automotive axles ltd

8/7/2019 Automotive Axles Ltd

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Automotive Axles Ltd.

A - Team

Aparna G

Anirudh Sonthalia

Srinivasa Rao N M

Kanhu Charan Mahapatra

Vivek Jain

Business Marketing


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AAL An Overview

Organizational Buying Behaviour

Market Segmentation

4Ps of Marketing

Market Potential

Sales Forecasting


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AAL An Overview

Established in 1981

JV between Kalyani Group and Arvin Meritor Inc., USA

Manufacturing facilities at Mysore

The largest independent manufacturer of Rear Drive Axle

Assemblies


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Product Offering

Single Drive Axle

Tandem Drive Axle

Non Drive Axle


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AAL - Clientele

Domestic OEMs


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AAL - Clientele


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Scope


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Sales & Marketing


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Market Share (Volume Wise)


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Sales Break-up


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Revenue Split

Quarter Revenue (%)

First Quarter 33%

Second Quarter 20%(Monsoon)

Third Quarter 25%

Fourth Quarter 15% 20%(year end)


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Revenues Break-up


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Organizational Buying Behavior


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The Process


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Process at AAL

Customers recognize the need- tones and power

Send their product specifications and design

Send a Request for Information (RFI) to theirsuppliers

Send a Request for Quotation (RFQ)

Can decide on multiple suppliers for de-risking


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Process at AAL (contd)

Meritor carries out the prototype testing whereas beta

testing is done by the clients

Production starts after the approval of prototype

AAL decides on the Bill of Materials (BOM) and the

order routine

Delivery varies with the buying situation of the customer

Customer survey - performance review


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Segmentation


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Segmentation

Types of commercial vehicles

LCV : < 5 tonnes

MCV : 5 -12 tonnes

HCV : > 12 tonnes

Caters to 5 tonnes & above category of CVs


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Tonnage

Completely driven by commercial vehicle

manufacturers

Within the HCV and MCV segments there are

vehicles with different gross combination weights

and housing load based on the customers usage

Automotive Axles manufactures axles with varied

load capacity and the power (BHP)


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Different Models

SOLOAXLES TANDEM AXLES


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Transmission to wheel

Based on the number of wheels and differentials in a

HCV or MCV

Various categories

4 2

6 2

6 4

8 4

12 x 4

12 x 6

6

4

Number ofwheels in thevehicle

Number ofdifferentials


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Product

Single Drive Axle

Ranging from 6000 kg to 14000 kg GAWR fortruck, bus, tractor & construction vocations


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Product

Tandem Drive Axle

GAWR capacities from 19000 kg to 28000 kg forvehicles used in the mining & tractorapplications


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Product

Non Drive Axle

used along with drive axles in order to increasethe vehicle load bearing capacity


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Place

One manufacturing plant in India

No distribution channel

Production is based on the order

Some OEMs use their own logistics

Delivery via contracted logistics service providers

VRL and Friendly Logistics


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Promotion

Auto Expo

Defence Expo

Ads in leading Auto magazines

Event sponsors


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Pricing

Products are highly design-oriented and customer-

driven

Cost-based pricing strategy

Cost + Fixed profit percentage = Selling price

Depends on the client specifications and the design

complexity

Single drive axle - Rs. 35,000 to Rs. 1,50,000

Tandem drive axle - Rs. 2.5 lakh (average)


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Market Potential and Sales Forecasting


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Market Potential Based on Users (OEMs)

Determine the expected sales of Commercial

Vehicles in 2010-11

Determine the Percentage of Medium andHeavy commercial vehicles in the CV segment

(More than 5 tonnes)


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CV - Sales


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AAL caters to > 5 tonnes category, i.e., 58%

CV Segmentation


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Calculation

Projected Sales = 8,23,662 vehicles

Segment sales share by tonnage applicable to

Automotive Axles = 58%

(Commercial Vehicles over 5 tonnes)

Market Potential = 8,23,662 * 58%

= 4,77,724 Axles for M & HCVs


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Sales Forecast


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Sales Forecast for 2010-11

Quarter Historical Sales Trend(%)

Sales for 2010-2011(No. of Axles)

First Quarter 30% 39,000

Second Quarter 20% ( Monsoon) 26,000

Third Quarter 25% 32,500

Fourth Quarter 25% (Year-end) 32,500

Total 100% 1,30,000

The actual sales for the quarter endingJune 30, 2010were 38,696 units


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Sales Variance

(Sales Forecast Actual Sales) / Actual Sales

= (39,000 38,696) / 38,696

= 0.0078 or < 1% (1st Quarter)

Reasons

Accurate order quantities for the coming month

Axle is the second most important part in a truck after the

engine. Hence, exact numbers ordered


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Sales Potential

Maximum production potential - 1,68,000 axles / year

3 shifts a day and 7 days a week


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automotive axles ltd

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