Automobile Industry in India Final

Automobile Industry in India
Submitted by Amit Mitra Biswadeep Sarkar Priyankar Chakrabarty Subhra Dutta Ujwal Prasad Zeno Zozzimos
Introduction
The automotive industry in India is one of the larger markets in the world and had previously been one of the fastest growing globally India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world In 2010,India beat Thailand to become Asia's third largest exporter of passenger cars In the same year India became the second fastest growing automobile market in the world after China 2/3rd of auto component production is consumed directly by OEMs. India is the largest three-wheeler market in the world and the largest twowheeler manufacturer in the world India is the fifth largest commercial vehicle manufacturer in the world.
The Growth Journey

Pre 1983
Closed market Growth of market limited by supply Outdated models Players Hindustan Motors Premier Telco Ashok Leyland Mahindra & Mahindra
1983-1993
Mahindra Japanisation - GOI- Suzuki joint venture to form Maruti Udyog Joint ventures with companies in commercial vehicles and components Players Maruti Udyog Hindustan Motors Premier Telco Ashok Leyland Mahindra & Mahindra
1993-2013
Deli censing of sector in 1993 Global major OEMs start assembly in India (Toyota, GM, Ford, Honda, Hyundai) Imports allowed from April 2001; alignment of duty on components and parts to ASEAN levels Implementation of VAT Era of globalization and evolution of India as a global manufacturing hub
Size of the Industry

The breakup of the automobile industry in India is given below Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%) India is the largest three-wheeler market in the world and the largest twowheeler manufacturer in the world
Domestic Market Share for 2011-12
15% 5%
3%
Passenger Vehicles Commercial Vehicles 77% Three Wheelers Two Wheelers
Size of the Industry contd.
With a turnover of almost $59 Million US Dollars in 2012,this industry provides employment to 13 million people in the Indian The gross turnover for the last 5years are as follows
Size of the Industry contd.

The size of the two major segments of automobile industry The two-wheeler market in India is the biggest contributor to the automobile industry with a size of Rs.100,000 million The cumulative sales of two wheelers in India stood at 3,519,555 units. The Indian passenger vehicle market size estimated at 2.5 million units which is relatively small compared to other emerging auto markets like China, South Korea and Brazil
The amount of cumulative FDI inflow into the Indian automobile industry during April 2000 to April 2013 was worth US$ 8.32 million, amounting to 4 per cent of the total FDI inflows
Structure of the Industry
Key Players-Two Wheeler Segment

The two wheeler industry is divided into three segments Motorcycle Segment- Dominates 83% of this industry Scooter Segment-Dominates 15% of this industry Moped Segment-Dominates 2% of this industry Major Indian Companies Major Multi-national companies
Market Share- Two Wheeler Segment

The analysis of the market share gives us the following data Hero Moto Corp is the market leader with nearly 45% of the market share Bajaj Auto and Honda have nearly the same market share but Honda has seen an increase in sales this year Industry is dominated by domestic companies
Key Players-Passenger Vehicle Segment

The passenger vehicle industry is divided into three segments Car Segment Utility/SUV Segment Van Segment Major Indian Companies Major Multi-national companies
Market Share- Passenger Vehicle Segment

The analysis of the market share gives us the following data Maruti Suzuki , the biggest passenger vehicle OEM in India holds 44.24% market share in passenger vehicle segment Mahindra claims its dominance in the Utility/SUV Segment and thus stands at second place in the overall industry with nearly 11% market share Hyundai remains at the second place with 15.7% in the car segment while overall it has 13.88% market share
Key Players and Market Share

In terms of production the market share of the various companies in India Maruti leads the market with a 29% units produced by it in this industry
Key Players-Three Wheeler Segment

The three wheeler industry is divided into two segments Passenger segment-Dominates 80% of this segment Goods segment-Dominates 20% of this segment Major Indian Companies Major Multi-national companies
Market Share- Three Wheeler Segment

The analysis of the market share gives us the following data Bajaj auto is the market leader in the passenger segment and holds a market share of 52.46% Though Piaggio is the market leader in the goods segment with 52.59%in the goods segment it has a overall market share of 31.07% Passenger segment is thus dominated by a domestic and the goods market by international brand Piaggio
Key Growth Drivers
Key Growth Drivers contd.

Indian pockets growing deeper.
Key Growth Drivers contd.

Indian Car Buyer getting Younger
Future Projections
Segment wise vehicle production in India & Future projections for 2015 & 2020
Growth forecasts - Indian auto industry

The Passenger Vehicle market of India will even cross Japan by selling about 5 million Vehicles by 2017-18. The Indian auto exports is expected to grow to $17.64 billion in 2015-16.
Indias passenger vehicle production projections : In 2010 2.6 million Vehicles By 2015 5.1 million Vehicles By 2020 9.7 million Vehicles
Segment Analysis
Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common need and then designing and implementing strategies to target their need and desires using media channels and other sources that best allow to reach them.
Segment analysis is studying a particular segment, the behavior of its consumers which would include buying pattern, their needs etc and then using the information to market its products.
Different Segments
The automobile industry is divided into four different segments: Passenger vehicle- used for household and other government transportation purpose Commercial vehicle- used for business purpose mainly like transportation of goods etc Two wheeler- used for personal purpose Three wheeler- used for both transportation and business purpose.
Different Segments
Each segment is again further divided into various other segments. o Passenger vehicle: - Cars - Buses o Commercial vehicle: -Light commercial vehicles (Goods carrier) -Multi Utility Vehicles, Sports Utility and mini vans -Heavy commercial vehicles (Trucks, Tempo, Tractor and Tipper/Dumper )
Different Segments
o Three vehicle: -Rickshaw, Trolleys, Delivery Vans and Tipper o Two wheeler: -Scooters and motorcycles
Shares of different Segments

Segments Passenger Vehicle 15.07 Share
Commercial vehicle Three wheeler

Two wheeler
4.66 2.95
77.32
Shares of different segments

Shares of different segments
15%
5%
3% 1 2
77%
3 4
1- Passenger Vehicle 2- Commercial Vehicle 3- Three wheeler 4- Two wheeler
Indian Automotive OEM Presence

North
Maruti Honda
GM
West
DaimlerChrysler Tata Motors Skoda Fiat Mahindra
Toyota
Daihatsu and Toyota plan for small car plant

Hyundai Ford Motors Hindustan Motors
South
Nissan
Suranjan Das
26
Automotive (Passenger Car) Growth In India

Domestic Sales
2007 2008 2009 2010
0 1379979 1549882 1552703 1949776 1000000 2000000
Production
Source: Society of Indian Automotive Manufacturer
2007
1545223
25.5%
3000000
2008
1777583
Export Sales
2007 2008 2009 2010
0 100000 198452 218401 335729 446146 200000 300000 400000
2009
1838593
27.8%
2010
2351240
33%
500000
0 500000 1000000 1500000 2000000 2500000
27
OEM Growth Rate, Volume and Market Share

Hundreds
10%
VW India New entrant Need to increase market share Also improve volume
Size of the bubble shows the market share
Growth over last year
8%
6%
Ford India Have shown great promise with Figo Grown faster than the rest over last year Target would be grow in number
4%
Maruti Suzuki Undoubtedly the market leader Will have to defend the market share
2%
Hyundai Tata Motors
0% -10 -5 0 5 10 15 20 25 30 35 40 x 10000
-2%
BMW India Pvt Ltd Ford India Pvt Ltd Honda Siel Cars India Ltd Mahindra & Mahindra Ltd
Fiat India Automobiles Pvt Ltd General Motors India Pvt Ltd Hyundai Motor India Ltd Mahindra Renault Pvt Ltd
Force Motors Ltd Hindustan Motors Ltd International Cars & Motors Ltd Maruti Suzuki India Ltd 28
OEM Growth Rate, Volume and M-Share W/O India Big3: Suzuki / Tata / Hyundai
Hundreds
3.5% 3.0%
Ford
Size of the bubble shows the market share
Growth over last year
2.5% 2.0%
1.5%
GM
1.0%
0.5% 0.0%
Toyota Mahindra Fiat Hyundai Honda
-1 -0.5%
6 x 10000
BMW India Pvt Ltd Ford India Pvt Ltd Honda Siel Cars India Ltd Mahindra Renault Pvt Ltd
Fiat India Automobiles Pvt Ltd General Motors India Pvt Ltd International Cars & Motors Ltd Mercedes-Benz India Pvt Ltd
Force Motors Ltd Hindustan Motors Ltd Mahindra & Mahindra Ltd SkodaAuto India Pvt Ltd 29
Indian Auto Segment Analysis

