Amity Business School

Automobile Industry

By:- Anupam Agrawal

MBA E&L(2011)
A0102109003
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Overview-1
• The Automobile industry in India is the seventh largest in the world with an annual
production of over 2.6 million units in 2009. In 2009, India emerged as Asia's fourth
largest exporter of automobiles, behind Japan, South Korea and Thailand.

• By 2050, the country is expected to top the world in car volumes with approximately
611 million vehicles on the nation's roads. In February 2009, monthly sales of
passenger cars in India exceeded 100,000 units.

• Embryonic automotive industry emerged in India in the 1940s. The growth was
relatively slow in the 1950s and 1960s due to nationalization and the license raj which
hampered the Indian private sector.

• After 1970, the automotive industry started to grow, but the growth was mainly driven
by tractors, commercial vehicles and scooters. Cars were still a major luxury. 
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Overview-2
• India has emerged as one of the world's largest manufacturers of small cars.
According to New York Times, India's strong engineering base and expertise in the
manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of
manufacturing facilities of several automobile companies.

• In India there are 100 people per vehicle, while this figure is 82 in China. It is
expected that Indian automobile industry will achieve mass motorization status by
2014.

• The cumulative production data for April-January 2010 shows production growth of
23.07 percent over same period last year.

• During April-January 2010,overall automobile exports registered a growth rate of

13.24 percent

• Passenger Vehicles segment, Three Wheelers and Two Wheelers segments grew by
33.92 percent, 4.60 percent and 8.84 percent respectively in this period. Commercial
Vehicles recorded growth of (-) 7.52 percent.
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Overview-3
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Facts
• The first automobile in India rolled in 1897 in Bombay.

• Foreign players are adding to their investments in Indian auto industry.

• Within two-wheelers, motorcycles contribute 80% of the segment size.

• Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%).

• Tata Motors dominates over 60% of the Indian commercial vehicle market.

• India is the largest three-wheeler market in the world.

• India is the largest two-wheeler manufacturer in the world.

• India is the fifth largest commercial vehicle manufacturer in the world.

• The number one global motorcycle manufacturer is in India.

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FDI
• Automatic approval for foreign equity investment up to 100 per cent of manufacture of
automobiles and component is permitted.

• The automobile industry is delicensed.

• Import of components is freely allowed.

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Major Players
• Rank wise Largest Automobile Manufacturers in India by Sales

1. Maruti Suzuki
2. Hyundai
3. Tata Motors
4. Mahindra
5. GM Chevrolet
6. Honda
7. HSD
8. Ford
9. Fiat Motors
10. Škoda
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Local Brands
• Chinkara: Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster

• Hindustan: Ambassador

• ICML: Rhino Rx

• Mahindra: Major, Xylo, Scorpio, Bolero.

• Mahindra Renault: Logan.

• Maruti Suzuki: 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swif etc.

• Premier: Sigma, RiO.

• San: Storm.

• Tata: Nano, Indica, Indica Vista, Indigo, Indigo Manza etc.

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SMEs
• Mainly SMEs are in Auto Component. The SMEs are riding a boom phase, driven by
demand from global auto manufacturers.

• As part of a highly fragmented industry, these companies mostly are part of the
unorganized sector.

• Some of the SMEs are:-

o Bharat Forge
o Motherson Sumi
o Amtek Auto
o Sundaram Fastners
o EL Forge
o TVS Autolec
o Sona Koyo
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Employment opportunity-1
• Improved information technology and automotive developments also demand the
human resource to develop and acquire the desired skills. Investment is leading to
the employment growth in the sector.

• With the emergence of new projects and introduction of technological advancements,

the focus is more on the skilled and experienced human resource.

• Engineers are in demand in automotive, electrical and mechanical fields. Some of the
firms going for automation, i.e. planning for CAD systems, are also recruiting people
with IT specializations. 

• The automobile sector in India has provided employment to more than 7 lakh skilled
workforce. The growth rate is 15% in the India automobile industry.
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Employment opportunity-2
• Employment status of Indian automobile sector (FY 2005-06) 
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Porter’s Five Forces Analysis

1. degree of rivalry (High)

2. threat of substitutes (fairly mild)

3. barriers to entry (substantial)

4. buyer power (Dominates)

5. supplier power (Low)

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Why Technology?
• Technology development is a continuous evolution and keeping pace with the
technology is even more challenging.

• It is the time to bring these technologies into “Affordable & Usable” .

