Ratan Tata and his Tata Motors Empire have dominated India for several years.
his empire in the most populous place in the world is facing challenges as international brands such as Volvo, Navistar, and Mercedes are starting to infiltrate. Without a change in their current structure, Tata Motors stands to lose incredible market share and possibly shut down entirely. The latter scenario is very unlikely – but if Enron has taught us anything it’s that even gigantic companies can falter.
A savvy businessman, Tata has foreseen the troubles up ahead and the 5% market share lost in 2012 was a wakeup call. Changes have begun, which is evident by the immense amount of debt borrowed since 2011. Consolidated debt for this company rose to nearly 44% in 2012 to more than Rs 47,000 crore, which has many people questioning what Tata Motors has up their sleeves.
One of their biggest new projects is the Nano, an affordable car for the average family. Problems with the engine and start-up road blocks failed to secure expected results in 2008. Tata is trying to remedy this setback and is continuing with the project. This vehicle is expected to boost national sales and expand globally. Fighting for the light truck market is also a priority, which is being threatened mostly by Daimler. The competition in this arena has been more intense than any expert had anticipated and Tata Motors definitely has a bumpy road ahead.
Plans to roll out nearly 50 new products have been rumored, and with the recent debt spike this is very possible. New models will emphasize fuel efficiency without high costs, a combination that consumers crave especially with rising fuel costs.
By Jessica Tyner
