Tata Motors Stock

Tata Motors Limited (TML) operates as a global automobile manufacturer in the world. The company provides integrated and smart e-mobility solutions to customers in over 123 countries.

The company is the only original equipment manufacturer in India that offers an extensive range of mobility solutions for its automotives, covering cars, Utility Vehicles, trucks, and buses. The company has a strong global network of 121 subsidiaries, equity-accounted associates and joint ventures, including Jaguar Land Rover in the United Kingdom and Tata Daewoo in South Korea. The company offers a broad portfolio of automotive products, ranging from sub-1 ton to 55-ton gross vehicle weight (GVW) trucks (including pickup trucks) to small, medium, and large buses and coaches to Passenger Cars, premium luxury cars and sports utility vehicles (SUVs).

The company also has a Chinese joint venture (Chery Jaguar Land Rover Automotive Co. Limited) that manufactures cars exclusively for the Chinese market.

The company has a joint venture agreement with FCA Italy Spa (FCA Italy), which is part of the Stellantis N.V. Group. Together with FCA Italy, the company operates a facility located at Ranjangaon in Maharashtra to manufacture Passenger Cars, engines and transmissions for the Indian and overseas markets.

The company entered into a joint venture agreement with Thonburi Automotive Assembly Plant Co. Ltd. (the Thonburi Group) to manufacture pickup trucks in Thailand.

Through its subsidiary and associate companies, the company is engaged in providing engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. Tata Technologies Limited (TTL) is engaged in providing specialized engineering and design services, product life cycle management (PLM) and product-centric IT services to leading global manufacturers. TTL’s customers are among the world’s premier automotive, aerospace and industrial heavy machinery manufacturers.

The company’s wholly-owned subsidiary, Tata Motors Insurance Broking and Advisory Services Limited (TMIBASL), is a licensed composite insurance broker with the Insurance Regulatory and Development Authority of India that services customers across the country with its expertise in insurance brokerage and consultancy services. TMIBASL provides end-to-end insurance solutions in direct insurance and reinsurance businesses. Tata Incorporated serves as the company’s authorized U.S. representative.

For the year ended March 31, 2023, Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of the company completed the acquisition of Ford India’s Sanand plant.

Segments

The company operates through Automotive Operations and Other Operations segments.

Automotive Operations

The company primarily operates in the automotive segment. This segment includes all activities relating to the development, design, manufacture, assembly and sale of vehicles, including financing thereof, as well as sale of related parts and accessories. The acquisition of the Jaguar Land Rover business has enabled the company to enter the premium car market in developed markets, such as the United Kingdom, the United States, Europe and China, as well as several emerging markets, such as Brazil and South Africa, among others.

The company’s automotive segment consists of the following four reportable sub-segments:

Tata Commercial Vehicles: Includes Commercial Vehicles (small Commercial Vehicles (SCV) & Pickups, Medium and Heavy Commercial Vehicles and Intermediate Light Commercial Vehicles and CV Passenger Vehicles) manufactured under the Tata and Daewoo brands (and excludes vehicles manufactured under the Jaguar Land Rover brand);

Tata Passenger Vehicles: Includes Passenger Vehicles and Utility Vehicles manufactured under the Tata and Fiat brands (and excludes vehicles manufactured under the Jaguar Land Rover brand)

Jaguar Land Rover: Includes vehicles manufactured under the Jaguar Land Rover brand (and excludes vehicles manufactured under the Tata, Fiat, Daewoo and other brands); and

Vehicle Financing: Includes financing of TML and Jaguar Land Rover new vehicles, pre-owned vehicles, including other original equipment manufacturers (OEMs) brands, and corporate lending to the company’s channel partners.

Tata Commercial Vehicles and Tata Passenger Vehicles

Exports

With a global presence in 39 countries, including most South Asian Association for Regional Cooperation (SAARC) countries, South Africa, Africa, the Middle East and Southeast Asia, the company offers a range of products, including M&HCV trucks, LCV trucks, buses, pickups and small commercial vehicles.

TDCV, a subsidiary company engaged in the manufacturing of medium and heavy Commercial Vehicles (MHCVs) and Light Commercial Vehicles (LCVs).

Sales and Distribution

The company’s sales and distribution network in India as of March 2023 consisted over 6,800 touch points for sales and service for its Passenger Vehicles and Commercial Vehicles businesses. The company uses a network of service centers on highways and a toll-free customer assistance center to provide 24-hour roadside assistance, including replacement of parts, to vehicle owners.

The company has a customer relations management system at all of its dealerships and offices across India, which supports users both at the company and among its distributors in India and abroad.

The company markets its Commercial Vehicles in most countries in SAARC, Africa, the Middle East, Southeast Asia and Latin America. The company has a network of distributors in all such countries where it exports its vehicles. Such distributors have created a network of dealers and branch offices and facilities for sales and after-sales servicing of its products in their respective markets. The company has also stationed overseas resident sales and service representatives in various countries to oversee its operations in the respective territories.

