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Automotive industry in India

From Wikipedia, the free encyclopedia

Mahindra Scorpio, one of India's best selling indigenously developed SUV.

Foreign carmakers have built plants in India.

The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year.[1] It is the world's second largest manufacturer ofmotorcycles, with annual sales exceeding 8.5 million in 2009.[2] India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010.[3] According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12.[4] In 2009, India emerged asAsia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[5] As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world.[6][7] According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by

2015 and more than 9 million by 2020.[8] By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.[9] A chunk of India's car manufacturing industry is based in and around Chennai, also known as the "Detroit of India"[10] with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60 per cent of the country's automotive exports.[11] Gurgaon and Manesar in Haryana are hubs where all of theMaruti Suzuki cars in India are manufactured.[12] The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda,Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors[13][14]having assembly plants in the area. Ahmedabad with the Tata Nano plant, Halol again withGeneral Motors, Aurangabad with Audi, Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.[15][16][17]

1 Overview 2 History 3 Industry Definition 4 Supply Chain of Automobile Industry 5 Key statistics

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5.1 Automobile Production 5.2 Automobile Sales 5.3 Automobile Exports 5.4 Product and service segmentation 5.5 Vehicle Registration 5.6 Total Number of Vehicle Registrations in India from 2001 to 2008

6 Emission norms 7 Geographic Segmentation

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7.1 Geographical Segmentation:State-wise motor vehicles registration in India from 2001 - 2008 7.2 Geographical Segmentation: Category-wise number of registrations in States of India 7.3 Geographical Segmentation: Category-wise registration in Union Territories of India

8 Exports


8.1 Top 20 Export destinations in 2007-2008 and growth from previous year

9 Passenger vehicles in India

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9.1 Indian automotive companies 9.2 Foreign automotive companies in India 

9.2.1 Vehicles manufactured or assembled in India 9.2.2 Vehicles brought into India as CBUs

10 Commercial vehicle manufacturers in India

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10.1 Indian brands 10.2 Joint Venture Brands 10.3 Foreign brands

11 Electric car manufacturers in India 12 Market Characteristics 13 International Markets 14 International Markets Analysis 15 Basis of Competition 16 Life Cycle 17 Industry Conditions 18 Taxation 19 MODVAT and CENVAT 20 Customs Duty 21 Service Tax 22 Capital and Labour Intensity 23 Industry Volatility 24 Key Competitors

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24.1 Tata Motors 24.2 Maruti Suzuki India 24.3 Hyundai Motor India 24.4 Mahindra & Mahindra 24.5 Ashok Leyland 24.6 Hero Honda Motors 24.7 Bajaj Auto

25 Key Factors 26 Key Success Factors

27 Further reading 28 Footnotes


The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year.[18] The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%.[18] Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes.[18] The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people.[18] The supply chain of this industry in India is very similar to the supply chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition in the sector is high and increasing, and its life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged. Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%.[18] The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more

Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. customer sentiment dropped. Industry and Indian Government are obligated to intervene the Indian Automotive industry. Currently. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India. Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Until the 1930s. Consumers are very important of the survival of the Motor Vehicle manufacturing industry. The key to success in the industry is to improve labour productivity. Bajaj Auto in itself is occupying about 58% of the three wheeler market. The price of oil and petrol affect the driving habits of consumers and the type of car they buy. and capital efficiency. the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles. Embryonic automotive industry emerged in India in the 1940s. With a combined effort. Hero Honda Motors is occupying over 41% and sharing 26%[18] of the two wheeler market in India with Bajaj Auto. the industry has been volatile. cars were imported directly. Mahindra & Mahindra was established by two brothers as a trading company in 1945. which burned on the augmentation in demand of cars. Having quality manpower.[18] Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. infrastructure improvements. and raw material availability also play a major role.[18] Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. In 2008-09. [edit]History The first car ran on India's roads in 1897. but in very small numbers. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. attract investment and promote research and development. Over the past few years. India¶s increasing per capita disposable income which is expected to rise by 106% by 2015[18] and growth in exports is playing a major role in the rise and competitiveness of the industry. and began assembly of Jeep CJ-3A . create favourable and predictable business environment. The Indian government should facilitate infrastructure creation.competitive. Both. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. labour flexibility.

[27] SIAM is the apex industry body representing all the vehicle manufacturers. Cars were still a major luxury.[20] Following the independence.[26] Congestion of Indian roads.utility vehicles under license from Willys. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant India-specific investment by multinational automobile manufacturers. in 1947. car sales in India have progressed at a CAGR of 13. more than market demand. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog.[21] Following economic liberalization in India in 1991. but the growth was mainly driven by tractors. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the license raj.[19] The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. and with only 10% of Indian households owning a car in 2009 (whereas this figure reaches 80% in Switzerland for example [25]) this progression is unlikely to stop in the coming decade. will likely be the limiting factor. a number of Indian and multi-national car companies launched operations. home-grown and international. Several Indian automobile manufacturers such as Tata Motors. expanded their domestic and international operations. the growth was relatively slow in the 1950s and 1960s due tonationalisation and the license raj which hampered the Indian private sector.992 units in October 2009. monthly sales of passenger cars in India exceeded 100. in India. commercial vehicles and scooters.[24] From 2003 to 2010. However. the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. the automotive industry started to grow. A number of foreign firms initiated joint ventures with Indian companies. the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry.000 units[23] and has since grown rapidly to a record monthly high of 182.[28] [edit]Industry Definition .7%. a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles.[21] In the 1980s. Since then. After 1970. Maruti Suzuki and Mahindra and Mahindra.[22] In February 2009. automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands.

This class consists of units mainly engaged in manufacturing motor vehicles or motor vehicle engines. plastic and aluminium to the second tier suppliers. They work on designs provided by the first tier suppliers or OEMs. flow from the top of the supply chain to reach the consumers. bending etc. glass. Products and Services The primary activities of this industry are: Motor cars manufacturing Motor vehicle engine manufacturing The major products and services in this industry are: Passenger motor vehicle manufacturing segment (Passenger Cars. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry. Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. They also provide engineering resources for detailed designs. Third Tier Suppliers: These companies provide basic products like rubber. However the products. or cockpit but also for the management of secondtier suppliers. fabrication. . These companies have global coverage. Utility Vehicles & Multi Purpose Vehicles) Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles) Two Wheelers Three Wheelers [edit]Supply Chain of Automobile Industry The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. e. from the consumers and goes through the automakers and climbs up until the third tier suppliers. First tier suppliers are responsible not only for the assembly of parts into complete units like dashboard. The orders of the industry arise from the bottom of the supply chain i.. steel. First Tier Suppliers: These companies provide major systems directly to assemblers. breaks-axel-suspension. shearing. in order to follow their customers to various locations around the world. Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers. seats. The description and the role of each of the contributors to the supply chain are discussed below. as channelled in every traditional automotive industry. Some of their services may include welding. They design and innovate in order to provide ³black-box´ solutions for the requirements of their customers.

473.403 285.149 Year Motor Vehicle Production Industry Revenue [18] [18] % Change 29.78 28.00 31.98 7.36 7.20 50.Toyota.161.511.25 3. The design process normally takes five years.930 32.89 13.99 -1.330 486.178.10 -9. to the authorised dealers of the companies. It passed the 1 million mark during 2003-2004 and has more than doubled since.52 -0.853. windshields.264.62 -2.808 362.27 29.175.33 16.503 26.74 16.35 10.354 907.379 2005-2006 9.550 2.641. automakers begin designing models which are tailored to consumers¶ demands.743.24 -43. repairing parts.86 -4.783 2. Examples of these companies are Tata Motors.846. and Honda.199 466.054 283.467.848 160. 755 332.328 2.277 540.019.555 190.000 1.83 7. Innovation.58 Total Vehicles Prodn.383 2008-2009 11.997 30.051 1.Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After researching consumers¶ wants and needs.557 517.342* .853 24.74 9.85 Commercial 722.479 1.957 533. and air bags etc.253.948 654.39 19. Service Providers: Some of the services to the customers include servicing of vehicles.250 546.96 8. design capability and branding are the main focus of these companies.55 26. 3.86 19.220 1. Many dealers provide these services but.22 23.713. Dealers: Once the vehicles are ready they are shipped to the regional branch and from there.37 -2.969 2006-2007 11.10 2004-2005 8.479 33.808 1.13 22.044 % Change 54.087.968 703.755 1. Automakers are the key to the supply chain of the automotive industry.999 2.[29] Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Car Production 2. Parts and Accessory: These companies provide products like tires.584 2. [edit]Key statistics The production of automobiles has greatly increased in the last decade. to automakers and dealers or directly to customers. These companies have manufacturing units where engines are manufactured and parts supplied by first tier suppliers and second tier suppliers are assembled.53 7.96 1. The dealers then sell the vehicles to the end customers.157 1. or financing of vehicles.175.000 1.803 253.536. customers can also choose to go to independent service providers.814.523 894796 814611 801360 818193 % Change 33.25 32.332.507 2007-2008 10.628.39 17. Maruti Suzuki.

