Automobile

Published on May 2016 | Categories: Documents | Downloads: 34 | Comments: 0 | Views: 321
of 32
Download PDF   Embed   Report

automobile overview

Comments

Content

Review of Automobile
Sector In
India

Presented by:
Ofer Ashtamkar
Kishor Choudhary
Ajay Jaiswal
Kunal Mane
Santosh Saud
Sagar Vijan

03
12
25
31
46
61

Introduction
The automobile industry is one of India’s most vibrant and growing

industries. This industry accounts for 22 per cent of the country's
manufacturing gross domestic product (GDP).
The auto sector is one of the biggest job creators, both directly and
indirectly.
India's domestic market and its growth potential have been a big
attraction for many global automakers. India is presently the world's
third largest exporter of two-wheelers after China and Japan.
The next few years are projected to show solid but cautious growth
due to improved affordability, rising incomes and untapped markets.

History
Indian market before independence - imported vehicles while
assembling of cars manufactured by General Motors (GM) and
other brands
Indian automobile industry mainly focused on servicing, dealership,
financing and maintenance of vehicles. Later only after a decade from
independence manufacturing started.
After independence - manufacturing capability was restricted by the
rule of license and could not be increased.
In 1953 an import substitution program was launched,
and the import of fully built-up cars began to be
impeded.

The production was confined to three main
manufacturers Hindustan Motors, Premier Automobiles
and Standard Motors.
Hindustan motors was launched in 1942, long time
competitor Premier in 1944. They built GM and Fiat products
respectively.
Mahindra & Mahindra was established by two brothers in 1945, and
began assembly of Jeep CJ-3A utility vehicles.
Tata entered the commercial vehicle sector in 1945 after
forming a joint venture with Daimler-Benz of Germany.
To promote the auto industry the government started the Delhi Auto
Expo which had its debut showcasing in 1986.
There was no expertise or research & development

Evolution of Automobile Industry
Initial Years

Early to mid 90s

Manufacturing was licensed
•High Customs duty on import
•Steep excise duties &
•sales tax
•2 Major players:
Premier Automobiles Ltd
& Hindustan Motors

•Seller’s market and long
waiting periods

1980s

•Decrease in customs &
excise

•Entry of MUL, better product,
with government support
•Seller’s Market
•Long Waiting Periods

•De-licensing in 1993
•Removal of capacity
restrictions

•Auto finance boom- more
players (foreign banks & non
banking companies, better
schemes.

Mid 90s – Early 2000s
•Buyers market
•Increase in Indigenization
•Easy Auto finance
•Manufactures diversifying
into related activities:
finance lease, fleet
management, insurance and
used car market

After 2000 - Era of globalization and evolution of India as a global

manufacturing hub

Top & Major Manufacturers in
Automobile Industry
 Maruti suzuki Ltd.
 General Motors India
 Ford India Ltd.
 Eicher Motors
 Bajaj Auto
 Hero Motors
 Hindustan Motors
 Hyundai Motor India Ltd.
 Royal Enfield Motors
 TVS Motors
 Swaraj Mazda Ltd
 Toyota
 Nissan
 Chevrolet
 Tata motors

India is….
Is one of the largest automotive markets in the world
Largest TRACTOR manufacturer
2nd Largest TWO WHEELER manufacturer
2nd Largest BUS manufacturer
5th Largest HEAVY TRUCK manufacturer
6th Largest CAR manufacturer
8th Largest COMMERCIAL VEHICLE manufacturer

Market Share

Automobile Domestic Sales
(Number 
Trends
of
Category
Passenger
Vehicles
Commercial
Vehicles
Three
Wheelers
Two
Wheelers
Grand
Total

2008-09

2009-10 2010-11

2011-12

Vehicles)
2012-13 2013-14

 15,52,7 19,51,333 25,01,542 26,29,839 26,65,015 25,03,685
03
3,84,194

5,32,721 6,84,905

8,09,499

7,93,211 6,32,738

3,49,727

4,40,392 5,26,024

5,13,281

5,38,290 4,79,634

74,37,61 93,70,951  1,17,68,9  1,34,09,1 1,37,97,18 1,48,05,4
9
10
50
5
81
97,24,2 1,22,95,3 1,54,81,3 1,73,61,7 1,77,93,7 1,84,21,5
43
97
81
69
01
38

Automotive industry crisis
Global financial crisis in the auto industry that began

during the latter half of 2008
Weakened by the substantially more expensive
automobile fuels linked to the 2003-2008 oil crisis
The global financial crisis and the related credit
crunch placed pressure on the prices of raw materials
In 2009, the vehicle companies of the world are being hit
hard by the economic slowdown across national
boundaries

Analysis of current scenario
• A total of 16.9 m two-wheelers were sold in FY14, a growth of a
tepid 7% over the previous year.
•Passenger vehicles (PV) also did badly as volumes declined by 6%.
Slowdown in the economy, firm interest rates and fuel prices had an
adverse impact on demand.
•It was a second consecutive challenging year for the medium and
heavy commercial vehicles (M/HCVs) segment as volumes plunged
by 25%. LCVs were at the receiving end as well as volumes dropped
by 17.6% YoY
Both Tata Motors and Ashok Leyland faced heavy
challenges during the year given that both of them corner a
significant chunk of the CV pie.