Seasonality

Demand for the company’s vehicles in the Indian market is subject to seasonal variations. Demand generally peaks between January and March each year, although there tends to be a decrease in demand in February just before release of the Government of India’s fiscal budget. Demand is usually lean from April to July and gains momentum again in the festival season from September onwards, with a decline in December due to the year-end (year ended March 31, 2023).

Vehicle Financing

Through the company’s wholly-owned subsidiary, TMF Holdings Limited (TMFHL), and its step-down subsidiaries Tata Motors Finance Limited (TMFL) and Tata Motors Finance Solutions Limited (TMFSL), the company provides financing services to purchasers of its vehicles through independent dealers, who act as its agents for financing transactions, and through its branch network.

Jaguar Land Rover

Sales and Distribution

For the year ended March 31, 2023, Jaguar Land Rover distributed its vehicles in 123 markets globally. Sales locations for vehicles are operated as independent franchises. Jaguar Land Rover is represented in its key markets through its National Sales Company’s (NSC’s), as well as third-party importers. Jaguar Land Rover has regional offices in certain select countries that manage customer relationships and vehicle supplies and provide marketing and sales support to its regional importer markets. The remaining importer markets are managed from the United Kingdom.

Jaguar Land Rover products are sold through a variety of sales channels: through its dealerships for retail sales; for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. Jaguar Land Rover does not depend on a single customer or small group of customers to the extent that the loss of such a customer or group of customers would have a material adverse effect on its business.

Competition

Jaguar vehicles compete primarily against other European brands, such as Audi, Porsche, BMW and Mercedes Benz, as well as Tesla. Land Rover and Range Rover vehicles compete largely against SUVs from companies, such as Audi, BMW, Infiniti, Lexus, Mercedes Benz, Porsche, Volvo and Volkswagen.

Seasonality

Jaguar Land Rover volumes are impacted by the bi-annual change in age-related registration plates of vehicles in the United Kingdom, where new age-related plate registrations take effect in March and September each year. This has an impact on the resale value of the vehicles because sales are clustered around the time of the year when the vehicle registration number change occurs.

Other Operations

This segment consists of IT services, machine tools, and factory automation solutions. In addition to the company’s automotive operations, it is involved in other business activities, mainly Information Technology services.

As of March 31, 2023, TML owned a 74.69% equity interest in its subsidiary, TTL. Service offerings provided by the TTL include providing outsourced engineering and designing services and digital transformation services to global manufacturing clients. TTL also complement the company’s service offerings with technology solution offerings containing academia upskilling and reskilling solutions and value added reselling of software applications and solutions.

The company’s range of services includes information technology (IT) Consultancy, SAP implementation and maintenance, providing networking solutions, CAD/CAM engineering & design consultancy.

The company is headquartered in Pune, India. The company has six offices located at Mumbai, Lucknow, Jamshedpur, Bangalore, Gurugram and one branch office located in Japan that enables it to provide high quality, cost-effective services to clients. TTL had 11 subsidiary companies, as well as offshore development centers in India, Thailand and Romania.

Products

The company produces a wide range of automotive products, including:

Passenger Vehicles (including Electric Vehicles): The company’s range of Tata-branded Passenger Cars includes the Tiago (compact), Tiago EV and the Altroz (premium) in the hatchback category, and the Tigor, Tigor EV, Xpres T-EV (mid-size) in the sedan category. The company has expanded its Passenger Car range with several variants and fuel options designed to suit various customer preferences. The company’s Jaguar Land Rover operations have an established presence in the premium Passenger Car market under the Jaguar brand name. There are six car lines manufactured under the Jaguar brand name, including the F-TYPE two-seater sports coupe and convertible, the XF sedan (including the long wheel base XFL at the China Joint Venture), the XE sports saloon (including the long wheel base XEL at the China Joint Venture), the F-PACE Jaguar’s luxury performance SUV, the Jaguar E-PACE compact SUV (manufactured in Graz, Austria under its manufacturing partnership with Magna Steyr and also manufactured at the China Joint Venture plant), and the Jaguar I-PACE (an all-electric performance SUV and Jaguar’s first BEV manufactured in Graz, Austria, under its manufacturing partnership with Magna Steyr). As part of the Reimagine strategy, Jaguar will be relaunched as a pure electric luxury brand in the future.

Utility Vehicles (including Electric Vehicles): The company manufactures a range of Tata brand Utility Vehicles, including the Harrier, the Nexon, the Nexon (EV), Nexon EV Max, Punch and Safari. There are seven car lines under the Land Rover umbrella, encompassing the luxury brands Range Rover, Defender and Discovery, including the Range Rover, the Range Rover Sport, Range Rover Velar, Range Rover Evoque, Defender, Discovery and Discovery Sport.

Commercial Vehicles: TML offers the widest range of vehicles in India designed and engineered to address every need of the customer. The company offers vehicles from sub-1 ton to 55-ton gross vehicle weight (GVW)/GCW.

