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AUTOMOBILE INDUSTRY CAR

INDUSTRY ANALYSIS
SUBMITTED BY:
VARUN KALE PG-15-20
MEET MANDAVIA PG-15- 24
ANKIT PALAN PG-15- 32
KUNAL PARAB PG-15- 35
ROHIT SANDAW PG-15- 46

INTRODUCTION
The automobile industry is one of the key drivers that
boosts the economic growth of the country. Since the delicensing of the sector in 1991 and the subsequent opening
up of 100 percent FDI through automatic route, Indian
automobile sector has come a long way. Today, almost
every global auto major has set up facilities in the country.
India has one of the biggest automobile markets in the
world and it is also one of the leading ones in terms of
growth. The commercial and passenger car industry in
India is one of the top ten of its kind on a global scale.

AUTOMOBILE INDUSTRY - CAR


The Indian automotive market is one of the most competitive
markets with low costs, which make it an attractive assembly
base for foreign automotive manufacturers.
India is the second fastest growing automobile market in the
world after china.
Cars is the major segment in the Indian automotive industry
with a growth rate of more than 19% annually.
The Indian car industry is witnessing a shift in demand going
from two wheelers to cars due to rising availability of low
cost cars and the car being a symbol of high prestige. IT is
expected that by 2030, the Indian car market will be the third
largest car market across the globe.

AUTOMOBILE INDUSTRY - CAR


The liberalization policies followed by the Indian government had been
inviting foreign investors and manufacturers to participate in the car
market in India.
The car market in India is crowded with all varieties of car models like
the small cars, mid-size cars, luxury cars, super luxury cars, and sports
utility vehicles.
Initially the most popular car model dominating the car market in India
was the ambassador, which however today gave way to numerous new
models like Maruti, Fiat, Hyundai, BMW, and many others.

AUTOMOBILE INDUSTRY - CAR

It also looks to take the industry output to 145 billion us


dollars by 2016, which is expected to account for at least
10% of the GDP by then. This can also generate extra job
opportunities for 25 million people.
The department of heavy industry of the ministry of
heavy industries and public enterprises is responsible for
promotion of the national auto industrys development
and growth.

KEY PLAYERS

MARKET SHARE
MANUFATURER

MARKET SHARE (%)

MARUTI SUZUKI
HYUNDAI
MAHINDRA
HONDA
TOYOTA
TATA
FORD
RENAULT
VOLKSWAGEN
CHEVERLOT

47.02
18.02
8.08
5.90
5.75
4.78
2.34
1.87
1.67
1.60

BODY STYLE DISTRIBUTION

BODY STYLE

8%

HATCH

18%
49%

SEDAN

MUV

25%
SUV

SALES (MANUFACTURER
ORIGIN)
O RIGIN
70%
61%

60%
50%
40%
30%
20%

18%
13%

10%
0%

INDIAN

JAPENESE

KOREAN

4%

4%

EUROPEAN

AMERICAN

SWOT ANALYSIS
STRENGTHS
Investment by foreign car
manufacturers
Low cost and cheap labour
Rise in the income level
Increase in export levels
Increase in demand for cars
Large pool of engineers

WEAKNESS
Low labour productivity
Production cost are higher than
some other Asian countries
Low quality compared to other
automotive countries
Low investment in R&D area
Local demand is still towards
low cost vehicle

SWOT ANALYSIS
OPPORTUNITIES

Growing population
Rising living standards
Increase in income level
Rising rural demand
Better car technology is
demanded
Women drivers have increased
Infrastructure development

THREATS
Less skilled labour
Lack of technologies for Indian
companies
Increase in the import tariff and
technology cost
Lack of infrastructure facilities
Import of cars from foreign
countries

CONTENT:
INTRODUCTION
PORTERS 5 FORCES MODEL
GLANCE ON MARUTI S STRATEGIES

A BRIEF INTRODUCTION TO MARUTI


SUZUKI
In 1982, Government of India entered into a joint venture with
Suzuki motor corporation of Japan
Plant was established at Gurgaon in Haryana
It was the first company in india to mass produce and sell more
than a million cars
Maruti Suzuki is the on of the indias leading automobile
manufacturers and the market leader in the car segment

Threat from the new players: Increasing


Most of the major global players are present in the Indian
market; few more are expected to enter.
Financial Strength assumes importance as high are required
for building capacity and maintaining adequacy of working
capital.

