RESEARCH REPORT “Automobile Industry in India”
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RESEARCH REPORT ON “Automobile Industry in India” Submitted under the partial fulfillment for the award of M.B.A. Batch (2008-10) Submitted To: - Submitted By:- Prof. C. lal PRAVEER SINGH (Director) MBA-(VIth sem) 0818470029 1 Research report On Automobile Industry in India Submitted By: Praveer singh In partial fulfilment of the requirement of MBA degree of U.P. technical University,Lucknow. Session: 2008-10 Submitted To:-Prof. C.lal Enrolment No: Roll No: 081847048911 0818470029 S INSTITUTE OF MANAGEMENT SCIENCES-VARANASI (SHEPA) Nibia bachchaon VRM Bypass Varanasi - 11 2 Institute of Management sciences (IMS) College code – 184 Nibia, Bachchaon, Varanasi 3 CERTIFICATE This is to certify that Mr. Praveer singh has completed his research report entitled “Automobile industry in India” in partial fulfillment of the requirement of Master of Administration of U.P. Technical University, Lucknow. The report contains the observations and opinion of the student himself . The project report submitted by Mr. Praveer singh Roll No. 0818470029 is of standards expected of an MBA student of UP technical University. Signature (Prof. C.Lal) Nibia, Bachchaon, Mohansarai-Mughalsarai Bypass Road, Varanasi-11 Phone No.: 0542-2230438, 3090984 4 DECLARATION I here by declare that all the information collected is correct in accordance with the findings of research topic. It has been prepared purely for academic purpose. PRAVEER SI#$% &.B.A.-(VIth sem) *+,+-.**/0 5 ACKNOWLEDGEMENT Research work is a combined effort, so one should be thank all that have helped in making report purposeful. Hence I take this opportunity to thank all that have been instrumental in helping me to prepare this report. It is great honor to be assigned this topic. First of all I would like to thank God who shows his blessing upon me in each and every step I am immensely grateful to Mr. A. Pandey for his continuous support and guidance. I also want to thank Director Prof. C. Lal Sir for providing me this opportunity. I also want to thank all teachers, the staff member and library members for their valuable advice and guidance which helped me to make this report purposeful. I specially wish to thank all other people directly or indirectly related with my research and my friend as without their valuable support this report would not have been possible. PRAVEER SINGH 6 PREFACE The automobile industry has grown by leaps and bounds in past decades. With every year new milestones have been achieved. With globalization, technological advancement and transfer of technology has revolutionized the sector. This research is carried out to assess the various components of automobile Industry. Also to analyze further opportunities and potential of automobile sector of India. 7 Content Chapter – 1 page o Industry Profile Indian automobile industries Growth in no Of companies( Investment climate) 1uture development e2pected( Out loo3 ) Opportunities and 4hallenges Posed By Recent Developments Recent Developments and Issues 1acing the Indian Automotive Industry S6O7 Analysis 7ractor Industry - Part of Automobile Indu List of 4ar &anufacturers 4ar Sales Statistics India India's auto industry comes of age Green rating for automobile sector 4urrent status of Indian Automotive Industry Production [Green page] Chapter 2 o Research Methodology of the project Problem Formulation Objective of the project Scope of the study Method of Study-Whether universe or sample Source of information Statistical tools and techniques Limitation of the study Significance of study - To the company - To the industry - To the consumer - To the Govt. - To the Academicians etc 8 Chapter 3 o Abstract( outcome thrugh data ) Chapter 4 o Conclusion o Suggestion & Recommendation Annexure – Big tables/ Rules etc Bibleography 9 10 Honda Small Car Maruti R3 Tata Aria Concept Concept Toyota Etios Small Toyota Etios Mercedes Car Sedan GL Class 11 Royal Enfield Classic Honda Unicorn Mahindra BattleGreen Sports Concept Concept MotorCycle Yamaha R15 Honda CB Honda White Twister VFR1200R Chaptor-1 12 INDIAN AUTOMOBILE INDUSTRY Overview 13 India’s automobile sector consists of the passenger cars and utility vehicles, commercial vehicle, two wheelers and tractors segment. The total market size of the auto sector in India is approximately Rs 540 billion and has been growing at around 8 percent per annum for the last few years. Since the last four to five years, the two wheelers segment has driven the overall volume growth on account of the spurt in the sales of motorcycles. However, lately the passenger cars and commercial vehicles segment has also seen a good growth due to high discounts, lower financing rates and a pickup in industrial activity respectively. The automobile industry is fairly concentrated, as in most of the