automobile industry in india final
TRANSCRIPT
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Automobile Industry in India
Submitted byAmit Mitra
Biswadeep Sarkar
Priyankar Chakrabarty
Subhra Dutta
Ujwal Prasad
Zeno Zozzimos
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The automotive industry in India is one of the larger markets in the worldand 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 two-
wheeler manufacturer in the world
India is the fifth largest commercial vehicle manufacturer in the world.
Introduction
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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Closed market Growth of market limited by supply Outdated models Players Hindustan Motors Premier Telco Ashok Leyland Mahindra & Mahindra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 Jointventures with companies in commercial vehicles and components Players MarutiUdyog 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 oncomponents and parts to ASEAN levels Implementation of VAT
Era of globalization and evolution of India as a global manufacturing hub
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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 two-
wheeler manufacturer in the world
15%5%
3%
77%
Domestic Market Share for 2011-12
Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers
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Size of the Industry contd.
With a turnover of almost $59 Million US Dollars in 2012,this industry providesemployment to 13 million people in the Indian
The gross turnover for the last 5years are as follows
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Size of the Industry contd.
The size of the two major segments of automobile industry
The two-wheeler market in India is the biggest contributor to the automobile
industry with a size of Rs.100,000 million
The cumulative sales of two wheelers in India stood at 3,519,555 units.
The Indian passenger vehicle market size estimated at 2.5 million units which is
relatively small compared to other emerging auto markets like China, South Korea
and Brazil
The amount of cumulative FDI inflow into the Indian automobile industry during
April 2000 to April 2013 was worth US$ 8.32 million, amounting to 4 per cent of
the total FDI inflows
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Structure of the Industry
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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
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Market Share- Two Wheeler Segment
The analysis of the market share gives us the following dataHero 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
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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
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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 inpassenger 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
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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
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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
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Market Share- Three Wheeler Segment
The analysis of the market share gives us the following dataBajaj 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 byinternational brand Piaggio
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Key Growth Drivers
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Key Growth Drivers contd.
Indian pockets growing deeper.
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Key Growth Drivers contd.
Indian Car Buyer getting Younger
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Future Projections
Segment wise vehicle production in India & Future projections for 2015 & 2020
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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 20102.6 million VehiclesBy 20155.1 million Vehicles
By 20209.7 million Vehicles
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Segment Analysis
Market segmentationis 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.
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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 )
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Different Segmentso
Three vehicle:-Rickshaw, Trolleys, Delivery Vans and Tipper
o Two wheeler:
-Scooters and motorcycles
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Shares of different Segments
Segments Share
Passenger Vehicle 15.07
Commercial vehicle 4.66Three wheeler 2.95
Two wheeler 77.32
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Shares of different segments
15% 5%
3%
77%
Shares of different segments
1
2
3
4
1- Passenger Vehicle2- Commercial Vehicle
3- Three wheeler
4- Two wheeler
I di A i OEM P
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Suranjan Das 26
Indian Automotive OEM Presence
Hyundai
Ford Motors
Hindustan Motors
Toyota
SkodaTata Motors
Fiat
Mahindra
GM
Maruti
Honda
DaimlerChrysler
Daihatsu and Toyota plan
for small car plant
