presentation on automobile industry1
TRANSCRIPT
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Presentation on
Presented by
Monika Gupta 6010020715076 Anurag Kumar 6010010832293Saurabh Jaiswal 6010020738989
THE AUTOMOBILEINDUSTRY
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Automobile Industry Michael Porter AnalysisGrowth Driver
ExportsTechnology Issue & ChallengesIndustry Outlook
Agenda
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Hero Honda is theleading player in themarket
Introduction of 4-stroke,fuel efficient.New product with variety in model.Invested continuously for
building brand.100% FDI.Low interest rate.Easy financing.
47.8
16.83
28.22
7.14
Hero Honda TVS Bajaj Others
Domestic market share of bike inMarch 2010
Mkt. Share of bike in March 2010
Source : SIAM
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Maruti with 52% of share is leadingplayer in domestic car segment
46.3
30.5
10.5
3.63.1
1.8 1.30.9
1.9MarutiHyundaiTataGMHondaFord
FiatSkoda AutoOther
Easy accessible for all.Launches new
product.Low maintenance
cost.Network has
increased.Lower interest rate.
Easy financing.100% FDI.
Mkt. share of car march 2010
Source : ACMA India
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Tata Motors with 52% of share isleading player in CV
52%30%
8% 10%
Mkt. Share of CV in March2010
Tata Motors Ashok LeylandEicher Motors Other
Source : SIAM
large Indian marketFamiliar with marketBrand loyaltyDeeper distributionCost efficiency
High fuel efficiency.Lower interest rate.New product has been
launched.Ensure durability &
volatility.
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Michael Porter Analysis
It has five force model-Threat of Entry High Licences is not required.
Bargaining powerof supplier
Low The industry being capitalintensive so switching cost is high.Rise in steel price.
Bargaining power
of consumer
Moderate Loyalty on product. Alternative
option.Inter-firm rival High Product differentiation.
Substitute product Low Railway , Airplanes
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.
CompetitionProduction of small and compact car.Increasing outsourcing, collaboration
and joint venture.Entry of foreign companies.
Price competitiveness.Increasing global trade.liberal government policy.Cost efficiency e. g. low labour cost &
raw material play a significant role incoping the competition.
Segmentation of automobile industry and sub segmentation of passenger, two wheeler and CV, so consumer has a widerange of choice.
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Improved intechnology ,design.Lower interest
rate.Easy financing.Mileage
Aggressivepricing.
0200,000
400,000600,000800,000
1,000,0001,200,000
Passenger VehiclesCommercial VehiclesThree WheelersTwo Wheelers
Source : SIAM
Trends of export
Two Wheeler boosted itsexport
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Growth DriverI. Driver Industry / Consumer trends /
Export
II. Regulation
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I. Driver Industry / Consumer
trends/Export 100% FDI.Lower interest rate.Easy financing .
JNNURM for commercial vehicles.Higher disposable income.Increase in infrastructure baseChinese government investmenthad led the growth.NATRIPS is set up for boostingexport , R&D, manufacturing etc.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2004-05 2005-06 2006-07 2007-08 2008-09
(IN USD MILLION )
(IN USD MILLION)
Growth in revenue
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Road networks are increased.Lower penetration rate.Reduction in excise duty
Improving infrastructure due to the growth of economy.Low base effect .Innovation in technology , design & efficiency
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Issue & Challenges Decrease in profitability.Cost of production is high.Rapid changes taking place.
Rising fuel prices.Rise in raw material.Global competence.Fuel efficiency.Increasing environmental pollution.Nurturing talented manpower.Third party logistics
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II. Regulation
The Exim Policy 2001 lifted quantitativerestrictions on the import of second-hand vehicles.FDI, external commercial borrowing (ECB).
Reduction in tariffs.Implementation of BS IV normsEmission Norms, safety regulation norms .
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The GOIs constructed an AMP2016 to make India a globalautomotive hub. Automotive Mission Plan, alsoprovide a level playing field to theplayers in the sector and to lay apredictable future direction of growth to enable themanufacturers in making a moreinformed investment decision . Industry has shown continuousgrowth.The government can play animportant role in promoting &increasing the sale over the year.
Contd:
Automobile industry : Outlook
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Series1
Source : SIAMA India
Sale trends of Automobile
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Service outsourcing opportunity.
Increase in employmentopportunity.There is need for innovation & upgradation for sustaineddevelopment of these sector.
Investment of $35-40bn forcreating value chain under AMPplan.From the chart it is clear that thesale of vehicle will increase as per
expectation . Out of these two wheeler will lead.
0 5 10 15 20 25 30
Car
Cv
Three Wheelers
Two Wheelers
Car Cv Three Wheelers Two Wheelers
Series1 2.65 0.64 0.87 27.8
Series1
Potential Vehicle sale in India(2015-16)Million unit
Source SIAMA : India
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Thank You