Tata Daewoo Merger

The Road to GUNSAN

Case Study Presented by Group 11 (Malad Center, Mumbai) Geetanjali Singh, Manohar Suvarna, Sanket Shah, Satishkumar Deshpande, Sridhar Turaga and Ramachandran Iyer

Overview SWOT Analysis – TATA MOTORS & DAEWOO CV Acquisition Fitment – Demand/Supply/Policies Long Run Average Cost Increase in Production Effect of Acquisition Leveraging existing resources Win-Win Acquisition


Tata Motors
•  Strong financial background and looking out for inorganic growth in global arena •  •  6th Largest CV manufacturer in the world Tata Motors had 5% revenue from exports (Soft currencies countries) •  Tata Motors had a turnover of 15,483 Crores (USD 3.09 Billion) •  •  •  Dominant in LCV & pick-up range Future for multi-axle & high powered CVs USP - Cost effective solution for truckers •  •  •  •  •  • 

Daewoo CV
22% Market Share in Korea Daewoo went into bankruptcy Daewoo had a turnover USD 231 Million Dominant in 8 Tonne & above Daewoo was not present in 1 Tonne CV segment in Korea USP – Innovative design & power

The fit between the two companies seemed perfect fit

SWOT Analysis
Strength •  Strong domestic player •  Steady revenue growth •  High level of innovation •  Strong labor relations Weakness •  Decline in vehicle sales •  Employee productivity •  Image of low quality makers •  Large domestic market •  Workforce with international exposure

Threats •  Competition from global players •  Strengthening rupee •  Environmental regulation Opportunities •  International growth •  New product lines


SWOT Analysis
Strength •  Strong product base •  High employee productivity •  R&D activities •  Workforce with international exposure Weakness •  Weak financial position •  Not present in 1 Tonne segment •  Hierarchical work culture

Threats •  Company could close down without buyout •  Strong domestic labor union Opportunities Attractive company for buyout