shobhit research report.docx

7/24/2019 Shobhit research report.docx

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INTRODUCTION

AUTOMOBILE INDUSTRY

One of the greatest creations of man, the "Automotive Car" or popularly known as "Car" is a

result of man's consistent efforts and perseverance. Over the years, the automobile industry

has evolved as one of the main revenue generators, provider of employment and has

progressed immensely.

Automobile can be basically defined as a self-propelled vehicle used primarily on public

roads but adaptable to other surfaces. he concept of automobiles was developed form a

horse carriage. Automobiles changed the world during the !thcentury. #rom the growth of

suburbs to the development of roads and highway systems, these so-called horseless

carriages has forever altered the modern landscape. Automobiles have brought about greater

mobility and also have opened up a new source of $ob creation. %e live in the Age of

Automobiles, and they will no doubt continue to shape our culture, economy and thus keep

on enriching our lifestyles in the future.

&ie, style, number of doors, and intended use can classify automobiles. he typical

automobile, also called a car, motorcar, passenger car, has four wheels and can carry up to si(

people, including the driver. )arger vehicles designed to carry more passengers are called

vans or buses. hose used for carrying cargo are called pickups or trucks depending upon

their sie and design. *inivans are van-style vehicles built on a passenger car platform that

usually carryupto eight passengers.

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he cars are basically classified by their body structure and utility as follows -

A normal or basic passenger car having four doors is called a &edan, which depicts its shape.

A hatchback is a sedan but with a compact boot. &port-utility vehicles, also known as &+s,

are more rugged than passenger cars and are designed for driving in mud or snow. A coupe is

usually a two-door sedan with a sloping roofline. A convertible is a sedan, hatchback or

coupe whose roof can be retracted. Convertibles having two seats including driver are also

called roadsters. *ulti-utility vehicles, also known as *+s are vehicles similar to &+s

but less rugged. hey are concentrated more on passenger seating and comfort thus are

shorter and longer than &+s.

he engineering that helps function a vehicle arerive train and chassis, /ngine, &teering,

&uspension, &afety parts and electronics.Chassis is an internal framework that supports the

vehicle.he under part of a chassis consists of the frame 0on which the body is mounted1

with the wheels and machinery. /ngine is a motor that powers the car. &teering is a type of

control that helps to direct the car depending upon the driver input. &uspension is a set of

springs, shock absorbers and linkages that serves as a dual purpose - contributing to the

vehicle's road handling and braking for safety and driving pleasure, and keeping vehicle

occupants comfortable and isolated from road noise, bumps, and vibrations,etc. &afety parts

include doors, bumpers, bonnet, hood, etc. which helps in providing safety to the occupants.

And electronics are the vehicles lighting, 0/ngine Control +nit1 /C+s etc.

hus an Automobile is a comple( piece of engineering that has made our lives more mobile

and lu(urious. Automobiles have gone through tremendous changes since the time they were

introduced. oday automobiles are not only considered as a means of transport but also as a

status symbol that enhances ones personality.

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Automobile industry is a symbol of technical marvel by human kind. 2eing one of the fastest

growing sectors in the world its dynamic growth phases are e(plained by nature of

competition, product life cycle and consumer demand. oday, the global automobile industry

is concerned with consumer demands for styling, safety, and comfort3 and with labor

relations and manufacturing efficiency. he industry is at the crossroads with global mergers

and relocation of production centers to emerging developing economies.

ue to its deep forward and backward linkages with several key segments of the economy,

the automobile industry is having a strong multiplier effect on the growth of a country and

hence is capable of being the driver of economic growth. 4t plays a ma$or catalytic role in

developing transport sector in one hand and help industrial sector on the other to grow faster

and thereby generate a significant employment opportunities. Also as many countries are

opening the land border for trade and developing international road links, the contribution of

automobile sector in increasing e(ports and imports will be significantly high. As automobile

industry is becoming more and more standardied, the level of competition is increasing and

production base of most of auto-giant companies are being shifted from the developed

countries to developing countries to take the advantage of low cost of production. hus,

many developing countries are making serious efforts to grab these opportunities that include

many Asian countries such as 4ndia, hailand, China, and 4ndonesia.

Background of Automobil Indu!tr"

he automobiles industry for many years operated in a seller's market. 4n such a

scenario the manufacturer could offer outdated models and also raise prices at

will. )ittle or no attempt was made to control costs or to offer new products. )ack

of innovation restricted the consumers options to the models offered by these

companies.

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he number of manufacturers 0domestic and foreign1 increased dramatically after

the de-licensing of the sector. 4ncreased competition has forced companies to

focus on cutting costs, improve technology and styling through research. 4t has

also constrained them to limit price increases.

Availability of easy credit facilities also resulted in creating demand for

automobiles. he car financing market has boomed from a turnover of 5s 6,

m in #789 to nearly 5s :9, m in #786.

Structur

he 4ndian automobile industry can be broadly classified into;

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Trnd! in ,a!!ngr Car . Utilit" -#icl Sal!

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he passenger car segment has seen rapid growth on the back of rise in disposable

income, increased availability of consumer finance, and reduction in e(cise and customs

duties. =ost-88, this segment has seen ma(imum foreign investment. here is a clear

segmentation of passenger cars based on price and sie. %hile the lower and medium

range cars 0*aruti, #ord, Cielo1 have been moderately successful, lu(ury cars such as

*ercedes have found the going tough.

he C segment is directly linked to industrial production and foreign trade and is

therefore sub$ect to cyclical fluctuations of the economy. he demand for Cs is related

to growth in movement of goods transported and freight rate levels, both of which are

linked to level of production.

Commrcial -#icl Sal! /ro%t# $.! II, /ro%t#

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0ISTORY O* INDIAN AUTOMOBILES

4ndian automobile industry has grown heaps and bounds since ?8?, a time when a car

had touched the 4ndian streets for the first time. he beginnings of automotive industry in

4ndia can be traced during 8@s. After the nation became independent in the year 8@6,

the 4ndian overnment and the private sector launched their efforts to establish an

automotive component manufacturing industry to meet the needs of the automobile

industry. he growth of this segment was however not so encouraging in the initial stage

and through the 89s and 8Ds on account of nationaliation combined with the license

ra$ that was hampering the private sector in the country. >owever, the period that

followed 86s, witnessed a sieable growth contributed by tractors, scooters and

commercial vehicles. /ven till those days, cars were something of a sort of a ma$or

lu(ury. /ventually, the country saw the entry of Eapanese manufacturers establishing

*aruti+dyog. uring the period that followed, several foreign-based companies started

$oint ventures with 4ndian companies.

uring 8?s, several Eapanese manufacturers started $oint ventures for manufacturing

motorcycles and light commercial vehicles. uring this time, that the 4ndian government

selected &uuki for a $oint venture to produce small cars. #ollowing the economic

liberaliation in 88 and the weakening of the license ra$, several 4ndian and multi-

national car companies launched their operations on the soil. After this, automotive

component and automobile manufacturing growth remarkably speed-up to meet the

demands of domestic and e(port needs.

/(perts have an opinion that during the early stages the policies and the treatment by the

4ndian government were not favorable to the development of the automobile industry.

>owever, the liberaliation policy and various ta( reliefs announced by the 4ndian

government over the recent past have pronounced a significantly encouraging impact on

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this industry segment. /stimates reveal that owing to several boosting factors, 4ndian

automobile industry has been growing at a pace of about ?F per year. herefore, global

automobile giants like olvo, eneral *otors and #ord have started looking at 4ndia as a

prospective hot destination to establish and e(pand their operations. he economic

liberaliation that dawned in 4ndia in the year 88 has succeeded in bringing about a

sustained growth in the automotive production sector triggered by enhanced

competitiveness and rela(ed restrictions prevailing in the 4ndian soil. A number of 4ndian

automobile manufacturers including ata *otors, *aruti &uuki and *ahindra and

*ahindra, have dramatically e(panded both their domestic and international operations.

he countrys active economic growth has paved a solid road to the further e(pansion of

its domestic automobile market. his segment has in fact invited a huge amount of 4ndia-

specific investment by a number of multinational automobile manufacturers. As a

significant milestone in its progress, the monthly sales of passenger cars in 4ndia

e(ceeded , units in #ebruary !8.

