GROUP PROFILE by jolinmilioncherie


									Executive Summary

According to a document called ACMA-McKinsey Vision 2015, the Indian auto
component sector is expected to grow to US$40 billion (including exports) at a rate of
17% per annum. And exports themselves are estimated at US$20 billion by 2015, from
the present value of US$2.8 billion, clocking a growth of 34% per annum.

Tata AutoComp Systems Limited (TACO), promoted by the Tata Group is amongst
India's largest and fastest growing auto component groups. The group provides products
and services in the area of auto components to global automotive customers including
Ashok Leyland, DaimlerChrysler, Fiat, Ford, General Motors, Honda, Hyundai, John
Deere, Mahindra and Mahindra, Piaggio, Tata Motors, Toyota, Volvo and VW. TACO
has capabilities in automotive interiors and plastics, and stamping and assemblies,
engineering, and supply chain management. The Company also has 17 joint ventures in
partnership with leading companies from the global auto component industry viz Johnson
Controls, Faurecia, Yazaki Corporation, T.Rad, Visteon, Knorr Bremse, Ficosa, Yutaka
Giken, Sungwoo Hitech, Owens Corning, Menzolit Fibron, MobiApps Holdings,
Hendrickson, Stadco, Chuo Springs, and GYIN.

With 23 facilities, including 15 manufacturing plants, four engineering centres and three
export oriented units and operations in Europe, US and China, TACO is rapidly
expanding its business globally in a host of areas in auto components.

In 2007-2008, auto component imports are estimated at $4.5 billion, while exports are
only around $3.5 billion. When you probe for the reason behind this recent trend comes
one word: “China”. The surge in Chinese imports is really beginning to hurt Indian
manufacturers, but      rather than immediately crying the wolf of dumping Indian
manufacturers see the hope of partnering with their Chinese counterparts to cater to
burgeoning component orders from major players across the world


The world's top car makers turn to India for the nuts and bolts of their vehicles. Riding
this success, and capitalizing on the spiraling demand of domestic auto companies, the
Indian automobile components industry has emerged as one of India's fastest growing
manufacturing sectors, and a globally competitive one.

The Indian auto component industry is likely to almost double to € 14 billion by 2009 and
reach about € 29.94 billion by 2014. Its globally competitive auto component
manufacturing sector has been much in demand with global auto majors. A number of
them source critical components from India, with engine parts making up nearly a third
of all exports:

    1.   Engine parts (31 per cent)
    2.   Drive transmission and steering parts (19 per cent)
    3.   Body and chassis (12 per cent)
    4. Suspension and braking parts (12 per cent)
    5. Equipment (10 per cent)
    6. Electrical parts (9 per cent)
    7. Others (7 per cent)

The India Advantage:

Steered here by the country's high engineering skills, established production lines, a
thriving domestic automobile industry and competitive costs, global auto majors are
rapidly ramping up the value of components they source from India. The industry is
poised to jump from exports of € 1.347 billion in 2004-05 to €4.416 billion in 2008-09.
According to the Automotive Component Manufacturers Association of India, more than
a third (36 per cent) of Indian auto component exports head for Europe, with North
America a close second at 26 per cent.

In 2006, components worth € 1.5 billion were exported by Indian companies, 75 per cent
of which were bought directly by car companies. The original equipment manufacturers
(OEMs) include firms like General Motors, Ford Motor Company, Cummins
International, Bosch, Volkswagen, BMW, MAN (trucks) and JCB (earthmoving
equipment) amongst others.

Economic Survey 2006-07 says:

The turnover of the auto component sector has grown from € 2.32 to € 7.487 billion
between 1997-98 and 2005-06. In 2005-06, the sector's exports grew by 28 per cent to
reach € 1.347 billion. The major destinations of export for this sector are US and Europe,
which belong to the category of high Accepted Quality Level (AQL).

Over 20 OEMs have set up their International Purchase Offices (IPOs) in India to the
components. This number is expected to double by the year 2010. India enjoys a cost
advantage with regard to castings and forgings. The manufacturing costs in India are
25 to 30 percent lower than its western counterparts. India's Competitive advantage
does not come from costs alone, but from its full service supply capability.

Global auto majors and domestic giants are pulling out their purses and putting their
money where the production lines are.

       Auto parts maker Robert Bosch of Germany will invest € 150.7 million in its
       Indian subsidiaries over two years. Bulk of the investment will be in Motor
       Industries Co Ltd (Mico) -- the Bosch flagship in India.

       Japanese electronic major, Hitachi Ltd, is planning to start auto component
       manufacturing in India when its OEMs-Isuzu Motor and Nissan Motor--start
       manufacturing their cars in India.

       GKN Driveline, an arm of UK-based auto component company GKN, plans to
       open a new manufacturing facility in India.

      Dubai-based auto ancillary major Parts International Company has plans to
       invest approximately € 2.7 million in India over three years. This includes setting
       up a manufacturing facility meant to service exports to CIS and SAARC

        Fiat India is taking baby steps in becoming a global sourcing hub for
       components. Fiat has exported components worth € 6.213 million last year to its
       operations in South Africa.

       General Motors has decided to increase sourcing of components from Indian
       suppliers and intends to ship parts worth $748.75 million to its global
       production units by 2010.

Big players go high-tech

The auto components industry in India is dominated by around 500 key players, which
contribute more than 85 per cent of India's production. Some of the largest, like
Motherson Sumi, Sona Koyo Steering Systems, Rico Auto Industries, Bharat Forge,
Amtek and Mahindra & Mahindra are scaling up from producing individual
components to making assemblies and systems, as automobile makers seek to manage
fewer vendors and trim costs.

