PROJECT REPORT

MARKET POTENTIAL OF NEW TECHNOLOGIES IN AUTOMOTIVE

AFTERMARKET:
A STUDY WITH REFERENCE TO ‘BOSCH LIMITED’

A dissertation report submitted in partial fulfillment of the requirement for MBA

degree course

By
H N Jyothi
Enrolment No: 072371947

Under the Guidance of

Dr O P Goel
Academic Counselor
IGNOU STUDY CENTRE
Bangalore

SCHOOL OF MANAGEMENT STUDIES

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
NEW DELHI-110 068

MAY 2010

1
 Dedicated

To my beloved

Parents, Husband & Child

2
INTRODUCTORY PAGES

3
 PREFACE

The automotive aftermarket is the part of the automotive industry concerned

with the manufacturing, distribution, retailing, and installation of all vehicle
parts, tools, equipment and accessories for light and heavy vehicles, after the
sale of the automobile by the original equipment manufacturer (OEM) to the
consumer.

The focus on getting more power from the engines, higher safety needs and
lower emissions has resulted into Automobile engineers trying and developing
new technologies like Common Rail Diesel Injection, Multi point Fuel Injection,
Anti lock Braking system and air bags.

The study has focused on finding out the market potential of these
technologies, with special reference to Bosch, a World leader in automotive
technologies.

4
 ACKNOWLEDGEMENTS

A study like this is not the outcome of the efforts of a single person. The study
would not be completed if I do not take on the names of those personalities
who have directly or indirectly helped me in carrying out the study. It gives me
immense pleasure to put on their names here.

I wish to extend my reverence to Dr O P Goel Academic counselor IGNOU

study Centre, Bangalore for his guidance & genuine support, who was constant
source of inspiration during the entire project work..

I also express my sincere gratitude to all the respondents for providing the
valuable data.

Finally, I express my gratitude towards my parents and family for their

continuous support during the study.

H N Jyothi

5
 CONTENTS

Page No.

INTRODUCTORY PAGES....................................................................................................3
PREFACE..............................................................................................................................4
ACKNOWLEDGEMENTS......................................................................................................5
CONTENTS...........................................................................................................................6
SYNOPSIS APPROVAL........................................................................................................7
CERTIFICATE OF ORIGINALITY.........................................................................................8
GUIDE BIO-DATA.................................................................................................................9
SYNOPSIS...........................................................................................................................11
CHAPTER 1.........................................................................................................................16
INTRODUCTION.................................................................................................................16
1.1 INDIAN AUTOMOBILE INDUSTRY...........................................................................17
1.2 AUTOMOTIVE TECHNOLOGIES IN INDIA..............................................................26
1.3 CHANGES IN AUTOMOBILE ENGINE TECHNOLOGY...........................................27
1.5 KEY AUTOMOTIVE TECHNOLOGY MANUFACTURERS IN INDIA:......................30
CHAPTER 2.........................................................................................................................39
RESEARCH METHODOLOGY...........................................................................................39
2.1 OBJECTIVES OF THE STUDY:................................................................................39
2.2 RESEARCH DESIGN................................................................................................40
2.3 PROFILE OF RESPONDENTS.................................................................................41
CHAPTER 3.........................................................................................................................44
DATA ANALYSIS AND INTERPRETATIONS.....................................................................44
3.1 ANALYSIS OF SERVICE STATIONS DATA.............................................................45
CHAPTER 4.........................................................................................................................54
CONCLUSIONS, RECOMMENDATIONS AND DIRECTIONS FOR FUTURE
RESEARCHES....................................................................................................................54
4.1 DIRECTIONS FOR FUTURE RESEARCHES...........................................................57
4.2 LIMITATIONS OF THE STUDY.................................................................................58
ANNEXURES.......................................................................................................................58
BIBLIOGRAPHY..................................................................................................................61

6
SYNOPSIS APPROVAL

7
 CERTIFICATE OF ORIGINALITY

This is to certify that the project report entitled “MARKET POTENTIAL OF

NEW TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH

REFERENCE TO ‘BOSCH LIMITED’ is an original work of the student and is

being submitted for the award of the Degree of Master in Business

Administration of Indira Gandhi National Open University, New Delhi. The

report has not been submitted, earlier, either to this or to any other

University/Institution for fulfillment of the requirement of a course of study.

Student Supervisor
H N Jyothi Dr O P Goel

Date:
Place: Bangalore

8
GUIDE BIO-DATA

9
10
 SYNOPSIS

MARKET POTENTIAL OF NEW TECHNOLOGIES IN ‘AUTOMOTIVE

AFTERMARKET’: A STUDY WITH REFERENCE TO ‘BOSCH LIMITED’

1. Rational Behind the Study

The Automotive Industry is one of the core industries in the Indian economy,

whose prospect is reflective of the economic resilience of the economy. Global

manufacturers’ are setting up units, not only for the local market but also to

function as export base. The qualitative analyses of the various trends reveal

that the Automotive Aftermarket in the industry has a huge potential to be

tapped in years to come. Annual cars production in India has already exceeded

1 million no in the year 2009 (Source: Society of India Automotive

Manufacturers’ – SIAM industry report, Jan.2010) , thereby posing big capacity

and competence challenge to the Auto Service Sector.

The need for newer technologies in the Cars is being driven by stringent

Emission norms, Safety regulations and riding comforts. The technologies like

CRDi (Common Rail diesel Injection), Air Bags & ABS (Anti - lock Breaking

System) respectively, are some of the newer products which are being

adopted by most of the car manufacturers’ in the Country. These technologies

are, by and large, already standard fitments in European countries and with

the entry of all major car MNCs in India, are slowly but surely going to change

11
the market potential of automotive components in the country. Automotive

Components Manufacturer’s Association (ACMA, Industry Report 2009) has

estimated that an average car will have 30% of the electronic components

contributing to its costs by 2013.

Bosch, a fortune 100 Global Company with its headquarters in Germany, is

represented by Bosch Ltd, in India (Turnover 2009: Rs. 6700 crores) and is

the largest automotive technology supplier to all the car manufactures in the

country, including for Tata Nano.

