CHAPTER-1 INTRODUCTION This project is made on the project title ³Comparative analysis of consumer preference between Hyundai͛s i-10 and Maruti͛s wagon-R Jaipur city´ The purpose of this project is to know consumer preference about i-10 & wagon-r. To create awareness about the i-10 features. To create awareness about the Vehicle of Hyundai Company. To create awareness & to tell the people what is importance of features of vehicle. Today there is a cut throat competition in the market and an Automobile industry cannot escape itself from this competition. So its became very important for every company of this industry to provide better services to aviary the comparative advantage So this project is very important for Morani Hyundai Ltd to increase the satisfaction level of its customers . So that it can retain its customer for a long time and can maintain good retains with its customer to increase its profitability with customer satisfaction 1 CHAPTER-2 AUTOMOBILE SECTORE Automobile Features Production volumes in automobile companies have grown by around 2% per year over the last 20 years; However, its relative importance in terms of market value compared to other industry sectors has decreased significantly. Today the automobile industry represents less than 2% of the total European market capitalization, while 20 years ago the sector was almost double in relative size. Only about 1/4 of over 50 car manufacturers who were operating 40 years ago have been able to retain their Economic independence. Despite this consolidation, overcapacity in the industry is a constant issue, keeping pricing and the return on invested capital under pressure when the cost of capital can often not be covered. A high fixed cost base ensures that companies follow a growth strategy. However, this does not mean more jobs in the sector, but rather that fewer employees in lower-cost countries have to produce more. As a result of tough competition, product cycles have become shorter which creates a crowded market place with newer and fresher products. This also means that 1) the competitive advantage period of a model, or technology, decreases, and 2) research & development costs have to be covered more quickly. Recognizing market movements first, or even creating them, is a key success factor for automobile companies. For example, early detection of the rising demand for hybrids was an important marketing move for Toyota, while other companies may be launching their hybrids when competition is already quite intense. The industry is mature, especially in the European and American markets, while some Asian markets (e.g. China and India) still offer some growth. Overall, demand growth is likely to stay below the nominal GDP (Gross Domestic Product) expansion rate. In all consumer markets, whether they are low-priced household goods, food, apparel, or cars, a clear polarization exists. On one side there are people who can afford to buy very expensive automobiles, while on the other, demand for low-cost vehicles is increasing. This trend can be expected to continue and car manufacturers have to ensure that they are not going to be lost in the middle. The regulatory focus on greenhouse gas emissions, as well as the increasingly tight regulations on air pollutants, is creating pressure for automakers to reduce fuel consumption, as well as emissions from internal combustion engines. The trend is moving towards developing drivetrains based on new technologies such as hybrids and fuel cells. Branding, technological leadership (especially in fuel efficient propulsion technologies and safety) and consequently differentiation, as well as good supplier relations will be the key success factors for the automobile company of the future. 2 Deutsche Bank, Global Automotive Industry, The Drivers: How to navigate the auto industry, 27 August 2004. This Euro if sector report has been compiled with research by SAM. It describes the major social and environmental challenges facing the European automobile industry and the associated risks and opportunities these pose for long-term returns. Notwithstanding the significant potential environmental risks and opportunities highlighted in this document, the car industry has achieved significant improvements in terms of transparency over past years. Although the auto parts makers are integrated parts of the value chain, specific issues uniquely relevant to Them are not addressed here. Automobile Trend t - 3rd in a series A Key Challenges The ability of people and goods to move and to be moved in an efficient way is essential for economies to prosper. However, if current trends continue, the growth in transport activity will lead to an increase of greenhouse gas (GHG) emissions to a level that is not sustainable. There will be a substantial negative impact not only on social and environmental values, but also on economic growth.2 The automotive sector is a major source of CO2 emissions, representing approximately one quarter of global anthropogenic GHG emissions. In order to