Government initiatives

The Government of India allows automatic approval for foreign equity investment up to
100 per cent for the manufacture of auto components. Manufacturing and imports in this
sector is free from licensing and approvals. There is no local content regulation in the
auto industry. The engineering export promotion council under the aegis of Ministry of
Commerce and Industry, Government of India, over the years has been engaged in
promoting exports of engineering goods including auto parts. Among other initiatives that
have been effected in 2006-07 are:

        Reduction in the duty of raw material to 5-7.5 per cent from the earlier 10

       Setting up of the National Automotive Testing and R&D Infrastructure Project
        (NATRIP) at a total cost of € 290.85 million for enabling the industry to usher in
       global standards of vehicular safety, emission and performance standards.

       Finalization of the Automotive Mission Plan (AMP) 2006-2016 for making India
       a preferred destination for design and manufacture of automobile and automotive

Climbing up the value chain

The Indian automotive component industry has made a sustained shift to the global Tier 1
market for their products. In the 1990s, the Indian auto components market was
dominated by supplies to the aftermarket, with only 35 per cent of exports being sourced
by Tier 1 OEMs. In 2006, it is a very different story. Today, Indian automobile
component manufacturers supply 75 per cent of their exports to Tier 1 OEMs and only 25
per cent to the aftermarket.

Indian component suppliers have displayed a growing capability to cater to the
engineering and production needs of the some of the world's biggest auto companies.
This is largely due to:

       Proficiency in understanding technical drawings and being well conversant in all
       global automotive standards: American, Japanese, Korean and European

       Appropriate automation has led to economically attractive production costs

       Flexibility in small batch production

       Growing IT capability for design, development and simulation

Striking the growth chart, Indian companies are:

        Increasing investments in production capacity
       Establishing partnerships in India and abroad
        Investing in or acquiring companies overseas
       Establishing Greenfield manufacturing footprints overseas

The road ahead

Exciting times lie ahead for the Indian automotive component industry. Besides the
burgeoning demand from global auto majors, there is also the domestic car industry,
which is growing at a spanking rate of over 16 per cent, driven by a rising consumer base
and affordable loans.

Tata group profile:

The Tata Group comprises 98 operating companies in seven business sectors:
Information systems and communications; engineering; materials; services; energy;
consumer products; and chemicals. The Group was founded by Jamsetji Tata in the mid
19th century, a period when India had just set out on the road to gaining independence
from British rule. Consequently, Jamsetji Tata and those who followed him aligned
business opportunities with the objective of nation building. This approach remains
enshrined in the Group's ethos to this day.

The Tata Group is one of India's largest and most respected business conglomerates,
with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2
per cent of the country's GDP, and a market capitalisation of $76.3 billion as on
December 27, 2007. Tata companies together employ some 289,500 people. The
Group's 27 publicly listed enterprises — among them stand out names such as Tata
Steel, Tata Consultancy Services, Tata Motors and Tata Tea — have a combined market
capitalisation that is the highest among Indian business houses in the private sector, and
a shareholder base of over 2.9 million. The Tata Group has operations in more than 85
countries across six continents, and its companies export products and services to 80

The Tata family of companies shares a set of five core values: integrity, understanding,
excellence, unity and responsibility. These values, which have been part of the Group's
beliefs and convictions from its earliest days, continue to guide and drive the business
decisions of Tata companies. The Group and its enterprises have been steadfast and
distinctive in their adherence to business ethics and their commitment to corporate social
responsibility. This is a legacy that has earned the Group the trust of many millions of
stakeholders in a measure few business houses anywhere in the world can match.

A saga of vision, commitment and fortitude

As much an institution as it is a business conglomerate, the Tata Group is unique in more
ways than one. Established by Jamsetji Tata in the second half of the 19th century, the
Group has grown into one of India's biggest and most respected business organisations,
thanks in no small part to its entrepreneurial vision, its commitment to ideals that put
people before profits, and its fortitude in the face of adversity.

The Tata titans

There is a difference between making money for oneself and creating wealth for others.
This is the story of a business house that has created wealth for a nation. It is a story of
struggle, anxiety, adventure and achievement. This is the story of our pioneers.

Jamsetji Tata:

The founder of the Tata Group began with a textile mill in central India in the 1870s. His
powerful vision inspired the steel and power industries in the country, set the foundation
for technical education, and helped India leapfrog from backwardness to the ranks of
industrialised nations.

Dorab Tata:

Through his endeavours in setting up Tata Steel and Tata Power, this elder son of
Jamsetji Tata was instrumental in transforming his father's grand vision into reality. It
was also under his leadership that the Sir Dorabji Tata Trust, the premier charitable
endowment of the Tatas, was created, propelling the Tata tradition of philanthropy

Sir Ratan Tata:

Jamsetji Tata's younger son had a personality that reflected his sensitivity to the
struggles of ordinary people and his desire to utilise his considerable wealth to enhance
the quality of public life. A philanthropist all his life, he created a trust fund for "the
advancement of learning and for the relief of human suffering and other works of public
utility". The Sir Ratan Tata Trust is today the second largest of the Tata trusts.

JRD Tata:

The late chairman of the Tata Group pioneered civil aviation on the subcontinent in 1932
by launching the airline now known as Air India. That was the first of many path-
breaking achievements that JRD, who guided the destiny of the Group for more
than half a century, came to be remembered for. Naval Tata: Naval Tata's myriad
contributions in the fields of       business, sports administration and labour relations
symbolised all that is best in the Tata spirit of giving back to society and the communities
in which its enterprises grow.

Tata group companies


   1. Tata Sons
   2. Tata Financial Services
   3. Tata Quality Management Services

Global operations

   1. Tata Africa Holdings
   2. Tata AG
   3. Tata Enterprises AG
   4. Tata Incorporated
   5. Tata International
   6. Tata International AG
   7. Tata Limited
   8. Tata Precision Industries
   9. Tata Tea Inc

The seven business sectors

   1. Engineering
   2. Materials
   3.   Energy
   4.   Chemicals
   5.   Services
   6.   Consumer products
   7.   Information systems, communications

                                    1. ENGINEERING


1. Tata AutoComp Systems

Subsidiaries / associates / joint ventures:
Automotive Composite Systems International, Automotive Stampings and
Assemblies, Knorr Bremse Systems for Commercial Vehicles, Tata AutoComp
GY Batteries, TACO Engineering, TACO Faurecia Design Centre, TACO
Hendrickson Suspension Systems, TACO Interiors and Plastics Division,
TacoKunststofftechnik, TACO MobiApps Telematics, TACO Supply Chain
Management, TACO Tooling, TACO Visteon Engineering Center, Tata Ficosa
Automotive Systems, Tata Johnson Controls Automotive, Tata Toyo Radiator,
Tata Yazaki AutoComp, TC Springs, Technical Stampings Automotive.

2. Tata Motors

Subsidiaries / associates / joint ventures:
Concorde Motors, HV Axels, HV Transmissions,
Nita Company, TAL Manufacturing Solutions, Tata Cummins, Tata Daewoo
Commercial Vehicles Company, Tata Engineering Services, Tata Precision
Industries, Tata Technologies, Telco Construction Equipment

Engineering services

Tata Projects
TCE Consulting Engineers

Engineering products

TAL Manufacturing Solutions
Telco Construction Equipment Company TRF

                                      2. MATERIALS


Tata Advanced Materials


Tata Steel
Subsidiaries / associates / joint ventures:

Hooghly Met Coke and Power Company, Jamshedpur Injection Powder
(Jamipol), Jamshedpur Utility and Service Company Limited (JUSCO), Lanka
Special Steel, mjunction services, NatSteel, Sila Eastern Company, Tata
BlueScope Steel,Tata Metaliks, Tata Pigments, Tata Refractories, Tata Ryerson, Tata
Sponge Iron, Tata Steel (Thailand),Tata Steel KZN, Tayo Rolls, The Dhamra Port
Company, The Indian Steel andWire Products, The Tinplate Company of India, TM
International Logistics, TRF

                                        3. ENERGY

Tata BP Solar India
Tata Power
Subsidiaries / associates / joint ventures: Tata Ceramics, Tata Power Trading,
North Delhi Power Limited

Oil and gas

Tata Petrodyne
                                      4. CHEMICALS
Rallis India
Tata Chemicals
Tata Pigments


Advinus Therapeutics

                                       5. SERVICES
Hotels and realty

Indian Hotels (Taj group)
Subsidiaries / associates / joint ventures:
Taj Air, Roots Corporation (Ginger Hotels)

Tata Realty and Infrastructure

Financial services

Tata AIG General Insurance
Tata AIG Life Insurance
Tata Asset Management
Tata Capital
Tata Financial Services
Tata Investment Corporation

Other services

Tata Quality Management Services
Tata Services
Tata Strategic Management Group

                               6. CONSUMER PRODUCTS
Infiniti Retail
Tata Tea
Subsidiaries / associates / joint ventures:
Tetley Group, Tata Coffee, Tata Tetley, Tata Tea Inc
Tata Ceramics
Tata McGraw Hill Publishing Company
Titan Industries

                               INFORMATION SYSTEMS
Nelito Systems
Tata Consultancy Services
Subsidiaries / associates / joint ventures:

APONLINE, Airline Financial Support Services, Aviation Software Development
Consultancy, CMC, CMC Americas Inc, Conscripti, HOTV, Tata America
International Corporation, WTI Advanced Technology
Tata Elxsi; SerWizSol ; Tata Interactive Systems
Tata Technologies

                                 8. COMMUNICATIONS

Tata Sky
Tata Teleservices
Subsidiaries / associates / joint ventures:
Tata Teleservices (Maharashtra)


Subsidiaries / associates / joint ventures: Tatanet

Tata Autocomp Systems Ltd (TACO)

A recent joint study by the Confederation of Indian Industry and McKinsey contends that
India is all set to capitalise on a historical opportunity that skill-intensive industries, such
as auto components and pharmaceuticals in particular, provide. The report makes it clear
that India's competitive advantage in varied sectors goes way beyond a low wage

TACO is part of the Tata Group — India's best-known industrial group with an estimated
turnover of around US$ 21.9 billion (equivalent to 2.8 per cent of India's GDP). The Tata
brand is recognised in India as the largest home grown brand and the most respected

TACO serves every OEM in India, provides complete programme management
capabilities and is focused on building exports and being a system supplier. TACO's 24
manufacturing plants and 5 engineering centres garner technology from the US, Europe,
Japan, Korea and Asia-Pacific, thus bring the latest technology to its customers.

The company has built strong manufacturing facilities in partnership with global and
Indian companies to supply auto components to the Indian and global automotive
industry. It also offers automotive companies in India and abroad capabilities in
processes and systems to ensure world-class design skills at competitive costs besides
providing supply chain management capabilities.

It can bring a transformation in low-cost transportation around the world. These days
people are looking for products that will meet standards, safety norms and still offer
comfort. With great concerns on climate change, depleting fossil fuels, pollution more
green and clean products will come from India. Products that meet performance standard
and price expectations will succeed.

