LOVELY PROFESSIONAL UNIVERSITY LOVELY SCHOOL OF BUSINESS AND APPLIED ARTS Presentation on: Indian Automobile industry Presented By: Asma Khanam Roll no:A20 Reg no:11112503
LOVELY PROFESSIONAL UNIVERSITYLOVELY SCHOOL OF BUSINESS AND
APPLIEDARTSPresentation on:Indian Automobile industryPresented
By:Asma KhanamRoll no:A20Reg no:11112503
SCHEME OF PRESENTATION Overview Production And Market Key
Growth Drivers Market Share Position In World Production Domestic
Production, Sales and Exports(2012) SWOT Analysis Future
Projections Current Issues For Union Budget 2012-13 Conclusion
OVERVIEW One of the major industrial sectors in India is the
automobilesector. Automobile Industry was delicensed in July 1991
with theannouncement of the New Industrial Policy. The Indian
Automobile Industry manufactures over 11 millionvehicles and
exports about 1.5 million each year, annualproduction of 3.9
million units(2011). Ranking: 2nd largest two wheeler market in the
world. 3rd largest passenger car market in Asia & 10th Largest
in theworld. 4th largest tractor market in the world. 5th largest
commercial vehicle market in the world. 5th largest bus & truck
market in the world.
CONTD.. The monthly sale of passenger cars in India
exceeds100,000 units. Tata Motors is leading the commercial
vehiclesegment with a market share of about 62%. Maruti Suzuki is
leading the passenger vehiclesegment with a market share of 51.36%.
Contribution of this industry to GDP was 2.77%( 1992-1993) and 6.9
% (2011-12) in real terms. Employment in this industry is 787,7702
, out ofthis 58% are in passenger car segment(Confederation of
RANK WISE LARGEST FOUR-WHEELERMANUFACTURERS IN INDIA BY SALES
:1.Maruti Suzuki2.Hyundai3.Tata Motors4.Mahindra.5.GM Chevrolet6.
Honda7. Ford8.Fiat Motors9. koda
PRODUCTION AND MARKETDomestic Automobile Market:According to
the statistics launched by(SIAM), the passenger car transactions
indomestic market was 145,905 units in January2010 against the 2009
sales of 110,300 units. Thisindirectly refers to the 32.28% growth
in thedomestic car sales.In January 2010, the total sales of
automobilesgrew to 1,114,156 units as compared to theprevious
fiscal years 768,698 units sales.
CONTD. Domestic Market Share for 2010-11Passenger Vehicles
16.25Commercial Vehicles 4.36 Automobile production
KEY GROWTH DRIVERS Rising industrial and agricultural output.
Rising per capita income. Favourable demographic distribution with
risingworking population and middle class. Urbanization. Increasing
disposable incomes in rural agri-sector Availability of a variety
of vehicle models meetingdiverse needs and preferences. Greater
affordability of vehicles. Easy finance schemes. Favourable
government policies. Robust production.
MARKET SHAREThe key competitors on the market of this industry
is ruled bypassenger automobile in India. The chief players in this
segment are : Maruti Suzuki with market share of 51.36% Tata Motors
with market share of 13.88% Hyundai with market share of 17.97%
Mahindra and Mahindra with market share of 2.15% Others with market
share of 16.83%The commercial vehicles segment is dominated by
leadingdomestic players like: Tata Motors with a total market share
of 62%, Ashok Leyland Ltd. with a total market share of 15%, M
& M Ltd. with a total market share of 11%, Eicher Motors Ltd.
with a total share of 6%, and others.
INDIAS POSITION IN WORLDS PRODUCTION Well-developed, globally
competitive auto ancillaryindustry . Established automobile testing
and R&D centres. Among one of the lowest cost producers of
steel inthe world. Worlds second largest manufacturer of
twowheelers . Fifth largest manufacturer of commercial vehicles.
Manufactures largest number of tractors in theworld. Ninth largest
car manufacturer in world.
