A

PROJECT REPORT
ON
ARTIFICIAL INTELLEGENCE IN
AUTOMOBILE INDUSTRY
(SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIRMENT
FOR MBA)

SUBMITTED BY : SUBMITTED TO :

SUPEKSHA SOLANKI MR.SHUBHAM AGGARWAL

MR. MAHENDER SOLANKI ( ASSIT.PROFESSOR)
BATCH OF (2020-2022)

LLOYD INSTITUTE OF MANAGEMENT & TECHNOLOGY

PLOT NO-11, KNOWLEDGE PARK-2, GREATER NOIDA-201306(UP)

1
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Lloyd Institute of Management & Technology (Dr. A.P.J. Abdul
Kalam Technical University) for imparting me a very valuable professional training in MBA.

I pay my gratitude and sincere regards to Prof. Shubham Aggarwal (faculty mentor) my project guide for his constant
support and guidance. I am humbled and thankful for his source of advice, motivation, and inspiration transcending the
Mini project.

I would like to take this opportunity to express my gratitude and thanks to our computer lab staff and library staff
forbeing readily available for my help whenever I needed them. I am also thankful to all other faculty members and
classmates for providing me a healthy and nurturing learning environment which enhanced my hunger for knowledge
and my ability to learn.

Hereby I thank all individuals and departments from both internal and external sources for helping me in completion
of the Mini Project report.

SUPEKSHA SOLANKI

Roll No – 2001720700237

MBA 2020-22

(2ndSemester)
 TABLE OF CONTENT

S No. Pages

1. Introduction 4

2. Scope Of Innovation 15

3. External Enviroment 19

4 Feasibility 32

Fiancial Feasibility

Operating feasibility

5 Recent development
42

7. References.
 CHAPTER – 1
INTRODUCTION

Indian Automobile Industry

History of the Industry

The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in
very small numbers.

An embryonic automotive industry emerged in India in the 1940s. Hindustan was launched in
1942, longtime competitor Premier in 1944. They built GM and Fiat products respectively
Mahindra & Mahindra was established by two brothers in 1945, and began assembly of Jeep CJ-
3A utility vehicles. Following the independence, in 1947, the Government of India and the
private sector launched efforts to create an automotive component manufacturing industry to
supply to the automobile industry. In 1953 an import substitution programmed was launched,
and the import of fully built-up cars began to be impeded.
The Hindustan Ambassador dominated India's automotive market from the 1960s until the mid-
80s.
However, the growth was relatively slow in the 1950s and 1960s due to nationalization and the
license raj which hampered the Indian private sector. Total restrictions for import of vehicles
were set and after 1970 the automotive industry started to grow, but the growth was mainly
driven by tractors, commercial vehicles and scooters. Cars were still a major luxury item. In the
1970s price controls were finally lifted, inserting a competitive element into the automobile
market. By the 1980s, the automobile market was still dominated by Hindustan and Premier,
who sold superannuated products in fairly limited numbers. During the eighties, a few competitors
began to arrive on the scene
Indian market before independence was seen as a market for imported vehicles while assembling
of cars manufactured by General Motors and other brands was the order of the day. Indian
automobile industry mainly focused on servicing, dealership, financing and maintenance of
vehicles. Later only after a decade from independence manufacturing started. India's
Transportation requirements were met by Indian Railways playing an important role till the
1950's. Since independence the Indian automobile industry faced several challenges and road
blocks like manufacturing capability was restricted by the rule of license and could not be
increased but still it lead to growth and success it has achieved today.
 NATURE OF THE INDUSTRY

The automotive industry in India is one of the larger markets in the world. It had previously
been one of the fastest growing globally, but is currently experiencing flat or negative growth
rates. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in
the world, with an annual production of more than 3.9 million units in 2011. According to recent
reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the
world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada,
Mexico, Russia, Spain, France, Brazil), grew 16 to 18 percent to sell around three million units
in the course of 2011 and 2012.In 2009, India emerged as Asia's fourth largest exporter of
passenger cars, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become
Asia's third largest exporter of passenger cars.

As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive
vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second
(after China) fastest growing automobile market in the world in that year.According to the
Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4
million by 2015, no longer 5 million as previously projected.

The majority of India's car manufacturing industry is based around three clusters in the south, west
and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue
share. The western hub near Mumbai and Pune contributes to 33% of the market and the
northern cluster around the National Capital Region contributes 32%.Chennai, with the India
operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler,
Caparo, and PSA Peugeot Citroën is about to begin their operations by 2014. Chennai accounts
for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern
cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan
corridor near Pune, M a h a r a s h t r a is the western cluster with companies like General
Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land
Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the area. Nashik has a major
base of Mahindra and Mahindra with a SUV assembly unit and an Engine assembly
unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster.
Another emerging cluster is in the state of Gujarat with manufacturing facility of General
Motors in Halol and further planned for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki
and Peugeot-Citroen plants are also set to come up in Gujarat.[13] Kolkata with Hindustan
Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive
manufacturing regions around the

country.

In 2011, there were 3,695 factories producing automotive parts in all of India.The average firm
made US$6 million in annual revenue with profits close to US$400 thousand.

Size of the Industry 2.6 Million Units

Geographical Jamshedpur, Pune, Lucknow, Gurgoan,
distribution Delhi, Mumbai, Bangalore, etc
Output per annum Rs 2,000 crore per annum
Percentage in world
6-8%
market
Market
5% of the share
Capitalization
 Market capitalization

Employment opportunities

India today is well known as a potential emerging automobile market and jobs in the automobile
industry are rising. Several foreign investments are pouring into Indian automobile industry. It
has become a major three-wheeler market and two-wheeler manufacturer in the world. India is
also the second largest manufacturer of tractors. Candidates with bachelor's degree in
mechanical, electrical or automobile engineering are eligible to get good job opportunities in
automobile companies.

For the candidates with diploma courses and ITI courses there are many opportunities in this
industry. Automobile companies even require IT specializations. While technical education is
offered by plenty of engineering and polytechnic colleges in India,. the eligible candidates are
selected by the companies. The considerable wide scope of Automobile sector, it is not that
surprising that more and more candidates are dreaming to develop a career in Automobile
Industry. With foreign automobile companies like Volkswagen, Audi, Renault etc coming in and
targeting India as a base for manufacturing cars, the scope for a career in Automobile Industry is
rising rapidly.
Indian Automobile Industry a glance in 2011 - 2012

⚫ In March 2012 as compared to March 2011, production grew at a single digit rate of
6.83%.

⚫ In 2011-12, the industry produced 20,366,432 vehicles of which share of two wheelers,
passenger vehicles, three wheelers and commercial vehicles were 76%, 15%, 4% and
4% respectively.
⚫ The growth rate for overall domestic sales for 2011-12 was 12.24 percent
amounting to 17,376,624 vehicles. Passenger Cars grew by 2.19%, Utility Vehicles grew
by 16.47% and Vans by 10.01% during this period.

⚫ For the first time in history car sales crossed two million in a financial year. If we
compare sales figures of March 2012 to March 2011, the growth for two wheelers was
8.27%.

⚫ During April to March 2012, the industry exported 2,910,055 automobiles registering
a growth of 25.44%.

⚫ In March 2012 compared to March 2011, overall automobile exports registered

a growth of 17.81%
 Players in the Industry

 Maruti Udyog Ltd.

