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Competitive Rivalry
In 1990s serious competition began to emerge with new vehicles, designs and
concepts entering the market.
Different companies providing different incentives to attract customers.
The Industry is a mature one and thus competition is fierce and rivalry will only
Threat of New Substitute Products increase over time.
Entrants (Low) (Low) Threat of New Entrants
Due to its High capital requirement, very few new players are able to venture in
this Industry.
Existing major multinational players benefit from economies of scale and scope
and makes it very difficult for a new entrant to offer competitive pricing.
Competitive
Rivalry Substitute Products
(High) Increasing fuel prices have been pushing some urban drivers to use public
transportation.
There is no realistic substitute to motor vehicles with the exception of large
scale transportation that railways provide
Bargaining power of Suppliers
Bargaining power of Bargaining power of Bargaining power of customers
Most of the auto component
Buyers have the power to walk away
Customers (high) Suppliers (Low) manufacturers are specialized in
from a purchase that they don't like
some segments and so bargaining
and take their purchase elsewhere.
power of suppliers is low
Market trends lure large shares of the
Cost of inputs-labour, parts, raw
buyer market from one auto-maker to
materials can have a significant
another.
effect
SWOT ANALYSIS
Strengths Weakness
1. Continuous product innovation & 1. Growth rate of Automobile industry is in
technological advancement hands of the government.
2. Increase in demand of luxury commercial 2. Automobile Industry has shifted from
vehicles demand to supply market.
3. Growth shifting to Asian markets. 3. Few controversies relating to recalling
4. Manufacturing facilities in Asian nations to vehicles on account of some technical dis-
control cost functionality.
Threats
Opportunities
1. Presence of large number of players in
1. Introducing fuel-efficient vehicles the Automobile industry results into
2. OEMs collaborating with suppliers and extensive competition.
experts outside the traditional auto industry. 2. Fluctuations in the fuel prices remains
3. with the increase in nuclear families there the determining factor for the growth of
has been increase in demand of two-wheelers the Industry.
& compact cars 3. ROI out of R&D is yet to be capitalized.
Growth Drivers
Indian population overall will likely move up the income curve
Growing Nearly 75 to 80 percent of the new vehicle purchases are done by using bank loans.
Demand
FDI encouragement in India has boosted the growth of this Industry (100% FDI).
Government of India is focused on establishing India is a major auto manufacturing
Policy
Support hub.
AMW
Eicher Motors
Force
Hindustan Motors
Mahindra & Mahindra
Tata Motors
Ashok Leyland
Tatra Vectra Motors Ltd.
SML Isuzu
Bajaj Auto
References
https://www.ukessays.com/essays/marketing/five-forces-of-the-automotive-industry-marketing-
essay.php
http://www.marketing91.com/swot-analysis-of-automobile-industry/
http://auto.economictimes.indiatimes.com/autologue/key-factors-that-will-propel-growth-in-
auto-industry/557
https://cleartax.in/s/gst-impact-automobile-industry
https://www.ibef.org/industry/india-automobiles/showcase/ashok-leyland
https://www.ibef.org/industry/india-automobiles
https://en.wikipedia.org/wiki/Automotive_industry_in_India