Size of the bubble shows the Segment Size
Growth over 2009-10 FY April-July data
180.00%
A1: (Upto3400) Maruti 800, Nano
130.00%
80.00%
A5: Premium (4701-5000 mm) A4: Executive (4501-4700mm) A3: Mid-size (4001-4500mm) A6: Luxury (5001mm & above)
A2: Compact (3401-4000mm) Alto, Wagon R, Zen-Estilo, Swift, Ritz, A Star Palio, Fiat 500, Grande Punto Figo Spark, U-VA, Beat Jazz Santro, Getz, i 10, i20 Micra Fabia Indica Polo
30.00%
-1
6
x 100000
-20.00%
Sales Volume FY 2010-11; April-July data

30
A2: Compact Car Segment Analysis

100.00%
GMI Spark, U-VA, Beat
Size of the bubble shows the Segment Size
80.00%
SkodaAuto Fabia Suzuki Alto, Wagon R, Zen-Estilo, Swift, Ritz, A Star
60.00%
40.00%
Hyundai Santro, Getz, i10, i20
20.00%
0.00% -0.5 -20.00% 0
Fiat Palio, Fiat 500, Grande Punto
0.5
TataMotors Indica
1.5
2.5 x 100000
-40.00%
Honda Jazz Other New Entrants this year are Nissan : Micra sold 928 units VW: Polo sold 5920 units Ford: Figp sold 25332 units
-60.00%
-80.00%
31
A3: Mid-Size Segment Analysis

160.00%
Size of the bubble shows the Segment Size Tata Motors Indigo
110.00%
GM Aveo Suzuki Sx4 HM Cedia, Lancer Hyundai Verna, Accent
60.00%
10.00% -0.1 0
MRL
0.1
Honda City
0.2
0.3
0.4
0.5 x 100000
-40.00%
Ford Ikon, Fiesta
-90.00%
32
Auto Component Industry Export & Import

Africa 8% Asia 24% Australia 1% S.America 4%
7 6 5 4 3 2 1 0
Export Import
6.8 5.2 3.6 3.8 5.9

N.America 23%
1.4 1.2
2003-04
1.9 1.7
2.5 2.5
3.5 2.7
Europe 40%
3.2
Export
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Profile of export OEM / Tier-1: 80% Aftermarket: 20%
33
Auto Component Industry Size & Product Range

25.0
(US$ Billion)
18.0 18.4
15.0 19.2
20.0
Drive Transmission & Steering Parts 19% Engine Parts 31%
Body & Chassis 12% Suspension & Braking Parts 12%
15.0 12.0 10.0 6.7 5.0 8.7
Equipments 10% Others Electrical Parts 7% 9%
0.0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
34
Segmental Analysis-Two Wheelers

The Indian two wheeler industry is divided into three segments: The market share of the top competitors is as follows Motorcycles Hero Motocorp- 56% Bajaj Motors- 25% TVS- 6% Scooters TVS- 19% Hero Motocorp- 16% Mopeds TVS- 49% Bajaj Motors- 32%

SALES: The overall sales of automobiles including exports stood at 6,735,988 units in April-July period of FY 2013-13 as against 6,892,768 units during same period of FY 2012-13. Domestic Sales for the April-July period of financial year 2013-14 stood at 57,90,184 units as against 59,13,993 units during same period for financial year 2012-13
The two wheeler contribution has increased to 80% for the period April-July FY 2013-14 from 79% during April-July FY 2012-13 The sales of two wheelers for April-July period of FY 2013-14 stood at 46,22,669 units as against 46,52,251 units during April-July FY 2012-13, representing a decrease of 0.64%.

EXPORTS: Two Wheeler Exports decline at 9.88% for April-July FY 2013-14 at 603,917 units as against 681,189 units in April-July FY 2012-13

PRODUCTION: For two wheelers the production in April-July FY 2013-14 decrease by 3.26% at 5,239,763 units as against 5,416,260 units during April-July FY 2012-13.
Segmental Analysis-Three Wheelers

The three wheeler industry is divided into two segments Passenger Segment Goods Segment The total sales of passenger three wheeler stood at 35,078 units as against 36,475 units in July 2012
Three Wheeler segment analysis

The market share of the top competitors in this segment is given below We can clearly see that Bajaj Auto is the market leader with 51% market share The segment is dominated by two domestic players BAJAJ AUTO and MAHINDRA & MAHINDRA Piaggio is the market leader in the goods segment of this industry
Market Share (Passenger)

60% 50% 40% 30% 20% 10% 0% Fy 2011-12 Fy 2012-13
Bajaj 48% 51%
Piaggio 31% 30%
M&M 12% 10%
Atul Auto 3% 4%
TVS 3% 4%
Market Share in Goods Segment

Market Share (Goods)
60.00%
50.00%
40.00% 30.00% 20.00% 10.00% 0.00% Piaggio 54.24% 53% M&M 17.66% 20.71% Atul Auto 12.20% 15.17% Bajaj 7.32% 2.93%
Fy 2011-12 Fy 2012-13
Segmental Analysis-Three wheelers

SALES: Bajaj Auto got their work cut out as only 2 units were sold in July 2013. Piaggio witness their sales decline by 15.22% for July 2013 at 3,544 units as against 4180 units in July 2012. M&M sold 1210 units in July 2013 as against 1330 units in July 2012 registering 9% decrease.

The overall export in passenger segment has taken a considerable downfall with major player Bajaj Auto suffering a de-growth. Goods carrier segment also saw a decline in the export segment
Past and future segmental changes

In recent years, the contribution of the automotive industry to GDP has risen noticeably - from 2.77 percent in 1992-93 to 4 percent in 2003-2004. o In the 1990s there was an upsurge in the volumes of vehicles produced o There was a flux of entry of global auto manufacturers into India along with their parts suppliers o The 4-wheeler segment (including tractors), for the first time, crossed the million marks in 1996-97, registering a growth of about 12.2 percent in the 1990-97 period.

o The 2- and 3- wheeler segments also showed good performance during the same period with a growth rate of nearly 9 percent . o In 2000, the production in the non-tractor segments of the auto industry recorded a growth rate of 15 percent o In 2002 the total production of vehicles has gone up to as high as 6.5 million o During the year 2002-03 the export of automobile industry had registered a growth rate of 65.35 percent.
.

Future Changes Two wheeler segment Since the petrol prices are rising in India a whole new segment of Hybrid bikes are being planned to be launched in India by companies like Honda and Suzuki The demand for high end bikes are rising in India we may also see more international brands entering into India by 2015. Commercial Bikes and Scooters are being planned to be launch in India as it has gained prominence in other major countries. Since the Indian roads will be well equipped to run those in future. Four wheeler segment As the demand for luxury segment cars in India is increasing by 8% we will see more influx of new variants of international brands Toyota is already planning to launch a hybrid car in India by 2015 other major players are also planning for the same Car with even better mileage are being planned to launch in India More passenger vehicles four wheelers are expected to be seen in near future in India as reported by cartrade.com.(one of the biggest side for insights on automobile industry)
Projections for future-Segment Wise
Key Performance Parameters

Amount of recyclable materials in fleet as a percentage of vehicle weight. Percentage of fleet that scores 80% or more on the Consumer Reports reliability ratings. Average fuel economy by type of vehicle. Average carbon dioxide emissions by type of vehicle. Count of visits to service centers for repair i.e. issues.

Amount of technical developments coming through per quarter.
Production and performance management provides essential functions to control and monitor production. Using Zenon HMI/SCADA software, it is possible to optimize production processes in the automobile industry.