North
West
South
Nissan
http://images.google.co.in/imgres?imgurl=http://www.cartype.com/images/page/Nissan_logo6.jpg&imgrefurl=http://www.cartype.com/page.cfm?id=1320&alph=all&dec=all&h=462&w=530&sz=29&hl=en&start=1&tbnid=9v8f9QK0iQFjvM:&tbnh=115&tbnw=132&prev=/images?q=nissan+logo&gbv=2&svnum=10&hl=en&sa=Ghttp://images.google.co.in/imgres?imgurl=http://www.cartype.com/images/page/Nissan_logo6.jpg&imgrefurl=http://www.cartype.com/page.cfm?id=1320&alph=all&dec=all&h=462&w=530&sz=29&hl=en&start=1&tbnid=9v8f9QK0iQFjvM:&tbnh=115&tbnw=132&prev=/images?q=nissan+logo&gbv=2&svnum=10&hl=en&sa=Ghttp://www.lysator.liu.se/~/teochfil/wei/weichangconnie/logo-volvo.jpghttp://www.tatamotors.com/home.php -
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27
Automotive (Passenger Car)
Growth In India
1949776
1552703
1549882
1379979
0 1000000 2000000 3000000
2010
2009
2008
2007
446146
335729
218401
198452
0 100000 200000 300000 400000 500000
2010
2009
2008
2007
2351240
1838593
1777583
1545223
0 500000 1000000 1500000 2000000 2500000
2010
2009
2008
2007
ProductionDomestic Sales
Export Sales
Source: Society of Indian Automotive Manufacturer
27.8%
33%
25.5%
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OEM Growth Rate, Volume and
Market Share
28
-2%
0%
2%
4%
6%
8%
10%
-10 -5 0 5 10 15 20 25 30 35 40
Hundreds
x 10000
BMW India Pvt Ltd Fiat India Automobiles Pvt Ltd Force Motors Ltd
Ford India Pvt Ltd General Motors India Pvt Ltd Hindustan Motors Ltd
Honda Siel Cars India Ltd Hyundai Motor India Ltd International Cars & Motors Ltd
Mahindra & Mahindra Ltd Mahindra Renault Pvt Ltd Maruti Suzuki India Ltd
HyundaiTata Motors
Maruti Suzuki
Undoubtedly the market leader
Will have to defend the market shareGrowth
overlastyear
Size of the bubble shows the market share
Ford IndiaHave shown great promise with Figo
Grown faster than the rest over last year
Target would be grow in number
VW IndiaNew entrant
Need to increase market share
Also improve volume
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OEM Growth Rate, Volume and M-Share
W/O India Big3: Suzuki / Tata / Hyundai
29
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
-1 0 1 2 3 4 5 6
Hundreds
x 10000
BMW India Pvt Ltd Fiat India Automobiles Pvt Ltd Force Motors LtdFord India Pvt Ltd General Motors India Pvt Ltd Hindustan Motors LtdHonda Siel Cars India Ltd International Cars & Motors Ltd Mahindra & Mahindra LtdMahindra Renault Pvt Ltd Mercedes-Benz India Pvt Ltd SkodaAuto India Pvt Ltd
Hyundai
Growthoverlastyear
Ford
Mahindra
Toyota
GM
Honda
Size of the bubble shows the market share
Fiat
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Indian Auto Segment Analysis
30
-20.00%
30.00%
80.00%
130.00%
180.00%
-1 0 1 2 3 4 5 6
x 100000
Size of the bubble shows the Segment Size
A2: Compact (3401-4000mm)
Alto, Wagon R, Zen-Estilo, Swift, Ritz, A Star
Palio, Fiat 500, Grande Punto
FigoSpark, U-VA, Beat
Jazz
Santro, Getz, i 10, i20
Micra
Fabia
Indica
Polo
A1: (Upto3400)
Maruti 800, Nano
A3: Mid-size
(4001-4500mm)
A5: Premium
(4701-5000 mm)
A4: Executive
(4501-4700mm)
A6: Luxury (5001mm & above)
Growthover2009-10F
YApril-Julydata
Sales Volume FY 2010-11; April-July data
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-80.00%
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
-0.5 0 0.5 1 1.5 2 2.5 3
x 100000
A2: Compact Car Segment Analysis
31
GMI
Spark, U-VA, Beat
Suzuki
Alto, Wagon R, Zen-Estilo,
Swift, Ritz, A Star
Honda
Jazz
Hyundai
Santro, Getz, i10, i20
Fiat
Palio, Fiat 500,
Grande Punto
SkodaAuto
Fabia
TataMotors
Indica
Size of the bubble shows the Segment Size
Other New Entrants this year are
Nissan: Micra sold 928 units
VW: Polo sold 5920 units
Ford: Figp sold 25332 units
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A3: Mid-Size Segment Analysis
32
-90.00%
-40.00%
10.00%
60.00%
110.00%
160.00%
-0.1 0 0.1 0.2 0.3 0.4 0.5
x 100000
Tata Motors
Indigo
Suzuki
Sx4
Ford
Ikon, Fiesta
Hyundai
Verna, Accent
HM
Cedia, Lancer
GM
Aveo
Honda
City
Size of the bubble shows the Segment Size
MRL
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Auto Component Industry Export &
Import
33
N.America23%
Africa
8%Asia
24%
Australia
1%
S.America
4%
Europe
40%
Profile of exportOEM / Tier-1: 80%
Aftermarket: 20%
Export0
1
2
3
4
5
6
7
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
1.21.7
2.5 2.7
3.53.8
3.2
1.41.9
2.5
3.6
5.2
6.8
5.9Export
Import
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Auto Component Industry Size &
Product Range
6.7
8.7
12.0
15.0
18.0 18.419.2
0.0
5.0
10.0
15.0
20.0
25.0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(US$ Billion)
Engine Parts
31%
Drive
Transmission &
Steering Parts
19%
Body & Chassis
12%
Suspension &
Braking Parts
12%Equipments
10%Electrical Parts
9%
Others
7%
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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%
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Segmental Analysis-Two WheelersSALES:
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
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Segmental Analysis-Two Wheelers 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%.
