INTRODUCTION TO TATA MOTORS:

Industry AutomotiveFounded 1945Founder(s) J. R. D. TataHeadquarters Mumbai, Maharashtra, IndiaArea served WorldwideKey people Ratan Tata (Chairman Emeritus)

Cyrus Pallonji Mistry (Chairman)Karl Slym (died 26 January 2014, Managing Director) Ravi Kant (Vice Chairman)

Products AutomobilesCommercial vehiclesCoachesBusesConstruction equipmentMilitary vehiclesAutomotive parts

Services Automotive design, engineering and outsourcing servicesVehicle leasingVehicle service

Revenue US$ 34.7 billion (FY 2012-13)Operating income

US$ 3.06 billion (2012)

Profit US$ 2.28 billion (2012)Total assets US$ 28.05 billion (2012)Total equity US$ 6.44 billion (2012)Employees 59,759 (2012)Parent Tata GroupDivisions Tata Motors CarsSubsidiaries Jaguar Land Rover

Tata DaewooTata Hispano

Website www.tatamotors.com

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is an Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses, construction equipment and military vehicles. It is the world's sixteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume.

Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom. It has research and development centres in Pune, Jamshedpur, Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. Tata Motors' principal subsidiaries include the British premium car maker Jaguar Land Rover (the maker of Jaguar, Land Rover and Range Rover cars) and the South Korean commercial vehicle manufactuer Tata Daewoo. Tata Motors has a bus manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo), a construction equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction Machinery) and a joint venture with Fiat which manufactures automotive components and Fiat and Tata branded vehicles.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile.[6] In 1998 Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008 launched the Tata Nano, the world's cheapest car. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land Rover from Ford in 2008.

Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations.

History

The second-generation Tata Indica is one of the best selling cars in the history of the Indian automobile industry.

The Tata Nano, the world's least expensive car

Tata entered the commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz of Germany. After years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. Tata subsequently launched the Tata Estate (1992; a station wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle), the Tata Sumo (1994; LCV) and the Tata Safari (1998; India's first sports utility vehicle).

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although initially criticised by auto-analysts, its excellent fuel economy, powerful engine and an aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favourite. Tata Motors also successfully exported large quantities of the car to South Africa. The success of Indica played a key role in the growth of Tata Motors.

In 2004 Tata Motors acquired Daewoo's South Korea-based truck manufacturing unit, Daewoo Commercial Vehicles Company, later renamed Tata Daewoo.

On 27 September 2004, Tata Motors rang the opening bell at the New York Stock Exchange (NYSE) to mark the listing of Tata Motors.

In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach manufacturer Hispano Carrocera. Tata Motors continued its market area expansion through the introduction of new products such as buses (Starbus & Globus, jointly developed with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with subsidiary Tata Daewoo).

In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus, to manufacture fully built buses and coaches.

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover, manufacturer of the Jaguar, Land Rover and Daimler luxury car brands, from Ford Motor Company.[12][13][14][15]

In May 2009 Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo; the range went in sale in South Korea, South Africa, the SAARC countries and the Middle-East at the end of 2009.

Tata acquired full ownership of Hispano Carrocera in 2009.

In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering company Trilix for €1.85 million. The acquisition formed part of the company's plan to enhance its styling and design capabilities.

In 2012, Tata Motors announced it would invest around 6 billion in the development of Futuristic Infantry Combat Vehicles in collaboration with DRDO.

In 2013, Tata Motors announced it will sell in India, the first vehicle in the world to run on compressed air (engines designed by the French company MDI) and dubbed "Mini CAT".

26 January 2014, the CEO Karl Slym is found dead in a Thai palace.According to Lieutenant-Colonel of Police Somoyot Boonnakaev "he had to make an effort to get through" a "very small window" making it impossible to drop accidentally.

OperationsTata Motors has vehicle assembly operations in India, the United Kingdom, South Korea,

Thailand, Spain and South Africa. It plans to establish plants in Turkey, Indonesia and Eastern Europe.Tata Motors' principal subsidiaries include Jaguar Land Rover, Tata Daewoo and Tata Hispano.

Joint ventures

Tata Marcopolo

A Tata Marcopolo bus in use in Chandigarh, India

Tata Marcopolo is a bus manufacturing joint venture between Tata Motors (51%) and the Brazil-based Marcopolo S.A. (49%). The joint venture manufactures and assembles fully built buses and coaches targeted at developing mass rapid transportation systems. It utilises technology and expertise in chassis and aggregates from Tata Motors, and know-how in processes and systems for bodybuilding and bus body design from Marcopolo. Tata Marcopolo has launched a low-floor city bus which is widely used by Chandigarh, Kolkata, Chennai, Coimbatore, Delhi, Hyderabad, Mumbai, Lucknow, Pune, Kochi, Trivandrum and Bengaluru transport corporations. Its manufacturing facility is based in Dharwad.

Fiat-Tata

Fiat-Tata is an India-based joint venture between Tata and Fiat which produces Fiat and Tata branded passenger cars as well as engines and transmissions. Tata Motors has gained access to Fiat’s diesel engine technology through the joint venture.[40]

The two companies formerly also had a distribution joint venture through which Fiat products were sold in India through joint Tata-Fiat dealerships. This distribution arrangement was ended in March 2013, since when Fiats have been distributed in India by Fiat Automobiles India Limited, a wholly owned subsidiary of Fiat.[41][42]

Tata Hitachi Construction Machinery

Tata Hitachi Construction Machinery is a joint venture between Tata Motors and Hitachi which manufactures excavators and other construction equipment. It was previously known as Telcon Construction Solutions.