Increased output, increased flexibility, increased safety The right SCADA software ensures that throughput time and inventory stocks are reduced and the supply speed is increased. The result is optimum utilization of production capacities.
Costs are reduced noticeably when an effective production and performance management solution is used; productivity increases and thus competitiveness too.
Key Performance Parameters - Dealers

- Sold hours versus available hours on the floor (depending on brand there are clear targets) - Sold parts workshop and sold parts OTC - Share warranty hours and -parts sold - Number of vehicles serviced in the workshop - Repeat repairs if it is happening often
These few numbers will then give us a first indication if we need to service more cars, sell more hours/parts per units, increase the speed/qualification of staff or improve processes.
Key Performance Parameters Dealers

Productivity (tech efficiency vs. labor utilization). Repeated repairs (VERY IMPORTANT and most of the organizations to not measure it) and of course the
Recovery Rate.
Retention Rate. the customer type and operations/vehicles mix are very important to see where you are, to where do you want to go and what is the best/easiest/cheaper way to achieve your goals.

The customer type (Internal vs External Customers; warranty cases are considered for this purpose Internal, although is an external customer do the DLR) mix is very important, mainly the amount of the CPUS (Customer Pay Units Serviced). These are the customers that put "real money" inside your organization and that allows the organization to pay the bills. Retention Rate one can measure by Unique CPUS (VIN) divided by UIO's (units in operation) in DLR area, or national wide area. If one dont have unique CPUS, one can always multiply the UIO by Customer Visit Rate, to arrive at the figure.

Another interesting KPI is the Absorption Ratio, percentage of fixed expenses of the DLR covered with PROFIT Contribution from After Sales Business (only). Parts side you have Stock turn, Stock wide and so on, but the important ones are the Stock Fill Rate (does the stock responds to Customers Needs), Repair Order Fill Rate (does the DLR have all the parts to repair orders at that day) and OIL (optimum inventory level) Gives you the amount of units by part number that you should have.
Evolution of the Competition

Early competition Cost Leadership approach Competition based on variety and choice Sloans portfolio strategy Competition based on diversification through leadership in design, technology or manufacturing excellence Competition based on mass customization-present day scenario

Early competition Cost Leadership approach Emergence of craft producers Employed skilled workforce Customized output hand craft single vehicles Made for the elite class Fords T-model Interchangeability of parts Moving assembly line maximizing production

Fords T-model Mass production Standardization of parts and job functions
Reduction in cost per unit

Age of T-model 1914-1926 ; cost leadership approach

Competition based on variety and choice Sloans portfolio strategy More choices offered Constant innovation Age of Flexible mass production Cosmetic updates to each vehicle every year Production in large batches to meet efficiency in economies of scale

Competition based on diversification through leadership in design, technology or manufacturing excellence Tightly synchronized process Short changeovers for small batch production Social system designed for workforce empowerment Continuous improvement

Competition based on mass customization present day scenario Factors affecting competition Product quality and features Innovation and development time Pricing Reliability and safety Fuel economy Customer service and financing terms

The Present: Shifts in the Competitive Landscape Regionalization - As demand in the established regions has been stagnating, we have seen several major waves of investment in emerging markets Fragmentation of markets - the implosion of traditional vehicle segments, in favor of cross-over and niche vehicles ; SUVs, MPVs, UAVs

Saturation and over capacity - a result of the failure to adjust capacity to demand Structural Changes in the Supply Chain - main changes here are a general reduction of supplier numbers per vehicle assembly plant, the re-distribution (i.e. outsourcing) of valueadded activities, and the increase in globally sourced components and materials.
Critical success factors

o Distribution network A more practical critical success factor for any automotive company is a strong network for distribution because of the following reasons: Cars and trucks are not sold directly to customers, auto manufacturers rely on franchised dealerships to provide local showrooms. The dealers must be knowledgeable and reputable to sell cars, which is essential for the automaker. Like auto corporations, dealers are reliant on a positive image that may be influenced by, or influence in turn, the image of the automaker.

o Cash flow A healthy cash flow is another practical critical success factor because: When an automaker provides incentives or lowers prices, it almost always sells more cars, but the profit margin may not be a healthy one. An automaker needs to keep costs under control, including line items that are prone to fluctuation such as the price of raw materials and outsourced components. Achieving a sustainable cash flow is central to the frequent discussions between automakers and employee unions.

o Compliance Automakers must also ensure that the vehicles they sell are in compliance with various federal and local regulations. These include emissions standards, fuel efficiency and safety standards. While it may cost less to produce vehicles that perform marginally in these areas, the cost of a safety recall or government-mandated repairs are often much higher and difficult to anticipate. o Ability to enhance and vary product mix A diverse and broad product mix enables a manufacturer to serve a wide variety of transportation solutions across different load levels. It also helps in building strong brand loyalty among customers. In addition the presence in business such as auto spares, buses, exports and defense helps companies to weather the cyclicity in passenger car sales.

o Flexibility An elusive critical success factor for the automotive industry is the ability to be flexible. People buying automobiles may change their buying habits quickly in response to factors like the state of the economy, the price of fuel and new automotive technologies. It is essential that automakers remain attentive to these trends and keep in place a system that can adapt quickly to create new products that meet the current and near-future needs of customers.

o Positive image One critical factor that often defines an automotive company is its public image. Because buyers entrust their safety, along with a sizable portion of their income, to an automobile company, the perception of the company figures greatly in the buying decision. Factors influencing an automotive company's image include advertising, word of mouth and expert reviews and opinions. o Access to new technologies In addition to matching competitors new products and upgraded machinery, technology is also going to be critical with emission norms are going to be stricter going forward. The requirement of updated technologies has driven domestic players into acquisition/collaborations/JVs with global majors.
Regulations that affect the Industry

The Indian Automobile Industry plays a major role in the economic scenario of the country. The automobile sector in India, record sales of more than one million passenger cars per year. The percentage of automobile exports has risen significantly during the last few years. The government policies on Indian automobile industry have been framed in order to aid in the expansion of the automobiles sector in India. A number of reforms were initiated in 1991. Liberal policies affected during this period, proved to be beneficial to the automobile industry.
Regulations that affect the Industry
Liberal policies affected during this period, proved to be beneficial to the automobile industry. The fiscal measures, tax reliefs and reforms in equity regulations and foreign exchange led to significant growth in the automobile sector. A reduction in the percentage of tariffs imposed on exports and a change in the banking policies was instrumental in the expansion and growth of the auto sector. The automobile market in India was however, opened up to foreign investors in 1996. The auto emission rules issued by the government in recent years ensured that the
vehicles manufactured in India, catered to international standards.
The Regulators
The automotive regulations in India are governed by the Ministry of Shipping, Road Transport & Highways (MoSRT&H) which is the nodal ministry for regulation of the automotive sector in India. Ministries such as Ministry of Environment & Forests and Ministry of Petroleum & Natural Gas also have a vital role in the formulation of automotive regulations and standards in India.
The principal instrument governing the automotive sector in India is the Motor Vehicles Act, 1988 (MVA) along with the Central Motor Vehicles Rules 1989 (CMVR).
Bureau of Indian Standards
Ministry of Shipping, Road Transport and Highway
Emission
Safety
Other Ministries Ministry of environment Ministry of natural Gas Ministry of non conventional energy
Standing committee on implementation of Emission Legislation
CMVR- Technical Standing Committee
Automotive Industry Standards Committee
Political-Legal Factors
Boosted Economic Growth
1 year 6% cut in CENVAT, abolition of surcharge on income tax. Abolition of FBT, Reduction of excise duty on big cars. Encourage Urban Fleet Modernization 1-5 Years - Providing Special Auto-component Parks (SAP) and Special Economic Zones (SEZ) as in IT . Negative list of items and rules of origin in FTAs / RTAs. (ASEAN Free Trade Agreement) - SIAM recommended the government on extending excise and sales tax benefits to customers who opt for scrap page of their old vehicles
5-10 Years
Stunted Economic Growth 1 year Differential excise duty for small and big cars. Customs duty for imported cars including hybrid cars. Excise duty cut only for petrol driven trucks 1-5 Years Existing Complex labor laws( 45 Central acts and 16 associated rules) Not implementing country wide VAT Ambiguous policy in land acquisition for green field projects 5-10 Years Poor execution of Infrastructure investments. (Construction of Highways of 16km per day against the target of 32 km per day) Absence of National Auto fuel Policy (NAFP)
Effective Implementation and Uniform enforcement of GST Maintain a three tier tariff structure for raw materials, intermediate goods, finished goods. Revamp WTO compatible export promotional schemes like DEPB, EOU and EPCG schemes AMP Plan 2006-16 set by govt
CMVR- Technical Standing Committee