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Segmental Analysis-Two Wheelers
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
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Segmental Analysis-Two Wheelers
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.
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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
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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
Bajaj Piaggio M&M Atul Auto TVS
Fy 2011-12 48% 31% 12% 3% 3%
Fy 2012-13 51% 30% 10% 4% 4%
0%10%20%30%40%50%60%
Market Share (Passenger)
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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.
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Segmental Analysis-Three wheelers
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Segmental Analysis-Three wheelers
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
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Segmental Analysis-Three wheelers
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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 producedo 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.
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Past and future segmental changes
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 6.5million
o During the year 2002-03 the export of automobile industry had registered
a growth rate of 65.35 percent.
.
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Past and future segmental changes
Future Changes
Two wheeler segment
Since the petrol prices are rising in India a whole new segment of Hybrid bikesare 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 moreinternational brands entering into India by 2015.
Commercial Bikes and Scooters are being planned to be launch in India as it hasgained prominence in other major countries. Since the Indian roads will be wellequipped 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 brandsToyota is already planning to launch a hybrid car in India by 2015 other majorplayers 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 inIndia as reported by cartrade.com.(one of the biggest side for insights on
automobile industry)
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Projections for future-Segment Wise
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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.
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Key Performance Parameters
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.
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Key Performance Parameters
Increased output, increased flexibility, increased safetyThe right SCADAsoftware 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.
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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 repairsif 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.
K P f P t
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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.
K P f P t
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Key Performance Parameters -
Dealers The customer type (Internal vs External Customers; warranty cases are
considered for this purpose Internal, although is an external customer dothe DLR) mix is very important, mainly the amount of the CPUS (CustomerPay Units Serviced). These are the customers that put "real money" insideyour 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 haveunique CPUS, one can always multiply the UIO by Customer Visit Rate, toarrive at the figure.
Ke Performance Parameters
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Key Performance Parameters -
Dealers
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 importantones 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.
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Evolution of the Competition
Early competitionCost Leadership approach Competition based on variety and choiceSloans
portfolio strategy
Competition based on diversification through leadership
in design, technology or manufacturing excellence
Competition based on mass customization-present day
scenario
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Evolution of the Competition
Early competitionCost Leadership approach
Emergence of craft producers
Employed skilled workforce
Customized outputhand craft single vehicles
Made for the elite class
Fords T-model
Interchangeability of parts
Moving assembly linemaximizing production
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Evolution of the Competition
Fords T-model
Mass production
Standardization of parts and job functions
Reduction in cost per unit
Age of T-model1914-1926 ; cost leadership approach
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Evolution of the Competition
Competition based on variety and choiceSloans portfoliostrategy
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
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Evolution of the Competition
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
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Evolution of the Competition
Competition based on mass customizationpresent dayscenario
Factors affecting competition
Product quality and features
Innovation and development time
Pricing
Reliability and safety
Fuel economy
Customer service and financing terms
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Evolution of the Competition
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
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Evolution of the Competition
Saturation and over capacity - a result of the failure to adjust
capacity to demand
Structural Changes in the Supply Chain - main changes hereare a general reduction of supplier numbers per vehicle
assembly plant, the re-distribution (i.e. outsourcing) of value-
added activities, and the increase in globally sourced
components and materials.
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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.
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Critical success factors
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 outsourcedcomponents.
Achieving a sustainable cash flow is central to the frequent discussions between
automakers and employee unions.
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Critical success factors
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 higherand 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.
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Critical success factors
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.
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Critical success factors
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 ofmouth 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 bestricter going forward.
The requirement of updated technologies has driven domestic players into
acquisition/collaborations/JVs with global majors.
