Post Recession performance Of Automobile Sector

By

Amit Samanta

What is recession?
A part of business cycle.
A slowdown in economic activities. GDP, employment, household income,

business profits, inflation all FALL during recession . Bankruptcies, unemployment rate rise.

A Brief Overview Of Financial Crisis 2008:

o Worst financial crisis since the great depression

of 1930s. o Affected the whole world. o Started: December 2007. o Believed that it ended in june2009. o Company failures: Lehman Brothers, net bank, terra securities, Mervyns, Washington mutual etc. o Company bailed out:American International Group(AIG) (US$150 bn), Chrysler.

Post recession performance :

VICTROY PODIUM: 9 th largest automobile industry in the world. Worlds no 1 two wheeler market. 4 th largest exporter in Asia after Japan, S.Korea & Thailand. Asias 3 rd largest passenger vehicle market. 5th largest bus &truck market in the world. 2nd fastest growing automobile market in the world after china. A home of 40 mn vehicles.

Domestic sales 2010:

Sales
4% 16% Two Wheelers Passenger Vehicles 76% Commercial Vehicles Three Wheelers 4%

Growing automobile production:

12000000 10000000

8000000
6000000 4000000 2000000 0

2003-04 2004-05 2005-06 2006-07 2007-08

2008-09
2009-10

Growing Automobile Export:

900000 800000 700000 600000 500000 400000 300000 200000 100000 0

2009-10

2010-11

Projections Of Automobile Industry for 2015-16:

Category Domestic sales(mn) 3.00 Export(mn ) 1.10 Total(mn) Current global position 9 Global position in 2016 7 Passenger Vehicle 4.10

Commercial 0.70 Vehicles

Three Wheelers Two Wheelers Total 0.97 32.00 36.67

0.08
0.50 3.00 4.68

0.78
1.47 35.00 41.35

11
1 2 9

4
1 2 7

SWOT Analysis of Indian Automobile Industry:

Strengths: Large domestic market Sustainable labor cost Government incentives for manufacturing plants. Strong engineering skills.
Weaknesses: Low labor productivity Various forms of taxes push up the production cost. Low investment in R&D.

Cont..
Opportunities: Commercial vehicles: SC ban on overloading. Heavy thrust on mining and construction activities. Increase in income level. Rising rural demand.
Threats: Rising input costs. Rising interest rate. Cut throat competition.

Conclusion:
Companies are doing well in India.
Suffered minimal during recession times. Will maintain its growth rate in recent future.

Have a tremendous prospect in India.

Competition will rise.

References:
Documents from CII logistic summit 2010,New Delhi.
Society of Indian automobile(SIAM) forecasts. Recession.org

Global financial crisis-Charles I. Jones

Thomas White international Ltd. Report on

automobile industry for BRIC cuntrieswww.thomaswhite.com