AUTOMOBIL

E INDUSTRY
I N D U S T RY A N A LY S I S
 ABOUT AUTOMOBILE
INDUSTRY
 The Indian automobile industry is fourth largest in the world.

The automobile industry of India produced 26.36 million vehicles which included passesnger
vehicles, commercial vehicles, two- wheelers, three- wheelers and also quadricycles in FY 2020.
 Out of 26.36 Mn vehicles produced 4.7 Mn vehicles were exported.

 The annual turnover of Indian automobile industry is approx $100 billion.

 Around 35 million people are employed in automobile industry.

 The share of two wheeler vehicles in India is around 80% and it dominates the industry.

 Around 33 million cars are running on Indian streets.

Some facts about automobile industry
Worlds largest tractor manufacturer and second largest bus
manufacturer.

Worlds third largest heavy truck manufacturer and fourth

largest car manufacturer.

Worlds largest two wheeler and three wheeler

manufacturer.
Top Competitors
Tata motors is a multinational automobile manufacturer based in Mumbai,
Maharashtra.
Market share- Passenger vehicle: 6.3%
Commercial vehicle: 45.1%

Maruti Suzuki India limited is biggest car maker in India. It is a subsidiary of

Suzuki motor corporation, Japan.
Market share- Passenger vehicle: 53%

Hyundai motor India limited is the second largest automobile manufacturer in

india.It is a fully owned subsidiary of Hyundai motor company in south korea.
It holds a market share of 16.2%.
THREAT OF NEW ENTRANTS: LOW
Huge investment is required to establish a automobile brand.

Initially it is very difficult to set up manufacturing facilities, hiring of skilled staff.

Difficult to build distributing channel.

Very tough competition from existing brands.

Innovative and differentiated products can help new entrants to get a market share.

All automobile companies have established brand image and reputation.

It is very hard to achieve economies of sale for small companies.

 Legal barriers for new companies and firms.

BARGAINING POWER OF SUPPLIERS: WEAK
There is a large number of suppliers.

Most of the suppliers are pretty small with only few

large suppliers.

Materials are widely accessible.

the threat of forward integration is minimum from

the suppliers.
Bargaining power of buyers: moderately
strong
Most of the buyers are
individuals that buy one Buyers can choose Whether small or large
car but corporates and
governments buy large between alternative buyer can easily
fleet and can bargain for brands. switch to new brand.
lower price.

Buyers are price

sensitive and they None of the buyers
often decide on the posesses a threat of
basis of cost for the backward integration.
vehicle.
Threat of substitutes: weak
There are many alternative types of
transportation like buses, trains,
motorcycle, planes etc.
The level of convenience
offered by substitutes is
rarely same.
The alternative transports like bus and
trains are usually cheaper and easier to
travel.
Government initiatives
The National Electric Mobility Mission Plan (NEMMP) 2020 aims to
achieve national fuel security by promoting hybrid and electric
vehicles in the country.

National Automotive Testing Research & Development Infrastructure Project

(NATRIP) is the most significant initiative in Automotive Sector by Govt. of
India.
Its aim is to create state-of-art testing and R&D infrastructure to drive India into
the Future of global automotive excellence.
As part of the NEMMP 2020, the Ministry of Heavy Industries formulated
aScheme namely Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles in India (FAME India) Scheme in 2015 to promote
adoption of electric/ hybrid vehicles (xEVs) in India.
Some new govt. policies regarding
automobile sector
Voluntary vehicle scrappage policy
• According to this recent policy
vehicle owners have to undergo
fitness test for their vehicles; if
passed they are allowed to drive it
and if declared unfit then they have
to phase out their vehicles.
• According to data available 52 lakh
commercial and 37 lakh private
vehicles are eligible for scrapping
out.
• If policy is executed then it will
reduce number of old vehicles
hence creating a increase in
demand for new vehicles.
Change in custom duty rates of
Investment in infrastructure
automobile parts
• The rate of imported auto parts are • New roads measuring 8500 km are
increased from 10% to 15% to be built by march 2022.
• This will take importers in • This will subsequently increase the
disadvantageous position demand for commercial vehicles.
• On contrary, will increase the local • Will also be beneficial for rural and
manufacturing of auto parts. daily wage workers.
• Import of steel will now be easier
due to the reduced custom of 7.5%.
• This will bring down cost of steel
used in manufacturing units.
 ECONOMIC ASPECTS

Automobile industry is expected to grow at 12.7% compound annual growth rate between 2019-2026.

