AUTOMOBILE

INDUSTRY

Statistics of Automobile

Industry

• India is presently ranked 17th amongst auto car manufacturing countries in the world.

• India is poised to become third largest auto car manufacturing hub in the world by 2020.

• The small car market counts for about 73 percent of the overall car market within India, which is densely populated with motor vehicles.

• And this outstanding growth in the small car segment has compelled the major players like Nissan, Renault, Toyota, Volkswagen (VW), etc to sit up and take notice.

Leader of Indian Passenger

Cars

• Maruti Udyog Limited

• Tata Motors

• Hyundai

• Honda

• Fiat

• Ford

• Toyota

• Mahindra & Mahindra

Market shares of major players

in Indian passenger car

segment

Economic factors affecting

sales

• Increased access to credit and lower interest loans.

• Investment in Infrastructure spending can boost the commercial

vehicles segment.

• Growing working population (441 million people in 2015/16)

• Upward migration of household income levels (600 million

people have annual income of more than $10,200)

• Middle class expanding by 30 - 40 million every year

• The availability of car loans, affordable rates of interest, smooth

repayment facilities and the deductions offered to the customers

by the retailers.

Social Factors

• Rapid Urbanization of semi urban regions

• Rising aspirational levels. Improvement in living

standards of middle class

• Increased spending on Fashion & lifestyle comforts.

• Seeking “Value for money”- consumer behavior

• Increasing customer emphasis on aesthetics and

comfort.

• A perfect marriage of rise in disposable income and

demographic dividend (From US$ 556 per annum

US$ 1150 by 2015)

JV/Collaborations

1. Maruti Suzuki : (Maruti-800,Zen Estillo,Swift)

• New car plant to make 250,000 cars per annum (total 800,000 cars/annum)

• 10 new Component JVs to support new Diesel Engine Plant.

2. Hyundai : (Getz Prime, Santro, I -10, I -20)

• Already a big player in the small car segment

• Increase capacity to 600,000 cars per annum over next 1 year.

3. Ford : (Figo)

• Plans to unveil its small car with 1.2 ltr engine by 2010

JV/Collaborations

5.Nissan-Renault

• 50:50 JV, to make 400,000 cars a year with an

investment of over US $ 1 billion.

• Coming up with the $2500 car to compete with Tata

Nano in 2011

6. Toyota

• Toyota Kirloskar motors planning to launch its

own small car in India by 2011

The market shares of the

segments of the automobile

industry

Statistics of Maruti Suzuki

• Currently, Maruti Suzuki is the market leader with 58 percent market share.

• It has the seven other small car in its portfolio M800, Omni, Wagon-R, Zen A-Star, Alto and Swift hatchback.

• With such a strong portfolio the company was able to sell nearly 8 lakh cars in the last fiscal year. It recorded a growth of 3.6 percent.

• The new Ritz is expected to further increase its lead in the market.

Our Player

Maruti Udyog Limited

R

SWOT Analysis

Opportunities Weakness

Strength Threat

PEST Analysis

Political Factors

• Government policies relating to the industry• Tax policies• Law and regulation• Trade restrictions and tariff

Economic Factors• economic growth• interest rates,• exchange rates and inflation rate

Social Factors

• population growth rate• age distribution• changes in tastes and buying patterns

Technological Factors

• R&D activity• automation• technology incentives and • the rate of technological change

Competitor: Hyundai Motors

• The country’s second largest car manufacturer and the largest passenger car exporter.

• Posted growth in cumulative sales for the month of April, 2009. While the domestic sales grew by a marginal 3.5% the exports grew by 19.6%. The cumulative sales however grew by 10.9%.

• The segment-wise cumulative sales in the month of April, 2009 are as follows: A2 Segment (Santro, i10, Getz & i20) 41,258 units; A3 Segment (Accent & Verna) 3,073 units; A5 Segment (Sonata Transform) 34 units; and SUV Segment (Tucson): 6 units

Contribution to exports by

major Indian players in

passenger car segment

Porter 5 Force Analysis

1.Threat of new Entrants

• In most markets, the capital and expertise needed to setup an auto or parts manufacturing facility, would be a great enough barrier to entry to prevent many new entrants from setting up.

• However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high.

• Result: Unfavorable

2. The bargaining power of buyers/customers

• Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). Of course there are also a plethora of incredibly cheap choices, like the famous Tata Nano.

• Result: Unfavorable

Porter Analysis Continued…

3. The threat of substitute products

• India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real and obvious threats to auto manufacturers.

• Result: Unfavorable

4. The amount of bargaining power suppliers have

• It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others in India.

• Result: Unfavorable

5. The amount of rivalry among competitors

• High. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.

• Result: Unfavorable

Future Of Car Industry In India

• Pre-liberalization India-- Maruti Suzuki 800 hatchback car in 1983 a joint venture between Government of India and Suzuki Motors of Japan

• Post liberalization--Many foreign manufacturers have setup base in India.

• 4th largest commercial vehicle market in the world.

• 11th largest passenger car market globally, expected to be the 7th largest by 2016.

• Reason for Growth--Easy availability of vehicle finance, attractive rates of interest, and convenient installments.

• Depending upon customers needs, 4 segments - small, midsize, premium and sports utility vehicles currently represent the car market in the country.

THANK YOU

Amrita WigAnkit Grover

Ashish PuriGaurav Mittal

Kanav BudhirajaMd.Zafeer

Sachin BhardwajShivani ElhanceVinmara Bansal