Regulations that affect the Industry
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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
Regulations that affect the Industry
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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 thebanking 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.
Regulations that affect the Industry
The Regulators
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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 andstandards 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).
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Ministry of Shipping, Road Transport
and Highway
Bureau of
Indian
Standards
CMVR- Technical Standing
Committee
Standing committee on
implementation of
Emission Legislation
Automotive Industry
Standards Committee
Other Ministries
Ministry of
environmentMinistry of natural
Gas
Ministry of non
conventional
energyEmission Safety
Political-Legal Factors
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Political Legal FactorsBoosted 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 inFTAs / RTAs. (ASEAN Free Trade Agreement)
- SIAM recommended the government on extendingexcise and sales tax benefits to customers whoopt for scrap page of their old vehicles
5-10 Years
Effective Implementation and Uniformenforcement of GST
Maintain a three tier tariff structure for rawmaterials, intermediate goods, finished goods.
Revamp WTO compatible export promotionalschemes like DEPB, EOU and EPCG schemes
AMP Plan 2006-16 set by govt
Stunted Economic Growth
1 year
Differential excise duty for small and bigcars.
Customs duty for imported cars includinghybrid cars.
Excise duty cut only for petrol driventrucks
1-5 Years
Existing Complex labor laws( 45 Central
acts and 16 associated rules) Not implementing country wide VAT
Ambiguous policy in land acquisition forgreen field projects
5-10 Years
Poor execution of Infrastructureinvestments. (Construction of Highways of
16km per day against the target of 32 kmper day)
Absence of National Auto fuel Policy(NAFP)
CMVR- Technical Standing Committee
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To provide technical clarification and interpretation of the Central Motor VehiclesRules 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 directrelevance 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.
Functions
Standing Committee on Implementation of Emission
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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 emissionnorms
Advise MoSRT&H on any issue relating to implementation of emission regulations.
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Import guidelines
The import of vehicles shall be subject to the following guidelines of theGovernment 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.
.
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Import guidelines
II) The import of new vehicles shall be subject to the followingconditions:
(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 theMotor Vehicles Act, 1988 and the rules made thereunder, as applicable, onthe date of import.
(c) The import of new vehicles shall be permitted only through theCustoms port at Nhava Sheva (Mumbai), Calcutta and Chennai
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Import guidelines2. (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 thefollowing 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.
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Import guidelines
c) In addition, the second hand or used vehicle shall conform to the provisionsof 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
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p
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 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Passenger Vehicles 175,572 198,452 218,401 335,729 446,145 444,326 507,318
Commercial Vehicles 40,600 49,537 58,994 42,625 45,009 74,043 92,663
Three Wheelers 76,881 143,896 141,225 148,066 173,214 269,968 362,876
Two Wheelers 513,169 619,644 819,713 1,004,174 1,140,058 1,531,619 1,947,198
Grand Total 806,222 1,011,529 1,238,333 1,530,594 1,804,426 2,319,956 2,910,055
Automobile Exports Trends(Number of vehicles)
E t f th l t f
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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 growth35.91 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 inApril to May 2013, as against the same period last year.
Export performance over the last few years
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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.
E t G th P S t
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Export Growth Per SegmentSegment 2007-08 2008-09 2009-10 2010-11 5-year
CAGR
Passenger Vehicles 218,401 (10.0%) 335,729
(53.7%)
446,145
(32.9%)
453,479 (1.6%) 20.90%
Commercial Vehicles 58,994 (19.1%) 42,625 (-27.7%) 45,007 (5.6%) 76,297 (69.5%) 13.40%
Two Wheelers 819,713 (32.3%) 1,004,174
(22.5%)
1,140,058
(13.5%)
1,539,590
(35.0%)
24.60%
Three Wheelers 141,225 (- 1.9%) 148,066(4.8%)
173,214(17.0%)
269,967 (55.9%) 28.60%
Grand Total 1,238,333
(22.4%)
1,530,594
(23.6%)
1,804,426
(17.9%)
2,339,333
(29.6%)
23.70%
R t t
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Recent events
New products
Volkswagen launches the Cross Polo in India at 7.75 lakh-
The 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 0-
100kmph 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 lakh-
The 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.
R t t
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Recent events
2013 Nissan Terrano unveiled in India, launch in October-Terrano, 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 lakh-
Audi 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.