The components supplied to the Original Equipment Manufacturers’ (OEMs)

carry a Warranty of 1 to 3 years, before the ‘Potential’ becomes accessible to

the automotive aftermarket business decision makers. The motive behind

proposed study is to find out as to how this business shall shape up in next 5

to 10 years, what will be the market trends in servicing these ‘electronics

loaded vehicles’ and if the service providers in the country are prepared to

‘take on’ this new market development.

2. Objective of the Study:

I. To find out the market potential of new technologies (CRDi, ABS & Air

Bags) in the Indian automotive Aftermarket.

II. To find out the preparedness level of Automotive Service providers to

handle new technology fitted cars.

12
III. To evaluate the strengths and weaknesses of the marketing

Strategies of Bosch Limited, India to tap the Market potential of new

technologies.

3. RESEARCH METHODOLOGY

3.1 Sample Size & Design: It is proposed to limit the sample size

to 100 service technicians, who are engaged in diagnosing and

repairing new generation cars. The technicians from both, organized

sector (Car Manufacturing Companies’ Authorized Dealers) as well as

unorganized sector ( roadside small garages) shall be included as

below:

Geographical area covered shall be Bangalore city which is one of the

fastest growing car market in the country. Due consideration shall be

given to include car repairing workshops which deal into various

makes and models. From organized sector, car authorized service

13
 workshops of Indian and Multinational manufacturers’ shall be

included.

3.2 Tools for Data Collection:

A self administered, well structured questionnaire shall be designed and

distributed for the collection of primary data. The technicians who

actually deal in diagnosis and repair of the cars shall be target

population. Interviews shall also be held with service Station Managers,

Spare Parts In charges and industry experts, including Bosch Marketing

Strategy officials on various aspects of the research. Random sampling

technique is proposed to be used. Questionnaire shall have both –

closed ended as well as open ended questions.

Secondary data shall be collected from the company (Bosch Ltd)

publications, website and the publications from Industry Associations

( SIAM, ACMA).

Period:

Data is proposed to be collected personally by the researcher between

15.06.10 to 15.07.10.

4. Expected Contribution From the Study

It is expected that the study will help in the following areas:

I. To know the market status of new technology components fitted in

the Cars plying in the country.

14
 II. To know the strengths and weaknesses of marketing strategies of

Bosch Ltd in tapping the current and increasing potential.

III. To know as to what extent the Service Stations are prepared to

meet the diagnosis and repair needs of the new generation cars.

IV. An ideal service station incorporating all the facilities and

equipments to service new technology cars, may be imagined.

5. Limitations of the Study

I. The data shall be collected from the technicians, including

those who own very small shops and are not well educated. Study

outcome shall depend on the quality of data they are able to provide.

II. Current market strategies of Bosch Limited are proposed

to be evaluated. Company Managers’ willingness to open up and

provide realistic data shall be the basis for developing the

construct for the study.

Name: H N Jyothi

Enrollment No. : 072371947

15
 CHAPTER 1

INTRODUCTION

16
 CHAPTER 1

INTRODUCTION

1.1 INDIAN AUTOMOBILE INDUSTRY

India has overtaken traditional car manufacturing nations such as France,

Spain, United Kingdom, Canada, Italy and Russia and became the seventh

largest motor vehicle/car manufacturer in the world in 2009. Indian auto

manufacturers produced 2.63 m (million) cars and commercial vehicles in

2009 out of which 2.17 m were cars. Domestic passenger vehicle sales hit a

new record in 2009-10 (Apr-Mar) when over 1.95 million vehicles were sold.

India is the largest manufacturer of three-wheelers (444,000 in 2009-10)

and the eighth largest commercial vehicle (0.53 m in 2009-10). India is also

the largest tractor manufacturing country (around 1/3 of global output)

having produced around 370,000 units in 2009-10. ( Source: Society of

Indian Automobile Manufacturers, SIAM)

India's automobile exports in 2008-09 (1,530,660 units in total) included

331,539 passenger cars and 1,004,174 two-wheelers. India is the second

largest motorcycle (6.54 m produced in 2007-08) and the fourth largest

17
 commercial vehicle manufacturer in the world. India's auto industry produced

a total of 14.1 million motor vehicles during 2009-10. Auto exports amounted

to almost USD 2.3 billion in the year 2005-06. Over 13 million people work

directly or indirectly in the auto industry. Indian car exports have increased at

a rapid pace reaching 210,088 units (mostly Maruti-Suzuki and Hyundai

models) during the first half (Apr-Sep) of 2009-10, well ahead of China

(SIAM).

The size of the Indian automotive component industry is estimated to be

approx. USD 21 billion. Auto ancillary exports increased to USD 3.6 bn in

2007-08 while the total turnover of India's vehicle tyre industry amounted to

an estimated Rs 142.5 bn in 2005-06. The total number of registered motor

vehicles on Indian roads is approx. 100 million ( Automotive Components

Manufacturers Association, ACMA).

Established auto manufacturers and new entrants in the Indian auto market

are expanding their production capacities on a large scale. Companies

undergoing expansion include Maruti-Suzuki, GM, Tata Motors, VW Group,

Toyota, Honda and Hyundai. The Renault-Nissan Alliance's new auto plant

near Chennai is expected to commence production in May 2010. Peugeot-

Citroen is planning a comeback to India.

Cars have till now been affordable to only a fraction of India's over 200 m

households. With the advent of the Tata minicar, the Nano, which received

18
top marks for its styling and design, retails for approx. USD 3,000 (Delhi on-

road) and therefore has created a completely new segment in the car market

and made autos within the reach to a substantial segment of the approx. 50

million current 2-wheeler owners and first time car buyers (SIAM).

