Government Policies Towards Indian Automobile Industry

Automobile industry in India also received an unintended boost from stringent

government auto emission regulations over the past few years. This ensured that vehicles
produced in India conformed to the standards of the developed world.
Though it has an advantage in India, thanks to low costs and government policies it soon
faces stiff competition from it multinational competitors all eyeing for a share in the ever
growing Indian auto sector. The policies adopted by Government will increase
competition in domestic market, motivate many foreign commercial vehicle
manufactures to set up shops in India, whom will make India as a production hub and
export to nearest market.

 Bring in a minimum foreign equity of US $ 50 Million if a joint venture involved

majority foreign equity ownership

 Automatic approval for foreign equity investment upto 100% of manufacture of

automobiles and component is permitted

 FIIs including overseas corporate bodies (OCBs) and NRIs are permitted to
invest up to 49 per cent of the paid-up equity capital of the investee company,
subject to approval of the board of directors and of the members by way of a
special resolution.

 Investments in making auto parts by a foreign vehicle maker will also be

considered a part of the minimum foreign investment made by it in an auto-
making subsidiary in India. The move is aimed at helping India emerge as a hub
for global manufacturing and sourcing for auto parts.

 Specific component of excise duty applicable to large cars and utility vehicles
will be reduced to 15,000 rupees per vehicle from 20,000 rupees earlier.

 The Proposal by the Govt. to set up an expert group to advise on a viable and
sustainable system of pricing petroleum products, as this will surely had an
impact on the Automobile Industry.

 The announced reduction on the basic customs on bio-diesel is great news for
all companies working on environmental saving technologies.
2.) TECHNICAL ANALYSIS
Technical analysts track price movements and trading volumes in various securities to
identify patterns in the price behavior of particular stocks, mutual funds, commodities, or
options in specific market sectors or in the overall financial markets.The goal is to predict
probable, often short-term, price changes in the investments that they study, which allows
them to choose an appropriate trading strategy. Following is the Technical Analysis of
TATA Motors & Maruti Suzuki to understand their pattern and behavior of share prices
in the market.

Implication of DOW THEORY