 General Motors India
 Ford India Ltd.
 Eicher Motors


 Bajaj Auto
 Daewoo Motors India
 Hero Motors
 Hindustan Motors
 Hyundai Motor India Ltd.
 Royal Enfield Motors
 Telco
 TVS Motors
 Swaraj Mazda Ltd
 Maruti Suzuki
 Tata Motors
 Mahindra & Mahindra
 Toyota
 Honda
 Volkswagen , Nissan erc.
 Nature of Competition From an economist’s perspective in the industry

Following types of competition ins exists in Indian Automobile Industry : Perfect

Competition

Monopolistic Competition

Oligopoly

Monopolistic Competition :

Current Trends in the current Monopolistic Automobile Market :

Considering huge market potential, production of passenger cars is projected to grow at CAGR
of 11% between 2010-11 and 2013-2014.

Oligopoly Competition :

Transformation from Oligopoly to Monopolistic Market : Causes Of

Transformation :

Sanjay Gandhiowned Maruti Technical Services Limited , which was liquidatd .

After his death , Indira Gandhi Government collaborated with Suzuki Motors , a Japanese firm ,
for collaboration- formation of Maruti Udyog Limited and renamed after later Maruti Suzuki in
2007.

New Industrial Policy in july 1991 by Congress Government led by Mr. Narsinha Rao. It
unshackled Indian industrial economy from unnecessary bureaucratic model. It introduced
liberalization poliies – Abolishment of License Raj.

April 1993 – Government removed motor cars from list of industries reserved for compulsory
licensing.

Effects Of Transformation :
New firm including foreign players entered with modern engineering , efficient processes and
modern shop-floor layouts.

Indian automobile industry grew at 19.31% per annum in post 1991 era compared to 8.56%
during 1985-91

Delicencing of sector attracted many major Global OEMs (G.M., Ford, Honda, Hyundai etc.) to
start assembly in India.

Impact of Oligopoly structure : Impact on

Automobile Industry –

a) Growth very slow because of low demand and low economic status of the country
b) Government restrictions provided no motivation or incentive foe firms to
technological upgradation.
c) Supply was low and there weren’t many competitors.

Impact on Cosumers –

Cosumers did not have many choices; the demand was fairly low as cars were still a luxury
and availability of same models.
Top 3 Players in the industry with market share :

⚫ Maruti Suzuki India Limited ( 37% Market Share)

⚫ Hyundai Motors India Limited (14.4% Market Share)
⚫ Tata Motors(13.1% Market Share)

Bottom 3 players in the industry with market share :

⚫ Honda (2.9% Market Share)

⚫ Volkswagen (2.4% Market Share)
⚫ Nissan ( 1.5% Market Share)

Classification of Players :

Leaders :

⚫ Maruti Suzuki
⚫ Hyundai Motors India Limited
⚫ Tata Motors

Followers :

⚫ Mahindra and Mahindra

⚫ General Motors India Private Limited
⚫ Ford India

Challengers :

⚫ Honda
⚫ Volkswagen
⚫ Nissan

Nichers :

Maruti Suzuki India Limited

 CHAPTER - 2
SCOPE OF INNOVATION

Just two percent of major automotive companies in India are implementing artificial intelligence (AI) projects
compared with 25 percent in the US and 9 percent in China, according to the French technology services major
Cap Gemini. Globally, just 10 percent of major automotive companies are implementing
AI projects, with many falling short of an opportunity that could increase operating profit by up to 16 percent,
said the report.
Since 2017, the number of automotive companies that have successfully scaled up AI implementation has
increased only marginally, from 7 percent to 10 percent. However, more significant has been the increase in
companies not using AI, from 26 percent to 39 percent, the findings showed. According to the report from the Cap
Gemini Research Institute, just 26 percent of companies are now piloting AI projects, down from 41 percent in 2017.
The second-largest carmaker in India, Hyundai Motor India Ltd on Wednesday achieved 10 million car productions
at its plant near here. While the small car Santro was the first model that was rolled out of the plant about 25 years
ago, it was the company’s latest model Alcazar that came out of the assembly lines as the magical 10 millionth car
Tamil Nadu Chief Minister M.K Stalin present at the plant signed on the car bonnet to mark the momentous occasion.
OE32“This historic milestone of the 10 millionth car roll-outs is a testimony of Hyundai’s commitment towards the
Make in India initiative," S.S.Kim, Managing Director & CEO said.As the country’s largest exporter of automobiles,
Hyundai Motor surpassed the three million vehicle export milestone in early 2020, exporting to 88 countries and
recorded multiple export milestones over the years – 5 lakh exports in March 2008, 10 lakh exports
February 2010, and 20 lakh exports in March 2014. Last fiscal, the company shipped out 1, 04,342 units.
Except for the first two million cars that took more than two years, Hyundai Motor touched rolling out of successive
million cars in less than two years.Hyundai Motor on Wednesday also announced community development
programmes like; inauguration of Dream Village Project 2.0 – Construction of Child Care Centre benefitting
500 people annually and Community Hall with capacity to accommodate 1,500 people at Katrambakkam village
in Sriperumbudur; launch of Income-Generation Programmed (Dairy Farming) for rural women benefitting
200 families in Kancheepuram district; donation of five life-saving ventilators to Government Hospitals at
Kancheepuram and support to a Self-Help Group for setting up a mobile catering service at Vallakottai village near
Sriperumbudur.
 Impact of Artificial Intelligence on the Automotive Industry

Artificial intelligence (AI) is changing the way we do business and the way we live. It is making breakthroughs

every day, from healthcare to finance to data security to travel and transport and social media. Talking about

the automotive industry, AI will bring a massive transformation. Research indicates

that the value of AI in automotive and cloud services will exceed $10.73 billion by 2024. 

This article sheds light on how AI in automotive industry will impact vehicle owners, automakers, and

service providers. 

 AI driving features

When it comes to driving, artificial intelligence provides many functionalities, including fully autonomous and

driver-assist modes.

One of the major concerns of the automotive industry is to ensure that drivers are safe while driving.

AI provides advanced safety features that can identify dangerous situations and alert the driver if it

detects a probable mishap. It can also take emergency control of the vehicle if the driver isn’t capable of

driving any longer. 

It consists of multiple sensors, cross-traffic detectors, emergency braking, driver-assist steering,

blind-spot monitoring, and other features that ensure the passengers’ security.

Although AI has reached a stage where it can assist humans in driving, there is a long time to see roads filled

with driverless cars. It is because driving is not limited to a specific set of rules. A few algorithms cannot

comprehend the nitty-gritty of driving. It is a complex process that requires monitoring multiple conditions
 and forecasting several scenarios. The processing power necessary for a driverless car is yet not available.

Companies like Google and Tesla are making several breakthroughs in Artificial Intelligence and machine learning,

and the day is not far when driverless cars become a reality.

AI cloud services

For both — driver-assist mode and fully autonomous mode — connected vehicles require vast swathes of data.
AI Cloud platforms ensure that data is available when needed. This data is not limited to low battery indicators,
check engine lights, gas tanks, and oil lights. By monitoring millions of data points per second, AI can predict
component failure to get it repaired before it wears out. This principle is known as predictive maintenance.
It will save not only the driver’s life but also their bank balance.
World-renowned automobile manufacturer Volkswagen and IT giant Microsoft have announced a
partnership that will transform the auto company into a digital service-driven business.
Volkswagen wants to become a torchbearer in the automotive industry by tapping the power of Skype,
Azure IoT, and Power BI.

AI individualized marketing

 In recent years the advertising competition has become brutal. Getting qualified leads has become a challenge

But the combined potential of AI, big data, and machine learning offers a ray of hope. They can examine vast

amounts of data according to set parameters and can accurately target qualified prospects. This data can suggest

those products and services that users are most likely to buy. For example, a driver whose social media posts

announced mountain excursions could be alerted of a sale at a nearby hiking and trekking Store. Or if the driver

has a liking for cakes and chocolates, the AI system can suggest nearby bakery shops.