DOMESTIC CAR SALES

Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

2007-08: Indicates April 2007-March 2008, FY09=Apr'08-Mar'09

06-07: Indicates April 2006-March 2007
* Incl. of exports
** Apr-Dec 2006
¹ Estimate
² 2004-05
³ 2003-04
@ 04/04-12/04

1,050
(All 1,400 (Jan-
1,658 (All
Audi A4 - - 102 Audi Jun, all
Audi models)
models models)
)

105 (all
300 (all 349 (all 111
Audi
Audi A6 Audi Audi (Jan- 396
models-'0
models) models) Apr)
5)

2,183 (all
1,075 BMW
BMW 3 Series - - 946 1,155
(FY09) models Jan-
Jun)

BMW 5 Series - - 822 1,352 1,590

19
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

(FY09)

1,174
Chevrolet Aveo - - 5,624 746 (Feb) 364 (Jan)
(Jan)

Chevrolet Aveo
- - 11,523 434 (Jan)
U-VA

Chevrolet 2,134
- - 607 201 (Feb) 72 (Jan)
Captiva (FY09)

Chevrolet
812 (Oct) 686 (Jan)
Cruze

6,058
1287
Chevrolet (inc.
9 191 Na (Jan- 89 (Feb) 51 (Jan)
Optra Magnum SR-V
Mar)
model)

7,265
Chevrolet
- - 22,060 (Jan- 2,940 (Feb) 3,477 (Jan)
Spark
Mar)

4,892
Chevrolet 18 622
Na 20,671 (Jan- 945 (Feb) 1,512 (Jan)
Tavera (2005)
Mar)

Ford Fiesta ca 3 500 Na 22,855

Ford Fusion 329 Na 2,678

Ford Ikon 24 536 Na 4,797

Hindustan
12 740 Na 8,487
Ambassador

Honda Accord 3 324 2,728 2,133 4,108 948 (Jan- 288 (Jan)

20
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

Apr)

40,536
37 545
40,464 (incl. 18,482 (Jan-
Honda City (2005- 4,485 (Jan)
(06-07) Marina Apr)
06)
STW)

16,262 2,386 (Jan-

Honda Civic na 16,723 644 (Jan)
(06-07) Apr)

1 858 1,873 501 (Jan-

Honda CR-V 3,425 76 (Jan)
(05-06) (06-07) Mar)

3,069 (Jun-
Honda Jazz 490 (Jan)
Jul)

Hyundai
24 383 Na 8,274
Accent

Hyundai
2 331 1,683 10
Elantra
(2005) (06-07) (Mar)
(discontd.)

Hyundai Getz 9,442

5 483 Na 16,787
Prime (FY09)

14,451 106,11 24,990 (till

Hyundai i10 - -
(2007) 0 Mar 12)

4,991
Hyundai i20 - - - 4,940 (Oct)
(FY09)

Hyundai 163,838 91,466

103 301² 121,163
Santro Xing (06-07) (FY09)

Hyundai 806 486 232 (Jan-

506 577 29 (Jan)
Sonata (2005) (FY09) Apr)

21
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

533
884
Hyundai (incl. 50
(March- 188 13 (Jan-Apr)
Tucson Terracan (FY09)
Nov 05)
)

2,132
Hyundai Verna na Na 24,370 5,502 (Jan)
(Feb)

~90 242 (incl.

Land Rover ca 30 Na 35 (Jan)
(2008) Jaguar)

Mahindra 55,924
- - 51,009
Bolero (FY09)

3,000
(Apr08
Mahindra Max - - -
-
Feb09)

Mahindra 31,661 38,015 27,000

41,443 3,200 (Mar)
Scorpio (05-06) (06-07) )

7,201 ~10,500
Mahindra Xylo - - -
(FY09) (Jan-Apr)

79,245 49,383 9,915 (Apr-

Maruti 800 116 262² 69,553
(06-07) (FY09) Jul)

Maruti DZire - - 5,658

Maruti Esteem
18 379 Na 12,485
(discontd.)

Maruti Grand 270

na Na 795
Vitara (FY09)

Maruti Gypsy na Na 3,132 7,219

22
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

(FY09)

Maruti Omni 60 377² Na 88,273

Maruti Ritz 6,214 (Jun)

34 463 110,07
Maruti Swift (May-Nov Na 88,745 1
05) (FY09)

1,953
Maruti SX4 - - 31,192
(Feb)

1,440
Maruti Versa 4 291³ Na 1,456
(FY09)

134,76
Maruti Wagon
79 712² Na 132,727 8 140,000
R
(FY09)

50,635
(Zen 32,694
Maruti Estilo 65 345² Na
and (FY09)
Estilo)

Mercedes E-Cl 825 (05) 922 1,048 1,167 1,048 245 (Jan)

Mercedes S- 144
248 518 561 467 22 (Jan)
Class (2005)

141 125 (models

Mercedes 6 CBU
(incl. other than
CLS/SLK/SL/CL na 118 imports(Jan
80 M- C,E and S
K/M )
class) class)

Mitsubishi 1,570
2 509 Na 2,582
Lancer/Cedia (FY09)

23
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

Mitsubishi 278
- - -
Outlander (FY09)

Mitsubishi
1,814
Pajero/Monter na Na 1,676
(FY09)
o

58
Nissan Teana - - 347
(FY09)

253 100
Nissan X-Trail 250 173
(2005) (FY09)

Opel Corsa 8 369 Na

Porsche
ca 100
(various 160 168 168
(2005)
models)

13,419 2,520 (Feb-

Renault Logan - - 25,884 555 (Jan)
(FY09 Apr)

12 14
Rolls-Royce 5 (2005) 7 (2006)
(2007) (2008)

5,510 (Jan-
Škoda Fabia - - 1,906 6,634 Mar) all
Škoda

Škoda 9 559 7,459

11,433 10,944
Octavia/Laura (05-06) (FY09)

694 541 (Apr-

Škoda Superb na 769 586
(FY09) Jun)

Tata Indica 111 574 144,690 135,642 111,25 91,295 (Apr- 11,448
(05-06) (06-07) 7 Jan '10) (Jan)

24
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

(FY09)

Tata
39 377 34,310 49,190 41,724 (Apr-
Indigo/Indigo 31,416 7,258 (Jan)
(05-06) (06-07) (FY09) Jan '10)
XL/Indigo CS

Tata Marina 2 050 Na

21,535 (Jul-
Tata Nano 4,001 (Jan)
Jan '10)

25,630
3,538
4 692 15,816 (Sumo+Safa
Tata Safari 19,078 (Safari/Su
(05-06) (06-07) ri: Apr-Jan
mo Jan)
'10)