Functions To provide technical clarification and interpretation of the Central Motor Vehicles Rules having technical bearing, to MoRT&H, as and when so desired. To recommend to the Government the International/ foreign standards which can be used in lieu of standard notified under the CMVR permit use of components/parts/assemblies complying with such standards. To make recommendations on any other technical issues which have direct relevance in implementation of the Central Motor Vehicles Rules. To make recommendations on the new safety standards of various components for notification and implementation under Central Motor Vehicles Rules. To make recommendations on lead time for implementation of such safety standards. To recommend amendment of Central Motor Vehicles Rules having technical bearing keeping in view of Changes in automobile technologies.
Standing Committee on Implementation of Emission Legislation (SCOE)
Functions:
To discuss the future emission norms To recommend norms for in-use vehicles to MoSRT&H To finalize the test procedures and the implementation strategy for emission norms Advise MoSRT&H on any issue relating to implementation of emission regulations.
Import guidelines
The import of vehicles shall be subject to the following guidelines of the Government of India: 1. (I) A new imported vehicle shall mean a vehicle that: (a) has not been manufactured/assembled in India; and (b) has not been sold, leased or loaned prior to importation into India; or (c) has not been registered for use in any country according to the laws of that country, prior to importation into India. .
Import guidelines
II) The import of new vehicles shall be subject to the following conditions: (a) The new vehicle shall(i) have a speedometer indicating the speed in km / h; (ii) have right hand steering, and controls (applicable on vehicles other than two and three wheelers); (iii) have photometry of the headlamps to suit "keep-left" traffic; and (iv) be imported from the country of manufacture. (b) In addition, the new vehicle shall conform to the provisions of the Motor Vehicles Act, 1988 and the rules made thereunder, as applicable, on the date of import. (c) The import of new vehicles shall be permitted only through the Customs port at Nhava Sheva (Mumbai), Calcutta and Chennai
Import guidelines
2. (I) A second hand or used vehicle shall mean a vehicle that :(a) has been sold, leased or loaned prior to importation into India; or (b) has been registered for use in any country according to the laws of that country, prior to importation into India;
(II). The import of second had or used vehicles shall be subject to the following conditions:(a) The second hand or used vehicle shall not be older than three years from the date of manufacture; (b) The second hand or used vehicle shall: (i) have right hand steering, and controls (applicable on vehicles other than two and three wheelers); (ii) have a speedometer indicating the speed km / h; and (iii) have photometry of the headlamps to suit "keep left" traffic.
Import guidelines
c) In addition, the second hand or used vehicle shall conform to the provisions of the Motor Vehicle Act, 1988 and the rules made there under, as applicable, on the date of import. (d) Import of second hand vehicles shall be allowed only through the customs port at Mumbai. (e) The second hand or used vehicles imported into India should have a minimum roadworthiness for a period of 5 years from the date of importation into India with assurance for providing service facilities within the country during the five year period.
Automobile Exports Trend

Automobile exports volumes increased at a CAGR of 22.4 percent over FY05-FY12. Over this period the fastest growth was in the two wheeler segment (25.8%) followed by three wheeler (21.9%)
Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total
Automobile Exports Trends(Number of vehicles) 2005-06 2006-07 2007-08 2008-09 2009-10 175,572 40,600 76,881 513,169 806,222 198,452 49,537 143,896 619,644 1,011,529 218,401 58,994 141,225 819,713 1,238,333 335,729 42,625 148,066 446,145 45,009 173,214
2010-11 444,326 74,043 269,968
2011-12 507,318 92,663 362,876
1,004,174 1,140,058 1,531,619 1,947,198 1,530,594 1,804,426 2,319,956 2,910,055
Export performance over the last few years

During April-September 2011, overall automobile exports registered a growth rate of 32.31 percent. Passenger Vehicles registered growth at 21.01 percent in this period. Two Wheelers, recorded growth of 32.34 percent in this period Commercial Vehicles and Three Wheelers segments recorded growth 35.91 percent and 49.55 percent respectively during April-September 2011. I In September 2011 compared to September 2010, overall automobile exports registered a growth of 39.62 percent. There is an 8.62% decline in cumulative exports of vehicles from India in April to May 2013, as against the same period last year.
Export performance over the last few years

Two Wheeler segment has lost 6% segment share due to weak demands in South East Asia, Latin America and Africa. Passenger vehicles has gained a few number from 16% during April-May 2012 to stay at 19% in the April-May period of current fiscal. Three wheeler segments good demand has gained them 13% segment share in the April-May against 9% during the same period previous year.
Export Growth Per Segment

Segment 2007-08 2008-09 2009-10 2010-11 5-year CAGR 20.90% Passenger Vehicles 218,401 (10.0%) 335,729 (53.7%) 42,625 (27.7%) 446,145 (32.9%) 453,479 (1.6%)
Commercial Vehicles
58,994 (19.1%)
45,007 (5.6%) 76,297 (69.5%)
13.40%
Two Wheelers
819,713 (32.3%) 1,004,174 (22.5%) 141,225 (- 1.9%) 148,066 (4.8%) 1,530,594 (23.6%)
1,140,058 (13.5%) 173,214 (17.0%) 1,804,426 (17.9%)
1,539,590 (35.0%) 269,967 (55.9%)
24.60%
Three Wheelers
28.60%
Grand Total
1,238,333 (22.4%)
2,339,333 (29.6%)
23.70%
Recent events
New products Volkswagen launches the Cross Polo in India at 7.75 lakhThe Volkswagen Cross Polo comes with a 75PS 1.2Tdi engine from the diesel Polo. It is mated to a 5-speed manual transmission. Expect a 0100kmph time of 16.16 seconds with a top speed around 180kmph, same as the regular diesel Polo. Sales for the Cross Polo start from August 23, 2013. Maruti WagonR Stingray launched in India at Rs 4.09 lakhThe Stingray will be available in three variants [Lxi, Vxi and Vxi (O)]. Differentiating the Stingray from the regular Wagon R ,are a tightly packed chrome grille, projector head lamps and the wide air dam. There are funky alloys on offer as well.
Recent events
2013 Nissan Terrano unveiled in India, launch in OctoberTerrano, the Duster equivalent for Nissan has officially been unveiled on 21 August 2013. Born out of the Renault-Nissan alliance, the Terrano bucks the trend of badge engineered cars from the joint venture. Audi launches the Q3 S in India at Rs 24.99 lakhAudi has launched its most affordable offering for the Indian market, the Q3 S at Rs 24.99 lakh ex- Delhi. The Q3 S is a trimmed down version of the popular Q3 SUV. The Q3 currently operates in a segment which has the BMW X1, Mercedes' A-Class, B-Class, Volvo V40, Mini Countryman and the upcoming GLA.
Recent events
Rolls Royce launches Wraith in India at Rs 4.6 crore-
Ultra luxury car maker Rolls Royce launched its 'Wraith' model with a price starting at Rs 4.6 crore in India, as part of its expansion plans in the country. In order to promote the new model, the company also plans to take the car to various cities in the country.
Maruti to launch rival to Hyundai's Grand i10 early next yearThe new model along with the upcoming WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its market share amid the ever increasing competition.
Events held
Automotive Testing Expo India Automotive Testing Expo was going held from 06-MAR-12 to 08-MAR-12 in Chennai Trade and Convention Centre. The major participants are Ashok Leyland, Daimler India, Ford India and Hyundai Motor Engineering. Indian Machine Tool and Automation Expo Indian Machine Tool and Automation Expo was held from 16-MAR-12 to 18-MAR-12 in Talkatora Stadium, New Delhi. The special attractions are thematic lectures on CNC machines & Tools and Automation. Automotive Engineering Show The Automotive Engineering Show took place from April 26-28, 2012. The venue was Auto Cluster Exhibition Center in Pune. Topic of discussion The event had highlighted the main and upcoming trends in automotive engineering.
Events held
Automobile World Show The Automobile World Show was held from July 05, 2012 to July 08, 2012. The venue for this prestigious event was Mahatma Mandir, Gandhinagar, Gujarat, India. India Auto Expo India Auto Expo took place from July 12, 2012 to July 15, 2012. The venue for this famous event was Chennai Trade Centre, Chennai, Tamil Nadu, India. Topic of discussion- The event attempted to highlight the developing vehicle manufacturing market in South India and growing opportunities for the automobile market in South India. Carmakers will get a costefficient platform to display their products in this event.
List of Top Automobile Companies in India 2011