Expected market size USD 512 billion by 2026

7% share in India’s GDP(2019)

35 million employment generated

222 billion USD market size(2019)

 Social aspects
Our country is going through rapid urbanisation and by 2050 around 60% people would be residents
of cities like Mumbai, Delhi and Kolkata. This rapid urbanisation will increase the demand of
vehicles and hence will boost the automobile sector.

The consumer base in country is witnessing rise of income level and this will also lead to increased
demand in automobile sector.

India has almost 120 vehicles of all segments for every 1000 people and expected to become 300 per
1000 people in next 10 years.

Focus of Indian customers is shifting to electronic vehicles which are cheaper than petrol/diesel
vehicles and also good for environment.
TECHNOLOGICAL DEVELOPMENTS
Digitalisation of the sector
• Digitalisation is being implemented in the automobile sector for providing their customers with easy
buying and selling of vehicles and also by providing all the information digitally.
AI based automatic vehicles
• Market giants like Tesla, Uber and google are working towards ai based driverless vehicles which will
reduce the requirement of human drivers making day to day transport easy.
• Although driverless cars are talk of the town, companies must have to prove their reliability to get
significant market share.
Electrification of vehicles
• With increase in population, carbon emission has also increased which needs to be taken care of
hence Government is emphasizing on production of electronic vehicles to reduce carbon emission.
 WEAKNESS OPPORTUNITIES
• Recalling of vehicles • Introduction of fuel efficient
• Strong bargaining power vehicles

w
• Partnering with other

o
of buyers
• Growth rate is in the companies to increase
hands of government. capabilities
• Entering new markets like
BRIC nations.
STRENGTH THREATS
• Evolving industry SWOT • Increased

t
• Increasing demand for

S
competition
value for money vehicles. • Slow economy
• Growth shifting to • Volatile fuel prices.
developing nations.
RATAN NAVAL TATA
Former chairman TATA
INTRODUCTION -
Ratan naval tata is an Indian industrialist, philanthropist, and a former chairman of tata sons. He was also chairman of
Tata group, from 1990 to 2012.
He was born on 28 December 1937 in Mumbai and currently he is 83 years old.
He is also the recipient of many prestigious awards including Padma Vibhushan and Padma Bhushan.

SOME SIGNIFICANT TRAITS OF RATAN TATA AS AN

SUCCESSFUL ENTERPRENEUR-
A VISIONARY
LEADER-
He is a true visionary leader and he had proved it many a times. He knows exactly what he has to do in future and
takes steps in present accordingly for example, when he joined tata group no one ever thought that tata can become a
multinational company but by his hard work and a great vision Ratan tata made it an international company and now
tata gets revenue globally. And also in 2020 he had been awarded with “Global visionary of sustainable business and
peace” award.
MOTIVATOR:
Apart from being such a successful businessman Ratan tata works as a motivation for many new entrepreneurs and always
tries to guide them by his motivational speeches. He motivates his employees and knows how to get job done. once Ratan
tata said “If you want to walk fast, walk alone; but if you want to walk far, walk together” this beautiful line by him shows
that he is not a businessman but a true leader and this line should be taken with a pinch of salt by the new entrepreneurs that
for making a big enterprise one should know how to work together instead of being a boss.

PERSISTENCE:
Ratan tata once said “Ups and downs are very important in life to keep us going because a straight line even in a ECG
means we are not alive” and rightly so because being an entrepreneur one should be persistent in continuing the work
because loss and gains are part of it and on can only better for good if they keep on working instead of being hopeless and
upset. Ratan tata had been very persistent regarding his ideas hence making Tata group a very reliable brand among
customers. The best example we can see is Tata Nano because Ratan tata dreamt of making a car for upliftment of quality
of life of lower middle class group of society and with his persistency he made it true by launching the cheapest car of the
country.

OPPORTUNITY SEEKER:
Ratan tata is a true example of opportunity seeker for example when the ‘LICENCE RAJ’ ended in India he fortified the
Tata embankments to guard against the threats that arrived in equal profusion. He took the tata group to foreign shores with
his new ideas, fostered innovations and calculated risk taking habit.
QUALITY CONSCIOUS:
Ratan tata has been very conscious regarding the quality of his products and that is what Tata group is known for among the
customers. I would like to quote Professor Narayandas senior associate dean at Harvard Business school; he said “Trust is
priceless; the person buying a packet of tata salt, was getting a promise of a high quality product just like someone buying a
house from Tata housing or jewellery from Tanishq. Quality is the core brand promise of Tata products” Needless to say
Ratan tata has made tata products so good in quality, and being an entrepreneur one should be equally conscious regarding
quality of product they are providing to people.