Analysis of current scenario
Tractors did very well during the year as

monsoons in 2013 were quite healthy and M&M,
which is a market leader in the tractors space,
benefitted from this as its auto division faced
rough weather.
As volumes took a beating, few of the companies
did manage to report an improvement in
operating margins largely on account of various
cost rationalization measures undertaken.

Porter five forces analysis
Porter five forces analysis is a framework to analyze

level of competition within an industry and
business strategy development.

BCG MATRIX OF TATA MOTORS

???

HIGH
Safari Dicor , Indica
Vista , Star bus ,
Manza , Winger,
Magic

BUSINESS
GROWTH
RATE

Nano, versa &
other new
inventions

Safari, Sumo, Indigo Indigo Sedan,
CS
Sierra, Estate
LOW
HIGH

LOW

Marketing Strategies adopted by Automobile industry in India

Advertisements
Digital medium
Print medium
Celebrity endorsements and testimonial advertisements

Segmentation
1.    Based on the price of the car:Economy Segment
Mid- Size Segment
Luxury car segment
Super luxury car segment

2. Based on the length of the car:A segment - Cars that are less than 3.5 meters long (800, Omni)
B segment- Cars between 3.5 meters to 4 meters long (Zen and Santro)
C Segment- Cars between 4 meters to 4.5 meters long (Honda city)
D segment- Cars that are more than 4.5 meters long (Mercedes,

Sonata, Accord, Skoda)

3.    Based on the user segment
Individual Buyers
Taxi operators
Government /non-government institutions

PEST
analysis

Political
The Government of India allows 100 % FDI under the

automatic route.
The government had lowered excise duty on small cars,
motorcycles, scooters & commercial vehicles to 8 % from 12
%, on sports utility vehicles to 24 % from 30 %, on midsegment cars to 20 % from 24 % and on large-segment cars to
24 % from 27 %.
The Government of India-appointed Society of Indian
Automobile Manufacturers (SIAM) and Automotive
Components Manufacturers Association (ACMA) are
responsible in working for the development of the Indian
automobile industry

Economical
The level of inflation, Employment, level of per capita .
Economic pressures on the industry are causing

automobile companies to reorganize the traditional sales
process.
Weighted tax deduction of up to 150% for in-house
research and R & D activities.
Govt. has granted concessions, such as reduced interest
rates for export

Social
Growth in urbanization, 4th largest economy by PPP

index.
Upward migration of household income levels.
85% of cars are financed in India.
Car priced below 720000 accounts for nearly 80% of the
market.
Vehicles priced between 420000-720000 form the largest
segment in the passenger car market.
Indian customers are highly discerning, educated and well
informed

Technological
Technological solutions helps in integrating the supply

chain, hence reduce losses and increase profitability.
Customized solutions (designer cars, etc) can be provided
with the proliferation of technology
Internet makes it easy to collect and analyse customer
feedback
With the entry of global companies into the Indian
market, advanced technologies, both in product and
production process have developed.
With the development or evolution of alternate fuels,
hybrid cars have made entry into the market.

Various Challenges
In Indian Automotive Market, there are some challenges by virtue of
which automobile industry faces lot of problems. These challenges
should be overcome and the challenges are listed below:









Growth in input costs
Fuel price volatility
Slowdown in demand
Production cuts
Growing competition
Changing consumer preferences
Environmental issues
Low R&D orientation

The Future of the Automotive
Industry
Development of the domestic electric and hybrid

vehicles in the country.
Industry gearing up for GREEN VEHICLE
manufacturing.
Development of smaller engines to be high on
agenda.
Penetration of telematics: In-vehicle infotainment
and embedded software to rise
Cost optimization: The survival tool.
Used cars market set for rapid expansion.

Conclusion
India has the potential to develop into a significant market for

automobile manufacturers.
Indian automotive industry holds significant scope for

expansion, both,
In the domestic market ,Where the vehicle penetration level is

on the lower side as compared to world average, and in the
international market, where India could position itself as a
manufacturing hub.

References:
Automotive Component Manufacturers Association of India

(ACMA)
Society of Indian Automobile Manufacturers (SIAM)
Union Budget 2014-15
Department of Industrial Policy and Promotion (DIPP)
Press Releases
Media Reports

Thank You !

Budget Proposals Directly Impacting the Indian
Automotive Industry

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close