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Tata Motors Chairman's Speech > Engineering - Heavy > Chairman's Speech from Tata Motors - BSE: 500570, NSE: TATAMOTORS
Tata Motors
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Chairman's Speech (Tata Motors) Year : Mar '13
Dear Shareholder,
 The world continues to be in the midst of a very challenging economic
 environment. While the global economic meltdown in 2008 had relatively
 limited impact on India and other emerging markets, we are currently
 buffeted by headwinds caused by global as well as domestic
 circumstances. The impact of the slowdown has been felt across the
 board in India, with all sectors of the economy being affected.
 Amongst the few bright spots in the performance of the global
 automobile industry has been the rebound of the US auto industry.
 Vehicle sales have once been rising in the US, after the nearly 22
 percent collapse in volumes that followed the 2008 economic crash. Auto
 factories are reportedly running at 95 percent capacity in the US, and
 several of the large US manufacturers have now become profitable.
 Europe, however, continues to see stagnant demand, with a number of
 auto makers reporting large losses.  Demand for new vehicles is at a
 record low in many nations. With domestic demand having dropped back to
 levels last seen more than a generation ago, this has left European
 manufacturers dependent on exports to survive. And in fact, premium
 vehicle manufacturers have been less affected by the European sales
 crisis; although their sales within the European Union have declined,
 they are benefitting from the pickup in demand in markets like China
 and the US. With German manufacturers outsourcing capacity to Asia, so
 as to be closer to local markets, in 2012 several of the German premium
 vehicle manufacturers sold more cars worldwide than ever before.  Great
 Britain was one of the few countries in this region to register an
 increase in car sales.
 In China as well, luxury manufacturers are doing well, thanks to
 booming demand. China has advanced as the largest vehicle market in the
 world and will continue to grow, even though the rate of growth might
 slow. Amidst slower growth in China, Chinese vehicle manufacturers
 shipped more than one million cars to other markets, with the majority
 of Chinese car exports going to emerging markets in Africa, the Middle
 East and South America.  Chinese exports are expected to double in
 volumes by 2016.
 The year saw passenger vehicle sales in India grow by a mere 0.9
 percent, while overall commercial vehicles sales registered a growth of
 1.7 percent. Diesel price hikes resulted in lower demand for diesel
 vehicles, thereby dampening growth in both the personal and commercial
 vehicle segments. Small commercial vehicles and pick-ups witnessed
 continued strong demand, and small SUVs and luxury brands saw
 significant increase in interest.
 The financial year 2013 has been a challenging one for Tata Motors.
 Nonetheless, despite difficult economic conditions and increasing
 competition, the Company retained its market leadership in commercial
 vehicles, on the back of new offerings and introduction of innovative
 technologies. Its highly successful and reliable Ace and Magic vehicles
 crossed the sales mark of one million units, achieved in seven years
 since these products were first introduced in the market. The sales
 performance of the Companys passenger vehicles, however, was
 significantly lower as compared to expectation; rapid changes in
 customer preferences along with the de-regulation of diesel pricing
 both took their toll.
 As we look ahead, we see a year of continuing challenges - but at the
 same time, full of opportunities. Tata Motors is privileged to have a
 strong parent brand, a rich commercial vehicle pedigree, international
 design centres of global standards, and last but not the least,
 committed employees and a strong dealer and vendor base. With changes
 in the organisation structure, the Company is determined to improve its
 customer understanding to better meet market needs, and deliver
 products swiftly through optimised operational processes. The Company
 has launched its ACES programme, with a renewed focus on
 Accountability, Customer and Product Focus, Excellence and Speed.
 Building on its DNA, Tata Motors recently announced HORIZONEXT, based
 on intense product focus, world-class quality and manufacturing,
 enriched customer purchase experience and a consistent, robust
 after-sales service.
 The Company is working on a slew of new products, with a plan running
 up to 2020; this includes appropriate focus on alternate fuels, hybrids
 and electric vehicles. The organisation is resolved to foster a culture
 of customer centricity and innovation, so that the Companys products
 and services consistently exceed customer expectations.
 In the commercial vehicles segment, Tata Motors expects to remain the
 preferred brand for customers. Given the Companys scale, it is in the
 best position to efficiently integrate its products and services and
 deliver the maximum value to its customers at the best prices. The
 Company continues to anticipate market demand and is well-positioned to
 address competition with its product portfolio that includes
 global-standard products and an extensive dealer network.
 As an industry, the shape of things to come will be a function of how
 the economy performs, as well as government policies that will drive
 the larger picture of how India sees transportation in its metros and
 rural areas.
 Despite tough market conditions, it was a good year for Jaguar Land
 Rover (JLR), which registered record volumes and revenues on the back
 of the launches of some of the most exciting and awaited new products.
 Volumes for the year were nearly 375,000 units with revenues reaching
 an all-time high of 15.8 billion. JLR is a healthy and vibrant
 Company, strongly positioned across key global markets for future
 growth. Technical innovation and engineering excellence have stood JLR
 in good stead for sustained, profitable growth and the Company plans to
 launch eight new or refreshed products this year.
 JLR has underlined its commitment to expanding its presence in China, a
 long-term strategic market for the Company. In November 2012, JLR and
 Chery Automobile Company laid the foundation stone for their joint
 venture in China, with a new plant to be built at Changshu, in Jiangshu
 JLR also continues to explore further opportunities in other growing
 markets, including Brazil, India and Saudi Arabia. It has developed a
 number of industry best practices, and is a company we should be proud
 The health of the automobile industry has traditionally been an
 important indicator of the economic strength of a nation. I have no
 doubt that the industry will play a critical role in the growing
 prosperity of India.
 Tata Motors has all the capabilities and strengths to navigate through
 the challenges presented by dynamic and evolving customer preferences.
 The Company has an exciting future, and is well placed to strengthen
 its position as a respected and viable competitor in the global auto
 industry. The Company will continue to be a responsible corporate
 citizen wherever it operates, and is committed to delivering long-term
 value creation for all its stakeholders.
 The Board joins me in expressing our deep appreciation to the
 employees, the Unions and the management team and all our partners for
 their support, co-operation and understanding. I would also like to
 express our appreciation to you, our shareholders, for your support and
 understanding in good times and in challenging times.
 Finally, I would like to thank Mr Ratan Tata for his visionary
 leadership during his tenure as Chairman of Tata Motors, which has
 transformed Tata Motors into a complete automobile company with a
 global footprint.
 Mumbai, June 24, 2013
Source : Dion Global Solutions Limited
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