indian auto mobile analysis
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Indian automobile analysis: A study of selected companies
Prepared by,Name-Parveen BanoRoll no-042-BBA10F-0002Deshbandhu college for girls
contentIntroductionIndian automobile industry: an overview Automobile Industry -Global scenarioThe key players
Mahindra & Mahindra Maruti Suzuki Tata motors
Limitation
Introduction
It begins as earlier as 1960.
History of the automobile begins as early as 1769, with the creation of steam-powered automobiles capable of human transport In 1806.
The first cars powered by internal combustion engines running on fuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern gasoline or petrol-fueled internal combustion engine.
Continued to next slide
Continued from previoues slide
Indian Automobile IndustryThree
Wheeler
Multi utility
vehiclesPasse
nger carriers
Good carriers
Commerical
vehicles
Passenger car
Mini vans
Small cars
Medium cars
Luxury
cars
Two wheele
rsMotor
cycles
Scooters
Mopeds
The automotive industry remains one of the highest revenue-earning industries in India and contributed over 5% to India’s GDP in 2009, providing direct and indirect employment to more than 13 million people.
Before going further it is necessary to understand the Indian car market classification.
The Indian automobile industry mainly constitutes the following four segments:
Passenger vehicle Commercial vehicle Two wheeler Three wheeler
Continued from previous slide
Source: society of Indian Automobile manufacturers (SIAM)
Passenger vehicle segment:
Passenger cars and utility vehicles are the main segments of the Indian passenger vehicle industry with the former accounting for ~80% the total volumes.
Within the passenger car segment, the mini and compact segment together accounts for around 80% of total volumes.
production0
200400600800
10001200
943
753
1006
743
year-2010 year-2011
Source: society of Indian Automobile manufacturers (SIAM)
Source: society of Indian Automobile manufacturers (SIAM)
Commercial vehicle segment
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
0100000200000300000400000500000600000700000800000
commercial vehicle segment
Source: society of Indian Automobile manufacturers (SIAM)
TWO WHEELER SEGMENT
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
02000000400000060000008000000
10000000120000001400000016000000
Two wheeler segment
Source: society of Indian Automobile manufacturers (SIAM)
THREE WHEELERS SEGMENT
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
0
200000
400000
600000
800000Three wheeler segment
Source: society of Indian Automobile manufacturers (SIAM)
Segment wise Share in Total Automobile Exports in last 7 years
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-2010
2010
-2011
0
500000
1000000
1500000
2000000
2500000
passenger vehiclescommercial vehiclesThree WheelerTwo wheelerGrand total
Source: society of Indian Automobile manufacturers (SIAM)
Current Scenario of Automobile Industry in Economy India ranks 1st in the
global two-wheeler market
India is the 4th biggest commercial vehicle market in the world
India ranks 11th in the international passenger car market
India is the second largest tractor manufacturer in the world.
Industry clustersThe Indian automotive industry has been noticed to have grown in clusters, which are evident in and around Manesar in North, Pune in West, Chennai in South, Jamshedpur-Kolkata in East and Indore in Central India (GOI 2006a). ACMA (2008a) describes such a pattern of investments in the country as ‘regionally balanced’. Figure below indicates the distribution of manufacturing plants of major automobile players across different states and union territories in India.
Automobile industry :Global scenario
The maximum numbers of cars are produced in Japan, followed by Germany, South Korea, India and USA. These 5 countries are stand at the top when the production of cars is concerned.
Company analysis All the car manufacturers are
giving tough competition to each other by opting innovative and unique ideas to capture the market. The car market deals with different types of cars like big cars, small cars, sports cars, luxurious cars, etc. For those, who cannot afford to buy a new car can go for used cars.
Some of the major players are:
Mahindra & Mahindra Maruti Suzuki Tata Motors
The Mahindra Group (SWOT Analysis) Strength Mahindra has been one of the strongest brands in the Indian automobile
market Mahindra group give employment to over 110,000 employeesExcellent branding and advertising, and low after sales service cost
Weakness
Mahindra’s partnership with Renault did not live up to international quality standards through their brand Logan
Opportunity.