)ike many other nations 4ndias highly developed transportation system has played a

very important role in the development of the countrys economy over the past to this

day. One can say that the automobile industry in the country has occupied a solid space in

the platform of 4ndian economy. /mpowered by its present growth, today the automobile

industry in the country can produce a diverse range of vehicles under three broad

categories namely cars, two-wheelers and heavy vehicles. he automobile sector in 4ndia

has always been largely influenced by government reforms. 4n 88, the congress led

government launched a comprehensive reforms program that changed the economic

scenario for ever.

=rior to 883 the investment in the backbone sectors such as heavy, basic B capital

goods were reserved for the government alone and were referred to as the =ublic &ector.

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Also one very interesting thing to be seen with the 4ndian automobile industry is that

during the early days of the license ra$ and even some time after the 88 reforms were

introduced3 cars were still an instrument of lu(ury for the average 4ndian3 but after this

Cars have only become more and more affordable to the average 4ndian and thus cars are

now becoming a necessity and this goes a long way in determining what type of cars to

introduce in the 4ndian market.

4ndia has emerged as one of the world's largest manufacturers of small cars. 4n !?,

>yundai *otors alone e(ported !@, cars made in 4ndia. Gissan *otors plans to

e(port !9, vehicles manufactured in its 4ndia plant by !. &imilarly, eneral

*otors announced its plans to e(port about 9, cars manufactured in 4ndia by !.

4n &eptember !8, #ord *otors announced its plans to setup a plant in 4ndia with an

annual capacity of !9, cars for +&H9 million. ata *otors has been focusing on

the e(port market in recent years and apart from &outh Africa it has been e(porting to

some other African countries, /urope, *iddle /ast and in the Asian markets.

Auto industry has gone through a critical transformation since the last two decades with

startling designs and state of the art innovations. 4t is anticipated that automotive industry

has got at its enith with e(traordinary B numerous designs and brands in the market.

he key global auto players like the Audi, the >yundai, the Gissan, the oyota, the #ord

and many more have turned the auto world upside down with their perpetual changes in

the technology of auto manufacturing. he crae for car collection, makes people go to

any e(tent in order to procure a car of their own choice, and they can even import cars

from overseas and are willing to pay all types of duties and ta(es.

lobaliation of the industry and a tremendous $ump in the sales B production in the

developing countries besides promising market in the developed nations have

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transformed the facets of the auto mobile industry. 4nnovation in the auto industry is

something pre-reIuisite, that is accelerating, because auto-makers are not only concerned

about present models but also conceiving the idea of designing the future cars. op car-

makers are slated to take a resort to supercomputing technologies in order to conduct

research focused at developing pollution free and less fuel consuming vehicles, and

lowering CO! emissions, enhancing safety and cost efficiency. All these innovations B

technologies make automotive industry remain evergreen.

emand for utility vehicles and tractors come from rural 4ndia. hese vehicles have

witnessed steady demand growth over the past few years due to successive monsoons,

better procurement prices, improved irrigation facilities, and availability of finance.

A strong in-house 5B capability allows a manufacturer to develop and introduce

products at lower prices, thus saving costs of importing technology. >owever, 4ndian

companies spend very little on 5B.

Availability of Iuality components is another factor that determines smooth production

without bottlenecks. >igh re$ection rate of auto components has prompted several global

ma$ors like #ord, to get their international suppliers

4n the year 6D8, a #rench engineer by the name of Gicolas E. Cugnot invented the

first automobile to run on roads. his automobile, in fact, was a self-powered, three-wheeled,

military tractor that made the use of a steam engine. he range of the automobile, however,

was very brief and at the most, it could only run at a stretch for fifteen minutes. 4n addition,

these automobiles were not fit for the roads as the steam engines made them very heavy and

large, and reIuired ample starting time. Oliver /vans was the first to design a steam engine

driven automobile in +.&.

A &cotsman, 5obert Anderson, was the first to invent an electric carriage between

?:! and ?:8. >owever, homas avenport of the +.&.A. and &cotsman 5obert avidson

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were amongst the first to invent more applicable automobiles, making use of non-

rechargeable electric batteries in ?@!. evelopment of roads made travelling comfortable

and as a result, the short ranged, electric battery driven automobiles were no more the best

option for travelling over longer distances.

he Automobile 4ndustry finally came of age with >enry >yundai in 8@ for the

bulk production of cars. his lead to the development of the industry and it first begun in the

assembly lines of his car factory. he several methods adopted by >yundai, made the new

invention 0that is, the car1 popular amongst the rich as well as the masses.

According the >istory of Automobile 4ndustry +&, dominated the

automobile markets around the globe with no notable competitors. >owever, after the end of

the &econd %orld %ar in 8@9, the Automobile 4ndustry of other technologically advanced

nations such as Eapan and certain /uropean nations gained momentum and within a very

short period, beginning in the early 8?s, the +.& Automobile 4ndustry was flooded with

foreign automobile companies, especially those of Eapan and ermany.

he current trends of the lobal Automobile 4ndustry reveal that in the developed

countries the Automobile 4ndustries are stagnating as a result of the drooping car markets,

whereas the Automobile 4ndustry in the developing nations, such as, 4ndia and 2rail, have

been consistently registering higher growth rates every passing year for their flourishing

domestic automobile markets.

Automobil Indu!tr" Trnd!

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4n keeping with the Automobil Indu!tr" Trnd!, the leading automobile

manufacturers are turning to the Asian markets that appear set to grow immensely over the

ne(t decade. he automobile markets in the +.&., /urope and the Eapan have almost matured

as a result of saturation and appear set to decline through the ne(t decade. 4n contrast, the

automobile markets spread over the entire Asian continent 0with the e(ception of Eapan1, are

constantly increasing in sie and will be the destination for most of the globally leading

automobile manufacturers.

he Automobil Indu!tr" Trnd! reveal that the emerging markets of the

developing nations of Asia especially China, and 4ndia are backed by their huge population

growth rate, to add to the growing national economy of these two nations.

he rapid growth of the national economy of the 254C countries 0including 2rail,

5ussia, 4ndia, and China1 has enabled a growing section of the population of these countries

to purchase automobiles. lobal surveys conducted recently reveal that within the ne(t ten

years, these emerging automobile markets will account for nearly a whooping 8 percent of

the global automobile sales growth. As a result of this, leading Automobile manufacturers of

the world are setting up factories in the emerging markets, in order to serve the potential

consumers better as well as reduce manufacturing and shipping costs. 4n addition, these

arrangements are enabling the leading global automobile manufacturers to compete with the

local automobile manufacturers, which were flourishing in the absence of Iuality

competition. he prosperity of the national economy is reflected in the rising per capita

income of the developing nations. herefore, increasing ross omestic =roduct and per

capita income have raised the purchasing ability of the population that constitutes these

emerging markets..

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S1OT ANALYSIS O* INDIAN AUTOMOBILE INDUSTRY

Strngt#!

omestic *arket is large

overnment provides monetary assistance for manufacturing units

5educed )abor cost

1akn!!!

4nfrastructural setbacks

)ow productivity oo many ta(es levied by government increase the cost of production

)ow investments in 5esearch and evelopment

O22ortuniti!

5eduction in /(cise duty

5ural demand is rising

4ncome level is at a constant increase

T#rat!

4ncreasing rates of interest

oo much competition

5ising cost of raw materials

INDIAN MAR3ET C0ALLEN/ES

4n addition to its many opportunities, the 4ndian automotive industry presents challenges for

all players. =olitical and economic stability in 4ndia and stable global financial markets are

the keys to meeting predicted growth rates3 however, stability has been hard to come by.

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/lobal Economic Cri!i!

#or the short term at least, the global economic crisis has slowed 4ndias economy and the

commercial vehicle market. he medium and heavy commercial vehicle markets havebeen

affected more than light commercial vehicles. Consumer lending has been severely affected.

Although interest rates have been reduced, the percentage of loan approvals has also

declined. Customer trade-downs mean lower trim levels and lower-end models.

espite all this, the four-wheel passenger vehicle market is e(pected to reach appro(imately

D percent

growth, far below the historic @ percent CA5, but a healthy level nonetheless. As noted

above, the news is not so good for the commercial vehicle sectorJsales are e(pected

to decline by :9 percent for #78. %ith support for financing from the government, sales

should recoverin #7. he two-wheeler segment has shown some resistance to the global

crisis3 however, in a broader market collapse, this segment will suffer as well.

Commodit" ,ric!

As discussed, the two-wheeler industry faces homegrown competition from ultra-low-cost

cars priced at H!,9 and less. A return to high steel prices will challenge these ine(pensive

four- wheelers. *anufacturers have little option but to pass cost hikes on to low-wage

consumers. Oil and other commodity price increases will also challenge the four-wheel

passenger market. Commodity prices may be depressed in a slowing worldwide economy,

but theyre in for another rapid rise once global economic growth recovers.