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Events held
Automotive Testing Expo IndiaAutomotive 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.
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Events held
Automobile World ShowThe 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 cost-
efficient platform to display their products in this event.
List of Top Automobile Companies in
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India 2011
Rank Company Turnover PAT MCRP CR Assets
7 Tata Motors Ltd 123222.91 9273.62 56499.77 52209.48
21 Mahindra & Mahindra Ltd 37026.37 3079.73 49945.17 36926.19
19 Maruti Suzuki India Ltd 38140.69 2382.37 31475.63 14762.9
41 Hero MotoCorp Ltd 19669.29 1927.9 40398.63 4447.22
46 Bajaj Auto Ltd. 17008.05 3454.89 46885.69 5154.9667 Ashok Leyland Ltd. 11133.04 631.3 6653.15 6621.16
101 Sundaram Clayton Ltd 7419.41 64.63 529.23 2428.87
110 TVS Motor Company Ltd. 6569.99 127.94 2985 1745.06
List of Top Automobile Companies in India 2011 (Figures in Crores Rs)
2011 ET 500
Analysis of cost and profitability
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Analysis of cost and profitability
Major costThe 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 designingand 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 marketresearch to anticipate consumer trends and preferences.
Analysis of cost and profitability
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y p y Margins
Indian automobile sector has shown tremendous growth and flexibility in
last couple of years. Mahindra, Tata, Maruti, and many others includingforeign players such as Hyundai, Ford, GM, and Skoda have made India
their home for production of small cars
Company GPM% OPM% NPM%
TATA MOTORS
LIMITED 17.49 9.81 3.78
BAJAJ AUTO LIMITED 23.36 19.78 20.3
MAHINDRA&MAHINDR
A 22.08 14.65 11.34
HERO MOTOR CORP. 20.54 13.43 9.97
MARUTI SUZUKI INDIA
LTD 13.17 9.5 6.25
ASHOK LEYLAND 16.43 10.67 5.53
EICHER MOTORS 21.35 10.17 17.06
HMT LTD -12.32 -25.29 -39.43
TVS MOTOR CO. LTD 15 4.92 3.14
ESCORTS LTD 14.5 5.01 3.7
Analysis of cost and profitability
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Analysis of cost and profitability
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
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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 withplant in Gujarat to make India a hub for mid-size cars.
Maruti Suzuki Market Size
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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.
Maruti Suzuki Market Size
Market Share of MSIL
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Market Share of MSIL
Year Market Share
2009 46.5 %
2010 44.6 %
2011 45.3 %
2012 38.3 %
2013 39.1 %
MARUTI SUZUKI GROWTH ANALYSIS
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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
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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 GROWTH ANALYSIS
Maruti Suzuki Net Sales & YOY Growth
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Maruti Suzuki Net Sales & YOY Growth
Year Net Sales (MN)
2009 203,583
2010 289,585
2011 358,490
2012 347,059
2013 426,126
Year on Year Growth Rate is 22.7%
Segmental Presence of MSIL
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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
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GROWTH (%)
Year Growth %
2010 25.7
2011 28.2
2012 5.1
2013 2.2
The passenger vehicle industry was growing at 2.2%, Maruti grew by 4.4 %
MSIL PETROL VEHICLE SALES
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MSIL PETROL VEHICLE SALESYear Units
2011
2012
893,000
701,000
2013 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)
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DIESEL VEHICLE SALES (in units)Year Units
2010 163,000
2011 199,000
2012 243,000
2013 393,000
CNG CAR SALES
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CNG CAR SALESYear Units
2011 1,300
2012 3,200
2013 4,200
The high prices of petrol and diesel have resulted in emergence as a viable and
preferred fuel option.