Electric vehicles

Tata Motors has unveiled electric versions of the Tata Indica passenger car and the Tata Ace commercial vehicle, both of which run on lithium batteries. The company has indicated that the electric Indica would be launched locally in India in about 2010, without disclosing the price. The vehicle would be launched in Norway in 2009.

Tata Motors' UK subsidiary, Tata Motors European Technical Centre, has bought a 50.3% holding in electric vehicle technology firm Miljobil Grenland/Innovasjon of Norway for US$1.93 million, which specialises in the development of innovative solutions for electric vehicles, and plans to launch the electric Indica hatchback in Europe next year. In September 2010, Tata Motors presented four CNG–Electric Hybrid low-floored Starbuses to the Delhi Transport Corporation, to be used during the Commonwealth games. These were the first environmentally friendly buses to be used for public transportation in India.

Notable vehicles

Tata Ace

Tata Ace was India's first mini truck

Tata Ace, India's first indigenously developed sub-one-ton mini-truck, was launched in May 2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had changed the dynamics of the light commercial vehicle (LCV) market in the country by creating a new market segment termed the small commercial vehicle (SCV) segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace. The Ace was built with a load body produced by Autoline Industries. By 2005, Autoline was producing 300 load bodies per day for Tata Motors.

Ace is still a top seller for TML with 500,000 units sold to date (June 2010). In 2011, Tata Motors invensted Rs.1000 Crore in Dharwad Plant, Karnataka with the capacity of 90,000 units annually and launched 2 models of 0.5T capacity as Tata Ace Zip, Magic Iris.

Ace has also been exported to several Asian, European, South American and African countries and all-electric models are sold through Polaris Industries' Global Electric Motorcars division. In Sri Lanka it is sold through Diesel & Motor Engineering (DIMO) PLC under the name of DIMO Batta.

Analysis of TATA group

Financial Situation:The earnings of Tata Motors are increasing day by day because of various acquisitions

and joint ventures with truck manufacturers in Southeast Asia. In 2006-07, the Gross profit was $1,160.9 million and in 2007 it increased to $1,510.1 million. Moreover, overall Earnings also increased significantly after paying tax .It was $410 million in between 2006 and 2007 and $434.7 million in 2007-08. The net profit was $214.5 million in 2008-09. In 2009-10(year ended 31st march), profit after tax will be $550.8 million it is more than the previous year. There was a large drop in profit in between 2008-09 and 2009-10 financial years because of acquisition of Jaguar Land Rover in June 2008.

Impact and influence of external environment in an organization:External environment has many influences on business to run that effectively. It involves many factors outside the organizations that can give opportunities or pressure to the business. The overall success of any business organizations depends on its consciousness about its surroundings, environment and flexibility to cope up with the changing environment. Business environment may be defined as combination of some factors that cannot be controlled in nature and it affects on organizational decisions; these are economical, demographical, legal and governmental, social and cultural and so on.

Political environment and TATA motors:Company needs to give attention on these factors-

Government laws and regulations-

Tax

Political motivation for globalization

Tata motors are doing their business in different countries across the world such as Africa, Europe, Middle East and Australia. The countries where Tata motors are going to operate should concentrate on political climate as well as the regional leading bodies. The business trade, expansion and investment are reliant on laws and regulations on business imposed by the local government. How much they will be flourishing in markets and economies for the effect of home and national influences.

Tata Motors made a deal with Ford for purchasing Jaguar and Land Rover on 26th March’2008. For fulfilling this achievement, Tata Motors need to understand the laws and regulations of the home country related to commerce, the United Kingdom, but also in countries Jaguar and Land

Rover operate in. UK political environment analysis: Government offers impressive tax benefits to attract the investors from other countries, Strong political inspiration regarding globalization, Strong reputation and trust, and political stability and goodwill, adaptive governmental support.

In India Tata Motors strictly maintain government laws and regulations and also keep in eye on labor laws in different countries where they are going to establish their manufacturing plant. Political changes always need to consider by the organizations this will facilitate them to spread out in new market. These all things maintained by the headquarters of Tata Motors which situated in Mumbai that all branches are maintaining and obeying local laws or not.

Economical environment and TATA motors:Tata Motors is operating through different countries across the world; they are functioning by focusing on individual market with considering global economical standpoint. They are spreading out by forming joint ventures over the five different countries in the world. Tata Motors have the experiences about the changes in market that occurs and can easily acclimatize by using resources they have around the globe. For example Tata Motors need raw materials for production of engine blocks but the price of raw materials is high in South Africa. They have suppliers for raw materials in Europe, so they can easily get it from Russia because they are operating globally. One important things need to consider that is the currency rate of that country. Suppose they are investing at a higher rates but when they get return rate is lower because it will impact on profit or loss. The demand of product also can vary with the fluctuations of currency. The rate of currency and its variations also influence the company to invest. Another important thing needs to consider labour cost is that cheap or high and available or not with related to business. In case of Tata Motors deals with Ford in UK economic advantages-huge movable workforce, reasonable labour cost, good in export, supportive authority to invest in technology.