The AI system tracks the driver’s likes and dislikes and sends periodic messages of businesses nearby

That can serve them instantly.

AI in car manufacturing
 According to statistics, 92 million cars were produced in 2019. No wonder, assembly line robots have proved

their mettle. And they have been doing so since the sixties. 

But AI in the automotive industry will completely change the way we operate. Smart robots don’t only accept

humans but also work along with them. Like the Hyundai Vest Exoskeleton (H-VEX) and Hyundai

Chairless Exoskeleton (H-CEX) provide extra mobility and strength to perform tenuous jobs. They sense

what their human counterparts are doing and help protect their knees, necks, backs, and other sensitive areas. 

Automated Guided Vehicles (AVGs) are used to shift heavy materials and machines. Artificial intelligence

can detect its path and adjust the route accordingly. 

Also, AI is used for doing painting and welding jobs. Apart from filling colors and cutting window

panes, doors, bonnets, roofs, and windshields, it can also detect irregularities and defects and alert the

quality control personnel.

Driver identification, recognition, and monitoring

AI can detect who is driving the vehicle using advanced facial recognition algorithms. It can adjust the mirrors,

temperature, and seat according to the individual preferences of the driver. It can alert the driver to keep their eyes

on the road by observing their head position, eye gaze, and eye openness. It can detect the driver’s posture and

can adjust the seat accordingly. It can also change the Heads-Up Display (HUD) according to where the driver’s

eyes are focused. Besides, it can also deploy airbags in a manner that will minimize the injury based on the driver’s

posture.

AI in automotive industry is making significant advancements and developments. Coupled with the power of

machine learning and big data, it will revolutionize how we will reach our destinations. It will not only streamline

traffic movement and monitor jams but also increase the driver’s safety. It will also open up new

marketing and entertainment opportunities. 

.
 Chapter 3 :
External Environment

PESTL Analysis of Automobile Sector

• Political
• In 2002, the Indian government formulated an auto policy that
aimed at promoting integrated, phased, enduring and self-sustained
growth of theIndian automotive industry
• Allows automatic approval for foreign equity investment up to 100% in
the automotive sector and does not lay down any minimum investment
criteria.
• Formulation of an appropriate auto fuel policy to ensure
availability of adequate amount of appropriate fuel to meet
emission norms
• Establish an international hub for manufacturing small,
affordable passenger cars as well as tractor and two wheeler.
• Lying emphasis on R&D activities carried out by companies in India.
• Promoting multi-model transportation and the implementation of mass
rapid transport system.

• Economic
• Economic pressures on the industry are causing automobile companies to
reorganize the traditional sales process.
• Govt. has granted concessions, such as reduced interest rates for export
financing.
• The Indian economy has grown at 8.5% per annum.
• The manufacturing sector has grown at 8-10 % per annum in the last few
years.
• More than 90% of the CV purchase is on credit.
• Finance availability to CV buyers has grown in scope during the last few
years.
• Several Indian firms have partnered with global players.
• While some have formed joint ventures with equity participation, other
also has entered intot echnology tie-ups.
• Establishment of India as a manufacturing hub, for mini, compact cars and
for auto components.
• Social
• Since changed lifestyle of people, leads to increased purchase
of automobiles, so automobile sector have a large customer base to serve.
• The average family size is 4, which makes it favorable to buy a
four wheeler.
• Upward migration of household income levels.
• 85% of cars are financed in India.
• Car priced below USD 12000 accounts for nearly 80% of the market.
• Vehicles priced between USD 7000-12000 form the largest segment in
the passenger car market.
• Indian customers are educated and well informed. They are price sensitive
and put a lot of emphasis on value for money.
• Preference for small and compact cars. They are socially
acceptable evenamongst the well off.
• Prefrence for fuel efficient cars with low running costs.

• Technological
• More and more emphasis is being laid on R & D activities
carried out bycompanies in India.
• tax deduction of up to 150% for in-house research and R & D
activities.
• The Government of India is promoting National Automotive
Testing andR&D Infrastructure
• Technological solutions helps in integrating the supply chain,
hence reduce losses and increase profitability.
• Advanced technologies, both in product and production
process have developed.
• With the development or evolution of alternate fuels, hybrid
cars have made entry into the market.
• few global companies have setup R &D centers in India.
 Environmental Issues

⚫ Physical infrastructure such as roads and bridges affect the use of automobiles. If there
is good availability of roads or the roads are smooth then it will affect the use of
automobiles.
⚫ Physical conditions like environmental situation affect the use of automobiles. If the
environment is pleasant then it will lead to more use of vehicles.

⚫ The category for Indian Automobile Industry is "Red" which represents the highly
polluting industries Several Automobile exhaust pollutants are as follows:

⚫ Hydrocarbon
⚫ Nitrogen Oxides
⚫ Carbon Monoxide
⚫ Carbon Dioxide

⚫ Legal
• Legal provision relating to environmental population by automobiles.
• Legal provisions relating to safety measures.
• Indian government auto policy aimed at promoting an integrated, phased
and conductive growth of the Indian automobile industry.
• Establish an international hub for manufacturing small, affordable passenger cars
as well as tractor and two wheelers.
 Automobile Industry Regulations in India

The automotive regulations in India are governed by the Ministry of Road Transport and Highways (MoRT&H)
which is the nodal ministry for regulation of the automotive sector in India.
In India the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic,
construction & maintenance of motor vehicles etc are governed by the Motor Vehicles Act, 1988 (MVA) and
the Central Motor Vehicles rules 1989 (CMVR).
The CMVR - Technical Standing Committee (CMVR-TSC) advises MoRT&H on various technical aspects
related to CMVR. This Committee has representatives from various organisations namely; Ministry of Heavy
Industries & Public Enterprises (MoHI&PE), MoRT&H, Bureau of Indian Standards (BIS), Testing Agencies
such as Automotive Research Association of India (ARAI), Vehicle Research and Development Establishment (VRDE),
Central Institute of Road Transport (CIRT), industry representatives from Society of Indian Automobile Manufacturers
(SIAM), Automotive Component Manufacturers Association (ACMA) and Tractor Manufacturers Association (TMA)
and representatives from State Transport Departments.

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards

Committee (AISC) having members from various stakeholders in drafting the technical
standards related to Safety. The major functions of the committee are as follows:

 Preparation of new standards for automotive items related to safety.

 To review and recommend amendments to the existing standards
 Recommend adoption of such standards to CMVR Technical Standing
Committee
 Recommend commissioning of testing facilities at appropriate stages
 Recommend the necessary funding of such facilities to the CMVR Technical Standing
Committee
 Advise CMVR Technical Standing Committee on any other issues referred
to it

AISC submits the draft safety standards in the form of recommendations to CMVR-
TSC for final approval. The CMVR – TSC looks into the
recommendations of AISC and either approves or sends the recommendations to AISC for
amendments. After approval CMVR-TSC submits its final proposal to MoRT&H. MoRT&H
then takes the final decision for incorporation of the recommendations in CMVR.

The Automotive Industry Standards are published by the Automotive Research Association of
India on behalf of the Automotive Industry Standards Committee.