Exports (Units)[18] Exports (Revenue) [18] 629.544 2005-2006 175.654.222 2006-2007 198.278 9.600 76.994 141.445 6.608.530.494 364. commercial vehicles and three wheelers.435 2008-2009 1.545.011.225 819.572 40. The passenger vehicles manufacturing account for about 15% of the market in India.008 1.076 351.122 349.660 Commercial Vehicles Three Wheelers Two Wheelers Total [edit]Product [18] [18] and service segmentation The automotive industry of India is categorised into passenger cars.697 417.876 353.552 1.765 403.309.906.074 1.853.739 42.829 8. with two wheelers dominating the market.175.719 7.a leading automaker of India.551.940 66.910 7.083 434.026.997 2008-2009 1.882 490.697 9.452 49.670 9.006 500. two wheelers. . is the world¶s cheapest passenger car.430 307.777.174 1.897.549.391 Commercial Vehicles Three Wheelers Two Wheelers Total [18] [18] [edit]Automobile Type of Vehicle Passenger Vehicles [18] [18] Exports 2004-2005 166. All sedan. Nearly 59% of these two wheelers sold weremotorcycles and about 12% were scooters.673 148.537 143.982 556.169 806. Multi-purpose vehicles or people-carriers are similar in shape to a van and are taller than a sedan.988 2007-2008 1.930 2009-2010 1.123.126 501.765 7.222 2.143.300 391.126 8.681 10.334 10. station wagon and sports cars fall under passenger cars.572 318.920 7. Utility vehicles are designed for specific tasks.544 1.209.529.660 3.402 29. Mopeds occupy a small portion in the two wheeler market however. manufactured by Tata Motors .223 519.862 6.896 619.723.881 513. hatchback or a station wagon.718* [edit]Automobile Type of Vehicle Passenger Vehicles [18] [18] Production 2005-2006 1.781 7.629 2005-2006 1.713 1. utility vehicles and multipurpose vehicles.004.238.391 8.011.979 467.249.437.418.626 11.030 8.209.530.880 384.333 2008-2009 335. More than 75% of the vehicles sold are two wheelers.041 359.872.529 2007-2008 218.529 2.853 2006-2007 1.660 8. electric two wheelers are yet to penetrate.479 Commercial Vehicles Three Wheelers Two Wheelers Total [18] [18] [edit]Automobile Type of Vehicle Passenger Vehicles [18] [18] Sales 2004-2005 1. hatchback.644 1.915 806.583 549.423 7.743.061.838.401 58. The passenger vehicles are further categorised into passenger cars.666 11.428 2006-2007 1.467.703 374.238.795 366.231 1.503 2007-2008 1.379. Tata Nano.333 3.466.407 629.052. and are designed for maximum interior room.087.

63 2.36 2.47 0.52 0.82 2. Three wheelers account for about 4% of the market in India.51 1.121 All Vehicles (in '000) 54.613 Buses (in '000) 634 635 Goods Vehicles (in Other Vehicles (in '000) '000) 2. Jeeps and Taxis '000) (in '000) 38.24 3.991 58.73 3.08 78.57 59.23 0.24 4.00 2005-06 9.27 1.74 79.73 100.17 1.22 2.00 9.33 0.44 0.19 2.25 1.39 0.39 2.28 2.56 1. Segment[18] Passenger Car [18] 2003-04 10.91 2.86 4.21 65.32 2.924 .39 1.77 2.04 10.18 100.52 78.65 0.57 100.01 61.45 3.[18] This is a growth of about 100% in the past 9 years.82 13.37 0. [edit]Total Year 2001 2002 Number of Vehicle Registrations in India from 2001 to 2008 Two Wheelers (in Cars.10 2.61 3. Over 5 million and over 1 million vehicles registered are goods vehicles and buses respectively.18 0. medium and light.32 1.25 1.07 77.83 3.63 2.73 0.82 13.00 2006-07 10. cheap and affordable passenger car.65 4.34 1.948 2.79 0.43 2.19 75.68 62.63 100.24 1.581 7.83 0.90 11.87 13.76 100.00 Scoters/Scooterettee (%) Motorcycles/Step-Throughs (%) Mopeds (%) Electric Two Wheelers (%) Total Two Wheelers Grand Total [18] [18] (%) (%) [edit]Vehicle Registration India had over 100 million vehicles registered on its roads in the year 2008.32 2.Commercial vehicles are categorised into heavy.00 2007-08 12.01 11.28 1.03 2. jeeps and taxis. Tata Motors with the launch of Tata Nano is trying to attract some of these two wheeler buyers to buy a small.53 0.61 (%) (%) 4.36 1.75 12.17 1.00 (%) Utility Vehicles (UVs) (%) Multi Purpose Vehicles (MPVs) (%) Total Passenger Vehicles Passenger Carriers (%) Goods Carriers (%) Total Medium & Heavy Commercial Vehicles Passenger Carriers (%) Goods Carriers (%) Total Light Commercial Vehicles (%) Total Commercial Vehicles Passenger Carriers (%) Goods Carriers (%) Total Three Wheelers [18] [18] [18] (%) (%) 2.556 41.25 0.65 2.51 0.01 [18] 2004-05 10. about 14% and over 14 million are cars.17 13.01 2. Three wheelers are categorised into passenger carriers and goods carriers.10 4.[18] Two wheelers account a significant market share.94 2. They account for about 5% of the market.65 4.98 15.35 4.974 5.90 4.18 0.31 64.44 2.67 1.15 0.42 2.058 7.795 6. Over 77% and about 77 million of these vehicles are two wheelers.52 4.51 4.

232 21 883 694 2007 (in '000) 8. About 91% of these vehicles are non-commercial vehicles purchased by households looking for a two wheeler. Solapur. the central government unveiled the standards titled 'India 2000' in 2000 with later upgraded guidelines as 'Bharat Stage'.966 21 542 949 . Bengaluru.808 106.000.571 12. Mumbai.065 [edit]Emission norms See also: Bharat Stage emission standards In tune with international standards to reduce vehicular pollution.451 10.989 21 1.417 63.2008 States\Year Andhra Pradesh Arunachal Pradesh Assam Bihar 2001 (in '000) 3. Ahmedabad.749 4.460 11.018 6.591. and Agra are the 13 cities where Bharat Stage IV has been imposed while the rest of the nation is still under Bharat Stage III.337 7.810 14. These standards are quite similar to the more stringent European standards and have been traditionally implemented in a phased manner.042 21 973 647 2008 (in '000) 8. Chennai. Hyderabad.446 21 798 726 2006 (in '000) 7. in the rest of the nation. Pune.599 9. with the latest upgrade getting implemented in 13 cities and later.002 21 657 1.Delhi(NCR).891 8.828 7. The number of new vehicles registrations has grown by about 66% in the past five years.045 88.588 8. Kanpur. and Gujarat had over 10 million. Only about 9% of new vehicles registered are used for commercial purposes. Kolkata.121 2004 (in '000) 5.464 9. Maharashtra had over 13 million.2003 2004 2005 2006 2007 2008 67. About 16 states and 1 union territory had over a million new vehicles registered. The diagram above displays the registration of new vehicles in various states and union territories.652 5.141 77.922 57. Tamil Nadu had about 16 million new vehicles registered. Sura t.389 21 596 1.519 51. [edit]Geographical Segmentation:State-wise motor vehicles registration in India 2002 (in '000) 4.487 70.720 21 727 751 2005 (in '000) 6. [edit]Geographic Segmentation The total number of new vehicles registered in the 28 states and 7 union territories of India in the year 2008 were about 106.345 4.068 96.676 6.003 3. or a car.222 721 768 822 879 936 1.718 80.053 4.492 3.086 593 from 2001 . Lucknow. Details of category wise new vehicle registrations in the various states and union territories are displayed.591 47.007 72.024 2003 (in '000) 5.