Rivalry with in the industry: High


There is keen competition in select segments.
(compact and mid size segments).
New Multinational players may enter the market.

Market strength of suppliers: Low

A large number of automotive components suppliers


Automotive players are rationalizing their vendor base to achieve
consistency in quality

Market strength of consumers: Increasing

Increased awareness among consumers has increased expectations. Thus the


ability to innovate is critical
Product differentiation via new features, improved performance and after
sales support is critical
Increased competitive intensity has limited the pricing power of manufactures

Threat from substitutes: Low to Medium

Consumer preference is changing (Mini cars are being replaced by compact


or mid size cars)

Setting up integrated manufacturing facilities may require higher capital


investments than establishing assembly facilities

India also is likely to increasingly serve as the sourcing base for global
automotive companies, and automotive experts are likely to gain increasing
importance over the medium term

Competition is likely to intensify in the SUV segment in India following the


launch of new models at competitive price

MAJOR COMPETITORS

PRODUCTION
Maruti Suzuki has two
manufacturing facilities in
India.
Both manufacturing facilities
have a combined production
capacity of 14,50,000
vehicles annually.
TheGurgaon manufacturing
facility has three fully
integrated manufacturing
plants and is spread over 300
acres
The Gurgaon Facilities
manufactures the800,Alto,
WagonR,Estilo,Omni,Gypsy,
Ertiga, Ritz andEeco.

TheManesarmanufacturing
planthad a production
capacity of 100,000
vehicles annually but this
was increased to 300,000
vehicles annually in
October 2008 and further
increased to 8000000.
The Manesar Plant
produces theA-star,Swift,
Swift DZire,SX4,Vitara
Brezza,Ritz , Baleno and
Celerio.

FINANCIAL ANALYSIS
Country's largest carmaker Maruti Suzuki India (MSI) on Thursday posted a
12.2 per cent rise in total sales in August at 1,32,211 units as against 1,17,864
units in the same month a year ago.
The company's domestic sales for the month stood at 1,19,931 units, up 12.3
per cent from 1,06,781 units in August 2015.
Sales of mini segment cars, including, Alto and WagonR, however, declined by
5.8 per cent to 35,490 units as compared to 37,665 units in the year-ago month,
MSI said in a statement.

The company said sales of the compact segment comprising Swift, Estilo, Ritz,
Dzire and Baleno increased by 9.9 per cent to 45,579 units in August this year
as against 41,461 units in the year-ago month.

ROBUST GROWTH IN REVENUES


The gross turnover of automobile manufacturers in India
expanded at a CAGR of 11.72 per cent over FY07-15
The domestic Two Wheelers segment accounted for 81% of
the total domestic market share for the year 2014-15
Japanese automakers Toyota (TM) and Honda
(HMC) have among the highest margins in the
business at 13.8% and 13.1%, respectively.

GROWTH IN THE SECTOR EVIDENT


FROM HIGHER TOTAL PRODUCTION
FIGURES
Production of automobiles increased at a CAGR of 10.5 per
cent over FY05-15
Two wheeler vehicle was the fastest growing segment,
representing a CAGR of 10.86 per cent, followed by
passenger
vehicle segment with CAGR of 10.31 per cent between
FY05-15.

MARKET BREAK-UP BY
PRODUCTION VOLUME
Two wheelers dominate production volumes; in FY15,
segment accounted for about 79.17 per cent of the total
automotive production in the country.
India is worlds sixth largest vehicles manufacturer
globally. Further, India is the Asias second largest two
wheeler manufacturer and fifth largest producer of
commercial vehicles, fourth largest manufacturer of
passenger car and the largest manufacturer of tractors.

STRONG GROWTH IN EXPORTS


Automobile export volumes
increased at a CAGR of 17.79 per
cent over FY0515.
Two-wheeler segment reported the
fastest growth (20.1 per cent)
followed by three-wheelers (14.8 per
cent) over FY0515

STRONG GROWTH IN EXPORTS

Two wheelers accounted for the largest share in exports


(by volume) at 68.77 per cent in FY15
Passenger vehicles comprised a sizeable 17.42 per cent
of overall exports
Exports of three wheeler vehicles registered around
11.42 per cent share in exports in FY15

AUTOMOBILE MARKET RECOVERS


AFTER A POOR SHOW IN FY14
Auto sales across categories domestically rose by 7.22 per
cent in FY15
Passenger vehicles grew by 3.90 per cent in FY15
Passenger car segment increased by 4.99 per cent in 2015
SUVs increased by 30 per cent
Commercial vehicles declined by 2.83 per cent in FY15

National Electric Mobility Mission Plan


(NEMMP) 2020
Passenger vehicles to increase at a CAGR of 25.6 per cent
during FY1520
Commercial vehicles expected to register a CAGR of 30.9
per cent during FY1520
Two and Three wheelers projected to expand at a CAGR of
12.6 per cent during FY1520

EASIER ACCESS TO CREDIT A KEY


DETERMINANT OF GROWTH IN
AUTOMOTIVES
Greater access to credit eases the purchase of passenger and
commercial vehicles
The Indian car finance market is growing at a CAGR of 13.20
per cent from the year 2010-15 and it is expected to grow to
USD30.43 billion by 2020.
BMW, Audi, Toyota, Skoda, Volkswagen and Mercedes-Benz
have started providing customized finance to customers,
dealers and suppliers through dedicated Non-Banking Finance
Companies (NBFCs)

FUTURE OF
AUTOMOBILE INDUSTRY
The key 5s
Going forward, India is a key pillar of global automotive market - policy, actions and
strategies of players in India will have a fundamental impact on the global auto landscape

1.

2. By 2015, India will exceed every major European market inc. Germany, France and UK in
automotive sales - making India the 4th largest automotive market by volume in the world
3. Over the next 20 years, India will be part of global automotive triumvirate - the global BIG
3
4. In fact, we expect the India automotive sales to exceed the US market by mid 2030s
5. The global automotive game will be pretty much decided by twin forces for China and
India

THE RESULT: INDIA IS AN ANCHOR OF FUTURE


GROWTH IN THE AUTO INDUSTRY

Indias car market has


the potential to grow
up to 6+ millions units
annually by 2020

BY 2030 INDIA WILL BE


AMONG THE BIG 3

MAKE IN INDIA
Seventh largest producer in the world with an
average annual production of 24 Million vehicles.
Third largest automotive market by volume, by 201617.
Fifth largest passenger vehicle and commercial
vehicle market
Four large auto manufacturing hubs across the
country.7.1 % of the country's GDP by volume.
Six Million-plus hybrid and electric vehicles to be sold
annually, by 2020.

MAKE IN INDIA
The automotive industry accounts for 45% of the
countrys manufacturing gross domestic
product(GDP), 7.1 % of the countrys GDP and
employs about 19 Million people both directly and
indirectly.
India is currently the seventh largest producer in
the world with an average annual production of 24
Million vehicles, of which 3.64 Million are exported.
India is the second largest two-wheeler
manufacturer, the largest motorcycle manufacturer
and the fifth largest commercial vehicle
manufacturer in the world.

FOREIGN INVESTORS

Suzuki (Japan)
Nissan (Japan)
Piaggio (Italy)
Volkswagen
(Germany)
Renault (France)
Hyundai
(South
Korea)
General Motors (USA)

BMW (Germany)
Ford (USA)
Toyota (Japan)
Mercedes
Daimler
FIAT
Honda

NEW INITIATIVES & VISION FOR THE FUTURE

The government of India aims to maintain this


upward growth trend of the automobile industry
and has launched several initiatives to achieve
the same.
The Automotive Mission Plan 2016-26 (AMP
2026) is one such initiative. It aims to make
India among the top three automotive industries
in the world and increase exports exponentially
to reach 35-40% of overall output. It also intends
to increase its contribution to the GDP to over 12
%, generating 65 million more jobs as well as
increasing the size to USD 300 billion by 2026. 9

With the emergence of 5 large automotive


clusters in the country i.e. the Delhi-GurgaonFaridabad in the north, Sanand-Halol and
Mumbai-Pune-Nasik-Aurangabad in the west,
Chennai-Bengaluru-Hosur in the south and
Jamshedpur-Kolkata in the east, India is fast on
its way to becoming the primary global
automobile manufacturer. The government of
India is more than willing to lead this charge and
assist this sector in every way to help it achieve
its full potential.
Citations:

http://www.ibef.org/industry/india-automobiles.aspx

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