Tata Sumo / 33 213 32,077

28,622
Sumo Victa (05-06) (06-07)

182
794 1,001
Toyota Camry 988 (Apr- 44 (Apr-Jun)
(2005) (06-07)
Jun)

Toyota Corolla 8 974

na 6,204
Altis (2005)

Toyota ~3,100
Fortuner (Aug-Dec)

32 000 ~2,200
Toyota Innova Na 48,069
(2005) (Feb)

Toyota Land 162 109

Na 141
Cruiser Prado (2005) (FY09)

Toyota Qualis 31 759 Na

25
 Domestic Car Sales Model wise 2004-09

2004/0 2007-
M od el 2006 2008 2009 2010
5 08

1,566
1,957 (Jan-
(all VW
VW Jetta - - Aug: all VW
models
models)
)

ca 90 (
ca 100 all
Volvo S80 - - (all Volvo
Volvo) models
)

1.2 AUTOMOTIVE TECHNOLOGIES IN INDIA

Automotive technology refers to the technologies that are incorporated in

automobiles or vehicles. With the continuous advancement of technologies

new inventions in the field of automobile technology is only paving the way for

more and more technologically superior and sophisticated vehicles. Automobile

technology is one of the most essential parts of the automobile industry today.

There are a number of vehicles available in the market all of which require

different technologies to support their smooth functioning.

26
1.3 CHANGES IN AUTOMOBILE ENGINE TECHNOLOGY

However the most important changes that has taken place in the automobile

industry in India pertains to the development of the engine. In the cars using

petrol the carburetor engine has been replaced by the Multi Point Fuel injection

(MPFI) engine. Similarly the engines running on diesel have undergone a sea

change from the time Rudolf Diesel to the Rail Direct Injection (CRDI).

1.3.1 Multi Point Fuel Injection (MPFI)

This technology sticks to stricter auto emission norms and manages to squeeze

out the maximum benefit of the fuel by making optimum use of even the last

drop of petrol or diesel and providing the vehicle with a great mileage.

1.3.2 Common Rail Direct Injection (CRDI)

If you have the benefit of a Common Rail Direct Injection engine fitted to your

car you will know that you have invested your money in the right place (CRDI)

offers 25% more power than the normal direct injection engine and also a

soundless pick up with mileage of about 24 kilometers to one liter of diesel.

1.4 CHANGES IN VEHICLE TECHNOLOFY

Along with the engine the vehicle has also undergone an enormous

improvement in the form of:

Autopilot cars: Driverless cars also known as autopilot, autonomous vehicle

or auto-drive car are intelligent vehicles because of the simple fact that they

drive themselves, to put it in a better way they actually do not require drivers

to drive them. These vehicles navigate the roads themselves and give you a

27
taxi experience.

Emission Standards: With the help of the advancement in automobile

technology a check can be put on the emission of harmful pollutants like NO

2 , particulate matter (PM) or soot, carbon monoxide (CO) or volatile

hydrocarbons which would by far help to save the planet from global warming.

Automotive Engine: Coming from the first steam engine built by Nicolas-

Joseph Cugnot ( 1769 ) to the modern day four stroke internal combustion

engine, the automobile engine has survived a long journey. It is simply the

determination and power of the human mind that has kept improving the

steam engine and today excelled in making it a fast and smooth running

engine.

Suspension technology: The suspension system of a vehicle consists of

springs, shock absorbers and linkages these together connect the vehicle to its

wheels. However the main function of the suspension system remains to

minimize jerks and to provide a smooth journey to its occupants.

Apart from the above mentioned technologies steering technologies and safety

technologies have also helped the automotive industry to reach great heights.

AIRBAG : An airbag is a vehicle safety device. It is an occupant restraint

consisting of a flexible envelope designed to inflate rapidly in an automobile

collision, to prevent vehicle occupants from striking interior objects such as the

steering wheel or window. Airbags for passenger cars were introduced in the

United States in the mid-1970s, when seat belt usage rates in the country

28
were quite low. Ford built an experimental fleet of cars with airbags in 1971,

followed by General Motors in 1973 on Chevrolet vehicles. The early fleet of

experimental GM vehicles equipped with airbags experienced seven fatalities,

one of which was later suspected to have been caused by the airbag.

ANTILOCK BRAKING SYSTEM (ABS) : An anti-lock braking system, or

ABS is a safety system which prevents the wheels on a motor vehicle from

locking up (or ceasing to rotate) while braking.

A rotating road wheel allows the driver to maintain steering control under

heavy braking by preventing a skid and allowing the wheel to continue

interacting tractively with the road surface as directed by driver steering

inputs. ABS offers improved vehicle control and decreases stopping distances

on dry and especially slippery surfaces. However, on loose surfaces like gravel

and snow-on-pavement, it can slightly increase braking distance while still

improving vehicle control.[1] On others, it may not improve control at all.

Since initial widespread use in production cars, anti-lock braking systems have

evolved considerably. Recent versions not only prevent wheel lock under

braking, but also electronically control the front-to-rear brake bias. This

function, depending on its specific capabilities and implementation, is known

as electronic brake force distribution (EBD), traction control system,

emergency brake assist, or electronic stability control.

29
1.5 KEY AUTOMOTIVE TECHNOLOGY MANUFACTURERS IN

INDIA:

DELPHI INDIA

Delphi India was incorporated in April 1995 as a wholly owned subsidiary of

Delphi. It operates in several locations, including three manufacturing facilities

located in Greater Noida, Dharuhera, and Gurgaon, a technical centre in

Bangalore and the Delphi – TVS joint venture in Chennai. Delphi India employs

a local workforce of highly skilled personnel intensively trained at Delphi

facilities both in India and abroad.

Delphi facilities boast the conveniences and tools necessary to safely and

efficiently produce the high-quality products that help make Delphi a leading

global supplier of electronics and technologies for automotive, commercial

vehicle and other market segments. Delphi India facilities are steadily

increasing product engineering capabilities to keep pace with the increasing

prevalence of electronics in vehicles.

Delphi India is linked into the global Delphi engineering network. Web-enabled

design and development tools enable the company to keep projects moving

forward around the clock.