The India advantage

The shackles have been broken, the potential is being exploited and manufacturing in
India is reaping the many benefits that the country has to offer. The India advantage in
manufacturing has proved a magnet for some of the biggest names in the business, among
them GE Corporation, General Motors, Ford Motor Company, Honda Motors, Toyota
Motors, DiamlerChrysler, Nissan-Renault, VW Group, who have set up production units

The reasons for India's emergence as a top-drawer manufacturing destination are obvious:
robust economic growth and the promise of more, a stable political system, a strong legal
and accounting framework, a tremendous pool of engineering talent, mature capabilities,
a sturdy capital goods base, low overall costs and the proliferation of the English

A recent joint study by the Confederation of Indian Industry and McKinsey contends that
India is all set to capitalise on a historical opportunity that skill-intensive industries, such
as auto components and pharmaceuticals in particular, provide. The report makes it clear
that India's competitive advantage in varied sectors goes way beyond a low wage

An established raw materials base and growing domestic demand are further factors that
endow India with significant advantages. Its geographical and strategic positioning in the
South Asia region makes it a unique manufacturing and marketing hub. The range of
machinery produced in India is wide, and Indian companies have a proven track record of
handling large projects in the country and abroad.

Though a good amount of media coverage - and investment - is being focused on India's
IT sector, most of the big bets are being placed on the traditional Manufacturing sector.
According to various sources FDI figures towards are gradually increasing and is
expected to cross $ 11 Billion in the year 2006 - 07, from nearly $ 8 billion is the last
year mainly in areas of infrastructure, manufacturing and IT. This has placed on an
enviable 4th largest FDI destination in Asia.

Automobiles and Auto Components are two of the most dynamic manufacturing sectors
in India. The country's auto-component companies have shown that they are well
positioned in terms of skills, price and quality to cater to global supply chains. Various
global automotive OEM's are using India's skill and low cost advantage, as a sourcing
platform for various components and automotive parts. Others such as Fiat, Toyota,
Honda, General Motors, Ford, DiamlerChrysler, Hyundai, Skoda Auto & Suzuki have
already established their manufacturing presence here and are expanding capacities and
introducing models at an accelerated pace.

The country today boasts of 12 Commercial & Utility Vehicle Manufacturers, 12 Tractor
Manufacturers, 11 Passenger Car Manufacturers, 10 two wheeler manufacturers, 3 Three
wheeler Manufacturers and nearly 7 Earth Moving Equipment Manufacturers.
India's automotive industry recorded an growth rate of about 7 per cent in 2005-06, down
from the higher growth rates in the prior years. Though Passenger Vehicles grew at 8
percent, Commercial Vehicles at around 10 percent, 2 Wheelers around 14 percent, and
Tractors grew at 33 percent. Overall the auto industry in bullish about India and
confidence in the market seems to grow stronger.

The Indian auto-components industry is well positioned in terms of diversification, skills,
price and quality to cater to global supply chains. Approvals for foreign direct
investments in the industry are automatic and exports from the country are exempt from
tax. The industry already exports close to 50 per cent of its production and is aiming at
reaching much greater heights.

Simply put, having come of age and found its feet, manufacturing in India has secured its
place in the global sun. The time to cash in has arrived.

The Tata group experience

The Tata Group has over half a century of experience in the engineering business,
including the automotive industry. A steel maker since the beginning of the 20th century,
the Tata Group ventured into automotive manufacture with the incorporation in the 1940s
of Tata Engineering & Locomotive Company Ltd, now known as Tata Motors Ltd.
Tata Motors has, since its inception, been the leader in the manufacture of commercial
vehicles. In the 1990s, the company launched the first indigenously developed car, the
Indica compact, and followed it up with the launch of the Indigo sedan and Indica Marina
estate car. The company also makes the Safari and Sumo SUVs.

Other Tata Group companies are into the design, engineering and manufacturing of a
variety of automotive-related and other engineering and industrial products. The large
pool of engineering talent at the Tata Group is unmatched in India, both for its size and
its quality. The group has built this strength over the decades, while absorbing a range of
technologies, honing skills, and building management and marketing competencies.
The group has consistently spent on research and development, and is now reaping the
benefits of its past investments in a wide range of automotive-relevant areas, from
metallurgy to plastics and from CAD/CAM/CAE to supply chain management, besides
its investments in state-of-the-art manufacturing and testing equipment.
The Tata Group has all the skills and experience needed to build a global automotive
manufacturing enterprise.


TACO has demonstrated the power of alliances to build the automotive components
business. Beginning with one joint venture for seating equipment, with Johnson Controls
of the US, the TACO group now has 24 manufacturing joint ventures offering a range of
automotive components and out of 5 engineering centres, three are joint ventures and
offering their services globally. They have partners from the US, Europe, Japan,
Singapore and Korea are bringing the latest technology to their customers.

TACO have built strong manufacturing facilities; and we also offer automotive
companies in India and abroad process and systems capabilities, world-class design skills
at competitive costs, and supply chain management services.

TACO alliances have worked well because in each of their joint ventures with leading
global companies both sides bring something substantial to the table — technology,
capital, design, engineering and manufacturing capabilities, an ability to harness and
manage skilled Indian engineering talent, and the ability to market and sell the products
and service the customers.

TACO is already supplying components to every automaker in India and has strong
relationships with all its customers in India. With every programme for each customer,
their relationships have deepened. TACO management processes and support have
ensured that each joint venture is profitable.

TACO joint ventures in India have provided strong support to our partners' global
operations. TACO has simultaneously protected every partner's technology and
proprietary knowledge by working in a completely transparent manner.

Over the years TACO     partners have developed confidence and trust in our capability to
handle existing projects and to grow. And the TACO group learned from each joint
venture to strengthen its competencies further, building capabilities to take on
bigger projects worldwide.

Given that India is becoming a global automotive location, both as a market and as a base
for global manufacturing and engineering, TACO is the best partner both to bring
India's strengths to business, establish leadership in the India market for product range
and to use low-cost Indian engineering and manufacturing to support your global


TACO has built strong manufacturing facilities in partnership with global companies to
supply auto components to the Indian and global automotive industries. The key intent of
the business unit is to become the leader in the domestic space and achieve global
competitiveness in quality, cost and delivery capabilities and to become the outsourcing
base of choice for the global automotive industry.