Social environment and TATA motors:The organisations are largely affected by shareholders idea, opinions and attitude. This includes every aspects of the organizational stake holder as of chief executive officer to president, investor to customers, down to line workers. The future of an organisation relies on stake holder’s mores and attitudes whether it will be beneficial or not. For this reason, Tata Motors tends to use assimilation and rarely partition technique with foreign companies they get hold of. In other aspect, there are some financial issues Tata motors have to consider on the basis of localize point of view. Firstly, India’s car market is different from car market in Italy or in UK depending on the size of population. Secondly, it has to consider the affect on demographics and the standard income of every market. Indians have a lower average income per capita than Italians and citizens of Italian likes to drive larger and fancier cars. In that case, the Tata Nano may not perfect for Italian market. Above all Tata Motors are operating their business globally by local market understanding and gaining knowledge through different markets. In 2004, the largest Korea’s truck manufacturing company Daewoo Commercial Vehicle was owned by Tata Motors. Tata used an incorporated approach, and nonstop building and marketing Daewoo’s current models as well as introducing some new models internationally and it had been

completed under supervision of Korean management, rather than assimilating Daewoo. When Tata purchase the Jaguar and Land Rover then they need to careful about how they hold it. Industry analyst of Tata thought that what could be the best value that can be added with Ford. They found separation approach for nearly future and they kept the name of Jaguar and Land Rover apparent. After that they coupled it with luxury automobile market. They found that separation was important from the name Tata may be precious in social areas.

Technological environment and TATA motors:Tata Motors and its parent company, the Tata Group, are developed in the technology field. Tata Group has great publicity over 20 listed enterprises and operates in more than 80 countries world-wide. From this Tata motors gain lots of experience and resources that actually helps them to get success in research and development.

“The growth of this company based on deep understanding of economic stimuli and needs for customer, and the skill to interpret them into customer-desired offerings through most important edge R&D” (Tata). Tata Motors’ Research and Development team is in advance in India’s market and accurate with all other field internationally. In 1998, Tata Motors first developed fully indigenous passenger car ‘Tata Indica’ and after that ‘Tata Nano’ the cheapest car which was cheap in production.

Now a days, it has become critical for manufacturers to hold their grown in business. It is now going to become very hard to maintain the technology curve because of problems arising. These problems are gas prices increasing and pollution problems. Tata spent lots of resources and time on research and development purposes to stay in top of rivals, global trends, and with economies changes. Tata is doing the right thing for maintaining rapid growth, and extensive research and development to adapt with technological changes.;

Legal environment and TATA motors

Determinants of national advantages using Porter’s Diamond Techniques:It is very important for organisations to achieve competitive advantages over competitors. When an organisation is going to start business in new countries primarily they have some disadvantages over existing home competitors such as better market knowledge, reputable local customer relationship and supply chain. A new company must need competitive advantages to rise above such things. Porter Diamond explains the positive needs of competitive advantages to sustain in company. He suggests four national determinants of interacting.

These are as follows:-

Factor conditions:

It refers to factors of production that needs in manufacturing of product or services for example: labour, raw material and land. These advantages in national level are considered as general competitive advantages of national firm in international markets. In compared to Tata Motors they have cheap labour, raw material and land.

Home demand conditions:

The customers in home country can produce competitive advantages. Sophisticated and high demanding customer and successful deal with them helps to train a company to be useful overseas. Tata motors have use population has high demand of cheapest car.

Related and supporting industries:

It will create competitive advantages if there are some mutually supporting industries. Sometime it may base on region and it will make personal communication easier.

Firm strategy, structure and rivalry

Factor conditions

Demand conditions

Relating and supporting industries

Firm strategy, industry structure and rivalry:

The characteristics of strategies, structures of industry and rivalry from different countries can be good competitive advantages. In considering with Tata motors is the best on the basis of good strategies making, experienced because it is operating globally.

SWOT analysis of Tata Motors:Organisations need strategic planning to run the business effectively and These SWOT analysis carry one of the major parts in strategic planning. It can be useful to anywhere such as any unit in an organisation, team or individuals. The performance of an organization with respect to the impact of external and internal demand and influences can identify through SWOT analysis as a part performance audit. Sometimes it helps to collect data for stakeholder analysis, analysis of competitors, and analysis of some issues in an organization, scanning of environment and scenario analysis. SWOT analysis also carries out the major influences on behavior and the success on results in an organization.

Strengths:Tata Motors is a leading market taker and dominating biggest part of automobile industry as well as they are holding high market share. Tata Motors is good employee based company and high productivity of Tata manufacturing unit. They have high reputation in brand in India. Their biggest strength is that it produces the cheapest car in world history ‘Tata Nano’ with low fuel consumption. Its gives competitive advantages to Tata Motors that is ahead compared to other company. It also helps Tata to capture huge Market as well as customers. Tata motors have 3500 touch points in dealership, sales and service. Tata is developed in some segments like Tata Acc and Tata Magic. There is no substitution of these products in the market yet. Another more important strong point is that it possesses soaring corporate responsibility. They also keep in eye in specific charity through donating from profit by escalating stock. This highlights that community improvement is their overall desire. Tata Motors has been insistently acquiring overseas brands to enhance its global presence. Tata motors are very strong in research and development.

Weakness:Main weakness of Tata motor is low return on share investment. Their vehicle is not maintaining safety standards at that much require with compared to its competitors. The product sale of Tata motors is not up to the score in domestic market. The sales of cars in India are less than 1 million yearly. This creates a problem for the company because if people don’t want to buy cars how can they sell. Technological advancement is not up to the mark as compared to its competitors. Tata owned Jaguar and Land Rover but Tata has not got enough recognition in producing luxury vehicles. Tata’s new innovation One CAT still has some rough spots that require working out on problems like it exhaust pollutant emissions and greenhouse gas emissions from the generation of electricity used to compress the air. It is the technical fault and this is another weakness. Moreover, One CAT only goes 62 miles per hour for 56 miles in an urban cycle. This is not very far and Tata Motors will have to recover this weakness as well as the emission weakness in order to attract more consumers to buy this new automobile.

