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Automobileindustry 100627032909
India is poised to become the third largest automobile manufacturing hub by 2020 according to the document. Currently India ranks 17th globally in automobile production. The small car market makes up 73% of total car sales in India. Major global automakers like Nissan, Renault, and Volkswagen are expanding in India due to growth in small car sales. Domestic leaders include Maruti Suzuki, Tata Motors, Hyundai, and Honda. Factors driving growth include increased access to credit, infrastructure investment, a growing middle class, and urbanization. The future of the Indian car industry looks promising as market size is expected to continue rising significantly.
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Automobileindustry 100627032909
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- 2. 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.
- 3. Leader of IndianPassenger Cars • Maruti Udyog Limited • Tata Motors • Hyundai • Honda • Fiat • Ford • Toyota • Mahindra & Mahindra
- 4. Market shares ofmajor players in Indian passenger car segment
- 5. 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 $10,200) • Middle class expanding by 30 - 40 million every year • The availability of car loans, affordable rates of interest, smooth repayment facilities and the deductions offered to the customers by the retailers.
- 6. Social Factors • RapidUrbanization of semi urban regions • Rising aspirational levels. Improvement in living standards of middle class • Increased spending on Fashion & lifestyle comforts. • Seeking “Value for money”- consumer behavior • Increasing customer emphasis on aesthetics and comfort. • A perfect marriage of rise in disposable income and demographic dividend (From US$ 556 per annum US$ 1150 by 2015)
- 7. 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
- 8. 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
- 9. The market sharesof the segments of the automobile industry
- 10. Statistics of MarutiSuzuki • 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.
- 11. Our Player Maruti UdyogLimited
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- 24. Political Factors • Governmentpolicies relating to the industry • Tax policies • Law and regulation • Trade restrictions and tariff Economic Factors • economic growth • interest rates, • exchange rates and inflation rate
- 25. Social Factors • populationgrowth rate • age distribution • changes in tastes and buying patterns Technological Factors • R&D activity • automation • technology incentives and • the rate of technological change
- 26. 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
- 27. Contribution to exportsby major Indian players in passenger car segment
- 28. Porter 5 ForceAnalysis 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
- 29. 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
- 30. Future Of CarIndustry 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.
- 31. THANK YOU Amrita Wig AnkitGrover Ashish Puri Gaurav Mittal Kanav Budhiraja Md.Zafeer Sachin Bhardwaj Shivani Elhance Vinmara Bansal