SCVs & Pickups: The company manufactures a variety of small Commercial Vehicles and pickup trucks (less than 3.5 ton). This includes the Tata Ace, India’s first indigenously developed mini-truck, with a sub-1 ton payload with different fuel options (Diesel, compressed natural gas (CNG), Gasolene, electric vehicle (EV)), the Tata Intra (V10,V20,V30,V50) with different payload options and the Tata Yodha pickup range with single cab and double cab variants and 4X2 and 4X4 options, including the 2Ton payload variant.

MHCVs and ILCVs: The company manufactures a variety of MHCVs and intermediate and light Commercial Vehicles (ILCVs), which include trucks, tractors, tippers, multi-axle vehicles and pickups with GVWs (including payload) of between 3.5 tons and 55 tons. The company also provides fully built solutions for special applications like garbage compactors, containers, tankers, reefers, and diesel bowser to customers and various government organizations, including solutions related to national defense. In addition, through Tata Daewoo Commercial Vehicles Co. Ltd. (TDCV), the company manufactures a wide array of trucks ranging from 215 horsepower to 560 horsepower, including dump trucks, tractor-trailers, mixers and cargo vehicles. The company’s signature product is the Prima range of trucks, which are sold in India and South Korea, as well as exported to a number of countries in South Asia, the Middle East and Africa. The SIGNA range of new MHCV trucks launched in 2016 has been extended to several additional tractor and tipper variants. Similarly, the newest addition to this portfolio—the Ultra range—spans across multiple tonnage points starting from 5-ton Light Commercial Vehicles (LCV) to 30-ton tractors.

CV Passenger Vehicles: The company manufactures a variety of passenger carriers, including buses. The company’s products include Magic Express, including an electric variant, a passenger variant for commercial transportation developed on the Tata Ace platform, and the Winger. The company also offers a range of buses, which includes the Semi Deluxe Starbus Ultra Contract Bus and the new Starbus Ultra. The company’s range of buses is intended for a variety of uses, including as intercity coaches (with both air-conditioned and non-air-conditioned luxury variants), as school transportation and as ambulances. The company also offers a range of electric buses in different configurations for every application.

Strategy

The company has pursued a strategy of increasing its presence in the global automotive markets and enhancing its product range and capabilities through strategic acquisitions and alliances.

Collaboration and knowledge sharing with industry leaders in connected services, data and software development is a cornerstone of Jaguar Land Rover's strategy. Jaguar Land Rover formed a multi-year strategic partnership with NVIDIA, the leader in artificial intelligence and computing, to jointly develop and deliver next-generation automated driving systems, plus AI-enabled services and experiences for its customers.

This year, the company extended this technology partnership to its whole business, through a global strategic agreement with Wolfspeed, to secure supply for the same cutting-edge Silicon Carbide semiconductors. This technology will provide the company’s next generation of modern luxury electric vehicles with significantly increased powertrain efficiency and extended driving range, while reducing weight and conserving space.

Intellectual Property

The company uses the Tata brand, which has been licensed to it by Tata Sons. As part of its acquisition of TDCV, the company has rights to the perpetual and exclusive use of the Daewoo brand and trademarks in South Korea and overseas markets for the product range of TDCV.

As part of the acquisition of the company’s Jaguar Land Rover business, ownership (or co-ownership, as applicable) of core intellectual property associated with Jaguar Land Rover was transferred to it; however, such intellectual property is still ultimately owned by Jaguar Land Rover entities. Additionally, perpetual royalty-free licenses to use other essential intellectual property from third parties have been granted to the company for use in Jaguar and Land Rover vehicles. Jaguar Land Rover owns registered designs to protect the design of its vehicles in several countries.

In particular, the Tata, Jaguar, Land Rover and Range Rover brands are integral to the conduct of the company’s business, a loss of which could lead to the dilution of its brand image and have a material adverse effect on its business.

Suppliers

The company’s associate company, Tata Auto Comp Systems Ltd., manufactures automotive components and collaborates with international manufacturers by setting up joint ventures with them.

Environmental Regulations

The company’s manufacturing units must ensure compliance with various environmental statutes. Significant statutes for the company’s business include the Water (Prevention and Control of Pollution) Act, 1974 and the Rules thereunder, the Air (Prevention and Control of Pollution) Act, 1981 and the Rules thereunder, the Environment Protection Act, 1986 and the Rules thereunder and the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.

All of the company’s manufacturing plants are either in possession of current, valid Consents to Operate and Hazardous Waste Authorizations or are in the process of renewing the same from the respective PCBs of the states where they operate. Other key regulations applicable to the company’s Plants include the Battery Waste Management Rules, 2022, the Plastic Waste Management Rules, 2016, and the Guidelines on Extended Producer Responsibility for Plastic Packaging, 2022, the Bio-Medical Waste (BMW) Management Rules 2016, E-Waste Management Rules-2022, and the Construction and Demolition (C&D) Waste Management Rules 2016.

History

The company was incorporated in 1945 as a public limited liability company under the Indian Companies Act VII of 1913. The company was formerly known as Tata Locomotive and Engineering Company Limited and changed its name to Tata Engineering and Locomotive Company Limited in 1960. Further, the company changed its name to Tata Motors Limited in 2003.