Mahindra & Mahindra Market Size
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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
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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
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Total domestic sales of M & MSegment 2010 2011 2012
Passenger Cars 1528337 1972845 2016115
Utility Vehicles 272740 315123 367012
MPV (Vans) 150256 213574 234945
Passenger
Vehicles
1951333 2501542 2618072
MHCV 244944 323059 348701
LCV 287777 361846 460831
2 wheeler 9370951 11768910 13435769
M & M Market Share
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M & M Market ShareSegment 2012 % 2011 %
UV Total 55.1 53.7
MPV Total 10.9 0.5
Verito 9.5 7.1
LCV < 2 21.5 22.8
LCV > 3.5 T 10.4 11.5
MHCV Load 1.2 0.3
MNAL Total 3.5 3.0
M &M AS Segmental Growth
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M &M AS Segmental GrowthSegment Financial year 2012 Growth %
UV Total 202217 19.5
MPV Total 25644 NM
Verito 17839 78.2
LCV < 2 53895 23.3
LCV > 3.5 T 10328 0.9%
MHCV Load 3490 NM
MNAL Total 13818 24.7
Mahindra & Mahindra
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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 7thhighest 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 29thconsecutive year in the domestic market with a
market share of 41.4%
Financials-Maruti Suzuki
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a c a s a ut Su u
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
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Revenue turnover -
2012-13 - Rs. 43,412.65crores
2011-12 - Rs. 34,353.63crores
2010-11 - Rs. 25,569.55crores
Profit
2012-13 - Rs. 3352.82crores
2011-12 - Rs. 2878.89crores
2010-11 - Rs. 2662.10crores
Hyundai Motor Co. Ltd.
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y
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
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Maruti Suzuki
Market CapRs. 389517.13 million
Dividend yield0.62 %
EPSRs. 86.07
P/E Ratio14.98
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Hyundai Motor Co. Ltd.
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Hyundai Motor Co. Ltd.
Market Cap50333.18 billion KRW
Dividend yield0.83 %
EPSRs. 15757.50 KRW
P/E Ratio7.61
Maruti Suzuki
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Maruti Suzuki
Operational and Financial ratios :
Earnings per share
2012-13Rs. 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
Mahindra and Mahindra
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Mahindra and Mahindra
Operational and Financial ratios :
Earnings per share
2012-13Rs. 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
Hyundai Motor Co. Ltd.
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Hyundai Motor Co. Ltd.
Operational and Financial ratios :
Earnings per share
2012-1315757.50 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
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Maruti Suzuki
Cash earnings per share2012-13Rs. 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
Mahindra and Mahindra
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Cash earnings per share2012-13Rs. 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
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Dividend per share2012-13 - 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
Mahindra and Mahindra
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Dividend per share2012-13 - 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
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Book NAV/Share2012-13Rs. 615.20
2011-12 - Rs. 525.52
2010-11 - Rs. 479.84
An expression for net asset value that represents a fund's (mutual, exchange-
traded, and closed-end) or a company's value per share. It is generally less
than the market price per share
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Book NAV/Share2012-13Rs. 245.91
2011-12 - Rs. 203.43
2010-11 - Rs. 174.86
An expression for net asset value that represents a fund's (mutual, exchange-
traded, and closed-end) or a company's value per share. It is generally less
than the market price per share
Hyundai Motor Co. Ltd.
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y
Quick ratio2012-131.4
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
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EBITDA margin2012-138.53 %
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
Mahindra and Mahindra
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EBITDA margin2012-1310.81 %
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
Hyundai Motor Co. Ltd.
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y
EBITDA margin2012-13 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
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Total debt to equity ratio2012-130.07
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
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Total debt to equity ratio2012-130.24
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 aresecured loans in the balance sheet
Hyundai Motor Co. Ltd.
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Total debt to equity ratio2012-130.93
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
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Current Ratio2012-131.29
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
Mahindra and Mahindra
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Current Ratio2012-131.10
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
Hyundai Motor Co. Ltd.
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Current Ratio
2012-131.7
A liquidity ratio that measures a company's ability to pay short-term
obligations. This is healthy sign for the company
Maruti Suzuki
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Interest cover2012-1316.76
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 financialleverage is high
Mahindra and Mahindra
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Interest cover2012-1324.26
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 moredebt funds as interest coverage is taken care of
Hyundai Motor Co. Ltd.
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Interest cover2012-1328.20
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 moredebt funds as interest coverage is taken care of
Maruti Suzuki
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Return on capital employed
2012-1317.48 %
2011-1214.39 %
2010 -1123.36 %
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 onthe higher side
Mahindra and Mahindra
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Return on capital employed
2012-1327.44 %
2011-1226.56 %
2010 -1130.69 %
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 onthe higher side
Hyundai Motor Co. Ltd.