follow the Kyoto protocol, several of the world¶s major automotive markets have adopted policies to reduce vehicle-related CO2 emissions. In the typical life cycle of an automobile 75% of automotive-related emissions occur during vehicle use (19% during fuel production, 4% during the production of materials/components, and 2% during assembly work).3 Thus, fuel economy and CO2 emission standards offer the best prospect for reducing vehicles¶ contribution to climate change. In the European Union, a dialogue between regulators and the automotive industry trade association (ACEA) inspired a voluntary commitment from the industry to reduce CO2emissions from passenger cars to a level of 140 g CO2/km by 2008. Depending on progress, ACEA may extend the target to 120g CO2/km by 2012. According to the Clean Air for Europe (CAFE) programme the pollutants of most concern for human health from road transport are airborne particulate matter (PMs) which are precursors of smog and other poor air quality problems, as well as the ozone that is formed by the reaction between hydrocarbon (HC) and nitrogen oxide (NOx). While the ACEA voluntary agreement (see key challenge ³Fuel Efficiency & Climate Change´) targets the reduction of CO2 levels, Euro 4 and Euro 5 aim to regulate the vehicular emission of PMs, HC and NOx. The Euro 4 standard came into effect in 2005. Euro 5, which could be introduced by mid-2008, has been submitted by the European Commission, although its final form is still unclear. The main priorities are to further reduce emissions of PM and No with the introduction of a limit value of 5 milligrams per kilometer for PM (-80%) and a NOx limit value of 200mg (-20%) for diesel cars. The commission is also considering proposing reductions in the emission limits for petrol cars (a 25% reduction in NOx as well as in hydrocarbons). 3 In 2000, approximately 1.2 million people worldwide died as a result of road traffic injuries, and another 7.8 million were seriously injured.5 In Europe, every year road traffic accidents kill more young people aged 5 to 29 than any other cause of death.6 The number of road deaths by inhabitant sharply rises in the early stages of motorization when people can afford to buy motorcycles first, and then cars as is happening in India and China. The World Health Organization in Europe considers speed as the single most important determinant for safety in road transport systems. They call for new road safety thinking that builds safety into the transport system, and improving implementation mechanisms and tools to achieve this. Automobile companies are very large employers. Some major companies in Europe have over 300,000 employees worldwide. A strong workforce provides the basis for a successful company. In order to foster their commitment, automobile companies must continually invest in training and development of their employees. Labor costs represent on average only about 10% of the sales price of a car while material costs are responsible for around 50%. R&D expenses will rise with increasing technical complexity of the product as well as with tougher safety and environmental regulations. Additionally, marketing costs are likely to go up as the need for differentiation will persist. Pressure to make cost elements, like labour, more flexible and to continuously restructure or even outsource part of operations is likely to increase. As car manufacturers are becoming assemblers, instead of manufacturers, the integration of suppliers into vehicle development and production is increasingly essential and a decisive factor in competition. A potential issue for car manufacturers is their rising dependence on their suppliers for innovation and quality. It is therefore necessary for the car company to integrate these criteria into the selection process. In the context of climate protection the western industrial nations would have to lower their GHG emissions by 60% to 80% by 2050 in order to limit global temperature increases to no more than 2°C of pre-industrial levels.4 This means that GHG emissions would have to be reduced by 2%-3.5% per year. On the assumption that car traffic increases by 2% per year, efficiency would have to increase by around 4%-5%, which is significantly higher than the commitment from the European automotive industry of 140 g CO2/km by 2008. The tougher ACEA objectives will be substantially more difficult and costly to meet since it might require the hybridization of the drive train and more dramatic shifts in the product portfolio. To meet the target by 2008, carmakers need an annual rate of improvement of 3.3%, suggesting that they may have to accelerate the introduction of expensive new technologies to boost fuel efficiency. Carmakers recognize that this will be challenging. To meet current imposed carbon constraints, Original Equipment Manufacturers (OEMs) can turn to a wide range of carbon efficient measures, such as incremental technologies, alternative fuels, hybrid vehicles, and, in the more distant future, fuel cell technology.