In each of its joint ventures, TACO has focused on: integrating the partner's best
practices and absorbing its processes, technologies and skills. Building product
development and programme management capabilities; building a strong vendor base that
can contribute to the global ambitions of the joint venture; developing world-class
quality, cost and delivery capabilities; continuously benchmarking the joint venture with
partner locations and with global supplier evaluations by OEMs.

The TACO Group has world-class capabilities in the manufacture of auto components.
With its many strengths it has established itself as a trusted supplier to almost every
original equipment manufacturer in India, across a range of industry segments — cars,
utility vehicles, commercial vehicles, two wheelers and tractors.


TACO, in collaboration with its partners, currently manufactures components in the
following product categories:

• Interiors
• Exteriors
• Powertrain
• Electricals and electronics
• Ride control and handling

Domestic customers

      New Holland
      Hyundai Motor
      Royal Enfield
      Eicher Motors
      Force Motors
      TAFE
      John Deere
      Behr India
      Skoda Auto
      Ford India
      Ashok Leyland
      Punjab Tractors
      Volvo

      General Motors
      Cummins India
      Swaraj Mazda
      Mahindra & Mahindra - Farm Equipment Sector / Renault
      Honda SIEL
      Tata Motors
      Fiat India
      Toyota Kirloskar Motors

International customers

      Europe North America      Asia Pacific (Excluding India) • OEM OEM OEM
      GM - Opel
      GM - SAAB
      General Motors
      GM Shaghai
      VW
      GM DAT
      Audi
      Changan Ford
      Ford Europe
      GM Holden
      Yazaki Corporation

Tier 1

        Peguform Black Hawk Air International
        Faurecia ABC Plastics
        Magna Steyr Intier
        Plastell Borg Warner (SCM)
        MODENAS (SCM)
        Honeywell Turbo Technologies (SCM)
        Lotus Cars (SCM) Visteon
        Ficosa International

Engineering capabilities

TACO offers automotive companies in India and across the globe world-class design
skills at competitive costs. It has proven capabilities in CAD, CAE, engineering design,
analysis, testing and homologation and prototype development and has a well-established
offshore model. TACO has the critical ability to understand customer expectations and
requirements, review designs and execute engineering projects within cost, quality and
delivery targets. It offers its customers reduced engineering costs and a faster
development cycle with round-the-clock development.

Quality certifications like ISO-9000:2000 and Six Sigma ensures customer satisfaction,
project monitoring, performance assessment and resource management.

Infrastructure and technology

TACO business units use modern state-of-the-art, computer-aided design tools;
computer-aided engineering analysis tools and world-class communication infrastructure.
The business units have knowledge of all the applied sciences necessary to meet the
requirements of its customers.

Styling: Alias, ICEMsurf
CAD / PDM: Catia, Ideas, UGS, PTC, and Metaphase
CAE software: Hypermesh, LS Dyna, MSC software, Moldflow

Product design: Styling, class ACAD, CAE, PDM, KBE reverse engineering
Scalability of technology

TACO can scale up its skills, manpower, software, hardware and space to meet spurt
requirements and higher customer demand levels by utilising the abundant resources of
the group or by having committed resources wherever they can be fully utilised on a
continuous basis.


TACO has five state-of-the-art engineering offices at Pune, India.

• TACO Engineering
• TACO IPD Technical Center
• TACO FAURECIA Design Centre
• TACO Visteon Engineering
• TATA Johnson Controls Engineering Center


The Supply Chain Management strategic business unit of Tata Auto Comp Systems
(TACO SCM) offers single-window services to global automotive customers for the
sourcing of components from India and other low cost locations in the region. TACO
SCM takes full responsibility for quality, cost and delivery, thereby substantially
lowering the risk of re- sourcing for the customers.

TACO SCM also provides logistics services to Indian automotive companies, including
TACO joint ventures, delivered through a consolidation of requirements and partnership
with logistics service providers.

The TACO SCM edge

TACO SCM offers significant advantages to its customers:
• Total supply-chain solutions
• Committed lead times
• Lower cost of execution
• Strong ties with competent sources

Products and services

TACO SCM sources a comprehensive range of automotive components from well-
established and qualified component manufacturers, including TACO's own business
units and supplies them to global automotive customers, taking complete responsibility
for quality, cost and delivery.

Current product groups include:

• Machined castings, both ferrous and non-ferrous
• Machined forgings
• Precision-machined parts
• Sheet metal assemblies
• Rubber parts and plastic parts
• Small system assemblies


TACO SCM also serves the import, export and inbound logistics needs of Indian
automotive companies, including TACO's various business units, through a consolidation
of requirements and partnership with logistics service providers.

SCM capabilities

The TACO SCM team has technical and commercial expertise in all the product areas it
serves and has five to ten years of worldwide exposure to the needs of the automotive
industry. It has the services of 4 ISO / QS / TS 16949 lead assessors, 6 business
excellence assessors and possesses a range of capabilities.

TACO SCM's competitive sourcing capabilities include: Costing expertise for all product
groups serviced Programme management capabilities
A focus on cost-optimisation at every stage Influence on raw material, equipment and
tooling vendors

Exposure to other low-cost sourcing bases in Asia, including China

TACO SCM's logistics capabilities include:
• Partnership with an international logistics company
• Access to warehouses in all major locations worldwide
• TACO SCM delivers value through process improvement initiatives such as Six

Other TACO service business units

• TACO Engineering
• TACO Tooling

Taco engineering capabilities

TACO Engineering, as a strategic business unit of Tata AutoComp Systems Limited, uses
the group's extensive experience in the auto-components industry to offer engineering
services to major automotive original equipment manufacturers and tier-I suppliers
Its capabilities include product design, prototyping, and testing and embedded software
development for a wide variety of automotive systems.