Under Rule 126 of the CMVR, various test agencies are established to test and certify the
vehicles based on the safety standards and emission norms prescribed by the Ministry. Every
manufacturer of motor vehicle has to submit a prototype of the vehicle to be manufactured to
any of the test agencies mentioned hereafter.
After testing the vehicle for compliance of all standards and norms, the test agency shall grant a
certificate to the manufacturer. The test agencies are – Automotive Research Association of India,
Pune (ARAI), Vehicle Research & Development Establishment, Ahmednagar, Central Farm
Machinery Testing and Training Institute, Budhni, Indian Institute of Petroleum, Dehradun,
Central Institute of Road Transport, Pune and International Centre for Automotive Technology,
Manesar.

Facing the challenges of new age

The Indian automotive industry has been facing new challenges due to the rapid changes taking
place during the last decade..

To realise the growth predictions, it is important to overcome various challenges the industry is
facing currently. Two of the foremost challenges are the spiralling cost of fuel and the paucity
of highly skilled manpower.

Rising oil price

International price of crude oil has crossed US$ 120 per barrel and is rising at an alarming rate.
The forecast of market experts that the crude oil price will plateau around US$ 100 per barrel has
been proved wrong. The skyrocketting crude oil price rise will affect the economic growth of
most of the nations of the world including India. The prospects of India and China of becoming
economic superpower will be seriously affected. Also, the rise in oil prices will impact the growth
of global automotive industry. Unless the use of alternative fuels increases, it is very unlikely
that the situation will change for the better. This necessarily means that more and more
investments should be directed towards R&D,
establishing mechanisms to translate R&D results into products and their efficient
manufacturing. This will also require radical redesigning of engines.

Human resources

The second major challenge is the creation of highly skilled human resource required for the auto
industry. Auto industry, like many other industries is facing severe shortage of skilled technical
as well as managerial manpower. This challenge becomes all the more daunting because faults
lie at a more fundamental level of training infrastructure and the social perception.

In India, engineering colleges and technology institutions impart engineering education. Many
of these institutions used to provide training in automotive engineering through well-established
Internal Combustion Engineering (ICE) and Mechanical Engineering departments. However, the
new wave of IT, electronics and communication technology has forced these institutions to close
down ICE departments and also reduce the umber of Mechanical Engineering departments. The
well-known ICE department of the Indian Institute of Science that produced high quality research
and trained manpower is a sad example of these developments. It is true that more than 50 per
cent of the total components of the current automobiles are electronic and that the importance of
communication technology is also increasing. However, the advances and training in these areas
cannot be at the cost of the fundamental aspects of auto engineering including thermodynamics.
Therefore, we need to redesign our automotive engineering courses and brand them properly to
attract good students. This will help in not only increasing the number of auto engineers, which
is crucial to the growth of the auto industry, but also getting the human resources to carry out
research in the auto sector and achieve breakthroughs necessary for designing the next-generation
vehicles.

There is also an urgent need to improve the quality of skilled and semi skilled manpower working
in the auto industry. To do this the existing vocational educational institutions have to be
upgraded and more number of such institutes should be started. Today, most of our vocational
educational institutes have poorly trained, unmotivated and uninspiring teaching faculty, and
outdated equipment, machines, syllabus and governance system. National Knowledge
Commission, in its recent report has given several recommendations to improve vocational
training in this country. The Central Government has accepted all the recommendations.
Two major recommendations are rebranding the vocational education by updating the syllabus
and public-private partnership (PPP) in the establishment and governance of vocational
educational institutes. Accordingly, the finance minister has allotted an initial amount of Rs.
1,000 crores in this year's budget to establish a corporation of Rs. 15,000 crore outlay through
PPP model. It is hoped that this corporation will help immensely in revolutionising and making the
vocational education more relevant to the contemporary needs.

The third area that needs to be addressed immediately is the shortage of human resources in auto
design. The government as well as the professionals have realised that creative people in India
need to be given training by which they can come into the mainstream and design contemporary
products in general and autos in particular. National Institute of Design at Ahmedabad is playing a
seminal role in producing good designers. However, the output of the institute is very small.
Therefore, in the first of its kind National Policy of Design, the Government has suggested to
establish four such institutes, immediately.

Regulatory Bodies of the industry :

⚫ The automotive regulations in India are governed by the Ministry of Shipping,
Road Transport & Highways (MoSRT&H) .
⚫ The principal instrument governing the automotive sector in India is the Motor
Vehicles Act, 1988 (MVA) along with the Central Motor Vehicles Rules 1989
(CMVR).
⚫ Automotive Research Association of India (ARAI)
⚫ Vehicle Research & Development Establishment, Ahmednagar
⚫ Central Farm Machinery Testing and Training Institute, Budni.
⚫ Indian Institute of Petroleum, Dehradun
⚫ Central Institute of Road Transport, Pune.
⚫ International centre for Automotive Technology, Manesar.
⚫ Ministry of Heavy Industries & Public Enterprises (MoHI&PE)
 ⚫ Vehicle Research and Development Establishment (VRDE)
⚫ Central Institute of Road Transport (CIRT)
⚫ Society of Indian Automobile Manufacturers (SIAM)
⚫ Automotive Component Manufacturers Association (ACMA)
⚫ Tractor Manufacturers Association (TMA)
⚫ Central Motor Vehicles Rules-Technical Standing Committee (CMVR-TSC)

Auto Policy In India :

1. POLICY OBJECTIVES

This policy aims to promote integrated, phased, enduring and self-sustained growth of the
Indian automotive industry. The objectives are to:-
(i) Exalt the sector as a lever of industrial growth and employment and to achieve a high
degree of value addition in the country;
(ii) Promote a globally competitive automotive industry and emerge as a global sourcefor
auto components;
(iii) Establish an international hub for manufacturing small, affordable passenger cars and a
key center for manufacturing Tractors and Two-wheelers in the world;
(iv) Ensure a balanced transition to open trade at a minimal risk to the Indian economy
and local industry;
(v) Conduce incessant modernization of the industry and facilitate indigenous
design, research and development;
(vi) Steer India's software industry into automotive technology;
(vii) Assist development of vehicles propelled by alternate energy sources;
(viii) Development of domestic safety and environmental standards at par with
international standards.

Policies :

FOREIGN DIRECT INVESTMENT

7Automatic approval for foreign equity investment upto 100% of manufacture of automobiles
and component is permitted.
IMPORT TARIFF

The Government will review the automotive tariff structure periodically to encourage demand,
promote the growth of the industry and prevent India from becoming a dumping ground for
international rejects. In respect of items with bound rates viz. Buses, Trucks, Tractors, CBUs and
Auto components, Government will give adequate accommodation to indigenous industry to
attain global standards. In consonance with Auto Policy objectives, in respect of unbound items
i.e., Motor Cars, MUVs, Motorcycles, Mopeds, Scooters and Auto Rickshaws, the import tariff
shall be so designed as to give maximum fillip to manufacturing in the country without extending
undue protection to domestic industry.. Used vehicles imported into the country would have to
meet CMVR, environmental requirements as per Public Notice issued by DGFT laying down
specific standards and other criteria for such imports.