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Return on capital employed
2012-13 11.28 %
2011-1211.79 %
2010 -119.35 %
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 onthe higher side
SWOT Analysis for the top players in
Two Wheelers Segment
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Two Wheelers SegmentStrengths
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 ofHonda in motor engineering
Capacity utilization is almost 100%
The word Hero Honda and Honda becamesynonymous for normal people
Hero and Honda have almost similar type of models
Opportunity
Increase in the sale of sports bike segment
Credit financing by different banks is increasing forthe 2 wheeler purchaser
Increase in disposable income
Threats
Increase in fuel price
Inflation Economic slowdown
SWOT Analysis forHero Moto Corp
SWOT Analysis for the top players in
Two Wheelers Segment
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Two Wheelers Segment
Strengths In the last few years they are the innovators in
technology (specially for the brand Pulsar)
Providing technology which can make fuelefficiency bike
Leader in 150+ cc segments
WeaknessNot full capacity utilization
Not strong in all the categories
Do not have any presence in the Moto-scootersegment
Worst asset turnover ration in the industry
Opportunity
Increase in the sale of sports bike segment
Credit financing by different banks is increasingfor the 2 wheeler purchaser
Increase in disposable income
Can re-enter the fastest growing segment
Threats
Increase in fuel price
Inflation
Economic slowdown
SWOT for BajajAuto Ltd.
SWOT Analysis for the top players in
Two Wheelers Segment
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Two Wheelers Segment
Strengths-Strong in the moped segment
-Gaining popularity in the 100 cc segment
-Capacity utilization is 100%
Weakness-Very less product portfolio in the motorcyclesegment
-Least financial leveragability in relation to industrystandard
-No expansion plans
Opportunity
-Increase in the sale of sports bike segment as thedemand is rising
-Credit financing by different banks is increasing
-Increase in disposable income
Threats
-Increase in fuel price
-Inflation
-Economic slowdown
-Migration of people from moped to motorcycle
SWOT for TVSMOTOR COMP
SWOT Analysis for the top players in
Four Wheelers Segment
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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 keencompetition.
OPPURTUNITY
First company to roll out suitably Designed cars before2008 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 andmanufactures are in market
Reduction in subsidies by government on petroleumproducts
Changing environmental and emission norms
Higher local taxes
SWOT forMaruti Suzuki
SWOT Analysis for the top players inFour Wheelers Segment
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g
Strengths:
(a) Trust people are having in the brand name Mahindramotors
(b) Strong relationship with dealers
(c) Number of authorize service station is in goodnumber than that of competitors
(d) Sturdy SUVs good for Indian roads and off-road
terrain(e) Most of the market is credit driven so easy financeprovided by Mahindra motors (Mahindra finance) itselfand others is an edge over competitors.
Weakness
(a) Dealers are selling vehicles at different prices in asingle city.
(b) Changing of original parts by a dealers.
(c) Type of MRF is not having a very good claimprocessing system. Claim processing is carried outonly twice a week.
(d) Maintenance cost is high
(e) Vehicle is out of the reach middle class becauseinitial of Mahindra sports utility v is above 4 lakhs
Opportunity
1. Developing hybrid cars and fuel efficient cars for thefuture2.Tapping emerging markets across the world andbuilding a global brand3.Fast growing automobile market4.Growing in the market through electric car Reva(controlling stake)
Threats1. Government policies for the automobile sectoracross the world2. Ever increasing fuel prices3. Intense competition from global automobile brands4. Substitute modes of public transport like buses,metro trains etc
SWOT for Mahindra &Mahindra Ltd.
SWOT Analysis for the top players in FourWheelers Segment
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Strength-The company employs about 75,000 persons aroundthe world.-Hyundai vehicles are sold in 193 countries throughsome 6,000 dealerships and showrooms worldwide-Hyundai sells over 1.5 million vehicles per year-Hyundai has excellent branding and advertising byhaving celebrity brand ambassadors
-Hyundai motor company has over 75,000 employeesglobally
Weakness
-Hyundai doesnt have any product match to competein Corporate orders like Tata Indica V2,Tata Indigo,Chevy Tavera, Ford Fiesta etc
-Spare parts of Hyundai vehicles are comparativelypriced higher and do not have PAN India presence
-Concentrates on both domestic and Internationalsales thus higher risks of exchange rate fluctuations
-Hyundai is still struggling to make a better impact insmall car segment in terms of cost efficiency
Opportunity
- Developing hybrid cars and fuel efficient cars for thefuture-Fast growing automobile market is India
-Hyundai has very good opportunity in entering intocommercial vehicles and Recreational vehicles as theyare already doing well outside India. Currently HMIL hasits focus only on Passenger car segment
Threat
Government policies for the automobile sectoracross the worldEver increasing fuel pricesIntense competition from global automobilebrandsSubstitute modes of public transport like buses,metro trains etc
SWOT forHyundaiMotors
SWOT Analysis for the top players in
Three Wheelers Segment
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Three Wheelers SegmentStrength
-The Bajaj group is one of the trusted Indian brandsand was in existence since 1926
-Bajaj auto has the highest market share in threewheeler segment in petrol segment
-It is the largest exporter in three wheeler commercialsegment in the world
-Product design and development capabilities.