30
Established in Bangalore in 2000, Delphi India's Technical Centre India (TCI)

has grown rapidly and has emerged as the largest Delphi technical center

outside of the United States. TCI complements Delphi's strong manufacturing

base in India and in the rest of the Asia Pacific region. Advanced engineering

activities at Delphi India's TCI include:

• Embedded software — Embedded software is integral to technological

leadership for many of Delphi's fastest growing product lines, such as

diesel common rail engine management systems and advanced mobile

multimedia systems.

• Mechanical engineering — In addition to expanding the electronics lab for

testing and verification, Delphi India's TCI includes a mechanical

engineering lab.

• Product engineering — By expanding its scope into product engineering,

TCI can now offer a range of engine controls for both gasoline and diesel

engine management systems, along with additional mobile multimedia

products.

• Design and engineering — TCI enables Delphi India to provide support

for fuel handling systems and engine management systems.

Delphi India has an engineering and manufacturing center where there is a

strong focus on localization of engineering validation and manufacturing

capabilities. Delphi is the first wiring harness manufacturer in India to be

31
certified for ISO TS/16949 and ISO 14001. Supplying products to major OEMs

in India as well as exporting to North America, Delphi India specializes in the

design, development as well as mass supply of electrical/electronic distribution

systems. Delphi India is also involved with bi-fuel, CNG (compressed natural

gas) and gasoline engine management system activities. Delphi produces a

wide range of products at its facilities in India, including:

• Electrical/Electronic Architecture Products

o Electrical centers

o Wiring harnesses

• Electronics & Safety Products

o Antennas

o Battery chargers

o Body computers

o Clusters

o DC-DC converters

o Immobilizers

o Li-Ion battery packs and power boxes

o Navigation systems

o Start-Stop systems

o Traction inverters

• Powertrain Products

32
 o Engine management systems

o Evaporative emissions canisters

o Fuel modules

o Fuel pumps, including modular reservoir fuel pump assemblies

o Throttle bodies

• Thermal Products

o Air-conditioners

o Compressors

o Condenser assemblies

o Heat exchangers

o HVAC (heating, ventilating, and air conditioning) modules and

systems

o Lines and hoses

o Powertrain cooling systems

In 2009, a grand opening ceremony was held for Delphi Product & Service

Solutions (DPSS) Authorized Wholesale Distributor's sales outlet in

Coimbatore, India. The sales outlet at Stanes Motors Limited features hands-

on displays of Delphi's complete product portfolio available for purchase in the

Indian aftermarket, and offers automotive replacement parts as well as vehicle

audio/video products. Delphi is devoted to providing original equipment quality

parts and services to the Indian aftermarket.

33
Delphi aftermarket products are distributed through national, regional and sate

level distributors reaching to over 5000 distributors/retailers in India.

Wholesale distributors also support Delphi's aftermarket products across India,

making products available in many cities.

• Aftermarket Products

o Brakes

o Consumer electronics

o Evaporative canisters

o HVAC products

o Lubricants

o Oil filters

o Radiator coolants

o Steering products

o Suspension products

o Vehicle electronics

o Wiring harnesses

Denso India Limited

Denso Corp is one of the world's largest automotive parts manufacturers,

employing 112,000 people in 32 countries. Its automotive product range

34
includes climate control, engine management, body electronics, driving control

and safety.

Toyota is Denso's largest customer, accounting for 49% of the company's

turnover in the financial year ended 31 March 2007. Its other OEM customers

include (ranked in order of sales in the year ended 31 March 2007) Honda,

Suzuki, Subaru, Mitsubishi, General Motors, Isuzu, Ford, Jaguar, Volvo, Land

Rover, Mazda, Chrysler, Mercedes-Benz, Fiat, Hyundai/Kia, Volkswagen, BMW,

Renault/Nissan and PSA Peugeot Citroen. None of these account for more than

10% of sales.

Denso's automotive business is divided into six main product segments:

* Thermal Systems;

* Powertrain Control Systems;

* Electronic Systems;

* Electric Systems;

* Information and Safety Systems; and

* Small Motors.

Denso India’ principal products include magneto, capacitor discharge ignition

(CDI), alternator, starter, fan / blower motor and wiper. Its subsidiaries

include Tianjin Denso Engine Electrical Products Co. Ltd., China; Denso

Manufacturing Italia S.P.A., Italia; Denso E& TS Training Centre Corporation,

Japan; Denso International Asia PTE Ltd., Singapore; Denso (Thailand) Co.

35
Ltd., Thailand; Denso (Malaysia) Sdn. Bhd., Malaysia, and Denso

Manufacturing Tennessee Inc., China.

BOSCH LIMITED

The Bosch Group is one of the world’s biggest private industrial

corporations. Headquartered in Stuttgart, Germany, the Bosch Group has

some 280,000 employees worldwide, and generated annual sales revenue

of 41.1 billion euros in 2009. There are about 300 subsidiary and regional

companies around the world.

Bosch India is a leading supplier of technology and services, and has a

strong presence in the country at numerous locations in diverse industry

segments. Bosch set up its manufacturing operations in 1953, and has

grown over the years to 14 manufacturing sites and 3 development

centers. Bosch employs about 18,030 associates in India, and in business

year 2008 achieved total consolidated revenue of over Rs. 6400 crores.

Bosch India operates through the following companies -

• Bosch Ltd.

• Bosch Chassis Systems India Ltd.

• Bosch Rexroth India Ltd.

• Robert Bosch Engineering and Business Solutions Ltd.

• Bosch Automotive Electronics India Private Ltd.

•Bosch Electrical Drives India Private Ltd.

Automotive technology Business Group

36
Bosch innovations have shaped cars from the start and will keep doing so in

future. As the world’s biggest independent automotive supplier, Bosch focuses

on innovations to make driving safer, cleaner and economical. Automotive

Technology is the largest business segment of Bosch in India, supplying to the

local automotive industry, and exporting components overseas.

Business divisions: Diesel Systems, Gasoline Systems, Chassis Brakes,

Automotive Accessories, Car multimedia, Starters and Generators, Energy and

Body Systems, Electrical Drives, Spark Plugs and Glow Plugs.

Industrial technology Business Group

Bosch Rexroth AG is an expert for all drive, control and motion technologies.