760 77 62 31 160 1.171 1.690 948 366 6.977 2.928 2.868 7 418 1.791 21 11.992 5.138 34 677 54 63 4.162 50 364 4.279 269 399 1.308 3.103 3.267 375 556 1.548 28 586 35 48 4.144 3.197 13 5.635 4 252 [edit]Geographical Segmentation: Category-wise number of registrations in States Hi m ac ha l Pr ad es Ja m m u & K as h M ad hy a Pr ad es h T N a P Ra Si ag O mi un jas k al ris l ja th ki an sa N b an m d ad u Ut ta r Pr ad es h of India A nd Type hr of a Vehic Pr le [18] ad es h Ar un ac ha l Pr ad es A Ch G H Bi G ss hat uj ar h o a tisg ar ya ar a m arh at na Jh ar kh an d Ka rn ata ka K er al a Ma har ash tra M an ip ur M eg hal ay a M iz or a m T ri p ur a Utt ara kha nd W est Be ng al .529 3.366 28 562 31 44 3.689 421 628 1.487 15 8.360 4.576 1.122 244 364 984 3.367 483 7.442 11.477 134 89 61 215 2.834 17 8.034 4.969 106 73 42 172 1.726 585 9.076 397 6.166 7 495 1.699 5 270 1.159 4.544 6 359 1.921 1.564 4.892 2.717 3.971 5 293 1.087 2.460 2.717 3.939 638 10.833 42 799 86 79 5.055 114 78 48 186 1.101 3.036 4.281 123 84 54 201 1.612 4.134 97 73 37 162 1.315 3.883 329 493 1.216 436 7.543 4.815 25 16.341 4.285 19 10.785 3.636 2.919 3.359 3.816 31 629 43 55 4.738 2.804 8.859 4.459 8.180 4.005 66 457 5.237 5 313 1.970 3.417 4.271 2.207 117 822 9.008 2.633 3.949 217 330 909 3.095 6.792 3.537 2.910 2.817 145 95 70 230 2.338 3.936 4.690 28 386 13 41 3.968 13.943 12 5.796 5.552 3.085 85 580 7.217 3.281 23 13.Chhattisgarh Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand Uttar Pradesh West Bengal 857 341 5.173 7.536 537 8.096 2.630 5.525 3.860 105 732 8.119 10.479 4.575 76 516 6.112 3.164 480 719 1.901 95 651 8.464 38 732 67 71 5.710 12.469 8 552 Andaman & Nicobar 25 Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Delhi Lakshadweep Pondicherry 386 13 37 3.508 2.571 5.548 289 439 1.215 3.225 4.658 57 406 5.414 90 67 34 177 1.

00 03 59 85 .1 .3 40. 6. 43. 45 9.2 7. 16 7 1. 8.3 81 83 . 6.7 93 59 87 6.2 . 20 29. 0. 41 50 75 17 6. 60 . 3 57 4.74 87 76 . 8 5 5 . 3. 24 11 32.h h m ir Multia xled/ Articu lated Vehicl es/Tru cks & Lorrie s 8 3 2 14 18 14 1. 6. 75 .2 19 99 62 67 89 2 82 28 38 20 8.9 59 . 51 74 92. 40.6 25 24 . 2. 7. 61 102 3. Vehicl 55 16. 15 0.6 41 02 . 33 62 7. 32 6 Cars 1 2 7 39 0 57 27 37 14 26 1. . 41 20 924 8.4 81 .0 9 6.4 3 6. 6 6. 14. 71 36 262 7. 1 6 Two 54 10.5 73 40 0 572 41 89 91 03 37 7 0 1 18 87 1 81 0 5 0 73 53 91 6 8 6 4 5 2 0 9 0 8 6 3 1 2 58 4. 7. .5 49. 52 6. 12 4. 58 1. 9.2 .6 92.5 48 72 9 621 31 19 19 40 51 96 2 8 4 09 49 76 62 37 904 56 9 19 06 8 6 7 2 1 4 2 5 5 0 2 6 3 0 9.3 . 4.7 3. 8. 4.02 7 7 ers 28 5 2 8 5 3 0 1 6. 4 8 8 5.2 .9 94 01 6 03 31 93 9 4 56 82 1 2 5 49 27 97 56 87 3 3 97 6. 59 5.6 3 0 .9 56 0. 1 5 3 .0 .2 33 25 0 72 6 13 91.11 96 02 21 .6 . 1. 9. 7.1 3.0 . 5. 21 26 32 12 53 0.9 3. 19 45 493 2. 87 12 10 23. 1. 2. 41 29 62. 27 24 3. 2. 2. 6. 4.2 0. 4. 2 4.8 3 2 es 5 686 91 1 9 (good 7 6 s) 20 58 2. 41. 67 24 2.3 . 2.2 25 0.0 . .9 .2 .3 . 8.9 . 16 2.4 . 9.2 7. 10 66 0. 6. 1. 28 6 1. 35 34 13. 37 2. 92 2. 88. 7.4 14 23 413 30 66 1 23 99 03 8 1 2 44 58 6 96 15 78 3 3 8 5 19 96 21 52 1 82 7 4 7 9 5 5 9 6 6 Light 1 3 Motor 66 4.9 9 005 7 24 3 30 4 37 7 385 27 6 0 00 90 70 25 4 9 24 5 4 8 14 82 8 93 18 3 5 7 3 8 0 Light Motor Vehicl es (passe nger) Total Com merci al 2 26 9. 7.1 . 1.9 . 3 2 8 . Taxis .4 5 7.3 .7 5.2 .5 43. 6.9 02 271 86 62 31 1 0 7 4 4 4.25 8 20 41 1 2 5 4. 2. 11 81 0. .1 3.4 2 9 . 25 13. 2. 2.6 . 3. 94 3. 7.4 . 14 36.3 5 43 6 39 092 27 0 26 98 8 6 69 9 2 39 0 06 26 3 5 66 79 6 6 07 6 37 85 8 6 1 1 1 8. 17 5 15 12 78 38 4.6 60 5 .9 . 19 36 22 58 3. 2. 13 18 55. Wheel 3.8 84 4. 9.5 .8 52 21 . 36 5.4 .6 40 50 . 2. 1.6 . 8. 21 36 64. 7. 40 4 15 2.1 . 3. . 5.1 .8 78 . .8 . 9. 991 8.7 1.3 05 .47 86 44 .6 36 87 . 10 73 77 243 5. 73 44 391 6 4.1 17 8.08 20 18 5 30 2 6 1 20 1. 40 14 14 10 21.3 6.7 8.6 .9 0. 8.9 86 . 04 7 1. 4.4 8 . 32. 14.5 93 0 . 1. 30 256 1. 2.1 71 . 66 86 13 45 34 1. 67 38 220 44 50 2 0 3 5 Jeeps 11 2. 16. 0.9 . 27 29 9.5 .3 34 .5 .5 .9 8 .4 . 30 67 29 22.0 8 9. 8. 40.1 12 24. 4 76 1. 4.14 52 14 29 .7 . 61 67 45 80 19 794 33 0 01 41 57 18 1 4 8 1 3 1 2.6 .2 75 21. 9. 0.5 32 . 4.6 31 5 62 5 3 43 45 1 3 81 4 1 1 4. 25 2. 26 41 66 2.3 . 11 4.6 Buses .8 58 32 30 0 74 7 90 24 34 0 41 3 55 7 62 46 2 1 5 1 93 38 0 5 7 5 8 4 6 1 9 5 57 4 74 26 68 23 14 17 7. 42. 1.1 .0 . 8.1 2 7 60 02 14 6 2 6 6 73 39 49 8.

