Background of the Automobile Industry
Automobile industry is in the business of manufacturing and selling of vehicles it includes farm equipment, passenger cars, commercial vehicles and trucks. It helped customers to travel long distance for shopping, work, etc. and it is the reason for the development of subsidiary industries, such as travel and oil business. Automobile mobile industry is the biggest buyer of manufacturing products such as steel and one of the reason for economic growth (Infoplease. 2017). Report involve brief discussion of world’s two major automotive companies they are Tata Motors and Volkswagen Group. Report will explain about companies Global strategies, Manufacturing/technology interface, Marketing/technology interface and Organization/technology interface.
In 1868, Jamsetji was the one who founded Tata Motors. USD 100 billion group’s one of the member is Tata Motors (Tata Motors. 2017). Their main Moto is to give back to the society and to sustain in the market. They maintain good corporate relationships with their competitors as well as with their customers. It is one of the leading automobile company. We provide customers variety of the choices and respect their choices and demands. They are trying to change the background of Indian vehicle commercial by providing advance technologies, with good performance and less life-cycle rate. Tata Motors passenger cars are designed for higher connectivity, performance and comfort. Their focus on future objectives and providing good services is the reason for their success. The UK, Korea, Italy and India are the locations of Tata Motor’s R & D department (Tata Motors. 2017).
Audi, Lamborghini, MAN, Volkswagen Passengers cars, Ducati, Scania, Bentley, SEAT, Porsche, Volkswagen Commercial Vehicles, Bugatti and SKODA are the brands comprises by the Volkswagen group (Volkswagen. 2017). Besides this, it also deals is different financial services like insurance, banking, leasing, etc. Volkswagens present focus is on their “TOGETHER-Strategy 2025”, it will lead to the major change in the history of the Volkswagen group to become the leading car makers in all over the world. By 2025 it will transform its automotive business and will provide fully electric cars with technology of battery expanding and self-directed driving features (Volkswagen. 2017).
Tata Motors
Tata Motors was recognized in 1945, it is one of the biggest multi-holding company. It works under three segments internationally they are Commercial vehicles, Utility vehicles and Passengers cars. Heavy vehicles, first light and mini-truck were first introduced by Tata Motors in India. Tata Motors have launched many new products in the market by entering into the joint ventures and strategic acquisition. Tata motors main strategy is to maintain their core three segments i.e. Commercial vehicles, Utility vehicles and Passengers cars and want to be specialized in these three segments. The reason behind the international expansion of Tata Motors are Increase in sales, market will expand, increase in customer base (Uni Assignment. 2017).
Volkswagen Group
Global Strategies of Tata Motors and Volkswagen Group
Volkswagen is one of the leading automobile company in the world. Volkswagen involve twelve brands i.e. Audi, Lamborghini, MAN, Volkswagen Passengers cars, Ducati, Scania, Bentley, SEAT, Porsche, Volkswagen Commercial Vehicles, Bugatti and SKODA. They are spreading their brands all over the world as their strategy is to cover larger market area. By 2018, they want to become environmental and economic leader and their goals are:
- Volkswagen wants to become leader in providing good quality and customer satisfaction by adopting new technologies and innovations as customer satisfaction will help business to sustain into the market and will lead to the success of the company.
- Volkswagen focus is on increasing the sales every year and want to increase the percentage of the growth in the market.
- Volkswagen wants to become the best employer in the industry of automobile. They need best team of fit, skilled and motivated people to manufacture best vehicles.
High competition faced by Volkswagen Group, but they handled it as a strong company by launching different brands over years. Automobile industry is gaining high growth in China and improving in North America. Although, other automobile companies are giving high competition to Volkswagen and trying to attain this growth. Ford motors company, General motors and Toyota are the competitors who have established their sound existence in the global market. Innovation, customer satisfaction and research and development are the key success factors on which company spend a lot for sustainability (Pratt, B. 2017).
Tata Motors
Tata Motors manufacturing services are not only the state of skill technology, they have experienced and talented engineers who produce quality vehicles. Determination towards excellence is essential chunk of Tata Motors. Manufacturing plants of Tata Motors are certified for providing good quality and manufacturing standards. Their main focus is on technology and automation, it is the reason for their success in the automobile industry (Tata Motors. 2017). Development cycles basis feature of IT industries is decreasing human interface. Today all the companies has started gaining benefits of Digital Manufacturing. When all the manufacturing process is managed on computers is known as Digital Manufacturing. With the help of Digital Manufacturing’s offering like “Design for Servicing” and “Design for Manufacturing” Tata Motor’s productivity got enhanced and were effectively handling their process of manufacturing. Due to this time taken in manufacturing and cost of manufacturing process also decreased. If the process or work flow are established then it became tough and expensive to correct it but a preceding support will help business to recognize such problem at previous stage of planning, it will save time and cost of restructuring (Design tech. 2015).
Volkswagen Group
To meet the market demands Volkswagen make their manufacturing plant and methods of the higher standards (Volkswagen fleet sales. 2017). The life cycle valuations directed by Volkswagen not only examine manufacturing of vehicle at their own plants but also analyze all the process not related to the plant. For manufacturing vehicle first of all iron ore, oil and sand like raw material is produced, then these raw materials are used to produce body and engine of aluminum, rubber and plastic for tyres and windows. Suppliers who supply raw materials to the Volkswagen with the help of trains and trucks use fuel and power and release emissions. Volkswagen arranges the bases for the life cycle of the vehicle valuation at the growth stage, determining the manufacturing procedure and the environmental influence on the life cycle. It will provide the reason for efforts towards improving the efficiency.
Manufacturing/Technology Interface of Tata Motors and Volkswagen Group
Volkswagen group also works for reducing the consumption of fuel and emission by reducing the weight of the vehicle. These are the factors that gets affected by the material selection, process of manufacturing and design of the vehicle. Vehicle’s environmental profile also gets affected due to the design of light weight. Hot stamping is the process used by Volkswagen for the body parts production. Hot stamping is more energy-exhaustive than the conservative procedures it changes- about 22 kilograms of CO2 are released per vehicle but it is said to be environmentally capable in the matter of whole life cycle. In the process of hot stamping less steel is used to produce the parts, it means the use of energy and raw material is less. The Passat body is lighter than the old methods. Volkswagen operated a distinct Life Cycle Assessment for this process to know hot stamping benefits. Process of new painting is another step taken by Volkswagen in manufacturing stage to improve vehicle’s environmental outline (Volkswagen. 2017).
Tata Motors
Tata Motors is the part of Tata Group and known as the top automobile company in India. Tata Motors manufacture three type of vehicles such as passenger vehicles, utility vehicles and commercial vehicles. It provide employment to approx. 24000 employees. In the world Tata Motors is said to be the fifth leading manufacturer of Commercial vehicles. Different marketing strategies and technologies are used by Tata Motors to compete with the competitors.
Tata Motor- Marketing plan
Organization should know the market scenario for effective market plan as it is very important for an organization. Every year Tata motors introduce new vehicles with different price, feature and design but their main focus is on midsize cars because they are affordable for middle class people and they use different plan for their vehicles (Innovative project. 2017). For Example- In 2012 and 2013 Tata launched their Tata Nano car in USA and Africa respectively due to the increase demand of Tata Nano in India because of its lower cost as compared to other cars. In case of Tata Nano they wanted to provide cars to customers easily, for this they decided to use Croma and Westside conventional outlets for selling the cars and ignored dealership option (LinkedIn. 2015). Marketing plans like providing key chains, caps and t-shirts to others were used for attracting people. Upgrading automobiles is another marketing plan of Tata Motors. In this they focus on changing the look, features and design of the automobile with extra mileage and engine. They provide warranty of 2-3 years, insurance facility, after sales services, etc. to cover the larger market area. To find out the strength, weakness, opportunity and threat SWOT analysis is done by organization for marketing plan.
Marketing/Technology Interface of Tata Motors and Volkswagen Group
Strengths
Tata Motors is known for producing lower cost vehicles with the feature of less consumption of fuel. Tata Motors have established their business in many countries. With vast employee base they provide many employment opportunities. The Research and Development department of Tata Motors is very strong and effective. Market share of Tata Motors is large with strong brand image in the market of India (Jacoby. 2009).
Weakness
Safety standards are not met by the vehicles of Tata Motors. Domestic sales is less of the vehicles of Tata Motors and return of investment is also low (Kasi. 2017).
Opportunities
Tata Motors should work for increasing the return on investment. New ideas should be used for business segmentation by Tata Motors and by concentrating on midsize cars they should also focus on luxury cars (Blitterswijk, M.V & Karadzhov, R. 2009).
Threats
Sales can be affected due to ignoring the safety measures. Different challenges can be faced by Tata Motors due to increase in the prices of raw material (Marketing. 2016).
