INDIAN AUTOMOBILE INDUSTRY

By Devidas Darade Akshay Bhosale Vaibhav Choudhari Barunjay Kumar Parag Choudhary Abhijeet Borse

INTRODUCTION TO AUTOMOBILE SECTOR

It begins as early as 1769. The automobile sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. It contributes about 4 per cent in India's Gross Domestic Product(GDP) and 5 per cent in India's industrial production. Indian Automobile sales growth rate would be 9.5 % by 2011.

FACTS
9th largest automobile industry . 2nd largest two-wheeler market, 4th largest in Heavy Trucks. 2nd largest tractor manufacturer. 11th largest passenger car market and expected to become 7th largest by 2016. Sale of passenger cars in India is likely to grow at an average of 14.9% each year to touch 2.1 million mark by 2010.

KEY PLAYERS

Maruti Hyundai Ford Sonalika International Force M&M Skoda Mercedes Benz Volkswagon

TATA Honda GM HM Toyota Kirloskar Fiat Audi BMW Mitshubishi

AUTOMOBILE

2 WHEELL ER

3 WHEELL ER

PASSENG ER VEHICLE

COMMERC IAL VEHICLE

2 WHEELER

Market leader Hero Honda with market share 50%

3 WHEELER

Market leader Mahindra & Mahindra with market share 42%

PASSENGER VEHICLE

Market leader Maruti with market share 52%

COMMERCIAL VEHICLE

Market leader Tata Motor with market share 61%

SEGMENTATION OF AUTOMOBILE INDUSTRY

Following is the segmentation that how much each sector comprises of whole Indian Automobile Industry

Indian Auto Market Growth

The automobile industry crossed a landmark with total vehicle production of 10 million units. Car sales was increasing per year. The two-wheeler market grew by 13.6 % compare to last year. Commercial vehicles segment grew at 10.1 % . Medium and heavy commercial vehicles managed a growth of 4.5%.

sales PERFORMANCE IN 2009

GDP
Directly and indirectly it employs more than 10 million people. The market value of Automobile Industry is more than US$8 billion. and Contribution in Indian GDP is near about 4% and will be double by 2016. The automobile industry in India grew at rate of 11.5 % over the past five years. In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand.

SWOT OF AUTOMOBILE INDUSTRY

STRENGTHS Large domestic market Government incentives for manufacturing plants Strong engineering skills in design Able to achieve significant gains in productivity WEAKNESSES Low labour productivity High interest costs and high overheads Rising cost of production Low investment in Research and Development

OPPORTUNITIES Commercial vehicles Heavy thrust on mining and construction activity Increase in the income level Cut in excise duties Rising rural demand THREATS Rising interest rates Cut throat competition Lack of technology for Indian Companies

Porters Five Forces Analysis:

 The great diversity of rivals in terms of cultures and Associated philosophies have intensified rivalry in the industry. China and India; in these booming markets, companies could take advantage of the opportunities to reap handsome rewards. The degree of rivalry in the automotive industry is further heightened by high fixed costs associated with manufacturing cars and trucks .

2.Threat of Substitutes:
The threat of substitutes to the automotive industry is fairly mild. Numerous other forms of transportation are available, but none offer the utility, The convenience, costs independence, associated and value a afforded by automobiles. switching with using different mode of transportation, such as train, may be high in terms of personal time (i.e., independence), convenience, and utility (e.g., luggage capacity), but not necessarily monetarily (e.g., round trip train fare would most likely be

3) Barriers to Entry
The barriers to enter the automotive industry are substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. All of the large and automotive companies markets have with globalized entered foreign

varying degrees of success. Although the barriers to new companies are substantial, established companies are entering new markets through strategic partnerships or through buying out or merging with other

 In the relationship between the automotive industry and its suppliers, the power axis is substantially tipped in the industrys favor. There are specific characteristics that make members of the automotive industry powerful buyers Consumers wield the greatest power in this relationship due to the fairly standardized nature of the automotive commodity (a vehicle) and the low switching costs associated with selecting from among competing brands

FUTURE PROSPECT OF INDIAN AUTOMOBILE SECTOR

Automobile industry expert predicts that by 2050 every sixth car in the world will be for Indians. By 2011 India will take over Germany in sales volumes and Japan by 2012 The Indian automobile component industry is estimated to triple from USD 63 billion to USD 190 billion within a span of six years by 2012. Industry analysts predict this industry to touch USD 13000 million mark by 2011, a cumulative growth of 9.5% annually. It is said that for every Re 1 spent, the auto sector returns Rs. 2.24 to the Indian economy.

CONCLUSION
Industry across countries will have to meet challenges of newer technologies, alternative fuels and affordability of automobiles by people at large through constructive cooperation. The earlier we are able to achieve this the better it would be for the world performance.

U YO K N A H T