The Bosch Packaging Machines division in India brings the global expertise to

address the needs of the local confectionary and pharmaceutical industries.

The Special Purpose Machines (SPMs) and High Precision Tooling division

engineers customized equipment using cutting-edge technologies for

industries.

Business divisions: Automation technology, Packaging Machines, Special

Purpose Machines.

Consumer goods and building technology Business Group

37
The Bosch Power Tools division in India is the market leader in the segment,

offers a complete range of power tools for construction, woodworking and

metalworking industry; cordless tools, accessories and tools for DIY (Do-It-

Yourself) enthusiasts as well. The Security Systems division in India is one of

the leading security technology players with a comprehensive portfolio.

Business divisions: Power Tools, Security Systems.

Engineering and IT Services Business Group

The Engineering and Information Technology division of Bosch in India is the

largest development center of Bosch outside Germany. For over 15 years, it

has been the preferred engineering services and solutions partner for the

Bosch Group worldwide.

38
 CHAPTER 2

RESEARCH METHODOLOGY

CHAPTER 2
RESEARCH METHODOLOGY

2.1 OBJECTIVES OF THE STUDY:

1. To find out the market potential of new technologies (CRDi, ABS & Air

Bags) in the Indian automotive Aftermarket.

39
2. To find out the preparedness level of Automotive Service providers to

handle new technology fitted cars.

3. To evaluate the strengths and weaknesses of the marketing Strategies of

Bosch Limited, India to tap the Market potential of new technologies.

2.2 RESEARCH DESIGN

2.2.1 Sample Size & Design: The design of the research was prepared to

make it an exploratory research. Survey method was used to collect the

data from 3 target respondents 1) Authorized service dealers of the car

companies 2) Un authorized garages , called roadside garages who repair

all makes of cars and 3) Bosch company officials from the aftermarket

division.

Two questionnaires were prepared to collect the data , 1) Service stations

of both categories, authorized and unauthorized and 2) second for Bosch

officials. The questionnaires’ design was structured. Also open ended

questions were included to give space to the respondents for providing

additional information. Questionnaires were self administered type, how

ever in most cases researcher herself was present and helped them in

understanding the questions where ever there was a doubt.

40
60 questionnaires each from both types of service stations were got filled

up. On careful scrutiny it was found that 59 nos. from authorized service

stations and 41 nos, from un authorized service stations were valid and

were included for analysis purposes. 25 questionnaires from Bosch officials

were included. The data collection was restricted to the geographical limits

of Bangalore city.

Secondary data was collected from the website of Bosch limited, Society of

Automobile Manufacturers of India (SIAM) and Automotive Components

Manufacturers’ Association of India (ACMA).

2.3 PROFILE OF RESPONDENTS

1. Status of Authorization of the Service Stations

Data presented in Figure 3.1 indicates that 59% of the service stations

surveyed were ‘authorized dealers’ of respective car manufacturing companies

and 41% were unauthorized service stations (roadside garages) who deal into

multi brand cars

41
 Distribution of Respondents- Authorisation
wise

Authorised
Un- Dealer
Authorised 41%
Service
Station
59%
AuthorisedDealer Un-AuthorisedService Station

Fig 3.1: Distribution of Respondents – Authorization wise

2. No. of years in operation:

As per data depicted in tables 3.2a and 3.2b, it can be observed that

authorized dealers are more stable ( 37% are more than 5 years in existence,

as compared to unauthorized service stations who are 22% ).

No. of Years in operation % of respondents

Less than 2 years 28%
Between 2-5 years 35%
More than 5 years 37%
Figure 3.2a : No. of years in operation ( authorized dealers )

No. of Years in operation % of respondents

Less than 2 years 42%
Between 2-5 years 36%
More than 5 years 22%
Figure 3.2b : No. of years in operation ( Un - authorized dealers )

42
 3. No. of Vehicles attending per month:

No. of Vehicles attended by the service stations are shown in the Fig 3.3.

Authorized service stations are relatively bigger in size and capacity and none

of them was attending less than 100 vehicles pm ( that means 4 vehicles per

day X 25 working days). 18% of the Un authorized service station sfell uinto

this category. Sixty five percentage from authorized and 28% from

unauthorized categories were attending more than 250 vehicles pm.

Distribution of Respondents- workLoad wise

<100 Vehicles pm Bet 100- 250 Vehicles pm >250 vehicles pm

0.8 72%
65%
0.6
No. of
0.4 35% 28%
Vehicles pm 18%
0.2
0 0
Authorised ServiceUn-Authorised
Stations Service Stations
Type of Service station

43
 CHAPTER 3

DATA ANALYSIS AND INTERPRETATIONS

CHAPTER 3

44
 DATA ANALYSIS AND INTERPRETATIONS

The data collected has been organized and presented below, in two parts. First

part has data collected from Service Stations ( Both types I e authorized as

well un-authorized). Second part presents that data pertaining to Bosch

officials, collected as per the plan.

3.1 ANALYSIS OF SERVICE STATIONS DATA

1. No. of vehicles attended per month fitted with New Technologies:

Average no. of vehicles being attended by Authorized service stations and the

un-authorized ones are shown in Fig 3.1. It is quite clear that the customers

owning new technology vehicles prefer to go to the company’s authorize

service stations and do not want to take chance with the roadside garages.

Data also indicates that the vehicles with Airbags ( normally high end cars like

Mercedes or BMW) are very few and only 3 vehicles in a month are being

attended by all the service stations in the sample ( that too all of them by the

authorized service stations).

45
 120 116
100
80 74
60
40
20 12 7
3 0
0
Authorised Service Un-authoriswed
Stations Service Stations

CRDi ABS Air Bags

Fig 3.1

Even the customers of Anti Lock Braking System ( ABS) cars do not seem to

be taking chance with the un-authorized car service stations and out of total

81 cars in a month, 74 customers patronize the authorized ones.

The data brings out that the customers still do not have much confidence in

the technical competence of the un authorized service stations , when it comes

to handing over their high end expensive cars for servicing.

2. Average no. of Technicians in the Service Station:

As per data depicted in Fig 3.2, authorized service stations had, on an average

14 service technicians each as compared to the 3 nos. each at un-authorized

service stations.