Opportunities:Tata motors can get benefits from low cost car; they can enter into third world countries where people can afford this car. Though this low cost car is fuel efficient and cheap so they can easily capture the market. They have export opportunities to other countries as well. Tata motors should focus in developing luxury cars. Tata motors can bring in additional safety features in vehicles to achieve added customer satisfaction. They can easily access into new markets though they have joint ventures with other countries.

The estimated car sales in China is about $8 million dollars yearly and in 2006 China was the second largest car market in the world. China’s government forecasts that demand for cars will increase to 20 million within 2020. Tata Motors cheapest car in the market will bring change and demand for the car in China market will raise drastically. This is in turn increase in sales for Tata Motors.

In 2008, Tata Motors completed a deal with Ford Motor Company .This will create a great chance for Tata Motors to achieve experienced knowledge and technologies for manufacturing and marketing luxury vehicles. This acquisition helps them to submerge into the additional established markets in Japan, Europe and the United States as well. The exchange of knowledge between two companies will significantly progress Tata Motors ability to continue to grow and boom in both developing and developed market segments.

Threats:Tata motors have low cost advantage over its competitors, if the competitors manage to find out production method of low costs, and then there will no longer have competitive advantage over competitors.

In case of market, their competitors are already started to compete with that.  In fact, the Pakistan’s Transmission Motor Company has built a basic four-wheeler for only $2,100.  This car is considerably cheap and they started exporting them to Sudan, Qatar, and Chile.  This is going to be the beginning of new emerging car manufactures that will be producing low priced cars. Another threat for Tata motors is that the increases in price of raw materials like steel, aluminium and plastic. The low standard in safety may reduce sell of cars.

SWOT ANALYSIS OF THAILAND AUTOMOBILE INDUSTRY:

Thailand’s automobile industry is a major employer and important contributor to the economy, with automobile being among the country’s top exports due to high domestic production. Combining its renowned production and design skills with cutting edge technology and internationally recognized testing facilities, Thailand has evolved over the past two decades into the acknowledged regional center for automobiles.

Strengths:

Availability of raw materials and easy import of raw materials.

Skilled labour

State’s liberalized policies i.e. Zero percent Import of automobile spare parts and export facilitation.

Availability of Finance, which can be utilized.

Availability of Technical Skill through training Institutes.

Large number of Entrepreneurs.

Wide local market for consumption.

Information Technology.

Easy Access to International markets.

Recognition in the Global market.

Weaknesses:

Illiteracy

Cut throat competition in internal market itself.

not completely developed technological atmosphere.

Labour is costly.

High rate of utility charges and tax regulations

Not easy entry in the business

Traditional Designs and no innovations

Not getting benefits from training Institutes.

Export is nominal.

Not utilization of International Markets.

Smuggling

Under invoicing

Opportunities:

Globalization and free trade.

Competition at international level

Access to new marketing information and skill.

New and unexplored markets.

Easy process of affiliation with International organizations.

Free and transparent trade.

Reduced role of State.

Quality Standards.

Threats:

Globalization and free Trade.

Competition with international manufacturing expertise.

Quality standards.

Unmatched customer Demand/ satisfaction

Reduced rate of competencies.

Losing of international buyers.

Potential for Import/Export in Thailand

To maximise your organization’s chances of successfully doing business in Thailand, you should consider a cultural awareness training course such as Communicaid’s Doing Business in Thailand programme. Having completed one of these intercultural training courses, your organization and its employees will be able to form strong strategies to help overcome any cultural pitfalls or challenges when doing business in Thailand. Some of the potential of doing business in Thailand include the following

Open and Welcoming Economy:

Thai society, and in particular the business community, is very welcoming to foreign investment and companies wishing to establish operations in the country. Organisations doing business in Thailand will find the infrastructure and systems ready for them to begin operating successfully.

Diverse Manufacturing Sector:

Thailand has a large and very active manufacturing sector producing a diverse array of goods including toys, fish products, rubber, furniture and jewellery. These strengths in manufacturing and FMCGs have led Thailand to become a regional leader in trade and commerce.

Pro-active Government Policies:

The Thai government is a forward-thinking and innovative body which actively encourages development and socioeconomic advancement. Foreign investment, both financial and in the local workforce, is strongly encouraged by the Thai authorities and the government’s policies over the last decade have made for a more inviting environment for foreign businesses and organizations.

A Large, Adaptable and Cost-efficient Workforce:

Thailand has a large and adaptable workforce. According to Thailand’s Board of Investment, literacy rates reach 94% for men and 90% for women, so that foreign investors will find an intelligent workforce with the potential for further development. In addition to being flexible and educated, the Thai workforce is also among the most cost-efficient in the region in terms of pay with the average daily wage for Bangkok being 203 THB (approximately US$6). Potential for India of Doing Import/Export of autmobile spare parts With Thailand.

Thailand’s automobile industry is widely considered one of the greatest potential markets in the world. Thailand has already started to take the necessary steps to move their automobile industry in the right direction. The Kingdom has set up the Research and Development Institute of automobile in cooperation with the ASEAN.

