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Challenges Faced by Tata Motors: Tata Ace Challenge: Targeting The Bottom of Pyramid

Tata Motors developed the Ace vehicle to fill the need for a safe and cost-effective four-wheeled transport solution for small traders in India. When acquiring Jaguar and Land Rover, Tata Motors agreed not to shift production or sourcing out of the UK to gain approval from the trade union. Tata faced criticism over the potential environmental impacts of the low-cost Nano car increasing pollution and was forced to relocate its Nano plant in West Bengal due to opposition from farmers whose land was forcibly acquired without proper consultation or compensation.

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Challenges Faced by Tata Motors: Tata Ace Challenge: Targeting The Bottom of Pyramid

Tata Motors developed the Ace vehicle to fill the need for a safe and cost-effective four-wheeled transport solution for small traders in India. When acquiring Jaguar and Land Rover, Tata Motors agreed not to shift production or sourcing out of the UK to gain approval from the trade union. Tata faced criticism over the potential environmental impacts of the low-cost Nano car increasing pollution and was forced to relocate its Nano plant in West Bengal due to opposition from farmers whose land was forcibly acquired without proper consultation or compensation.

Uploaded by

Lijo Mathew
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Challenges Faced By Tata Motors

Tata Ace Challenge: Targeting the Bottom of Pyramid


Till 2005 Indian commercial transport vehicles comprised of three-wheelers and trucks . Three wheeler s were unsafe and banned at freeways. Also trucks are costly for small traders. A vehicle that combined strength and utility with optimum loading capacity was required. Tata Motors developed Ace- a sturdy four-wheeler with necessary safety and comfort features, high-ground clearance (a must for Indian roads), a fuel-efficient engine, and high loading capacity. This offered the bottom of pyramid a cost-efficient, high-performance, low-maintenance design fuel-efficient transport solution that served their business needs

Jaguar and Land Rover deal: Engaging the Worker Union


The workers in Ford Motors factories in UK had concerns regarding their job retention in the UK. Tata Motors agreed not to shift production and component sourcing out of the UK after acquisition. UKs trade union, Unite, was given the commitment not to shift production or component sourcing. It meant that Tatas could not leverage its lower-cost capabilities in India. The problem of pension fund deficit of Jaguar and Land Rover had to be solved in association with Ford. One of the major reasons of the successful acquisition was the Unions faith in Tatas. Tata has no prior history of layoffs. Other reason is the trust it developed amongst Britons after Tetely Tea acquisition .

Tata Nano : Environmental Challenge


The Nano car project was criticized against over the issue of environmental and energy costs of personal transport compared with shared transport. Environmentalists were concerned that the launch of such a low-priced car could lead to mass motorization in India with adverse effects on pollution and global warming. Tata Nano conforms to Bharat III emissions standards adopted in India. It has also produced Nano cars conforming much stricter to Euro IV norms. Tata Motors in West Bengal Tata Motors had to pull out of Nano Plant at Sigur in west Bengal , due to the opposition from project affected farmers . The cause of farmers was lead by opposition party Trinamul Congress. Approximately 1000 acres of land was forcibly acquired from the farmers against a paltry compensation. Tata Motors pulled out of the project as it was not consulted in the process of land acquisition.

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