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Strategy Presentation

Strategy Presentation

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Published by Shashank Singh

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Published by: Shashank Singh on Nov 22, 2012
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11/03/2013

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Submitted to:Dr. J.K.

Sharma

Submitted by:Alok Srivastava

 Heavy Commercial vehicles industry in India has

reflected a steady growth over the last decade by constantly trying to upgrade their technology and production process.  Heavy vehicles in India are mostly made by companies like Tata Motors and Ashok Leyland.  HCVs however form an indispensable part of Indian automobile industry.

 The automobile industry is one of the largest in the

world and one of the fastest growing globally.  India’s commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 1.6 million units in 2011.  The contribution of automobile industry to GDP has risen from 2.77% in 1992-93 to 5% in 2010-11 and it will expect to be double by 2016.

 Ranking of Indian Light Commercial Vehicles Industry is Fifth in World market. Ranking of Indian Heavy Commercial Vehicles Industry is Third in World market. .

1400 1200 1000 800 600 267 400 273 318 HCV 383 225 202 676 790 LCV 200 0 374 431 445 526 2006 2007 2008 2009 2010 2011 .

1400 1200 1000 341 800 600 400 295 203 732 844 HCV LCV 419 283 247 200 0 416 491 467 538 2006 2007 2008 2009 2010 2011 .

 Tata Motors  Ashok Leyland  Volvo Motors  Eicher Motors  Swaraj Mazda  Force Motors .

Brand Tata Motors Ashok Leyland Eicher Motors Swaraj Mazda Asia Motors Works Force Motors Volvo Trucks 2006 164873 72874 18036 10315 858 2007 165892 72924 21870 10951 1031 2008 134158 61512 16082 8189 1959 1270 2009 128101 42529 16903 4954 3319 4268 1444 2010 188660 79696 28221 7142 6074 6021 1663 Mahindra & Mahindra Mercedes-Benz Scania (VW) - - 205 135 230 112 247 165 165 .

Market Share 12% Tata Motors Ltd. 22% 52% Eicher Motors Ashok Leyland Others 14% .

 Barriers to entry into Heavy commercial vehicles Industry are relatively low and setting up operations is fairly easy.  100% FDI is allowed  Government of India permits 200% weighted deduction on in-house research expenditure and 175% on outsourced research & development expenses. .

KEY FEATURES OF POLICY  Low entry barrier  Investment Incentive  Concern for Emissions  Emphasis on R&D .

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. Large domestic market  Sustainable labour cost advantage  Competitive auto component  Government incentive for manufacturing  plants Strong engineering skills in design etc.

     Low labour Productivity High interest costs and high overheads make the production uncompetitive Various forms of taxes push up the cost of production Low investment in Research and Development Infrastructure bottleneck .

. Supreme court ban on overloading  Heavy thrust on mining and construction activity  Cut in excise duty  Rising rural demand  Establishment of SEZ hub for HCVs.

 Rising Inputs cost  Rising interest rates  Cut throat competition .

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Establish an international hub for manufacturing Tractors. Indian government automatic allowing approval for     foreign equity investment up to 100%. Laying emphasis on R&D activities carried out by companies in India by giving a weighted tax deduction for in-house research. Plan to have a terminal plan policy for HCV along with incentives. Assist development of vehicles propelled by alternative energy source. .

 Several Indian companies have partnered with global players.a. in the past few years  Financial availability to HCV buyers has grown in scope during the last few years  More than 90% HCVs purchase is on credit.a.  The manufacturing sector has grown at 8-10% p. .5% p. Indian economy has grown at 8.

 The Automotive Research Association of India (ARAI) has been playing a crucial role in assuring safe.  Preference for fuel efficient HCVs with low running cost. less polluting and more efficient vehicles.  New measures are being taken to make the automobiles less polluting. Growth in urbanization. This will help in reducing the exploitation. . 4th largest economy by PPP index.

both in product and production processes have developed. hybrid heavy commercial vehicles have made entry into the market. advanced technologies.  Fuel specifications of gasoline and diesel have been aligned with the corresponding fuel specifications for meeting the Euro II.  With the development or evolution of alternative fuels such as biodiesel and ethanol gasoline. With the entry of global companies into the Indian market. . Euro III and Euro IV emission norms.

. Product being matched in a few months by the competitors.  Bargaining Power of Buyers Buyers is having bargaining power due to low switching costs associated with selecting from among competing brands. Rivalry among Competitors Rivalry in the Indian HCV Industry is intense due to the foreign companies in the market.

 Bargaining Power of Suppliers The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.  Barriers to Entry Introduction of Indian Auto Policy 2002 100% FDI is allowed .

Switching cost is also high in terms of time. convenience and utility. Threats of Substitutes The threats of substitutes to HCVs industry is very less because only alternative is Indian railways . .

 2nd largest heavy commercial vehicle market in the world. Eicher Motors are the dominant player of the Indian HCVs Industry  Rise in interest rate adversely affect the demand of HCV because around 90% of vehicles purchased are financed. Tata Motors has largest share in heavy commercial vehicles industry. .  Tata Motors. Ashok Leyland .

 Indian Railways are the only competitor of Indian HCVs Industry.  Now a days Indian HCV Industry uses sales promotion tool such as electronic media advertisement. . Cost advantage is the strongest point for the Indian HCV Industry.

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projectvendor. http://www.com  IHS Automotive & KPMG International Report .automobileindia.com  www.com  www.investindia.nic.icra.gov.tatamotors.in  http://pmindia.in/Economic_Outlook_2010-11  www.in  www.

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