Analysis of the process of exporting auto spare parts from Thailand to India:

Auto spare parts are considered a key industrial export in terms of their impact on economic growth. The total export value of auto spare parts from Thailand increased rapidly between 2005 and 2009 and the export of auto spare parts generates an annual income of about USD 400 million. According to the Thai Trade Centre Chennai of the Department of Export Promotion in the Ministry of Commerce, exports of auto spare parts are expected to continue rising, with India being a major market.

The study of the process of exporting auto spare parts from Thailand to India limited the scope of analysis to the delivery of a full container-load (20 foot and 40 foot containers) of auto spare parts from Thailand by maritime transport to the port of destination in India (Delhi/Mumbai) under CIF terms, with the payment being made by remittance after shipment.

Steps involved in the process:

The BPA of the process of exporting auto spare parts from Thailand to India found that there are a total of eight procedures involved. These procedures are described below.

1) “Buy” Process

1.1. Issue and validate the purchase order:

Upon establishment of a deal or contract, the importer issues a Purchase Order to the exporter. The exporter then validates the Purchase Order. If it contains incorrect information, the exporter will return the document to the importer for modification. Otherwise, the exporter will proceed to check the stock.

2) “Ship” Process

2.1 Allocate and package

If the items are in stock, the exporter pulls them from the inventory. Ship labels, cartons and other documents such as packing slips and packing lists are prepared for the items to be packed for shipment. But if the exporter cannot find the items from the inventory, he/she sends orders to suppliers to produce and deliver products to the exporter. The suppliers then confirms receipt of the documents. The exporter allocates products based on the orders, prepares purchase confirmation and replies to the importer. By the end of this process, the products are ready for movement. The Federation of Thai Industries. (2010). Car Manufacturers Export Record 1995-2009, Automotive Industry Club.

2.2 Prepare for shipment

The exporter prepares and sends to the shipping agent the “preemption freight” in order to book a shipment. The shipping agent then sends a copy of the Bill of Lading (B/L) to the exporter. The exporter verifies the documents. If they contain incorrect information, the exporter returns them to the shipping agent for modification. Once corrected, the documents are returned to the exporter. The exporter sends the order and booking number to the haulage service for confirmation. Upon receiving confirmation from the haulage service, the exporter reviews and updates the shipment status in the electronic system.

2.3 Request Certificate of Origin under Free Trade Agreement (FTA form)

To prepare a FTA form required of an importer for importation, the exporter prepares the relevant documents (Request for FTA form, Invoice, Bill of Lading, draft FTA form) and sends them to the Foreign Trade Department. Upon receiving the documents, an officer verifies the data. If incorrect, the exporter has to modify and resubmit the documents. If correct, the officer creates and approves an FTA form. The exporter pays the fee and receives the FTA form.

2.4 Load and inland transport

The exporter sends a reservation confirmation to the haulage service and makes an appointment to have the cargo picked up and any empty containers returned, via a company vehicle preemption truck, to the warehouse where they can be packed. Meanwhile, the exporter prepares products to be loaded into containers. When the empty containers are brought to the warehouse and packed, the exporter checks and seals the containers. The container slips and the Permit for Cargo Movement (KN 6.1) form are prepared by the exporter and submitted to the Royal Thai Customs Department. The Royal Thai Customs Department receives the documents and verifies them. If they contain incorrect information, a notice of acceptance “goods transition control list rejected” will be sent to the exporter. If they are correct, a notice of acceptance “goods transition control list accepted” will be sent to the exporter. The exporter receives and prints out the container slip and gives it, together with a form requesting permission to transport the containers to the port (TK 308.2) to the haulage service.

The haulage service submits those documents to Port Authority of Thailand (PAT) to seek permission to move the containers to the port. Upon receiving the documents from the haulage service and verifying them, the PAT prepares and sends the Equipment Interchange Receipt (EIR) to the exporter. The haulage service moves the containers to the container yard in the port area.

2.5 Declare to customs

The exporter submits electronic data (Invoice, Permit Reference Number and Export Declaration) to the Thai Customs Department through that body’s paperless system. The Thai Customs Department verifies the data electronically. If there is incorrect information, a notice of rejection will be sent to the exporter. If the information is correct, a notice of acceptance, including a unique declaration number, will be sent to the exporter.

In case of tax required for exportation, the exporter reports a Payment Order to the bank. The exporter's bank attempts to deduct the balance from the exporter's account by sending a Debit Advice to the exporter and a Bank Statement to the Thai Customs Department's bank. The exporter acknowledges the debit and filing. The bank sends a Remittance Advice to the Thai Customs Department. The Thai Customs Department’s bank acknowledges this and sends a Credit Advice to the Thai Customs Department. The Thai Customs Department acknowledges and updates the export declaration status electronically.

2.6 Move cargo onto the ship

The shipping agent sends the Bill of Lading to the exporter and submits (online) the Container Loading List and Manifest to the Thai Customs Department through the paperless system. The shipping agent sends the Container Loading List to the PAT for its records and to arrange space on the ship for the containers. The PAT then returns the Manifest to the shipping agent.

3) “Pay” Process:

3.1. Delivery of goods and payment

The importer sends a contract for traded goods (CFR: Cost and Freight) to the exporter for later payment. Upon receiving those documents, the exporter sends the Invoice, Packing List and Bill of Lading to the importer and then delivers the products to the importer.

The importer goes through the import declaration process, receives the products and prepares payment for the exporter. When the importer’s bank receives money from the importer, it reviews and makes payment or direct debit from the importer. The importer’s bank sends money orders to the exporter’s bank, which normally will be 35 days after the ship’s estimated time of departure. The exporter’s bank charges the debit from the importer’s account. The fee is deducted before the transfer to the exporter’s account. The exporter checks and receives the money.

