This the comprehensive PESTEL or PESTLE analysis of TATA Motors which explains the external factors have impact on the company.
Tata motors is headquartered in India and they are the market leader in India. They also ship to other parts of the world and market themselves as manufacturers of cheapest car; Tata Nano. Tata Motors is in collaboration with Fiat and Ford. Fiat and Tata share the manufacturing facility in India whereas Tata has purchased Ford’s Jaguar and Land Rover. Tata Motors is part of Tata Group which is in diverse set of businesses including engineering, FMCG and IT. This company started off in 1945 with locomotives business. Tata strictly abide by laws and more than that it is ethical, it declined an African project because that was supposed to pollute water.
When Tata set up its small car manufacturing plant at Singur it faced fierce opposition from the government as a result of which it decided to move its operations from Singur to Sanand. Since then no industrial development has touched the region, people have been left poor and helpless. Government has promised them industrialization and new jobs but failed to deliver so. The government says that earlier the industries were taking off lands from farmers and in a way causing more harm than good that is why the government had to push them out but now that they have implemented laws to ensure the safety of rights of farmers they are ready for industrialization to take over.
The economic conditions that effect the automobile business include but are not limited to: fluctuations in demand and economic conditions and the changes in competitive landscape of major markets like Japan, Europe, Asia, any fluctuations in the exchange rates of currency especially in Indian rupees, any changes in the regulations and functioning of financial markets like increase in competition etc, company’s distribution system, company’s ability to secure capital at lowest rates possible and achieve economies of scale, fluctuations in the prices of raw material, any changes in the prices or quality of what supplier provides, shortage in fuel supply, fluctuations in the prices of oil in international oil market, the effect of natural disasters and calamities and economic cycles like recession etc. then there are bylaws which are specific to each country and they determine how much rights consumer and manufacturer have and that also determines the fines and penalties that each side will have to pay.
Tata Motors is very responsible and ethical in terms of its business activities. They have been committed to promoting and improving education standards in areas which are near to its manufacturing facility, they give scholarships to under privileged children at public schools in order to encourage them to study, also the spend on improving he infrastructure facilities at rural areas. In Thailand Tata Moors donated sun-filter shades in order to prevent the sunlight from disturbing the students. They also donated life-vests to many schools in outskirts of Thailand, food essentials were also distributed among malnutrition kids. In order to promote the skills and talent of youth Tata Motors has collaborated with training institutes, special attention is given to women in order to empower them and train them to work side by side with men. (CORPORATE SOCIAL RESPONSIBILITY)
Tata Motors has setup its research and development centre in United Kingdom by the name of Tata Motors European Technical Centre. It has been responsible for providing engine development and support services. It has filed for 7 patents. Apart from this Tata Motors has also signed an agreement with EngageNext iSourcing to shift to delivery based model from staff accumulation one. This will help in streamlining activities and fasten the process of advancement and development at Tata Motors. EngageNext will help Tata Motors in delivering goods against a set of standards and measures and will prevent from any kind of deviation from the standards. Together with Tata Technologies, which provides world class manufacturing facilities to its clients worldwide, and EngageNext, Tata Motors will hopefully produce innovative designs much faster and make it efficiently available to the people.
When Tata came up with Tata Nano, which is the cheapest car in the world, it became all the more necessary to understand and analyze the environmental effect of these additional 14 million vehicles on the roads of Mumbai. It will definitely increase the congestion of traffic on roads which are already overcrowded. Second main concern is that of pollution the car which claims to be the cheapest in the world does not come pollution proof, it has minimum number of combustion filters and it can turn the cheapest quality oil into fuel which means more Carbon dioxide emission. Nano manufacturers say that through this car now everybody can own a car, instead of making a case for pollution people should appreciate the fact that Tata feels for the common man, it is just like preventing fast food chains from selling food because the kind of food they sell make people fat and increase their chances of having a heart attack.
For a manufacturing facility strikes and shut downs are common, this incident happened with Tata as well when on 15 October 2015 ITI trainees protested in front of the facility and blocked the entrances saying that they want increase in their wages and other benefits like medical insurance, paid leaves etc. they said that their wages are in level with laborers and they are asked to work overtime and that too unpaid, they are called on duty on weekends. This speaks of the culture of the company that plans to provide everyone with a car, perhaps it should first make sure that its employees are able to afford that cheapest car. (Labour Trouble: Police deployed at Tata Motors gate as trainees put up blockade, 2015)
CORPORATE SOCIAL RESPONSIBILITY. (n.d.). Retrieved February 11, 2016, from Tata Motors: http://www.tatamotors.com/investors/financials/67-ar-html/csr.html
Labour Trouble: Police deployed at Tata Motors gate as trainees put up blockade. (2015, October 15). Retrieved February 12, 2016, from ET Auto: http://webcache.googleusercontent.com/search?q=cache:http://auto.economictimes.indiatimes.com/news/industry/labour-trouble-police-deployed-at-tata-motors-gate-as-trainees-put-up-blockade/49437400