EXCISE DUTY

India can build export capability and become an Asian hub for export of small cars. The growth
of this segment needs to be spurred. Multi Utility Vehicles are an important mode of economical
mass transport in rural India due to poor road infrastructure and lack of good State transport
system. They are the first vehicle purchased by a number of farmers, traders, small businessmen
in rural and semi- urban markets. The Government will endeavour to provide fiscal incentives to
this sector. Commercial Vehicles Presently excise duty on commercial vehicles sold by a
manufacturer whether as a chassis or with a complete body is 16%. However, no duty is levied
on the body that is built by an independent body builder on chassis bought from a manufacturer.
This dispensation inveigles production of the complete trucks and buses by the chassis
manufacturer and is detrimental to safety standards. The duty imposed on the construction of
bodies by an independent body builder, small or organised sector, shall be equal to that of bodies
built by a chassis manufacturer. The Government will encourage fabrication of bus body on bus
chassis designed for better passenger comfort instead of truck chassis as is the current practice.
The Government will promote the use of multi-axle vehicles for carriage of goods as they cause
reduced environmental pollution and lesser wear and tear on road surface in comparison to the
existing 2-axle trucks.
In the Interiem Budget 2014 of India, Exise duty for automobile sector will reduce from 12% to
8%.So that prices of automobiles will reduced.
IMPROVING ROAD INFRASTRUCTURE

Traffic on roads is growing at a rate of 7 to 10% per annum while the vehicle population growth
for the past few years is of the order of 12% per annum. Poor road infrastructure and traffic
congestion can be a bottleneck in the growth of vehicle industry. A balanced and coordinated
approach will be undertaken for proper maintenance, upgradation and development of roads by
encouraging private sector participation besides public investment and incorporating latest
technologies and management practices to take care of increase in vehicular traffic. For the
convenience of traveling public the Government shall also promote multi-modal transportation
and the implementation of mass rapid transport systems.

INCENTIVE FOR RESEARCH AND DEVELOPMENT

The Government shall promote Research & Development in automotive industry by

strengthening the efforts of industry in this direction by providing suitable fiscal and financial
incentives. The current policy allows Weighted Tax Deduction under
I.T. Act, 1961 for sponsored research and in-house R&D expenditure. This will be improved
further for research and development activities of vehicle and component manufacturers from the
current level of 125%. 11.3 In addition, Vehicle manufacturers will also be considered for a
rebate on the applicable excise duty for every 1% of the gross turnover of the company expended
during the year on Research and Development carried either in-house under a distinct dedicated
entity, faculty or division within the company assessed as competent and qualified for the
purpose or in any other R&D institution in the country. Allocations to automotive cess fund
created for R&D of automotive industry shall be increased and the scope of activities covered
under it enlarged.

BUILDING BYE LAWS FOR RESIDENTIAL, COMMERCIAL AND OTHER

USES

With the growth of vehicles, smooth traffic movement has come under severe strain. The
problem has been aggravated because of inadequate provision of parking facilities generally.
Starting with metropolitan and important towns, the Government will pursue with State
Governments and Local bodies amendments to bye laws for upward revision of the parking
norms for new residential buildings, construction of common parking for existing residential
areas besides parking upgradation in all commercial areas. Multi-storied parking shall also be
encouraged.

ENVIRONMENTAL ASPECTS
The automotive and oil industry have to heave together to constantly fulfill environment
imperatives. The Government will continue to promote the use of low emission fuel auto
technology. The Government after considering the recommendations of the Expert Committee
on Auto Fuel Policy headed by Dr.
R.A. Mashelkar, have approved a road map for implementation for the auto fuel quality
consistent with the required levels of vehicular emissions norms and environmental quality. The
Government will formulate a comprehensive auto fuel policy covering the other related aspects
and ensure availability of appropriate auto fuel/fuel mixes at minimum social costs across the
country. Suitable institutional mechanism will be put in place for certification, monitoring and
enforcement of different technologies/fuel mixes . In the short run, the Government will
encourage the use of short chain hydrocarbons along with other auto fuels of the quality
necessary to meet the vehicular emissions norms. There is prime need to support the
development and introduction of vehicles propelled by energy sources other than hydrocarbons
by promoting appropriate automotive technology. Hybrid vehicles and vehicles operating with
batteries and fuel cells are alternatives to the conventional automobile, which in their early
beginnings, lie intreasured.. In order to facilitate faster upgradation of environmental quality, the
Govt. will consider having a terminal life policy for commercial vehicles alongwith incentives
for replacement for such vehicles.

SAFETY

14.1 Government will duly amend the Central Motor Vehicles Rules, Bureau of Indian Standards
(BIS) and other relevant provisions and introduce safety regulations that conform to global
standards. 14.2 Testing and certification facilities need to be revised and strengthened in
accordance with safety standards of global order. Government, in partnership with industry, will
tend to this requirement.
Pollution handling and environmental issues faced by the industry.

If it is believed that smoking is harmful then there is a need to take a break from the personal
automobile as the favorite set of wheels could be harming the environment and even the health
more. As rest of the world is catching up with the concept of personal cars in the country, where
days back having a car for the entire family will soon become a thing of the past as each bread
winner of the family wants his or her personal set of wheels. Hence it is would not be surprising
that the pollution levels in several metros of the country like Delhi, Mumbai, Kolkata and
Bangalore are on the increase. In the cars the pollution comes from the process of the
evaporation of the fuel and from the by-products of the combustion process.

Cars use Petrol and Diesel which are a mixture of Hydrocarbons and compounds usually
contain Hydrogen and carbon items. In simple terms the Oxygen in the air converts all the
Hydrogen in the fuel to water and Carbon in the fuel would be converted to Carbon D11ioxide.
Nitrogen is supposed to remain unaffected in this whole process. However things are not that
good as they look and engines are not that perfect either. Several types of harmful gases are
emitted in the whole process of combustion which leaves the air polluted.

The government is taking and has taken steps to introduce catalytic converters in the country a
few years back to reduce air pollution. In addition to this petrol with lead has been phased out
from several parts of the country to cut down on lead particles in the exhaust.

In addition to this several cars and two wheeler companies are striving hard themselves to
provide pollution free environment. Companies like Tata Motors and Mahindra are fine tuning
their Diesel engines for optimum performance and reduced emission. In the two-wheelers
category the companies like Hero Honda is providing pollution free vehicles.
Liberalisation

Eventually multinational automakers, such as, though not limited to, Suzuki and Toyota of Japan
and Hyundai of South Korea, were allowed to invest in the Indian market ultimately leading to
the establishment of an automotive industry in India. Maruti Suzuki was the first, and the most
successfulof these new entries, and in part the result of government policies to promote the
automotive industry beginning in the 1980s. As India began to liberalise their automobile
market in 1991, a number of foreign firms also initiated joint ventures with existing Indian
companies. The variety of options available to the consumer began to multiply in the nineties,
whereas before there had usually only been one option in each price class. By 2000, there were
12 large automotive companies in the Indian market, most of them offshoots of global
companies.

The Premier Padmini was the Ambassador's only true competitor.

Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets and
neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe
(Hungary). After some growth in the mid-nineties, exports once again began to drop as the
outmoded platforms handed down to Indian manufacturers by multinationals were not
competitive. This was not to last, and today India manufactures low-priced cars for markets
across the globe. As of 18 March 2013 global brands such as Proton Holdings, PSA Group, Kia,
Mazda, Chrysler, Dodge and Geely Holding Group are shelving plans for India due to the
global economic crisis.
 CHAPTER 4:
FINANCIAL FEASIBILITY

