industrial analysis of automobile sector
Post on 20-Aug-2015
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Presented by Chaithra C N
Aruna K N
A number of environmental factors influence the organization.
For the firm to make profit it must create value for customers or buyers, while creating value for its buyers the firm must closely look at the rivals who are there in the arena competing for the same ‘space’.
The Indian automobile industry has emerged as a sunrise sector in the Indian economy.
India is emerging as one of the world`s fastest growing passenger car markets and second largest two wheeler manufacturer.
India is the largest base to export compact cars to Europe.
While the industry is highly capital intensive in nature in case of four-wheelers, capital intensity is a lot less for two-wheelers.
Though three-wheelers and tractors have low barriers to entry in terms of technology, four wheelers is technology intensive. .
As compared to their global counterparts, both the two-wheeler as well as four wheeler segments are relatively lesser fragmented. However, things are changing, especially on the passenger cars front as many foreign majors are eyeing the Indian market.
As a result, pricing power is likely to diminish going forward.
The automobile industry, one of the core sectors has undergone metamorphosis with the advent of new business and manufacturing practices in the light of liberalization and globalization.
Example of Indian automobile industries in India- ford motors, Audi, Maruthi Suzuki, Mahindra and Mahindra, fiat etc.
Strengths1. Increase in the
export levels.2. Low cost and cheap
labor.3. Investments by
foreign car manufacturers.
4. Large pool of engineers.
Weaknesses:1. Low labour
productivity.2. High interest rate
and overhead level. 3. Low investment in
R&D area.4. Low quality
compared to other automotive countries.
Opportunities:1. Growing population in
the country.2. Rising living standars. 3. Incrase in income
levels.4. Better car technology
is demanded. 5. Rising rural demand.6. Women drivers have
increased.
Threats:1. Less skilled labour.2. Lack of technologies for Indian
companies. 3. Increase in import tariff and
technological cost,4. Increased congestion in the urban
areas.
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