Automobile Sector

PRESENTATION ON AUTOMOBILE INDUSTRY

INTRODUCTION TO AUTOMOBILE SECTOR • It begins as early as 1769. • The automobile sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. • It contributes about 4 per cent in India's Gross Domestic Product(GDP) and 5 per cent in India's industrial production. • Indian Automobile sales growth rate would be 9.5 % by 2010.

FACTS • • • • •

9th largest automobile industry . 2nd largest two-wheeler market, 4th largest in Heavy Trucks. 2nd largest tractor manufacturer. 11th largest passenger car market and expected to become 7th largest by 2016. • Sale of passenger cars in India is likely to grow at an average of 14.9% each year to touch 2.1 million mark by 2010.

KEY PLAYERS  

Maruti Hyundai Ford Sonalika International Force M&M Skoda Mercedes Benz Volkswagon

TATA Honda GM HM Toyota Kirloskar Fiat Audi BMW Mitshubishi

AUTOMOBILE

2 WHEELL ER

3 WHEELL ER

PASSENG ER VEHICLE

COMMERC IAL VEHICLE

2 WHEELER

• Market leader Hero Honda with market share 50%

3 WHEELER

• Market leader Mahindra & Mahindra with market share 42%

PASSENGER VEHICLE

• Market leader Maruti with market share 52%

COMMERCIAL VEHICLE

• Market leader Tata Motor with market share 61%

SEGMENTATION OF AUTOMOBILE INDUSTRY •

Following is the segmentation that how much each sector comprises of whole Indian Automobile Industry

.

Indian Auto Market Growth for the year 2007-08 • The automobile industry crossed a landmark with total vehicle production of 10 million units. • Car sales was 8,82,094 units against 8,20,179 units in 200708. • The two-wheeler market grew by 13.6 % with 70,56,317 units against 62,09,765 units in 2007-08. • Commercial vehicles segment grew at 10.1 % with 3,50,683 units against 3,18,430 units in 2007-08 • The domestic automobile industry sales grew 12.8% at 89,10,224 units as against 78,97,629 units in 2007-08.

• Medium and heavy commercial vehicles managed a growth of 4.5%. • Light commercial vehicles sales growth was 19.4% at 1,43,237 units against 1,19,924 units in 2007-08. • Three-wheelers sales rose by 17% at 3,60,187 units against 3,07,862 units in 2007-08.

sales PERFORMANCE IN 2009

GDP • Directly and indirectly it employs more than 10 million people. • The market value of Automobile Industry is more than US$8 billion. and Contribution in Indian GDP is near about 4% and will be double by 2016. • The automobile industry in India grew at rate of 11.5 % over the past five years, but growth rate in last year 2008-09 was only 0.7%. • FDI inflows in Automobile Industry 2008-09 was Rs.5,212 Cr an increase of 47.25% compare to 2007-08. • In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand.

SWOT OF AUTOMOBILE INDUSTRY STRENGTHS • Large domestic market • Sustainable labor cost advantage • Government incentives for manufacturing plants • Strong engineering skills in design • Able to achieve significant gains in productivity WEAKNESSES • Low labor productivity • High interest costs and high overheads • Rising cost of production • Low investment in Research and Development

OPPORTUNITIES • • • • •

Commercial vehicles Heavy thrust on mining and construction activity Increase in the income level Cut in excise duties Rising rural demand

THREATS • Rising interest rates • Cut throat competition • Lack of technology for Indian Companies

FUTURE PROSPECT OF INDIAN AUTOMOBILE SECTOR • Automobile industry expert predicts that by 2050 every sixth car in the world will be for Indians. • By 2010 India will take over Germany in sales volumes and Japan by 2012 • The Indian automobile component industry is estimated to triple from USD 63 billion to USD 190 billion within a span of six years by 2012. • Industry analysts predict this industry to touch USD 13000 million mark by 2010, a cumulative growth of 9.5% annually. • It is said that for every Re 1 spent, the auto sector returns Rs. 2.24 to the Indian economy.

CAREER POSITION DETAIL FOR MBA STUDENT • • • • • • •

State - Head- Commercial Regional Manager- Commercial Regional Manager- Refurbishment Senior Manager-Refurbishment Sales Executive "MIS Manager“ HR/Industrial

AUTOMOBILE JOB DESCRIPTION • To coordinate with the different department . • To sketch new ideas . • To get opinions of the users and clients and work towards getting better results. • To plan, implement and design the blueprints for every part of the model. • To build up prototypes for a new model • Building up the actual model • To conduct various quality tests

EDUCATION REQUIREMENT FOR AUTOMOBILE JOBS • Bachelor’s Degree • Diploma in Automobile/ Mechanical engineering • Post Graduate degree • Master’s degree • MBA (Master’s of Business Administration)

SKILLS NEEDED • Computer literacy • Communication skills • Risk identification skills • Analytical skills • Technical skills

AUTOMOBILE JOB SALARY • Beginner (0-1 years of experience) Monthly: Rs.8,000 to Rs.18,000 Annual: Rs.0.96 lakhs to Rs.2.16 lakhs • Professional ( 2-3 years of experience) : Monthly: Rs. 18,000 to Rs. 30,000 Annual: Rs.2.16 lakhs to Rs. 3.60 lakhs • Automobile Manager professional ( 5 and above  years of experience) Monthly: Rs. 30,000 to Rs. 50,000 Annual: Rs.3.60 lakhs to Rs. 6.00 lakhs

JOBS IN SELLING UNITS (SHOWROOMS) • CRM (Package: Rs 12000 to Rs 18000) + Incentives • HR Manager (Package: Rs 12000 to Rs 18000) • Sales Manager (Should be experienced) salary starts from Rs 20000 + incentives. • Event Manager (Package: Rs 12000 to Rs 18000)