55.665.0 80 35 9 2 03 0 99 111 1 2 7 11 0 2 58 78 5 6 5 02 08 18 6 4 8 4 4 5 6 3 5.612 36 574.8 32 41 88 12 829 69 3 26 2 1 3 4 1.565 5.904 2.438 47. 87 27.582 4. 24 57 0.1 1 13 93 12 85 3 19 2. 5.258 1.0 86. 0. 16 17 1.881 9. 74 54 475 9 7.831 1. .94 26 82 .278 295 38 165 124 30 43. 8.463 4.601 75. 1.671 7.1 . 1.283 17. 64 7 1.351 12.487 1.3 .5 9 . 9. 44 20 9. 34 76 44 5 5 - 36. 2.3 rs 3 321 54 37 38 1 9 01 7 981 08 63 8 4 0 8 69 6 40 4 0 3 7 92 23 86 41 3 3 0 4 2 0 8 1 5 8. 13 5 3. 10 15. 4 3.8 4 rs 5 4 804 6 85 0 0 0 3 3 16 12 12 56 1. 20 23 7 8 - 4 19 8 .36 Omni .0 66 62 40 .5 Others 50 7 . 9. 15 9. 9 46 0. 33 8 2.7 36 1 7 27 37 32 45 71 62 0. 2.829 361 43 890 5.838 2.1 . 2 5 9 - 1. 11 9.190 154 108 500 7.642 3.389 78 122. 30 51 .3 00 . 3. 47 0 3. 5.923 1. 8.5 0. .541 295.545 318 1. 89 10. 9 01 8 021 1 5 0 2 2.421 4.003.4 3 88 12. Total 7 5 8 22 14 15.281 75.8 93 48.173 11.019 30.896 1.8 1 22 88 64 95 7.046 235. 31 23.519 459 436 784 3.239 1.3 2 8 7 89 . 6.693 . 17 9 2. 1.1 33 27 non8.1 . 3.9 7 57 14 787 . 25 69 41 580 30 . 3. comm 8 4 2 20 43 2 124 17 71 ercial 5 2 7 4 2 3 8 3 3 8 [edit]Geographical 35 1.5 7. 35 1.978 1.947 36. 14 31.459 1.6 . 19 11 11 8. 201 1.1 .7 16. 4.5 Buses 49 - 3.283 8. 6. 1. 57 609 0 - 2.212 Lakshadweep Pondicherry 270 408 678 6. 2. 5.270 429 6 44 46 27. 22 77 24 4. .71 1 22 16 1 1 0 6. 37 8.8 56 . 5.9 13 9.1 .1 8 5. 3. 9.693 1.917 157.712 20.893 233. 26 9 19 35 76 54 2.743 1.192.386 4.059 24. .198 21.588 2. 17 3.9 4. 30 40 90 48 Tracto 33 44. 78 2 2.033 261 67 461 25.439 17. Trailo 15 7 38. 9.8 .705 85 5 44 503 4. 3. 62 .0 62 4 6 0 4 81 13 8 3 9. 8. 24.750 3. 4.542 416. 7.851 99 9.4 93.1 .676 India Type of Vehicle Multiaxled/Articulated Vehicles/Trucks & Lorries Light Motor Vehicles (goods) Buses Taxis Light Motor Vehicles (passenger) Total Commercial Two Wheelers Cars Jeeps Omni Buses Tractors Trailors Others Total non-commercial [edit]Exports Daman & Delhi Diu 1.5 10 10 56 7. 33 6 Segmentation: Category-wise registration in Union Territories of Dadra & Andaman & Chandigarh Nagar Nicobar Islands Haveli 1.

Nissan Motors plans to export 250.[30] India's automobile exports are expected to cross $12 billion by 2014. India's automobile exports have grown consistently and reached $4. Germany. General Motorsannounced its plans to export about 50.[32] In 2008. The cars will be manufactured both for the Indian market and for export. investing EUR 700M in the operation.[35] The company said that the plant was a part of its plan to make India the hub for its global production business.5 billion in 2009. with United Kingdom being India's largest export market followed by Italy.000 cars made in India.000 vehicles manufactured in its India plant by 2011.000 cars for US$500 million. India's strong engineering base and expertise in the manufacturing of low-cost.Mahindra Scorpio Jeep in service with the Italy's CNSAS.[33] Similarly. Hyundai Motors alone exported 240. Volkswagen and Suzuki.[37] In July 2010.[31] According to New York Times. Nissan.000 cars manufactured in India by 2011.[38] PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010.[36] Fiat Motors also announced that it would source more than US$1 billion worth auto components from India. . Ford Motors announced its plans to setup a plant in India with an annual capacity of 250. Netherlands and South Africa.[34] In September 2009. Toyota. fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors.000 vehicles. The Economic Times reported that PSA Peugeot Citroën was planning to re-enter the Indian market and open a production plant in Andhra Pradesh with an annual capacity of 100.

[39] While the possibilities are impressive.A Tata Safari on display in Poznan. Korea (1.23m) surpassed China (0.64 Italy Sri Lanka South Africa United Kingdom United Arab Emirates Algeria 332. India has emerged as a leading center for the manufacture of small cars. The firm is also planning to launch an electric version of its low-cost car Nano in Europe and the U.[39] [edit]Top Rank 1 2 3 4 5 6 7 20 Export destinations in 2007-2008 and growth from previous year Country 2007-2008 (in USD Millions) 2008-2009 (in USD Millions) 525.68 216.S.S. now ships more than 250.52 8.34 . and is in preparation to launch electric vehicles in Europe in 2010. market.12m) and Thailand (0.74 265.000 cars annually from India. Bajaj Auto is designing a low-cost car for the Renault Nissan Automotive India.35 249. Nissan will also export small cars from its new Indian assembly line. Renault Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in another small car project. which China does not allow.21 80.[5] In recent years. which will market the product worldwide.11 188.22 -13.57 164. Apart from shipments to its parent Suzuki. Maruti Suzuki also manufactures small cars forNissan. In 2009 India (0. the biggest exporter from the country.32 192.24 359.14 224. which sells them in Europe.26m) by allowing foreign carmakers 100% ownership of factories in India. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes.63 Percentage Growth -11.93 165.77m). Tata Motors exports its passenger vehicles to Asian and African markets. industry growth will slow if the economy weakens.79 48.26 -15. there are challenges that could thwart future growth of the Indian automobile industry.Poland.44 147. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in the U.16m) as Asia's fourth largest exporter of cars after Japan (1.28 United States of America 593.77 17. Hyundai.57 246.

[47] Smart. Roadster 1.86 143.1 151.01 76.8 9 10 11 12 13 14 15 16 17 18 19 20 Bangladesh Egypt Germany Colombia Nepal Mexico Turkey Spain France Nigeria Greece Netherland Ghana 137.[41] Pagani.43 133.77 66.[51] Acura.07 [edit]Passenger vehicles in India See also: List of cars available in India and List of auto plants in India This list is of cars that are officially available and serviced in India.03 94.99 206.01 65.96 134.53 81.63 -29.66 38.80 83.54 409.[59] Kia.[60]GAZ[61] and Proton[62] are in varying stages of official introduction to the Indian automobile market. Verito. [edit]Indian automotive companies  Chinkara Motors[63]: Beachster. car-makers such as Alfa Romeo. While other cars can be imported to the country at a steep 110% import duty.30 20.[49] Lexus.83 125.[46] MINI.54 -11.05 -36.13 94.[58] SsangYong.[44] SSC.86 0. Jeepster.69 74. Bolero.19 59.[48]D aihatsu.63 163. Sailster      Hindustan Motors[64]: Ambassador ICML[65]: Rhino Rx Mahindra[66]: Major. Thar.63 120.71 98.[52] Saab.10 73. Rockster. RiO San Motors[68]: Storm . Genio Premier Automobiles Limited[67]: Sigma.75 65.[56] Mazda.11 5. Hammer.[53] Spyker.[43] Chrysler.26 134.[45] Zenvo.32 -11. Xylo.74 127.[54] Lotus.21 148.8S.[40] McLaren.91 164.[42] Cadillac.8 1. Scorpio.[55] PeugeotCitroën.82 56.33 93.52 118.[50] Infiniti.[57] Jeep.88 111.

India. Accent. Beat. Tavera.   Honda Siel[76]: Jazz. [70]     BMW India[71]: 3 Series. a subsidiary of Japan's Suzuki Motor. Safari. Xenon. Indica Vista. Ford India[73]: Figo. i10. Sumo. Linea. Accord. Aveo. Civic. Maruti Swift. i20. Indigo Manza. Venture. Aria automotive companies in India [edit]Vehicles manufactured or assembled in India Manufactured only in Chennai. City. . Verna Transform. Indigo. Cruze. Indigo CS. Fiesta. Hyundai Motor India[77]: Santro. [edit]Foreign Tata Motors[69]: Nano. thei10 is one of Hyundai's best selling globally exported cars. Indica. 5 Series. X1. Fiat India[72] (in collaboration with Tata Motors): Grande Punto. is the largest automobile manufacturer in India. Aveo UVA. Optra. Maruti Suzuki. Endeavour. General Motors India[74]  Chevrolet[75]: Spark. Ikon. Sonata Transform.

X5. Yeti. One-77. Rapide. Chevrolet: Captiva. Laura. Jetta. S6. Virage. Conti nental GT. SX4. Q7.Versa. Audi[91]: A7. X6. Renault India[83][84]: Fluence Toyota Kirloskar[85]: Etios. Volkswagen India[88][89]: Polo. Estilo. R8. BMW[94]: 5 Series GT. M3. X3. Innova. Opel only provides spare parts and vehicle servicing to existing Opel vehicle owners. WagonR. Ritz. Swift. Opel was present in India until 2006. Bentley[92][93]: Arnage. A6. Eeco. M5. DBS.   Mercedes-Benz India: C-Class. [edit]Vehicles brought into India as CBUs  Aston Martin[90]: Vantage. DB9. A8.  Land Rover[78]: Freelander 2 Maruti Suzuki[79]: 800. Q5.      . koda Auto India[86][87]: Fabia. TT. Volkswagen Group Sales India: Audi India: A4. 6 Series. Gypsy. Pajero        Nissan Motor India[82]: Micra. Swift DZire. Brooklands. Passat. S4. M6 and Z4. Lancer Cedia. Superb. S8. Astar. E-Class. Corolla. Bugatti[95][96]: Veyron. Omni. RS5. Continental Flying Spur. X6 M. Alto. Vento. Mitsubishi[80] (in collaboration with Hindustan Motors):[81] Lancer. Mulsanne. Azure. As of 2011. 7 Series.