46
 Avearge no. of Technicians in each
Service Station

14

Authorised Service Stations

Un-authrised Service Stations

Fig 3.2

3. Training Status of Technicians :

The status of training on new technologies of the technicians working at both

types of service stations is depicted by the data in Fig 3.3. It is clear from the

data that the situation of training at un-authorized service station is abysmal,

which places them at a quite incompetent place in the service market of new

technology fitted vehicles.

Even at authorized service stations, there is huge gap in training status and

particularly, in case of airbags, the companies need to focus on improving

technicians competence.

47
 Statusof TechniciansTraining

80
70
60
%of Persons 50 Authorised Service
40
Trained Stations
30
20 Un-authorised
10 Service Stations
0
CRDi ABS Airbags
Technology Type

Fig 3.3

4. Availability of Tools & Equipments necessary for handling new

technologies

The availability of tools and equipments required to handle new technologies

fitted in the cars is as important as a trained technician. As per data shown in

table no 3.1a and 3.1b, it is clear that only authorized service stations are

reasonably well equipped ( 90%) that too mainly to handle Common Rail

Diesel Injection (CRDi) and to some extent ABS (74%)

Authorized Service Stations

CRDi ABS Airbags

Available 90% 74% 24%

Not Available 10% 26% 76%

Table 3.1a

48
Unauthorized service stations ( Table 3.1b) are far from equipping themselves

to handle all of these technologies except that only 12% are equipped to

handle CRDi and 8% for ABS.

Un- authorized Service Stations

CRDi ABS Airbags

Available 12% 8% 0

Not Available 88% 92% 100%

Table 3.1b

5. Preparedness to handle new technologies coming in next 5 years.

As more and more vehicles with new technologies start coming on the Indian

roads, preparedness of the service stations shall become crucial to ensure

proper running of these vehicles. Only 16% of the Authorized service stations

find themselves going in the right direction with excellent preparation ( Fig

3.4) and none of the service station in unorganized sector seem to be coping

with the requirements.

With 64% of the service stations in unorganized sector being completely un-

ware of the requirements as to how these vehicles will be diagnosed or

repaired, it appears a cause of concern, not only for the manufacturers but

also for the Govt. which poses newer and newer norms for emissions and

safety.

49
 80%
70% 64%
60%
50% 12%
40% 38%
30% 20%
0% 4%
20% 22%
16% 14%
10% 10%
0%
Excellent Very Good Good Fair Bad

Authorised Service Stations Un Authorised Service stations

Fig: 3.4

6. Rating of Marketing Mix for New Technologies

As per data shown in Fig 3.5, The products coming in are near excellent

with 4.6 rating ( on a 5 point scale), followed by availability. The real issues

seems to be the ‘price’, which, with 1.9 rating appears to be very high.

Promotion of these parts at 2.5 rating also has considerable scope for

improvement.

50
 5
4.6
4 3.8
3
2.5
2 1.9

0
Product Price Promotion Availability

Rating ( 5 point scale)

Fig: 3.5

7. Key Suggestions given by Service Technicians for the

Companies

1. As there is very low level of awareness about compatibility of the

components, the companies should provide application charts for each of
the component fitted in the sub assemblies of new technology items.

2. On the spot, short duration training cum re-fresher training

programmes should be organized more often.

3. As far as possible, compatible items should be produced by various

manufacturers (means, components in one brand of the assembly, should
be interchangeable with another brand). This will help reduce inventory.

ANALYSIS OF BOSCH OFFICIALS DATA

51
 8. Rating of Marketing Mix Strategies

Bosch Ltd, being the pioneer and market leader in supplying new technologies

to almost all the car manufacturers’ in the country, has its marketing

strategies which are evolving over time. The Company’s officials were

interviewed by the researcher with the help of a structured questionnaire (copy

appended in the annexure) and the findings are presented below.

Marketing Mix Strategy Mean Score

Products 5
Price 4.2
Promotion 4
Availability 4
Table 3.2

The company officials, with high ratings (Table 5) appear to be confident

about every element of their marketing mix strategies. The company has

strong product plate-form backing from its parent company in Germany

( Robert Bosch GmbH, Stuttgart), which supplies these technologies to most of

the car manufacturers in Europe and North America.

9. What % age of the vehicles are you able to service with your
products in automotive aftermarket?

52
No. of officials ( Total : 25) % age of vehicles serviced with
available products
21 More than 90%
4 Between 75-90%
0 Less than 75%
Table 3.3

As per data presented in table 3.3, Company officials are sure that their

product range takes care of majority of the vehicles in the market and the

product range in wide enough to cover 90% of the vehicles ( 21 officials).

10. What is the break - up of Service Technicians ( Authorized

and un-authorized) who have undergone training organized by
your company

Out of the total technicians trained by the company 82% were from
authorized service stations and rest from unauthorized.

Break-up of Service Station Technicains

underwent Trainingin Bosch

18%

82%

Authorised Service Stations Un-Authorised service Stations

Fig 3.6

53
 CHAPTER 4

CONCLUSIONS, RECOMMENDATIONS AND

DIRECTIONS FOR FUTURE RESEARCHES

CHAPTER 4
CONCLUSIONS, RECOMMENDATIONS AND DIRECTIONS
FOR FUTURE RESEARCHES

54
1. Traditionally, India is low cost preference car service market. Companies

like Maruti Suzuki have been historically strategizing to increase service load at

their authorized Service stations from about 12% to 25%, which means more

than 75% of the vehicles are repaired at Un –authorized Service stations

operating in unorganized sector (popularly known as roadside garages).

The study has brought out that, in case of new technologies the trend is

reverse, where majority of the vehicles are attended by company’s

dealers as they are better equipped to handle these products.

2. Common Rail Diesel Injection (CRDi) has emerged as relatively more

popular technology than Anti Lock Braking System (ABS) and Airbags. With

emission norms becoming stricter in the country and price gap between Diesel

and Petrol rates continuing to be high, CRDi appears to be the technology for

all new models of the cars coming in Diesel Version. The companies

manufacturing CRDi technology, led by Bosch Ltd, in India has to start looking

at it as basis for future business and start investing in marketing activities

more heavily.