Cities where it will be easier to find an Automobile job • • • • • • • • • •

Mumbai Delhi Chennai Pune Hyderabad Gurgaon Bangalore Chandigarh Kolkatta Ahmedabad

PROBLEMS RELATED TO RECRUITMENT IN AUTOMOBILE SECTOR • Attrition and skill migration • Talent Crunch • Lower Salary hikes

MICHAEL PORTER FIVE FORCE MODEL • DEGREE OF RIVALRY • THREAT OF SUBSTITUTES • BARRIERS TO ENTRY  • SUPPLIER’S POWER • BUYER’S POWER

INTRODUCTION TO TATA MOTORS • Tata Motors Limited is a multinational corporation headquartered in Mumbai, India. Part of the Tata Group • Established in 1945, when the company began manufacturing locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. • Tata Motors has a consolidated revenue of USD 16 billion after the acquisition of British automotive brands Jaguar and Landrover in 2008. • It is India's largest company in the automobile and commercial vehicle sector.

INTRODUCTION CONTINUED…. • The company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer. In India. • Tata Motors is a dual-listed company traded on both the Bombay Stock Exchange as well as on the New York Stock Exchange. • In 1998 it launched Tata Indica, India's first fully indigenous passenger car. • Tata ranks as the leader in every commercial vehicle segment, and is in the top 3 makers of passenger cars. Tata Motors is also the designer and manufacturer of the iconic Tata Nano, which is the cheapest car in the world.

SWOT STRENGTHS • The internationalization strategy • Expertise. • Intensive management development. • Successful alliance with Italian mass producer Fiat since 2006. WEAKNESSES • The company's passenger car products are based upon 3rd and 4th generation platforms. • Tata has not got a foothold in the luxury car segment in its domestic, Indian market.

SWOT CONTINUED……. OPPORTUNITIES • Purchased the Land Rover and Jaguar brands from Ford Motors for UK £2.3 million in 2008. • Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around USD $16 million. • Nano is the cheapest car in the World introduced by TATA.

SWOT CONTINUED…… THREATS • Other competing car manufacturers have been in the passenger car business for 40, 50 or more years. • Sustainability and environmentalism could mean extra costs for this low-cost producer. • Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. • The price of steel and aluminium is increasing putting pressure on the costs of production. • Many of Tata's products run on Diesel fuel which is becoming expensive globally and within its traditional home market.

MARUTI UDYOG LIMITED • Maruti Suzuki India Limited is a publicly listed automaker in India. • It was the first company in India to mass-produce and sell more than a million cars. • It is the market leader in India and on 17 September 2007, Maruti Udyog was renamed Maruti Suzuki India Limited. • The company headquarter is in Gurgaon,Haryana.s • Established in December 1983, Maruti Suzuki India Ltd. has ushered a revolution in the Indian car industry.

INTRODUCTION OF MUL CONT….. • This car is meant for an average Indian individual which is affordable as well as has elegant appeal. • Maruti Suzuki India Ltd. is the result of collaboration of Maruti with Suzuki of Japan. • The company has crossed the milestone of becoming the first Indian company in March 1994, by manufacturing in totality one million vehicles.

SWOT STRENGTHS • Established distribution and after-sales networks • Understanding of the Indian market and ability to liaison with the government • Ability to design products with differentiating features • Brand Image • Experience and Know-how in technology WEAKNESSES • Lack of experience with the foreign market • Inexperience with foreign workforce • Heavy Import tariffs

SWOT CONTINUED……. OPPORTUNITY • Increased purchasing power of Indian middleclass category • Govt. subsidies • Tax benefits • Foreign collaboration THREATS • Threats from Chinese manufacturers • Indian as well as foreign competitors

Mahindra & Mahindra • Incorporated on 2nd October 1945 by two brothers Mr. J C Mahindra & Mr. K C Mahindra. • Converted into public limited company in 1955. • Started with manufacturing General Utility Vehicles. • Also started manufacturing Tractors and LCV(Light Commercial Vehicles)

Conti… • Major Players in Utility vehicle segment and Tractor segment. • One amongst the top five tractor manufacturing companies in the world • Very indigenous regarding very little help from foreign technology sources. • Presence in countries of Europe, Latin America, Africa and United States of America

SWOT Analysis STRENGTH • Very high Brand recall in Tractors Market. • Continuous Innovation. • Strong Research & Development WEAKNESS • High dependence on Rural Market.

OPPORTUNITY • 10 tractors per 1000 hectares of agricultural area, much below world average. • Huge untapped Market. THREAT • Entry of Competent Foreign & Domestic Players in Tractors Market.

HERO HONDA • Joint venture – Both Hero Cycles(India) and Honda Motor Company (Japan) holds 26%stake. • Incorporated in January 1984. • Market leader in Two Wheeler Segment with 55 % of domestic market . • Two Manufacturing Units Located at Gurgaon and Dhaurhera in Hariyana.

SWOT Analysis STRENGTH • Excellent ability to Understand Customer Needs and deliver best suitable products. • Recognized and established Brand name. • Products with Superior Performance, Low maintenance and high resell value. WEAKNESS • Honda Motor Company is dominant partner. • Lack of technical capabilities of Honda Motors may degrade the performance of the company and its products.

OPPORTUNITY • Global Expansion. • Expansion of Target Market • Huge Indian market. THREAT • Honda and Scooter India can take away market Share and form joint venture to go sour. • Emergence of strong Players. • FDI Announcement 100 % may attract foreign players to domestic market.

CONCLUSION Industry across countries will have to meet challenges of newer technologies, alternative fuels and affordability of automobiles by people at large through constructive cooperation. The earlier we are able to achieve this the better it would be for the world performance.

K N A H T

U YO

Yugesh Kumar Dubey