S80. Boxster. Phantom Coupé. Hyundai[77]: Santa Fe. Lamborghini[104]: Gallardo. MClass. Jaguar[101]: XF. Suzuki: Grand Vitara. XK. Mitsubishi: Montero. Hummer H3. Maserati[106]: Quattroporte. Volkswagen[113]: Beetle. Cayenne. Carrera GT. G-Class. Agera. Honda[99][100]: Civic Hybrid. XJ. Nissan[109]: Teana. koda[86]: Yeti. Toyota[85]: Prius. Range Rover. SLK-Class. X-Trail. Kizashi. Tiguan. Touareg. Viano. Bravo. Volvo[114]: S60. GL-Class. Ferrari[97][98]: California. Koenigsegg[102][103]: CCX. CCXR. Cay man. Panamera. Camry. Phantom. Porsche[110][111]: 997. FF. GranTurismo. S-Class. Range Rover Sport. Superb. Land Cruiser. GT-R. Evo X. Pha eton. Land Rover[105]: Discovery 4. General Motors[74]: Hummer H2. Mercedes-Benz[108]: CL-Class. Gran Cabrio. 599 GTB Fiorano. Murciélago. Phantom Drophead Coupé.                     *Toyota Fortuner is imported as a CKD kit from Toyota Motor Thailand. Maybach[107]: 57 and 62. Fiat[72]: 500. CLS-Class. 458 Italia. Rolls Royce[112]: Ghost. CR-V. XC60. SLClass. XC90. R-Class. Fortuner*. Outlander. Land Cruiser Prado. 370Z. [edit]Commercial vehicle manufacturers in India . SLS.

as a JV with Force Motors.A JV between Russia's KaMAZ and the Vectra Group     [edit]Foreign brands    Volvo[125] Tatra[126] MAN[127] . Ashok Leyland[121] .manufactures BharatBenz. a brand of trucks based on the Fuso and the Mercedes Benz truck platforms.originally a JV between Ashok Motors and Leyland Motors.originally a JV between Punjab Tractors and Mazda.[edit]Indian brands       Force[115] Hindustan Motors[116] Premier[67] Tata[117] AMW[118] Eicher Motors[119] [edit]Joint Venture Brands  VE Commercial Vehicles Limited[120] . makes MAN Trucks in India Mercedes-Benz[128] sells luxury buses in India Daimler AG[129] .a 51:49 JV between Mahindra Group and Navistar International Swaraj Mazda[123] . now 53. which Daimler AG owns   .VE Commercial Vehicles limited . now 51% owned by Hinduja Group Mahindra Navistar[122] .5% owned by Sumitomo Group Kamaz Vectra[124] .A JV between Volvo Groups & Eicher Motors Limited.

[135] [edit]Electric car manufacturers in India       Ajanta Group[136] Mahindra[137] Hero Electric[138] REVA Tara International[139] Tata[140] [edit]Market Characteristics Market Size The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years.[18] Demand Determinants .8 billion. India¶s current GDP is about USD 650 billion and is expected to grow to USD 1. The industry has attained a turnover of USD 35.390 billion by 2016. Automobile industry is currently contributing about 5% of the total GDP of India.1 million people.[18] The projected size in 2016 of the Indian automotive industry varies between USD 122 billion and UDS 159 billion including USD 35 billion in exports. (INR 165. This translates into a contribution of 10% to 11% towards India¶s GDP by 2016.[18] The industry has provided direct and indirect employment to 13. which is more than double the current contribution.      Scania[130] Iveco[131] Hino[132] Isuzu[133] Piaggio[134] Caterpillar Inc.9 billion.000 crores) and an investment of USD 10.

Exchange Rate:Movement in the value of Rupee determines the attractiveness of Indian products overseas and the price of import for domestic consumption. Affordability: Movement in income and interest rates determine the affordability of new motor vehicles. preferences. and product innovation. Infrastructure: Longer-term determinants of demand include development in Indian¶s infrastructure. material and equipment costs) and exchange rates. income.Determinants of demand for this industry include vehicle prices (which are determined largely by wage. Allowing unrestricted Foreign Direct Investment (FDI) led to increase in competition in the domestic market hence. increase in people with lesser dependency on traditional single family income structure is likely to add value to vehicle demand. interest rates. Factors that may be augment demand include rising population and an increasing proportion of young persons in the population that will be more inclined to use and replace cars. scrapping rates. Product Innovation is an important determinant as it allows better models to be available each year and also encourages manufacturing of environmental friendly cars. making better vehicles available at affordable prices. Also. Demographics: It is evident that high population of India has been one of the major reasons for large size of automobile industry in India. the running cost of a vehicle (mainly determined by the price of petrol). India¶s banking giant State Bank of India and Australia¶s Macquarie Group has .

[edit]International Markets International Markets Exports The level of trade export is medium The level of trade export is increasing International Markets Imports The level of trade import is low The level of trade import is increasing [edit]International Markets Analysis The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). India needs about $500 billion to repair its infrastructure such as ports. power. and power units. These investments are been made with an aim to generate long-term cash flow from automobile. Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years. demand for large cars declined in favour of smaller. and telecom industries. The changing patterns in customer preferences for smaller more fuel efficient vehicles led to the launch of Tata Motor¶s Nano ± one of world¶s smallest and cheapest cars. more fuel efficient vehicles.launched an infrastructure fund to rise up to USD 3 billion for infrastructure improvements. roads. During periods of high fuel cost as experienced in 2007 and first ±half of 2008. (Source: Silicon India) Price of Petrol:Movement in oil prices also have an impact on demand for large cars in India.[18] The exports in automotive sector have grown on an average .

the Indian automotive industry¶s contribution in global terms is very low. India¶s automotive exports constitute only about 0.53 million passenger and commercial vehicles.3% of global automotive trade. The export earnings from this sector are over USD 6 billion. A greater emphasis is required on the development of .3 million in the year 2008. favourable exchange rates. This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2. Automotive industry is a volume-driven industry. not sustainable. and certain critical mass is a pre-requisite for attracting the much-needed investment in research and development and new product design and development. The most important indices of competitiveness are productivity of both labour and capital.28% of world production of 70. Competition in this industry is increasing.[18] Even with this rapid growth.[18] [edit]Basis of Competition Competition in this industry is high.compound annual growth rate of 30% per year for the last seven years. This competitiveness in turn depends on the capacity and the speed of the industry to innovate and upgrade. The concept of attaining competitiveness on the basis of low cost and abundant labour. low interest rates and concessional duty structure is becoming inadequate and therefore.[18] yet India¶s share is about 3. Research and development investment is needed for innovations which is the lifeline for achieving and retaining competitiveness in the industry.

has emerged as one of the favourite investment destinations for the automotive manufacturers. Japanese and European manufacturers of motor vehicles have entered the . The government aims that with its policies its encourage growth. the Indian Government recognises its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance. These advantages need to be leveraged in a manner to attain the twin objective of ensuring availability of best quality product at lower cost to the consumers on the one hand and developing and assimilating the latest technology in the industry on the other hand. with a rapidly growing middle class (450 million in 2007 as per NCAER Report). fairly well developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost.the factors like innovation which can ensure competitiveness on a long-term basis. Companies have been consistently opening new plats and employing over the past five years. promote domestic competition and stimulate innovation. As per Automotive Mission Plan 2006±2016 (2008). market oriented stable economy. The Indian Government wants to create a policy environment to help companies gain competitive advantage. The products manufactured by this industry are profitable. availability of trained manpower at competitive cost. India. [edit]Life Cycle The life cycle stage is growth Life Cycle Reasons The market for manufacturing motor vehicles is consistently increasing.

