MUMBAI: The head of India's Tata Group, Ratan Tata, yesterday warned staff of the "difficult economic environment" while handing over the reins of the business empire on his 75th birthday to successor Cyrus Pallonji Mistry.
Tata, who steered the group for 21 years as chairman, has been credited with transforming it into a streamlined conglomerate of more than 100 companies and earning a global reputation for eye-catching acquisitions of Western firms.
Tata, in a farewell message to staff, said "the difficult economic environment that we face will most likely continue through most of next year", with constraints in consumer demand, overcapacity and more competition from imports.
"There will therefore be great pressure on our companies to reinvent themselves in terms of business processes, to dramatically reduce costs and to be more aggressive in the market place," Tata's internal email to staff said.
There was no event scheduled to mark the transition, which will see Mistry become the new supremo. Tata said he was confident that staff would extend the "same support, commitment and understanding" that he had enjoyed to Mistry.
From luxury cars to steel, Tata is India's largest group with total combined sales of $100 billion in 2011-12, nearly 60 per cent of which came from business outside India, mainly the US and Britain.
During Tata's time at the helm, the organisation went on a global purchasing spree, acquiring major names ranging from Tetley Tea to Land Rover and the Anglo-Dutch steel firm Corus in 2007 for $13.7bn.
In addition, Tata Motors is India's top vehicle maker, while Tata Consultancy Services is its largest software outsourcer.