Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — Investor Presentation (February 2005)
40 slides from Tata Motors Passenger Vehicles's investor presentation, February 2005
Slide 1: Leading the Future
TATA MOTORS Leading the Future Investor Presentation February, 2005
Slide 2: Forward-looking statements
Statements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors th
Slide 3: Presentation Outline
Presentation Outline Indian Auto Industry – At Inflection Point Introduction to Tata Motors Tata Motors’ Performance Tata Motors’ Future Strategy Growth in Automotive Business Opportunities in Non-Automotive Business 2
Slide 4: Indian Economy – Emerging from the shadows
Indian Economy – Emerging from the shadows GDP Growth of India Forecasted GDP growth 10% 8.0% % 8% 6.5%-7.0% 10 5.8% 6% 4.4% 7.5 4.3% India 4% 5 Brazil 2% China 2.5 Russia 0% 0 FY 01 FY 02 FY03 FY04 FY05 E 2000-05 2005-10 2010-15 2015-20 2020-25 2025-30 2030-35 2035-40 2040-45 2045-50 Source : CSO ,
Slide 5: Implications for Indian Auto industry
Implications for Indian Auto industry Contribution to Industrial Output 15-17% 20 15 8-10% 10 ~5% 5 0 India Developing Developed economies economies Economic Development offers a great growth opportunity for India Auto & Related activities 4
Slide 6: Road Development in India – a structural change
Road Development in India – a structural change ¾ Proposed strengthening and four- laning of high-density corridors. Golden Quadrilateral - 5,846 Kms NSEW Corridor - 7,300 Kms ¾ Road connectivity to major Ports. ¾ Funding primarily from Fuel Cess and External Multilateral Agencies ¾ Private sect
Slide 7: Commercial Vehicle Cycle
Commercial Vehicle Cycle Dramatic impact on 1000 volumes in initial Stage 280,000 3 Years 2 Years 900 stage of road 260,302 800 development Germany 240,000 Total Trucks MHCV / m population 3 Years 222,273 5Years France 700 Truck penetration UK 200,000 600 Turkey 500 Spain 160,000 145,166 161,400 4 4
Slide 8: Changing patterns of Private Final Consumption Exp. in India
Changing patterns of Private Final Consumption Exp. in India 70% 62.5% 60% 50% 44.5% 40% 30% 20% 13.5% 10% 8.1% 2.8% 0% 2.6% 1970-71 1975-76 1980-81 1985-86 1990-91 1995-96 2000-01 Food & Beverage Medical Care Transport Source : CMIE [ Increasing per capita Disposable Income is leading to [ Secular
Slide 9: Potential in Indian Car Market
Potential in Indian Car Market Projected Increase in Car Ownership in India 160 145.9 Projected Incremental nos. (mn units) 140.8 140 124.2 120 100 85.2 80 60 49.2 40 26.9 20 15.2 9.1 3.6 5.3 - 2000-05 2005-10 2010-15 2015-20 2020-25 2025-30 2030-35 2035-40 2040-45 2045-50 Source ; Goldman Sachs – T
Slide 10: Car growth to follow 2-Wheeler growth
Car growth to follow 2-Wheeler growth mn units Vehicle ownership in India 60 51.1 50 2-Wheeler Population 38.6 40 30 23.3 20 14.2 10 Car Population 6.2 6.9 5.3 Current First Time Car Buyers 2.5 3.2 1.0 1.4 2.3 Types of Previously-owned Vehicles 0.6 - 0.5 0.6 0.9 1971 1976 1981 1986 1991 1996 2001 70
Slide 11: Presentation Outline
Presentation Outline Indian Auto Industry – At Inflection Point Introduction to Tata Motors Tata Motors’ Performance Tata Motors’ Future Strategy Growth in Automotive Business Opportunities in Non-Automotive Business 10
Slide 12: Tata Motors – An Introduction
Tata Motors – An Introduction India’s largest Automotive company in revenue terms Strong R&D skill sets Capability to develop vehicle platforms indigenously at a relatively low cost Began manufacturing Commercial vehicles in 1954 Currently has four manufacturing plants at Jamshedpur, Pune,
Slide 13: Comprehensive Product range
Comprehensive Product range Trucks (2MT– 40 MT GVW) Buses (12 -60 seater) Passenger Vehicles 12 12
Slide 14: Presentation Outline
Presentation Outline Indian Auto Industry – At Inflection Point Introduction to Tata Motors Tata Motors’ Performance Tata Motors’ Future Strategy Growth in Automotive Business Opportunities in Non-Automotive Business 13
Slide 15: Tata Motors - Portfolio of Businesses
Tata Motors - Portfolio of Businesses Tata Motors FY 04 US GAAP Revenue – Rs 140 bn Automotive Non Automotive FY 04 US GAAP Revenue – Rs 128 bn FY 04 US GAAP Revenue – Rs 12 bn Commercial Vehicles Auto Components Cons. Equipment Passenger Vehicles Customer Financing Engg. Tech. Services 92% of TML F