Chennai in South. The ability to gain access to technology of major global operators. The major clusters are in and around Manesar in North. Certification and Homologation to the communication and export infrastructure facilities. The auto industry has grown in the clusters of interconnected companies which are linked by commonalities and complementarities. Industry value added has been rising. The Government is planning to create a National Level Specialises Education and Training Institute for Automotive Sector and to enhance the transportation. [edit]Industry Conditions Barriers to Entry Barriers to entry in this industry is high These barriers are study The cost of developing high volume production facilities. A similar initiative is required for creating specialised institutions in automotive sector for education. Two and Three wheelers. along with the rise in GDP. training and development. Jamshedpur-Kolkata in East and Indore in Central India. Life Cycle Analysis General improvement in availability of trained manpower and good infrastructure is required for sustainable growth of the industry. Pune in West. the Indian Government has launched a unique initiative of National Automotive Testing and R&D Infrastructure Project (NATRIP) to provide specialised facilities for Testing. The contribution of automotive sector in the GDP of India is expected to double by 2016[18] through major spotlight on export of small cars. Multi-Utility Vehicles. Keeping this in view. The relatively high competition between established domestic companies and foreign .

The Local Bodies are empowered to levy tax on properties (buildings.). Duty on Entertainment and Tax on Professions & Callings. etc. that have considerable claims to new technology. and the ability to gain access to technology of major operators. Land Revenue (levy on land used for agricultural/non-agricultural purposes).companies. high fixed cost and break-even point levels. Some of the barriers that need to be overcome by a new entrant include: the cost of developing high volume production facilities. Stamp Duty (duty on transfer of property). The automobile manufacturing sector is characterised by a high cyclical growth patterns. has already seen significant rationalisation of this industry. together with high competition. and an excessive number of participants. in order to benefit from economies of scale. State Excise (duty on manufacture of alcohol). The main taxes/duties that the Union Government is empowered to levy are:. Octroi (tax on entry of goods for . The principal taxes levied by the State Governments are:.Sales Tax (tax on intra-State sale of goods). The relative large size of domestic market. The power to levy taxes and duties is distributed among the three tiers of Government. as the present incumbents include some of the largest multinationals. Customs duties.Income Tax (except tax on agricultural income. in accordance with the provisions of the Indian Constitution. Barriers to entry into automobile manufacturing activity are formidable. which the State Governments can levy). Central Excise and Sales Tax and Service Tax. [edit]Taxation India has a well developed tax structure.

in addition to the aforesaid duties. Excise Duties and Cesses Leviable under Miscellaneous Act:On certain specified goods. 1985 at the rates mentioned in the said Schedule. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the automobiles are manufactured. Education Cesson excisable goods is levied in addition to any other duties of excise chargeable on such goods. At present this is leviable on very few items. Types of Excise Duties Basic Excise Duty: This is the duty leviable under First Schedule to the Central Excise Tariff Act. It is a tax on manufacturing. [edit]MODVAT and CENVAT . as a surcharge on specified goods. 2001. which is paid by a manufacturer. under the Central Excise Act. 1944 or any other law for the time being in force. Excise Duty Central Excise duty is an indirect tax levied on those automobiles which are manufactured in India and are meant for home consumption. Tax on Markets and Tax/User Charges for utilities.use/consumption within areas of the Local Bodies). Special Excise Duty: This is the duty leviable under Second Schedule to the Central Excise Tariff Act. who passes its incidence on to the customers. prescribed rate of excise duty and cess is also leviable. National Calamity Contingent Duty (NCCD): Normally known as NCCD. 1985 at the rates mentioned in the said Schedule. This duty is levied as per section 136 of the Finance Act.

e. if a manufacturer A purchases certain . Therefore. Hence. output of the first manufacturer becomes input for second manufacturer and so on. An ideal system to realize this objective would have been to adopt value added taxation (VAT). components and other intermediaries has a number of limitations. on account of some practical difficulties it was not possible to fully adopt the value added taxation. like raw materials. raw material passes through various processes stages till a final product emerges. duty charged on product `A' meant doubly taxing raw materials. the Government tried to remove these defects of the Central Excise System by progressively relieving inputs from excise and countervailing duties. However. each subsequent purchaser has to pay tax again and again on the material which has already suffered tax. As the duty on the final product is on ad valorem basis and the final cost of product `A' includes the cost of inputs. Government evolved a new scheme. inclusive of the duty paid. In production process. In other words. This very often distorted the production structure and did not allow the correct assessment of the tax incidence. but also on account of the duty paid on such inputs. `MODVAT' (Modified Value Added Tax).Taxation of inputs. When the inputs are used in the manufacture of product `A'. the tax burden goes on increasing as raw material and final product passes from one stage to other because. Thus. i. This is called cascading effect or double taxation. the cost of the final product increases not only on account of the cost of the inputs. MODVAT Scheme which essentially follows VAT Scheme of taxation.

components(raw materials) from another manufacturer B for use in its product. Inputs include goods used in the . 2004. It amounts to excise duty only on additions in value by each manufacturer at each stage. MODVAT scheme was restructured into CENVAT (Central Value Added Tax) scheme. a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product. A has to pay excise duty on product manufactured by it as well as bear the excise duty paid by the supplier of raw material B. this scheme will help the consumer to understand precisely the impact of taxation on the cost of any product. Apart from reducing the costs through elimination of cascade effect. A new set of rules 57AA to 57AK . were framed and whatever restrictions were there in MODVAT Scheme were put to an end and comparatively. Under the CENVAT Scheme. a free hand was given to the assesses. Under the MODVAT scheme. Now. under The CENVAT Credit Rules. an Original Equipment Manufacturer can take credit of excise duty paid by First Tier and Second Tier suppliers. Subsequently. B would have paid excise duty on components manufactured by it and would have recovered that excise duty in its sales price from A. MODVAT Scheme ensures the revenue of the same order and at same time the price of the final product could be lower. and bringing in greater rationalization in tax structure and also bringing in certainty in the amount of tax leviable on the final product.

1994.[18] (Source: National Information Centre) .manufacture of capital goods which are further used in the factory of the manufacturer. penalties. It provides for levy and collection of duty on imports and exports. the basic law for levy and collection of customs duty is Customs Act 1962. except the State of Jammu & Kashmir. But the sweep of import duties is quite wide. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act. import/export procedures. offences. The Finance Act extends the levy of service tax to the whole of India. In India. It was imposed on an initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. [edit]Service Tax Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. Export duties are levied occasionally to mop up excess profitability in international prices of goods in respect of which domestic prices may be low at the given time. prohibitions on importation and exportation of goods. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. etc. Taxable event is import into or export from India. [edit]Customs Duty Customs Duty (Import duty and Export tax) is a type of indirect tax levied on goods imported into India as well as on goods exported from India.

improving productivity of both labour and capital. promote the country¶s capabilities. Singapore. Incremental . Gulf etc. Egypt. two and three wheelers.[18] In order to achieve this plan interventions are required from both Industry and Indian Government. create a favourable and predictable business environment. Malaysia.Industry Assistance The automobile industry has a defined its target in the Automotive Mission Plan as ³To emerge as the destination of choice in the world for design and manufacture of automobiles with output reaching a level of USD 145 billion accounting more than 10% of GDP and providing additional employment to 25 million people by 2016´. Attractive Tariff Policy which may follow attractive investment. China. Specific measures will be taken for expansion of domestic market. establishing cost competitiveness. multi-utility vehicles. Korea. The role of Industry will primarily be in designing and manufacturing products of world-class quality standards. The Indian Government would play a key enabling role in facilitating infrastructure creation. components to be promoted Care to be taken of negative like and rules of the country with current negotiation of Free Trade Agreement and Regional Trade agreement with countries like Thailand. achieving scale and R&D enhancing capability and showcasing India¶s products in potential markets. In order to achieve these goals the following key recommendations have been made in the Automotive Mission Plan to the Indian Government and Industry: Manufacturing and export of small cars. tractors. attract investment and promote research & development.

Whereas.investment of USD 35 to 40 billion to Automotive Industry during the next 10 years.5% to 3%. The profitability of motor vehicle manufacturers has been rising over the past five years. Inspection and Certification system to be strengthened by encouraging publicprivate partnership. Ahmadabad. like Maruti Suzuki India and Tata Motors have been recording profits of 6% to 11% from the past five years. . R&D for product. Major players of the industry. Road Map for Auto Fuel Policy beyond 2010 would be drawn. process and technology to be incentivised. Integration of Information Technology in manufacturing to be promoted. An Auto Design Centre to be established at National Institute of Design. National Automotive Testing and R&D Implementation Project (NATRIP) to act as Centre of Excellence for Technical Design Data. earlier profit margins in the industry were only 1. National Road Safety Board to act as the coordinating body for promoting safety. mainly due to rising demand and growth of Indian middle class. Cost of material has reduced from over 85% in the year 2001-2002 to under 80% in the year20082009.[18] Wages and salary as a percentage of revenue has been declining and with the increasing labour productivity this is expected to decline further in the coming years. National level Automotive Institute for training on automobile at International Training Institutes (ITIs) and Automotive Training Institute (ATIs) to be set up.