-Extensive R & D focus.
Widespread distribution network
Weakness
-Bajaj has a negligible presence in commercial threewheeler diesel segment
-Not a global player in spite of huge volumes.
-Not a globally recognizable brand
-Hasn't employed the excess cash for long.
Opportunity
-Bajaj has partnered with Renault-Nissan in bringing RE60, analternative to replace 5 million three wheelers in the market
-It can expand into foreign markets like China and it already hasgood market share in Africa, South Asia and Latin America
-Increasing fuel price has made people shift to higher mileagevehicles hence they should concentrate on the good segmentvehicle market
Threat
Bajaj three wheeler passenger segment has lot of
alternatives like Tata Ace, Tata Magic, Piaggio Ape etcIncreasing price of petrol has made Auto drivers toshift to diesel autos from Piaggio
Bajaj has heavy competition for its petrolAutorikshaws from TVS King
SWOT for BajajAuto Ltd.
SWOT Analysis for the top players in
Three Wheelers Segment
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Three Wheelers SegmentStrength
-Strong Brands and product line
-Great innovation capabilities, both in engine anddesign
-Economies of scale in the production of engines andpossibility to sign deals as engine global automotiveplayer
Weakness
-Poor ability to compete in other segments of thisindustry
-Distribution system not as strong as Bajaj
-Spare Parts are more expensive and availability ofthem is far less than Bajaj
-Less amount of service centers than Bajaj
Opportunities
-Poor infrastructure and high urban traffic fuel 2-
wheelers growth in India.-Introduce Hybrid technology and get the first moveradvantage over Bajaj
-Since Indian market is price conscious try to launchnew fuel efficient vehicles at lower price
Threat
-Weak Indian market recovery
-New competitions like Atul Auto focusing on priceand gaining market share
-New competitors like GM and Nissan are planning toenter this segment
-Rise of input costs
SWOT forPiaggio
PRODUCT SEGMENTATION OF MAJORPLAYERSIN TWO-WHEELERINDUSTRY
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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
Upto100ccPlatina(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 MAJORPLAYERSIN FOUR-WHEELERINDUSTRY
Maruti Suzuki
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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
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Porters 5 Forces-Two Wheelers
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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 anew 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
Porters 5 Forces-Two Wheelers
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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
Porters 5 Forces-Two Wheelers
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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
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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
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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
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AutomobileIndustry-4wheelers
Rivalry among Competitors :
>Rivalry in the Indian auto sector isintense due to the entry of foreigncompanies in the market.
>Product being matched in a few monthsby the competitors
Threat of substitutes:
>The threat of substitutes tothe automotive industry isfairly mild.
>The switching cost may be
high in terms of personaltime, convenience andutility.
>The industry is comprised of powerfulbuyers who are generally able todictate their terms to the suppliers.
Barriers to entry :
>Regulatory framework
>The startup capital requiredto establish manufacturingcapacity to achieve minimumefficient scale is prohibitive.
Buyer/Customer Power :>Buyer is having bargaining power dueto low switching costs associated withselecting from among competingbrands.
Segment-Wise Positioning
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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 targetedand best suited for Indian roads
Segment-Wise Positioning
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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 willserve the customer with hassle free service
Segment-Wise Positioning
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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
Prosperitythrough a variety of existing and new agriinitiatives to impact the lives offarmers, enabling them to RISE above their current realm of possibility.
Strategic decision taken in the past
and their results
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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 bikesTVS 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
Strategic decision taken in the past
and their results
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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
Strategic decision taken in the past