Infra!tructur and Tc#nolog"

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4f 4ndia is to achieve the full potential offered by motor vehicle industry growth, it must

address several challenges. /missions and safety standards in 4ndia are not up to /uropean or

Gorth American standards3 without reform in these areas, 4ndia wont be taken seriously as a

vehicle e(porter. At the same time, the commercial vehicle industry in 4ndia faces legislation

that would mandate anti-lock braking 0A2&1 and anti-skid technologies3 with a high

personal-ownership rate for commercial vehicles, it will be difficult to pass on the increased

cost of such safety mandates to price-sensitive consumers.

4nfrastructure development in 4ndia must keep pace with the growth of small cars on the

road. 4mpediments to the construction of the olden Kuadrilateral, the highway connecting

the countrys ma$or metropolitan cities in a giant ring, would directly affect commercial

segment sales. Currently 4ndia has only :,6 miles of highway, compared to !9, miles in

China and @D, miles in the +nited &tates. iven this underdevelopment in infrastructure,

4ndia needs to redefine the normal commercial truck pyramid by emphasiing sales of small

and light commercial vehicles.

AUTOMOBILE MAR3ETIN/ IN INDIA

he competitive nature of the automobile industry has prompted the companies to take up

new and innovative marketing strategies to survive the competition. he lu(ury segment of

cars is the segment, which sees ma(imum competition as the consumer has a number of

models to choose from and it's the volumes, which drive the margins.

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All the companies as a part of their marketing strategy offers a range of vehicles in all the

segment to make sure that the customer is driving one of their vehicles only.

Advertisements on the audiovisual medium are a rage as it gives the carmakers an

opportunity to flaunt their cars. #lashy cars can be demonstrated on television but when it

comes to the finer prints of the cars, print and online media comes to the rescue.

he online medium offers a greater fle(ibility to the car companies since they come with a

lot of interactive features like demonstrating the interiors of the car with its salient features.

he print medium on the other hand provides an opportunity to the car makers to e(plain the

function of a car in detail.

Celebrity endorsements and testimonial advertisements have come a long way and they are

also doing their bit to sell the cars. &uper star &hahrukh Lhan has been associated with

>yundai *otor Company for a long time and he comes regularly on television to promote

the cars. &imilarly #ord has roped in Eunior 2achan for the promotion of the latest offering

from the company. On a similar note &aif Ali Lhan and 5ani *ukher$ee is shown chasing

each other with a Chevrolet.

Aamir Lhan who is considered to be one of the most talented actors in the industry is

freIuently seen changing roles on screen to promote oyota.Cricketers haven't been left

behind in the race of promoting cars. #iat had received a great thrust when the batting

maestro &achin endulkar took up the promotion of the car. 4n addition to the publicity and

advertisement that is done by the companies there are certain innovative strategies that are

taken up by the companies to beat the competition from time to time.

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he India Automobil Markt is a promising industrial sector that is growing

immensely every passing year. he passenger cars are referred to, through the use of the

word "automobile." he whooping growth e(perienced by the 4ndian Automobile *arket in

the last financial year itself that is the financial year end in #ebruary, ! was very close to

a :? percent over the previous fiscal. his statistical fact is a glittering e(ample of the

potential of the growing Automobile 4ndustry in 4ndia.

As per the survey conducted by the &ociety of 4ndian Automobile *anufacturers,

the total number of automobiles manufactured by the Automobile 4ndustry in 4ndia,

throughout the financial year !-, was very close to the :9.9 lakh 0:.9 million1 margin.

he huge of number of automobiles manufactured by the Automobile 4ndustry in 4ndia was

an enormous growth upon the number of automobiles manufactured during the previous

fiscal that ended in !.

he total number of cars that were e(ported from 4ndia was very close to the 9. lakh

09. hundred thousand1 margin, an encouraging sign for the Automobile 4ndustry in 4ndia.

he e(port of cars manufactured in 4ndia comprised nearly :: percent of the total number of

cars manufactured domestically by the Automobile 4ndustry in 4ndia.

he 4ndia Automobile *arket looks set to prosper, largely due to the growing market for

automobiles that is developing in 4ndia. 4n the financial year that ended in #ebruary, !8,

the 4ndian automobile markets were the fastest growing in the world, with the registered

growth rate touching nearly ! percent.

he Automobile 4ndustry in 4ndia mainly comprises of the small car section, which

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poised to become even larger and enter the top five passenger car markets in the world in the

ne(t decade.

#ollowing 4ndia's growing openness, the arrival of new and e(isting models, easy

availability of finance at relatively low rate of interest and price discounts offered by the

dealers and manufacturers all have stirred the demand for vehicles and a strong growth of the

4ndian automobile industry.

he data obtained from ministry of commerce and industry, shows high growth obtained

since !- ! in automobile production continuing in the first three Iuarters of the !@-9.

Annual growth was D. per cent in April-ecember, !@3 the growth rate in !:-@ was

9. per cent.

%ith investment e(ceeding 5s. 9, crore, the turnover of the automobil

indu!tr"e(ceeded 5s. 98,9? crore in !!-:. 4ncluding turnover of the auto-component

sector, the automotive industry's turnover, which was above 5s. ?@, crore in !!-:, is

estimated to have e(ceeded 5s.,, crore 0 +& !!. 6@ billion1 in !:-@.

Auto 2olic" of t# /o$rnmnt of India

-ISION

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o establish a globally competitive automotive industry in 4ndia and to double its

contribution to the economy by !.

,OLICY OB4ECTI-ES

his policy aims to promote integrated, phased, enduring and self-sustained growth of the

4ndian automotive industry. he ob$ectives are to;-

/(alt the sector as a lever of industrial growth and employment and to achieve a high

degree of value addition in the country3

=romote a globally competitive automotive industry and emerge as a global source

for auto components3

/stablish an international hub for manufacturing small, affordable passenger cars and

a key center for manufacturing ractors and wo-wheelers in the world3

/nsure a balanced transition to open trade at a minimal risk to the 4ndian economy

and local industry3

Conduce incessant moderniation of the industry and facilitate indigenous design,

research and development3

&teer 4ndia's software industry into automotive technology3

Assist development of vehicles propelled by alternate energy sources3

evelopment of domestic safety and environmental standards at par with

international standards.

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&4A* welcomed the announcement of Auto =olicy, and feels that the policy would serve as a

reference document for all stake holders and other interested parties.

he Auto =olicy has spelt out the direction of growth for the auto sector in 4ndia and

addresses most concerns of the automobile sector, including-

=romotion of 5B in the automotive sector to ensure continuous technology

upgradation, building better designing capacities to remain competitive3

4mpetus to Alternative #uel ehicles through appropriate long term fiscal structure to

facilitate their acceptance3

/mphasis on low emission fuel auto technologies and availability of appropriate auto

fuels and encouragement to construction of safer busowever, this aspect has not been fully addressed. he Auto

=olicy allows automatic approval for foreign eIuity investment upto F in the automotive

sector and does not lay down any minimum investment criteria.

he recommendation of promoting passenger cars of length upto :.? meters through e(cise

benefits is not in line with the free market concept and may lead to market distortion.

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>owever, with the Auto =olicy in place, the automotive industry would get further fillip to

become vibrant and globally competitive. he industry would get the reIuired support from

other *inistries and departments of overnment of 4ndia in achieving the goals laid down in

the auto policy.

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Rol of /o$rnmnt in Automobil Indu!tr"

he government is making efforts to overcome the constraints at their research

centers for automobile industry. 4ndia can also learn from countries like Eapan that are

already using these technologies for a wide number of applications. he 4ndian auto industry

should launch programmes for market development and a wider acceptance of alternative

energy-driven vehicles in 4ndia. 4t should also work in tandem with the government to make

4ndia a world leader in this area.

4ndian automobile industry is also consistently trying to meet the emerging

challenges of environmental pollution and better safety standard. According to a study,

automobile e(haust contributes more than DF of the atmospheric pollution in metropolitan

cities, with the growing number of vehicles, the pollution in the cities is continuously

increasing. overnment initiated controls by notifying emission standard from the year 88!

under which were furthers tightened in April 88D under the *otor ehicles Act. /uro-4

emission norms have already been made applicable throughout the country and 4ndian is

poised to induct /uro-44 norms across the country by April !9. #orm that date 6

metropolitan cities are going to switch over to /uroM444 norms. o meet this emerging

challenges of newer emission norms 4ndian automobile industry has already braced itself up

with new investment and fresh technological induction.