Today Common Rail Direct Injection (CRDI) is the order of the day. assembly. Labour input is required in the manufacturing. The Diesel engines have also under gone a sea change from the time Rudolf Diesel invented it way back in the 1892. Technology and Systems The level of technology change is high The rate of change in technology is medium Investment in technology by producers has been on the rise. .[edit]Capital and Labour Intensity The level of Capital Intensity is high The level of Labour intensity in medium The motor vehicle manufacturing industry requires significant level of capital investment. and finishing processes. The most imperative indices for competitiveness in the industry are productivity in both labour and capital. The automobile industry in India has seen an enormous development in the engines which are being used. Carburettor engines have become obsolete and Multi Point Fuel Injection (MPFI) engines are the order of the days in patrol cars. In order to achieve and retain competitiveness.¹ Multi Point Fuel injection (MPFI) ¹ The fuel injects were used to meet stricter emission norms as it keeps pollutants to bare minimum and drives the maximum performance out of a vehicle by squeezing out the maximum mileage even from the last drop of fuel that goes into the engine. Value is added through the automated manufacturing and assembly of costly components. vehicle manufacturing industry depends on its capacity and speed to innovate and upgrade.

only to be adopted by other automobile companies around the world. However. They also require higher degree of maintenance and spares are also expensive. the technology has been pioneered by the Fiat group. the fuel breaks up into small particles and mixes evenly with the air. engine performance and reduced pollution. Common Rail Direct Injection (CRDI)¹± CRDI engine cars offer 25% more power than the normal direct injection engine with a superior pickup and torque. and Power. these engines are 25% more costly than the conventional engines. The common rail principle has been used to reduce the noise which used to be a downside with earlier Diesel engines. Speed. thereby leaving little un-burnt fuel thus reducing pollution. This technology results in superior fuel combustion. better fuel management. offering sometimes up to 70% more power than the conventional diesel engines. To get the maximum out from these types of engine one should use Premium petrol like XTRA Premium. less strident. The fact that Diesel is cheaper than petrol in India further attributes greatness to the engine. a tube or a common rail connects all the injectors and contains fuel at a constant pressure. They are smooth. . The high pressure in the common rail ensures that when injected. and immensely fuel efficient giving around 24 kilometres to a litre of Diesel.MPFI system injects fuel into individual cylinders after receiving command from the on board engine management system computer or Engine Control Unit (ECU). In a CRDI engine.

As per the BRIC report India¶s per capita disposable income from current year will rise by 106% in 2015¹. India¶s increasing per capita disposable income and growth in exports is playing a major role in the rise and the competitiveness of the industry. In this process most of the Small Scale Industrial units.The Indian automotive industry is in the mindset of a major structural transformation in today¶s globalised scenario. Over the past few years. as well as changes in legislation and assistance packages. manufacturing smaller individual components. [edit]Industry Volatility The level of volatility is medium. This increase in the spending power has been a forefront of the economic development. with individual small components being supplied to the system integrators instead of vehicle manufacturers. the Motor Vehicle Manufacturing industry has become more volatile. According . (Source: Department of Heavy Industry) Investment in new technology such as supply-chain management and collaborative forecasting (where members of the supply chain share forecasting data to reduce bottlenecks) will help make industry more competitive. have become tier 2 and tier 3 suppliers. This has been the result of fluctuations in metal prices and fuel prices. while the large companies including most Multi National Companies are being transformed into tier 1 companies who purchase from tier 2 and tier 3. ³System Supplies´ of integrated components and sub-systems has become the order of the day. and sell to the auto manufacturers.

economic liberalization ± allowing unrestricted Foreign Direct Investment (FDI) and removing foreign currency neutralisation and export obligations ± has been also been one of the key to India¶s automotive volatility². a business comprising the two British brands which was acquired in 2008.45%[18] Tata Motors Limited is India¶s largest automobile company. Tata Motors has winning products in the compact. Passenger Vehicles 16. Tata Motors is the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004). The rechristened Tata Daewoo Commercial Vehicles Company has launched several new . midsize car and utility vehicle segments. Thailand and Spain. and the world's second largest bus manufacturer with over 24. Through subsidiaries and associate companies. it acquired the Daewoo Commercial Vehicles Company. Tata Motors as has produced and sold over 4 million vehicles in India. South Korea's second largest truck maker. It is the leader in commercial vehicles and among the top three in passenger vehicles. with consolidated revenues of USD 14 billion in 2008-09.000 employees. South Korea. [edit]Key [edit]Tata Competitors Motors Market Share: Commercial Vehicles 63. The company is the world's fourth largest truck manufacturer. has also emerged as an international automobile the Economic Times of India. Since first rolled out in 1954. In 2004. Among them is Jaguar Land Rover. Tata Motors has operations in the United Kingdom.94%.

Dharwad in India. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck. established in 1966. Tata Motors formed a joint venture with the Brazil-based Marcopolo. and subsequently the remaining stake in 2009. It was Tata Motors. Tata Motors acquired a 21% stake in Hispano Carrocera. the Tata Indica. in 1998. Bangladesh. and in South Korea. Tata Motors is also expanding its international footprint by franchises and joint ventures assembly operations in Kenya.000 engineers and scientists. Spain. with the Xenon having been launched in Thailand in 2008. Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. a reputed Spanish bus and coach manufacturer. In 2006. With over 3. Russia. The company today has R&D centres in Pune. In 2005. Senegal and South Africa.products in the Korean market. and the UK. while also exporting these products to several international markets. Lucknow. In 2006. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. Jamshedpur. India's first Sports Utility Vehicle and. Hispano's presence is being expanded in other markets. which developed the first indigenously developed Light Commercial Vehicle. has enabled pioneering technologies and products. Ukraine. India's first fully indigenous . the company's Engineering Research Centre. a global leader in bodybuilding for buses and coaches to manufacture fully-built buses and coaches for India and select international markets.

15% . 22. Swift. Within two years of launch. The company¶s revenue for the fiscal 2010-2011 stood over Rs 375.100. Tata Motors created a new segment by launching the Tata Ace.[18] [edit]Maruti Suzuki India Market Share: Passenger Vehicles 46.000 (excluding VAT and transportation cost). Nano brings the comfort and safety of a car within the reach of thousands of families. Wagon-R. Maruti Suzuki India has produced and sold over 10 million vehicles in India and exported over 500. Tata Indica became India's largest selling car in its segment. The company offers a complete range of cars from entry level Maruti-800 and Alto. A star. In 2005. Since inception in 1983. to stylish hatchback Ritz.000 units to Europe and other countries. Estillo and sedans DZire. Tata Motors unveiled its People's Car. is India's largest passenger car company.passenger car.886 million. SX4 and Sports Utility vehicle Grand Vitara.[141] [edit]Hyundai Motor India Market Share: Passenger Vehicles 14.224 million and Profits After Tax at over Rs. a subsidiary of Suzuki Motor Corporation of Japan. a development which signifies a first for the global automobile industry. The Tata Nano has been subsequently launched as planned. in India in March 2009. The standard version has been priced at USD 2. accounting for over 45% of the domestic car market. the Tata Nano.200 or Rs. In January 2008.07% Maruti Suzuki India Limited. India's first indigenously developed mini-truck.

In a little over a decade since Hyundai has been present in India. the Sonata Transform in the E segment. Hyundai Motor presently markets 49 variants of passenger cars across segments. the i10. Hyundai Motor currently exports cars to more than 110 countries across European Union. It has been the number one exporter of passenger car of the country for the sixth year in a row. Hyundai Motor Company. continuing its tradition of being the fastest growing passenger car manufacturer.7%. registered total sales of 559. Africa. In 2009. The first shipment to Australia is of 500 units of the i20 and the total i20 exports to Australia are expected to be in the region of 15.Hyundai Motor India Limited is a wholly owned subsidiary of world¶s fifth largest automobile company.000 per annum. Middle East.017 units. the premium hatchback i20 in the B+ segment. an increase of 14. with export of 270. and is the largest passenger car exporter. Hyundai Motor India¶s exports grew by 10.[18] In 2010 Hyundai plans to add 10 new markets with Australia being the latest entrant to the list.1% as compared to 2008 with 289. Hyundai Motor. in spite of a global slowdown. .7%. South Korea. the Accent and the Verna in the C segment. In the domestic market it clocked a growth of 18. These includes the Santro in the B segment. it has become the leading exporter of passenger cars with a market share of 66% of the total exports of passenger cars from India.880 vehicles in the year 2009. Latin America and Asia. making it a significant contributor to the Indian automobile industry.863 units.4% over 2008. while overseas sales grew by 10.