COMITTED TO WORK:
Ratan tata, being a billionaire never hesitates in working for long hours he says that he begin attending all the meetings of
various companies of Tata sons starting from 6 AM early in the morning. And due to all his hardwork only he was able to
make Tata a global trading and distribution company running in around 39 countries of the world.

EFFICIENCY SEEKER:
Ratan tata by his very humble nature knows how to get best of the employees, he keeps connecting to the people working
under him because according him the employees are the one who makes the company what it is and being humble, helpful
and empathic towards them can take the best out of them. He said once the employee becomes as concerned as the
workplace as they are to their houses then it will build a empathetic relationship which will eventually translate into better
results, productivity and profits.
PLANNER:
Ratan tata is a great planner and executer as well once he said that “I don’t believe in taking right decisions. I take decisions
and then make them right” this shows his mindset and planning of strategy. For entrepreneurs one decision can make it or
break it and hence they are hesitant about it but from Ratan tata we can learn that with effective planning and execution we
can make our decisions right.

EFFECTIVE
STRATEGIST:
Ratan tata is a renowned strategist of the country. After he became the chairman of tata sons the company witnessed an all
time high increase in the share market as well as also became the one of the most trusted brand of the country. He is an
example for new entrepreneurs as to how to make strategies and executing accordingly. For example ventures like TATA
nano does not became successful overnight but due to innovation and strategy.
SELF CONFIDENT:
Self confidence is the major trait required to become an successful entrepreneur and Ratan tata is the true example of it.
Ratan tata once said that those who copy others might get ahead for sometime but not sustained there for long this shows
that if one is confident with his ideas then only he can become innovative creative and introduce something different to the
society. Ratan tata is so confident about himself that he say any decision taken by oneself can be proved right if there is
hard work along with self confidence.

EMPLOYEE WELFARE ORIENTED:

It is well known in the country that TATA is the best employee welfare company of times. Employees at tata are treated
with dignity and they are provided with facilities like medical facilities, eight hour working and no free lance working
for anyone. Ratan tata himself keeps talking about welfare of employees and how important it is for a employer to keep
their employers with full dignity. Also Tata group pioneered labour welfare even before the ratification of law.

Tata steel has been certified as a great place to work organisation in

India for the fourth time by Great Place to work Institute.
 REFRENCES
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government initiatives. IBEF. Retrieved October 22, 2021, from https://www.ibef.org/industry/india-automobiles/infographic.
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• Invest in Indian automobile industry, auto sector growth trends. (2021). Investment Promotion and Facilitation Agency | Invest
India. https://www.investindia.gov.in/sector/automobile
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https://www.marketing91.com/swot-analysis-of-automobile-industry/
• Porter’s Five Forces of the automotive industry. (n.d.). LinkedIn. 
https://www.linkedin.com/pulse/porters-five-forces-automotive-industry-rizwana-ashraf-1c?articleId=6595636157462253568
• What makes ‘TATA’ India’s number one brand? (2021). LinkedIn. 
https://www.linkedin.com/pulse/what-makes-tata-indias-number-one-brand-dr-shashank-shah
• Create empathy | The times of India. (2020, July 25). The Times of India. 
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ent-post-covid-19/photostory/77127723.cms?picid=77127745
• 7 quotes by ratan Tata that will inspire you to succeed. (2019, July 28). Latest News India: Breaking
News Headlines Today, Business, Cricket, Videos, Photos. 
https://www.timesnownews.com/business-economy/companies/article/7-ratan-tata-quotes-that-will-i
nspire-you-to-become-successful/460310
• Hungama Digital Services. (2021). Tata steel recognised among India’s best work places, for the fourth
time. Steel Supplier & Manufacturer in India | Tata Steel. 
https://www.tatasteel.com/media/newsroom/press-releases/india/2021/tata-steel-recognised-among-
india-s-best-work-places-for-the-fourth-time/
• swot analysis template. (2021, January 18). YouTube. 
https://www.youtube.com/watch?v=KdMMvh6OiiQ&t=484s

SUBMITTED TO: DR. MITALI TIWARI SUBMITTED BY- ABHISHEK YADAV

ASSISTANT PROFESSOR (ECONOMICS) ENROLLMENT NO.- 210101006
DR. RAM MANOHAR LOHIYA NLU FIRST SEMESTER B.A.LL.B (Hons.)
LUCKNOW