Maruti Suzuki India Limited

 Key Financial Ratios of Maruti
Suzuki India

' Mar '13 Mar '12 Mar '11 Mar '10

Investment Valuation Ratios
Face Value 5.00 5.00 5.00 5.00
Dividend Per Share 8.00 7.50 7.50 6.00
Operating Profit Per re (Rs) 140.02 86.98 125.94 129.38
Sha
Net Operating Profit Share (Rs) 1,442.93 1,231.77 1,267.47 1,014.77
Per
Free Reserves Per (Rs) -- -- -- 403.82
Share
Bonus in Equity Capital -- -- -- --
Profitability Ratios
Operating Profit %) 9.70 7.06 9.93 12.74
Margin(
Profit Before Interest And Tax Margin(%) 5.33 3.77 7.07 9.73
Gross Profit Margin(%) 5.43 3.86 7.16 9.93
Cash Profit Margin(%) 9.57 7.61 8.89 10.78
Adjusted Cash Margin(%) 9.57 7.61 8.89 10.78
Net Profit Margin(%) 5.38 4.49 6.16 8.34
Adjusted Net Profit gin(%) 5.38 4.49 6.16 8.34
Mar
Return On Capital Employed(%) 15.92 13.53 22.32 27.89
Return On Net ) 12.87 10.76 16.50 21.10
Worth(%
Adjusted Return on Net Worth(%) 12.87 10.76 16.50 20.29
Return on Assets ing Revaluations 615.03 525.68 479.99 409.65
Exclud
Return on Assets ng Revaluations 615.03 525.68 479.99 409.65
Includi
Return on Long Term Funds(%) 16.63 14.49 22.37 28.80
Liquidity And Solvency Ratios
Current Ratio 1.04 1.13 1.57 0.91
Quick Ratio 0.90 1.03 1.26 0.68
Debt Equity Ratio 0.07 0.07 0.01 0.07
Long Term Debt Equity Ratio 0.03 -- 0.01 0.04
Debt Coverage Ratios
Interest Cover 16.76 39.88 125.35 105.39
Total Debt to Owners Fund 0.07 0.07 0.01 0.07
Financial Charges Coverage Ratio 26.56 60.50 165.89 130.02
Financial Charges Coverage Ratio Post Tax 23.41 51.25 133.08 100.18
Management Efficiency Ratios
Inventory Turnover Ratio 23.68 19.81 25.88 30.47
Debtors Turnover Ratio 36.92 40.39 44.81 33.92
Investments Turnover Ratio 23.68 19.81 25.88 30.47
Financial Statements for maruti suzuki india ltd (MSIL)
Year over year, Maruti Suzuki India Limited has been able to grow revenues from 352.0B INR
to 432.2B INR. Most impressively, the company has been able to reduce the percentage of sales
devoted to cost of goods sold, SGA expenses and income tax expenses. All of these
improvements led to a bottom line growth from 16.8B INR to 24.7B INR.

Currency in Mar 31 Mar 31 Mar 31 Mar 31

Millions of Indian Rupees 2010 2011 2012 2013
Restated Restated Restated INR
INR INR INR

Revenues 295,915. 363,330. 351,972. 432,159.

0 0 0 0
Other Revenues -- 3,559.0 3,959.0 5,477.0

TOTAL REVENUES 295,915. 366,889. 355,931. 437,636.

0 0 0 0
Cost of Goods Sold 241,123. 311,231. 308,382. 365,491.
0 0 0 0
GROSS PROFIT 54,792.0 55,658.0 47,549.0 72,145.0

Selling General & Admin Expenses, Total 15,820.0 17,170.0 19,006.0 23,326.0

Depreciation & Amortization, Total 8,414.0 10,313.0 11,625.0 18,897.0

Other Operating Expenses -1,001.0 1,408.0 233.0 3,158.0

OTHER OPERATING EXPENSES, TOTAL 23,233.0 28,891.0 30,864.0 45,381.0

OPERATING INCOME 31,559.0 26,767.0 16,685.0 26,764.0

Interest Expense -374.0 -288.0 -611.0 -1,967.0

Interest and Investment Income 3,756.0 3,856.0 3,598.0 2,652.0

NET INTEREST EXPENSE 3,382.0 3,568.0 2,987.0 685.0

Income (Loss) on Equity Investments 797.0 753.0 474.0 219.0

Currency Exchange Gains (Loss) -135.0 135.0 -1,810.0 -1,519.0

Other Non-Operating Income (Expenses) 696.0 362.0 1,173.0 869.0

EBT, EXCLUDING UNUSUAL ITEMS 36,299.0 31,585.0 19,509.0 27,018.0

Gain (Loss) on Sale of Investments 1,264.0 597.0 2,575.0 4,234.0

Gain (Loss) on Sale of Assets -97.0 -79.0 -157.0 -332.0
 EBT, INCLUDING UNUSUAL ITEMS 37,466.0 32,103.0 21,927.0 30,920.
0
Income Tax Expense 11,219.0 8,279.0 5,115.0 6,215.0

Minority Interest in Earnings -- -- -- -13.0

Earnings from Continuing Operations 26,247.0 23,824.0 16,812.0 24,705.

0
NET INCOME 26,247.0 23,824.0 16,812.0 24,692.
0

NET INCOME TO COMMON INCLUDING EXTRA 26,247.0 23,824.0 16,812.0 24,692.0

ITEMS

NET INCOME TO COMMON EXCLUDING EXTRA 26,247.0 23,824.0 16,812.0 24,692.0

ITEMS
Hyundai Motors India Limited

Hyundai reports Rs 12,600 crore revenue from India in H1, 2012

Korean auto major Hyundai Motor Co today reported 3 per cent increase in revenue from Indian
operations at 2,612 billion Korean Won (over Rs 12,600 crore) during the first half of 2012
amid declining sales of its main models, except for entry-level small car Eon.

According to its half yearly business results report, the the company's Indian arm -- Hyundai
Motor India Ltd (HMIL) had a revenue of 2,533 billion Korean Won (over Rs 12,300 crore) in
the first half of 2011.

In terms of volumes, HMIL posted 7.2 per cent increase in sales during the first half of 2012
to 3,25,000 units as against 3,03,000 units in the same period last year.

The gain in the volume was mainly on account of the entry level hatchback, Eon which clocked
62,000 units during the period. HMIL had launched Eon in October last year.

During the period under review, sales of the company's best selling model i10 declined by 11.26
per cent to 1,26,000 units in the first six months of the year as compared to 1,42,000 in the
year-ago period, the report said.

Sales of premium hatchback i20 also declined by 16.41 per cent to 56,000 units in the first six
months of the year as compared to 67,000 units in the same period last year.

HMIL's combined sales of other models, including Santro, Accent and Verna, also dropped by
13.82 per cent to 81,000 units during the period under review as against 94,000 units the
corresponding period in 2011, it added.

.
Tata Motors India Limited

Balance Sheet of Tata

------------------- in Rs. Cr. -------------------
Motors
Mar '13 Mar '12 Mar '11 Mar '10
12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share 638.07 634.75 637.71 570.60
Capital
Equity Share Capital 638.07 634.75 637.71 570.60
Share Application Money 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00
Reserves 18,496.77 18,991.26 19,375.59 14,208.55
Revaluation Reserves 0.00 0.00 0.00 24.63
Networth 19,134.84 19,626.01 20,013.30 14,803.78
Secured Loans 5,877.72 6,915.77 7,708.52 7,742.60
Unsecured Loans 8,390.97 4,095.86 6,929.67 8,883.31
Total Debt 14,268.69 11,011.63 14,638.19 16,625.91
Total Liabilities 33,403.53 30,637.64 34,651.49 31,429.69
Mar '13 Mar '12 Mar '11 Mar '10
12 mths 12 mths 12 mths 12 mths
Application Of Funds
Gross Block 25,190.73 23,676.46 21,002.78 18,416.81
Less: Accum. Depreciation 9,734.99 8,656.94 7,585.71 7,212.92
Net Block 15,455.74 15,019.52 13,417.07 11,203.89
Capital Work in Progress 4,752.80 4,036.67 3,799.03 5,232.15
Investments 19,934.39 20,493.55 22,624.21 22,336.90
Inventories 4,455.03 4,588.23 3,891.39 2,935.59
Sundry Debtors 1,818.04 2,708.32 2,602.88 2,391.92
Cash and Bank Balance 462.86 1,840.96 2,428.92 612.16
Total Current Assets 6,735.93 9,137.51 8,923.19 5,939.67
Loans and Advances 5,305.91 5,832.03 5,426.95 5,248.71
Fixed Deposits 0.00 0.00 0.00 1,141.10
Total CA, Loans & Advances 12,041.84 14,969.54 14,350.14 12,329.48
Deffered Credit 0.00 0.00 0.00 0.00
Current Liabilities 16,580.47 20,280.82 16,271.85 16,909.30
Provisions 2,200.77 3,600.82 3,267.11 2,763.43
Total CL & Provisions 18,781.24 23,881.64 19,538.96 19,672.73
Net Current Assets -6,739.40 -8,912.10 -5,188.82 -7,343.25
Miscellaneous Expenses 0.00 0.00 0.00 0.00
Total Assets 33,403.53 30,637.64 34,651.49 31,429.69
Contingent Liabilities 14,981.11 15,413.62 19,084.08 3,708.33
Book Value (Rs) 59.98 61.84 315.36 259.03
 Key Financial Ratios of Tata Motors