%ith the growing number of vehicles, the pollution in the cities is ever increasing.

overnment initiated controls by notifying emission standards from the year 88! which

were further tightened under the *otor ehicle Act. #or meeting these norms, unleaded

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petrol was also introduced in metropolitan cities from 889, which enabled fitments of

catalytic convertors on new petrol driven vehicles. he norms are being further tightened

from April,! when 4ndias stage one norm eIuivalent to /uro-4 will become effective. #or

!-wheelers, 4ndia has announced one of the tightest norms in the entire world. 4n the national

capital territory region of elhi, 4ndias stage ! norms eIuivalent to /uro-44 norms, will be

effective from April, !, as per the order of >onble &upreme Court. his would apply to

passenger cars.

he government seems most keen to hand over a huge replacement market on a

platter to the automobile industry without ensuring that manufacturers take responsibility of

the emission performance of the vehicles they produce for its useful life. 4n fact the most

important action point that was recorded after the ministerial consultation was that

manufacturers would have to give emissions warranty for two- wheelers from 2ut ultimately,

the government could not muster enough courage to push the mighty automobile industry

and enforce it.

overnment will encourage and assist establishment of specialied training institutes

for the automobile sector through the active association of interested automobile industries.

hese institutes will be set up in 2idadi 4ndustrial area and harwad rowth center. he

4nstitute will be managed by the participating automobile industries and will train skilled

category of auto workers, in specified skill areas such as painting, welding, auto mechanical,

etc. 4t also is making an effort abe to enlist the support of multilateral aid institutions to

provide part of the funding for this pro$ect, which promises tremendous environment-

improvement benefits for the vehicle, which create pollution.

he policy of broadbanding capacities in the eighties led to increased utiliation of

capacity for four-wheelers in the industry.

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he liberal policy on foreign participation through technical and financial

collaboration in early eighties led to substantial product upgradation and introduction of new

models. 2ut it was alleged that the policy was discriminatory in favor of *+), while others

like elco, =A), >* were denied permission to produce cars in collaboration with Eapanese

companies.

he O4 controls the car sector by way of framing policies on depreciation norms,

import duty on cars and parts used in it, petrol prices and import duty of steel.

uring the era of socialist inspired controls, the government protected the car

industry from new entrants by making effective use of licenses. >owever, after liberaliation

and with the conseIuent opening up of the auto sector in 88!-8:, the license ra$ ceased to

e(ist .

he perception of a car as a lu(ury good lead to heavy e(cise duty on cars. he e(cise duty

doubled from !9F in #7?6 to 99F in #78. ill 8?6, the O4 followed a discriminatory

policy so as to charge lower duty on fuel efficient car with engine capacity of less than

cc. his helped *+) to price its car at a lower price in comparison to others. 2ut with

lobbying from =A) and >* government withdrew the provision in 8?6.

2ut with the onset of the liberaliation process in the early nineties, the government

has continually rationalied the e(cise duty regime. =resently, there is a duty of @F 0DF N

!@F1 on motor vehicles, designed for transport of not more than si( persons 0e(cluding the

driver1. On vehicles designed for transport of more than si( persons, but not more than !

persons, the duty is :!F 0DF N DF1. Over and above the e(cise duty, cess by the Central

overnment, states are now charging a uniform sales ta( of !F. his came in being after

25


26/83

the 9th of *ay !. /arlier, states used to charge sales ta( varying from : to @F. 2ut

*+) vehicles receive favorable treatment in terms of sales ta( as well.

4n line with its treatment for lu(ury items import duties for car have been maintained high.

4n the ?'s, import duties varied between 9 to !F based on the engine capacity of a car.

he import duty on cars and components has come down in the last few years in line with

general reduction in import tariffs. 4n the #78? budget, the import duty on cars has also been

further brought down from 9F to @F ad valorem. &ubstantial reduction in import duty has

been e(tended in the budget #78? for import of certain items which would help the industry

to reduce the emission level of vehicles. he import duty on catalytic converters and parts

thereof has been reduced from !9F to 9F. he duty on CG kits and parts thereof have

been reduced from F to 9F.

he import duty on auto components will be a key factor in deciding the final

pricing of cars as new ventures start with about 9F indigenisation levels. he reduction in

import duty on steel in the last few years has helped the industry in reducing raw material

costs as ma$or steel reIuirement of car industry was imported. /ven today, all CL


27/83

MA4OR ,LAYERS IN AUTOMOBILE SECTOR

MarutiUd"og Ltd5

ecember 8?: heralded a revolution in the 4ndian car industry. *aruti collaborated with

&uuki of Eapan to produce the first affordable car for the average 4ndian. At this time, the

4ndian car market had stagnated at a volume of :, to @, cars for the decade ending

8?:. his was from where *aruti took over.

Gineteen years back *aruti introduced the first small car in the 4ndian auto market. hey

started with their model *aruti ? which was very popular at that time and still its ma$or

cash cow. he models, which were available at that time, were =remier =admini and

Ambassador. Customers were interested in having some different types of models with some

fashionable looks. hat was the perfect time to enter into market and *aruti took right step

to introduce its different models.

*aruti established its monopoly over 4ndian auto market 4ndia's largest automobile company,

*aruti entered the 4ndian car market with the avowed aim to provide high Iuality, fuel -

efficient, low - cost vehicles. 4ts cars operate on Eapanese technology, adapted to 4ndian

conditions and 4ndian car users. *aruti comes in a variety of models in the small segment.

he sales figure for the year 88: reached up to ,8D,?!. he company reached a total

production of one million vehicles in *arch 88@ becoming the first 4ndian Company to

cross this milestone. 4t crossed the two million mark in 886.

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o fend off growing competition, *aruti has recently completed a 5s. @ billion e(pansion

pro$ect at the current site, which has increased the total production capacity to over :,!,

vehicles per annum. 4t has further plans to modernie the e(isting facilities and to e(pand its

capacity by ,, units in the year 88?-88. he total production of the company will

e(ceed @,, vehicles per year.

*aruti registered sales of :8,?:? units in April !@, up :?.@F yoy from !?,68: vehicle

units in April !:. his includes !,8 units of e(ports compared to :,9 in April !:,

decreasing by 6.DF.

Sal! for A2ril 6789&

Sgmnt Modl! A2ril

6789

A2ril

678:

( c#ang

A2ril;8:


29/83

otal &ales:8,?:? !?,68: :?.@F @6!,!!

he A segment has grown by :.:F yoy from ,6@ units in April !: to ,86 units.

his is lower compared to some of its other segments. he A! segment comprising of the

Alto, %agon5 and en registered a F growth from 8,DD? units in April !: to 8,!8D

units, mainly driven by rising Alto sales. he A: segment has grown by :?F yoy to ,:: in

April !@ from 89! in the same period last year.

he C segment comprising of the Omni and the ersa has shown a !.!F growth yoy from

:,86! in the same period last year to @,?D.

4n the multi utility vehicle 0*+1 comprising ypsy and itara, it sold @D units in April

!@ from : units in April !:, a rise of :F yoy.

Modl! of MUL

Alto

*aruti ?

en

%agon 5

Omni

/steem

2aleno

0"undai& Can T# Dram Run Continu=

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>yundai has become the undisputed number two in the 4ndian auto market, and the only

one -- even rivals admit -- with the capability of giving leader *aruti a run for its money

in the total volume stakes though >yundai in 4ndia currently sells $ust about a Iuarter of

the numbers that *aruti does.

>yundai got everything right because it got the value-price-technology eIuation almost

perfectly right from day one. he &antro was an instant winner from the day it was

introduced in the 4ndian market because it offered the optimum mi( of space and

technology in the small car market, at a highly competitive price. And with easy consumer

financing available in the market, >yundai did not have to work too hard to persuade even

entry-level car buyers to go for the &antro instead of the *aruti ?. And when it

launched mid-sie Accent some time later, >yundai proved that it could get its value-price

eIuation consistently right across different segments.

2ut despite its great start, >yundai made two mistakes. he two miscalculations that

>yundai madeP #irst, while >yundai &antro was harping on the fact that it was a new

generation car, it hadn't brought its latest engine technology to 4ndia. 4t was a mistake that

rival *aticapitalised on once /uro-44 pollution norms were announced for the metros.

aewoo made most of the fact that every *ati was /uro-44 complaint -- while >yundai

could offer an /uro-44 version only at a higher price. hough the latter moved Iuickly in a

damage-control e(ercise, the &antro did lose a bit of its sheen. it miscalculated demand for

its cars. he result; when demand peaked for the &antro, it was in no position to offer the

car off-the-shelf like its rivals. 2uyers had to wait for three months to get a &antro after

booking it.