Along with TACO's two dedicated centres for Johnson Controls, USA and Faurecia,
France, TACO Engineering constitutes the largest group of engineers serving overseas
automotive customers in India.

At its state-of-the-art new engineering facility in central Pune, India, a team of about 380
engineers offers globally benchmarked engineering services at a high level of
productivity and competitive costs. Faster development cycles are assured through two-
shift working schedules.

As a Tata Group company, TACO attracts the best talent in the country. TACO
Engineering's project teams are led by people with global experience in dealing with
customer expectations, and include product experts and young engineers from the best
Indian universities.

A majority of these engineers have international shop-floor experience and have received
training for a variety of automotive component systems.

TACO can provide onsite engineering at customers' locations, offshore development in
India and also dedicated engineering centres that can provide exclusive services to

Project teams work with TACO's onsite coordinators and technical experts to meet each
customer's special engineering requirements.

Services offered

TACO Engineering is an ISO-9000: 2000-certified company. To see the services offered
by TACO Engineering, click here

Automotive systems

TACO Engineering has proven engineering capabilities in a variety of product lines,
      Seating systems
      Suspension systems
       Control cables Mirrors
       HVAC Engine coolings
       Dashboards Wiring harnesses
       Coil springs Radiators
       Sheet metals Injection moulds
       Welding fixtures

Engineering capabilities

The engineering facility uses the latest versions of all the major industry-standard
computer-aided design (CAD) and computer-aided engineering (CAE) software
technologies, including:

Application Software

Styling Alias, Icemsurf 2001
CAD Catia V4 and V5, Ideas 10, Pro-E 2001, Wildfire and Wildfire 2, Unigraphics 18,
Nx and Nx 2, AutoCad 2005, and SolidEdge 15
CAE Hypermesh 6, Ideas 10, LS Dyna, MSC Nastran 2001, Moldflow PDM Metaphase

Taco product range

Automotive interiors & exteriors

Product range
      Seating system and components
      Cockpits
      Injection-moulded plastic components
      Inner rear view mirror •
      Dashboard Composites
      Instrument panel
      Dashboards
      Door pads (Door trims)     Instrument panel • Grab handles
      ABC pillars
      Air vents
      Cockpits
      Injection-moulded plastic components


Product range

      Radiator Intercooler
      Oil cooler
      Gear shifter-rod and cable type
      Radiator fan motor shroud assembly
      Clutch cable
      Accelerator cable Oil sump
      Fuel tank Composites
      SMC valve cover
      Oil sump

Electricals and electronics

• Windshield washing system
• Wiring harness
• Battery cables Vehicle tracking system

Ride controls and handling

• Parking brake system
• Control cables
• Coil spring
• Torsion bars
• Trailing arms
• Commercial vehicle braking systems


Engineering services

TACO offers engineering skills to Indian and global automotive companies through its
stateof-the-art design facilities, ensuring quality, competitive cost and timely delivery.
The engineering services include computer-aided design (CAD), computer-aided
engineering (CAE), tooling, testing, homologation and system engineering for faster
product development cycles in the manufacture of a wide range of automotive component

TACO has over 400 engineers at its Pune facilities and can provide onsite engineering at
customers locations, offshore development in India and also dedicated engineering
centres to provide exclusive services to customers.

Services offered
•   Class-A, CAD, CAE, PDM, KBE and Reverse Engineering •           Engineering analysis
• Tool design and process engineering • Design optimisation
• Prototype development

Testing [in association with Tata Johnson Control - Engineering, Automotive Research
Association of India (ARAI) and National Chemical Laboratories (NCL)]:

Material, component and product testing
• Mechanical testing
• Engine testing
• Wind Tunnel testing
• Emission testing
• Chemical testing
• Fatigue, endurance and performance testing

Software development in association with other TATA group companies:
• Application development
• Engineering software development • Knowledge-based applications
• Electronics
• Real time systems
• Electronic system design
• Embedded software development
• VLSI design
• Chemical testing

• Fatigue, endurance and performance testing

Range of automotive component modules:

TACO has proven capabilities in providing engineering services across different product
• Seating systems
• Suspension systems
• Control cable
• VLSI design
• Mirrors
• Engine cooling
• Dashboard
• Wiring harness
• Coil springs
• Radiator
• Sheet metal
• Injection moulds
• Welding fixtures, etc

TACO has 5 state-of-the-art engineering offices at Pune, India.

TACO Tooling

TACO Tooling offers turnkey solutions in product design services and assembly
solutions for automobiles. It develops tandem dies, high speed transfer dies for
automobile exteriors, interiors and structural parts used in manufacturing of exterior skin
panels (door outer, roof), interior high strength (pillars, floors, dash panels and door
inner), structures (cross members, reinforcements and cross car beams), fuel tanks and oil

TACO Tooling offers partnership in product development with customers, ensuring faster
design process, cost reduction and superior quality. It specialises in the reduction of
product launch time by providing simultaneous engineering support to the customer's
product team. This includes:

        Simulation for product feasibility
        Die design along with product design
        Die development along with die design
        Try-out on the required presses and on the customer's home-line Launch support
        Supply of parts
        Quality certification ISO-9001: 2000 by BVQI

