Tata Dawoo Essay

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Contents 1. Pre-acquisition Scenarios (Facts & Figures) 3 1.1. Tata Motors 3 1.2. Daewoo Motors 3 2. Market Implications of acquiring the Daewoo plant by Tata Motors 4 3. New Markets technology and policies that are influencing Tata Motors cost 6 Pre-acquisition Scenarios (Facts & Figures) Tata Motors ➢ 6th largest commercial vehicle (CV) company in the world. ➢ The company’s commercial vehicle business was primarily focused on the domestic market which accounted for only 5% of the total sales. The company wants to increase this to 20%. ➢ The Indian commercial vehicle (CV) industry is cyclical in nature and does not have the appetite for high powered, high capacity and high speed trucks. ➢ The company prior to acquiring Daewoo did not have high powered, high tonnage and high speed trucks in its catalogue of products which is the primary reason for the company not being able to foray into China’s growing demand for sophisticated trucks due to its new declared plan of expressway system in the country. ➢ Tata Tea (one of the Tata group companies) had already acquired Tetley Tea for $502 million in the year 2000 had already proved to the world its appetite for successful international acquisitions. Daewoo Motors ➢ The company is making profits. ➢ Daewoo’s plant was operating at only a quarter of its capacity, but still commanded a 22% market share in the 8-tonne plus truck segment. ➢ The company had the technical prowess to bring out newer versions. ➢ Daewoo’s exports accounted for only 8% of the total turnover. Market Implications of acquiring the Daewoo plant by Tata Motors Historically manufacturers dominated the market when they said “This is what we have and this is what we will give you”. However the current scenario has changed. Now the

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