Mar Mar '12 Mar '11 Mar '10

'13
Investment Valuation Ratios
Face Value 2.00 2.00 10.00 10.00
Dividend Per Share 2.00 4.00 20.00 15.00
Operating Profit Per Share (Rs) 5.39 13.16 73.51 70.68
Net Operating Profit Per Share (Rs) 140.33 171.12 742.00 619.98
Free Reserves Per Share (Rs) -- -- -- 229.67
Bonus in Equity Capital 17.44 17.53 17.45 19.50
Profitability Ratios
Operating Profit Margin(%) 3.83 7.69 9.90 11.40
Profit Before Interest And Tax Margin(%) -0.21 4.68 6.95 8.38
Gross Profit Margin(%) -0.22 4.73 7.01 8.47
Cash Profit Margin(%) 5.43 6.25 6.98 7.26
Adjusted Cash Margin(%) 5.43 6.25 6.98 7.26
Net Profit Margin(%) 0.64 2.26 3.81 6.26
Adjusted Net Profit Margin(%) 0.64 2.26 3.81 6.26
Return On Capital Employed(%) 5.95 10.26 10.75 10.37
Return On Net Worth(%) 1.57 6.32 9.05 15.15
Adjusted Return on Net Worth(%) 3.80 9.31 9.78 9.61
Return on Assets Excluding Revaluations 59.98 61.84 315.36 259.03
Return on Assets Including Revaluations 59.98 61.84 315.36 259.46
Return on Long Term 7.31 11.38 12.55 12.26
Funds(%) Liquidity And
Solvency Ratios
Current Ratio 0.42 0.50 0.52 0.44
Quick Ratio 0.40 0.43 0.54 0.44
Debt Equity Ratio 0.75 0.56 0.73 1.12
Long Term Debt Equity Ratio 0.42 0.41 0.48 0.80
Debt Coverage Ratios
Interest Cover 1.43 2.58 2.69 2.61
Total Debt to Owners Fund 0.75 0.56 0.73 1.12
Financial Charges Coverage Ratio 2.74 3.90 3.68 3.56
Financial Charges Coverage Ratio Post 2.53 3.34 3.29 3.74
Tax Management Efficiency Ratios
Inventory Turnover Ratio 10.05 11.84 12.10 13.50
Debtors Turnover Ratio 19.78 20.45 18.86 17.92
Investments Turnover Ratio 10.05 11.84 12.10 13.50
Fixed Assets Turnover Ratio 2.03 2.66 2.55 1.95
Total Assets Turnover Ratio 1.48 1.98 1.46 1.14
Asset Turnover Ratio 1.40 1.66 1.43 1.24
Earnings Per Share 0.95 3.91 28.55 39.26
Honda Cars India Limited

¥9.877 trillion$ 104

Revenue Billion USD (2013)

Operating
income ¥544.8 billion (2013)

Net income ¥367.1 billion (2013)

Total assets ¥11.780 trillion (2012)

Total equity ¥4.402 trillion (2012)

Honda's Net Sales and Other Operating Revenue by Geographical Regions in 2007[

Geographic Region Total revenue (in millions of ¥)

Japan 1,681,190

North America 5,980,876

Europe 1,236,757

Asia 1,283,154

Others 905,163
Volkswagan India

Production output 5,771,789 units (2012)

Revenue €103.942 billion (2012)
Profit €21.7 billion (2012)

Sales performance

In the year 2010, VIPL recorded sales of 32,627 vehicles against 3,039 vehicles sold during the
year 2009 and registered a sales growth of over 1,000%.

Nissan Motors India Limited

Sales performance

In the year 2007, NMIPL recorded sales of 533 vehicles. Nissan Motor India has
sold more than 13,000 units of its flagship model Micra since sales began in July 2010.

Production 4,889,379 units

output
(2012)[4]

Revenue ¥9.63 trillion (2012)[5]

Operating income ¥523.5 billion (2012)[5]

Profit ¥342.4 billion (2012)[5]

Total assets ¥12.8 trillion (2012)[5]

Total equity ¥4.51 trillion (2012)[6]

 OPERATING / PRODUCTION FEASIBILITY

A number of economic trends could help in meeting this target. Rapid urbanization means the country will have
over 500 million people living in cities by 2030—1.5 times the current US population. Rising incomes will also
play a role, as roughly 60 million households could enter the consuming class (defined as households with
incomes greater than $8,000 per annum) by 2025. At the same time, more people will join the workforce.
Participation could reach 67 percent in 2020, as more women and youth enter the job market, raising the
demand for mobility.
Some of them would leap straight into four-wheeler segment, and others will graduate from two- to four-wheelers.
Over 44 percent of the consuming-class households will be in 49 growth clusters—for example, Delhi is expected
to have the same GDP per capita at purchasing power parity as the entire country of Russia in 2025.Cities like
Delhi are a sweet spot for car manufacturers to target.

Continued government focus on supporting the industry

 Through the Automotive Mission Plan, the National Electric Mobility Mission Plan (NEMMP), and
other initiatives, the government seeks to achieve two objectives—facilitate long-term growth in the
industry and reduce emissions and oil dependence.
 In the Automotive Mission Plan 2026, the government and industry set a target to triple industry
revenues, to $300 billion, and expand exports sevenfold, to $80 billion. To meet these aims, it is
estimated that the sector could contribute more than 60 million additional direct and indirect jobs,
and the result could be improved manufacturing competitiveness and reduced emissions.
 To tackle emissions, the government seeks to bring local standards up to par with global standards,
enabling India to leapfrog from BS-4 to BS-6 emissions (the Euro 6 equivalent) by 2020 (Exhibit 1).
Additionally, India has implemented Corporate Average Fuel Efficiency norms in which the manufacturers
have to improve their fuel efficiency by 10 percent between 2017 and 2021 and by 30 percent or more from 2022.
 CHAPTER 5:
RECENT DEVELOPMENTS

Indian auto industry, is currently growing at the pace of around 18 % per annum, has become a
hot destination for global auto manufacturers like Volvo, General Motors and Ford. The Indian
Automobile industry has adopted global standards which are manifested in the increasing exports
of this sector. After a temporary decline in the years 1998- 99 and 1999-00, exports increased
with robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two
and- a-half times the export figure for 2001-02.