>yundai is moving fast to sort out its capacity problem. %ork will soon start on the

second phase of its &riperumbudur car pro$ect, one year ahead of what was initially

planned. An additional investment of H@ million will help e(pand capacity from .!

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31/83

lakh cars to ! lakh cars per annum. his e(pansion is likely to be completed by ecember,

!, ahead of schedule. 2ut even that could be a bit too late as it gives rivals that much

time to grab sales that would otherwise have gone to >yundai.

hat apart, the big worry for >yundai is that other than the &antro 0the Atos in Lorea1, it

doesn't have any other small car in its armoury. +nlike &uuki, which is primarily a small

car specialist, >yundai can only introduce bigger cars in the 4ndian market either from its

own product range, or those of Lia *otors, which it took over last year.

>yundai is looking a bit vulnerable now because globally it is a minnow in the car market.

4t lacks the sheer money power and product muscle to keep fighting the #ords and *s in

any market. And if #ord does take over aewoo *otors, >yundai's number two position

in 4ndia could be seriously under threat.

0indu!tan Motor!

>industan *otors )td 0>*)1 is the oldest passenger car manufacturer in the country. 4t also

has a small presence in the multi-utility vehicle and the heavy commercial vehicle segments.

he later is generally manufactured for e(ports. Other than the automotive sector, the

company has diversified into earth moving eIuipments and power products. 4n the passenger

car segment, the company has the well known QAmbassador and QContessa models. 4t has

recently tied with *itsubishi of Eapan for manufacturing the Q)ancer range of cars. At

present, the company has a market share of @.!F in the car segment.

>*), incorporated in 8@!, is the flagship company of the C.L. 2irla group of companies

he company became the first manufacturer of cars in 4ndia when it set up its plant at =ort

Okha in u$arat. 4n 8@?, it shifted its activities in +ttarpara near Calcutta and set up

facilities to manufacture cars and trucks. Over the years, >*) has diversified into heavy

31


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engineering eIuipment like e(cavators, cranes, presses and steel products under the heavy

engineering division 0>/1. %ith the division becoming a loss making one, it was hived off

to >yderabad 4ndustries )td, a group company, in #78!. 4n 86, >*) further diversified its

activities to include earth-moving eIuipment such as dumpers, front-end loaders etc by

setting up a plant near Chennai. 4n 8?9, >*) set up a plant at >osur in amil Gadu for

manufacturing heavy-duty transmission reIuired for earth moving eIuipments.

4n 8?D, a pro$ect was undertaken to produce >Cs at adodara. A part of the assets was

later sold to a E between * and >*), eneral *otors 4ndia )td. 4n 8?6, >*)

commenced the production of petrol engines in collaboration with 4suu *otor Company,

Eapan. 5ecently, the company has entered into a technical collaboration with *itsubishi of

Eapan for the manufacture of the Q)ancer car. Commercial production of the car started in

October 88?. >*) also entered into collaboration with OLA *otor Company of Australia

to produce custom-designed rural transport vehicle.

Modl! of 0indu!tan Motor!

Ambassador ? 4&

Ambassador ! &)

Ambassador Gova iesel

Contessa motors

Mit!ubi!#i Motor!

4n the early ?6s, as Eapan emerged from over : years of feudal isolation, a young

entrepreneur, 7ataro 4wasaki, formed a small shipping company named the

sukumo&hokia. #ollowing several name changes this company became *itsubishi *ail

&teamship Company in ?69, the root of the combined *itsubishi Companies of today.

32
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33/83

A family owned and directed business, the company Iuickly e(panded into other fields of

endeavor and became one of the largest combines in pre-world war 44 Eapan. 2y the end of

8@9, business ventures in addition to shipping included heavy industries with ship

building at its helm, banking, trading, mining real estate, chemicals and many other.

he history of *itsubishi as an automobile manufacturer dates back long before the

*otor ehicles ivision of *itsubishi >eavy 4ndustries )td. was incorporated as

*itsubishi *otors Corporation in 86. *itsubishis epoch making vehicles, which rolled

off the assembly line in 86, were the *odel-A, Eapans first series production passenger

cars. Always the innovators, the *itsubishi *odel-A were the pioneers of vehicles in

Eapan. 4n early years, the ship and aircraft-manufacturing arm of *itsubishi produced

vehicles. herein the provenance of *itsubishi *otors engineering e(cellence and the

resultant reputation for outstanding reliability and all around performance of its vehicles.

oday, *itsubishi *otors ranks as one of the largest vehicle manufacturer, and one of the

very few that can boast a vehicle lineup which e(tends from mini cars to heavy-duty trunk

buses and other specialied commercial vehicles.

he all new *itsubishi )ancer comes to you from two automotive giants; >industan

*otors and *itsubishi *otors. A technical collaboration between the two, the pro$ect

brings together their formidable e(pertise and e(perience to provide you with a whole

new automotive e(perience.

*itsubishi *otors brings the most contemporary technology on 4ndian roads. he )ancer

has an impeccable rallying pedigree and has proven it's mettle in the toughest conditions.

he combination of high technology and classic build Iuality continues to woo customers

the world over. *itsubishi provided you with a comfortable and intuitive environment to

e(plore the )ancer. here's virtual reality so you can view the car as you would in one of

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our showrooms, and every aspect of the car is e(plored in detail to let you get a good feel

for the car from the comfort of your own home. here are useful tools to make your

buying process easier.

Got only has >* cleared any doubts pertaining to the Iuality of its locally-made )ancer,

but it has also proved that its mid-sie car is the one customers like or appreciate most.

he )ancer scores superbly in all but the 5ide, >andling and 2raking categories, where

customers find comparatively more problems, as a result of the stiffened and raised

suspension.

he )ancer wins hands down in the A=/A) study too, scoring a full :: points more than

its closest rival, the >onda City a substantial lead. his performance in the A=/A) study

has been achieved due to the fact that the )ancer scores e(tremely well in each of the nine

categories and this makes it the pick of the mid-sie cars by a fair margin.

Modl! of Mit!ubi!#i

*4&+24&>4 *OG/5O &=O5 :.9R&

*ontero

/ndeavor

*ontero sports

Outlander

)ancer /volution

)ancer

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/clipse

/clipse &pyder

alant

imant

Ma#indra > Ma#indra

*B* sold ,:@9 units in April !@, growing by @:F yoy from 6,!:9 during the same

period last year.

Sgmnt! A2ril 6779 A2ril 677: "o" '()

+ ?,:8 9,86 :8.D

)C @8D @: 9.?

hree-wheelers ,9@ ?:: ?@.?6

Total ,:@9 6,!:9 @!.88

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?,:8 utility vehicles were sold in April !@ as compared to 9,86 units during the same

period last year registering a :8F yoy growth. +tility vehicle sales included !,6 units of

the &corpio model compared to ,D@ units last year.

4t sold @8D )C units compared to @: )C units in April !: and ,9@ three-wheelers

from ?:: three-wheeler units in April !:. he )C segment showed a 9F growth

compared to last year, however the company saw a huge growth in its three-wheeler

business, which grew by almost ?9F yoy.

Tata Motor!

ata *otors registered a 96.6F increase yoy in total sales at !@,8D units in April !@,

compared to 9,?!8 units in the same period last year.

he company's sales in the domestic market increased by D.9F yoy at !@,!D vehicles from

@,8DD units in April !:.

-olum! A2ril 6779 A2ril 677: "o" '()

omestic!@,!D @,8DD D.9@

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/(ports8:9 ?D: ?.:@

Total

!@,8D 9,?!8 96.D8

he company e(ported 8:9 units in April !@ as compared to ?D: vehicles in April last

year, which is an ?.:F yoy growth.

C- !gmnt

Commercial vehicle sales at !,9 units compared to 6,:6 units in April last year growing

by 6.!F yoy.

Sgmnt

A2ril 6779 A2ril 677: "o"'()

*C6,869 @,9: 6D.9

)C@,69 !,96 D!.9@

Total

!,9 6,:6 6.!@

*edium and heavy commercial vehicles sales grew by 6D.F yoy at 6,869 units and light

commercial vehicle sales showing a growth of D!.9F yoy at @,69 units.