Product, branding and advertising are very important for the marketing plan. Advertising is done by organization for promoting the product and creating successful brand image in the eyes of the customers is another way of doing advertising. Tata Motors achieved success in the case of creating good brand image in the market. Spokesmen are used by Tata Motors. Tata Motors use quality control, packing and innovation strategies for marketing. They change their pricing strategy every year for covering the market. Tata Motors use other marketing strategies like providing after sales services for supporting and maintaining the customers (Philip, L. 2014).
Technology used by Tata Motors helped them to increase their productivity and growth. Business of Tata Motors is expanded due to use of the technology. It will help in solving problem faced by Tata Motors with reducing the work load. Tata Motors should adopt those technology that will help them in developing service and product.
Volkswagen main focus is to increase the core business by increasing productivity and reducing cost of production. To achieve these goals, the company is focusing on different strategies like divesting those segments that are non-core, introducing new models and restructuring. Volkswagen aim is to provide safe environment, quality product and improving productivity.
Double marketing strategy is used by Volkswagen for the position of its brand. Double Marketing does not mean communicating various messages into one campaign. In this different messages in multiple campaigns are advertised parallel. Coke was the one who followed double marketing because they have vast budget of marketing. In that various add campaigns are advertised at same time but the results are not so good. Volkswagen main focus is on the easy availability of the product for this they opened 44 production sites in different countries of the world. Branding of the products in various sections of production lines is the marketing strategy of Volkswagen (Economic Times. 2014).
Organization/Technology Interface of Tata Motors and Volkswagen Group
Volkswagen use Blueprinting technology, it means the science of reconstructing engine. Carefully fitting, balancing and measuring is done in the process of blueprinting that makes an engine for performance improvement. Process of setting all acceptance in the engine to its best worth is known as engine blueprinting. Volkswagen use those techniques which are environment friendly for this they use recyclable and recycled ingredients where ever it is possible (Volkswagen. 2017). SWOT analysis is also done by Volkswagen for effective marketing plan.
Organizational interface- Tata Motors
Organizational climate and knowledge management are the integral part of the organization structure. Communication between worker and employer is important in Tata Motors company either it can be formal or informal to make employees feel comfortable and familiar towards organization. Interaction between different levels is easy in Tata Motors because it has flat structure. Tata Motors adopt transformational strategy at international market to transfer local manager at new location and to transfer senior managers from Indian market to new market. In this way Tata Motors transfer their expert and talented employees to other place for increasing productivity. Tata Motors have partnership with giant Fiat that helped both of them in increasing market share, growth and productivity. Characteristics of culture followed in Tata Motors are adaptability, involvement, constancy and change (Economic Times. 2017).
In the automobile industry Volkswagen is the top group of various brands. Divisions of business activities are Financial and Automotive services. Automotive division of Volkswagen are officially independent distinct companies except Volkswagen commercial vehicles and Volkswagen passenger cars. Business activities of Volkswagen concentrate on manufacturing, developing and retailing light commercial vehicles, buses, trucks and passenger cars. Volkswagen provide different ranges from luxury vehicles, small cars, motorcycles. Commercial vehicles of Volkswagen provide busses and trucks. Volkswagen provide different financial services, further planning to expand it and providing mobility services. Volkswagen is providing their services in different countries like Brazil, Turkey, USA, Chine and Europe. Volkswagen AG’s management board manage the Volkswagen Group and Volkswagen AG according to the procedure rules and article of association. Committees discuss different strategic issues like investment, foreign currency etc. at group level. Management board of Volkswagen control all the activities of Volkswagen group brands. Targets of Volkswagen group are also assigned by management board (Volkswagen. 2016).
Conclusion
In the conclusion it can be said that Tata Motors and Volkswagen both are the leading companies of Automobile industry and focused towards improving performance and increasing market share. Main focus of Tata Motors is on the core products provided by them such as Commercial vehicles, Utility vehicles and Passengers cars and on the other side focus of Volkswagen is on the twelve brands provided by them such as Audi, Lamborghini, MAN, and Volkswagen Passengers cars, Ducati, Scania, Bentley, SEAT, Porsche, Volkswagen Commercial Vehicles, Bugatti and SKODA. Tata Motors and Volkswagen has different manufacturing, marketing strategies for increasing profitability and attracting customers. Technologies implemented by both the companies are used for saving the time and cost. Organization structure of Tata motors is flat whether Volkswagen’s all the divisions are independent except commercial vehicles and passenger cars.
References
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