• Objective of new technology

o Create an innovative product which is technology backed
o The "add on" cost should be at an affordable cost compared to the other accessories
available in the market place
o The features should help the users to reduce maintenance and operational costs
o Reduced installation time - less than a day
o Can be fitted on new cars as well as old cars
o This addresses almost all the features that the car owners are looking for all these
years
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Emerging Technology-1
• Black Box
o The car will have a black box akin to that of an aircraft will help evaluate accident
causes.
o Record travel history (starts, stops, maximum speed, RPM, idling time, fuel efficiency,
fuel consumption, fuel refilling if any, distance travelled and time stamp of all these
parameters)
o The black box will be more than welcome by the insurance companies and probably
lent the vehicle “Insurance Friendly”.
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Emerging Technology-2
• Global Positioning System
o Many a times, it is important for the vehicle owner to
know the geographical coordinates of the vehicle. 
o This feature can come in handy in case of car theft.
o The owner may like to know where the vehicle is at the

moment.
o It will also help in guiding the driver by showing the road map. It will also give an
alternative ways to reach destination in case there is traffic on the current way.
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Emerging Technology-3
• Digital Dash board
o It is prevailing in the world for a long time now. But probably has not translated into
increased cabin space in terms of volumes.
o Speed, Distance travelled
o RPM
o Digital fuel gauge
o Fuel economy. Fuel efficiency in last 100 km. / Distance the car can travel with
present fuel
o Gear position & Warning for gear shift
o Driving skills as a function of speed, gear position & RPM
o Temperature Cabin, engine and ambient temperature
o Engine On-Off frequency and idle time
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Emerging Technology-4
o Coolant level / Engine oil level / Brake oil
o Tyre pressure
o Door closure
o Lights – linear intensity control / blinkers
o Wiper – Linear speed control
o Inter automobile communication – Parameters of the vehicle ahead and rear
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Emerging Technology-4
• Fuel Cells
o Touted as the cleanest source of energy because they use hydrogen to generate
power.
o With increasing investment in their development by governments and companies
alike, fuel cell-powered cars could well be the cars of the future.
o A hydrogen fuel cell uses hydrogen as its fuel and oxygen
 (usually from air) as its oxidant.
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Feasibility Analysis Of Technology-1

• All the technologies that we have referred to are already available in foreign
countries. But in all the four technologies only fuel cells technology is less feasible as
it is costly.

• GPS, Black Box and Digital Dashboard are readily available at an extra cost and all
these feasible technologies as the cost is also not so high.

• In the West, Black Box (costing the equivalent of about Rs 35,000) are already
available.  According to Deccan Herald it is soon going to be available in India.

• GPS is also available in India.

• Digital Dashboard is available with half of the features and soon it will be available in
the market.

• Many companies are currently researching the feasibility of building hydrogen cars,
and some automobile manufacturers have begun developing hydrogen cars. Funding
has come from both private and government sources
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Feasibility Analysis Of Technology-2

• However, the Ford Motor Company, Renault Nissan, General Motors have dropped
down their fuel cells project because of increasing cost.

• Most hydrogen cars are currently only available in demonstration models or in a lease
construction in limited numbers and are not yet ready for general public use.

• The estimated number of hydrogen-powered cars in the United States was 200 as of
October 2009, mostly in California.

• A hydrogen vehicle would cost around $400,000.

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Evolution Of Technique-1
• Fuel Cells
o The principle of the fuel cell was discovered by German scientist Christian Friedrich
Schönbein in 1838 and published in one of the scientific magazines of the time.

o In 1955, W. Thomas Grubb, a chemist working for the General Electric Company
(GE), further modified the original fuel cell design by using a sulphonated polystyrene
ion-exchange membrane as the electrolyte.

o The actual Car was rolled by Honda FCX for the first time in 1999.

• Black Box
o The modern term "black box" seems to have entered the English language around
1945. But it didn’t come into limelight until it was used in planes.
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Evolution Of Technique-2
• GPS
o In 1973, the idea of a Global Positioning System, initially dubbed NAVSTAR, was
developed by the United States Department of Defense.
o GPS did not reach full operational capacity until July 17, 1995

• Digital Dashboard
o The first application of an electronic instrument cluster, in a production automobile,
was in the 1976 Aston Martin Lagonda.
o In 1980s Fiat Tipo DGT was the first European hatchback to have digital dashboard.
o In the 2000s, digital speedometers have been produced in some hybrid vehicles,
including the Toyota Prius and Honda Civic
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Company Adoption
• List of fuel cell vehicles
o Audi
o BMW
o Chrysler
o Daimler
o Fiat
o Ford
o Honda etc

• List of GPS vehicles

o Audi
o BMW
o Ford
o Volkswagen etc
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References
• ME 6753: Principles of Management for Engineers by Prof. Alan Flury

• http://www.naukrihub.com/india/automobile/

• http://en.wikipedia.org/wiki/Automobile_industry_in_India

• http://www.automobileindia.com/automobile-industry/

• http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sectors/automobile.htm

• http://www.dnb.co.in/smes/smes.asp

• http://www.dnb.co.in/smes/overview.asp

• Asia-Pacific Research and Training Network on Trade Working Paper Series, No. 37, July 2007

• http://www.deccanherald.com/content/49301/now-cars-india-have-black.html