THE INDIAN AUTO COMPONENTS MARKET
MAIN EXPORT DESTINATION FOR AUTOCOMPONENTS
DOMESTIC SALES IN 2012 The growth rate for overall domestic
sales for 2011-12was 12.24 percent amounting to 17,376,624
vehicles. Passenger Vehicles segment grew at 4.66 percentduring
April-March 2012 over same period last year. Passenger Cars grew by
2.19 percent, Utility Vehiclesgrew by 16.47 percent and Vans by
10.01 percentduring this period. The overall Commercial Vehicles
segment registeredgrowth of 18.20 percent during April-March 2012
ascompared to the same period last year. Three Wheelers sales
recorded a decline of (-) 2.43percent in April-March 2012 over same
period last year. Total Two Wheelers sales registered a growth of
14.16percent during April-March 2012.
PRODUCTION AND EXPORTS The cumulative production data for
April-March2012 shows production growth of 13.83 percentover same
period last year. During April-March 2012, the industry
exported2,910,055 automobiles registering a growth of25.44
SWOT ANALYSIS OF INDIAN AUTOMOBILEINDUSTRY
STRENGTHS Automobile Industry is established and
EvergreenIndustry. India is the strongest player in small car
segment. Indian companies are best cost innovators. Assembly line
manufacturing and JIT inventorymanagement, the automotive industry
has beenable to achieve significant gains in productivity.
Exceptional human resource base. Government provides monetary
assistance formanufacturing units.
WEAKNESS India lacks proper infrastructural facilities. Poor
sales service. The automotive sector lags behind other sectorssuch
an IT and financial services inmanagement, training, reward and
retention. Too many taxes levied by government increase thecost of
production. Low productivity. Low investments in Research and
OPPORTUNITIES Small cars is a future. Green cars. Auto
financing. Royalty through Patents. Reduction in Excise duty. Rural
demand is rising. Income level is at a constant increase.
THREATS Global Crises. Companies not focusing on R&D are
under greatrisk. High competition from Foreign players. Lack of
technology for Indian Companies. Increasing rates of interest.
Rising cost of raw materials.
FUTURE TRENDS AND PROJECTIONSDemand of four wheelers is
expectedvery high due to following factors: Improved life style of
people Income of people Prices of four wheelers Price of fuel
CURRENT ISSUES FOR UNION BUDGET 2013 Excise duty on SUVs is
hiked from 27 to 30%. The duty on high capacity motorcycles (800cc
or more) hasbeen increased to 75% (from the existing 60%). The duty
on second hand vehicles has been raised to 125%(from 100%). The
Indian government only allows the importof right-hand-drive used
cars that are up to 3 years old. Jawaharlal Nehru National Urban
Renewal Mission(JNNURM) is proposed to go up to Rs 14,873 crore
from theRs 7,383 crore provided this year. Duty on CBU cars in this
budget is 100 % (up from 75%). Cars like the Toyota Innova,
Mahindra Scorpio & Tata Safariare sure to suffer from price
hikes of about Rs. 25,000 30,000.
CONCLUSIONThe auto component industry was growing graduallyand
was making significant developments in domesticas well as in
international market till 2006-07. Theinternal barriers in the
country and constraints atinternational level had sluggish down the
industrygrowth, these barriers predominantly are hindranceslike Tax
structure especially the disparity in customand excise duties on
the raw material of autocomponents, and automobiles. The
unavailability ofresources at reasonable cost for example-Power,
Skilled Labour, Technology etc is also a majorconstraint. The
challenges are mainly to overcomewith these hindrances and sustain
into internationalcompetition with other low cost countries.
SUGGESTIONS There is need to promote and sustain
internationalcooperation between Governments and industry. There is
need for coordinated research anddevelopment, standardization of
designs andbroader technologies, effective cost cutting toenhance
affordability and loosening of tradebarriers across the globe.
There should be separate measures, which requireaddressing at the
national and international levels.
CONTD Single tax across the country is an ideal situationand
possibilities of this should be explored. Labour laws reforms to
facilitate better productivityand reduction in manpower costs as
has alreadybeen committed by the Government should beexpedited.
Greater tax incentive on expenditure incurred onresearch and
development in automotive sector. Easier availability of market
credit for fundingautomobile acquisition is required.