III. Time/cost-distance analysis:

The whole process of exporting auto spare parts from Thailand to India takes a total of 51 days starting from the process of placing an order until the settlement of payment. The “buy” and “ship” processes together take approximately 16 days, maritime transport from Thailand’s sea port to the port of destination port in India takes 14 days and the settlement of the payment, which is made by remittance after the shipment’s estimated time of departure (ETD), takes 35 days. The necessary time needed to complete each process is summarized in Figure 1.

Figure 1: Time-procedure chart of auto spare parts export from Thailand to India

The Association of Southeast Asian Nations (ASEAN):

The ASEAN vehicle sales hit record highs in 2010 due to strongly performing economies. ASEAN is our fifth largest export market for all merchandise trade, behind Canada, Mexico, China and Japan. ASEAN has a combined GDP of over $150 billion and a population of close to 600 million people, making it a key market for U.S. exports and investments. In 2009, total ASEAN merchandise trade was $1.5 trillion. In 2010, U.S.-ASEAN trade was nearly $163 billion (an 11.6 percent increase from 2009). According to Just-Auto, combined automotive sales in the ASEAN’s six main markets, Thailand, Indonesia, Vietnam, Philippines, Singapore, and Malaysia, grew by 32 percent in 2010 to nearly 2.5 million units, up from 1.9 million in 2009. All of the major economies, with the exception of Singapore, recorded record highs. Forecasts suggest combined vehicle sales in ASEAN’s top six markets are expected to grow in 2011, but at a slower pace, not likely to exceed 2.6 million units. Some economies, however, will continue to fare better than others. Government policies such as scrappage schemes and fiscal stimulus policies are positively stimulating the market and affording some markets an advantage over others. The Thai auto market, for example, has responded favorably to tax incentives provided by the government for producers of “eco-cars.”

According to Business Monitor, “the ASEAN region and the ASEAN Free Trade Agreement (AFTA) have been instrumental in providing a basis for trade and cooperation between not only the member states, but between divisions of the same company in different countries.” AFTA provides for regional tariff reductions, elimination of NTBs, harmonized customs nomenclature, intra-regional liberalization of trade in services, and regional IPR cooperation. ASEAN is seeking to build a European Union (EU)-like community by 2015 for all its members. Under the AFTA, all internal tariffs on manufactured products have been lowered to 0-5 percent. Thailand has been particularly successful in taking advantage of low tariff rates throughout the region. In fact, Thailand has become the world’s second largest market for the one-ton pickup truck behind the United States, making Thailand both a regional production and export hub.

The ASEAN Industrial Cooperation Scheme (AICO) has also had a major impact on automotive trade within the region. Under the AICO program, approved companies are eligible to benefit immediately from the AFTA 0-5 percent preferential tariff rate for trade in approved items. In the automotive sector this applies to completed vehicles, parts, half-finished goods, and materials. In order to qualify, products must have 40 percent ASEAN content and demonstrate resource sharing between participating companies. In addition, ASEAN members are required to abolish the localization arrangements in each country as well as the import tariff exemptions and local capital requirements.

The three largest automotive markets in ASEAN are Thailand, Indonesia, and Malaysia. The automotive industry in Thailand is one of the key sectors in the Thai economy. Despite a backdrop of political instability and a global recession, the Thai economy is estimated to have expanded by close to eight percent in 2010, aided by low interest rates. These interest rates helped drive domestic consumption and strong export growth. In 2010, Thailand produced approximately 1.5 million vehicles, and over half

of these were exported (871,000). This compares with less than one million produced in 2009. Thailand’s passenger car sales rose by 50.7 percent to 346,750 units in 2010, while commercial vehicle sales were up by 42.3 percent to 453,617 units. Toyota’s sales increased to 325,750 units (an increase of 41.4 percent), for a market share of 40.7 percent. Thailand has become the premier production base for the rest of ASEAN, taking advantage of high import duties (80 percent on passenger cars) to keep imports low and 0-5 percent tariff rates for exports within ASEAN, thanks to the AFTA. Thailand also exports vehicle parts, primarily to the rest of Southeast Asia, and with the consolidation of the AICO scheme, this is only expected to grow.

Indonesia is also vying to become a major regional hub by possibly adopting World Forum for Harmonization of Vehicle Regulations (WP29) global technical regulations (GTRs). Indonesia believes it can benefit significantly from adoption of these GTRs, particularly in four key areas:

tires, seat belts, automotive glass, and noise emission components. It is already attracting investment as a hub by auto companies such as Nissan and Toyota. Demand for motor vehicles in Indonesia has continued to be robust with an increase in new vehicle sales of 57.5 percent or 764,710 units, from 486,061 units in 2009. Despite one of the largest passenger car markets, with sales of 541,475 units in 2010 (a 50.7 percent increase over 2009), its commercial vehicle sales outperformed the industry average with 223,235 units sold in 2010 (a 79.8 percent increase). The Indonesian economy grew by an estimated six percent in 2010, with the domestic economy accounting for the majority of that growth. However, the economy has also benefited from a large rebound in exports, with increased demand for commodities and energy. The vehicle industry is cautiously optimistic that these large numbers can be sustained, although there is concern over rising fuel costs for private motorists and higher vehicle taxation.

