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The large population growth of more than 20 million a year and the rising living standards are two important indicators that logically lead to an increasing demand for automotives in India.
Car brands as Jaguar have an advantage when they are produced in India, since they become less expensive to sell. Imported cars are very expensive to acquire in India, due to to the many import licenses and tariffs that lead to higher prices on imported cars.
Two wheelers:
Scooters, Motorcycles and Mopeds
Million units
5000
0 2009 2010 2011 2016 2021
Year
TATA
27.6 billion
Maruti Suzuki
Cars
Gurgaon
7.5 billion
Commercial vehicles
7.4 billion
Hero Honda
Motorcycles
3.9 billion
Bajaj Auto
Motorcycles
3.39 billion
Ashok Leyland
Commercial vehicles
2.5 billion
Cars
Pune
13.5 billion
767 million
Cars
Gurgaon
192 billion
NA
BMW
Cars
Mumbai, Pune
69 billion
NA
SOUTH
Number of brands
Time
Future perspective
By 2016, the government is targeting an annual turnover of US$145bn, representing 10% of GDP and employing a total of 25mn staff. A switch to a 30% tariff could be a major boost for European premium vehicle manufacturers such as BMW , Audi and Mercedes , which currently face import tariffs of up to 100%. The economic growth, population expansion and the increasing wealth of individuals are key factors behind the forecasted 18% growth of the auto vehicles sector.
Investments by foreign car manufacturers Increase in the export levels Low cost and cheap labor Rise in the working and middle class income Increasing demand for European quality Expert skills in producing small cars good for environment Large pool of engineers
Opportunities Growing population in the country Focus from the government in improving the road infrastructure Rising living standards Increase in income level Better car technology is demanded Rising rural demand The car is a status symbol Women drivers have increased
Low quality compared to other automotive countries Low labour productivity High interest rate and overhead level Production cost are generally higher than some othe Asian states, such as China Low investment in R&D area Local demand is still towards low cost vehicles, due to low income levels
Threats Less skilled labor Lack of technologies for Indian companies Increase in the import tariff and technology cost Imports of two wheelers from the Chinese market in India Smaller players that do not fulfill international standards Increased congestion in the urban areas