The Indian automobile market is price sensitive; they seek the lowest possible price while ignoring safety. For an automobile company to succeed, the manufacturing costs should be very low so that customers can get cars at low prices while the company still earns high margins.
Tata Motors used the platform strategy model and reduced its costs to such an extent that the manufacturing cost per car was even less than that of the market leader, Maruti Suzuki.According to the strategy, the less the platform on which the car is built and all components are assembled, the more money the company earns. In 2017, Tata used six platforms to produce 10 types of cars. The same company, after five years, used only two platforms to produce 8u201310 types of cars. This resulted in massive cost reductions along with many efficiency gains. And with time, as more cars are produced on the same platform, the company will earn higher profits.The next achievement by Tata Motors is its entry into the EV market. They entered the market slowly, making just 8 cars a day, and have now increased production to 100 cars per day. The company’s success is based on the integration of Tata family companies in order to maximize resource utilization. What do you think Tata will do to lead this segment, or will other giants make their way?