• Cummins
• Ford
• General Motors
• Honda
• Supply of parts
• Toyota

Awards and commendations

•    Best Quality Supplier Award from TKML
•    Supplier of the Year - Gold Award 2005
•    Zero PPM Award 2005
•    Best Quality Supplier’ for supplies of ORVM for Innova 2005
•    ‘Recognition of their Best Efforts and Quick response to meet Customer
     requirement’ 2005
•    'Silver Award’ for commendable performance in Quality 2005
•    Silver Award’ for commendable performance in Cost 2005
•    Merit Award for Overall Best Performance’ 2005
•    Global Supplier of the Year 2005
•    Tata Johnson Controls wins National Energy Conservation Award for 2005
•    Award for "Smooth Production Preparation" 2004
•    "0" PPM and QCD Award 2004
•    "Supplier of the Year Award" 2000-2004
•    TACO Interiors and Plastics wins TBEM Serious Adoption and Highest Delta
•    TJC Automotive Ltd wins Ford Motor Company World Excellence Gold Award
     for 2004
•    Tata Auto Plastic Systems honoured by General Motors as supplier of the year
•    Tata AutoPlastic Sytems awarded TKML award for 2004
•    JBM Sungwoo receives leadership award for safety, health and environment
•    TJC foam plant wins JCI Asia Pacific Best Six Sigma Project Award for FY
•    Tata Johnson Controls wins CII-EXIM bank award for Business Excellence-
•    ASAL wins prizes in the Tata Crucible-Business Quiz
•    Delivery award 2003

•   Tata Auto Plastic Systems honoured by General Motors as a 2003 supplier of
    the year
•   Cost & Delivery Award 2002
•   QCD Award 2001


Partner: Johnson Control


Metal Structures and Mechanisms:

Johnson Controls’ component portfolio for metal structures and mechanisms includes all
adjusters, such as Gemini track family, latches, height adjusters, and a wide selection of
manual and power recliners.

Modular Structure (MS) for front seats is based on a Core Product Portfolio (CPP)
philosophy of using modular components in order to reduce development cost and time
and minimize investment. CPP also reduces technical risk and improves quality. How?
By adapting to different applications and configurations without changing the basic seat

Rear seat structures, featuring modular platform solutions, utilize state-of-the-art
manufacturing technology that includes transfer presses (up to 1,600 tons) and laser


They also offer VT, a new and highly durable type of foam pad for vehicle seating. It
improves occupant comfort and ensures superior performance characteristics when
compared to conventional vehicle seating. This advanced, vibration-dampening foam
offers major improvements in comfort, durability, and craftsmanship.

Climate Systems

The EcoClimate seat, the passive climate system, features a unique combination of
superior comfort and humidity control. It is based on an innovative combination of inner
seat materials. Compared to conventional seats, EcoClimate provides up to 80% higher
heat absorption and 300% higher moisture absorption.

VentSys is active climate solution. The improved airflow enables best-in-class thermal
comfort. The unique combination of one or two fans, air channels, and special materials
optimizes the occupant’s feeling of well-being. Because VentSys reduces noise, weight,
and cost levels, it competes easily with high-end luxury ventilation systems.

Safety Systems

The riACT Rear-Impact Active Head Restraint, for example,
optimizes the anti-whiplash performance of seats.

riACT has been rated best-in-class by numerous car manufacturers. The front section of
the head restraint moves forward and upward to reduce the distance between the head and
the head restraint during a rear impact collision. Two systems are available: an occupant-
driven version and an ECU-triggered version.


Johnson Controls’ solutions include:

      Human Machine Interaction Design Expertise
      Driver Information
      Infotainment & Connectivity
      HomeLink
      Body Electronics
      Energy Management

Home link

HomeLink® is a radio-frequency (RF) device that communicates with other RF devices,
such as garage door openers, estate gates, and home lighting. HomeLink® is seamlessly
integrated in the vehicle’s interior. Through a few easy programming steps, HomeLink®
learns the security codes of these devices, making HomeLink® the most reliable,
convenient, and technologically advanced connection between vehicle and home.

Partner: Faurecia

Ventilated seats are a recent innovation that ensures optimal thermal comfort for the
occupant whatever the weather conditions outside.

To improve comfort, Faurecia’s high-performance foam offers either enhanced
performance for a given volume or reduced volume for given performance criteria, for
example on slimline seats, which help to optimize the vehicle’s interior space.

Current Industry Status

India as a country has missed many opportunities in the past by keeping our economy
insular and not integrating it fast enough with the global shifts in manufacturing which
have happened in many industries. Unless we are pioneers or take part in these shifts
early, we miss the boat. It is very difficult to catch up until a structural change happens
once again (eg. higher cost of the manufacturing country due to transition of the
economy), which usually takes place after a long time – sometimes more than a decade.
In the IT sector, we pioneered the ‘Global Delivery Model’ and we can all see the impact
on our economy and the way business is changing.

If we take electronic industry for example, the outsourcing wave happened in 1980’s with
the establishment of Electronic Manufacturing Service Firms (EMS). We were still in the
license raj when this happened. Most of the opportunity was taken up by South East
Asian countries initially and then later China. EMS has grown tremendously in the last
two decades and accounted for 20% of cost of goods sold of branded players in 2000 and
is expected to rise to 50% by the end of the decade. Most of these are likely to go to
China and South East Asia, a lost opportunity worth billions of dollars!

Luckily for India, auto sector is laggard in outsourcing and hence the opportunity
is still open for us. It is not that the auto sector worldwide was not focussed on cost
cutting. It was just that their priority was elsewhere - in rationalising the number of
product platforms and in tiering of vendors. Many MNCs slashed the number of product
platforms (for example from 20 to 6) for better standardisation, economies of scale and
lower design costs. They also resorted to tiering of vendors, with tier 1 vendors acting as
system integrators.

However these have still not helped auto players to improve profits and hence the
pressure to reduce costs continues for American and European car manufacturers. They
are also realising that their core business must be profitable rather than making money
from complimentary businesses like finance, service, parts, etc. Any big reduction in cost
will come only from outsourcing manufacturing to developing countries hence this will
be the next wave of cost cutting for global auto majors.

