AUTOMOBILE INDUSTRY

Statistics of Automobile Industry

India is presently ranked 17th amongst auto car manufacturing countries in the world.
India is poised to become third largest auto car manufacturing hub in the world by 2020. The small car market counts for about 73 percent of the overall car market within India, which is densely populated with motor vehicles. And this outstanding growth in the small car segment has compelled the major players like Nissan, Renault, Toyota, Volkswagen (VW), etc to sit up and take notice.

Leader of Indian Passenger Cars

Maruti Udyog Limited Tata Motors Hyundai Honda Fiat Ford Toyota Mahindra & Mahindra

Market shares of major players in Indian passenger car segment

Economic factors affecting sales

Increased access to credit and lower interest loans. Investment in Infrastructure spending can boost the commercial vehicles segment. Growing working population (441 million people in 2015/16) Upward migration of household income levels (600 million people have annual income of more than $10,200) Middle class expanding by 30 - 40 million every year The availability of car loans, affordable rates of interest, smooth repayment facilities and the deductions offered to the customers by the retailers.

Social Factors
Rapid Urbanization of semi urban regions Rising aspirational levels. Improvement in living standards of middle class Increased spending on Fashion & lifestyle comforts. Seeking Value for money- consumer behavior Increasing customer emphasis on aesthetics and comfort. A perfect marriage of rise in disposable income and demographic dividend (From US$ 556 per annum US$ 1150 by 2015)

JV/Collaborations
1. Maruti Suzuki : (Maruti-800,Zen Estillo,Swift) New car plant to make 250,000 cars per annum (total 800,000 cars/annum) 10 new Component JVs to support new Diesel Engine Plant. 2. Hyundai : (Getz Prime, Santro, I -10, I -20) Already a big player in the small car segment Increase capacity to 600,000 cars per annum over next 1 year. 3. Ford : (Figo) Plans to unveil its small car with 1.2 ltr engine by 2010

JV/Collaborations
5.Nissan-Renault 50:50 JV, to make 400,000 cars a year with an investment of over US $ 1 billion. Coming up with the $2500 car to compete with Tata Nano in 2011 6. Toyota

Toyota Kirloskar motors planning to launch its own small car in India by 2011

The market shares of the segments of the automobile industry

Statistics of Maruti Suzuki

Currently, Maruti Suzuki is the market leader with 58 percent market share. It has the seven other small car in its portfolio M800, Omni, Wagon-R, Zen A-Star, Alto and Swift hatchback. With such a strong portfolio the company was able to sell nearly 8 lakh cars in the last fiscal year. It recorded a growth of 3.6 percent. The new Ritz is expected to further increase its lead in the market.

Our Player
Maruti Udyog Limited

SWOT Analysis

Opportunities

Weakness

Strength

Threat

PEST Analysis

Political Factors
Government policies relating to the industry Tax policies Law and regulation Trade restrictions and tariff

Economic Factors
economic growth interest rates, exchange rates and inflation rate

Social Factors
population growth rate age distribution changes in tastes and buying patterns

Technological Factors
R&D activity automation technology incentives and the rate of technological change

Competitor: Hyundai Motors

The countrys second largest car manufacturer and the largest passenger car exporter. Posted growth in cumulative sales for the month of April, 2009. While the domestic sales grew by a marginal 3.5% the exports grew by 19.6%. The cumulative sales however grew by 10.9%. The segment-wise cumulative sales in the month of April, 2009 are as follows: A2 Segment (Santro, i10, Getz & i20) 41,258 units; A3 Segment (Accent & Verna) 3,073 units; A5 Segment (Sonata Transform) 34 units; and SUV Segment (Tucson): 6 units

Contribution to exports by major Indian players in passenger car segment

Porter 5 Force Analysis

1.Threat of new Entrants
In most markets, the capital and expertise needed to setup an auto or parts manufacturing facility, would be a great enough barrier to entry to prevent many new entrants from setting up. However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high. Result: Unfavorable

2. The bargaining power of buyers/customers

Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). Of course there are also a plethora of incredibly cheap choices, like the famous Tata Nano. Result: Unfavorable

Porter Analysis Continued

3. The threat of substitute products
India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real and obvious threats to auto manufacturers. Result: Unfavorable

4. The amount of bargaining power suppliers have It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others in India. Result: Unfavorable 5. The amount of rivalry among competitors High. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders. Result: Unfavorable

Future Of Car Industry In India

Pre-liberalization India-- Maruti Suzuki 800 hatchback car in 1983 a joint venture between Government of India and Suzuki Motors of Japan Post liberalization--Many foreign manufacturers have setup base in India. 4th largest commercial vehicle market in the world. 11th largest passenger car market globally, expected to be the 7th largest by 2016. Reason for Growth--Easy availability of vehicle finance, attractive rates of interest, and convenient installments. Depending upon customers needs, 4 segments - small, midsize, premium and sports utility vehicles currently represent the car market in the country.

THANK YOU
Amrita Wig Ankit Grover Ashish Puri Gaurav Mittal Kanav Budhiraja Md.Zafeer Sachin Bhardwaj Shivani Elhance Vinmara Bansal