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Initial Years Manufacturing was licensed
High Customs duty on
Steep excise duties & sales tax
2 Major players: Premier Automobiles Ltd. & Hindustan Motors
1980s Entry of MUL, better product, with government support Seller’s Market, Long Waiting Periods Early to mid 90s Delicensing in 1991 Removal of capacity restrictions Decrease in customs & excise Auto finance boom- more players (foreign banks & non banking companies, better schemes) Mid 90s – Early 2000s Buyers market Increase in Indigenization Easy Auto finance
Manufactures diversifying into related activities: finance lease, fleet management, insurance and used car market
50.000 crore turnover with investment of over Rs.000 crores of investment in pipeline. • Rural households possessing cars or jeeps has grown four times between 1993-94 and 2007-08 while in urban areas it has gone up from 1.2% to 4.6% in the same time according to NSSO.65.Industry Overview • Car Industry is in growing phase. • Rs.7%.000 crore and some Rs. . • Contributing 17% to indirect taxes.35. After delicensing in 1991 it has grown at a rate of 17% for last few years. • Current growth rate is 12.1. • The exports in the automotive sector has grown on an average CAGR of 30% per year for the last five years reaching a turnover of 8 billion USD.31 crore people. • Providing direct and indirect employment to 1.
The Key Players… .
5. but growth rate in last year 2008-09 was only 0.GDP • Directly and indirectly it employs more than 10 million people. • The automobile industry in India grew at rate of 11. • FDI inflows in Automobile Industry 2008-09 was Rs. and Contribution in Indian GDP is near about 4% and will be double by 2016.5 % over the past five years. behind Japan. South Korea and Thailand .212 Cr an increase of 47. • In 2009.25% compare to 2007-08. India emerged as Asia's fourth largest exporter of automobiles. • The market value of Automobile Industry is more than US$8 billion.7%.
• Monetary policies which promote low interest rates (affordability) • Stability in exchange rates. • Commitment by the government to the auto sector. • High inflation rate • Open trade and investment environment to foster economically rational decisions based on market principles. rather than government policies. • Improvement of automobile infrastructure (roads. • Transparent economic and regulatory policies.Macroeconomic Policies Affecting the Auto Industry • Stable national economic performance. parking lots and complementary public transportation). . • Consistent national economic and regulatory policies.
• Harmonisation and Modernisation of Customs Procedures. • Tax policies which encourage consumption.• Consistency. rather than penalise purchase. • Harmonisation of automotive safety and emissions standards and certification. . transparency and non discrimination in automotive policies. • Ease and availability of consumer and investment financing. • Reducing distortion impact of duty and commodity tax policies.
India is expected to achieve mass motorization status in 2014 .
Key Market Drivers Increasing disposable incomes Rising aspiration levels Wide variety and easy availability of Financing options. High sensitivity to Fuel prices Lack of urban & rural public transportation infrastructure Flourishing Service Sector Key Trends Market evolution from Mini cars to Hatchbacks to Compact Sedans now evident Increasing customer emphasis on aesthetics and comfort. Shrinking product life-cycles .
Automotive Sector in India is guided by: • SIAM .Federation of Automobile Dealers Association • FISPDA. • Industry analysts predict this industry to touch USD 13000 million mark by 2010.Federation of Indian Spare Parts Dealers Association • ARAI . a cumulative growth of 9.24 to the Indian economy. • By 2010 India will take over Germany in sales volumes and Japan by 2012 • The Indian automobile component industry is estimated to triple from USD 63 billion to USD 190 billion within a span of six years by 2012.Automobile Research Association of India. . • It is said that for every Re 1 spent. 2.Society of Indian Automobile Manufacturers • ACMA .Auto Components Manufacturers Association • FADA . FUTURE PROSPECT OF INDIAN AUTOMOBILE SECTOR • Automobile industry expert predicts that by 2050 every sixth car in the world will be for Indians.5% annually. the auto sector returns Rs.
which is the cheapest car in the world. India. and is in the top 3 makers of passenger cars. Tata Motors is also the designer and manufacturer of the iconic Tata Nano. when the company began manufacturing locomotives. India's first fully indigenous passenger car. • It is India's largest company in the automobile and commercial vehicle sector. . • Tata Motors has a consolidated revenue of USD 16 billion after the acquisition of British automotive brands Jaguar and Landrover in 2008. • In 1998 it launched Tata Indica. and the world’s second largest bus manufacturer. the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG. Part of the Tata Group • Established in 1945. • The company is the world’s fourth largest truck manufacturer.TATA MOTORS • Tata Motors Limited is a multinational corporation headquartered in Mumbai. • Tata Motors is a dual-listed company traded on both the Bombay Stock Exchange as well as on the New York Stock Exchange. which ended in 1969. • Tata ranks as the leader in every commercial vehicle segment. In India.