Tapping emerging markets across the world and building a global brand.Fast growing automobile market. Growing in the market through electric car Reva (controlling stake) and entry into two-wheeler segments.
Threats Government policies for the automobile sector across the world
Ever increasing fuel prices. Intense competition from global automobile brands Substitute modes of public transport like buses, metro trains etc
Analysis of Financial Information
PROFIT & LOSS ACCOUNT: The operating income of the company is increasing at good phase and the same root has been followed by operating expenses. In other words cost of sales is also increasing. As, a result the PAT of the company is also increasing at a fair way year. Thus, the earning of the company is stable.
Balance sheet: The basic funding source of the company is equity share capital & reserve. The dependency of borrowed capital is showing a decreasing trend and the major portion of capital is invested in fixed assts also the external investment of the company is showing a investment trend.
Cash Flow Statement: The company earning good quality of profit the same is also supported by the cash flow statement .Moreover increasing investment activity in last year is also supported by the cash flow although in 2011 there was negative net cash flow and that was basically due to the heavy outflow related investment activity.
MARUTI SUZUKI INDIA LIMITED Strengths
Maruti Udyog limited (MUL) is in a leadership position in the market with a market share of 48.74
Major strength of MUL is having largest network of dealers and after sales service centers in the country.
Alto still beats the small car segment with highest number of sales. MUL is the first automobile company to start second hand vehicle sales
through its True-value entity.
Weaknesses Low interior quality inside the cars when compared to quality players like
Hyundai and other new foreign players like Volkswagen, Nissan etc. Maruti hasn’t proved itself in SUV segment like other players.
Opportunities MUL can start R&D on electric cars for a much better substitute of the
fuel. Maruti’s cervo 600 has a huge potential in tapping the middle class
segment and act as a strong threat to Nano Export capacity of the company is giving new hopes in American and UK
markets
Threats MUL recently faced a decline in market share from its 50.09% to 48.09 %
in the previous year(2011) China may give a good competition as they are also planning to enter
into Indian car segment
Analysis of financial information-
Profit and loss- The operating income of the company is increasing gradually and the cost of the sales is also increasing at a fair ways year after year. Thus, the earning of the company is stable
. Balance sheet: The equity share capital of the company
remaining .And on the other hand the secured loans are increasing gradually but the unsecure loans are decreasing. . The increasing trends of fixed assts indicate that the most of the capital is invested in fixed assts but the external investment is fluctuating year after year.
Profits & loss: the operating income of the company is increasing
gradually and the same root has been followed by operating expenses. In the other word cost of the sales is also increasing at a fair ways year after year. Thus, the earning of the company is stable.
Tata Motors (SWOT Analysis)-
Strengths Market share leadership.. Innovation . Introducing Tata Nano.
Weaknesses Tata Motors is not well positioned in the luxury segment. Most of the automobiles Tata manufactures are based on
older platforms.
Opportunities The Nano could sell well in other geographic markets. Product and services expansion Takeovers
Threats Rising material costs will create pressure to increase prices. There is a trending rise in diesel fuel costs which will hurt
Tata’s line of products
Analysis of financial information Profit and loss- The operating profit is showing a healthy increasing
trend. However the area of concern is that the EPS is very much fluctuating which means due to multiple financial factors.
Balance Sheet- Equity base is increasing but the company is not having preference capital. The company is also utilizing the leverage advantage by having suspension amount of secured and unsecured loan.
Cash flow- The operating activity is fluctuating i.e. high quality
profit is not guaranteed other fig. are more or less rational.
Ratio -All profitable ratios more or less stable and satisfactory. Current and quick ratios are showing a very poor position .interest coverage ratio is also very safe and showing an increasing trend which is optimistic.
Limitation of study
.
Sample size Lack of available and/or reliable
data Lack of prior research studies on
the topic
Thank you
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