AUTOMOBILE INDUSTRY OF INDIA A Nations economy is well known from its transport system. For instant and rapid growth in economy, a well-developed and well- networked transportation system is essential. As India's transport network is developing at a fast pace, Indian Automobile Industry is growing too. Also, the Automobile industry has strong backward and forward linkages and hence provides employment to a large section of the population. Thus the role of Automobile Industry is very essential in Indian economy. Various types of vehicles are manufactured by the Automobile Industry. Indian Automobile Industry includes the manufacturing of trucks, buses, passenger cars, defense vehicles, two-wheelers, etc. The industry can be broadly segmented into into the Car manufacturing, two- wheeler manufacturing and heavy vehicle manufacturing units. The major Car manufacturer are Hindustan Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd ., General Motors India Pvt. Ltd., Honda Siel Cars India Ltd. Hyundai Motors India Ltd., Skoda India Private Ltd., Toyota Kirloskar Motor Ltd. The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The heavy motors like buses, trucks, defense vehicles, auto rickshaws and other multi-utility vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and Mahindra, etc. The Indian Automobile Market growth is expected to grow at a CAGR of 9.5 percent amounting to Rs. 13,008 million by 2010 which is a
Transcript
AUTOMOBILE INDUSTRY OF INDIA
A Nations economy is well known from its transport system. For instant and rapid growth in economy, a well-developed and well-networked transportation system is essential. As India's transport network is developing at a fast pace, Indian Automobile Industry is growing too. Also, the Automobile industry has strong backward and forward linkages and hence provides employment to a large section of the population. Thus the role of Automobile Industry is very essential in Indian economy. Various types of vehicles are manufactured by the Automobile Industry. Indian Automobile Industry includes the manufacturing of trucks, buses, passenger cars, defense vehicles, two-wheelers, etc. The industry can be broadly segmented into into the Car manufacturing, two-wheeler manufacturing and heavy vehicle manufacturing units. The major Car manufacturer are Hindustan Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd ., General Motors India Pvt. Ltd., Honda Siel Cars India Ltd. Hyundai Motors India Ltd., Skoda India Private Ltd., Toyota Kirloskar Motor Ltd.
The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The heavy motors like buses, trucks, defense vehicles, auto rickshaws and other multi-utility vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and Mahindra, etc.
The Indian Automobile Market growth is expected to grow at a CAGR of 9.5 percent amounting to Rs. 13,008 million by 2010 which is a big in number. The Commercial Vehicle Segment has been contributing to the automobile market to a great extent. So as in passenger luxury cars now/
Many foreign companies like Mercedes,Suzuki,chevorlet,Honda,mitsubushi,Toyota,Hyundai etc. have been investing in the Indian Automobile Market in various ways such as technology transfers, joint ventures, strategic alliances, exports, and financial collaborations.like maruti joined hands with Suzuki in passenger cars,same as Mahindra with Renault,hero joint ventures Honda in two wheeler segment,ashkoa with Leyland in commercial vehicle segment.The auto market in India can boast of attractive finance schemes, increasing purchasing power, and launch of the latest products.investments in the automobile industry by the foreign companies
in india help in strengthening the india`s economy. India`s giant automotive manufacturer company TATA MOTORS has largest share in commercial vehicle.and now they have acquired the jaquar and range rover globally,capturing international market too,also they are exporting their key products in the international market.
Total sales of major car manufacturers in India registered a figure of 0.674 million units at the end of March, 2007. The number of car exports in India was 39,295 units. General Motors, Maruti, and Honda accounted for 60 percent of the market sales at the end of April, 2007. As the increase in per capita income is observed in india,There has been an increase in the purchase of motorcycles and cars both in the rural as well as urban areas.{figures from reliable sources}
Some vital statistics regarding the automobile market in India has been mentioned below: Two wheelers - 2nd largest in the world Commercial Vehicle - 4th largest in the world
Passenger car- 11th largest in the world
The Indian automobile market consists of a wide variety of vehicles such as light, medium, and heavy commercial vehicles, cars, scooters, mopeds, motor cycles, 3 wheelers, and multi-utility vehicles such as jeeps and small trucks.
The modern automobile market in India has been considering key issues in the process of growth:
Customer care, and not just 'service' Domestic as well as multinational investments
Searing through cut-throat competition
Road safety
Anti-pollution norms
Coordination with the government to enable advancement
Used vehicle trade
The future of Indian Automobile market is bright as it looks forward to manufacturing and implementing new innovations such as electric cars as provided by Reva,CNG technology is
used in new upcoming models of maruti and Honda has launched their new hybrid car in the Indian market. alternate fuels like CNG and LPG, and probably customized Internet automobile orders.
Segmentation of automobile industry
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}
E-BUSINESS OF AUTOMOTIVE INDUSTRY
The online vehicle market in India has been providing excellent services to online vehicle sellers as well online vehicle buyers. The advantage of online vehicle buying is that one can get an exhaustive list of cars and bikes and even make a purchase without having to leave the comforts of one's house. Many websites like autoindia.com,ebay.ca.in are their to promote online business of auto industry.
Sellers can make their vehicles available instantly through the Internet to millions of buyers at the domestic level. Online vehicle selling sites advertise in daily newspapers and magazines ensuring buyer as well as seller attention benifitting both.
Online Vehicle Market in India provides valuable information on vehicle overviews, dealers, financing institutions, insurance companies, and also product comparisons. All information is with regard to the region of the online vehicle purchaser.many customer services are offered online.The online Indian automobile market is part of the growing automobile industry in India.
The Online Vehicles market in India provides full security to its buyers and sellers. Some of the security measures have been mentioned below:
Good online companies do not keep a record of the transactions made nor are they involved in the transacting process.
No trustee or financial department services offered by the websites.
Discouraging the practice of advance payment. Thus, avoiding the possibility of fraud.
Reliable websites like Cartradeindia.com,ebay.ca.in make sure that that their customers are not victims of manipulated electronic paper work.
All these services are offered free for the customers and hence they facilitate the growth of the online vehicles market in India. Some of the companies that offer their services in this area are Cartradeindia.com, IndiaAutoMall.com, CarWale.com, AutoIndia.com, Autotrader.com, eeautomaid.com, atozsupermarket.com, and IndiaAutimobile.com.
Online Vehicle Market in India has thus made vehicle purchase potentially easier for the modern Indian automobile enthusiast and comes equipped with unparalleled market research and valuable utility tools that make vehicle-buying a lot less complicated a procedure than it used to be.
ENVIORNMENTAL ANALYSIS OF AUTOMOTIVE INDUSTRY
POLITICAL FACTORS
ARAI provides technical expertise in R&D, testing, certification, homologation and framing of vehicle regulations. ARAI is a co-operative industrial research association established by the automotive industry with the Ministry of Industries, Government of India. It works in harmony and complete confidence with its members, customers and the Government of India to offer
the finest services, which earned for itself ISO 9001, ISO 14001, OHSAS 18001 and NABL accreditations. ARAI is well-equipped with state-of-the-art infra-structural facilities and highly qualified manpower.
The Indian Auto Industry is harmonizing both Safety & Emission regulations with International Standards for sustained growth of the Industry for combating the environment and become a global export hub.
India has a well established and Regulatory Framework under the Ministry of Shipping, Road Transport and Highways in which SIAM(SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS plays a very important role. All the stake holders are part of the regulation formulation setup. The ministry issues the notifications under the Central Motor Vehicle Rules and Motor Vehicles Act.
The Safety Regulations are being aligned with the ECE regulation and the Road Map prepared by SIAM(SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS envisages alignment by 2010.
The In use Vehicle Emission norms have been tightened with effect from 1st October 2004 and computerization model has been developed by SIAM(SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS, which is already in place in the Major Metro Cities and would be extended throughout the country in a phased manner.
ECONOMICAL FACTORS
India’s huge geographic spread- Mass transport system.There is a very large transportation system in India for the public which helps the economy to the large scale.
Increasing road developmentThe new development of road system is contributing a lot towards the transportation system of the country. Better and wide roads and the material used to build the roads is very long lasting and environment friendly. With the better material used the life of the roads is increased which is helping the economy of the country as less expenses will occur.
Higher GDP growth
With the better transportation system the material is moved to different places in short time and easily which helps in increase of the GDP as more products can be made in same time.
Increasing Per Capita incomeThe per capita income of India is increasing due to which the buying power of the consumers has also increased making people buy cars and bikes.
Cheaper (decline interest rates) and easier finance schemeThe banking system in India is in a good shape. It provides people with easier and cheaper finance schemes which help the consumers to buy vehicles easily. This helps in the increase in sales of the automobile industry which also helps in the th increase of country’s economy.
TECHNICAL FACTORS
India is harmonizing its Emission Norms for Four Wheelers with the European Regulation and has adopted Euro III, equivalent norms in 11 Metropolitan Cities from Apr 1 2005. For Two Wheelers, which constitutes 70% of the vehicle population unique Indian emission norms, which are one of the tightest in the world have been adopted.
The Fuel Quality plays a very important role in meeting the stringent emission regulation. The fuel specifications of Gasoline and Diesel have been aligned with the Corresponding European Fuel Specifications for meeting the Euro II, Euro III and Euro IV emission norms.
The use of alternative fuels has been promoted in India both for energy security and emission reduction Delhi and Mumbai have more than 100,000 commercial vehicles running on CNG fuel. Delhi has the largest number of CNG commercial vehicles running anywhere in the World. India is planning to introduce Biodiesel; Ethanol Gasoline blends in a phased manner and has drawn up a road map for the same.
The Indian auto Industry is working with the authorities to facilitate for introduction of the alternative fuels. India has also setup a task force for preparing the Hydrogen road map. The use of LPG has also been introduced as an auto fuel and the oil industry has drawn up plans for setting up of Auto LPG dispensing station in major cities.
The latest technology is being adopted by the companies and is being launched in India as well. One of the latest technologies is the Hybrid Engines which are launched by Honda
motors in India.
A lot of new safety measures are now taken into consideration before the car or any other motor vehicle is launched to ensure its safety and reliability.
SOCIAL FACTORS
The Automotive Research Association of India ( ARAI ) has been playing a crucial role in assuring safe, less polluting and more efficient vehicles. Reducing pollution helps creating a better and healthy environment for the society.
85% of the cars in India are financed. The banks are giving finance options easily helping the people who cannot afford to buy themselves. Low interest rates translating to low financing and acquisition costs hence greater affordability.
The new technology of Hybrid engines launched in India (Honda CIVIC) is very much safe and helps the environment making it better for the social community. This technology is coming worldwide and is also available in Canada now.
New measures are being taken to make the automobiles less polluting. This well help in reducing the exploitation of atmosphere. Better atmosphere gives better life.
COMPETITIEVE FACTORS OF AUTOMOBILE INDUSTRY OF
INDIA
The automotive sector is one of India’s 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
As a result, competition in India’s 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.
Competition in the International Market
Besides on the competition observed amongst all global players in the domestic Indian
market, India as an automotive manufacturing country is also pitting against other
competitors in the international market. In terms of exports of automobile, India is
ranked 29th, while China, the other huge automotive factory ranked 17th. For exports of
auto parts, India was 26th, while China came in 11th. The top country for exports of