,a!!ngr car!

he passenger car business reported total sales of ,86D vehicles in the domestic market

registering an increase of 9F over April !:.

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38/83

4ndica sales recorded a @:.:F growth yoy at 6,!9 units, while 4ndigo sales grew [email protected] yoy

at !,6!: units.

Utilit" -#icl!

+tility vehicles registered a sale of !,! units, showing a @:.@F increase as compared to the

same period last year. &umo sales grew by @?F and &afari sales grew by DF over the April

!:.

MAR3ETIN/ STRATE/Y

A marketing strategy is a process that can allow an organiation to concentrate its limited

resources on the greatest opportunities to increase sales and achieve a sustainable

competitive advantage. 4ts a written plan which combines product development, promotion,

distribution, and pricing approach, identifies the firm's marketing goals, and e(plains how

they will be achieved within a stated timeframe. *arketing strategy determines the choice of

target market segment, positioning, marketing mi(, and allocation of resources. 4t is most

effective when it is an integral component of firm strategy, defining how the organiation

will successfully engage customers, prospects, and competitors in the market arena.

*arketing strategies serve as the fundamental underpinning of marketing plans designed to

fill market needs and reach marketingob$ectives. *arketing strategies are dynamic and

interactive. 4t may differ depending on the uniIue situation of the individual business.

On the Canvas of 4ndian /conomy, Auto 4ndustry occupies a prominent place. Automobile

sector is one of the core of 4ndian 4ndustry.Continuous economic liberaliation over the years

by the overnment of 4ndia has resulted in making 4ndia as one of the prime business

destination for many global automotive players.

38
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketing


39/83

One of the largest industries in 4ndia, automotive industry has been witnessing impressive

growth during the last two decades. 4ndian automobile industry has a mi( of large domestic

private players such as ata, *ahindra, 2a$a$, Ashok )eyland and ma$or international players

including *, #ord, oyota, >onda, >yundai, etc. o remain in this competitve market on

has to come up different ides and strategies.

arious *arketing &trategies enables a firm to e(pand business activities for market

reputation, to satisfy human wants , to lead to specialisation and efficient performance of

production function clima(ing in econimic stability.

After liberaliation automobile 4ndustry is growing at very high rate and many new

companies have also entered into market. %ith offering variety of cars in all segments for

everyone. &o it is important to know which company is providing us good Iuality cars at fair

prices and providing better after sales services. And how they are trying to reach customers.

he most obvious ob$ective marketers have for promotional activities is to convince

customers to make a decision that benefits the marketer 0of course the marketer believes the

decision will also benefit the customer1. #or most for-profit marketers this means getting

customers to buy an organiations product and, in most cases, to remain a loyal long-term

customer.

>owever, marketers must understand that getting customers to commit to a decision, such as

a purchase decision, is only achievable when a customer is ready to make the decision.

TITLE O* RESEARC0

SAnalysis of market study for Automobile 4ndustryT

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Markting Mc#ani!m

,romotion

=romotion concerns the message the firm sends out to potential consumers. 4t provides

information and persuades people, it creates awareness, stimulates demand and differentiates

the product and influences public behavior. =romotion wont make a bad product that no one

wants a success3 although the absence of promotion might that a good product is not

successful, promotion includes all the activities or tools a company uses to communicate or

promote its product in the market.

,romotional tool! or 2romotion mi?

85 PERSONAL SELLING& 4t involves personal confrontation either by phone or face, it is

an e(pensive and time-consuming tool of promoting the product.

!. ADVERTISING& 4t is defined as a paid non-personal communication with a target

0usually mass1 market. 4t is cost effective and can reach a large number of people. 4t can

also be used for long term or short term ob$ectives.

here are various forms or mediums through which can advertise.

A5 Broadca!t Mdia&

elevision

5adio

Cinema

B5 ,rint mdia&

Gewspapers

*againes

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)eaflets

C5 Outdoor mdia&

=osters and billboards.

:5 ,UBLIC RELATIONS AN ,UBLICITY&

=ublic relations are an umbrella term and refer to the totality of the organiations behavior

with respect to the society in which it operates. he maybe regarded as good or bad and is

reflected in the companys reputation and image.

95 S,ONSORS0I,&

&ponsorship can be seen as a part of public relations and it is certainly the case that some

sponsorship goes on to generate positive publicity for the organiation.

@5 DIRECT MAR3ETIN/&

4t is an interactive system of marketing which uses one or more advertising media to affect a

measurable response at any locations.

COMMON MAR3ETIN/ STRATE/IES O* AUTOMOBILE

INDUSTRY

Advertising in Gews papers and *againes&+

4n this companies advertise about the car in various local

newspapers like /conomic times and they give detail

e(planation about the feature of the cars, keeping

customers reIuirement. hey also provide various dealers addresses and contact numbers

41


42/83

for reference. Company also tries to advertise through various magaines like Auto Cars,

Overdrive, etc.

/rand Launc# &+

42


43/83

43


44/83

5ecently ata Gano car was grandly launched and created a bu in market. After the launch

media aggressively took interest in providing the minute details about the car to the customer

by showing test drives, etc.

Once the car is launched they give adds in every possible newspaper, car magaines, put

hoardings, display car models in the malls.

Com2an" 2ro$id! ?c#ang offr! to cu!tomr! &+

his is one of the most effective ways adopted by the companies and very successful

marketing strategy, which has helped company increase their sales.

4n this method, companies provide option to buy a new car of your choice in e(change of

their old cars, but the price of old car is decided by the dealer by looking at its condition. 4t

helps customers, as they dont need to go anywhere else to sell their old car. his also helps

companies to increase their sale of new cars.

Adding Star -alu to 2roduct+ Brand Amba!!ador &+

Companies choose brand ambassadors for their cars to reach wide masses. #or e.g. &hahrukh

Lhan promotes >yundai, Abhishek 2achan promoted #ord #iesta, &aif Ali Lhan and 5ani

*ukher$ee promoted Chevrolet Aveo and Amir Lhan promoted oyota 4nnova. Ambassadors

give a special identity to the products.

44


45/83

Com2ani! #a$ !tartd !2on!oring ralit" !#o%! for bttr $i!ibilit" &+

As we all know reality shows are making all time big in television and entertainment

industry. his is really a smart move by automobile companies to gain visibility through

reality shows. he reality shows are aired all over the world and huge number of people

watch it. &o companies sponsor such shows and get noticed./.g. *aruti sponsored 4ndias

ot alent show on Colors channel and gifted 5it to the winner. 4ndian 4dol winner was also

gifted with *aruti &R@.

Mall Di!2la"!

45


46/83

arious companies display their cars in *alls so as to get prime attention. =eople go in *alls

for shopping and hangouts with their friends and family. hey conduct small contests and

give gift hampers as prie. hus they try to attract crowd towards them.

Com2ani! ntr markt %it# #l2 of *ilm!

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47/83

4n terms of marketing strategies Chevrolet Aveo found a uniIue way of advertising by way of

a 7ash 5a$ #ilm production, ara 5um =um. he main motive behind this was to popularie

and promote the product in youth.

Com2ani! S2on!or /o+ 3arting $nt!

o-karting events are really booming up among young crowd. And thats the reason we see

crae for participating in go-karting events is on high. =eople have started taking interest in

the sport and huge crowds turn up for such events. 2ut for sure car companies would to not

like to miss chance of visibility they get in such competitions. #ew years before *aruti

&uuki sponsored Autocross rally. &imilarly ata /ngineering has sponsored Garayan

Lartikeyan as 4ndias /ntry in to the %orld &eries motorcar racing.

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48/83

,r!onal !lling

=ersonal &elling largely takes place at the ealers /nd. he way customer is attended

depends mainly on the ealer as he acts as an interface between the company and the

Consumer. he various cases in which =ersonal &elling takes place is 4ndividual &ales,

Corporate &ales, &ales =resentations, #air and trade &hows. *ostly in case of 4ndividual

&ales the Customer goes to the showroom and takes a look at the product. here he is

attended to by the &ales =ersonnel of the ealership. &ometimes the &enior &ales /(ecutive

has to make &ales =resentation to Corporate 2uyers. =ersonal &elling is also practiced at

rade #airs and Auto &hows wherein the Company appointed &ales =ersonnel attend

prospective customers and also book their orders.

48


49/83

Markt S#ar Of Automobil Com2ani!

46.9

14.6

13.5

6.7

4.3 3.910.1

% Market Share

Maruti Suzuki Ltd. Tata Motors Ltd. Hyundai Motor India Ltd.

