Globalist Factsheet

Tata: How India Goes Global

How has India’s Tata conglomerate become one of the world's premier industrial groups?

Takeaways


  • In 2008, more than half of Tata's revenues are expected to come from outside India. (New York Times)
  • The Tata family tree stretches back 800 years through generations of Parsi priests. The Parsi are an Indian minority descended from the Persians. (Business Week)
  • Tata Steel pioneered the world's first eight-hour working day, established paid leave in 1920, and maternity benefit in 1928 — far ahead of similar benefits in Britain and the United States. (Financial Times)
  • Tata has 333,000 employees worldwide — 26% of them outside India. (Business Week)
  • Tata bought Jaguar and Land Rover from Ford in late March 2008 for $2.3 billion — about half what Ford initially paid for the brands. (Financial Times)

Tata, India’s biggest conglomerate, recently made headlines by launching the Tata Nano — at $2,000, the world’s cheapest car. However, the company has had a difficult year, due in part to its ill-timed acquisition of Jaguar and Land Rover from Ford in early 2008. Beyond the car business, though, Tata sells everything from software and steel to tea bags. Our Globalist Factsheet takes a closer look.

Where does the Tata family trace its roots?

The Tata family tree stretches back 800 years through generations of Parsi priests. The Parsi are an Indian minority descended from the Persians.

(Business Week)

What businesses is Tata in?

Through 98 companies, Tata creates and sells everything from steel to tea to watches.

(New York Times)

What are the group's largest companies?

The three big Tata companies — accounting for 75% of the entire group's sales — are Tata Steel, Tata Motors and Tata Consultancy Services.

(Business Week)

How many employees does the group have?

Tata has 333,000 employees worldwide — 26% of them outside India.

(Business Week)

And what are the group's publicly traded companies worth?

Tata's 27 listed companies have a market capitalization of more than $70 billion, and the Tata Group as a whole reported after-tax profits of $2.8 billion in the fiscal year ending 2007 — a 33% increase from the year before.

(New York Times)

Why is Tata increasingly known outside India?

Tata has spent $18 billion acquiring overseas companies since 2000, when it acquired Tetley Tea for $400 million.

(Business Week)

Which deal stands out?

In February 2007, Tata Steel agreed to acquire Corus Group of Britain for £6.2 billion ($12.1 billion). The acquisition formed a company with revenues of $24.4 billion — and lifted Tata from 56th to fifth in the global steel industry rankings.

(Bloomberg)

What else has Tata bought?

Since the late 1990s, Tata has bought businesses as diverse as U.S.-based Tyco's undersea fiber optics telecommunications division, South Korea's Daewoo Commercial Vehicles and the Moroccan chemical company Imacid.

(New York Times)

What has the consultancy business been doing?

India’s Tata Consultancy Services adds 100 people every day, with the headcount reaching over 100,000 IT consultants in 47 countries in October 2007.

(Financial Times)

Are there any recent notable contracts?

Back in January 2004, India’s Tata Consultancy Services and Mastek won a British government contract to improve the IT infrastructure of the National Health Service.

(UK Department of Trade and Industry)

And the company's automotive division?

In January 2008, Tata unveiled the Tata Nano. Priced at just 100,000 rupees, or $2,000, it is the world’s cheapest car. The car went on sale in March 2009.

(Financial Times)

Besides its price, what is notable about the Nano?

While it can reach a top speed of 105 kph (65 mph), more than double the average road speed in India, the Nano gets 21 km per liter (79 miles per gallon) — and meets all safety requirements in India.

(Financial Times)

Is the Nano Tata's first foray into the passenger car market?

Between 1998 and 2004, Tata Motors developed the Indica hatchback (the name combines “India” and “Car”) for a total cost of $350 million. An equivalent project in the United States or Europe would have cost at least three times as much — mainly due to Indian engineers’ relatively low salaries.

(Wall Street Journal)

Does Tata Motors have any other plans for expansion?

Tata bought Jaguar and Land Rover from Ford in late March 2008 for $2.3 billion — about half what Ford initially paid for the brands.

(Financial Times)

Does Tata plan to deal with other major car companies in the near future?

Tata is expected to undertake further vehicle or technological partnerships with other carmakers once it has finalized its purchase of Land Rover and Jaguar from Ford. Fiat, on whose board the company’s chairman, Ratan Tata, sits, is seen as a likely candidate.

(Financial Times)

What is the company's share of the Indian car market?

Tata Motors accounts for about 17% of India's passenger-car sales — and controls more than half of the country's truck market.

(Bloomberg)

And what are its prospects in markets like the United States and Europe?

Drawing on the Nano, Tata Motors could build a car that would meet U.S. or European safety specifications and sell for about $6,000 — still a bargain in either market.

(Business Week)

How productive is Tata Motors?

In 2007, Tata Motors’ 22,000 employees had net outside sales of 515,906 vehicles — compared to 35,000 workers who produced just 129,400 vehicles for the Indian manufacturer in 1999.

(Morgan Stanley)

What is another aim of Tata in the future?

The company is prepared to add value in the supply chain by cooperating on engineering and development — in addition to building the brands' business in Asia.

(Tata)

Who owns Tata?

Since its founding in 1868, Tata has been controlled by charitable trusts. Today, they own 66% of the shares in Tata Sons, the private holding company with controlling stakes in its businesses — and aren't as focused on short-term gains as most investors.

(Business Week)

For example?

Many of Tata's companies fund grassroots anti-poverty projects that seem far removed from their core businesses.

(Business Week)

Does the company have a tradition of looking beyond short-term profits?

Tata Steel pioneered the world’s first eight-hour working day (at a time when 12 was the norm), established a provident fund and paid leave in 1920, and maternity benefits in 1928 — far ahead of similar benefits in Britain and the United States.

(Financial Times)

Who runs the company today?

While Ratan Tata and other family members own just 3% of shares in Tata Sons, Tata himself chairs key units including Tata Motors and Tata Steel.

(Business Week)

And finally, what's notable about Ratan Tata?

Seventy-year-old Ratan Tata has a daredevil streak. An avid aviator, he often flies around India in his own Falcon 2000 business jet. In February 2007, he caused a sensation at the Aero India 2007 air show by co-piloting Lockheed F-16 and Boeing F-18 fighter jets.

(Business Week)

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