List of Top Automobile Companies in India 2011 (Figures in Crores Rs) 2011 ET 500 Rank 7 21 19 41 46 67 101 110 Company Tata Motors Ltd Mahindra & Mahindra Ltd Maruti Suzuki India Ltd Hero MotoCorp Ltd Bajaj Auto Ltd. Ashok Leyland Ltd. Sundaram Clayton Ltd TVS Motor Company Ltd. Turnover 123222.91 37026.37 38140.69 19669.29 17008.05 11133.04 7419.41 6569.99 PAT 9273.62 3079.73 2382.37 1927.9 3454.89 631.3 64.63 127.94 MCRP CR 56499.77 49945.17 31475.63 40398.63 46885.69 6653.15 529.23 2985 Assets 52209.48 36926.19 14762.9 4447.22 5154.96 6621.16 2428.87 1745.06
Analysis of cost and profitability

Major cost The auto manufacturing industry is considered to be highly capital and labor intensive. The major costs for producing and selling automobiles include: -Labor - While machines and robots are playing a greater role in manufacturing vehicles, there are still substantial labor costs in designing and engineering automobiles. -Materials - Everything from steel, aluminum, dashboards, seats, tires, etc. are purchased from suppliers. -Advertising - Each year automakers spend billions on print and broadcast advertising; furthermore, they spent large amounts of money on market research to anticipate consumer trends and preferences.
Margins Indian automobile sector has shown tremendous growth and flexibility in last couple of years. Mahindra, Tata, Maruti, and many others including foreign players such as Hyundai, Ford, GM, and Skoda have made India their home for production of small cars
Company
TATA MOTORS LIMITED BAJAJ AUTO LIMITED
MAHINDRA&MAHINDR A HERO MOTOR CORP. MARUTI SUZUKI INDIA LTD ASHOK LEYLAND EICHER MOTORS HMT LTD TVS MOTOR CO. LTD ESCORTS LTD
GPM%
17.49
OPM%
9.81
NPM%
3.78
23.36
22.08 20.54 13.17 16.43 21.35 -12.32 15 14.5
19.78
14.65 13.43 9.5 10.67 10.17 -25.29 4.92 5.01
20.3
11.34 9.97 6.25 5.53 17.06 -39.43 3.14 3.7

From the previous data we can see that: Bajaj auto and Eicher Motors has the best margin among all the automobile players while TVS motors, Tata motors, and Escorts Ltd have the lowest. M&M has maintained very good gross margin but their net margin is lower than Bajaj and Eicher.
Maruti Suzuki Market Size

It has a market cap of Rs(CR) 39,129.94
As of November 2012, it had a market share of 38.3% of the Indian passenger car market
Maruti is a market leader in mid-size segment of cars and has a market share of around 42% in mid-size segment cars. The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually.
Maruti has manufacturing plant in Manesar and Gurgaon and they are coming up with plant in Gujarat to make India a hub for mid-size cars.
Maruti Suzuki Market Size

Its manufacturing facilities are located at two facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions
Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units
annually.
Market Share of MSIL

Year 2009 Market Share 46.5 %
2010
2011 2012 2013
44.6 %
45.3 % 38.3 % 39.1 %
MARUTI SUZUKI GROWTH ANALYSIS

Maruti Suzuki India Limited logged 9.2 percent increase in sales for July 2012 at 82,234 units as against 75,300 units in the same month last year.
Its domestic sales during July stood at 71,024 units, compared to 66,504 units in July last year, up 6.8 percent.
The sales were driven mostly by its compact sedan Dzire, which clocked 11,413 units.
MARUTI SUZUKI GROWTH ANALYSIS

Sales of small cars, including the M800, Alto, A-Star and Wagon R, however, declined by 23.7 percent to 28,998 units. The company's other best-selling model Swift along with Estillo and Ritz together clocked 15,759 units in July this year, up 73.2 percent from last year. MSIL's sales of its mid-sized sedan SX4 plunged by 70.5 percent to 679 units Exports during the month stood at 11,210 as compared to 8,796 in July last year, up
27.4 percent.
Maruti Suzuki Net Sales & YOY Growth

Year 2009 2010 2011 2012 2013 Net Sales (MN) 203,583 289,585 358,490 347,059 426,126
Year on Year Growth Rate is 22.7%
Segmental Presence of MSIL

Maruti Suzuki is present across a wide variety of segments as follows: Passenger Cars Vans Utility Vehicles Petrol Variants Diesel Variants
Compressed Natural Gas Variant
PASSENGER VEHICLE INDUSTRY GROWTH (%)

Year 2010 2011 2012 2013 Growth % 25.7 28.2 5.1 2.2
The passenger vehicle industry was growing at 2.2%, Maruti grew by 4.4 %
MSIL PETROL VEHICLE SALES

Year Units 2011 893,000
2012 2013
701,000 598,000
Petrol price deregulation and depreciating rupee against dollar increased petrol prices leading to an impact on petrol vehicle sales
DIESEL VEHICLE SALES (in units)

Year Units
2010 2011 2012 2013
163,000 199,000 243,000 393,000
CNG CAR SALES

Year Units
2011 2012 2013
1,300 3,200 4,200
The high prices of petrol and diesel have resulted in emergence as a viable and preferred fuel option.
Mahindra & Mahindra Market Size

It is the leader in the diesel-powered passenger utility vehicle segment, with a market share of 53% in fiscal 2012. It is ranked #21 in the list of top companies of India in Fortune India 500 in 2011. It has a market capitalisation of Rs (Cr) 50,161.36 The company's acquisition of a majority stake in one of its competitors, Punjab Tractors Limited, increased Mahindra's already dominant domestic market share from 30% in fiscal 2008 to more than 37% in fiscal 2009.
Segmental presence of M & M

M & M is present across a wide variety of segments as follows:
Passenger Cars
Utility Vehicles MPV (Vans) Passenger Vehicles MHCV- Passenger, goods.
LCV- Passenger, goods

3 wheeler- Passenger, goods 2 wheeler
Total domestic sales of M & M

Segment Passenger Cars 2010 1528337 2011 1972845 2012 2016115
Utility Vehicles
MPV (Vans) Passenger Vehicles MHCV LCV 2 wheeler
272740
150256 1951333 244944 287777 9370951
315123
213574 2501542 323059 361846 11768910
367012
234945 2618072 348701 460831 13435769
M & M Market Share

Segment UV Total MPV Total Verito LCV < 2 LCV > 3.5 T MHCV Load MNAL Total 2012 % 55.1 10.9 9.5 21.5 10.4 1.2 3.5 2011 % 53.7 0.5 7.1 22.8 11.5 0.3 3.0
M &M AS Segmental Growth

Segment Financial year 2012 Growth % UV Total MPV Total Verito LCV < 2 LCV > 3.5 T MHCV Load MNAL Total 202217 25644 17839 53895 10328 3490 13818 19.5 NM 78.2 23.3 0.9% NM 24.7
Mahindra & Mahindra

A growth of 19.5 % has been achieved in the domestic utility vehicle and its market share rose to 55.1 % from 53.7 % in the previous year.
It is the 7th highest selling passenger vehicle in India
Its the market leader in the 2-3.5 tonne LCV segment with a market share of 66.5%
It retained its leadership for the 29th consecutive year in the domestic market with a market share of 41.4%
Financials-Maruti Suzuki
Revenue turnover 2012-13 - Rs. 49,090.00 crores 2011-12 - Rs. 39,495.30 crores 2010-11 - Rs. 40,865.50 crores Profit 2012-13 - Rs. 2392.10 crores
2011-12 - Rs. 1635.20 crores

2010-11 - Rs. 2288.60 crores
Mahindra and Mahindra

Revenue turnover 2012-13 - Rs. 43,412.65 crores
2011-12 - Rs. 34,353.63 crores

2010-11 - Rs. 25,569.55 crores Profit 2012-13 - Rs. 3352.82 crores 2011-12 - Rs. 2878.89 crores 2010-11 - Rs. 2662.10 crores
Hyundai Motor Co. Ltd.

