ADDITION &

DELETION OF
AUTOMOBILE
COMPANY

ADDITION & DELETION OF

AUTOMOBILE COMPANY
Indian automobile industry heavily depended on foreign
technologies. However, over the years, the manufacturers
in India have started using their own technology evolved in
the native soil. The thriving market place in the country has
attracted a number of automobile manufacturers including
some of the reputed global leaders to set their foot in the
soil looking forward to enhance their profile and prospects
to new heights.
Motor cycles manufacture makes up the major share in the
two-wheeler segment of the Indian automobile industry.
About 50% of the motorcycles are manufactured by Hero
Honda. While Honda manufactures about 46% of the
scooters, TVS produces 82% of the mopeds running on the
Indian roads.

Auto sector this year

Despite economic slowdown that has affected the
automobile industry, production and exports of the
sector went up last fiscal, said the Economic
Survey 2014-15, and underlined that the industry
employs over one crore people.
While the overall automobile production went up by
3 per cent to reach 1.11-crore, exports increased
by over 23 per cent to over 15-lakh. The domestic
turnover of the sector stood at Rs. 2.19-lakh crore,
while exports totalled at Rs. 31,782 crore, taking
the total size of the industry to Rs. 2.50-lakh crore
during 2008-09.

GOVERNMENT SUPPORT TO UPCOMING COMPANIES

The Industrial Policy of 1991 de-licensed the

Automobile Industry in India, but passenger

car was de-licensed in 1993.
This took the Indian automobile production
from 5.3 Million Units in 2003-04 to 10.8
Million Units in 2013-14. The other reasons
attracting global auto manufacturers to India
are the countrys large middle class
population, growing earning power, strong
technological capability and availability of
trained manpower at competitive prices.
These are the major findings of our new
report, Indian Automobile Sector - A Booming

The Key Players

Two wheeler

Passenger
vehicle

Commercial
vehicles

TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force

motors, Eicher Motors

Passenger
vehicle

TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra &
Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler

Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler

Bajaj Auto, Piaggio India

Daewoo Motors
Daewoo is good at making cars, but rotten at
marketing them.

Daewoo Overseas
In 1991 Daewoo bought out 50% stake in the venture for 50
billion
Faced tough competition in European and US market it looked
to diversify it into eastern Europe, Latin America and Asia
Took over 50% equity held by Japans' Toyota in DCMTOYOTA
Renamed it as Daewoo motors India ltd
Overseas investment on borrowed funds
In 2000, cos labor union refused to accept a restructuring plan
for the company
Daewoo was declared bankrupt

Models

Segmentation & Positioning

Did not consider itself worthy to challenge Maruti in small car
segment
There were not enough players in the mid-size segment,
Daewoo thought that it would stand a fair chance in capturing
this segment.
Daewoo found the mid size market more alluring.
Daewoo could not visualize that the small sized segment
would grow at a faster pace than the segment it decided to
enter in.
The mid-sized segment got crowded with players like Opel,
Maruti, Honda and Daewoo itself.

Promotional Activities
In 1995 Daewoo came up with Diwali bonanza scheme
Reduced the finance rates to 14.33%
Discount of 10% was given
Test drive scheme in April 1997
VAL-YOU Campaign

Reasons for failure

Positioning was hit by the stiff competitors.
Daewoo's dealers began offering discounts & became a
discount brand.
Its Marketshare in the mid-size segment came down from a
high of 29 per cent in 1996-97 to 13 percent in 1998-99.
Daewoo's had created a perception problem.
Lack of Vision and proper market survey.
Took huge debts to expand the automobile business.
Did not react to customer complaints
Tried to tackle this problem through its sales staff but they
were also not properly trained

The Bad Part

70000 customers cancelled there booking
Predicted an annual turnover of 10 billion and 20000 cars but
managed 6.05 billion and 9044 cars.
Feb 1998, 9006 cars were sold again a decline of 41%
Next year reduced by 50 %
Recorded a loss of 351.4 million in 6 months as sales also
declined to 1.22 billion from 2.7
It is not necessary that tried and trusted formula in one country
will work in every country.

SWOT ANALYSIS
STRENGTHS
Strong brand portfolio
Huge market share
Quality products
Technology potential
State of art plant

WEAKNESSES
Huge debts
Aggressive expansion
No training to sales staff
Lack of proper marketing
strategies
Huge discounts

OPPORTUNITIES
Few players in mid-size segment
Regional Tie Ups
Tapping untapped market

THREATS
Well established competitors
Fluctuation in price of fuel and
raw materials
Government policies

KTM
High Performance motorcycle company from Austria
Produce Mini-bikes ,Dirt Bikes, Sport Bikes, and Dual Sport
Bikes
Company Colors Orange, Gray, and Black
They are the only non-Japanese bike that is part of the big 5

How They Started

Founded in 1934 by
Hans Trukenpolz in
Mattighofen, Austria.
Started as a car and
motorcycle repair shop.
The company expanded
throughout Austria
Ernst Kronreif becomes
partner in the
Trukenpolz company
and the name is
changed to KTM

Market Crash
In 1957 sales of all European
bikes slowed down.
Caused by the introduction
of Japanese Bikes to the
world market, such as
Honda, Suzuki, and YAMAHA.
Japanese Bikes were more
affordable
To compete KTM introduced
production of line of scooters
and bicycles.
By 1959 all production
motorcycles stops

Bankruptcy
Majority of Shares sold to a holding
company
In 1991 KTM Motorfahrzeugbau AG
declares bankruptcy
Company is divided into four
separate entities
Radiators, Motorcycles, Bicycles, and
Tooling Manufacture.

The 1990s

1992 production motorcycles resumes under

KTM Sport motorcycles AG
1995 KTM acquires Swedish made Husaberg
company and White Power Suspension
Extensive Engineering and design work on
production models.

Today
Marketing as Ready to Race
KTM sells over 80,000 bikes a year.
Production models include mini-bikes,
Enduro, MX, and Supermoto dirt bikes,
dual sport bikes, and sport bikes.

Bike sizes range from 50 cc to 990 cc

Have headquarters in Austria, Spain,
France, America, and Great Britain

SWOT Analysis
Strengths
Automobile industry is an established and an evergreen industry.
India is the strongest player in the small car segment of the global
automobile market
Indian companies are the best cost innovators
The automotive industry has long been known for its development and
promulgation of the assembly-line.

Strengths

con..

Some of the greatest developments in the automotive supply chain lie

in the development of Just-In-Time (JIT) inventory methods.
Through the use of advanced technologies, assembly line
manufacturing, and JIT inventory management, the automotive
industry has been able to achieve significant gains in productivity.

Weakness
Indian is lacking in proper
infrastructure.
This is slowing the pace of growth of
auto industry
Companies are not improving after
sale services

Opportunities
The automotive ecosystem is in the midst of significant change, with
increasing challenges in consumer demands, technology development, and
globalization.
While demand for incumbent technologies will remain strong, alternative power
trains could capture more than 20 percent of the global market by 2020,
depending upon boundary conditions such as fuel taxation and emissions
regulation set by governments as well as oil price development.
storage is in the heart of the next generation of efforts for fuel economy.
More realistic scenario will emerge for technologies using Hydrogen as
automotive fuel.
Intelligent use of NCES (Non conventional energy sources) for powering
Public Transport.

Threats
Global Crisis
Companies not focusing on R & D are
under great risk
High competition from foreign players
Lack of technology for Indian companies