No developing country has taken a leadership position in this sector. Hence India does
not have a huge gap to bridge in this sector. China also does not have high economies of
scale, as is prevalent in most sectors where they have a much larger domestic market
compared to India. China’s auto sector is growing at a scorching pace (>50% per annum)
and hence three years down the lane the difference could be high and India may find it
difficult to catch up unless we act now. All South East Asian nations including China
have less than 2% of world trade in auto components sector.

In future, competition for leadership is essentially going to be between China and
India. In terms of quality and engineering strength, we currently lead China and we need
to be capitalising on this. Hence auto components are still largely a virgin territory in
terms of supply to OEMs.

The free trade agreement (FTA) that India signed with Thailand in 2003 became
operative in 2004, with the auto component supply sector likely to be greatly affected.

Sona Koyo Steering is one of India's largest component manufacturers and newspapers
report that chairman Surinder Kapur plans to set up a representative office in Bangkok to
explore investment and import opportunities. Additionally, Sona Koyo Steering could use
Thailand as an export hub for the global market.

Outlook India reports that Bajaj Auto, another Indian industrial player, is planning
assembly operations in the Philippines and Indonesia. One reason for this strategy is to
tap the potential for South East Asian sales.

The technique of importing specialty items while maintaining the main thrust of
assembly in India could also appeal to the Indian auto components sector, fearing as it
does the wholesale flight of work and jobs to Thailand under the FTA provisions that
provide lower costs and lower duties.

China Challenge

In 2007-2008, for example, auto component imports are estimated at $4.5 billion, while
exports are only around $3.5 billion. When you probe for the reason behind this recent
trend comes one word: “China”.

The export of Chinese auto components to India has been growing at 130 per cent
annually over the last 5 years .Last year, India imported Rs 3,000 crore worth of
components from China. Exports to China, on the other hand, languished at a relatively
negligible Rs 100 crore.

The bald reality is that Chinese auto components sell in India at a price that is some 20
per cent cheaper than Indian equivalents (although this varies from product to product). If
one takes into account the cost of transport, customs duty etc.The real difference in
factory-to-factory cost between India and China at a huge 40-45 per cent.

While the obvious advantages that Chinese companies enjoy regarding infrastructure,
logistics, cheap power, economies of scale and so on may explain up to 10-12 per cent
price differential between products manufactured in the two countries.

From a low base, imports of parts and components from Hong Kong jumped 344% in the
year to 2007, while imports from the Chinese mainland leapt 146%. By contrast the
Mainland is already becoming an increasingly serious player in India's motor industry,
exporting chassis and bodywork, plus parts, for both cars and motor bikes worth US$214
million for the period 2006/2007.

The Chinese mainland currently accounts for about a third of India's imports of bodywork
for motor vehicles (for public transport), valued at around US$10 million annually. The
import category has grown 760% in the year to 2007, while sourcing from China has
accelerated from 30 mould units in 2005/2006 to 720 units in 2006/2007.

The Mainland supplies bodywork at between US$4,500 and US$4,650 per mould unit,
which is the lowest sourcing cost overseas for Indian producers. Other suppliers in this
segment include South Korea, Italy and France with 40 units each, costing in the range of
between US$55,000 and US$65,000 per unit.

The Way Ahead

The surge in Chinese imports is really beginning to hurt Indian manufacturers, but rather
than immediately crying the wolf of dumping, the members have visited China with an
open mind and seen the situation for themselves.

The hope is that the opportunity presented by the burgeoning Chinese market in
automobiles, can in fact translate into benefit for component manufacturers south of the

If the cost of manufacturing in China is so much lower, then it makes sense for Indian
companies to also set up shop there. From a Chinese base, they could both export as well
as supply local and MNC clients present in China.

Presence in China

Some Indian companies are already following this strategy. For example, Sundram
Fasteners has had a plant in Zhejiang province since 2004. More recently, Bharat Forge
set up a joint venture with China’s largest foundry unit, FAW Corporation, in Jilin

The Indian companies can neither ignore China, nor blame all their ills on the country.
Instead, India must try and engage with its northern neighbour.


The two countries today account for some 11.5 million vehicular units. They have
moreover been experiencing a 20-25 per cent growth rate over the last 5 years. ACMA
thus predicts that by 2040, India and China will account for between 40 and 70 million

To put this figure in perspective, the vehicle figure for Europe, the US and Japan
combined stands today at around 40 million.

SWOT Indian Auto component manufacturers


•     Application Engineering
•     High Quality - Low Cost (There are even Deming Award winners)
•     Consistency in Quality
•     Ability to cater to low volumes
•     R&D


•     Lack of scale
•     Supply Chain Infrastructure
•     Manufacturing Infrastructure - Hence Capital Requirement
•     Marketing


•      China
•      Complacency


•     MNCs focussing on low-cost outsourcing opportunities
•     Trend likely to increase in future
•     India and China are the two countries on the radar

Strategic Options Arising Out of SWOT Analysis

Focus on products / markets which have the following characteristics

1. Only require strength in manufacturing and in application engg.

•       Older models where the volumes are low for a western manufacturer to focus
•       High labour components (say more than 30% is manual content)
•       Intermediate technology


1. Indian auto component manufacturers good on low volume game (learn the scale
game in the meanwhile)

2. Transplant manufacturing
    Look at who owns the design (Tier 1 or Tier 2 supplier) and approach them for
subcontract manufacturing (beef up R&D over a medium term)

• Labour value addition in assembly operations Castings, Forgings, etc.
• Auto related software development where manufacturers can use their strengths in
application engg.
•Indian players are used to high operating margins


         7. Report-Automotive-Component-Sector (Indo- Italian chamber of


To top