Project on Brand Revitalization of

Mitsubishi Cedia

FASTER THAN BEFORE

Submitted to –

Dr. Sakhhi CHHABRA

SUBMITTED BY –

SHREYA BAGCHI (18BSP2018)

SUBHANJANA PANDEY (18BSP2083)

 INDUSTRY ANALYSIS

The automobile industry in India is world’s fourth largest, with the country
currently being the world's 4th largest manufacturer of cars and 7th largest
manufacturer of commercial vehicles in 2017. Indian automotive industry
(including component manufacturing) is expected to reach Rs 16.16-18.18
trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers dominate the industry
and made up 81 per cent share in the domestic automobile sales in FY18.
Overall, Domestic automobiles sales increased at 7.01 per cent CAGR between
FY13-18 with 24.97 million vehicles being sold in FY18. Indian automobile
industry has received Foreign Direct Investments (FDI) worth US$ 19.29 billion
between April 2000 and June 2018.
Domestic automobile production increased at 7.08 per cent CAGR between
FY13-18 with 29.07 million vehicles manufactured in the country in FY18.
During April-November 2018, automobile production increased 12.53 per cent
year-on-year to reach 21.95 million units.
During April-November 2018, highest year-on-year growth in domestic sales
among all the categories was recorded in commercial vehicles at 31.49 per cent
followed by 25.16 per cent year-on-year growth in the sales of three-wheelers.
The passenger vehicle sales in India crossed the 3.2 million units in FY18, and
is further expected increase to 10 million units by FY20.
The government aims to develop India as a global manufacturing as well as a
research and development (R&D) hub. It has set up National Automotive
Testing and R&D Infrastructure Project (NATRiP) centres as well as a National
Automotive Board to act as facilitator between the government and the industry.
Under (NATRIP), five testing and research centres have been established in the
country since 2015.
The Indian government has also set up an ambitious target of having only
electric vehicles being sold in the country. Indian auto industry is expected to
see 8-12 per cent increase in its hiring during FY19. The Ministry of Heavy
Industries, Government of India has shortlisted 11 cities in the country for
introduction of electric vehicles (EVs) in their public transport systems under
the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric
Vehicles in India) scheme. The scheme has further been extended to March
2019 from September 2018. Number of vehicles supported under FAME
scheme has increased to 192,451 units in March 2018 from 5,197 units in June
2015.
Automobile exports grew 20.78 per cent during April-November 2018. It is
expected to grow at a CAGR of 3.05 per cent during 2016-2026. Also, Luxury
car market in India is expected to grow at a 25 per cent CAGR till 2020.
 PESTEL ANALYSIS

Political Factors
Political factors play a significant role in determining the factors that can impact
Mitsubishi long term profitability in a certain country or market. Mitsubishi is
operating in Car in more than dozen countries and expose itself to different
types of political environment and political system risks. The achieve success in
such a dynamic Industrial Goods & Services industry across various countries is
to diversify the systematic risks of political environment. Mitsubishi can
closely analyze the following factors before entering or investing in a certain
market-

 Political stability and importance of Industrial Goods & Services sector in the
country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Industrials sector.
 Bureaucracy and interference in Industrial Goods & Services industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Industrials
 Favored trading partners
 Economic Factors
The Macro environment factors such as – inflation rate, savings rate, interest
rate, foreign exchange rate and economic cycle determine the aggregate demand
and aggregate investment in an economy. While micro environment factors
such as competition norms impact the competitive advantage of the firm.
Mitsubishi can use country’s economic factor such as growth rate, inflation &
industry’s economic indicators such as Industrial Goods & Services industry
growth rate, consumer spending etc to forecast the growth trajectory of not only
--sector name-- sector but also that of the organization. Economic factors that
Mitsubishi should consider while conducting PESTEL analysis are -

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.
 Government intervention in the free market and related Industrials
 Exchange rates & stability of host country currency.
 Infrastructure quality in Industrial Goods & Services industry
 Comparative advantages of host country and Industrials sector in the particular
country.
 Skill level of workforce in Industrial Goods & Services industry.
 Education level in the economy
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates

Social Factors
Society’s culture and way of doing things impact the culture of an organization in an environment.
Shared beliefs and attitudes of the population play a great role in how marketers at Mitsubishi will
understand the customers of a given market and how they design the marketing message for
Industrial Goods & Services industry consumers. Social factors that leadership of Mitsubishi should
analyze for PESTEL analysis are -

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Mitsubishi industry
 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies encourage entrepreneurship
while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests
 Technological Factors
Technology is fast disrupting various industries across the board. Transportation
industry is a good case to illustrate this point. Over the last 5 years the industry
has been transforming really fast, not even giving chance to the established
players to cope with the changes. Taxi industry is now dominated by players
like Uber and Lyft. Car industry is fast moving toward automation led by
technology firm such as Google & manufacturing is disrupted by Tesla, which
has stated an electronic car revolution.

A firm should not only do technological analysis of the industry but also the
speed at which technology disrupts that industry. Slow speed will give more
time while fast speed of technological disruption may give a firm little time to
cope and be profitable. Technology analysis involves understanding the
following impacts -

 Recent technological developments by Mitsubishi Electric Corporation

competitors
 Technology's impact on product offering
 Impact on cost structure in Industrial Goods & Services industry
 Impact on value chain structure in Industrials sector
 Rate of technological diffusion

Environmental Factors
Different markets have different norms or environmental standards which can
impact the profitability of an organization in those markets. Even within a
country often states can have different environmental laws and liability laws.
For example in United States – Texas and Florida have different liability clauses
in case of mishaps or environmental disaster. Similarly a lot of European
countries give healthy tax breaks to companies that operate in the renewable
sector.

Before entering new markets or starting a new business in existing market the
firm should carefully evaluate the environmental standards that are required to
operate in those markets. Some of the environmental factors that a firm should
consider beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Industrial Goods & Services industry
 Recycling
 Waste management in Industrials sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy

Legal Factors
In number of countries, the legal framework and institutions are not robust
enough to protect the intellectual property rights of an organization. A firm
should carefully evaluate before entering such markets as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal
factors that Mitsubishi leadership should consider while entering a new market
are -

 Anti-trust law in Industrial Goods & Services industry and overall in the
country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection