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A STUDY ON

ANALYSIS OF AUTO MOBILE INDUSTRY

Submitted in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

BY R.ANAND MBA III SEMESTER R.NO: O8931E0027 Under the esteemed guidance of P. GUNA SHEELA Assistant Professor Department of MBA

SRI KOTTAM TULASI REDDY MEMORIAL COLLEGE OF ENGINEERING

KONDAIR, ITIKYALA MANDAL, MAHABOOB NAGAR- DISTRICT-519125 (AP) DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

SRI KOTTAM TULASI REDDY MEMORIALCOLLEGE OF ENGINEERING

KONDAIR, ITIKYALA (MANDAL)

MAHABOOBNAGAR (DIST)-509125(A.P)
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(Affiliated to J.N.T.U.H)

CERTIFICATE

This is to certify that the industry analysis report on AUTO MOBILE INDUSTRY submitted by Mr. R.ANAND in partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION in Jawaharlal Nehru technological university Hyd is a record of bonafied work carried out by him in this department.

Internal guide the department

Head of

Examiner:

ACKNOWLEDGEMENT

I am thankful to our guide, for her motivation, help and continuous support which made this industry analysis happen. I am also indebted to her invaluable suggestions, which made me to correct my faults and improve myself. I express my deep sense of gratitude and thanks to B.PARIMALADEVI (Head of Department) for her consistent support and guidance. I am also thankful to her for helping me find and overcome many problems faced during the period. I am very much obliged to SRI KOTTAM TULASI REDDY MEMORIAL COLLEGE which has given me opportunity to carry our industry analysis in its premises.I feel privileged to thank wholeheartedly our Director Dr.K.S.NAYANTHARA for giving me this opportunity.

DECLARATION
I here by declare that this project entitled A STUDY OF REPORT ON AUTO MOBILE INDUSTRY IN INDIA is a bonafied work carried out by me under the guidance of Ms. P.GUNA SHEELA, Assistant professor, Dept. of Management SKTRMC, Kondair. I also declare that report is original and not submitted to any other university/ Institution for the award of any degree / Diploma.

Date: Place: Signature of the student.

EXECUTIVE SUMMARY 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. The sector seems to be optimistic of posting strong sales in the couple of years in the view of a reasonable surge in demand. The Indian automobile market is gearing towards international standards to meet the needs of the global automobile giants and become a global hub. A detailed analysis of Automobile industry has been covered in respect of past growth and performance. Under this project to better understand the Industry we have used Fundamental and Technical tools to make it more authentic n meaningful. An E.I.C approach has been followed under Fundamental Analysis which covered effect of Recession, the impact of inflation, FDIs, Export, GDP etc. on Automobile Industry. The Industry Analysis has been done with the help of five forces model, BCG Matrix, SWOT analysis, industry life cycle and the industry specific index.. For Industry Analysis as a part of Fundamental tool we have undergone with the comparative analysis of TATA Motors as our leading Industry with Maruti Suzuki Indias largest Car manufacturer. The fundamental aspect consists financial and Non-Financial analysis of both the Industry. In the Technical aspect we have considered Share price analysis, moving average, moving average crossover, Bollinger bands and M.A.C.D. of both the Industry by keeping TATA Motors as our leading Industry.At the end conclusion and recommendations have been specified so as to make the research work more meaningful and purposeful.

OBJECTIVE OF THE PROJECT: The objective of this project is deeply analyze our Indian Automobile Industry for investment purpose by monitoring the growth rate and performance on the basis of historical data. The main objectives of the Project study are: Detailed analysis of Automobile industry which is gearing towards international standards Analyze the impact of qualitative factors on industrys and companys prospects Comparative analysis of two tough competitors TATA Motors and Maruti Suzuki Application of various Technical Tools and Fundamental tools (like Financial and Nonfinancial statements).

WHAT IS AN INDUSTRY?
Definition: An industry (from Latin industrius, "diligent, industrious") is the manufacturing of a good or service within a category.[1] Although industry is a broad term for any kind of economic production, in economics and urban planning industry is a synonym for the secondary sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products.[1] There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction, and manufacturing; the tertiary sector, which deals with services (such as law and medicine) and distribution of manufactured goods; and the quaternary sector, a relatively new type of knowledge industry focusing on technological research, design and development such as computer programming, and biochemistry. A fifth quinary sector has been proposed encompassing nonprofit activities. The economy is also broadly separated into public sector and private sector, with industry generally categorized as private. Industries are also any business or manufacturing. Industry in the sense of manufacturing became a key sector of production and labour in European and North American countries during the Industrial Revolution, which upset previous mercantile and feudal economies through many successive rapid advances in technology, such as the steel and coal production. It is aided by technological advances, and has continued to develop into new types and sectors to this day. Industrial countries then assumed a capitalist economic policy. Railroads and steam-powered ships began speedily establishing links with previously unreachable world markets, enabling private companies to develop to then-unheard of size and wealth. Following the Industrial Revolution, perhaps a third of the world's economic output is derived from manufacturing industriesmore than agriculture's share. Many developed countries (for example the UK, the U.S., and Canada) and many developing/semi-developed countries (People's Republic of China, India etc.) depend significantly on industry. Industries, the countries they reside in, and the economies of those countries are interlinked in a complex web of interdependence. The term industry refers to that part of business activity which is relates to production processing or fabrication of products.

INDUSTRY ANALYSIS
Definition:

A market assessment tool designed to provide a business with an idea of the complexity of a particular industry. Industry analysis involves reviewing the economic ,political and market factors that influence the way the industry develops. Major factors can include the power wielded by suppliers and buyers, the condition of competitors, and the likelihood of new market entrants. THE BEGINNING OF NEW ERA : With the invention of the wheel in 4000 BC, mans journey on the road of mechanized transport had begun. Since then he continually sought to devise an automated, labor saving machine to replace the horse. Innumerable attempts reached conclusion in the early 1760s with the building of the first steam driven tractor by a French Captain, Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce the first vehicles powered by the internal combustion engine in 1885. It was then that the petrol engine was introduced, which made the car a practical and safe proposition. Then onwards, it has been one big journey...on the roads HISTORY OF AUTOMOBILE INDUSTRY: Jan 30, 1880 - It was while ho was engaged in thor ough examination of tho incidents of our local history at tho opening of our Revolution, ... investigation purification of tho Indian Bureau, just about two years ago. His thoroughness and earnestnesB in the work wero praised on every hand .

1926

Jan 11, 1926 - ... ... early this morning, and in the wreck WC Durant, head of the Durant Motor Car Company and long prominent in the automotive industry, ... The brakes had barely been applied when the big engine of the West Indian crashed into the Durant private car, telescoping it and two Pullmans ... From IN WRECK; HAS NARROW ESCAPE; Automotive Leader Is Shaken Up - Related web pages select.nytimes.com/gst/abstract.html?res ...

1. 2. 1983 Dec 14, 1983 - The first Maruti vehicle, a Maruti 800 [ Images ] model, rolled
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out on December 14, 1983, and thereafter the company changed the face of the Indian automobile industry. From Maruti rolls out five-millionth car - Related web pages inhome.rediff.com/money/2005/apr/27maruti.htm 3. 4. 2001 Aug 23, 2001 - International 10-01-2003 India's auto industry drives offshore. CALCUTTA, India ... motorways. Indeed, for India's auto industry, which, not long ago was ruled primarily ... according to industry analysts, the Indian auto industry has come of age finally, having inves ... From German auto industry showing strong engine. | Article from United Press - Related web pages www.highbeam.com/doc/1G1-77441446.html?refid ...

5. 6. 2002 Oct 22, 2002 - In line with SAE International, the Indian chapter will also provide support to the Indian automobile industry in areas of idea exchange, exposure to the latest technology, financial assistance, research support and creation of high calibre manpower. ... From SAE sees big role in India with chapter - Related web pages www.thehindubusinessline.com/2002/10/22 ...

7. 8. 2003 Mar 13, 2003 - There is definitely maturity in the Indian automobile industry with great impact on quality, according to Mr Gerrit Kuyntjes, General Manager, Singapore office, JD Power Asia Pacific. Addressing a meeting here when the JD Power awards for 2002 were given away to various automobile ... From Indian auto industry close to global standards - Related web pages www.thehindubusinessline.com/2003/03/13 ...

9. 10. 2004 Jan 17, 2004 - "The Indian automobile ancillary sector, despite its high cost efficiency will not be able to compete with cheaper imports from Thailand and ... At the two-day Auto Trade Dialogue, jointly organised by the Ministry of Heavy Industries and Society of Indian Automobile Manufacturers, ... From Car industry wants 3 SEZs - Related web pages www.rediff.com/money/2004/jan/17car.htm

11. 12. 2006 Mar 20, 2006 - After China, the Indian car industry is the second fastestgrowing automotive market, currently totaling about 8 million vehicles. ... auto industry. In Russia, foreign automakers face inconsistent and unpredictable regulations, and a history of government interference in the market. ... From Emerging Markets Beckon World Carmakers - Related web pages www.businessweek.com/investor/content/mar2006 ...
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13. 14. 2007 Apr 3, 2007 - India has begun an ambitious development programme for its automotive industry, which it hopes will make it a global production hub by 2016. ... Efforts to create a manufacturing industry to supply the automotive industry with components get underway, spearheaded by the Indian ... From Timeline: India's automotive industry - Related web pages news.bbc.co.uk/2/low/business/6478685.stm

15. 16. 2008 Dec 24, 2008 - In fact, Chenoy says, the financial crunch could offer a silver lining to the Indian auto industry, as demand is expected to grow all over the ... Analysts say projections that the Indian auto industry will grow from $35 billion, at present, to $145 billion by 2016 still hold good. ... From India's Auto Industry Faces Slowdown - Related web pages voanews.com/english/2008-12-24-voa16.cfm

17. 18. 2009 Dec 4, 2009 - AFP/File The Shanghai Automotive Industry Corporation logo is shown at their Tyson's Corner, Virginia. General BEIJING (AFP) General Motors and Shanghai Automotive Industry Corp ... GM has recently been making major efforts to increase sales in India and plans to launch a small car. From GM and China's SAIC to launch India auto venture - Related web pages news.yahoo.com/s/afp/20091204/bs_afp ...

PREVIEW OF AUTOMOBILE INDUSTRY: 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. The sector seems to be optimistic of posting strong sales in the next couple of years in view of a reasonable surge in demand. The Indian automobile market is gearing towards having international standards to meet the needs of the global automobile giants and become a global hub. Players are strategizing to consolidate their position and gradually increase market penetration with the launch of new models, targeting different segments. Since the sector is price driven, huge investment is envisaged to remain competitive through cost advantage, for which indigenization is highly important. The product becomes dearer if it is manufactured using imported parts.
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IT in the automobile sector plays a crucial role.. Some players are working towards development of efficient production systems that control the entire production process with high precision and accuracy. Such systems working on real time operating systems allow efficient control of different parts of manufacturing and production. It is essential to leverage skills of different engineering disciplines to build these kinds of integrated systems. Analysts foresee high scope in the electronics for auto sector and expect the retailing of such electronics products to contribute a major chunk of future revenues. The government is increasing the research and development (R&D) fund for the automobile industry over and above the Rs 1400 crores earmarked for eight years. All laboratories in the country researching on automobile technology, such as BHEL which is developing cell technology as alternative fuel, have also been brought together through the setting up of a national R & D working group. The group is working out a plan to link all major laboratories across the country to give a thrust to automotive research. Indian automobile sector being a driver of product and process technologies, and has become a excellent manufacturing base for global players, because of its high machine tool capabilities, extremely capable component industry, most of the raw material locally produced, low cost manufacturing base and highly skilled manpower. Not only a large number of world manufacturers have set up production bases in India but also a large number of foreign companies are collaborating with the auto component suppliers and vendors.Indian Automobile Components Industry has been making rapid strides towards achievement of world-class Quality Systems by imbibing ISO 9000/QS 9000 Quality Systems whereby the Indian Automotive industry has become more competitive in the export market due to its technological and quality advances, so much so that in quality conscious markets such as. Europe and America, it is emerging as a major player, based on its performance. India today exports: Engine and engine parts, electrical parts, drive transmission & steering pats, suspension & braking parts among others.The sector is striding inroads into the rural middle class after its inroads into the urban markets and rural rich. It is trying to bring in varying products to suit requirements of different class segments of customers.

States like Rajasthan, Uttar Pradesh, Maharashtra, Andhra Pradesh and West Bengal are vying to woo global players with proposals including heavy tax exemptions and to create a more investor friendly regime, each state is proposing to provide all regulatory clearances at express speed. The Government should promote Research & Development in automotive industry by strengthening the efforts of industry in this direction by providing suitable fiscal and financial incentives. The current policy allows Weighted Tax Deduction under I.T. Act, 1961 for sponsored research and in-house R&D expenditure. This will be improved further for research and development activities of vehicle and component manufacturers from the current level of 125%. In addition, Vehicle manufacturers will also be considered for a rebate on the applicable excise duty for every 1% of the gross turnover of the company expended during the year on Research and Development carried either in-house under a distinct dedicated entity, faculty or division within the company assessed as competent and qualified for the
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purpose or in any other R&D institution in the country. This would include R & D leading to adoption of low emission technologies and energy saving devices. Government will encourage setting up of independent auto design firms by providing them tax breaks, concessional duty on plant/equipment imports and granting automatic approval. Allocations to automotive cess fund created for R&D of automotive industry shall be increased and the scope of activities covered under it enlarged. The landmarks along the way:
1928- The first imported car was seen on Indian roads

1942- Hindustan Motors incorporated

1944- Premier automobiles started 1948- First car manufactured in India 1953- The Government of India decreed that only those firms which have a manufacturing

program should be allowed to operate

1955- Only seven firms, namely, Hindustan Motors Limited, Automobile Products of India

Limited, Ashok Leyland Limited, Standard Motors Products of India Limited. Premier Automobiles Limited, Mahindra & Mahindra and TELCO received approval.
1960 - 1970 - The two, three wheeler industries established a foothold in the Indian

scenario.
1970 - 1980 - Not much change was witnessed during this period. The major factors

affecting the industry were the implementation of the MRTP Act (Monopolies and Restrictive Trade Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973.

1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the liberalization of the Government's protectionist policies, the advantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear. 1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed with, and the automobile industries were allowed to expand freely. 1993 - With the winds of liberalization sweeping the Indian car market, many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into the Indian car market. 1997 - The National Highway Policy was announced which will hopefully have a positive impact on the automobile industry. The Government also laid down the emission
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standards to be met by car manufacturers in India in the coming millennium. There were two successively stringent emission levels to be met by April 2000 and April 2005, respectively. These norms were benchmarked on the basis of those already adopted in Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region(NCR) of Delhi. The deadline was later extended to 1st June, 1999 2004 - Tata Motors becomes the first Indian auto company to be listed on the New York Stock Exchange.

AUTOMOBILE INDUSTRY WHEELS OF CHANGE: India had its date with this wonderful vehicle first time in 1898. Then for the next fifty years, cars were imported to satisfy domestic demand. Between 1910 and 20's the automobile industry made a humble beginning by setting up assembly plants in Mumbai, Calcutta and Chennai. The import/assembly of vehicles grew consistently after the 1920's, crossing the 30,000 mark in 1930. In 1946, Premier Automobile Ltd (PAL) earned the distinction of manufacturing the first car in the country by assembling 'Dodge DeSoto' and 'Plymouth' cars at its Kurla plant. Hindustan Motors (HM), which started as a manufacturer of auto components graduated to manufacture cars in 1949. Thanks to the Licence Raj which restricted foreign competitors to enter the Indian car market, Indian roads were ruled by Ambassador Car from Hindustan Motors and the Fiat from Premier Auto Ltd. for many of the initial years. In 1952, the GOI set up a tariff commission to devise regulations to develop an indigenous automobile industry in the country. After the commission submitted its recommendations, the GOI asked assembly plants, which did not have plans to set up manufacturing facilities, to shut operations. As a result General Motors, Ford and other assemblers closed operations in the country. The year was 1954 and this decision of the government marked a turning point in the history of the Indian car industry. The GOI also had a say in what type of vehicle each manufacturer should make. Therefore, each product was safely cocooned in its own segment with no fears of any impending competition. Also, no new entrant was allowed even though they had plans of a full-fledged manufacturing program. The restrictive set of policies was chiefly aimed at building an indigenous auto industry. However, the restrictions on foreign collaborations led to limitations on import of technology through technical agreements. In the absence of adequate technology and purchasing power, the car industry grew at a snail's pace in the 60s. The demand for cars in

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1960 was to the tune of 15,714. In the next two decades the number increased to 30,989 i.e. a CAGR of only 3.5 per cent. The other control imposed on carmakers related to production capacity and distribution. The GOI control even extended to fixation of prices for cars and dealer commissions. This triggered the start of a protracted legal battle in 1969 between some carmakers and GOI. Simply put, the three decades following the establishment of the passenger car industry in India and leading upto the early 1980s, proved to be the 'dark ages' for the consumer, as his choice throughout this period was limited to two models viz. Ambassador and Padmini. It was only in 1985, after the entry of Maruti Udyog, that the car makers were given a free hand to fix the prices of cars, thus, effectively abolishing all controls relating to the pricing of the end product. In the early 80's, a series of liberal policy changes were announced marking another turning point for the automobile industry. The GOI entered the car business, with a 74% stake in Maruti Udyog Ltd (MUL), the joint venture with Suzuki Motors Ltd of Japan. The very face of the industry was changed for ever in 1983 with the entry of public sector Maruti Udyog in a joint venture with the Suzuki Corporation of Japan. Car sales grew by 42 per cent yoy in 1985 after Maruti 800 was launched. Thanks to MUL car sales registered a CAGR of 18.6 per cent i.e. from 1981 to 1990. In 1985, the GOI announced its famous broadbanding policy which gave new licenses to broad groups of automotive products like two and four-wheeled vehicles. Though a liberal move, the licensing system was still very much intact. MUL introduced 'Maruti 800' in 1983 providing a complete facelift to the Indian car industry. The car was launched as a "peoples car" with a price tag of Rs 40,000. This changed the industry's profile dramatically. Maruti 800 was well accepted by middle income families in the country and its sales increased from 1,200 units in FY84 to more than 200,000 units in FY99. However in FY2000, this figure came down due to rising competition from Hyundai's 'Santro', Telco's Indica and Daewoo's 'Matiz'. MUL extended its product range to include vans, multi-utility vehicles (MUVs) and mid-sized cars. The company has single handedly driven the sales of cars in the country cornering around 79.6% market share. With increasing competition from new entrants, this market share has plummeted to almost 62% in FY2000. A brief 3-year downturn till 1993 and car sales bounced back to register a 17 per cent growth rate in 1997.Since then, the economy slumped into recession and sales of cars remained quite stagnant FY97 and FY99. The Financial year 2000 has, however, been the turnaround year for the Auto industry with the economy looking up. The automobile industry, crossed the half million mark for the first time in FY2000. Overwhelmed by newer models from new and existing players had led to an impressive shift from a constrained supply situation to a surplus one. Within the past decade, about 30 models have entered the Indian market with a number of models still awaiting launch. The delicensing of auto industry in 1993 opened the gates to a virtual flood of international auto makers into the country with an idea to tap the large population. Also the lifting of quantitative restrictions on imports by the recent policy is expected to add up to the flurry of foreign cars in to the country. The Indian Automobile industry registered one of the strongest growth rates in FY04. Aided by sustained economic recovery, the industry registered high growth rates in all major segments.

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The growth story was led by Medium and Heavy Commercial Vehicles (M&HCVs) registering a 40% growth while Light Commercial Vehicles (LCVs) recorded a 32% jump in total sales. Passenger cars also registered an impressive 34% growth in FY04 and total sales volume crossed the 1 million mark for the first time. Interestingly, two wheelers registered the lowest but healthy growth rate of 13% in FY04. While motorcycle volumes tripped on a high base, scooters registered a 10% growth after 4 years of continuous decline. Three wheelers grew by 23% in FY04. Apart from strong economic growth in all sectors, low interest rate regime, normal monsoon, continued infrastructure investment, fiscal measures like cut in excise duty (in case of cars), etc provided impetus for the growth. The year also saw a sharp 56% rise in export volumes with all the sectors registering more than 40% growth, signalling the rising international competitiveness of the industry. Profitability improvements were recorded in companies across segments driven by rise in volumes and lower interest costs to some extent, notwithstanding the rise in prices of certain inputs like steel.

Structure:

INDUSTRY STRUCTURE

The Indian automobile industry can be broadly classified into: 2 /3 Wheelers Passenger Cars Commercial Vehicles (LCV/HCV/MCV) UV (Utility vehicles) Tractors

The models in the car market can be fitted to different segments as given below: Category Economy segment (upto Rs 0.25mn) Mid-size segment (Rs 0.25-0.45 mn) Luxury car segment (Rs 0.45- 1mn) Models Maruti Omni, Maruti 800 etc. Fiat Uno, Hyundai Santro, tata Indica, Maruti Alto etc. Tata Indigo, Honda City, Mitsibushi Lancer, Ford Ikon, Opel Astra, Hyundai Accent & others Mercedes Benz & other imported models

Super luxury segment (above Rs 1mn)

The economy segment has a very large foothold over the Indian automobile market as compared to the mid-size and luxury segment.

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Segment Economy Mid-size and luxury

Market Share (%) 90.2 9.8

Segmentation of Automobile Industry: The automobile industry comprises of Heavy vehicles (trucks, buses, tempos, tractors); passenger cars; Two-wheelers; Commercial Vehicles; and Three-wheelers. Following is the segmentation that how much each sector comprises of whole Indian Automobile Industry.

8 OUT OF TOP 10 GLOBAL COMPANIES HAVE INDIA PRESENCE

They c ont rib ute 60 % of glo bal product ion 25 % of I ndia Product ion Key players in t he Indian aut o industry - Passenger Cars and Comme rcial ve hicles

The largest player in the India n industry. Plans to laun ch new and excit products in the I ndian markets, includi ng the 100,000 car

Suzuki s JV in India and the largest passe nger car manufact urer in India

The thi rd largest pass enger car manufa cturer in India

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and one of the largest exporters of vehicles. Has establi shed Indi a as one of its m anufactur base s in the world. Is planning to invest heavil y to boost exports from Has vision of c aptu ring 10 % share of the I ndian passenger car marke 2010 . One of the leadi ng players in the I ndian prem ium cars segment One of the leadi ng players in the I ndian prem ium cars segment

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One of the leading players in the Indian premi um cars segmen t. Plans to en ter the smal l car segment by relaunching the Matiz One of the largest players in the UV / MUV segme nt

The 2n d lar gest CV manufacture r in Indi. a KEY PLAYERS IN T HE I NDIAN AUTO INDUSTRY - TW O WHEE LERS

The lar gest 2 w heeler ma nufacturer in the world and 1st in Ind The 2n d lar gest 2- whe eler manufa cturer in India and the largest . 3 whe eler manuf acturer . Has plans for establish ing a manuf acturing facil ity in Indonesia . The third largest 2 whe eler manuf acturer in India. Has plans for esta blishing a ma nufacturing facil ity in Indonesia

Has recently en tered the Indian marke t through its direct subsidiary ( in addition to its JV Hero Honda)

Has recently en tered the Indian marke t through its direct subsidiary

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INDUSTRY PERFORMANCE Automobile Production Trends :

CATEGORY Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total 5,622,741 7,243,564 6,529,829 8,467,853 7,608,697 9,743,503 8,466,666 11,087,997 8,026,681 10,853,930 8,418,626 11,175,479 356,223 374,445 434,423 556,126 500,660 501,030 275,040 353,703 391,083 519,982 549,006 417,126 2003-04 989,560 2004-05 1,209,876 2005-06 1,309,300 2006-07 1,545,223 2007-08 1,777,583 2008-09 1,838,697

Automobile Exports Trends :

CATEGORY Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total

2003-04 129,291 17,432 68,144 265,052 479,919

2004-05 166,402 29,940 66,795 366,407 629,544

2005-06 175,572 40,600 76,881 513,169 806,222

2006-07 198,452 49,537 143,896 619,644 1,011,529

2007-08 218,401 58,994 141,225 819,713 1,238,333

2008-09 335739 42673 148074 1004174 1,530,666

Automobile Domestic Sales Trends : CATEGORY Passenger Vehicles 2003-04 902,096 2004-05 1,061,572 2005-06 1,143,076 2006-07 1,379,979 2007-08 1,549,882 2008-09 1,551,880

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Commercial Vehicles Three Wheelers Two Wheelers Grand Total

260,114 284,078 5,364,249 6,810,537

318,430 307,862 6,209,765 7,897,629

351,041 359,920 7,052,391 8,906,428

467,765 403,910 7,872,334 10,123,988

490,494 364,781 7,249,278 9,654,435

384,122 349,719 7,437,670 9,723,391

FIVE FORCES MODEL:

Michael Porter identifies five forces that influence an industry. These forces are Degree of Rivalry Despite the high concentration ratio seen in the automotive sector, rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market. The industry rivalry is extremely high with any being product being matched in a few months by the competitors. This instinct of the industry is primarily driven by technical capabilities acquired over years of gestation under the technical collaboration with international players. 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, convenience, independence and value offered by automobiles. The switching cost associated with using a different mode of transportation, may be high in terms of personal time, convenience and utility. Barriers to entry The barriers to enter automotive industry are substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. Although the barriers to new companies are substantial, establishing companies are entering the new markets through strategic partnerships or through buying out or merging with other companies. However, a domestic company, with local knowledge and expertise, has the potential to compete its home market against the global firms who are not well established there. Suppliers power In the relationship between the industry and its suppliers, the power axis is tipped in industrys favor. The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers. Buyers Power In the relationship between the automotive industry and its ultimate consumers, the power axis is tipped in the consumers favor. This is due to the fairly standardized nature and the low switching costs associated with selecting from among competing brands.

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1)

BCG Matrix

In an economy, different industries are present and different industries have different growth rate as compared to the growth of the economy. In an economy, there are a number of major industries and they all occupy different positions in the BCG matrix according to their growth and contribution towards the economy. In the Indian economy, some of the major sectors are FMCG, automobiles, banking and insurance, steel, telecom, software, pharmacology and retail sectors and these can be placed in the different positions in the matrix as shown below:

Hig h M a r k e t G r o w t h R Low

STA Banking & AUTOMOBIL ES Softwa re CASH FMC G

QUESTION Telecom Retai l

DO

2) Industrial Life Cycle

The industrial life cycle is a term used for classifying industry vitality over time. Industry life cycle classification generally groups industries into one of four stages: pioneer, growth, maturity and decline. In the pioneer phase, the product has not been widely accepted or adopted. Business strategies are developing, and there is high risk of failure. However, successful companies can grow at extraordinary rates. The Indian automobile sector has passed this stage quite successfully.

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In the growth phase, the product market has been established and there is at least some historical guide to ground demand estimates. The industry is growing rapidly, often at an accelerating rate of sales and earnings growth. Indian Automotive Industry is booming with a growth rate of around 15 % annually. The cumulative growth of the Passenger Vehicles segment during April 2007 March 2008 was 12.17 percent. Passenger Cars grew by 11.79 percent, Utility Vehicles by 10.57 percent and Multi Purpose Vehicles by 21.39 percent in this period. The Commercial Vehicles segment grew marginally at 4.07 percent. While Medium & Heavy Commercial Vehicles declined by 1.66 percent, Light Commercial Vehicles recorded a growth of 12.29 percent. Three Wheelers sales fell by 9.71 percent with sales of Goods Carriers declining drastically by 20.49 percent and Passenger Carriers declined by 2.13 percent during April- March 2008 compared to the last year. Two Wheelers registered a negative growth rate of 7.92 % during this period, with motorcycles and electric two wheelers segments declining by 11.90 percent and 44.93% respect. However, Scooters and Mopeds segment grew by 11.64% and 16.63% respect. The growth rate of the automobile industry in India is greater than the GDP growth rate of the economy, so the automobile sector can be very well be said to be in the growth phase As the product matures, growth slows as penetration reaches practical limits. Companies
began to focus on market share rather than growth. Industry demand tends to follow the overall economy, but the scope of growth of the automobile sector is very much possible in India due to the increasing income of the middle class and their income as well as standard of living.

3) SWOT Analysis
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points:
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Strengths: Large domestic market Sustainable labor cost advantage Competitive auto component vendor base Government incentives for manufacturing plants Strong engineering skills in design etc Low labor productivity High interest costs and high overheads make the production uncompetitive Various forms of taxes push up the cost of production Low investment in Research and Development Infrastructure bottleneck Commercial vehicles: SC ban on overloading Heavy thrust on mining and construction activity Increase in the income level Cut in excise duties Rising rural demand Rising input costs Rising interest rates Cut throat competition

Weaknesses:

Opportunities:

Threats:

INDUSTRY INVESTMENT
According to Commerce Minister Kamal Nath, India is an attractive destination for global auto giants like BMW, General Motors, Ford and Hyundai who were setting base in India, despite the absence of specific trade agreements. CURRENT SCENARIO:
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 On the cost front of Indian automobile industry, OEMs are eyeing India in a big way, investing to source products and components at significant discounts to home market. On the revenue side, OEMs are active in the booming passenger car market in India. OVERVIEW Snippets: By 2010, India is expected to witness over Rs 30,000 crore of investment.
Maruti Udyog has set up the second car with an investment of Rs 6,500 crore. Hyundai will bring in more than Rs 3,800 crore to India. Tata Motors will be investing Rs 2,000 crore in its small car project. General Motors will be investing Rs 100 crore and Ford about Rs 350 crore.

Ashok Leyland and Tata Motors have each announced over Rs 1,000 crore of investment.

WHY INDIA
The economy of India is emerging. The following table show the ranking of India in the past four years. Rank 1 2 3 4 5 6 7 China India Thailand Vietnam USA Russia Korea 2005 China Thailand India Vietnam USA Russia Indonesia 2004 China Thailand USA Vietnam India Indonesia Korea 2003 China Thailand USA Indonesia Vietnam India Korea 2002

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 Increased urbanisation, low pricing policies, improvement in products and technology have fuelled demand for 4-wheelers. The markets are clearly segmented between economy models and premium models. The easy availability of finance and increased levels of disposable incomes has led to higher demand for premium models. Rural areas have also become an exciting market to cater to. The growth of the economy has also resulted in a shift in consumer preferences in each of the segment. Gradual shift can be seen in buyers from mopeds to economy scooters, from economy scooters to premium and from premium to motorcycles
Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda

contributes 50% motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country.

40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers.

Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multipurpose vehicles. In utility vehicles Mahindra holds 42% share.

In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer. {figures from reliable sources}

INDUSTRY SPECIFIC INDEX:

Industry specific index also called as sectoral index are those indices, which represent a specific industry sector. All stocks in a sectoral index belong to that sector only. Hence an index like the BSE auto index is made of auto stocks. Sectoral Indices are very useful in tracking the movement and performance of particular sector.
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BSE Auto Index comprises all the major auto stocks in the BSE 500 Index.

BSE AUTO Index 5 Year Chart

Automobile Industry Index at BSE for 5 Year

COMPANY
Above is the Indian Auto Industry Index(BSE) shows the ups and downs over the period of 5 years. Intially in 2003 when major giants got listed on stock exchange TATA Motors, Maruti Suzuki, etc. indian auto industry start picking up growth slowly in the first end of 1st quarter index reaches to its highest in his history. Than we saw a steady fall in the index and in the mid 2006 reaches to years lowest point it again start booming and than year on year we saw a up and down movement in the index as lots of new players came in Indian market with foreign colaboration but when 2008 came with global slowdown it brings the demand of automobile so low that index reaches to its lowest in past 5year .

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Most of the company even shut down their manufacturing units for more than a week, production came down because of less demand in the economy. Also no further launches were made in mid or late 2008 and postponed to next year. We have also saw a fall in FDIs in automobile Industry. But in the beginning of 2009 right from 1st quarter auto industry again start regaining and we saw a tremondous growth in auto industry which never seen before not in india but all over the world. The demand of 2 and 4 Wheelers start increasing rapidly which also force auto industry to employ more workers to meet demand and with in the 2nd quarter of FY2009-10 Auto index reaches to its highest ever crossed mark of 6000. And this growth of industry will be carry further as festive season still to come, so there is a lot of scope to growth in this industry.

DEMAND
The demand for cars in the past was supply driven as demand did not match supply. This led to high premium and long waiting periods for the cars. But change in government policies coupled with aggressive capacity additions and upgradation of models by MUL in the early nineties led to increase in supply and subsequently reduced the waiting periods for economy cars.The demand for cars was suppressed by various supply constraints. The demand for cars increased from 15,714 in FY60 to 30,989 in FY80 at a CAGR of only 3.5%. The entry of Maruti Udyog Ltd (GoI-Suzuki JV) in 1983 with a "peoples" car and a more favorable policy framework resulted in a CAGR of 18.6% in car sales from FY81-FY90. After witnessing a downturn from FY90 to FY93, car sales bounced back to register 17% growth rate till FY97. Since then, the economy slumped into recession and this affected the growth of the automobile industry as a whole. As a result car sales remained almost stagnant in the period between FY97 and FY99. CAGR recorded during the FY94-FY99 period was 14.4%, reaching sales of 409,624 cars in FY99. However, during FY2000, with the revival of economy, the segment went great guns posting a sales growth of 56%yoy. The table below indicates the past sales trend for cars Cars Volume Growth %yoy 2004 209,203 27.0 2005 264,822 27.0 2006 345,486 30.0 2007 410,992 19.0 2008 417,736 2.0 2009 409,624 -2.0

The demand for cars is dependent on a number of factors. The key variables are per capita income, introduction of new models, availability & cost of car financing schemes, price of cars, incidence of duties and taxes, depreciation norms, fuel cost and its subsidization, public transport facilities etc. The first four factors viz, increase in per capita income, introduction of new models, availability & cost of car financing have positive relationship with the demand whereas others have an inverse relationship with demand for cars. The demand for cars in the future can be estimated with the help of making use of macro economic variables like growth in GDP, per capita income etc. or house hold penetration technique. An attempt is made to estimate the potential demand for passenger cars based on the household penetration level of passenger cars as explained in Annexure 4 of the report.

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The demand for cars in the future is expected to come predominantly from the existing two-wheeler owners who will be upgrading to a four-wheeler, due to rising income and necessity of car for personal transportation purposes. Therefore, excluding the owners of mopeds, the potential demand for cars in the next fifteen to twenty years can be taken as 50% of the existing two-wheeler population of around 28mn units. But with the release of new models in the higher end of the economy segment, the supply of second hand economy cars is expected to increase substantially, which will be costing just about two times the price of premium range two-wheelers. This could affect the demand for first hand/new cars. Also, with cross demand from utility vehicles, availability of finance and other factors the above mentioned potential for cars will be difficult to realize. Growth in the segment thus is expected to hover around 15-20%yoy. The dominance of economy segment will continue in the future as it will provide large volume to Indian car industry. This is because a majority of customers for cars will graduate from two-wheelers. The demand for mid-sized and premium cars is expected to rise as new models enter the market, income levels rise and present car owners upgrading from the economy segment to higher end cars. SUPPLY: The supply of cars in Indian industry till 1991 was dependent upon the production capacity of individual players. The production of cars has increased from 42,475 units to 181,420 units from 1981 to 1991 respectively. The growth in production of cars has varied in the last three decades from just 1% in 1970-80 to 21% in 1980-90 and above 15% in 1991- 96. The table below gives the production numbers of passenger cars in the past few years. Cars Production Growth %yoy 2003 207,658 27.2 2004 264,468 27.4 2005 348,146 31.6 2006 407,539 17.1 2007 401,002 (1.6) 2008 390,355 (2.7) 2009 577,243 32.4

The major increase in production of cars in the 80's was due to the entry of MUL in 1983, which helped increase car production by 20,000 to 30,000 cars per annum till the early nineties.With the entry of MUL, the face of the passenger car industry changed forever. Existing producers who had operated in a protected, high margin environment faced the prospect of not just diminishing market share, but a shift in focus from producing vehicles to selling them. But MUL made use of the opportunity open to its technologically superior product and increased its capacity from 100,000 cars in FY90 to 240,000 cars in FY96 and 350,000 cars in FY98. The opening of economy in 1993, attracted world majors who joined hands with existing auto majors, to start their operations at the earliest. The first ones to enter the field were Mercedes Benz in joint venture with Telco to manufacture E220, E250D models, Peugeot in JV with PAL to manufacture Peugeot 309L, Fiat in JV with PAL to manufacture Fiat Uno. This has helped in increasing the number of models available to the customer from 8 to 30 and hence provided a wide choice to him. This has also helped in reducing the average waiting period and premium on cars, which were a part and parcel of car cost in the eighties. CAPACITY:

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The present production capacities is detailed in the table below. This has increased from an estimated 600,000 units in FY98 to the present 727,000 units in FY2000. Car Capacity Maruti Udyog Hyundai Telco Daewoo Ford India Fiat India General Motors Honda Siel Hindustan Motors Total FY2000 250,000 110,000 100,000 72,000 50,000 60,000 25,000 30,000 30,000 727,000 Expected 350,000 130,000 150,000 130,000 70,000 60,000 100,000 30,000 50,000 1,070,000

Thus, capacity utilization in FY2000 stands at 79.4%. This is still better than utilization levels the world over which stands at around 40%. Production capacities are expected to increase in the next two years as players introduce new models. The major increase in supply, as was witnessed in FY2000, will be in the mid-size and luxury segment. The supply in the future, taking into account the plans announced by the car majors are expected to grow to 1,070,000 cars by 2002. The segment which has seen a number of new entrants in the recent past will see two new models from the stable of Maruti namely the 'Alto', which will be available in the 800cc and 1000cc configuration. However, industry sources have indicated that after the hectic action of the past two years, this segment will slowly witness some stability in terms of sales volumes and prices. The entry of new players is expected to create a marketing warfare in the car industry. A start has already been made by sharp reduction in prices of Daewoo 'Cielo' and Maruti 800. Lately, the price of Wagon R was also lowered by MUL to face the intensifying competition. However, with manufacturers having to comply with Euro emission norms, car manufacturers have sold their products at lowered margins. This is expected to affect their ability to reduce prices in the future. Increased support through finance from auto manufacturers was quite evident in FY2000. This has and will in the future induce existing owners of cars to go for technologically superior products in the same segment leading to sharp drop in prices of second-hand cars. This will also create a platform for upgradation of existing two-wheeler owners to four-wheelers. The luxury segment will see more new entrants namely Toyota of Japan, Skoda of Czech Republic and Proton of Malaysia in the years to come. Recently, companies like MUL, GM and

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Hindustan Motors have come out with new models to cover the present gap in the segment. Therefore, the customer will be having a wider choice to choose depending on his specific needs

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MARKETING:
The industry is estimated to be a US$ 34 billion industry with exports contributing 5 per cent of the revenues. The growth of the Indian middle class with increasing purchasing power along with the strong growth of the economy over the past few years has attracted global major auto manufacturers to the Indian market. Moreover, India provides trained manpower at competitive costs making India a favoured global manufacturing hub. The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to maintain the competitive advantage and provide customers with the optimized products and services. The de-licensing of the sector in 1991 and the subsequent opening up of 100 per cent foreign direct investment (FDI) through the automatic route marked the beginning of a new era for the Indian automotive industry. Since then almost all the global major automobile players have set up their facilities in India taking the level of production of vehicles from 2 million in 1991 to 10.83 million in 200708. Stagnation of the auto sector in markets such as Europe, US and Japan on the other, have resulted in shifting of new capacities and flow of capital to the Indian auto industry. The Indian automobile industry has been growing at the rate of 1527 per cent over the past five years. In two wheelers industry, Indian companies are the largest manufacturers in the world. Bikes are a major segment in the industry, the other two being scooters and mopeds. Moreover, Indian car makers are earning acclaim worldwide. The home-grown automaker, Maruti Suzuki has emerged as the fourth most reputed among auto companies in the world, even ahead of its parent Suzuki Motor Co of Japan, according to the Global 200: The World's Best Corporate Reputations list, compiled by US-based Reputation Institute. EVOLUTION OF THE INDIAN AUTOMOBILE INDUSTRY: Pre 1983 Closed market Growth of market limited by supply Outdated models Players Hindustan Motors Premier Telco Ashok Leyland Mahindra & Mahindra 1983-1993 Suzuki, Japan and GOI joint venture to form Maruti Udyog Joint ventures with companies in commercial vehicles and components Players Maruti Udyog Hindustan Motors Premier Telco Ashok Leyland Mahindra & Mahindra
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1993-2007 De-licensing of the sector in 1993 Global major OEMs start assembly in India (GM, Ford, Honda, Hyundai, etc.) Imports allowed from April 2001; alignment of duty on components and parts to ASEAN levels Implementation of VAT

PRODUCTION: INDIA AS THE MANUFACTURING HUB

India with its rapidly growing middle class, market-oriented stable economy, availability of trained manpower at competitive cost, fairly well-developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost has emerged as one of the favourite investment destinations for the automotive manufacturers. Japanese auto major, Nissan Motor Co, has identified India as one of the five lowcost countries to manufacture its new generation compact cars, including the Micro. Hyundai has made India its global hub for manufacturing small cars. It will invest US$ 1 billion in its second plant in Chennai by 2013. In addition, it is also investing US$ 40 million in its R&D facility in Hyderabad. General Motors has so far invested about US$ 1 billion into its Indian operations. It has already started production of its small car, Spark in its new Talegaon factory in Maharashtra, which has been set up with an investment of US$ 300 million. Mercedes-Benz will invest about US$ 64. 21 million in its plant at Chakan near Pune, which would begin operations in February-March next year. The plant would have a production capacity of 2,500 trucks and buses and 10,000 cars over two shifts per year. Renault has entered into 50:50 joint ventures with Nissan Motors and together they have set up a manufacturing facility near Chennai at a cost of US$ 901.35 million to deliver 400,000 cars annually. Skoda Auto plans to make India its regional manufacturing hub. It will start producing cars in India by 2010 with a manufacturing target of 50,000 units. Besides the domestic market, these will also be exported to neighbouring countries like Nepal, Sri Lanka, Burma and Bangladesh.

DOMESTIC MARKET:According to the Society of Indian Automobile

Manufacturers (SIAM), the Indian auto industry recorded a production growth of 8.39 per cent during the current fiscal year till October 2008, over the same period in the previous fiscal.

SALES: The growth of the passenger vehicles segment during AprilOctober 2008
was 4.87 per cent over the same period, the previous year. Passenger cars grew by 3.51 per cent, utility vehicles by 6.33 per cent and multi-purpose vehicles by 18.15 per cent in this period. However, cumulative sales of commercial vehicles segment registered a
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decline during the period. The segment registered a decline of 2.97 per cent during April October 2008 as compared to the same period last year. In the three-wheelers segment, passenger carriers grew by 19.64 per cent during April- October 2008.

Two-wheelers registered a growth of 6.65 per cent during AprilOctober 2008. Mopeds, motorcycles and scooters grew by 4.77 per cent, 6.59 per cent and 6.79 per cent, respectively. Electric two-wheelers segment also grew by 54.25 per cent.

INDIA AS THE EXPORT HUB :

In terms of manufacturing excellence and availability of low-cost quality components as well as a fast expanding domestic market, India is all set to become the global export hub of the automobile industry. The exports markets have helped carmakers such as Maruti Suzuki and Hyundai Motor India post greater sales overseas than in the domestic market. According to the figures released by SIAM, the period from AprilOctober 2008 saw automobile exports registering a growth of 29.36 per cent. As the world moves away from big cars to smaller makes, owing to high fuel costs and general recessionary trends, the small car advantage presents a huge business opportunity for car makers in India. The Indian car market accounts for 71 per cent of small cars, while in China it accounts for 33 per cent. Home-grown auto major, Maruti Suzuki, the country's largest car maker, currently exports Alto, M800, Omni, Wagon R and Zen Estilo to non-European markets such as Chile, UAE, Algeria and East Africa. The Japanese car maker, which exported 53,000 units in 200708, will up it to 200,000 units by 2010. Korean car maker Hyundai exports 40 per cent of its small car production, primarily 'i10' and 'Santro', which sells as 'Autos' in 97 countries across the world. The sales of its newly-launched compact car i10 touched 106,749 units in the overseas markets within seven months of being launched in December 2007. As a part of its strategy to make India an export hub for compact cars, Hyundai Motors has raised production to 0.6 million units per annum. The latest addition to the list is Nissan, which plans to buy 50,000 A-Star compact cars from its rival Maruti Suzuki and export to markets in Europe as well as make small cars in India and start exporting it to Latin American and African countries by 2010. The car makers in the markets like Latin America and Europe too have ramped up sourcing orders of small cars from Indian companies.

FDI, MERGERS, ACQUISITIONS AND JOINT VENTURES In sync

with the dynamics of an open market, mergers and acquisitions and joint ventures have continued to be the driving force in the Indian automobile industry. Leading Japanese,
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Korean, European, French, Italian and American automobile companies have either set up their own manufacturing base in India or have tied up with Indian automotive firms to roll out new products from Indian market. The list includes Toyota, Nissan, Renault, Fiat, Honda, Kawasaki, Cummins and many more. On the other hand, Indian companies have also been bullish in acquiring foreign automobile companies to reinforce their presence in the global market. The biggest acquisition in the first half of 2008 has been the Tata Motors' acquisition of Jaguar-Land Rover from US automobile firm for US$ 2.3 billion. During this period, another auto major, Mahindra & Mahindra has acquired three Italian companies - G R Grafica Ricerca, Metalcastello and Engines Engineering. Another event is Daimler AG's acquisition of 26 per cent stake in Sutlej Motors. The prominent private equity deals in the first half of the year include Golbot Holding's (a Goldman Sach arm) 3.68 per cent stake in M&M for US$ 175 million, AIG Global Investment's US$ 20 million in Unipart, AIG's 14.5 per cent in Kinetic Engineering and Phi Advisors' 10 per cent in M&M's subsidiary First Choice.

EMERGING TRENDS: SMALL CARS, HYBRID CARS :One of the

innovative cars which is prominent in existence in the southern zone of India is the electric car, Reva. Reva has now begun to capture other markets too, with emphasis shifting to saving fuel. Other carmakers such as Hero Electric and M&M are coming out with electric versions. Recently, after the launch of Nano by Tata Motors, the global automotive market has shifted its focus on the huge potential of small car segment. The landmark innovation has shed light on a vast market of potential consumers who were hitherto unable to afford a car. The Invest India Incomes and Savings Survey 2007, by IIMS Data works, and another study by CRISIL Research suggest that there is a huge demand base for entry level cars in India. The immediate potential demand base for a car of 1.6 million units, according to the former, is based on the respondents, who do not own a car at present but aspire to own one in the next 12 months. Nearly all automotive giants have geared up towards leveraging the prospect of this segment. Quite a few of Indian auto-makersMaruti-Suzuki with its 'Splash' and 'A Star', Hyundai with 'i20', Fiat with 'Grande Punto'plan to roll out new small car models by the end of 2008. General Motors plans to roll out its new mini car next year from its Talegaon plant, near Pune. This will be followed by the launch of a sedan category car named Cruz by 2010. Tata Motors is also set to offer an all-new version of its Indica, which has lured the Indian auto consumer segment for the last many years. Many new players would also make an entry into the small car segment. Honda, with its much-awaited 'Jazz', and Volkswagen, with an Indian version of its
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popular 'Polo compact', are among the prominent ones. Global biggies like Toyota and General Motors are also expected to join the bandwagon by 2010. Apart from that it is the hybrid car that has caught the attention of the Indian auto manufacturers. India's first hybrid car, Honda's 'Civic' sedan has been launched in June 2008. Following the precedence, home-grown majors like, Tata Motors and Mahindra & Mahindra are developing hybrid cars. Even BMW is planning to introduce its hybrid car to India within two years of its global launch due in the next 18 months.

AUTOMOTIVE MISSION PLAN 20062016:

The vision of the Automotive Mission Plan (AMP) 20062016 is to emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10 per cent of the GDP and providing additional employment to 25 million people by 2016. As per the AMP, it is estimated that the total turnover of the automotive industry in India would be in the order of US$ 122 billion159 billion in 2016. It is expected that in real terms, India would continue to enjoy its eminent position of being the largest tractor and three-wheeler manufacturers in the world and the worlds second largest two-wheeler manufacturer. By 2016, India would emerge as the worlds seventh largest car producer (as compared to the eleventh largest currently) and retain the fourth largest position in world truck manufacturing sector. Further, by 2016, the automotive sector would double its contribution to the countrys GDP from current levels of 5 per cent to 10 per cent.

LEADING PLAYERS AND SEGMENTS IN WHICH THEY OPERATE Manufacturer Ashok Leyland Asian Motor Works Atul Auto Bajaj Auto BMW India Daimler Chrysler India Segments LCVs, M&HCVs, Buses M&HCVs Three wheelers Two and Three Wheelers Cars and MUVs Cars
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Eicher Motors Electrotherm India Electric Fiat India Force Motors Ford India General Motors India Hero Honda Motors Hindustan Motors Honda Hyundai Kinetic Motor Mahindra & Mahindra Majestic Auto Maruti Suzuki Piaggio Reva Electric Car Co. Royal Enfield Motors Scooters India Skoda Auto India Suzuki Motorcycles Swaraj Mazda Ltd. Tata Motors Tatra Vectra Motors Toyota Kirloskar TVS Motor Co. Volvo India Yamaha Motor India

LCVs, M&HCVs, Buses Two Wheelers Cars Three Wheelers, MUVs and LCVs Cars and MUVs Cars & MUVs Two Wheelers Cars, MUVs and LCVs Two Wheelers, Cars and MUVs Motors Cars and MUVs Two Wheelers Three Wheelers, Cars, MUVs, LCVs Three Wheelers Cars, MUVs Three Wheelers, LCVs Electric Cars Two Wheelers Three Wheelers Cars Two Wheelers LCVs, M&HCVSs, Buses Cars, MUVs, LCVs, M&HCVs, Buses M&HCVs Cars, MUVs Two Wheelers M&HCVs, Buses Two Wheelers
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MARKET RESEARCH
Market research often refers to either primary or secondary research. Secondary research involves a company using information compiled from various sources, which is about a new or existing product.. Primary market research involves qualitative research (such as focus groups or one-on-one interviews) and quantitative research (such as surveys) as well as field tests or observations conducted for or tailored specifically to that product. Primary research, which is also called field research or original research, is useful for finding new information and getting customers' views on products.

SCORPIO:
Having defined the competitive framework, the next task undertaken was that of analyzing the consumer. Consumer segments of B and C category car buyers were analyzed in terms of their expectations from a car, their perceptions about cars and their relationship. Proprietary techniques of research, of the advertising agency Interface Communications, like Mind & Mood, ICON and VIP were used to understand this consumer. The findings were: * Size matters- big size stands for status * Consumers seek latest technology * Imagery but at affordable prices * The sheer thrill and passion of driving an SUV * Power of the vehicle makes a statement * But along with the others, luxury was a very important parameter * International vehicles define imagery

THE MARKETING ENVIRONMENT

Marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers. The marketing environment offers both opportunities and threats. The environment continues to change rapidly. The marketing environment is made up of Micro-environment and Macroenvironment.

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The Micro environment consists of the actors close to the company that affect its ability to serve its customers. These actors are: the company, suppliers, marketing intermediaries, customer markets, competitors and publics. The Macro environment consists of the larger societal forces that affect the microenvironment. These forces are: demographic, economic, natural, technological, political and cultural forces.

GM STUXX:
THE DEMOGRAPHIC ENVIRONMENT The demographic position will be on the United States. Since, the target market is for the middle class; it will provide a boost for the 32% of the total population. This product will produce a superior value to customers who always value the brand. Also, it will keep the popularity of the product at their trend. In this case, more and more customers will be able to keep this product if it satisfies their condition. Additionally, the middle class group will be loyal to this product brand and as generation goes by; this product will be there forever. On the other hand, this product is also designed for students, and working class people. This is due to the fancy and environmental design. Students will be so grateful to have fancy car while the working class group will tend to afford such an affordable environmental car design. THE NATURAL ENVIRONMENT This product is basically designed to reduce the carbon emission from fuels and help to preserve our environment. It is very important to design such car to help decrease the rate of carbon dioxide from the air and provide a better condition to tackle global warming. This car will provide a boost to the natural environment because it is safer and has an image to be friendlier to the environment itself. In this case, more and more people will tend to buy such car to protect the environment by reducing the carbon emission to the air.

THE ECONOMICAL ENVIRONMENT The world is facing a shortage of fuel and it has become an economical crisis to everycountry. This is evidence as the price of fuel is increasing and the probability of the price of a barrel to increase at any day is very high. Therefore, this product will help customers to save money because it consumes less fuel. The fuel consumption is one of the best criteria based on this product. On the other hand, customers will be able to satisfy with this kind of product because it is not too expensive and everybody has the privilege to afford one. This product will satisfy the superior value of all different customers since it has a very good design to solve to fuel shortage, less expensive, and can be affordable to anyone.
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THE TECHNOLOGICAL ENVIRONMENT The fastest growing of information technology helps this product to be at its best. Its design is basically provided with the help of information technology. Looking at its design, this product benefits a lot from the technological sectors. This proves that this product is favourable to the environment. Also, this product can be modified or even upgraded to the standard where it will be suitable at any environmental condition. TheInformation technology is very effective in letting this product to be very efficient. In this case, it helps customers to satisfy this kind of product in this technological environment. THE SOCIAL AND CULTURAL ENVIRONMENT It is believed that protecting the environment is a great concern. Therefore, this product is purposely designed to be environmentally friendly. As a result, most people in the United States and elsewhere are willing to offer such kind of product to save the environment. If more and more people are keen to buy such kind of product then the environment would be safe at any cost. Consequently, people will be more supportive to save what is best for the communities and the environment.

SEGMENTATION:
A market segment consists of a group of customers who share a similar set of wants The marketer does not create the segments; the marketers task is to identify the segments and decide which one(s) to target. Segment marketing offers several benefits over mass marketing. The company can create a more fine-tuned product or service offering and price it appropriately for the target segment. The company can more easily select the best distribution and communication channels, and it will also have a clearer picture of its competitors, which are the companies going after the same segment.In the context of automotive sector, we would be classifying it in the following ways-:

BASED ON THE PRICE OF THE CAR BASED ON THE LENGTH OF THE CAR BASED ON THE USER SEGMENT

BASED ON THE PRICE OF THE CAR

On the basis of price of car we can segment the car in following ways-: Economy Segment The economy segment of car ranges up to Rs. 2.5 lacs. The products in ths segment are Maruti 800, Alto and the newly launched product of TATA motors i.e. NANO.

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 Mid- Size Segment The mid-size segment of car ranges from 2.5 lacs to 4.5 lacs. It includes the products like Hyundai santro, Maruti zen, Tata Indica etc. Luxury car segment The luxury segment of car ranges from 4.5 lacs to 10 lacs. It includes the products like Honda city, Hyundai Verna, Mahindra Scorpio etc. Super luxury car segment The super luxury segment of car ranges above 10 lacs. This segment satisfies the elite class of the society. It includes the products like Skoda Laura, Honda Accord, BMW, Mercedes, Audi etc.

BASED ON THE LENGTH OF THE CAR:

A segment- Cars that are less than 3.5 meters long (800, omni) B segment- Cars between 3.5 meters to 4 meters long( Zen, SX4, Santro) C Segment- Cars between 4 meters to 4.5 meters long (Verna, Honda city, ford fiesta) D segment- Cars that are more than 4.5 meters long( Mercedez, Sonata, Accord, Skoda)

BASED ON THE USER :

Segmentation of automotive sector is also based on the user of the products. Like the example of TATA Motors, when it observed that their product INDICA is used extensively by the taxi operators, it came up with a new model of the car having Round Tail Lights to distinguish it from the car having vertical tail lights used by the individual buyers. Individual Buyers Taxi operators -: Government /non-government institutions TARGET MARKETS: The segment that gives the greatest opportunity to the marketer is called target marketing. VOLVO MOTORS Volvo Motors develops its cars for buyer to whom automobile safety is a major concern. Volvo therefore positions its as a safest a customer can buy.

.
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HYUNDAI MOTORS : Hyundai marketing strategy is differentiated marketing. Its primary consumer target is middle to upper income professionals who need true value for their money and comfortable ride in city conditions. Its secondary consumer target is college students who need style and speed. Its primary business target is midsized to large sized corporate that want to help their managers and employees by providing them a car for ease of transport. Its secondary business target is entrepreneurs and small business owners who want to provide discounts to managers buying a new car. Each of the four marketing strategies conveys Hyundai differentiation to the target marketing segments identified above.

Hyundai Santro is targeting middle professionals Accent was launched to target corporate clients

NICHE MARKET
A niche is a more narrowly defined group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub segments. BMW is targeting high class people but it is mainly targeting the young people who earn a lot of money up to the age of 35-40 years and want to have a stylish saloon. Mercedes is also targeting high class people but it is mainly targeting the CEOs, chairmen, etc of age group of 50-60 years.

Marketing Mix:
A Marketing mix is the division of groups to make a particular product by pricing, product, branding, place, and quality. Although some Day1 marketers have added other P's, such as personnel, packaging and physical evidence, the fundamentals of marketing typically identifies the four P's of the marketing mix as referring to "Marketing Mix" is set of correlated tools that work together to achieve company's objectives, they are: product, price, promotion, place. The set of controllable tactical marketing tools, product, price,place and promotion - that the firm blends to produce the response it wants in the target market:
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Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are often service based like the tourism industry & the hotel industry. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Price The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product. Place Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. Promotion Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from television and cinema commercials, radio and Internet adverts through print media and billboards. One of the most notable means of promotion today is the Promotional Product, as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations.

PRODUCT
MARUTI SWIFT:
European Styling. Japanese Engineering. Dream-Like Handling.

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The new Swift is a generation different from Suzuki design. Styled with a clear sense of muscularity, its one-and-a-half box, aggressive form makes for a look of stability, a sense that it is packed with energy and ready to deliver a dynamicdrive. Its solid look is complemented by an equally rooted road presence and class-defining ride quality. New chassis systems allow for the front suspension lower arms, steering, gear box and rear engine mounting to be attached to a suspension frame. You get lower road noise, and a greater feeling of stability as you sail over our roads with feather-touch ease.

(a) TATA INDICA

Though a late entrant, the Indica quickly established itself as the benchmark for the segment. By offering exciting features, the car changed the rules of the category in Space, Power, Style, Safety and Economy for international market. The Indica ensured a pleasant ride and handling experience as it had features like wide large tyres, generous leg room and independent front and rear suspension. It developed a new segment of diesel small cars along with its petrol offering. The luggage space was also the best in its class. The rigid 980 kgs steel body of the car was rigorously tested at India's first and only crash test facility. A collapsible steering wheel, impact absorbing bumpers, anti-submarine seats, crumple zones and side impact beams are just a few of the features that make the Indica one of the safest cars on the roads today. Savings are ensured with the fuel-efficient 1.4L diesel engine, while the 1.4L petrol engine is optimized for performance. Indica features for international market: Collapsible steering column Side-impact beam Energy-absorbing crumple zones in the front Anti-submarine seats Child-safety locks on rear doors Laminated front and rear windshield glass

SCORPIO:
Rational benefits: World class vehicle, good looks, car like comfort, great value Emotional benefits: Ownership experience of thrill, excitement and powerRelational benefits: Young modern, premium, city companion / extension of lifestyle.

Product, Services And Branding Strategy :

What is a Product?
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Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than just tangible goods. Broadly defined, products include physical objects, services, events, persons, places, organizations, ideas or mixes of these entities. Services are a form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Example: banking, hotel and airline. Products, Services and Experiences: Today, companies are creating and managing customer experiences with their products. Levels of Products and Services: Product Planners need to think on three levels: 1. Core Benefit: This addresses the question What the buyer is really buying?. At this level, marketers must define the core: problem-solving benefits or services that consumer seeks. 2. Actual Product: At this level, the core benefits must be turned into actual products. Product planners need to develop product and service features, design, quality level, brand name and packaging. 3. Augmented Product: Finally at this level, the product planners must bundle the products with services. They must build an augmented product by offering additional consumer services and benefits. HYUNDAI SANTRO: CORE PRODUCT Core Product is the problem solving services or benefits that consumers purchase the product for, and by applying this concept to Santro you can state that the core product is speed, transportation, and freedom to go anywhere, easy traveling, and convenience. ACTUAL PRODUCT: Actual product meaning the products parts, quality, features, design, brand name and other attributes received. Now, if we use these things and combine it with Santro we can state that the actual product is: Santro, as the brand name, it matters little about the name, because HYUNDAI is very famous already, people will recognize the brand in an instance, and features such as the fact that the car is fully customizable, so you can add most things to your car, i.e. Stereo, big speakers, rims for the tires, TV in seat etc., also design, where you can choose between a lot of colours, seat colour, and fabrics, all the things you can imagine. And of course the quality, the car will be regular HYUNDAI standard, meaning quality will be the same as for any other car made by HYUNDAI, which is high quality. AUGMENTED PRODUCT Augmented product is the additional consumer services and benefits built around the core and actual product, as well as add value and differentiate the product from its competition. The augmented product for Santro is after-sale services such as free yearly check up, as well as a free

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oil check after 2 years, free installation of additional features when you customize your car, and help with car insurance, and quick repair services.

PRODUCT CLASSIFICATIONS:
GM STUXX:
From the 4 product classifications, convenience, shopping, specialty and unsought, the Stuxx is classified as a specialty good, since specialty goods are purchased infrequently, and most of the times, buyers make special purchasing effort. By listing some of the characteristics for specialty products we can say that substitutes are not accepted, and that the product is infrequently purchased, and since our Stuxx is a GM we know that there are some brand loyalty as well. And if we look at the strategy, we can note limited distribution, and consumers might seek our product regardless of location,

STAGES IN DEVELOPING PRODUCT AND SERVICE ATTRIBUTES PRODUCT ATTRIBUTES:

Product attributes consist of several categories, such as Product quality, Product features, Product style and design. For Stuxx product quality is the performance quality, because it can be used a lot and still last for a long time (Durability). And as for Product style we know that Stuxx offers many colours and many styles used to attract attention from trendy consumers, and general consumers, the style however does not contribute to better performance. For Product design, the car has a very special chassis that allows many changes, making this a fully customizable car, where you are free to alter appearance, features, construction, such as adding items on the back of the car, lowering the car making it look more stylish like a race car.

BRANDING:
There are several advantages for buyers when talking about branding, first of all product recognition, everyone knows GM, so if they know GM, then they know Stuxx as well. Quality on Stuxx is same standard as the rest of GMs cars. There are. But not only buyers have advantages, no, sellers as well. Here are a few examples, basis for products quality, provides legal protection, helps to segment the markets.

BRAND STRATEGY :
A study of international brand names was done and a classification of brand names of midsize cars and SUVs was done into groups. International brand naming trends and strategies were analyzed. New names were generated. These brand names were researched massively first by qualitative techniques and then by quantitative techniques.
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The name that emerged as most popular, and which was also the most liked name internally at Mahindra was SCORPIO.

BRAND ENDORSEMENT STRATEGY:

The relation between Scorpio and the mother brand Mahindra was also deliberated upon. The strategy chosen for Brand Endorsement was - Scorpio from Mahindra - shadow endorsement, one which does not shout Mahindra. The Mahindra brand image was not modern and young. There was a need to create a strong distinct modern brand. Hence Mahindra as a Masterbrand could not contribute towards enhancing the Value Proposition. Yet Mahindra had to provide source reassurance. Also the distribution would be through Mahindra dealerships. Hence it became a shadow endorser.

PACKAGING
Since product is a car, packaging might not be of much importance. Cars usually dont come in a box. However, since Santro is made for students and older, they have decided to make a big box, free of all charges, if the car is a gift for someones birthday. Santro is a good choice as a first car; parents can easily buy it as a gift for their young teenagers/students.

LABELING
No labelling, however for curious users, there will be a small brochure about the ingredients car parts, so they can see how exactly the car works, and what and where the different parts are from.

Product Support Services:

As for product support services, there are 3 things to know: Assess the value of current services and obtain ideas for new services. Assess the cost of providing the extra services and putting together a package of services that delights the customers and yields profits for the company. All these, are already applied to Santro if we look at Augmented Product, which I wrote about earlier. Customers would be delighted about those extra services, and might tell friends about them and in the end make more profit for the company.

Product Line Decisions (The Product Mix):

When it comes to product line decisions, and product mix to be exact; we will find that there are 3 types, namely width, length and depth. As for Stuxx, it is definitely width, because Stuxx is a different product line for GM.

PRICE:
Maruti Swift:
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After launching cars for the masses since so many years, Indias largest automobile manufacturer is now targeting the premium segment with their latest model from the Suzukis stable. Pricing of this premium hatchback is start from Rs.4 lakh. This price range would practically rip apart Hyundais offering in Getz, which is priced at a much higher tag of Rs. 4.5 lakh. Both the companies are known for their value based offerings and Maruti with their extensive service network and brand reputation for making reliable cars should get the customers nod over their competition.

Tata Indica:
Tata Motors adopted a competitive pricing strategy for Indica in the global market. Prices were fixed on the basis of the norms prevailing in the international market. Also the prices offered by their competitors like Toyota, Ford, Fiat, were kept in mind while deciding the prices.

Scorpio

Pricing Strategy: to be a premium brand yethaving universal appeal .Scorpio was to compete with the midsize cars like Hyundai Accent, Ford Ikon, Opel Corsa, Maruti Suzuki Esteem on the one side and UVs like Toyota Quails, Tata Safari and the Tata Sumo on the other. Scorpio adopted the penetrative pricing strategy positioned in the psychological price barrier of Rs. 5 -7 Lakhs.

PROMOTION:
Maruti Swift:
When Maruti Udyog launched the Swift, the automotive industry was agog with expectation that the car had the makings of a real winner. Three versions were launched with the base variant carrying a retail tag of Rs 3.85 lakh, ex-showroom, New Delhi, and this aggressive pricing only reinforced this feeling.

Event Organized By Maruti to Promote Swift:

Fever FM and Maruti Suzuki Swift organize a Night Rally for Delhi-ites In a co-operative marketing initiative, Fever FM and Maruti Suzuki Swift came together to organize a Night Rally in Delhi. The Swift Night Life Rally was organized for the Swift Life Club. The brand tied up with the station to extend the experience to the people who were unable to participate in the activity.

The company plans to stage road shows, to display vehicles in the pavilions during various college festivals and exhibition.

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Hyundai
Television advertisements Advertisements to promote and market our product are shown on leading television channels. Major music and sports channels promote and they reach out to the youth will be promoted through Star, Zee, Sony and A TV Commercial by Hyundai doordarshan etc as it has more viewers. Radio: Radio is the medium with the widest coverage. Studies have recently shown high levels of exposure to radio broadcasting both within urban and rural areas, whether or not listeners actually own a set. Many people listen to other people's radios or hear them in public places. So radio announcements are made and advertisements are announced on the radio about the product features and price, qualities, etc.

Print Ads

Daily advertisements in leading newspapers and magazines are used to promote the product. Leaflets at the initial stage are distributed at railway stations, malls, college areas and various other locations. Print ad by BMW: Workshops and Seminars Workshops and seminars are held in colleges and big corporate to make people aware about the companies past performance and product features, its affordability and usage, vast distribution network. Banners, neon signsL :

Hoardings, banners, neon signs are displayed at clubs, discs, outside theatres, highways and shops to promote its brand car. Booklets and pamphlets: Booklets are kept at car showrooms, retail battery outlets, etc for the customer to read. These booklets provide information about its company; the products offered which suits the customers need accordingly.

TOYOTA COROLLA:

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The Promotion for Toyota Corolla consists of a blend of activities making its Promotion Mix. Its Promotion Mix consists of almost all the possible techniques of Promotion used for any other product. Some of the major elements of Promotion Mix of Toyota Corolla are listed as under: Advertising: It uses many different techniques of Advertisement as a part of its Advertising Strategy. Most of the Print Ads of Toyota Corolla are individually targeted at one of these factors such as Comfort, Performance, Styling, Power, Leg Room, Design, and Driving Pleasure. One most common feature of almost all the Ads is that in every Advertisement, the fact that it is the Worlds Largest Selling Car and its presence across 160 countries is present. This is done to because the company wants to differentiate the product in terms of its Reliability that it is an entrusted brand of 30 Million people across the globe. The fact that it is present in 160 countries proves that it is a Global Car. There are 3 TV Commercials of this Car in India. The Commercials show that this Car is targeted mainly at the Indian youth and young Executive. It has been positioned as a little sportier which is the main reason that it is for young people and is also like by them too. The Brochures, Posters/Leaflets are such designed that shows that Corolla is a car for people who demand Performance, Style, Power and Sheer Driving Pleasure. The car being a perfect combination of these factors makes it a huge success across its segment. The Other Sources of Advertisement include Bill Boards, Display Signs, POP, Displays, Symbol/Logo. The company does the Advertising of Corolla by displaying Bill Boards and Display Signs at various target places where it feels that prospective buyer will come across it. At the showroom also, there are huge amount of Point Of Purchase Displays and also Symbols/Logo which add to it. One of the major sources of Sales Promotion is Trade Fairs like AUTO EXPO, MOTOR SHOW etc. The company used to take part in these types of fairs and used it for its Sales Promotion. But now the trend is shifting because the company thinks that if they want to launch a product on a National Level, then there is no need for such kind of shows as now there are various other powerful sources of media available to them. Moreover the cost spent on these kinds of fairs was not justified. So therefore the company is now keeping away from fairs. In 1999 Toyota last time participant at the RAC rally in Britain. Some other Sales Promotion technique used by the company is the Festival Season Offers it introduces in the market at the time of Diwali, New Year, Christmas, Navratri etc to boost short term sales.

METHODS OF SELLING
PERSONAL SELLING: Personal Selling largely takes place at the Dealers End. The way the customer is attended depends mainly on the Dealer as he acts as an interface between the company and the Consumer.The various cases in which Personal Selling takes
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place is Individual Sales, Corporate Sales, Sales Presentations, Fair and trade Shows. Mostly in case of Individual Sales the Customer goes to the showroom and takes a look at the product. There he is attended to by the Sales Personnel of the Dealership. Sometimes the Senior Sales Executive has to make Sales Presentation to Corporate Buyers. Personal Selling is also practiced at Trade Fairs and Auto Shows wherein the Company appointed Sales Personnel attend prospective customers and also book their orders. DIRECT MARKETING: In the case of Direct Marketing the Company Officials directly contact the Prospective buyers with the information available through various sources. For example in case of Road Shows, Trade Fairs, Auto shows etc. Sometimes the existing customers also provide references of prospective buyers such as their friends or relatives.

Toyota Stall at the Auto Expo: GM STUXX:

GMI has launched several industry first programs such as Opel Club Card facility, Opel rnivals, Opel Autobahn newsletter, chauffeur training programmes, mobile road-show caravan, car exchange programme for Opel customers, OK 5-Star used car programme, There is two-year and four-year warranty schemes, 2 year service holiday etc. Such programmes have helped GM in building its brand equity and developing a loyal customer base.

Scorpio:
Brand Promise: Luxury of a car. Thrill of an SUV this brand positioning addresses the key consumer Insight and the product delivers the promise. The position is also a unique proposition, which will help the brand have a distinct image in the consumers mind. Baseline - Nothing Else will do The baseline captures the essence of the brand, which is superiority and uncompromising attitude. It also summarises the spirit behind the making of the Scorpio. Media Strategy: *Dramatic and high impact launch * High visibility * Push brand image even by the media vehicle Building impact through multiple-media: * PR, Mass Media, Direct Marketing, Events
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Public Relations: Pre-launch excitement and buzz was created by a full blown PR program. Media coverage on the IDAM process, the people behind the Scorpio, the obsession, the world class technology, etc set the tone for the hyped up launch. PR was also the first tool used for launching the Scorpio. The coverage of the launch was massive. It got four cover stories Mass Media: While the media targets would be achieved through the right selection of the media mix, the Scorpio media posture was to ensure that Scorpio was present on the decided media but with a difference. Scorpio would use media innovations to create differentiation on the traditional media and do things in a bigger and better manner. Customer Relationship Management (CRM): CRM as a tool was used to create positive word-of-mouth, to monitor customer experiences and generate referrals. A series of CRM activities were implemented with regular direct communication, events and customer research. The CRM plan included a welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction surveys, Events, Festive offers, Rewards Program, etc.

TATA INDICA:
More car per car is the famous tagline of this product. The Indicas positioning has remained consistent with the brand's offering in an increasingly competitive market. The Indica is now synonymous with the word More, by encapsulating the inherent product strengths and marrying them with the customer trait of desiring More. A promotion strategy for Indica v2 in international market is more or less same as that of the Indian market. Media innovations have been a key to the success of the Indica.

PLACE
Maruti Swift:
The car manufacturing company, called Maruti Suzuki Automobiles India Limited, is a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake respectively. The Rs1,524.2 crore plant has a capacity to roll out 1 lakh cars per year with a capacity to scale up to 2.5 lakh units per annum. The car manufacturing plant will begin commercial production by the end of 2006. The engine and the transmission plant has owned by Suzuki Power train India Limited in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog holding the balance. The ultimate total plant capacity is three lakh diesel engines. However, the initial production is 1 lakh diesel engines, 20,000 petrol engines and 1.4 lakh transmission assemblies.

TATA INDICA:
Tata automobile group have a very large distribution network all over the world. Tata Indica v2 is exported and assembled in many countries. South Africa has an assembling unit for consumer
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vehicles. Other places where the companys products (Tata Indica) are exported and in some assembled also are mentioned below:

Africa :- Algeria , Angola , Ethiopia , Ghana , Kenya , Mauritius , Sudan , Uganda , South Africa , Senegal etc. Europe: - Greece, Hungary, Italy, Malta, Portugal, Spain, Switzerland, UK and Ireland. CIS: - Belarus, Russia, Ukraine. Asia: - Bangladesh, Malaysia, Sri-Lanka, Nepal, Bhutan. Australia continent

PEOPLE:
There are various types of people in any Organization. The various types of people in case of Toyota can be classified as Customers, Sales Executives, Society, Government, Competitors, and Media. The most important out of these is our Customers. A customer can be any person who purchases the product; he may or may not use that product for himself. A consumer is one who actually uses the product himself. For example a father purchases Corolla for his son. In this case the father will be the Customer and son will be the Consumer. The main people involved in the purchase decision of the car are the Family Members. In a recent study conducted, it was found out that these days children play a major role in deciding which car to buy for the family. The company has to seriously take into consideration all these factors. Also the factors that whether one uses the car for travelling, office, shopping or family/personal etc. As this car falls into a segment where price range is between 9-11 Lacs, so the company has to target those people who not only have the ability to spend that much amount of money but are also willing to spend that much amount of money. Data regarding the purchasing power of different classes of people is also very necessary. Customers tastes and preferences have to be taken into consideration. Next comes the Sales Executives who deal with the final customers and finish the sales call. The Sales Executives play a major role. As the people of the organization they are a window through which the customers interact with the company. They have to be trained properly through customized modules designed especially for them taking into consideration the various factors. Corolla Owners Profile :

Age Occupation Social Class Areas

: 25-45 : Business Class or High Level Service Executives : These people (Lower Upper to Higher Upper Class) generally have an : Urban/ Sub Urban, major Cities/Towns
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existing C segment car before they purchase Corolla

Income Level

: More than Rs. 2 lacs p.m.

PHYSICAL EVIDENCE:
The Physical Evidence is created by displaying physically the product. Along with that creating an atmosphere for the customers where in they feel the presence of product. Toyota creates a powerful physical evidence for its customers through its Showrooms, Hoardings, Logo etc. All the showrooms are designed on a common platform. The interiors of all the showrooms across India are the same. The designs for the same are created by a team of Professionals in this field. The designs are prepared very carefully keeping into consideration various factors such as customers tastes and preferences, likes and dislikes etc. You will always find a Toyota showroom having the Toyota Bill Board outside with white base and red foreground. This creates a physical presence and people can feel the product. SHOWROOM INTERIOR AND EXTERIOR:

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DEALING WITH THE COMPETITION:

Poor firms ignore their competitors; average firms copy their competitors; winning firms lead their competitors PHILIP KOTLER

GENERA L ATTACK STRATEGY

FRONTAL ATTACK: the attacker matches its opponents product, advertising, price and distribution.

In this advertisement BMW is using frontal attack strategy against its biggest competitor AUDI

COMPETITIEVE FACTORS OF AUTOMOBILE INDUSTRY OF INDIA The automotive sector is one of Indias largest and fastest growing manufacturing sectors. It is ranked the 11th largest passenger car producer in the world. In the category of motorcycles and scooters, India is ranked 1st and 2nd respectively. With India increasingly liberalizing its market place, many new joint ventures evolved, resulting in close to 24 global auto manufacturers setting up their shop in India.
Competition in India:

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As a result, competition in Indias automobile had been heating up in the recent years. Many global players in the automobile have already set up presence in India. Most of them are through tie-ups with dominant local players, while some are done entirely on their own. In the absence of strong competition in the past, the local car manufacturer Maruti Udyog Ltd (MUL) has virtually dominated the Indian automotive market in the passenger segments since the 1980s. As the automotive manufacturing sector rapidly evolved through the dynamics of open market and deregulation, many new joint ventures (both technical and financial) were formed between local players with leading global manufacturers. In 1982, MUL, then a wholly government-owned company, signed up a collaboration agreement with Suzuki of Japan to establish the volume production of contemporary models. Subsequently, the licensing regime was scrapped in 1993 paving way for 17 new ventures, of which 16 are now manufacturing cars since then; there has also been an emergence of new competition for higher value segments of the passenger car market. Hence, local players like MUL also began to face competition from new foreign car makers. Ford entered the mid-range market with the Ikon model in April 1998, a move which was followed by Honda, Mitsubishi, Hyundai, and Daewoo. Other players, Hyundai and Daewoo, have since improved their share of the passenger car market with new models. For the 4-wheelers segment, MUL/Suzuki dominates the automotive landscape holding a 33% share of the passenger car market in 2004/05. In the second place is Tata Motors, a local company, commanding 26% share, while Hyundai Motor ranked third with 15% share and the rest split amongst close to 2 dozen other manufacturers. For the 2-wheelers segment, it remains quite a local dominant game but global players also have obvious presence in the market. Major players in this segment include Bajaj Auto, TVS Suzuki, LML Limited, Hero-Honda Motors, Yamaha Motor India, Kinetic Engineering, Maharashtra Scooters Majestic Auto, Kinetic-Honda Motors, Royal Enfield (India), Scooters (India), Greaves Ltd. Foreign manufacturers also have presence in India through their 100% owned subsidiaries, e.g. Honda Motorcycle, Scooter India Pvt. Ltd. M/s Honda Motor Co., Japan, Yamaha Motor, Japan. The largest player is Hero Honda Motors, accounting for 40% of market share, followed by Bajaj Auto and TVS Motor, which account for 27% and 18% respectively.

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DISTRIBUTION CHANNELS SCORPIO:

Since the Scorpio was targeted at an urban clientele it needed a stronger distribution presence in Metros and urban areas. Hence, the distribution channel had to focus on providing an appealing experience for modern car buyers and on offering international standards of auto retail. The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi, Bangalore, Chennai. Twenty cities were included over a period of 4 months and within a year 50 cities were covered. This ensured attention to main markets and to ensure that initial production of the vehicle could match demand. Dealerships were revamped prior to launch in a particular city.

The Marketing Distribution Channel of Toyota Kirloskar Motor India, the Manufacturer of Corolla, is a Single Level Channel depicted

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Manufacturer-TKM India, Toyota Flagship Dealer Consumer Bangalore

DISTRIBUTION CHANNEL OF HYUNDAI:

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DISTRIBUTION CHANNEL OF HYUNDAI:

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DEALERS BOOKING AGENTS STOCKIST SUB DEALERS

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DISTRIBUTION CHANNEL OF HYUNDAI:

The value chain:

The Value-Chain Network within Stuxx is a significant medium for measuring the products quality and performance, from Inbound Logistics-to- Operations-to-Outbound Logistics-to- Marketing/Sales-to-Service. As a manufacturing firm, GM that produces Stuxx manufactures the vehicle and then distributes it to its store all over USA. The whole team network has a common purpose in operation and that is to produce and to sell it to make the customer smiling when disembarking. This common belief has brought a successful feedback to the overall sales and because providing the service for selling is considered an important task by the employees at Stuxx, it has never failed. Stores are designed so that accommodating a customer is luxurious but keeping his/her perception to as not expensive-sense.

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HUMAN RESOURCE MANAGEMENT:

Personnel management is that part of management process which is primarily concerned with the human constituents of an organization. Objectives: To help the organization reach its goals. To employ the skills and abilities of the workforce efficiently. To provide the organization with well-trained and well-motivated employees. To increase to the fullest the employees job satisfaction and self-actualization. To develop and maintain a quality of work life. To communicate HR policies to all employees. To be Ethically and Socially Responsive to the needs of society.

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Importance: Social significance: proper management of personnels, enhances their dignity by satisfying their social needs. Professional significance: By providing healthy working environment, it promotes team work in the employees. Significance for Individual Enterprise: It can help the organization in accomplishing.

HR VISION :
Lead and Facilitate continuous Change towards organisational Excellence ; create a learning And vibrant organisation with High sense of pride amongst its Members

CULTURE BUILDING INITIATIVES SINCE INCEPTION: Japanese Spirit Management philosophy of Team Common uniform Open office Common Canteen FOCUS OF EFFECTIVE MANAGENENT PROCESS Top Driven HR MD is also Director HR HRs role of a facilitator Line managers as HR Managers Year of the Customer

HR INTERNAL CUSTOMER FOCUS Focus on Internal & External Customer

HR INITIATIVES
Prepare MUL Strategic Business Plan-2000-2003; To achieve the Vision & Goal Improve the performance Appraisal system - its process, skill & usage Introduce a Potential Appraisal System
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 Improvements in internal & external Training & its effective utilisation. Training need identification. Systematic career planning ; Job Rotation ; Empowerment; Job enrichment Periodic communication meeting at various level; Roll out of Vision Raise cost consciousness for cost control and reduction Exposure on Brand Strategy to all non- marketing staff Retention of Talent.

INDUCTION SUCCESSION: Transparent Recruitment & Selection process Recruitment on an All India Basis no sectoral or Region specific Recruitment of Best available Talent in the Country

ENGINEERS CAMPUS - IITS/RECS/RORKEE/HBTI ALL-INDIA TEST MBAs IIMs/XLRI CAs - Rank Holders Technicians - ITIs diploma holders after All India Exam & Apprenticeship In MUL Lateral Entry for Experienced Professionals

SUCCESSION PLANNING
POTENTIAL & PERFORMANCE VACANCY BASED Open Office Easy accessibility, Speedy Communication and decision making Morning Meetings Morning Exercises Management Committee Meetings every Tuesday Single unaffiliated Union Excellent Industrial Relations scenario no loss of mandays due to strike/lockout etc. in past 5 yrs. Maruti Udyog Sahyog Samiti a forum for
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Non-Unionised Staff Delayered Organisation Structure Workers(Techn. / Asst.), Supervisors, Executives, Managers

INDUCTION PROGRAMME Objective: The objective of this program is to facilitate smooth induction of the new DSEs into their place of work i.e. Maruti dealerships. This program attempts to orient the new DSEs on a few important parameters, which are listed below:

Overview of Maruti and Suzuki: Building understanding of the car market in India and various segments Understand MULs product range and positioning in each segment Understanding the basics in the automobile industry Overview of each Maruti model and the MUL Advantage Overview of the selling process and how to uncover needs of a customer to do need based selling Role of financing as a sales tool and the various financing options available Ensuring personal effectiveness Understand the attributes of a good DSE

MEANING OF RECRUITMENT
It is the process of searching the potential candidate and offers him or her the job It is positive in nature in the Indian context. Process of identifying and hiring bestqualified candidate. RECRUITMENT PROCESS OF MARUTI UDYOG LTD: The recruiting procedure at a Maruti dealership is as follows: FOR A PARTICULAR DEALERSHIP The dealership should release an advertisement. Depending on availability of infrastructure Interview of shortlisted/ qualified personnel
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MEANING OF SELECTION: It is the process of searching the potential candidate. It is negative in nature in the Indian context. But it is positive in the US context.

Steps in Selection Process of Maruti udyog ltd:

Selection process consists of a series of steps, at each stage, facts may come light which may lead to the rejection of the applicant. It is a series of successive hurdles or barriers which an applicant must cross. These hurdles or screens are designed to eliminate an unqualified candidate at any point in the selection process There is no standards selection procedure to be used in all organizations or for all jobs. The complexity of selection procedures increases with the level and responsibility of the position to be filled. Preliminary Interview (screening applications) Application Form Selection Test Employment Interview Medical Examination Reference Checks Final Approval Employment. Induction. Follow up (Evaluation)

IMPORTANCE OF TRAINING Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals. Annual Training Plan - All Levels Training customised to meet Organisational Objectives Topics selected based on Vision, Values & Departmental Feedback of Industry-wide Managers Competency Mapping to identify Individual Training Needs Technical Training on latest Technologies abroad at SMC, Japan STRONG FOCUS ON TRAINING INITIATIVES: Build a Learning Organisation Continuous Value Additions to Professional Skills Customised Training Training to the personnel of Business Partners OVERSEAS TRAINING : Training held in co-ordination with SMC, Japan and AOTS (Assoc. for Overseas Tech. Scholarship) (covered 1600 employees under the various schemes)
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 6 months SMC Training for Technicians

OJT in SMC, Japan (2 batches/yr of 50 each) 9 months Javada Training for Press, Tool & Die Specialists - Design & Maintenance AOTS Managerial Training (4-10weeks) for Manager &above - Managerial Best Practices AOTS Technical Training (3.5 to 6 months) for Supervisors & above - Technological Knowhow R & D Training (2 yrs.) - Research on new Technologies APPRAISAL REWARD Appraisal: A systematic, periodic and so far as humanly possible, an impartial rating of an employees excellence in matters pertaining to his present job and to his potentialities for a better job. New Appraisal System based on KRAs &Targets Review of Targets at regular Intervals People Development an important KRA REWARD Promotions based on Performance Productivity & Profit-linked Incentive Schemes Training including Long-term SMC Japan Trg. Highest paid workforce in the Industry, if not the Country LEADERSHIP Vision, Value & Team Building Workshops for Top Management CFT (Cross Functional Teams) of Managers for Major Thrust Areas Managers sent to Joint Ventures to upgrade their practices to MUL standards CAREER DESIGN It is defined as the process of deciding on the content of a job in terms of its duties and responsibilities on the methods to be used in carrying out the job, in terms of techniques, systems and procedures and on the relationships that should exist between the job holder and his superiors, subordinates and colleagues Performance & Potential based Appraisals Fast Track Option for High-performers Promotions after Managers Vacancy based Interviews for promotions above Managers SELECTION OF SUPERVISORS: Performance / Attendance / Discipline record Written Test & Interview Job Rotation - including Inter-functional OUTSOURCING HR: Part of our Long-term Strategic Plan
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 Currently Trainers hired from outside RETENTION EMPLOYEE WELFARE : Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. EMPLOYEE WELFARE: Residential Colonies for Employees Chakkarpur & Bhondsi Hospitalisation Reimbursement on actuals without Ceiling Vehicle Loans Household Equipment Loans House Building Advance Annual Advance MUL PF Trust for better Mgt., Service & speedy redress Proposed MUL Pension Scheme Learning Opportunity - Benchmark in Auto Technology Professional Value addition through Training Opportunity for foreign training at SMC, Japan Job Rotation & Job enrichment EMPLOYEE ENGAGEMENT -ESOPs Maruti Udyog Ltd. Employees Mutual Benefit Fund Scheme Managed by a 10-member Trust Fixed Equity of 0.26% Lock-in period of 3 years Transferable Internally SUGGESTION SCHEME QUALITY CIRCLES: For better quality and productivity Through involvement of all employees and teamwork During the year 1999-2000 : Suggestions Implemented - 52,054 Cost Saving (in crores) - Rs. 131.69 Crores Number of QC Groups - 510 QC Meetings held - 7189 Target for SS & QC for 2000-01: Suggestions Implemented - Prod. & VI - 1implmented/employee/month Other areas - 8.4 implemented/employee/month Cost Saving Rs. 165 crores (25%)increase for the Industry QC Meeting - 13 meetings/QC Gp./ Year Target - 34 marks / suggestion Industry-wide QC Groups (8-15 members per group) Monthly QC Meetings on the First Wednesday each Month Industry-wide QC Competitions - Best Team sent to SMC MDs lunch with Best QC Team & Best Suggestion Winner

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SUGGESTIONS : MONETARY REWARD: Criteria - Idea Efforts Result : Cost reduction / Q Improvement / Productivity Improvement FUTURE CHALLENGES Realigning organisation culture based on new vision & values Objective performance management & development system Transparent job rotation & job enrichment Performance linked reward and recognition system Career planning & promotion policy Revised recruitment policy Competency mapping Strong fucus on training initiatives Build a learnng organisation Continuous value addition to professional skill Customised training Training to the personnel of business partners Internal Communication Union alignment Employee involvment & participation THE CHALLENGES External Level : Integrating into Global Supply Chains WTO Multilateral trade regimes FTAs (i.e. Bi-lateral Trade) Country Level : Infrastructure Cascading effect of Taxes Cost of Capital Cost of Power Inflexible labor laws Inflexible labor laws Firm Level : Export as a mind set QCDDM equation taken for granted Logistics Warranties & Liabilities Challenges for CEOs Dilemma of Investment Addressing fast Global Business Environment Changing mind set of teams Developing & Employing people with right right skills skills
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Appropriate Strategies the key to success: Government : Flexible Labor laws : Stringent labor laws in India are hindering the over all development of the Industry. Changing these archaic laws will help in attracting investment and lead to expansion of the industry.

Cutting down R.M cost: Government should reduce import duty and taxes on raw materials for auto ancillary industry which will bring down their raw material cost to counter Chinese threat. Corpus for R& D & expansion: Since most of auto ancillary companies are up coming their range of operation is limited to a few products. In order to encourage these companies to venture into new product categories Government should allocate Soft loans. Auto expo zones: On lines on software technology parks, govt. should establish export zones of autoancillary industries, equipping them with infrastructure & offering them tax sops or holidays. Research center: Government should establish a research center dedicated to automobile research called Indian institute of automobile research which can work with auto industry to develop cutting edge technology. INDUSTRY: Marketing and Advertising in potential markets: ACMA in collaboration with CII or FICCI should organize Trade fairs showcasing Indian Auto ancillary industry both in India and abroad. Acquiring Auto ancillary companies in potential markets: Acquiring companies in overseas market gives a direct entry in that market to Indian companies. For e.g. Bharat Forge acquired one of the largest forging companies in
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Germany, Carl Dan Peddinghaus GmbH (CDP). Moving up the value chain: Automobiles companies are going for aggregate buying, hence company should try to acquire tier I status and ultimately target OEM status. Leveraging Software skills Culture change: Auto ancillary industry should adopt concepts like six sigma rather than continuing with post Morton analysis. R & D spending: Industry should target at allocating at least 5 % of their revenues on R & D expenditures for achieving cutting edge in technology. GLOBAL SCENARIO The passenger car segment has emerged as a major driving force for upstream industries like steel, iron, aluminum, rubber, plastics, glass, and electronics and down stream industries like advertising and marketing, transport and insurance. The car industry generates large amount of employment opportunities in the economy. For example in the US, every sixth worker is involved in the making of an automobile. The global automotive car market is growing at a rate of only 2 percent per annum and is not expected to pick up in the near term. Growth has dropped due to the increasing levels of saturation in the larger car markets of the world. Worldwide the trend is towards ensuring that one's products are superior in terms of quality. This will enhance the useful life of cars and, hence, slow down growth in sales.The world car production has increased from 44.66 mn in 1996 to an estimated 48.3 mn cars in 1999. Japan, Canada and USA brought about the major increases, which contribute to 53% of the world's car production. The largest car market - the US market expects car sales to decline 8 to 9 per cent to 16 million cars in 2001, as compared to 17.4 million cars sold in 2000. The USA and Japan are the leaders with around 42% of the total world market. However, since the last two to three years, the international passenger car industry has been witnessing an over capacity of more than 30%. The trend suggests that industry volumes may grow by just 2% or around 10 mn vehicles per year. If this situation continues for the next few years the world car market may witness shakeout in the near future. Already signs towards this are being observed as the phenomenon of mergers catches on. The recent mergers in the international car market are Ford-Volvo, Renault-Nissan, Daimler-Chrysler. A few more players are expected to join the fray in the next few years so as to strengthen their hold in the world market. Among the top car manufacturing companies General Motors and Ford Motors group of USA lead with a
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contribution of 15.8% and 11.6%, of world car production, respectively. Volkswagen and Toyota stand third and fourth with more than 9% contribution each to the world car production. The global domination of the larger automotive manufacturers is slowly on the wane and the trend in sales is shifting towards more "regio-centric" products. Automakers that have been enjoying a generally prosperous spell would have to rethink on the way vehicles are designed, manufactured, distributed or sold. Already, players like General Motors Volkswagen and Toyota have begun to re-examine their dealer relationships and pricing strategies. Car makers would now have to think in terms of a new customer focus and provide better financing and servicing. Strategic tie-ups, mergers and acquisitions have become the talk of the day. A few instances are Daimler Benz's tie-up with Chrysler of the US, Ford's acquiring of Daewoo and tie up with Volvo Car Corporation and Renault acquiring a stake in Nissan. Such deals will certainly lead to economy in terms of costs but it remains to be seen whether they will also create significant new opportunities for growth. With global consolidation in the car industry, it is expected that more international players will work closely to bring about operational efficiencies. By nature, the car industry is highly capitalintensive and vast amounts of money are being spent on R&D. With the players getting together to produce more technologically superior cars, they can derive greater benefits from their R&D efforts. Profits, which are under pressure due to wafer thin margins will be boosted due to greater economies of scale. Moreover, bigger capacities among players means lesser fixed costs per car produced. Even if mergers are not on the cards in the near future (one can see that the DaimlerChrysler merger has not brought about synergies as expected by automobile experts), technology-sharing and the offering of equity stakes is inevitable. In India, the car market has become extremely competitive and come April 2001, India's automobile market will be thrown open to imports of completely built up vehicles, which hitherto was prohibited. With the international acquisitions and alliances, one can expect to see a dramatic change in the auto market. If GM were to acquire Daewoo in Korea, then GM would be in a commanding position in India with its alliance with FIAT and Suzuki motors as well. Already Daimler Chrysler and Ford are contemplating introducing new models in India from their various associate companies through their local subsidiaries. The situation could become very difficult for the purely Indian automakers such as Telco, Mahindra and Hindustan Motors unless they rethink their strategy. It can easily be seen why TELCO has been in the news on rumors that it wants to hive off its car division and bring in an overseas partner. Reports suggest that HM is thinking of exporting parts from its manufacturing units and also assembling and distributing other makes of vehicles who may wish to enter into India, but cannot enter full scale manufacture due to the small market sizes. Clearly exports will be the big opportunity for Indian automobile companies if they can control costs and deliver good quality output. Already Maruti, Hyundai and Ford as well as Mercedes Benz have started exports in a small way and this can grow. Majors like TELCO and Ashok Leyland are already exporting their products in reasonable volumes. : DIFFERENT PLAYERS IN AUTOMOBILE INDUSTRY

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Jagdish Khattar. Y.S. Kim. Ratan Tata. S.G. Awasthi. The four men are peers. Each has unequivocally established himself as one of the winners in the first round of the car wars. Between them, they control almost 80% of the Rs 30,500-crore Indian automobile market. The battle royale in the Indian car market has entered the next phase. As the dust and excitement of the dozens of new models introduced in the past one year settles down, the winners have pulled way ahead of the also-rans. One old assumption has been vindicated -- that over 80% of the Indian car market is still confined to the small, sub-Rs 4 lakh models. And those mid-size and bigger models can only provide the icing on the cake, not the cake itself to any manufacturer. Maruti found out that price is no longer the most important factor in winning car battles. Daewoo's Awasthi admits candidly that he learnt precisely the opposite lesson -- that price does matter. Kim of Hyundai found out the hard way that you could get your pricing and value equation just right and still land up with egg on your face if you tried to cut corners in the technology game. Ratan Tata learnt that providing an internationally designed car with a great value proposition didn't get you far if you couldn't provide global quality standards. Both the Indica and the Matiz had to upgrade their engines in less than one year after launch, the Honda City had to bring in both a new body and a more powerful engine, and Hyundai had to start offering a new variant with the power steering option barely a year after it hit the market. From now on, the battle is expected to get more vicious. In 1999-2000, the car market bounced back from the recession by showing a 55.83% growth! But now, no one expects the market to grow by more than 10-15% per annum. The really big volume gains will come from wresting market share away from rivals rather than because the market itself is growing exponentially.

MARUTI UDYOG LTD. December 1983 heralded a revolution in the Indian car industry. Maruti collaborated with Suzuki of Japan to produce the first affordable car for the average Indian. At this time, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. This was from where Maruti took over. Nineteen years back Maruti introduced the first small car in the Indian auto market. They started with their model Maruti 800 which was very popular at that time and still its major cash cow. The models, which were available at that time, were Premier Padmini and Ambassador. Customers were interested in having some different types of models with some fashionable looks. That was the perfect time to enter into market and Maruti took right step to introduce its different models.

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Maruti established its monopoly over Indian auto market India's largest automobile company, Maruti entered the Indian car market with the avowed aim to provide high quality, fuel - efficient, low - cost vehicles. Its cars operate on Japanese technology, adapted to Indian conditions and Indian car users. Maruti comes in a variety of models in the small segment. The sales figure for the year 1993 reached up to 1,96,820. The company reached a total production of one million vehicles in March 1994 becoming the first Indian Company to cross this milestone. It crossed the two million mark in 1997. To fend off growing competition, Maruti has recently completed a Rs. 4 billion expansion project at the current site, which has increased the total production capacity to over 3,20,000 vehicles per annum. It has further plans to modernize the existing facilities and to expand its capacity by 1,00,000 units in the year 1998-99. The total production of the company will exceed 4,00,000 vehicles per year. Maruti registered sales of 39,838 units in April 2004, up 38.4% yoy from 28,793 vehicle units in April 2003. This includes 2,910 units of exports compared to 3,150 in April 2003, decreasing by 7.6%. HYUNDAI: CAN THE DREAM RUN CONTINUE? Hyundai has become the undisputed number two in the Indian auto market, and the only one -even rivals admit -- with the capability of giving leader Maruti a run for its money in the total volume stakes though Hyundai in India currently sells just about a quarter of the numbers that Maruti does. Hyundai got everything right because it got the value-price-technology equation almost perfectly right from day one. The Santro was an instant winner from the day it was introduced in the Indian market because it offered the optimum mix of space and technology in the small car market, at a highly competitive price. And with easy consumer financing available in the market, Hyundai did not have to work too hard to persuade even entry-level car buyers to go for the Santro instead of the Maruti 800. And when it launched mid-size Accent some time later, Hyundai proved that it could get its value-price equation consistently right across different segments. But despite its great start, Hyundai made two mistakes. The two miscalculations that Hyundai made? First, while Hyundai Santro was harping on the fact that it was a new generation car, it hadn't brought its latest engine technology to India. It was a mistake that rival Matiz capitalised on once Euro-II pollution norms were announced for the metros. Daewoo made most of the fact that every Matiz was Euro-II complaint -- while Hyundai could offer an Euro-II version only at a higher price. Though the latter moved quickly in a damage-control exercise, the Santro did lose a bit of its sheen. it miscalculated demand for its cars. The result: when demand peaked for the Santro, it was in no position to offer the car off-the-shelf like its rivals. Buyers had to wait for three months to get a Santro after booking it. Hyundai is moving fast to sort out its capacity problem. Work will soon start on the second phase of its Sriperumbudur car project, one year ahead of what was initially planned. An additional investment of $400 million will help expand capacity from 1.2 lakh cars to 2 lakh cars per annum. This expansion is likely to be completed by December, 2001, ahead of schedule. But even that could be a bit too late as it gives rivals that much time to grab sales that would otherwise have gone to Hyundai.

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That apart, the big worry for Hyundai is that other than the Santro (the Atos in Korea), it doesn't have any other small car in its armoury. Unlike Suzuki, which is primarily a small car specialist, Hyundai can only introduce bigger cars in the Indian market either from its own product range, or those of Kia Motors, which it took over last year. Hyundai is looking a bit vulnerable now because globally it is a minnow in the car market. It lacks the sheer money power and product muscle to keep fighting the Fords and GMs in any market. And if Ford does take over Daewoo Motors, Hyundai's number two position in India could be seriously under threat.

TATA MOTORS LTD. "leading the future"

Tata Motors is India's largest automobile company. It is the largest commercial vehicle manufacturer in India and 2nd largest passenger car manufacturer. It is the 5th largest medium and heavy commercial vehicle manufacturer in the world. The popular brands of the company are Tata Indica, Tata Indigo, Tata Sumo and Tata Safari. QUICK FACTS:

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Founder Year of Establishment Industry Business Group Listings & its codes

Jamshedji Tata 1945 Automotive The Tata Group BSE - Code: 500570 NSE - Code: TELCO & TATAMOTORS NYSE - Code: TTM

Corporate Office

Bombay House 24, Homi Mody Street Mumbai 400 001, India Tel.: +(91)-(22)-56561676

Works E-mail

Jamshedpur, Pune, Lucknow and Dharwad am@tatamotors.com rbc@telco.co.in (for international inquiries)

Website

www.tatamotors.com www.tata.com/tata_motors

INDUSTRY ASSESMENT:
COMParitive ANALYSIS (Maruti Suzuki & TATA Motors): The company analysis shows the longterm strenght of the company that what is the financial Position of the company in the market where it stand among its competitors and who are the key drivers of the company, what is the future plans of the company, what are the policies of government towards the company and how the stake of the company divested among different groups of people. Following is the financial and Non-Financial analysis of Maruti Suzuki & TATA Motors.

Financial Analysis

1. Financial Statements
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RATIO ANALYSIS OF TATA MOTORS AND MARUTI SUZUKI EPS measures the profit available to the equity shareholders per share, that is, the amount that they can get on every share held. Till 2008 both the companies had a rising EPS but in 2009 both of them fall and the effect more on Tata motors as they bought two brands Ford Motors and fall in sales results in low EPS. But as trend shows TATA motors have potential so an shareholder expect better in future. EPS = Net income- Dividends on Preferred stock Average Outstanding shares

The trend shows that Tatas net profit margin is quite stable until it falls to 3.77 in 2009. While the net profit of Indias no.1 car manufacturer Maruti Suzuki shows a negative trend from 2007 onwards. But the future prospect for both the companys profit is higher. Profit margins come down as recession hits economy badly hence sales get reduced and cost get increased very much. Net profit Ratio = (Net profit) 100 (Net sales) Both giants of Automobile industry shows positive trend in Sales Revenue over the past 5year. However recession brought hurdles but both companies have potential to grow in future as lots of products are still to add in their portfolio. Moreover increased demand in foreign market also seems to be a positive signal for better future.

The quick ratio is a very stringent measure of solvency. A general rule of thumb suggests that the quick ratio should be around 1. Maruti is always showing a positive trend as its ratio is always greater than 1 except in 2008, while TATA motors was doing good till 2007, but the performance decreased from 2008 onwards as shortage of cash was there and current liabilities and provision increased by Rs800Cr.

A high debt to equity ratio suggests that a company has financed its growth mostly via debt. We see that the debt equity ratio of TATA motors is very high compared to that of Maruti. It means that a lot of debt is used by TATAs to finance its increased operations. Sometimes the cost of the debt financing

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may outweigh the return that the company generates on the debt through investment and business activities and can lead to bankruptcy. Maruti is going very swiftly in this field.

Debt-Equity Ratio= Total Debt Total Equity The current ratio is a convenient and reliable tool for measuring a company's level of liquidity. The ratio acts as an indication that the firm is able to generate funds to make all needed payments in the future; thus, the ratio indicates whether the firm is likely to be a going concern. Both the companies possess a good ratio but the ratio which is close to 2 is desirable, so we see in graph that Maruti has more strong liquidity than TATA Motors as its current ratio is always greater than 1. Maruti is more successful in paying off its liabilities. Expansion plans of TATA brought down its cash & Bank Balance and increase of outside liabilities.

Tata motors and Maruti Suzuki both the companies showed a positive trend in paying dividends till 2008, but the scenario changed in 2009 as both the companys dividend per share fell. According to graph TATAs dividend was much higher than that of Maruti, it always provided dividend of above 10 per share to its shareholders while maruti stick to below 5 per share, even though the fall in dividend in 2009, still both the companies are earning good profit. Dividend Per Share= Total amount of Dividend Share Outstanding

BALANCE SHEET

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Maruti Suzuki

Tata Motors

Hind Motors

Mar '09 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 144.50 144.50 0.00 0.00 9,200.40 0.00 9,344.90 0.10 698.80 698.90 10,043.80 Maruti Suzuki Mar '09 Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances 8,720.60 4,649.80 4,070.80 861.30 3,173.30 902.30 918.90 239.00 2,060.20 1,809.80
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Mar '09

Mar '09

272.62 272.62 0.00 0.00 4,959.26 12.09 5,243.97 981.00 3,071.76 4,052.76 9,296.73 Tata Motors Mar '09

161.26 161.26 0.00 0.00 -77.82 8.85 92.29 57.63 71.39 129.02 221.31 Hind Motors Mar '09

4,893.89 2,326.29 2,567.60 646.73 5,786.41 1,060.67 1,043.65 635.61 2,739.93 1,402.45

481.25 327.25 154.00 5.56 70.17 74.93 16.04 6.62 97.59 45.28

Non-Financial Analysis

1. Share Holding Pattern for Quarter Ended 30-June-09

Above is the updated share holding pattern of TATA motors which shows that Indian promoter share in the company is 41% that means if they are not in the position to raise further money from general public, Company already raised huge money by selling their large stake to institutional investors about 27%. General Public also have quite large stake in the company

2. Board of Director TATA Motors

Being a venture of Japanese company Suzuki big stake of the company is held by foreign promoters which shows that they can divest their part(small part) to raise money in future. However institutional investors also held 39% major stake in the company but general public have very small part which shows that less presence of share in the secondary market hence low volume trading in stock market.

Maruti Suzuki

Mr. Ratan Tata Mr. N.A. Soonawala Mr. R. Gopalakrishnan Mr. S.M. Palia Mr. S. Bhargava Mr. V. K. Jairath Mr. Ravi Kant Mr. J. J. Irani Mr. N. N. Wadia Mr. R.A. Mashelkar Mr. n Munjee Mr. Prakash M Telang

Chairman Director Director Director Director Director Vice Chairman Director Director Director Director Director

Mr. R. C. Bhargava Mr. Shinzo Hakanishi Mr. Manvinder Singh Banga Mr. Amal Ganguli Mr. D. S. Brar Mr. Keiichi Asai Mr. Osamu Suzuki Mr. Shuji Oishi Ms. Pallavi Shroff Mr. Kenichi Ayukawa Mr. Tsuneo Shashi

3. Upcoming Ventures & Products

Chairman MD and CEO Director Director Director Director Director Director Director Director Director & Managing Executive Office (Production)

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TATA MOTORS:
Tata Motors is try to be in a position to dominate the Indian Auto industry, at least in four-wheeler segment. Tata Motors have announced that they are interested in the idea of designing electric cars. To take it a step further Tata has also initialized plans for the manufacture of a hybrid car which it will market with Chryster in the U.S. After the launch of Nano, Tata also apparently has its eye on the European and U.S. markets. The company hopes to have a version for Europe by 2011 and one for the U.S perhaps by 2012. Tata Motors, is now aiming to launch its cars in Indonesia and is also planning to sell Nano in South America with the help of Fiat. After launching the worlds cheapest car, Nano, Tata Motors is looking east, towards neighboring Myanmar to boost its sales by setting up a truck manufacturing plant. As part of its expansion plans in Southeast Asia, Tata Motors had inked a joint venture with Thailands Thonburi Auto Assemblys to manufacture up to 35,000 one tone pickup trucks a year over the next 3-5 years. Tata Motors, is searching options to pump approximately Rs. 8,000 cr. During the next 3-4 years on capital expenditure and product development. MARUTI SUZUKI: Maruti Suzuki has expanded the capacity at its Manesar plant to 1.7 lakhs unit per annum from January 2009. By the year 2010, Suzuki Motors plan to increase their dealership in India. This is a step to increase their sales to one million units as well as for a better position in the Indian auto market. The expansion is estimated to cost $ 3.5 billion, out of which a quarter will be assigned for amplifying leadership network to 1000 in number. As Maruti Suzuki eyes one million sales by 2010, they have firmed up a massive expansion plan of its service network and plans to expand it to 1700 towns and cities from the current of about 1200. The company plans to increase the number of service stations and workshops to over 3800 from about 2800 currently. They have also been coming with specific sales promotion programmes targeted at interior regions, among them is the Mera Sapna Meri Maruti: New Panchayati Scheme. The Haryana government has allotted 700 acres of land to Maruti Suzuki for hi tech Research & Development complex at Rohtak. The upcoming facility, will see an investment in the range of Rs. 1,000 cr. to 1,500 cr. And will introduce world class R&D facilities into India. While the development of the allotted land and construction of the test tracks will be completed in the first phase by 2012, the overall R&D facilities will be progressively completed by 2015. In a move ahead, Maruti Suzuki India limited launched the Estilo with all new overall looks and advanced technological features.

The upcoming cars in near future by both companies are: TATA Motors
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Maruti Suzuki

Products (CAR) Expected Launch Maruti Grand Vitara Diesel December2009 Maruti 02 December 2009 Maruti SX4 Diesel December 2009 Maruti Cervo December 2009 Maruti Kizashi December 2009 Maruti xl7 March 2010 Maruti APV June 2010 Maruti Jimny July 2010

Government Policies Towards Indian Automobile Industry: Automobile industry in India also received an unintended boost from stringent government auto emission regulations over the past few years. This ensured that vehicles produced in India conformed to the standards of the developed world.
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Though it has an advantage in India, thanks to low costs and government policies it soon faces stiff competition from it multinational competitors all eyeing for a share in the ever growing Indian auto sector. The policies adopted by Government will increase competition in domestic market, motivate many foreign commercial vehicle manufactures to set up shops in India, whom will make India as a production hub and export to nearest market. Bring in a minimum foreign equity of US $ 50 Million if a joint venture involved majority foreign equity ownership Automatic approval for foreign equity investment upto 100% of manufacture of automobiles and component is permitted FIIs including overseas corporate bodies (OCBs) and NRIs are permitted to invest up to 49 per cent of the paid-up equity capital of the investee company, subject to approval of the board of directors and of the members by way of a special resolution. . Investments in making auto parts by a foreign vehicle maker will also be considered a part of the minimum foreign investment made by it in an auto-making subsidiary in India. The move is aimed at helping India emerge as a hub for global manufacturing and sourcing for auto parts. Specific component of excise duty applicable to large cars and utility vehicles will be reduced to 15,000 rupees per vehicle from 20,000 rupees earlier. The Proposal by the Govt. to set up an expert group to advise on a viable and sustainable system of pricing petroleum products, as this will surely had an impact on the Automobile Industry. The announced reduction on the basic customs on bio-diesel is great news for all companies working on environmental saving technologies.

FUTURE OUTLOOK The passenger car segment has continued to report a strong 30%+ growth in the first month of FY04, partly due to low base effect. The transporters strike had impacted volumes in April 2008. The car segment is likely to grow by 20-22% during the current year. Commercial vehicle

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segment is expected to grow at a higher pace on the low base of the previous year and accelerated GDP growth in the current year. Growth in the short term is likely to be higher following increased consumer spending (improved economic performance) and launch of new models. The midsize segment is expected to record the highest growth followed by the premium and economy segments. In the economy and medium segments, it is estimated that total capacity is expected to more or less match the expected demand by 2007-08. The premium segment of the industry is however expected to witness acute over-capacity. The premium segment is likely to emerge as the largest segment over the very long term as people graduate to more expensive models. In the meantime, exports are also expected to increase because of over capacity in the domestic car industry and the Government's policy to bring about a more liberal regime on the foreign exchange front. It is worth mentioning that the car production capacity has increased significantly in the last three years. The industry will witness substantial over capacity in the next few years unless there is a substantial spurt in sales. If not, Low capacity utilization will lead to an inevitable marketing war between the car manufacturers which is most likely to lead to a stake out which will see some of today's major players withdrawing from particular segments in the coming years. Consumer will however continue to remain the KING. The prospective buyer will be the main beneficiary of the marketing war in the industry not only in terms of prices but also better technology. There is always a fear of the shakeout eating into your favourite brand you own, for example discontinuation of a model. India would have the largest young population of the world in next 20 years - If India is to achieve a sustainable 7-8% GDP growth and 9-10% growth of industrial production, we should have 50 million people every year moving up from middle class to upper middle class. This defines the future vehicle owners of the country.

Based on SIAM analysis, it is estimated that we should have a healthy growth of sales (including exports) in the automobile sector in 2004-05. Segment wise growth expectations, provided the Government takes necessary steps that promote growth are:

Passenger vehicles Commercial vehicles Two wheelers Three wheelers

: 10 15% : 12 15% : 10 15% : 10 15%

Ending the briefing on an optimistic note, Mr Khattar concluded that the passenger vehicle manufacturers would easily cross a domestic sale of one million vehicles during the year excluding exports. However, the real challenge before the Indian automobile industry is to catch up with China which was at par with us till recently and currently aspiring to be the third largest market in the world.
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With current penetration level of six cars per thousand people, the potential for growth is significant. In view of a couple of positive measures such as the excise duty exemption on tractors and 150% deduction on R&D expenditure, we remain positive on the future prospects of the industry. Also, with government pressing for improvement in road infrastructure, the position of railways as the main carriers of goods such as food grains and cement has come under significant threat. Since most manufacturers have a technology tie-up with a foreign major, the incentive to do R&D with the Indian counterpart has increased. Since operating margins of auto majors have increased over the last three years, significant further improvement from the current level is limited and to that extent, we remain cautious. Firstly, the international car market is growing by around 2% pa and this set to continue for the next few years. This slow down is due to the increasing level of saturation in the largest car markets of the world. Analysts from EIU state that this saturation level may even translate into negative growth, given the recent trend of carmakers to opt for quality components which will increase the vehicles useful life. Secondly, the South-East Asian crises has been a dampener to the collective fortunes of various carmakers worldwide. According to EIU estimates, some countries in the region have witnessed cumulative falls of 70% this year. In Indonesia record sales reported in 1997 are not expected to be matched until 2005. In Malaysia it is expected to be 2003 before peak sales and production volumes are repeated and in the Philippines the market will take seven years to recover. In Thailand, the market for cars and commercial vehicles is expected to fall from almost 600,000 units per year to 125,000 this year. Thirdly, the global domination by the large automotive players has slowly abated with local manufacturers getting hold over the market. Japan, Western Europe and the North American Free-Trade Agreement area comprising USA, Mexico and Canada are expected to account for 71% of the global park by 2005, down from almost 77% at the start of the 1990s. This has come about, as the concept of "regio-centric" cars is becoming popular.

FINDINGS
MARKETING: A study of international brand names was done and a classification of brand names of midsize cars and SUVs was done into groups. International brand naming trends and strategies were analyzed. New names were generated. The car manufacturing company, called Maruti Suzuki Automobiles India Limited, is a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake respectively. Personal Selling largely takes place at the Dealers End. The way the customer is attended depends mainly on the Dealer as he acts as an interface between the company and the Consumer. HRM:

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Prepare MUL Strategic Business Plan-2000-2003; To achieve the Vision & Goal Improve the performance Appraisal system - its process, skill & usage Introduce a Potential Appraisal System Improvements in internal & external Training & its effective utilisation. Training need identification. Systematic career planning ; Job Rotation ; Empowerment; Job enrichment Periodic communication meeting at various level; Roll out of Vision

FINANCIALS: The updated share holding pattern of TATA motors which shows that Indian promoter share in the company is 41% that means if they are not in the position to raise further money from general public, Company already raised huge money by selling their large stake to institutional investors about 27%. EPS measures the profit available to the equity shareholders per share, that is, the amount that they can get on every share held. Till 2008 both the companies had a rising EPS but in 2009 both of them fall and the effect more on Tata motors as they bought two brands Ford Motors and fall in sales results in low EPS. After the launch of Nano, Tata also apparently has its eye on the European and U.S. markets. The company hopes to have a version for Europe by 2011 and one for the U.S perhaps by 2012.

RECOMMENDATIONS

By analyzing the industry on various parameters with the help of implementing Fundamental and Technical tools we came to know that this industry has a lot of potential to grow in future. So recommending to invest in Automobile Industry have no doubt is going to be a good and smart option because this industry is booming like never before not only in India but all around the world.

The returns which came out of this industry were very impressive recently, as if we take an example of TATA motors it gives approx 90% return in a period of just 3 months while Maruti Suzuki shows always a buy and hold position because there is possibility of

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growth in future, same situation is in two wheeler segment with market leader HeroHonda a debt free company also have bright future ahead. The numbers which came out in the end of financial year 2009 prove that even in the period of recession the overall sales went up is sufficient to support to this fact. Through Technical analysis of TATA Motors and Maruti it can be recommended that for now Maruti share price shows that its a time to hold the position or buy more shares as there is scope in further rise in share prices until and unless any negative reaction or sentiments comes in the Economy. Investing in Maruti Suzuki for long time could be a good option whereas in TATA motors there is a chance of getting correction, as it already went on high side in a very short period of time so holding the shares for long time could be a wrong step, so at this point of time those who invested earlier can book their profit or new investors can buy now and sell with in short period of time by earning profit in short period of time.

CONCLUSION

Indian Automobile Industry is in the growth phase and the expected growth rate is 910% for FY2009-10 compare to last year growth rate which was just 0.7% and the above facts and figures in our study also support this truth. Indian Automobile has a lot of scope for both two wheelers and four wheelers due to development in infrastructure of the country and especially the rural sector in which demand of two wheeler has increased even in recession. According to Indian Statistical Organization the per capita income (Rs.38000) is increasing and national income at the rate of 14.4% which shows potential to buy vehicle in auto industry. The growth rate of Indian Automobile is so fast that by 2016 Indian Industry will be world 7 largest manufacturer in all sections. The Indian auto market is still untapped the majority of the people in country dont own a four wheeler and all the major auto companies are trying to increase their sales by several moves. Like TATA has launch NANO the peoples car and now TATA motors is also planning to come out with an electric car as well as hybrid car, moreover in two wheeler segment many companies like Mahindra and Mahindra grow even more than expectations.
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From the Technical Analysis of both companies we come to know that the share price of Maruti will move in the band of Rs.1275 to Rs.1425 and that of TATA Motors will move in the range of Rs. 430 to Rs. 490 if certain correction made in the market. We have also come to know that share price movement of TATA Motors is just according to the movement of SENSEX, whenever there is a negative sentiment in the market regarding TATA Motors there is a steep fall in the stock price of TATA Motors but we have seen quick recovery in its share prices to regain its primary trend E.g as we seen in last 3-4 months TATA recovers approx.90% after downfall. By analyzing the current trend of Indian Economy and Automobile Industry we can say that being a developing economy there is lot of scope for growth and this industry still have to cross many levels so there is huge opportunities to invest in and this is proving as more and more foreign Companies setting up there ventures in India.

BIBLIOGRAPHY
1. Ministry of Heavy Industries & Public Enterprises, Government of India, New Delhi 2. The Economic Times. 2009-03-10. http://economictimes.indiatimes.com/News/News-

By-Industry/Car-sales-rise-22-in-Feb/articleshow/4247812.cms. Retrieved 2009-03-16.

3. "Nissan upcoming Chennai plant to be its global small car hub - WheelsUnplugged

Automobile Industry News". Wheelsunplugged.com. http://www.wheelsunplugged.com/ViewNews.aspx?newsid=3609. Retrieved 2009-0709.

4. Jose, Darlington (2009-06-25). "GM to make India small car hub". mydigitalfc.com.

WORLD BUSINESS BRIEFING | ASIA - India: Ford Plans to Build Small Cars
5. Ford Set to Start Production of Small Car in India 6. Fiat Purchasing to source $1 bln parts from India 7. Ashok Leyland 8. Chinkara Motors 9. Force Motors 88

10. Hindustan Motors 11. Mahindra 12. Maruti Suzuki - Showroom 13. Premier Automobiles Limited 14. San Motors 15. Tata Motors - Products

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