Malaysia retained the highest level of ASEAN passenger car sales for 2009 with 486,342 vehicles sold, mainly due to its domestic national car programs which focus on indigenous car sales and production. For example, Malaysia’s closest rival in the region in terms of passenger car vehicles in operation is Indonesia, which only totaled 4.8 million in 2008, compared with 7.2 million for Malaysia. Malaysia has an indigenous vehicle industry, and, over the past three decades, has been dependent on strong protection provided by the government. Consequently, liberalization in the vehicle industry has been slow. In October 2009, the government released its new National Automotive Policy (NAP), which focuses on sustainability of the domestic industry, with more market opening for foreign brands. It is especially interested in streamlining its domestic industry to two national high volume car producers, Proton and Perodua. Malaysia has made progress in reducing import tariffs, admittedly after having secured a two-year deferral from ASEAN. Import tariffs on completely built-up (CBU) units were reduced from a band of 70–90 percent to 20 percent at the start of 2005. For completely knocked-down (CKD) kits, the import tariff was cut from 25 percent to zero. Import duties on CBUs were cut further, to just 5

percent, in March 2006.

India - Thailand Relations:

1. India and Thailand, located in each other’s extended neighbourhood, share unique civilizational links going back several millennia. The shared link of Buddhism is reflected in regular pilgrimages to places of Buddhist interest in India by a large number of Thai people. Hindu elements can be found among those reflected in Thai architecture, arts, sculpture, dance, drama and literature. The Thai language incorporates Pali and Sanskrit influences. A large Indian Diaspora living and working in Thailand is another important bond.

2. Over the past two decades India’s ‘Look East’ policy has been complemented by Thailand’s ‘Look West’ policy in bringing the two countries closer. India and Thailand would celebrate 65 years of their diplomatic relations in 2012. In recent years, political contacts have intensified as reflected in a series of high level visits by leaders of the two countries. Trade and economic linkages and tourist traffic continue to grow steadily.

3. Both countries are important regional partners linking South and Southeast Asia. They cooperate closely in the ASEAN, East Asia Summit (EAS) and BIMSTEC groupings as also Mekong Ganga Cooperation (MGC) and Asia Cooperation Dialogue (ACD). The implementation of the India-AESAN Agreement on Trade in Goods from January 2010 is an important latest milestone of this partnership.

EXCHANGE OF HIGH LEVEL VISITS:

4. HRH Princess Mahachakri Sirindhorn, a recipient of India Gandhi Prize for Peace, Development and Disarmament 2004, is a regular visitor to India. She visited India last in October 2011 under ICCR’s Distinguished Visitor Programme. Her other recent visits were in Mar 2011, Aug 09, Feb 09, March 08, March, Aug Crown Prince HRH Mahavajiralongkorn, accompanied by royal family members and other prominent figures, piloted a special Thai Air flight to Bodhgaya to perform Buddhist pilgrimage on November 13, 2010. HRH Princess Bajrakittiyabha visited Bodhgaya and other pilgrimage sites in November 2011.

5. There have been six Prime Ministerial visits from Thailand to India during 2001- 2011. There were four Prime Ministerial visits from India to Thailand during this period. Thai Prime Minister Yingluck Shinawatra paid a State visit to India on January 24-26, 2012 as Chief Guest for our Republic Day upon invitation of Prime Minister Dr. Manmohan Singh. She became the first Thai PM to do so. A number of important agreements were signed and new initiatives were announced during the visit. Visits from Thai side were of Prime Minister Abhisit Vejjajiva (Apr 2011), Prime Minister Somchai Wongsawat (Nov 08) who participated in the 2nd BIMSTEC Summit in New Delhi, Prime Minister Surayud Chulanont (April 07), and Prime Minister Thaksin Shinawatra (Nov 01, Feb 02, and June 05). From Indian side, visits were of PM Atal Bihari Vajpayee (Nov 02, Oct 03) and PM Dr. Manmohan Singh (July 04 – for 1st BIMSTEC Summit). Dr Manmohan Singh also participated in the 7th India-ASEAN and 4th EAS Summits held in Hua Hin on Oct 24-24, 2009.

6. Foreign Minister Surapong Tochakchaikuk visited India to co-chair the 6 th meeting of Thailand India Joint Commission on December 27, 2011. Other important Ministerial visits include of Foreign Minister Kasit Piromya (Mar 11, Dec 2009), Culture Minister Niphit Intarasombat (Jan 2011), Industry Minister Charnchai (Feb 2010, June 09), Dy. PM Korbasak Sabhavasu (Oct 2009), Foreign Minister Tej Bunnag (Aug 08), Dy PM & Minister for Industry Panpiemras (Aug 07), Minister of Commerce (Sep 09, April 07). From the Indian side – EAM (July 09 for the Ministerial Meetings of 16th ARF, ASEAN-India and EAS; Sep07), C&IM (Oct, Aug 2009, twice in April 09; April 08), Minister for Urban Development (Apr 2011), Minister for Road Transport & Highways (Dec 2009), Minister DoNER (March, Oct 07) and MOS Industry (Oct 07). MOS for External. Affairs Mrs. Preneet Kaur (Dec 2010 for AMED-III meeting).

7. A Thailand-India Parliamentary Friendship Group was formed in the National Assembly of Thailand in 2008. Group was reconstituted recently in September 2011. A counterpart group has been formed in Indian Parliament in December 2011. Recent parliamentary exchanges include visit of Thai parliamentary delegation led by Mr. Chai Chidchob, President of National Assembly and Speaker of House of Representatives to India in Dec 2009. A delegation of the Standing Committee of the House of Representatives had visited India in Sep 2009. For the 122nd Assembly of Inter Parliamentary Union (IPU) held in Bangkok from March 27- April 1, 2010, a 19 member Indian delegation was led by Mrs Meira Kumar, Speaker of Lok Sabha.

