automobile sector in india

INDIAN AUTOMOBILE INDUSTRY

Automobile Industry Where it has been

Where its going

Indian automotive industry

Pre 1983 1983-1993 1993-2007•Closed market

• Growth of market limited by supply

• Outdated models

Players• Hindustan Motors• Premier• Telco• Ashok Leyland• Mahindra & Mahindra

•Suzuki, Japan and GOI jointventure to form Maruti Udyog

• Joint ventures with companies in commercial vehicles and components

Players• Maruti Udyog• Hindustan Motors• Premier• Telco• Ashok Leyland• Mahindra & Mahindra

•Delicensing 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

Automotive Companies in India

Major Multi-national companiesMajor Indian Companies

NODAL AGENCIESARAI Provide research & development, testing,

certification and calibration support for developing safe, reliable and eco-friendly vehicles / components

SIAMApex Industry body representing 44 leading

vehicle and vehicular engine manufacturers in India.

Future Prospects Of Indian Automobile Industry

SKODA AUTO • SKODA Auto is planning to make India its regional

manufacturing hub.• Company plans to start to manufacturing in India from

2010 with a target of 50000 cars a year.

TATA MOTORS• TATA motors plan to manufacture 80000 units of its NANO

car in Pantnagar plant in UTTARAKHAND.• The Mother facility in SANAND, Gujarat may be fully

functional by 2010-11 with a capacity of 1.5 lakhs/year

RENAULT• RENAULT has entered into partnership with NISSAN Motors

to setup a manufacturing unit near Chennai.• Project costs around $ 901.35 millions and having Capacity

of 4lakh cars /year

HONDA MOTORS•Investing US $ 250 million in a new plant in Rajasthan with capacity of 60,000 car per year

TOYOTA –KIRLOSKAR• Toyota- Kirloskar motors planning to launch its own small car in India by 2011

GENERAL MOTORS• To manufacture small cars at its Talegaon, Maharashtra plant with 80% local input.

Why India?

GROWTH DRIVERS OF INDIAN AUTO MARKET

2010• Rising industrial and agricultural output

• Favorable demographic distribution with rising

working population and middle class

• Urbanization

• Greater affordability of vehicles

• Easy finance schemes

The Indian Auto Components Market

• Original Equipment Manufacturers (OEMs)

• Replacement Parts Production and Distribution : e.g. Air filters, oil filers and replacement lights

• Rubber Fabrication : tyres, hoses, belts etc.

• Estimated component market size is US$ 6.7 bn

The Indian Auto Components Market

Composition Of Indian Auto Exports

PEST ANALYSIS OF INDIAN AUTOMOBILE INDUSTRY

POLITICAL• Indian govt. launched AUTO POLICY for its Self

Sustained growth.

• Allowed Foreign Equity Investment up to 100%

• Formulation of FUEL POLICY

• Promotes for Vehicles propelled by AES

ECONOMIC• Weighted Tax Deductions up to 150% for in

house R&D activities.• Reduced Interest rates for export financing.• Economy has grown over 8.5% per annum

for last 5 years.• Manufacturing sector has grown 8-10 % for

last few years.

Social•Changed Lifestyle leads to Increased demand

•The Average family size is 4 which makes it favorable to buy a four wheeler.

•4th largest economy on PURCHASING PARITY INDEX

•Preference for small and compact car

•Preference for Fuel efficient cars with low maintenance

TECHNOLOGICAL• More & more emphasis on R&D.• Govt .is promoting NATRIP(National

Automotive testing and R&D Infrastructure Project) to support the growth of Auto industry in India.

• Customized solutions (Designer cars ets)can be provided with proliferation of technology.

• With Entry of global brands both product and production process has been improved.

SWOT ANALYSIS OF INDIAN AUTOMOBILE

INDUSTRY

STRENGTHS•Automobile industry is established and Evergreen industry.

•India is the strongest player in small car segment

•Indian Companies are best cost innovators

•Assembly line manufacturing, and JIT inventory management, the automotive industry has been able to achieve significant gains in productivity.

•Exceptional human resource base

WEAKNESS• India lack proper infrastructural facilities

• Poor after sales service

• the automotive industry lags behind other sectors such as IT and financial services in management training, reward

• and retention.

Opportunities• Small cars is a future

• Green cars

• Auto financing

• Royalty through Patents

THREATS• Global Crisis

• Companies not focusing on R & D are under great risk

• High competition from foreign players

• Lack of technology for Indian companies

• Due to liquidity crunch buyers stayed away

• Mahindra & Mahindra recorded a fall of about 40%, Tata Motors showed 12% decline in the car sales.

• Resulted into less production

• Job Cuts

Impact Of Global Recession

Three Major Players of Automobile(Car) Sector

MARUTI SUZUKI• Founded: 1981 (as Maruti Udyog Limited)

• Headquarters: Delhi, India

• Key people: Mr. Shinzo Nakanishi, Managing Director and CEO

• Revenue: US$4.8 billion (2009)

• It offers 14 brands and over 150 variants

WHY MARUTI ???• Sales and service network

• Maruti Insurance

• Maruti TrueValue

• Maruti Driving School

Hyundai• Founded: 6 May 1996• Headquarters: Chennai, India• Key people: Mr. H.W. Park, MD• The second largest car manufacturer in India• HMIL presently markets 6 models of passenger cars across

segments.• HMIL has set up a modern research and development facility

in the cyber city of Hyderabad.

TATA MOTORS• Founded in 1945 by JRD Tata• Headquarters: Mumbai, Maharashtra• Revenue: $20 billion (2009)• Key people: Ratan Tata, Chairman; Ravi Kant,

Vice Chairman; Carl Peter Forster, CEO• Tata Motors is a dual-listed company

IMPORTANT DEVELOPMENTS

• Tata Indica

• Tata Nano

• Compressed Air Car

• Electric Vehicles

CAREER OPTIONS AFTER MBA IN

AUTOMOBILE SECTOR

CHENNAI IS CALLED AS “DETROIT” OF INDIA

Opportunities for AllStream Designations OfferedHR HR Manager, Personnel Manager,

Compensation Analyst.

Marketing Sales Manager, Marketing Manager, Product manager

Operations Production Manager, Purchase Manager, Inventory Manager

Finance Financial Analyst, Risk Manager.

Interested in & around Mumbai?

• MUMBAI: MAHINDRA AND MHINDRA.

• PUNE: TATA MOTORS, TELCO, FORCE MOTORS,LUCAS TVS, MAHINDRA & MAHINDRA,VOLKSWAGON, GM,DAIMLER – CHRYSLER,FIAT INDIA,BAJAJ AUTO,EICHER, KINETIC, BAJAJ TEMPO,HERO HONDA MOTORS LTD,PIAGGIO,PREMIER Ltd,

• Besides This Many Auto Component Industries are in Pune.