Mahindra Mahindra Ltd. !enera" Motors India #$t Ltd. Honda Sie" ars India Ltd.

&thers

49


50/83

RESEARC0 ,ROBLEM

he data which was used in the previous researches was not covering all the aspects

of the Automobile 4ndustry.

he output that the previous reports was showing is not up to the mark.

here was still the scope of analysing more about the Automobile 4ndustry.

he above mentioned reasons compels me to conduct the revised report that covers all the

aspects of Automobile 4ndustry and is helpful to analyse the upcoming circumstances for the

Automobile 4ndustry.

As the scope and impact of Automobile 4ndustry change with the change of time, &o

wanted to know the current facts about the Automobile 4ndustry, that is not been covered in

the previous reports.

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RE,ORT O* *ICCI ON AUTOMOBILE INDUSTRY O* INDIA&

he report of 0#4CC4-!61 specified the overview of automotive industry of 4ndia and

e(plained the added advantages of automobile industry in 4ndia. According to this article

4ndia has high potential of automobile industry, which contributes @F= in 4ndian

economy. 4ndian automobile industry offers different types of automobiles such as cars,

scooters, bikes, busses, trucks, $eeps, tractors and all types of two wheelers, three wheelers as

well as four wheelers.

4ndian automobile industry includes nearly 9 huge firms as well as small scare

registered firms that are offering automobile services to the customers. 4ndia is having huge

benefits because of managing automobileindustries as its ma$or sector and it is getting many

technological benefits, cost and manpower advantages etc.

he Auto Ancillary 4ndustry is the world famous 5B test center in 4ndia for automobile

verifications that can be considered as one of the competitive advantage to 4ndian automobile

industry. According to the %orld automobile statistics, 4ndia is the fast growing market sector

for cars in the year !@ and it is the second largest two wheeler market sector in the world

and third largest three wheeler dealer in the world. According to this statistics 4ndia is the

fourth largest market, which is having high tractor sales in the world.

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3,M RE,ORT ON AUTOMOBILEINDUSTRY

According to the report of L=* 0!1 4ndian automobile industry is a developed industry

that is having high opportunities when we compare among the others industries. 4ndian

market is an open door for many opportunities and it is having wide range of employment

opportunities. 2ecause of presence of a higher population the work prospects are also high

which is allowing 4ndian customers to depend on vehicles to manage their daily activities.

hese reasons lead to huge demand for automobile vehicles in 4ndia and for this reason many

automobile companies are offering wide range of vehicles according to customer

preferences. his article even e(plained the significant information on automobile sector of

4ndia and even specified the information on growth and development of 4ndian automobile

industry. he information on short term and long term sectors of 4ndian automobile industries

are e(plained clearly.

he future work is reIuired in order to give a clear idea on developmental factors that lead to

development of 4ndian auto industry.

he significant information on 4ndian automobile industry is described in this article, which

is significant aspect for research process

According to 5esearch and *arket report 0!1, 4ndian automobile industry has a bright

history and the first car in 4ndia came into the roads in the year ?8? and liberaliation and

globaliation policies has shown ma$or impact on 4ndian auto industry which lead to drastic

changes in automobile industry of 4ndia.

According to this article, automobile industry is playing vital role in economical sector and

employment sector, which is offering wide range of employment opportunities to the

individuals. Competition is the ma$or problem in automobile industry and especially 4ndian

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auto industry is facing tough competition with global companies in global markets and local

markets.

4ndia is a place with different communities of people with wide range of cultures and

preferences. %hile comparing 4ndian auto industry with global auto industry 4ndia still needs

to make many developments in order to compete themselves with ma$or global competitors.

#uture work should be performed in order to specify the comparison of 4ndian auto market

with global auto market.

his article consists of significant information on competitive challenges faced by 4ndian

auto industry which is the important aspect related to problem statement of research process

and for this reason this article is used for research process.

ASIAN 4OURNAL O* TEC0NOLO/Y > MANA/EMENT RESEARC0&

Automobile industry in 4ndia is an emerging sector and has a potential to improve it. he key

players have framed the strategies to tap the sector as per their features of the automotives.

he increasing = and economical resources have boost up during the last decade which

has increased purchasing power of the 4ndian peoples. he car segment in 4ndia has emerged

as one of the promising sector and has shown growth trends in tremendous sales. ata *otors

has emerged as key player in 4ndian automobile industry and its share in Commercial

ehicles has D:.8@F, =assenger ehicles D.@9F. ata *otors )imited is 4ndias largest

automobile company, with consolidated revenues of +& @ billion in !?-8. 4t is the

leader in commercial vehicles and among the top three in passenger vehicles. *aruti &uuki

4ndia )imited, a subsidiary of &uuki *otor Corporation of Eapan, one of the 4ndia's largest

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passenger car companies has grabbed a share for over @9F of the domestic car market. Other

key players in automobile segment of 4ndia have contributed significantly and their e(istence

in market has made others players to act actively in 4ndia.

espite economic slowdown, the 4ndian automobile sector has shown high growth. he

passenger vehicle market, which constitutes around ?F of automobile sales, has immense

growth potential as passenger car stock stood at around per , people in !?.

Anticipating the future market potential, the production of passenger vehicle is forecasted to

grow at a CA5 of around F from !8- to !!-:.

e-licensing in 88 has put the 4ndian automobile industry on a new growth track,

attracting foreign auto giants to set up their production facilities in the country to take

advantage of various benefits it offers. his took the 4ndian automobile production from 9.:

*illion +nits in !-! to .? *illion +nits in !6-?. he other reasons attracting

global auto manufacturers to 4ndia are the countrys large middle class population, growing

earning power, strong technological capability and availability of trained manpower at

competitive prices. hese are the ma$or findings of our new report, '4ndian Automobile

&ector - A 2ooming *arketT 4n !D-6, the 4ndian automotive industry provided direct

employment to more than :, people, e(ported auto component worth around +&H !.?6

2illion, and contributed 9F to the =. ue to this large contribution of the industry in the

national economy, the 4ndian government lifted the reIuirement of forging $oint ventures for

foreign companies, which attracted global to the 4ndian market to establish their plants,

resulting in heightened automobile production.

he 4ndian automobile market is currently dominated by two-wheeler segment but in future,

the demand for passenger cars and commercial vehicles will increase with industrial

development.

Also, as 4ndia has low vehicle presence it possesses substantial potential for growth.

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/very ma$or shift in policies made by the 4ndian government, the automotive industry has

come out stronger and better. %hile the shift in policies seems to have mostly been brought

by chance events, the 4ndian government has at least to be credited for making the right

decisions and implementing them correctly. 4t is parado(ical that the 4ndian middle class, the

most attractive feature for foreign investment in the liberaliation phase, was an outcome of

the statist ideologies in the regulatory phase. he product innovations of domestic firms like

ata *otors and 2a$a$ Auto today are the fruits of indigeniation and protection policies of

the regulatory phases.2uyer decision processes are the decision making processes undertaken

by consumers in regard to a potential market transaction before, during, and after the

purchase of a product or service. Consumers have to make different kinds of decisions

everyday according to their different needs.

INDIAN ,ASSEN/ER CAR ANALYSIS&

According to new research report S4ndian =assenger Car *arket AnalysisT, the passenger car

market, which constitutes around 6?.9F of passenger vehicle sales 0in #7 !1, has

immense growth potential as passenger car stock stood at around .D per , people in

!8. 5ealiing booming passenger car demand in the country, many domestic and foreign

automobile giants are formulating capacity e(pansion strategies, and billions of dollar worth

of investments is already in pipeline. Considering huge market potential, production of

passenger cars is pro$ected to grow at a CA5 of around F between !- and !:-

@.he increasing scenario of passenger car segment has shown positive effect on the sales

of the segment because of the tourist industry growth. =assenger car production in 4ndia is

pro$ected to cross three million units in !@-9. &ales of passenger cars during the period

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!9-D are e(pected to grow around F. /(port of passenger cars is anticipated to raise

more than the domestic sales !9-D.=assanger car segment is dominated by the share of

*aruti &uuki 4ndia and it has recorded a percentage of @D percent, second position has

grabbed by the ata *otors which has a share of D.@9 percent. hird position is of >yundai

*otors of 4ndia. he rest of the companies have not recorded a significant sales increase

during the period and their sales are less than percent.

he sales of *aruti &uuki of 4ndia has increased because of its value added service like

after sales services which includes regular check camps of the vehicles and free lubricants to

the customers. *aruti &uuki of 4ndia has a team of e(perts and they are always ready to

give their e(pert advice to the customers regarding the vehicle problems. *aruti has

maintained its Iuality and it has good mileage per liter of diesel and petrol too. he life of

vehicle is also a positive point to increase sales of the vehicles.

ata motors is the local manufacture of the vehicles but still the sales has not increased

because of it after sales services and the Iuality of the cars they produce. Other car

manufacturer have not shown significant impact on customers because they are lacking

somewhere in attracting customers, hence they have to have a strategy to attract customers

and make some impact on the minds of the customers.