Slide 16: Segment-wise Details (US GAAP)
Rs bn Segment-wise Details (US GAAP) 2002 2003 2004 Net Revenue Automotive 72.6 89.7 128.2 % of Net Revenue 94.7% 93.7% 91.7% Others 4.1 6.1 11.5 % of Net Revenue 5.3% 6.3% 8.3% Net Income Automotive (2.5) 2.5 7.5 % of Segment Revenue -3.1% 2.7% 5.9% Others (0.6) 0.1 0.8 % of Segment Revenue -12.4%
Slide 17: Automotive - Strong Volume Growth in Last Three Years
Automotive - Strong Volume Growth in Last Three Years Tata Motors Volume Sales Growth +23.0% +43.7% +29.3% 350,000 314,259 300,000 282,692 250,000 117,063 219,859 216,904 106,479 200,000 183,224 81,465 34,048 82,349 24,366 150,000 66,207 55,454 25,397 22,630 52,115 100,000 27,271 36,473 38,317 30,26
Slide 18: Significant presence in all vehicle product lines
Significant presence in all vehicle product lines % Tata Motors’ Market Shares in different product lines in India 70.0 64 67 63 64 2002 2003 2004 Apr-Dec 2004 60.0 50 50 50.0 45 43 40.0 30.0 24 22 22 20.0 16 17 18 15 12 10.0 0.0 P. Cars Utility Vehicles Light CV Medium & Heavy CV Source : SIAM Gain
Slide 19: Financial Performance (Indian GAAP Unconsolidated)
Financial Performance (Indian GAAP Unconsolidated) Rs mn Apr-Dec Full Year FY04 FY05 Change FY04 Net Revenue 90,798 120,861 33.1% 132,232 EBITDA 12,606 15,305 21.4% 18,818 EBITDA Margin 13.9% 12.7% 14.2% Other Income 499 1,365 589 Net Interest 1,272 1,228 1,613 Dep. & Amortisation 2,839 3,059 3,826
Slide 20: YTD FY05 Financial Performance (Indian GAAP Consolidated)
YTD FY05 Financial Performance (Indian GAAP Consolidated) Rs mn Apr-Dec Full Year FY05 FY04 Net Revenue 136,143 139,247 EBITDA 17,489 20,783 EBITDA Margin 12.8% 14.9% Other Income 1,011 562 Net Interest 1,357 1,938 Dep. & Amortisation 3,724 4,372 Prod. Dev. Exp. 486 516 PBT before Extra-ord. Items 1
Slide 21: Cost Pressures & Cost Reduction
Cost Pressures & Cost Reduction [ Cost Pressures arising primarily from Hardening of steel and other commodity prices Increase in prices of engineering plastics resulting from hike in crude oil prices. Cost of technology up-gradation to meet emission, safety and noise norms. Cost Reduction Programme
Slide 22: Presentation Outline
Presentation Outline Indian Auto Industry – At Inflection Point Introduction to Tata Motors Tata Motors’ Performance Tata Motors’ Future Strategy Growth in Automotive Business Opportunities in Non-Automotive Business 21
Slide 23: Tata Motors' future growth
Tata Motors’ future growth • Key elements of growth – Opportunities in the domestic market resulting from structural changes • TML – strong competitive position • Growing in existing and new markets – International business opportunities • Product & market expansion – Focus on non-cyclical revenue s
Slide 24: Opportunity in Truck market
Opportunity in Truck market 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 9 9 6 -9 7 1 9 9 7 -9 8 1 9 9 8 -9 9 1 9 9 9 -2 0 0 0 2 0 0 0 -0 1 2 0 0 1 -0 2 2 0 0 2 -0 3 2 0 0 3 -0 4 A p r-D e c 2004 MAV T ra c to r-T ra ile rs T ip p e rs MCV IC V L C V tru c k s P ic k -u p s [ Structural shift towar
Slide 25: Opportunity in Bus market
Opportunity in Bus market 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 MCV Bus LCV Bus [ Besides GQ and NSEW corridor , the current road programme also involves connect
Slide 26: Passenger Car classification and demand drivers
Passenger Car classification and demand drivers 100% 1% 2% 3% 3% 3% 3% 4% 6% 90% 9% 9% 9% 9% 2% 3% 80% 6% 6% 70% 44% 60% 46% 41% 42% 50% 40% 30% 20% 40% 37% 37% 34% 10% 0% FY02 FY03 FY04 Apr-Dec 2004 < 300,000 300,000 - 500,000 Hatch 300,000 - 500,000 Midsize 500,000 - 700,000 700,000 - 1,000,000 >
Slide 27: People's Car – The Innovation Challenge
People’s Car – The Innovation Challenge [ Concept A Five-seater car with on-Road Price between two-wheelers & current lowest priced car in India. [ Models Three trim levels – Base, Middle, High (buyer would have the flexibility to upgrade from one level to another). [ Safety In compliance with all d
Slide 28: Current and potential international markets