Limited. [edit]Ashok Leyland . to focus on the Australian Market.653 Multi Utility Vehicles were sold in the domestic market in 2009 compared to 148.423 cars through Mahindra Renault).6% over the previous year. The company formed a new joint venture Mahindra Automotive Australia Pty.2% over the previous year¶s market share of 51.Hence. as against a decline of 7.[18] Mahindra & Mahindra is expanding its footprint in the overseas market. A record number of 153. recording a growth of 0.213 vehicles (including 44. on the domestic sales front.4% for industry Multi Utility Vehicle sales.50%. the Company along with its subsidiaries sold a total of 220.[18] The company¶s domestic Multi Utility Vehicle sales volumes increased by 3. In 2009 the Xylo was launched in South Africa.[edit]Mahindra & Mahindra Market Share: Commercial Vehicles 10. Mahindra & Mahindra further strengthened its domination of the domestic Multi Utility Vehicle subsegment during the year.3%. In the year 2009. Passenger Vehicles 6. Three Wheelers 1. The company competes in the Light Commercial Vehicle segment through its joint venture subsidiary Mahindra Navistar Automotives Limited and in the passenger car segment through another joint venture subsidiary Mahindra Renault.31% Mahindra & Mahindra is mainly engaged in the Multi Utility Vehicle and Three Wheeler segments directly. increasing its market share to 57.533 three wheelers.01%.761 MUVs in the previous year. 8.3%.603 Light Commercial Vehicles through Mahindra Navistar Automotives and 13.

049 vehicles during the year. during 2008-09. whilst the market declined sharply in other regions.5% less than in the previous year.812 vehicles in the overseas markets during 2008-09.[18]mainly due to loss of sales in the truck segment.[18] To combat the impact of decline in CV sales. the Middle East) witnessed a reduction of about 25% over the previous year.3% less than in the previous year. While total industry volume of the medium and heavy duty buses declined by about 8.8% market share in the Indian medium and heavy commercial vehicle market during the financial year 2008-09.5% over the previous year. 37. This represents a decrease of approximately 6. was relatively stable. the Company¶s market share grew marginally and Ashok Leyland retained its number one position in this segment.118 medium and heavy commercial vehicles (M&HCV). The Company produced in all 54. Ashok Leyland registered sales of 47.049 M&HCV buses and 31. where the Company¶s presence had been historically weak.Market Share: Commercial Vehicles 22%[18] Against the backdrop of the sharp slump in demand for commercial vehicles. 8. Total industry volume related to overseas markets to which the Company exports (such as Sri Lanka. This includes 16. the Company focused on non-cyclical businesses in the portfolio. The Company sold 6. To contain costs and conserve . This was because the Eastern Region. The company lost 1.7%.069 M&HCV trucks respectively.7% and 46.

Since both partners continue to focus on their respective strengths. Hero Honda sold more two wheelers than the second. Hero . As one of the world's technology leaders in the automotive sector. Honda has been able to consistently provide technical know-how.for. the Hero Group has took the responsibility of creating world-class manufacturing facilities with robust processes. Hero Honda is recognized today as one of the most successful joint ventures in the world.35%[18] Hero Honda has been the largest two wheeler company in the world for eight consecutive years. value . building the supply chain. In the process. design specifications and R&D innovations. This has led to the development of world class. setting up an extensive distribution networks and providing insights into the mind of the Indian customer. On its part. comprising a mix of dealers. the Company worked only about 50% of the working days in all its manufacturing units during the second half of the It is therefore no surprise that there are more Hero Honda bikes on this country's roads than the total population of some European countries. service centres and stockists located across rural and urban India. they have been able to complement each other. third and fourth placed two-wheeler companies put together. Hero Honda's bikes are sold and serviced through a network of over 3500 customer touch motorcycles and scooters for the Indian market. [edit]Hero Honda Motors Market Share: Two Wheelers 41. The company crossed the 15 million unit milestone over a 25 year span.

the company sold 3. Its third and most sophisticated manufacturing plant at Haridwar has just completed a full year of operations. your Company exported 81. third and fourth placed competitor. with a 49% growth in domestic sales to 156.210 units. It sold more two-wheelers during the year than the combined volumes of the second. Hero Honda's performance in the two-wheeler industry was the only standout performance during the year amongst the large players. were up by 11%. a decline of 10%. [edit]Bajaj Auto Market Share: Two Wheelers 26. The company posted sales of USD 2. During the year.4 billion and profits after tax of USD 256.72 million two-wheelers. Without Hero Honda's numbers.Honda has built two world-class manufacturing facilities at Dharuhera and Gurgaon in Haryana.40 million during the year 2008-2009. Three Wheelers 58. which account for more than 95 per cent of Hero Honda's sales. the company also turned in a rollicking performance with its scooter portfolio. During the year under review. the two wheeler industry growth would have been marginal. and Hero Honda was the torchbearer for the twowheeler industry during 2008-2009.194 two-wheelers.[18] growth of 12% over previous year.[18] This performance allowed Hero Honda to increase its share in the domestic scooter market by more than three percentage points.60%[18] . Motorcycle sales in the domestic market. Overall.70%.

Exports of three wheelers grew at 2% to 139.463 units in 2008-2009. South and South East Asia. Middle East. the company¶s domestic sales fell by 23% to 1. The total value of exports was USD 528 million.28 million units in 20082009. Despite falling demand in the motorcycle segment. Bajaj Auto¶s international sales achieved an all-time high of 772. where the region¶s share rose from 30% of the export business in 2007-2008 to 43% in 2008-2009.519 units of two and three wheelers. which increased by 31% over 2007-2008 to achieve sales of 633.056 units [edit]Key Factors Key Sensitivity Consumer Sentiment Index .The growth was driven by the export of twowheelers. representing a growth of 25% over the previous year. taxes. the company has succeeded in maintaining an operating EBITDA (earnings before interest.473 units.[18] Bajaj Auto is the country¶s largest exporter of twoand three-wheelers.[18] The company¶s domestic sales of three wheelers in 2008-209 were 12% lower compared to the previous year. The company expanded its footprint in Africa and Middle East. From 1.6% of net sales and other operating income. depreciation and amortisation) margin of 13.During 2008-2009. representing a growth of 29%. and stood at 135.Bajaj Auto is ranked as the world's fourth largest two and three wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America.66 million motorcycles in 2007-2008. Africa.

End customers are very important to ensure the survival of the Motor Vehicle Manufacturing industry. Steel is a major input used when manufacturing a motor vehicle. which will have a brunt on the augmentation in demand of cars. These rises in price eventually pass from the manufacturers to the end customers¶. Over the past five years. customer sentiment is expected to fall. Economic downturns and other events can affect the expenditure decision of households. Domestic Goods Price ± Metal ± Iron and Steel Description: The price of input such as steel.Description: Customer Sentiment Index. Rises in the price of steel puts cost pressures on manufacturers. In 2008-09. 12 month rolling average of the Index. Import and Export Taxes (Duties) ± Motor Vehicle Tariffs Description: Tariff rates applicable to the industry High taffies may restrict flow of trade but may attract investment if domestic market is big enough and growing. they will tend to postpone expenditure until times are better. which often leads to a fall in profitability. Industry is keen that the existing tariff structure roadmap and conditions of import of vehicles are retained without any modifications because of . the price of steel has been rising rapidly. When customers are not happy or optimistic about the future of the economy. historical and forecast data and analysis. Over the last few years India¶s tariff policies and conditions of import of vehicles have served the purpose of attracting investments.

Close relationship with supplies and goods distribution channels. etc. and price analysis. Wold Price . who are switching more to fuel efficient options. These include cars that run on liquefied petroleum gas (LPG). and capital efficiency Resource Availability .certain systematic deficiencies which make manufacturing less cost competitive in India as compared to some of the neighbouring countries like China. The trucking sector has also been struggling with the rise in the price of fuel. Establishment of export markets Growth of export markets Having an extensive distribution/collection network . the price of petrol has been influenced the buying decision of motorists. Over the past five years.The degree of investment in .Energy ± Crude Oil Description: The world price of crude oil. Thailand. [edit]Key Success Factors The Key Success factors in the Motor Vehicle Manufacturing industry are: Efficiency factor . infrastructure improvements.Quality manpower availability.Improve labour productivity. diesel and small cars that achieve better mileage. which has put enormous pressures on their costs. Indonesia. labour flexibility. $US/barrel.Goods distribution channels Successful industrial relations policy Ethical and tactical industrial relations Access to the latest available and most efficient technology and techniques . and raw material availability Effective cost controls . The price of oil and petrol affect the driving habits of consumers and the type of car they buy.

technological improvements and product development Optimum capacity utilisation .The level of plant utilisation Management of high quality assets portfolio .Understanding implications from Government policies [edit] .