Tata ace - Indian Commercial vehicle sector
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Transcript of Tata ace - Indian Commercial vehicle sector
Tata ACE Group 12 –
-Ajay Norman. V (DM18202)
-Ankur Kislaya (DM18206)
-Melissa Mariam (DM18233)
-Saurabh Arora(DM18246)
-Shivam shukla (DM18248)
Overview of the Indian Commercial vehicle sector
Three wheelers in India are popular because of their ability to
maneuver through narrow roads.
Major manufacturers in the 3 wheeler segment are Bajaj, Piaggio,
Force motors and M&M.
3 Wheelers are used in both the Passenger segment and cargo
segment.
LCV has grown at 22% compound annual rate from 2000-2005.
Tata motors with a market share of 51% was the market leader in
LCV segment.
Contn.. 30%-50% of overloading of vehicle takes place.
It reduces acceleration, fuel economy. However per unit cost can be
reduced.
Road conditions are inadequate and under developed in India.
Such conditions prevent the truck to enter into ‘last mile’ vehicle category.
Consumers in India are very cost conscious.
Diesel vehicle was preferred among the consumers because of its low price
& fuel efficiency.
Overview of Tata Motors
Founded by Jamshedji Tata. Tata Indica was the first large scale passenger to replace
the Maruti 800. It is also exporting vehicles to U.K. It acquired Daewoo’s Commercial vehicle business and
acquired 21% stake in Hispano Carrocera, a Spanish bus manufacturer.
It is operated as an independent company and was the largest of the other Tata companies in terms of revenues.
Competition Analysis
In 3 wheelers, Bajaj had 51 % market share, Piaggio had 26% market share and the remaining was shared by the other small players.
In LCV,
Bajaj Piaggio Force Motors M&MHigh Market share
Good payload capacity
Loyal followers in rural areas
Focused on cargo segment
Tata M&M Swaraj Mazda Eicher
Market leader, 51% market share
33% market share
3.5-7 ton trucks
High ground clearance, gradeabiity
Contn..
Idea for the Ace & market Research
Ace was considered as a last mile delivery vehicle. Company had to commit to initial costs for each single part of
the vehicle. Market Research was done to analyze the Indian market. Customers expected the vehicle to be fuel efficient, low
priced, high maneuverability, high safety, durability, additional payload and comfort of four wheeled vehicle.
Customers are not willing to pay more than what a three wheeler costs.
So the estimated fixed price is Rs 2 lakhs.
Market segmentation
Market was segmented based on function and customers.
Customers are segmented based on performance sensitive, balanced perspective, ROI sensitive, and acquisition price constrained.
Customers in the ROI price sensitive category contribute 55% and balanced perspective consumers contribute 25%.
ROI type consumers do not place any value on non monetary purchase considerations. They want a vehicle which gives low cost per mile of transport.
Segmentation Pyramid
10Product Hierarchy
Item –
Tata Ace
Product type – 0.75 ton Payload
Product line – LCV
Product class – Commercial Vehicle
Product family – 4 wheeler
Need family – Freight Transportation
4Ps Product – Tata Ace which is low cost, fuel efficiency, high payload
capacity, and high maneuverable. It adheres to safety regulations.
Place – It is targeted towards consumers in western and southern India. Distribution Channel: Dealership would only be responsible for sales
(1S).
Existing rural mechanics to be trained free of charge to complete simple maintenance procedure.
Mobile workshop was launched to help mechanics in rural areas by providing spare parts and lubricants.
Contn…
• Promotion – Promotion of the vehicle was done in local languages like “சின்ன யானைன” (Chinna Aanai) to resonate with the minds of customers.
• Price – Acquisition cost (Rs.250.000) for consumers is higher compared to competitors offerings. However, this will be compensated by lower operating cost/km/month. It is achieved through lower EMI, and longer intervals between maintenance.
Product Hierarchy – Tata Ace SKU/Item – TATA Ace Product type – 0.75 ton payload Product line – Light commercial vehicle(LCV) Product class – Commercial vehicle Product family – 4 wheeler Need Family – Freight transportation
Product LevelsPotential Product
Augmented Product
Expected Product
Basic Product
Core Benefit
Transportation
4 Wheeler LCV
Reliable and sturdy
High status
An A/C vehicle running on CNG
Perception Map
Value Communication Local Language. Emotional appeal to the customers. Newspapers, Ads and television.
Points of Differentiation
Overloading capability Limiting high strength steel to stress points Semimonocoque body.
Engine selection 2 cylinder diesel engine Part sharing
Safety and comfort M1/N1 class safety norms
Value Delivery
Service outlets at customers’ convenience. (40 kms)
1S dealership model – Only “Sales” Existing employees to address problems. 300 new distribution points – rent /
leased sites to minimize risks Under Suvidham, local mechanics are
trained to provide service. Mobile workshops.
Market launch
Launched in May 2005 Price: ₹2.25L BSII, ₹2.35L BSIII Launched only in all southern states and
Maharashtra.
Response
Response exceeded annual target of 30,000 vehicles in less than a year
Attracted first time buyers (54%). Vehicles were being overloaded 30% above
rated capacity
Challenges & StrategyParameters Challenges /Current
statusStrategy
Line extension ACE Diesel New variants such as ACE gasoline and ACE CNG
Competition Bajaj – Service centerHyundai – Powerful variantsChangan - Low cost alternative
Build dedicated service centers
Market expansion
Southern India & Maharashtra
Wider market in India to capture market share
Exports None Emerging markets (Bangladesh)Emerging markets (China)Developed markets (Italy, U.K.)
Capacity expansion
Pune plant working at 100% capacity.Strong supplier presenceExisting facilities of Tata motors
High Capital expenditureWeakened economic conditionsGovt. road construction plansImprove the process at Pune plant
Thank You