The Annual growth of the industry was 16.0 per cent in April-December, 2004; the growth rate
in 2003-04 was 15.1 per cent. The compound annual growth rate (CAGR) of Indian
Automobile Industry is of 22 per cent between 1992 and 1997. While the investments
exceeding to Rs.
50,000 crore, the turnover of the industry was Rs. 59,518 crore in 2002-03. It even estimated to
have exceeded Rs.1, 00,000 crore (USD

The development story of the Indian automobile industry cannot be complete without
mentioning the Pioneer Mr. J.R.D Tata's role in setting up the Tata group with high standard
Engineering Research Centre (ERC) in 1965 to facilitate technological advancement.. 60% of
the Indian commercial vehicle market is dominated by Tata Motors.

 Today India is being recognized as a potential emerging auto market.

 The industry adds up foreign players to their investments.
 80% of the segment size is contributed by two-wheelers & motorcycles.
 Indian passenger vehicle market is dominated by cars (79%) unlike the USA.
 India is the largest three-wheeler & two-wheeler market in the world. It is second largest
tractor manufacturer in the world, fifth largest commercial vehicle manufacturer in the
world.
 India crossed the 1 million mark as the fourth largest car market in Asia recently.
 The industry is expected to grow to US$ 40 billion by 2015 from the current level of
US$ 7 billion in 2008. By the year 2016 the industry is expected to contribute 10% of the
nation's GDP.
 Very recently history has been created in the world of Automobile Industry by Ratan
Tata, Chairman (Tata Motors) by launching the world's cheapest car NANO. The price of
the car was around one lakh which gained instant recognition in the automobile industry
across the globe. It heralded the coming to age of the Indian Automobile Industry.

India is the second Largest Producer of Motorcycles in the world (5.2 Mln) after China .
Exports in the industry

India's automobile exports have grown consistently and reached $4.5 billion in 2009, with
United Kingdom being India's largest export market followed by Italy, Germany, Netherlands
and South Africa. India's automobile exports are expected to cross $12 billion by 2014.

In 2008, South Korean multinational Hyundai Motors alone exported 240,000 cars made in India.
Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011.[83]
Similarly, US automobile company, General Motors announced its plans to export about 50,000
cars manufactured in India by 2011.

In September 2009, Ford Motors announced its plans to set up a plant in India with an annual
capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the Indian
market and for export.

In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after
Japan (1.77m), Korea (1.12m) and Thailand (0.26m) by allowing foreign carmakers 100%
ownership of factories in India, which China does not allow.

Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually
from India. Apart from Maruti Exports' shipments to Suzuki's other markets, Maruti Suzuki also
manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small
cars from its new Indian assembly line.
Tata Motors exports its passenger vehicles to Asian and African markets, and is in preparation to
launch electric vehicles in Europe in 2010. The firm is also planning to launch an electric
version of its low-cost car the Tata Nano in Europe and in the
U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in
the U.S. market. Bajaj Auto is designing a low-cost car for Renault Nissan Automotive India,
which will market the product worldwide. Renault Nissan may also join domestic commercial
vehicle manufacturer Ashok Leyland in another small car project.

Following are the top 20 export countries of Indian Automobiule Industry :

 Rank
2007-2008 (in USD 2008-2009 (in USD Percentage
Country
Millions) Millions) Growth

1 United States of 593.64 525.24 -11.52

America
2 Italy 332.35 359.68 8.22
3 Sri Lanka 249.14 216.11 -13.26
4 South Africa 224.93 188.57 -15.79
5 United Kingdom 165.57 246.32 48.77

6 United Arab 164.44 192.74 17.21

Emirates
7 Algeria 147.34 265.63 80.28
8 Bangladesh 137.26 164.86 20.11
9 Egypt 134.43 143.54 5.99
10 Germany 133.52 409.63 206.8
11 Colombia 118.88 120.71 1.54
12 Nepal 111.33 98.13 -11.86
13 Mexico 93.80 94.10 0.32
14 Turkey 83.53 73.82 -11.63
15 Spain 81.01 56.96 -29.69
16 France 76.77 134.21 74.83
17 Nigeria 66.01 148.74 125.03
18 Greece 65.75 127.63 94.1
19 Netherland 65.19 163.66 151.05
20 Ghana 59.91 38.30 -36.07
Technological Development in the industry :

Indian automotive industry urgently needs technologies to produce fuel efficient, environmental
friendly, lighter, safer, and cost competitive engines and vehicles. Therefore, some of the areas
where there is a need for nationally focused efforts in technology development are: advanced
materials, advanced manufacturing techniques, newer and innovative technologies for utilization
of alternative fuels, emission abatement, fuel economy improvement, safety enhancement, engine
management systems, embedded vehicle control system.

In this phase of TDM, there are 33 projects ( 2 from IITD, 2 from IITM, 11from IITKG, 4 from
IISc ,8 from IITR,6 from IITK ) in automotive technology areas that aim at providing
technological solutions in a wide spectrum of subjects ranging from development of advanced
materials, hydrogen fueled bus, fuel efficient two wheeler engine, electric vehicle to intelligent
vehicles.

Leading Automotive OEMs and Component industries like Ashok Leyland, Tata Auto
Components Ltd., Harita Industries, TVS Motors, Motorola, Tata Steel, Tata Motors have
committed participation in these projects.

National Needs

Indian automotive industry contributes significantly to the overall GDP of the nation and also
provides significant business and employment opportunities. It is an engine of growth for the
Indian economy. It is one of the key industries whose well being is very important in our
vision of improving the living standard of our population.

With the liberalization of economy, the decades old monopolistic environment of the Indian
automotive industry where only a handful of vehicle models were available with a long waiting
list, gradually gave way to a highly competitive, complex and rapidly changing market which
was not limited to domestic market alone. Today the number of vehicle models available are
more than hundred and not a month goes without offerings of newer and more advanced model.
Today the market is customer driven with performance, cost, fuel economy and reliability being
the key drivers.

. The market has slowly become a technology driven market where MNCs are using "technology
forcing" as a route to keep their market share. Thus the need for Indian automotive industry to
develop/ acquire a range of new technologies in a very short time has never been so acute .
Ironically for the Indian automotive industry, the cost of technology development has increased
manifold and increasing product cost has put a squeeze on profit margins affecting their ability
to outsource expensive technologies.

Some of the issues we face are unique to India (such that 70% of our vehicle population consists
of two wheelers and 7 out of the 10 dirtiest cities are in India) and innovative technologies
relevant to its need are needed. Three wheelers are unique to our market and no technologies are
available from advanced countries to optimize such veh. Indian automotive industry urgently
needs technologies to produce fuel efficient, environmental friendly, lighter, safer and cost
competitive engines, and vehicle
From this Desk Research we concluded that,

The Indian Automobile Industry is the fastest growing industry in India. Many foreign
automobile players setuping its units in India. Almost all big automobile players perform CSR
activities. External environment factors affects a lot on Indian automobile industry. Day by day
profits of automobile industry is increasing and lot of technological developments happening in
the industry.
References:
 http://www.siamindia.com/scripts/auto-policy.aspx
 http://www.caradzindia.com/caradzindia/newsroom-media.php
 http://www.niir.org/profiles/profiles/identified-project-opportunities-andhra-
pradesh/z,,8c,0,a/index.html
 http://www.ibef.org/industry
 International Organization of Motor Vehicle Manufacturers, Media Reports, Press
Releases, Department for Promotion of Industry and Internal Trade (DPIIT),
Automotive Component Manufacturers Association of India (ACMA), Society of Indian
Automobile Manufacturers (SIAM), Union Budget 2021-22