorporated Indian company, in 1960 it was changed to Tata Engineering and Locomotive Company Limited, and in 2003 its name was changed to Tata Motors Limited.
Tata Motors is now headquartered in Mumbai, India.

Subsidiaries (Obtained from Tata Motors website):

Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations.

The Risks

Tata Motors and Fiat have come together recently. This makes it so Fiat can sell their cars through Tata's dealers. Fiats sales have been no where near the amount Tata has sold (Tata sold 10,000 more vehicles this December), so they are not becoming big in the Indian market.

At the moment Toyota finds it very hard to make a small car in India and make a profit, quoting the Vice Chairman "It would be very challenging to make a small car in India and keep it profitable now. There are already three big players -- Maruti, Hyundai and Tata Motors -- we will have to compete with."

Maruti sold 50,109 vehicles January, so they are a big player. Tata is in a great position though. Tata has other markets, which is the way they can beat off Maruti. Tata is expanding to other areas outside of India, they are the leader in commercial vehicles, they do trucks of sorts, and all their segments are growing! What I'm saying is Maruti is only a big player in small cars, Tata is big in the commercial world also, so they have different markets to grow in.

Hyundai Motor India sold 8,313 vehicles this January, so I don't see them as a huge threat right now. Tata Motors has a big lead, they are experienced in the Indian market, I just don't see them failing.

GM is in India, but far behind Tata. GM sold 30,837 cars in India in 2005, which was 18% higher than the previous year, but Tata has been growing at a faster rate and they sell much more vehicles every year, so I see GM as a small player right now. GM