*arket &hare of Commercial ehicles 4ndustry;

Commercial vehicle segment has dominated by the ata group of motors in 4ndia and stood

first in automobile industry. 4t has a share or D:.8@ percent. Ashok )eyland has its brand

name in market and known for the Iuality product. he price section of Ashok )eyland is

higher than the other automobile companies but still it has second position in commercial

vehicle segment and has garbed D.@6 percent share of the market. hird largest market share

is captured by the *ahindra and *ahindra automobiles it has . percent share in market.

he other Automobile companies have shown their presence in market but it is not

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significant in nature. heir share is in between D percent to one percent . here are so many

reasons why these companies have not performed in market. 4t may be the price war, Iuality

of the product, durability of the product and performance of the product. he customers of

this segment always think about the service provided by the company after sales. >ence it is

most important to improve Iuality, durability and after sales service along with competitive

price of the =roduct.

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OB4ECTI-ES O* STUDY

- o know the various strategies used by Automobile 4ndustry to attract ma(imum number of

customers

- o know which company offers better cars, better after sales services and by which

company cars customers are satisfied most.

- Competition in the Automobile 4ndustry

-o know the trend in *arket.

- hrough which strategies ma(imum customers are attracted.

- o know recession effect on sale of cars

-o know the step taken by overnment in Automobile &ector

SCO,E O* RESEARC0

- 4ndustry will come to know what attracts Customers.

- 4ndustry will come to know that which are the criterias customers look for before buying

car.

- 4ndustry will also come to know the future changes which will be reIuire to satisfy

customer needs and wants.

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RESEARC0 MET0ODOLO/Y

4t is well known fact that the most important step in marketing research process is to define

the problem. Choose for investigation because a problem well defined is half solved. hat

was the reason that at most care was taken while defining various parameters of the problem.

After giving through brain storming session, ob$ectives were selected and the set on the base

of these ob$ectives. A Iuestionnaire was designed ma$or emphasis of which was gathering

new ideas or insight so as to determine and bind out solution to the problems.

RESEARC0 DESI/N

/(ploratory research design has been used in the research process.

/(ploratory research focuses on the discovery of new ideas. 4n a business where sales have

been declining for the past few months, the past few months, the management may conduct a

Iuick study to find out what could be the possible e(planations.

DATA SOURCE

5esearch included gathering both =rimary and &econdary data. ,rimar" datais the first

hand data, which are selected a fresh and thus happen to be original in character. =rimary

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ata was crucial to know various customers and past consumer views about bikes and to

calculate the market share of this brand in regards to other brands.

Scondar" dataare those which has been collected by some one else and which already

have been passed through statistical process. &econdary data has been taken from internet,

newspaper, magaines and companies web sites.

RESEARC0 A,,ROAC0

he research approach was used survey method which is a widely used method for data

collection and best suited for descriptive type of research survey includes research instrument

like Iuestionnaire which can be structured and unstructured. arget population is well

identified and various methods like personal interviews and telephone interviews are

employees.

SAM,LIN/ TEC0NIUE

5andom sampling has been used in the research process.

Sam2l Si & persons are considered that includes the customers of Automobile

&howrooms and the dealers.

Sam2l Unit & . ata *otors 0&hri 5am *otors1, 5ing 5oad, 4ndira Gagar, )ucknow

!. *aruti &uuki, 5ing 5oad, 4ndira Gagar, )ucknow

:. *ahindra B *ahindra, Alambagh, )ucknow

DATA COM,LETION AND ANALYSIS

After the data has been collected, it was tabulated and findings of the pro$ect were presented

followed by analysis and interpretation to reach certain conclusions.

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SCO,E

*y pro$ect was based on the ANALYSIS O* MAR3ET STRATE/Y *OR

AUTOMOBILE INDUSTRYand data was taken in the LUC3NO1only.

Limitation! Of Stud"

he customers were reluctant to fill up the Iuestionnaire which resulted the sample

sie to be restricted.

*any members who did fill the Iuestionnaire left the open ended Iuestions blank. *any people do not know themselves why they use any particular brand as their

answer was Swe use UUbrand because we like itT so the actual reason behind their

liking was not confirmed. *any retailers do not like to interact because of their

business. =eople are not interested to fill Iuestionnaire as they think it wastage of

time, this is again because of less scope of research in 4ndustry.

As the view of every customer is different on the same topic, so it is really hard to get

the e(act output from those variations. &o there is little variance as compared to real

situation.

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K.1 o you think *arketing &trategies helps to increase sales of productP

Statmnt ,rcntag

&trongly agree @?.

Agree :D.

Geutral D.

&trongly isagree 9.

isagree 9.

Total .

stongly agree agree neutral strongly disagree disagree

0

10

20

30

40

50

60

respondent

4G/5=5/A4OG; #rom above graph it is clear that most of the respondent0?@F1

are agree that marketing strategy helps in increasing the sales of product.

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K.!1 o you think =romotion through *edia is more effective than any other

mediumP

Statmnt ,rcntag&trongly agree @.

Agree :.

Geutral 9.

&trongly isgree .

isagree 9.

Total .

strongly agree

agree

neutral

strongly dis agree

disagree

0 5 10 15 20 25 30 35 40

Chart Title

Series 3

4G/5=5/A4OG; #rom above figure it is clear that 6F of respondent are

agree that promotion of automobile is more effective than other medium.

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K.:1 id *arketing strategy like ads, newspaper have attracted you to buy

AutomobileP

Statmnt ,rcntag&trongly agree @@.

Agree :!.

Geutral !.

&trongly disagree 6.

isagree 9.

Total .

strongly agree

agree

neutral

stronglydisagree

disagree

0 5 10 15 20 25 30 35 40 45

Series 3

4G/5=5/A4OG; he above graph shows that6DF people are agree that

marketing like ads, newspaper ads attract them to buy an auto mobile while

8F are not agree with this.

K.@1 %hile 2uying the automobile, do you think that Kuality are the main

criteria in your *indP

Statmnt ,rcntag

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&trongly agree :!.

Agree :6.

Geutral :.

&trongly isagree .

isagree ?.

Total .

strongly agree agree neutral strongly disagree Disagree

0

5

10

15

20

25

30

35

40

Series 3

4G/5=5/A4OG; he above diagram represents that D8F of respondent

accepts that they kept Iuality as the main criteria in their mind where ? F are

not in this favour.

K.91 %hile 2uying the Automobile, do you prefer mileage as the main criteria

in your *indP

Statmnt ,rcntag

&trongly agree :9.

Agree !9.

Geutral 9.

&trongly isagree .

isagree 9.Total .

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strongly agree

agree

neutral

strongly disagree

disagree

0 5 10 15 20 25 30 35

Series 3

4G/5=5/A4OG; he above graph shoes that DF of respondent are agree

that they prefer mileage as the main criteria while buying automobile and!9F

are not in the favour of this.

K.D1 Are you satisfied with the government norms for the automobile 4ndustryP

Statmnt ,rcntag

>ighly satisfied :9.

&atisfied !9.

Geutral 9.>ighly dissatisfied .

issatisfied 9.

Total .

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0

5

10

15

20

25

30

35

Series 3

4G/5=5/A4OG; According to above graph DF are satisfied with the

government norms for automobile industry, !9F are not satisfied while 9F

are neutral.

K.61 %hich version of Automobile would you like to purchaseP

Statmnt ,rcntag

=etrol !6.

iesel @:.

CG !.

uo .

Total .

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27%

43%

20%

10%

Petrol

Diesel

CN

Duo

4G/5=5/A4OG; Above pie-chart shows that@:F of total respondent

willgo for diesel version, !6F for petrol version , !F for CG and F will

prefer uo version.

K.?1 oes a rand )aunch of a Automobile makes &elling easyP

Statmnt ,rcntag

&trongly agree :D.Agree :@.

Geutral .

&trongly disagree ?.

isagree !.

Total .

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Strongly agree

!gree

neutral

Strongly di

shobhit research report.docx

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