Current and potential international markets Europe CIS & Russia Pick-up, P. Veh. LCV West Asia China MHCV, P. Veh. MHCV, LCV Pick-up, P. Veh. South East Asia MHCV, LCV Africa South Asia Pick-up, P. Veh. MHCV, LCV MHCV, LCV Pick-up, P. Veh. LATAM LCV, Pick-up International Revenues, including TDCV, f
Slide 29: International Business Initiatives
International Business Initiatives [ Focused positioning & marketing in selective countries E.g. [ S Africa ▪ Industry Vol. - 360,000 units – primarily comprising of P. Cars and Pick-ups ▪ TML products positioned as “Value for Money” ▪ Despatches started in 2Q FY05 and total volumes have crossed 2,0
Slide 30: Organic Growth Elements
Organic Growth Elements [ Capacity expansion Current utilisation around 75% for CVs and UVs and 100% for Indica plant Indica capacity being expanded by 50% by end FY05 CV capacity being addressed with demand expansion. New Products [ Product pipeline 2005 Small Pick – up Intra-city & Inter-city
Slide 31: Elements of Inorganic Growth Strategy
Elements of Inorganic Growth Strategy [ Acquiring an international company Access to markets Access to new technology and R&D capability Growth in International business [ Marketing tie-ups Distribution Co-branding [ Asset purchase New product New technology New capacities Exploratory stage [ Strate
Slide 32: Integration of Tata Daewoo Commercial Vehicle Co.
Integration of Tata Daewoo Commercial Vehicle Co. TDCV share in S. Korean HCV market 30.0% 30.0% 29.0% Financial Performance 28.0% (Rs mn) April-Dec April-Dec Change 27.0% 2003 2004 26.0% 25.0% 25.0% Revenue 7,695 9,235 10.2% 24.0% 23.0% PAT 144 161 11.8% 22.0% Apr-Dec 2003 April - Dec 2004 Note : K
Slide 33: Auto Components – HVAL & HVTL
Auto Components – HVAL & HVTL [ 100% subsidiaries in Axles and Gear Boxes manufacturing for Medium & Heavy Commercial Vehicles [ Performance Drivers Growth in M/HCV demand Significant increase in profitability due to operational efficiencies Strong cash flows – expected to be debt-free by March 2005
Slide 34: Auto Components - Tata Auto Components (TACO)
Auto Components - Tata Auto Components (TACO) [ Objective of global footprint in Auto Comp. manufacturing and engineering services [ Currently, 12 JVs and 2 wholly-owned companies JV route for accessing technology for domestic market Offering access to Indian market and production base in India to g
Slide 35: Construction Equipment - Telco Construction Equipment Co. Ltd
Construction Equipment - Telco Construction Equipment Co. Ltd [ 80:20 JV between TML and Hitachi Construction Machinery Co. [ Market leader in excavators with 55% market share in India [ Performance Drivers Large project investment line-up Significant improvement in operating and financial leverage.
Slide 36: Customer Financing
Customer Financing [ Strengthening the captive Customer Financing business through proposed merger of Tata Finance with TML Appointed date of merger : 1st April, 2005 Swap Ratio : 8 equity shares of Tata Motors for 100 equity shares of Tata Finance Complementary to TML in-house Dealer-driven vehicle
Slide 37: Engineering and Technical Services – TTL & TAL
Engineering and Technical Services – TTL & TAL Tata Technologies (TTIL) [ 95% subsidiary - provides wide ranging services e.g., IT services, BPO, infrastructure and E&D services [ Global OEM clients General Motors, Ford, DaimlerChrysler, Toyota, Volkswagen, Honda, Nissan, Fiat, Boeing and Airbus [ N
Slide 38: Challenges Affecting Performance
Challenges Affecting Performance [ Input cost pressures Steel, engineering plastics, aluminium, copper etc. [ Impact of Emission compliance measures From April 2005, 11 cities will migrate to Euro III while the rest of the country will migrate to Euro II emission norms. Cost implications of this may
Slide 39: Conclusion
Conclusion [ Tata Motors well positioned to capture the Automotive growth in India [ Tata Motors to grow significantly through international business Consolidation in the existing markets Organic growth with new markets and products Inorganic growth [ Focus on expanding non-automotive business by ta
Slide 40: www.tatamotors.com
ao TATA www.tatamotors.com TATA MOTORS 39