ECONOMIC & COMMERCIAL PARTNERSHIP:

8. Economic & commercial linkages form an important aspect of India’s partnership with Thailand. The past few years have seen a rapid growth in this area.

9. Bilateral Trade has multiplied six times since 2000 to cross US$ 6.6 billion in 2010. Global financial and economic crisis impacted the bilateral trade during 2009. The trade figure for 2009 was US$ 4.9 billion declining by 17% (Indian exports were US$ 1.7 b, down by 34%, while Thai exports were US$ 3.2 b declining by 3.6%). Bilateral Trade for the annual year 2011 is about USD 8.19 billion.

10. Investment by Indian and Thai companies into each others’ countries is growing. Indian FDI into Thailand is estimated to be around US$ 2.00 billion since 1970s. (Approved Indian investment from Jan-Nov, 2011 is around US $ 56 million). Thailand has invested US$ 90.55 million in India (April 2000-Sep 2011) according to Department of Investment Policy Promotion of Government of India.

11. The major Indian groups doing business in Thailand include: Tata group (automobiles, steel, software), Aditya Birla group (chemicals, textiles), Indo Rama group (chemicals), Ranbaxy*, Dabur, Lupin (pharmaceuticals), Bharti Airtel, NIIT, Punj-Lloyd, Kirloskar, Mahindra-Satyam, etc, reflecting the diverse sectors of interest. Among public sector, Indian Overseas Bank, Bank of Baroda, Air India, New India Assurance etc. are present.

12. Leading Thai companies in the fields of Agro-processing, infrastructure, automotive, engineering, banking, housing and hospitality have active and growing business presence in India. Major Thai companies active in India are - CP Aquaculture (India) Ltd., Ital Thai Development Pcl., Krung Thai Bank Pcl., Charoen Pokphand (India) Private Limited, Stanley Electric Engineering India Pvt. Ltd., Thai Summit Neel Auto Pvt. Ltd., Thai Airways International Pcl., Precious Shipping (PSL) of Thailand, Preuksa Real Estate, Dusit and Amarigroup of hotels.

13. The ASEAN-India Agreement on Trade in Goods was signed in Bangkok on Aug 13, 2009 and was operationalised w.e.f. January 1, 2010. Negotiations are continuing on concluding its Investments and Services sector components, as well as for a BIMSTEC FTA and an India-Thailand FTA. An Early Harvest Scheme under the proposed India-Thailand FTA is in place since Sep 2004 covering 82 products. Negotiations for a comprehensive bilateral agreement for trade in goods, services, and investments are currently underway, and are targeted to be completed by mid-2012. The 2nd Protocol to amend the Framework Agreement of 2003 was signed during the visit of Prime Minister Yingluck Shinawatra to India in January 2012.

14. Another significant recent element has been the active promotion of trade & investment linkages between the north eastern states of India and Thailand.

TOURISM AND CONNECTIVITY

15. Air connectivity between India and Thailand is growing with nearly 140 flights per week, reflecting a rapidly growing passenger traffic between the two countries. Bangkok is connected by air to 9 Indian destinations. India and Thailand are cooperating closely on improving regional connectivity through initiatives such as India-Myanmar-Thailand trilateral Highway, Asian Highway Network (under UNESCAP), BTILS under BIMSTEC framework.

16. About 790,000 Indian tourists visited Thailand in 2010, making India one of the fastest growing markets for Thailand for inbound tourism. In 2011, the number is about 8,30,000 for Jan-Nov 2011 (some slowdown in later part of the year is due to floods in Thailand) The number of Thai tourists to India is around 45,000 (mainly to Buddhist pilgrimage sites).

CULTURE

18. Cultural exchanges take place under the framework of a Cultural Exchange Programme (CEP) between the two governments. An Indian Cultural centre was opened in Bangkok in September 2009. Cultural Agreement Programmme for 2012-14 has been signed during the visit of Thai PM in Jan 2012. A number of India Studies Centre are operational in prestigious Thai Universities.

EDUCATION

19. An MoU on Cooperation in the field of Education was signed in 2005. During 2010 the Government of Indian offered nearly 130 scholarships to Thai students under its ITEC and ICCR sponsored schemes. A large number of Thai students are also studying on self financing basis. Ministry of Human Resource Development provides for secondment of 8 professors every semester for the Asian Institute of Technology (AIT), Bangkok.

20. Government of India contributed Rs. 1.25 crores (Thai Bht 10 million) in 2008 towards construction of a new building for the Sanskrit Studies Centre at Silpakorn University, Bangkok and has deputed a Sanskrit professor. An India Studies Centre is functioning at the Thammasat University of Bangkok since April 1993. In 2008, the Mahidol University of Bangkok started a Masters of Arts course on Indian studies.

INDIAN DIAPSORA IN THAILAND

21. It is estimated that there are between 100,000-150,000 people of Indian origin in Thailand. Many of them have lived here for several generations over the past century. Majority of them hold Thai nationality. The Indian community comes from different past of India and mainly comprises Sikhs, Punjabis, Gorakhpuris, Tamils and Sindhis. Two persons of Indian origin from Thailand have been awarded the Pravasi Samman in 2006 and 2010.