SWOT STRENGTHS • The internationalization strategy • Expertise. • Tata has not got a foothold in the luxury car segment in its domestic.3 million in 2008. THREATS • Other competing car manufacturers have been in the passenger car business for 40. • Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around USD $16 million. • Nano is the cheapest car in the World introduced by TATA. • Successful alliance with Italian mass producer Fiat since 2006. • Intensive management development. WEAKNESSES • The company's passenger car products are based upon 3rd and 4th generation platforms. Indian market. OPPORTUNITIES • Purchased the Land Rover and Jaguar brands from Ford Motors for UK £2. 50 or more years. .
• The company has crossed the milestone of becoming the first Indian company in March 1994. • It is the market leader in India and on 17 September 2007. Maruti Suzuki India Ltd. . Maruti Udyog was renamed Maruti Suzuki India Limited. is the result of collaboration of Maruti with Suzuki of Japan.Haryana. MARUTI UDYOG LIMITED • Maruti Suzuki India Limited is a publicly listed automaker in India. • Maruti Suzuki India Ltd. • The price of steel and aluminium is increasing putting pressure on the costs of production. • Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. • Many of Tata's products run on Diesel fuel which is becoming expensive globally and within its traditional home market. • The company headquarter is in Gurgaon. has ushered a revolution in the Indian car industry. by manufacturing in totality one million vehicles. • It was the first company in India to mass-produce and sell more than a million cars.• Sustainability and environmentalism could mean extra costs for this low-cost producer. • This car is meant for an average Indian individual which is affordable as well as has elegant appeal.s • Established in December 1983.
SWOT STRENGTHS • Established distribution and after-sales networks • Understanding of the Indian market and ability to liaison with the government • Ability to design products with differentiating features • Brand Image • Experience and Know-how in technology WEAKNESSES • Lack of experience with the foreign market • Inexperience with foreign workforce • Heavy Import tariffs OPPORTUNITY • Increased purchasing power of Indian middleclass category • Govt. subsidies • Tax benefits • Foreign collaboration THREATS • Threats from Chinese manufacturers .
• Indian as well as foreign competitors Key Concerns • Increasing cost of raw materials (Especially metals) combined with high inflation rate is set to have negative impact on industry. • Now with increase in cost of inputs competition can result in further reduction in profitability. So. • Passenger vehicle market is fairly fragmented. interest rates are set to increase in short term and it can have dampening effect. There are 14 players and more than 80 models in the market. • As the RBI has taken some liquidity tightening steps. there exists high competition in the segment resulting in fierce price competition which in turn has resulted reduced margins for players. .
General Motors and other companies.000 crore will come from Tata Motors. on a new compact car that will roll out in 2009 entailing a huge investment of $908m. • Mahindra has already launched a no. Hyundai.e. Honda Motors.Capital Investment And FDI Inflow • Honda to sell 150.frills Logan sedan. • Nissan has planned to construct a 200. about Rs. . • About two-thirds of the planned investments in the Indian passenger car industry i. Maruti.000 cars by end 2010 after investing $150-$200mn.000 unit a year plant in Chennai.24.
000 crore of investment is in pipeline. 35. • Government Policies are towards harnessing the growth of Car Industry . • Over Rs.Conclusion • After de-licensing in July 1991. Auto industry has grown at a spectacular rate • The exports in the automotive sector has grown at a spectacular rate for the last five years & future looks bright. Lot of International players are coming with huge investments in India.
REFERENCES • • www.economywatch.indiamart.ciionline.com/scripts/ IndustryStatistics.com http://www.siamindia.com www. report on Automobile Sector .aspx www.auto.org/ • • • DBS Cholamandalam Securities ltd.
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