3. Anti Lock Braking System is mandatory in each type of car sold in Europe

as it has strong link with the safety of the passengers. In India it is still being

used only in the high end , expensive cars like Mercedes and BMW. Govt. of

India, in its Automotive Mission Plan ( AMP-2016) has indicated about more

stringent safety norms and the possibility of ABS becoming mandatory for

registration of Mid end cars in near future seems evident. This norm will have

55
immediate effect on the preparedness level of the service stations in the

country. While initially, until the vehicles are under warranty period, the

Authorized service stations shall be more in demand for attending to the

vehicles, as soon as the vehicles run out of the warranty period, a surge in

demand of unorganized sector shall be seen.

4. This research has brought out that the unorganized sector in servicing

vehicle is not only grossly unprepared- both in terms of training as well as

tools and equipment, they are not even fully aware of the changes happening

in the Automotive Technology space.

5. It is the joint responsibility of the Technology manufacturers and the

Govt. to start spreading the clear communications among the target audience,

as to what will be the technological future in next 5 to 10 years. The seminars

can be organized to reach the unorganized players, who then can be checked

for their interest in acquiring the competence and affordability.

6. Availability of Finance with the unorganized sector appears to be another

area of concern. With the Govt. focus on generating employment through

entrepreneurship, this is an area where micro-finance should be promoted and

low interest loans with longer repayment period should be offered to the

roadside garages, who are interesting in staying in the business in the longer

term.

7. Airbag as a technology has come out at its inception stage and even

authorized dealers of the company do not seem to be serious about it.

56
Companies, manufacturing this technology as well as those who use this as in

OE ( Original Equipment) in their cars, need to organize seminars to create

awareness about this technology. Most of the states in the country have ‘Auto

Service Garages Associations’ and these forums should be used to

communicate such messages to the target audience.

8. Marketing strategist at Bosch need to look at these products from a

completely different perspective. As most of the components, at present, are

not interchangeable with other brands, it is inevitable that the customer and

the garages need ready – reference guides or application charts about the right

fitments. The company should invest more in such activities to gain a first

movers advantage in the market before the completion picks up.

9. Companies should also look at the possibility of local tie ups of their

dealers with the nearest garages in the interest of better customer service. If a

customer approaches a roadside garage and he is not able to diagnose or

repair the product, help fro the nearest authorized dealer should be possible.

4.1 DIRECTIONS FOR FUTURE RESEARCHES

1. The research has thrown some light on the status of Automotive new

technology service situation. As the under awareness and under

preparedness of unorganized sector has clearly emerged, The researches

in future may be directed at evaluating and profiling of the garages , as to

who can afford to upgrade and equip themselves.

57
2. Researches in future can also be directed at understanding the

finance requirements of a garage to fully upgrade to handle these

technologies.

3. Role of Govt. in supporting the smaller garages through subsidy or

low interest loans may also be an area of interest in future researches.

4.2 LIMITATIONS OF THE STUDY

1. The researcher had limited time and resources at her disposal and hence

the sample size taken was 100 service technicians from one city I e

Bangalore. The finding may not be true representative of the situation

countrywide.

2. Although complete confidentiality was assured, the responses from

Bosch Officials may not be completely free from biases as the there

might be a fear of their names coming out in disclosing the companies

strategies, which may affect the competitive market situation.

ANNEXURES

QUESTIONNAIRE 1 - Service Technicians

Dear Sir/Madam,

I am carrying out a study on “MARKET POTENTIAL OF NEW

TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH
REFERENCE TO ‘BOSCH LIMITED’. The information provided by you shall be

58
used for academic purposes only. Kindly give your free responses. Your
cooperation will be highly appreciated.
H N Jyothi

1. Name of the service station:

2. Status: Authorized dealer Un-authorized service station

3. No. of years in operation:

4. No. of Vehicles attend per month:

5. Out of the above no. of vehicle per month fitted with:

CRDi
ABS
Airbags
6. Total no of technicians in your service station:

7. How many of these technicians have undergone training on:

CRDi
ABS
Airbag
8. Is your service station fully equipped with necessary tools &
equipments to handle new technologies?

Yes No
CRDi
ABS
Airbag
9. How do you rate your preparedness to handle new technology
fitted vehicles likely to come to your workshop in next 5 years on
a 5 point scale.

Excellent Very Good Good Fair Bad

10. How do you rate the new technologies on following parameters
( on 5 point scale…5 for best and 1..for worst)

5 4 3 2 1

59
 Product
Price
Promotion
Availability

11. Would you like to give any suggestions to the companies

manufacturing new technology fitted vehicles.

QUESTIONNAIRE 2 – Bosch

Dear Sir/Madam,

I am carrying out a study on “MARKET POTENTIAL OF NEW

TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH

REFERENCE TO ‘BOSCH LIMITED’. The information provided by you shall be

60
used for academic purposes only. Kindly give your free responses. Your

cooperation will be highly appreciated.

H N Jyothi
Name :

Designation:

1. How do you rate your marketing strategies for new technologies on

following parameters ( on 5 point scale…5 for best and 1..for worst)
vis a vis competition.

5 4 3 2 1
Product
Price
Promotion
Availability

2. What % of the vehicles are you able to service with your

products in Automotive aftermarket?

3. What is the break - up of Service Technicians ( Authorized

and un-authorized) who have undergone training organized by
your company

BIBLIOGRAPHY

 Anastakis, D., 2005. Auto pact: creating a borderless North American auto
industry, 1960-1971. University of Toronto Press, Toronto.

61
 Kotler on Marketing: How to Create, Win, and Dominate Markets, Philip Kotler,
April 1999
 The New Strategic Selling : The Unique Sales System Proven Successful by the
World's Best Companies, Stephen E. Heiman, January 1998
 The Soul of a New Machine, Tracy Kidder, June 2000
 Advances in services marketing and management : research and practice.
Greenwich, Conn. : JAI Press, 1992.

Websites Visited

www.boschindia.com
www.acmainfo.com
www.siamindia.com
en.wikipedia.org
www.automotive-technology.com
www.automobileindia.com

62