segments two to three players have cornered a major chunk of the total sales. For instance, in passenger cars segment, MSL, Tata Motors and Hyundai Motors control around 85 percent of the total annual sales. Similarly, in the two wheelers segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute around 80 percent of the total sales and in the commercial vehicles segment, the market leader Telco controls around 56 percent of the total annual sales. The auto components industry on the other hand is highly fragmented, though there are dominant players in some of the critical segments. Investment climate Given the high growth expectations and a liberal government policy, the investment potential in the India auto sector is huge. CRIS INFAC is forecasting a 12-15% annual growth in the passenger car sales, 6-8% in commercial vehicles and around 10% in two wheelers. Several passenger car makers have already achieved near full capacity utilization and are expanding. Almost all the major automobile manufacturers such as GM, Ford, DaimlerChrysler, Honda, Toyota, Hyundai, and Fiat (with the exception of Volkswagen, which is planning to set up manufacturing shortly) already have made significant investments in India. In the next 2-3 years, the passenger vehicle industry is expected to see investments of more than Rs 30 billion. Similarly, two wheeler industries are expected to attract investment amounting to Rs 10 billion. There has also been a surge in exports of cars, utility vehicles and two wheelers. The expected growth in domestic sales and exports of vehicles also offers significant opportunity for investors to invest in the auto ancillary industry. Already several international suppliers such as Delphi, Visteon, TRW, Johnson Controls, Denso and Dana, have set up manufacturing facilities and are expanding rapidly to serve not only the domestic market but also to supply to their global customers. Another 14 attractive area of investment for vehicle and parts makers is research and design, to take advantage of India’s low cost advantage. However, investment in commercial vehicle manufacturing looks relatively unattractive, given the current size and structure of the Indian market 15 Outlook The expected rise in income levels, wide choice of models and easy availability of finance at low interest rates will drive growth in passenger cars segment, which is likely to be over 12 percent per annum for the next four to five years. Two wheelers growth is likely to marginally slow down, but still grow at an average annual growth rate of around 10 percent. The commercial vehicles segment is likely to grow at a trend rate of 6- 8 percent driven mainly by the Increase in industrial and economic activity on account of the expected growth in the economy, though annual growth rates may fluctuate widely with the cyclical ups and downs of the economy. Tractor industry growth is likely to turnaround and post a growth in volumes in 2004-05. However, it will post a moderate growth of around 4-5 percent annual growth rate over the medium term. If we look into the other economies we find that • Japan Automobile Manufacturers Association, the nation churned out a total of 859,677 cars, trucks and buses in November 2009, up by 0.5% YoY and marking the first YoY rise in 14 months. • China made a sales figure 13 million units this year, including commercial vehicles. • The China Association of Automobile Manufacturers has released a report saying that the country’s auto exports were 40,600 units in November, up 13.43% year on year or 11.87% month on month. Below is the chart as on September 2009 of global auto productions. Worldwide Car Sales September 2009 Region September 2009 Total Sales % Change from September 2008 EU+3* 388,136 +6.6 China 1.33 Million +78.0 US 745,997 -22.7 Japan 321,137 +3.5 Brazil 308,718 +19.6 India 129,683 +21.0 Russia 117,981 -58.0 Here also we find comfortable growth figures being posted by Asian economies in automobile sector. Now a question might come up in the mind of my readers that when US is struggling and have managed to come out of the major downtrend in US auto industry then in 2010 how India and other Asian automobile sectors will sustain. India is now on e of the hottest destination of auto sector growth.UK and US companies are already in the path of negotiations and various types of partnership projects with Indian companies to enter Indian auto market. At the same time we find that across the globe every one is coming with small car deigns and models to suit the purpose of the common mass of people of any economy. We don’t find those days of big cars and luxury cars in the showrooms ofautomobiles. China is among the leader to bring such car models to the world auto market. The car market is growing at a 16% rate annually, despite the depressed first half of the fiscal. And small car growth is the fastest.