TATA ACE

What led to the idea of TATA ACE ?

Growth of improved highway system eg. Golden quadilateral
Better secondary roads and construction of all weather roads
connecting the rural market with the urban markets
Company recorded the highest loss of $5 billion in the year
2001
Absence of smaller transportation vehicles
Company felt the core business could be threaten without
any product in the smaller and the larger commercial
vehicles
What company found in the Market research ?
Customers wanted a scaled down version of TATA 407
4 wheeler truck gave more sense of status in the society
Families of drivers wanted more safety for their family
members
Market is not ready to pay more than Rs 2,00,000
People wanted to get rid of the limitations of the 3 wheeler
vehicles
Strategic Decision
Kant, appointed Girish Wagh,30 year old engineer, to head the
TATA ACE project team. Under Wagh, the ACE team implemented
cross functional team for product development and production
prepration process (3P) which allowed involving suppliers,
customers, marketing team and dealers at the intitial stage of
development. The ACE team was assigned $2.2 billion for the
complete development stage.

Challenges faced under designing of the product

Overloading Capability
Engine Selection
Safety, comfort and aesthetic considerations

Sourcing and Production

Tata Motors was getting 70% of the parts from the outsourced
vendors and it wanted to increase this share dues to 2 reasons
Higher wages being paid at TATA Motors
Conversion of fixed costs of production to variable costs
which would help the company during downturn in the
market
The company used the under utilized Pune plant for productions.
Pune gave the company a locational advantage as the company
was expecting 70% of its sales from the western and the southern
region.
Marketing
From the emotional perspective, the marketing team wanted to
create a sense of liberation and feeling good about your job. The
team wanted the customer to sense the new opportunities that
would come with the 4 wheeler TATA ACE. Indias First Minitruck
was the tagline assigned to TATA ACE. Ad having 2 elephants
walking together suggested customers a sense of stability and
trust of big truck ina small package. The dealers were trained to
communicate the functionality and operating-economics analysis
to the customer.
Distribution
The company started distribution in 5 states with the 1S model. 1
S model meant only sales stores having just 400 square foot
building, 1 or 2 vehicles, one desk and a phone. In order to avoid
providing service bays at its dealership, the company provided
training to the local mechanics along with free tools under the
program Suvidham.
Launch and Next steps

The product was well appreciated in the markets as the company

was able to sell 30,000 products in less than ayear. Kant wanted
to take this idea forward on the following lines
New model varients
New Regional markets
Export to foreign markets