Revenue turnover 2012-13 - 84,469,721 million KRW 2011-12 - 77,797,895 million KRW 2010-11 - 66,985,271 million KRW Profit
2012-13 - 14,555,747 million KRW

2011-12 - 13,293,485 million KRW 2010-11 - 10,215,187 million KRW
Maruti Suzuki
Market Cap Rs. 389517.13 million
Dividend yield 0.62 %

EPS Rs. 86.07 P/E Ratio 14.98

Market Cap Rs. 489788.42 million

EPS Rs. 57.89 P/E Ratio 13.74

Market Cap 50333.18 billion KRW

EPS Rs. 15757.50 KRW P/E Ratio 7.61
Maruti Suzuki
Operational and Financial ratios : Earnings per share 2012-13 Rs. 79.21 2011-12 - Rs. 56.58 2010-11 - Rs. 79.19 Earnings per share serves as an indicator of a company's profitability. This shows EPS is high for Maruti in the last 3 years

Operational and Financial ratios : Earnings per share 2012-13 Rs. 56.80 2011-12 - Rs. 48.87 2010-11 - Rs. 45.33 Earnings per share serves as an indicator of a company's profitability. EPS is on the higher side for Mahindra in the last 3 years

Operational and Financial ratios : Earnings per share 2012-13 15757.50 KRW 2011-12 - 14100.00 KRW 2010-11 - 10258.00 KRW Earnings per share serves as an indicator of a company's profitability. EPS is on the higher side for Mahindra in the last 3 years
Maruti Suzuki
Cash earnings per share 2012-13 Rs. 140.84 2011-12 - Rs. 95.97 2010-11 - Rs. 114.26 A measure of financial performance that looks at the cash flow generated by a company on a per share basis. The higher a company's cash EPS, the better it is considered to have performed over the period

Cash earnings per share 2012-13 Rs. 68.84 2011-12 - Rs. 58.66 2010-11 - Rs. 52.38 A measure of financial performance that looks at the cash flow generated by a company on a per share basis. The higher a company's cash EPS, the better it is considered to have performed over the period
Maruti Suzuki
Dividend per share 2012-13 - Rs. 8 2011-12 - Rs. 7.50 2010-11- Rs. 7.50 The sum of declared dividends for every ordinary share issued in an year. Its consistent over the years which indicates good overall performance

Dividend per share 2012-13 - Rs. 13 2011-12 - Rs. 12.50 2010-11- Rs. 11.50 The sum of declared dividends for every ordinary share issued in an year. Its consistent over the years which indicates good overall performance
Maruti Suzuki
Book NAV/Share 2012-13 Rs. 615.20 2011-12 - Rs. 525.52 2010-11 - Rs. 479.84 An expression for net asset value that represents a fund's (mutual, exchangetraded, and closed-end) or a company's value per share. It is generally less than the market price per share

Book NAV/Share 2012-13 Rs. 245.91 2011-12 - Rs. 203.43 2010-11 - Rs. 174.86 An expression for net asset value that represents a fund's (mutual, exchangetraded, and closed-end) or a company's value per share. It is generally less than the market price per share

Quick ratio 2012-13 1.4 Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values
Maruti Suzuki
EBITDA margin 2012-13 8.53 % 2011-12 - 6.25 % 2010-11 - 8.84 % The higher the EBITDA margin, the less operating expenses eat into a company's bottom line, leading to a more profitable operation. Here it is on the higher side for Maruti

EBITDA margin 2012-13 10.81 % 2011-12 - 10.91 % 2010-11 - 13.42 % The higher the EBITDA margin, the less operating expenses eat into a company's bottom line, leading to a more profitable operation. It is really good for Mahindra

EBITDA margin 2012-13 11.71% The higher the EBITDA margin, the less operating expenses eat into a company's bottom line, leading to a more profitable operation. It is really good for Mahindra
Maruti Suzuki
Total debt to equity ratio 2012-13 0.07 2011-12 - 0.08 2010 -11 - 0.02 A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. The leverage is high, which is a good sign for Maruti

Total debt to equity ratio 2012-13 0.24 2011-12 - 0.30 2010 -11 - 0.23 A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. The leverage is not that high, as there are secured loans in the balance sheet

Total debt to equity ratio 2012-13 0.93 A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. The leverage is not that high, as there are secured loans in the balance sheet
Maruti Suzuki
Current Ratio 2012-13 1.29 2011-12 - 1.35 2010-11 - 1.55 A liquidity ratio that measures a company's ability to pay short-term obligations. This is healthy sign for the company

Current Ratio 2012-13 1.10 2011-12 - 1.08 2010-11 - 0.91 A liquidity ratio that measures a company's ability to pay short-term obligations. This is healthy sign for the company

Current Ratio 2012-13 1.7
A liquidity ratio that measures a company's ability to pay short-term obligations. This is healthy sign for the company
Maruti Suzuki
Interest cover 2012-13 16.76 2011-12 - 39.88 2010-11 - 125.35 A ratio used to determine how easily a company can pay interest on outstanding debt. There are lesser debts in the books and so the financial leverage is high

Interest cover 2012-13 24.26 2011-12 - 23.16 2010-11 - 49.45 A ratio used to determine how easily a company can pay interest on outstanding debt. Here the figures show that the company can go for more debt funds as interest coverage is taken care of

Interest cover 2012-13 28.20 2011-12 - 21.42 2010-11 - 14.17 A ratio used to determine how easily a company can pay interest on outstanding debt. Here the figures show that the company can go for more debt funds as interest coverage is taken care of
Maruti Suzuki
Return on capital employed 2012-13 17.48 % 2011-12 14.39 % 2010 -11 23.36 % A ratio that indicates the efficiency and profitability of a company's capital investments. This is also showing some good signs for the company as it is on the higher side


SWOT Analysis for the top players in Two Wheelers Segment

Strengths Largest manufacturer of two wheelers in India Many service stations Easy availability of replacement part/spare parts Products for all the segments Weakness After the demerger of Honda from Hero Honda, Hero will not be getting the technical expertise of Honda in motor engineering Capacity utilization is almost 100% The word Hero Honda and Honda became synonymous for normal people Hero and Honda have almost similar type of models
SWOT Analysis for Hero Moto Corp

Opportunity Increase in the sale of sports bike segment Credit financing by different banks is increasing for the 2 wheeler purchaser Increase in disposable income Threats Increase in fuel price Inflation Economic slowdown

Strengths
In the last few years they are the innovators in technology (specially for the brand Pulsar) Providing technology which can make fuel efficiency bike Leader in 150+ cc segments
Weakness
Not full capacity utilization Not strong in all the categories Do not have any presence in the Moto-scooter segment Worst asset turnover ration in the industry
SWOT for Bajaj Auto Ltd. Opportunity

Increase in the sale of sports bike segment Credit financing by different banks is increasing for the 2 wheeler purchaser Increase in disposable income Can re-enter the fastest growing segment
Threats
Increase in fuel price Inflation Economic slowdown

Strengths
-Strong in the moped segment -Gaining popularity in the 100 cc segment -Capacity utilization is 100%
Weakness -Very less product portfolio in the motorcycle segment -Least financial leveragability in relation to industry standard -No expansion plans
SWOT for TVS MOTOR COMP

Opportunity -Increase in the sale of sports bike segment as the demand is rising -Credit financing by different banks is increasing Threats -Increase in fuel price -Inflation -Economic slowdown -Migration of people from moped to motorcycle
-Increase in disposable income
SWOT Analysis for the top players in Four Wheelers Segment

STRENGTHS Contemporary technology Japanese Management practices After sale services Distribution Diversification & R&D WEAKNESS Still depends upon SUZUKI COPORATION 10% components are manufactured outside India Still considered as poor mans brand Unaccustomed to international standards or keen competition.
SWOT for Maruti Suzuki

OPPURTUNITY First company to roll out suitably Designed cars before 2008 as per Govt.s Proposal of new ethanol (renewable) Other companies lacks economy of scale Rising demand Untapped rural market THREAT Numbers of new Technology driven players and manufactures are in market Reduction in subsidies by government on petroleum products Changing environmental and emission norms Higher local taxes

Strengths: Weakness (a) Dealers are selling vehicles at different prices in a (a) Trust people are having in the brand name Mahindra single city. motors (b) Changing of original parts by a dealers. (b) Strong relationship with dealers (c) Type of MRF is not having a very good claim (c) Number of authorize service station is in good processing system. Claim processing is carried out number than that of competitors only twice a week. (d) Sturdy SUVs good for Indian roads and off-road (d) Maintenance cost is high terrain (e) Vehicle is out of the reach middle class because (e) Most of the market is credit driven so easy finance initial of Mahindra sports utility v is above 4 lakhs provided by Mahindra motors (Mahindra finance) itself and others is an edge over competitors. SWOT for Mahindra & Mahindra Ltd. Opportunity 1. Developing hybrid cars and fuel efficient cars for the future 2.Tapping emerging markets across the world and building a global brand 3.Fast growing automobile market 4.Growing in the market through electric car Reva (controlling stake) Threats 1. Government policies for the automobile sector across the world 2. Ever increasing fuel prices 3. Intense competition from global automobile brands 4. Substitute modes of public transport like buses, metro trains etc

Weakness
Strength
-The company employs about 75,000 persons around the world. -Hyundai vehicles are sold in 193 countries through -Spare parts of Hyundai vehicles are comparatively some 6,000 dealerships and showrooms worldwide priced higher and do not have PAN India presence -Hyundai sells over 1.5 million vehicles per year -Concentrates on both domestic and International -Hyundai has excellent branding and advertising by sales thus higher risks of exchange rate fluctuations having celebrity brand ambassadors -Hyundai is still struggling to make a better impact in -Hyundai motor company has over 75,000 employees small car segment in terms of cost efficiency globally SWOT for Hyundai Motors Opportunity
-Hyundai doesnt have any product match to compete in Corporate orders like Tata Indica V2,Tata Indigo, Chevy Tavera, Ford Fiesta etc
Threat
Government policies for the automobile sector across the world Ever increasing fuel prices Intense competition from global automobile -Hyundai has very good opportunity in entering into brands commercial vehicles and Recreational vehicles as they are already doing well outside India. Currently HMIL has Substitute modes of public transport like buses, its focus only on Passenger car segment metro trains etc
- Developing hybrid cars and fuel efficient cars for the future -Fast growing automobile market is India
SWOT Analysis for the top players in Three Wheelers Segment

Strength -The Bajaj group is one of the trusted Indian brands and was in existence since 1926 -Bajaj auto has the highest market share in three wheeler segment in petrol segment -It is the largest exporter in three wheeler commercial segment in the world -Product design and development capabilities. -Extensive R & D focus. Widespread distribution network
Opportunity -Bajaj has partnered with Renault-Nissan in bringing RE60, an alternative to replace 5 million three wheelers in the market -It can expand into foreign markets like China and it already has good market share in Africa, South Asia and Latin America
Weakness -Bajaj has a negligible presence in commercial three wheeler diesel segment -Not a global player in spite of huge volumes. -Not a globally recognizable brand -Hasn't employed the excess cash for long.
SWOT for Bajaj Auto Ltd.

Threat Bajaj three wheeler passenger segment has lot of alternatives like Tata Ace, Tata Magic, Piaggio Ape etc Increasing price of petrol has made Auto drivers to shift to diesel autos from Piaggio Bajaj has heavy competition for its petrol Autorikshaws from TVS King
-Increasing fuel price has made people shift to higher mileage vehicles hence they should concentrate on the good segment vehicle market
SWOT Analysis for the top players in Three Wheelers Segment

Strength -Strong Brands and product line -Great innovation capabilities, both in engine and design -Economies of scale in the production of engines and possibility to sign deals as engine global automotive player Weakness -Poor ability to compete in other segments of this industry -Distribution system not as strong as Bajaj -Spare Parts are more expensive and availability of them is far less than Bajaj -Less amount of service centers than Bajaj
SWOT for Piaggio

Opportunities -Poor infrastructure and high urban traffic fuel 2wheelers growth in India. -Introduce Hybrid technology and get the first mover advantage over Bajaj -Since Indian market is price conscious try to launch new fuel efficient vehicles at lower price Threat -Weak Indian market recovery -New competitions like Atul Auto focusing on price and gaining market share -New competitors like GM and Nissan are planning to enter this segment -Rise of input costs
PRODUCT SEGMENTATION OF MAJOR PLAYERS IN TWO-WHEELER INDUSTRY

Hero Moto Corp
Up to 100cc -CD Dawn, CD Deluxe, Splendor plus, Splendor NXG , Passion plus 100 to 135cc -Glamour , Super Splendor More than 150cc-Achiever , CBZ extreme , Hunk and Karizma
Bajaj Auto Ltd

Upto100cc Platina(Platinum) 100to135cc - XCD-125 DTS Si, Discover 135, Kristal DTSi More than 150cc-Pulsar-(150 ,180, 200 , 220 DTSi )and Avenger DTSi
TVS Motor Company

Up to 100cc -Scooty pep+, Star City 100to135cc -Flame, Victor GLX More than 150cc- Apache RTR
PRODUCT SEGMENTATION OF MAJOR PLAYERS IN FOUR-WHEELER INDUSTRY

Maruti Suzuki Entry level -Alto , Maruti 800 Hatchback-Ritz, A-Star, Swift , Wagon R ,Estilo Sedans- DZire, Kizashi and SX4 Van segment- Eeco , Omni Multi Purpose vehicle -Suzuki Ertiga ,Stringray Sports Utility vehicle-Grand Vitara Hyundai Motors -Hatchback- Santro Xing , i10, Eon and the i20 -Sedans- Accent ,fluidic Verna ,fluidic Elantra and Sonata Transform -Sports Utility vehicle-Santa Fe
Mahindra & Mahindra Ltd -Sedans- Logan ,Mahindra Verito -Sports Utility vehicle-Mahindra Xylo , XUV 500 and Mahindra Quanto -Multi Purpose vehicle-Scorpio and the Bolero
Porters 5 Forces-Two Wheelers

Threat of New Entrants Very Low because Entry barriers are very high Product falls under the category of high level of involvement The biggest challenge is setting up sales service center, which is very hard for a new entrant Well established players are already existing Industry is consolidated Economies of scale Threat of Buyers Bargaining Power Very High because So many options are available to buyers Substitutes are available Supply-demand mismatch in the industry Supply is greater than the demand

Threat of Supplier's Bargaining Power In automobile industry sellers can have bargaining power in the following area Metal : Prices are determined in international markets, chances of Bargaining power is less Tires: They are 40 listed tire manufactures in India, Industry is fragmented. Bargaining power of suppliers is low Batteries: Industry is fragmented. Bargaining power of suppliers is low Component Manufacturers: Industry is fragmented. Bargaining power of suppliers is low Intensity of Competition Intensity of competition is high Aggressive competent players are already present 7 players are present in commuter segment Manufacturing capacity already exceeding demand

Threat of Substitutes Local trains Cars Electrical Vehicles Public transport The substitutes in one form or other have the following attributes Relative price of substitutes is cheaper Relative quality of substitutes is higher Switching costs is lower
Threat of Substitutes
Why people are switching to Local trains? Safety Affordability Time saving Cost Pollution Why people are switching to Cars? Safety Comfort Status Symbol Why people are switching to Public Transport? Safety Affordability Time saving Cost Pollution
Threat of Substitutes
Why people are switching to Electrical Vehicles? Environmental Friendly Maintenance cost Reasons for Electrical Vehicles not doing well ? Electrical vehicles at present not competitive with respect to present petrol running vehicles No established player is offering Electrical vehicles
Porters Five Forces-4 Wheeler Industry

Bargaining Power of Suppliers:
>The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.
Barriers to entry :
>Regulatory framework >The startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive.
Threat of substitutes:
>The threat of substitutes to the automotive industry is fairly mild. >The switching cost may be high in terms of personal time, convenience and utility.
Automobile Industry-4 wheelers
Buyer/Customer Power :
>Buyer is having bargaining power due to low switching costs associated with selecting from among competing brands.
Rivalry among Competitors :

>Rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market.
>Product being matched in a few months by the competitors
Segment-Wise Positioning
4 wheeler segment- Top players positioning Maruti Suzuki- The Middle class car of India- These cars again targeted the middle income groups, but this time the positioning was not as the basic need, it was comfort at comparatively lower price
Hyundai-'New Thinking New Possibilities- The concept of 'Modern Premium' means to get a premium product at prices that are not necessarily suited for the elite class
Mahindra & Mahindra Ltd- Rise; Every 2 minutes a Mahindra is born Indians are second to none in the world-The best domestic automobile company are targeted and best suited for Indian roads
2-wheeler segment- Top players positioning Hero moto corp-Hum mei hai Hero; Desh ki Dhadkan (HeroHonda)-Every person has a hero and a winner within ones self-Young boys looking for fast sporty bikes for Indian roads
Bajaj- Hamara Bajaj; Distinctly Ahead-Two-wheelers for every Indian-The core competency of Bajaj Auto Ltd is its technology and innovation-Middle-class people who want a bike that is stylish and gives a good mileage
TVS Motors-Bikes which will bring a smile in the lives of customers-Bikes which will bring a smile in the lives of customers based on its services and technology it will serve the customer with hassle free service
3-wheeler segment- Top players positioning Bajaj Auto-- Hamara Bajaj; Distinctly Ahead but here the positioning is different than that of the two wheeler segment- the company aims to convert three-wheeler users to 4-wheelers by giving them a feel of a four wheeler by products like Tata Ace at affordable prices. Piaggio- Reliable and innovative. Best technology for goods vehicle segment. It aims to provide with a hassle free service to the customer when they are carrying goods. M & M-Rise; Every 2 minutes a Mahindra is born. The FES vision is to deliver FarmTech Prosperity through a variety of existing and new agri initiatives to impact the lives of farmers, enabling them to RISE above their current realm of possibility.
Strategic decision taken in the past and their results

Bajaj Auto Ltd. Past strategy: Full reliance on scooter segment Impact: Was numero uno when scooter was a dominant segment Lost out after the entry of motorcycles in the market Current Strategy Target the youth with sporty bikes TVS Motors
Past strategy Focus on rural/semi urban population Impact Did poorly in urban areas Started losing due to Population Migration Increase in purchasing power

Current strategy Maintain dominance in rural/ semi urban population Focus on economy segment in urban population Presence in premium segment Hero Motocorp
Past strategy: Focus on economy segment with splendor and passion being the flagship product Minimal presence in the premium segment Impact Largest selling 2 wheeler in the world Started losing due to market evolution

Current Strategy Fully utilize the domination in the economy segment Have bigger presence in the premium segment Decision-The year 2010 marked the end of one of the worlds most successful corporate marriages Hero Honda and a new beginning for The Munjals of the Hero Cycles Ltd. Impact- HeroMotoCorp needs to make its consumers aware of the technology advancements and progress to maintain their leadership position in the market.

Maruti Suzuki India LtdPast Strategy Joint venture with Suzuki Motor Corporation Stopped manufacturing its top selling car Maruti Zen Impact The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. The decision was taken due to high dependency MUL(Maruti India Limited) on ZEN in terms of sales and revenue(Product cannibalization) It lead to sale of all product of the company, 800n, Alto, in equal proportion. Mahindra & Mahindra LtdPast Strategy-Mahindra Renault Limited was a JV between India's largest Utility vehicle manufacturer Mahindra & Mahindra Limited & Renault S.A. of France
The Future
Passenger car production in India is projected to cross three million units in 2014-15.
Sales of passenger cars during 2008-09 to 2015-16 are expected to grow at a CAGR of around 10%.
By the year 2016 the industry is expected to contribute 10% of the nations GDP. Export of passenger cars is anticipated to rise more than the domestic sales during 2008-09 to 2015-16. Motorcycle sales will perform positively in future, exceeding 10 Million units by 2013-14. Value of auto component exports is likely to attain a double digit figure in 2013-14.
The Future
The Indian automobile industry is expected to grow to US$ 40 billion by 2015 from the current level of US$ 7 billion in 2008. Ratan Tata, Chairman (Tata Motors) created history by launching the world's cheapest car NANO. The cars pricing is around one lakh, gaining instant recognition in the automobile industry across the globe. It heralded the coming to age of the Indian Automobile Industry.
The Future
Indias strength in software sector, combined with skilled labor and low cost of manufacturing should place it in a favorable position globally. The global recession has had a dampener effect on the growth of the industry, but market experts believe it is only a short term phenomenon and are confident of the industry bouncing back.
The Future
India will be a Automotive hub, led by small cars and auto component domains Export of automotive components to ASEAN,BRIC,EU and USA for OEMs as well as Aftermarket Booming Automobiles (Particularly cars) second sales and remodeling Increased deployment of IT-enabled Automobile support systems like GPS,ABS,ASR and Safety systems
The Future
Quality Certification (Deming, Six Sigma,TQM,TS16949) amongst suppliers have attained critical mass and the entire market will follow to get quality certifications. Will be a hub for optimal cost, high quality vehicular testing and terrain data acquisition services Alternate fuel (Bio fuel, electricity) and environment friendly green engines (Bharat emission norms)
The Future
Challenges in future
The greatest challenge and competition would be from the Chinese automobile industry. The Chinese automobile industry has been able to give stiff completion to India in terms of productivity, cost of manufacturing and technology. The present trend of excess manufacturing capability along with reduced margins put additional pressure on the industry. Developing a supply base in terms of technical and human capabilities, achieving economies of scale and lowering manufacturing costs, as well as overcoming infrastructural bottlenecks. Involves stimulating domestic demand and exploiting export and international business opportunities The role of the Government is of facilitating infrastructure creation, promoting the countrys capabilities, creating a favorable and predictable business environment, attracting investments and promoting R&D.
Automotive Mission Plan 2016

The Prime Minister released automobile plan 2006 2016 to give a road map to Indian automobile industry. Increase turnover to $145 billion by 2016. Increase export revenue to $35 billion by 2016. Provide employment to additional 25 million people by 2016. By 2016, auto sector is expected to contribute 10% of the countrys GDP & 30-35% of the industry.
THANK YOU

Automobile Industry in India Final

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Automobile Industry in India Final

Uploaded by

Copyright:

Available Formats

Automobile Industry in India

The Growth Journey

Size of the Industry

Size of the Industry contd.

Size of the Industry contd.

Structure of the Industry

Key Players-Two Wheeler Segment

Market Share- Two Wheeler Segment

Key Players-Passenger Vehicle Segment

Market Share- Passenger Vehicle Segment

Key Players and Market Share

Key Players-Three Wheeler Segment

Market Share- Three Wheeler Segment

Key Growth Drivers

Key Growth Drivers contd.

Key Growth Drivers contd.

Growth forecasts - Indian auto industry

Shares of different Segments

Commercial vehicle Three wheeler

Shares of different segments

1- Passenger Vehicle 2- Commercial Vehicle 3- Three wheeler 4- Two wheeler

Indian Automotive OEM Presence

DaimlerChrysler Tata Motors Skoda Fiat Mahindra

Daihatsu and Toyota plan for small car plant

Automotive (Passenger Car) Growth In India

OEM Growth Rate, Volume and Market Share

Size of the bubble shows the market share

Growth over last year

Size of the bubble shows the market share

Growth over last year

Toyota Mahindra Fiat Hyundai Honda

Indian Auto Segment Analysis

Sales Volume FY 2010-11; April-July data

A2: Compact Car Segment Analysis

Size of the bubble shows the Segment Size

Hyundai Santro, Getz, i10, i20

0.00% -0.5 -20.00% 0

Fiat Palio, Fiat 500, Grande Punto

A3: Mid-Size Segment Analysis

GM Aveo Suzuki Sx4 HM Cedia, Lancer Hyundai Verna, Accent

Ford Ikon, Fiesta

Auto Component Industry Export & Import

6.8 5.2 3.6 3.8 5.9

Profile of export OEM / Tier-1: 80% Aftermarket: 20%

Auto Component Industry Size & Product Range

Drive Transmission & Steering Parts 19% Engine Parts 31%

Body & Chassis 12% Suspension & Braking Parts 12%

15.0 12.0 10.0 6.7 5.0 8.7

Equipments 10% Others Electrical Parts 7% 9%

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Segmental Analysis-Two Wheelers

Segmental Analysis-Two Wheelers

Segmental Analysis-Two Wheelers

Segmental Analysis-Two Wheelers

Segmental Analysis-Two Wheelers

Segmental Analysis-Three Wheelers

Three Wheeler segment analysis

Market Share (Passenger)

Bajaj 48% 51%

Piaggio 31% 30%

M&M 12% 10%

Market Share in Goods Segment

Segmental Analysis-Three wheelers