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Tata Case Paper

Rural Animals Ana to rely on these roads to transport their agricultural output to urban areas. Farming was the dominant occupation in India, and it was conducted in a highly fragmented manner with each farmer independently owning and operating a small plot. As a result, most farmers were neither well capitalized nor did they require a large commercial vehicle to transport their harvest. Farmers would either pool their crops to generate a full truckload and use a rented truck, or use three wheelers or bullock carts.

Using the latter often resulted in spoilage and wasted time. More importantly, a poor transportation network hurt the cash-conversion cycle and hindered the attainment off higher standard of living. Lower levels of prosperity also resulted in rural customers using smaller quantities of consumer packaged goods (Cups) such as toothpaste, soap, and soft drinks. As a result, rural retail outlets required deliveries of smaller lots of Cups, and distributors serving these customers faced the same transportation challenges as rural farmers.

India was a net importer of oil, and in 2006, gasoline at the retail level cost between $4 and $5 per gallon. High fuel prices combined with low incomes made Indian consumers very cost conscious in their transportation decisions. The tax on gasoline was higher than on sell, and the government subsidized kerosene and LIP, the two main cooking fuels used in Indian households. The price of diesel at the retail level was approximately 70% of the price of gasoline on a per gallon basis. In addition, diesel engines were more efficient (able to travel more miles per gallon of fuel).

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While diesel-powered vehicles were historically less environmentally friendly and provided a poorer- quality ride, many new technologies had bridged this gap. As a result, diesel was the preferred fuel for most goods-transportation applications in India. Within major cities, traffic and pollution were major problems. In response, the 1 1 largest cities in India implemented Brat Stage Ill (equivalent to Euro Ill) emissions standards for four-wheeled vehicles. 13 Smaller cities adopted the older Brat Stage II (equivalent to Euro II) emission standards.

Also, to help ease congestion in Iambi and Delhi, large-tonnage trucks (greater than four tons) were not allowed on major streets during the day and would typically stop at city boundaries, where 12 http://undisturbed. Nice. In/assess-06/chapattis/chap.’s. PDF, accessed May 2006. 13 Euro Ill and Euro II emissions standards applied to all four-wheeled vehicles and aped the levels of carbon monoxide, hydrocarbon, nitrous oxide, and particulate emissions based on vehicle size and engine type (diesel versus gasoline). Data Motors: The -rata Ace 108-011 5 loads would be broken into smaller parcels.

In addition, certain metro areas banned three wheelers on some streets in an effort to keep traffic moving faster. In 1999, in order to improve transportation problems, the government began construction of the Golden Quadrilateral, a 5,800-kilometer highway system that would connect the four major cities in India (Delhi, Iambi, Achaean, and Kola). Construction was also started on a north-south highway and an east-west highway. Two wheelers and three wheelers were not allowed on these new highways due to estate Ana speed concentrations.

Future projects were also envelopes to connect large ports to the highway system and add additional lanes and shoulders to existing highways. In addition to the large-scale highway construction, the Indian government was focused on improving the road network between medium-size cities and connecting all rural towns with more than 1,000 residents through all-weather roads. Many of these highways and roads were constructed through public-private readerships in which an independent contractor would construct and then maintain the highway through toll collection.

The government continued to own the land and provided subsidies. As of September 2006, 95% of work on the Golden Quadrilateral had been completed. For other projects, despite clear objectives, actual construction had been hampered by land-acquisition problems, a lack of funding, political discord, and poor performance by some contractors. 14 Overview of the Data Group and Data Motors 5 The Data Group was founded by Seamiest Data in the mid-nineteenth century and was en of largest business conglomerates, with revenues in 200616 of $21. 9 billion, the equivalent of about 2. % of gross domestic product (GAP). Data companies together employed some 202,000 people in more than 54 countries across six continents, and its companies exported products and services to 120 nations. Through 96 operating companies, the Data Group focused on seven business sectors: information systems and communications, engineering, materials, services, energy, consumer products, and chemicals. The 28 publicly listed them names such as Data Steel, Data Consultancy Services, Data Motors, and Data the highest combined market optimization of any Indian business group and more than 2 million shareholders.

Data Motors Recognizing the growing demand for transportation, the Data Engineering and Locomotive Company (TELLS) was established in 1945. Following independence from England in 1947, TELLS introduced a steam roller in collaboration with Marshall Sons in 1948 and entered into a 15-year collaboration agreement with Daimler Benz in 1954 to manufacture medium-size commercial vehicles. During the partnership with Daimler Benz, TELLS set up an Indian research and development center in 1959 and began exporting trucks in 1961.

In 1969, TELLS Egan designing and developing its own commercial vehicles in-house, as continuance of the technical collaboration was not approved by the government. Through the asses and asses, TELLS expanded its product offerings into larger and smaller commercial vehicles and formed a Joint venture with Hitachi to develop hydraulic excavators. During 14 Ibid. 15 http://www. Data. Com/o_about_us/group_profile. HTML, accessed November 2006. 16 Data based on fiscal year ended March 2006. 6 the asses, the Indian government licensed selected foreign competitors to enter the commercial- ventricle segment tongue Jolt ventures.

In response to new products from Toyota, Ionians, Mazda, and Mediumistic in the light-commercial segment, TELLS launched the four-ton 407 truck. The 407 became the top seller in the category by offering a sturdy suspension and the ability to withstand overloading. The 407 also benefited from extensive service network and simpler technology that could be easily repaired in the field. In 1991, facing a foreign exchange shortage, the Indian government undertook additional economic reforms that started the process of opening economy. Reversing the policies of the past 40 years, the government encouraged foreign direct investment (FED).

Economic liberalizing allowed TELLS to form Joint ventures with Cummins Engine Company to develop high-horsepower and emissions-friendly diesel engines in 1993 and with Mercedes Benz to market cars in India in 1994. In September 1995, Rattan Data, chairman of the Data Group, had a vision to develop a car for the Indian market that would be a modern, more spacious alternative to the Marti 800. 17 In 1998, his vision became a reality with the introduction of the Data Indict, the first large-scale passenger car indigenously developed in India.

The Indian consumer responded with great enthusiasm, and 15,000 orders for the Indict were taken within two weeks of the launch. A revised version of the Indict called the Indict VI was introduced in 2001, and a sedan-model variant called the Indigo was introduced in 2002. The company also began exporting the Indict to the U. K. Through an agreement with M. G. Rover. In addition to expanding its passenger-car business, the company continued to grow its commercial-vehicle business and develop adjacent product lines.

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