The current global car market is expected to grow from 44 million to 64 million by 2002 due to the development of China (who at present have 680 people per car), India, the Pacific Rim and South Africa
Environment - EU Environmental ministers accepted an offer made by the European Automobile Manufacturer’s Association to voluntarily cut the amount of CO2 emitted from car exhausts over the next 10 years. Company Cars - 45% of UK market fleet car sector, favourable deals on leasing, distortion of registration figures. Taxes meant taking payment in lieu of company car and buying own smaller car. Legislation - from 2002 taxed by number of miles and emissions Competition - legal restraints on competition within the EU car industry are expected to drop substantially over the next 5 years Taxes and Duty - MOT, price increased. Road tax to be directly linked to amount of emissions from next year. Fuel duties – SEE NEXT SLIDE
Subsidies - Government protection for Renault, Peugeot and Fiat to disappear by 2000
Excess Capacity - foreign imports. Supply>Demand lead to spending heavily on marketing and new product design. 4/2/99 80 surplus assembly plants- 15mn more s than d. 6mn cars more produced in Europe than can be sold. Up to 80% UK production exported.SEE NEXT SLIDE.
Economies Of Scale- $1bn for new model - need large operator Diversification Ford - 81% Hertz. Finance subsidiary, Ford Motor Credit. Also into other segments of the market - suv’s etc - see Ford below. Mergers and strategic alliances - Ford 33% of Mazda, Aston Martin, Jaguar, Lincoln, Mercury, Volvo (Sold car division to Ford to have the funds available to purchase truck builders Scania, who where actually taken over by VW), Land Rover. Allianz Cornhill (insurer) and its approved repairer network. General Motors 35% of Isuzu, and equity swop joint venture with Fiat. Daimler Chrysler. Chrysler and Mitsubishi. VW - Rolls Royce. Rover and Honda (strategic alliance)- Rover to BMW - broken up and sold. Renault 36.8% stake in Nissan. 20 large players soon only 5 or 6. Oligopoly in US market.
Environment: Offering low-emission car is a method used by car makers to expand sales in the mature car market. GMs battery operated EV1 fell flat because it required frequent rechargings. Now the major automakers are investing in fuel cells – devices that convert liquid hydrogen into electricity. DaimlerChrysler has a prototype that it expects to get to market by 2004; Ford, GM, BMW and Honda all have announced plans to market competing versions that same year. (taken from Hoovers online) Environment - SEE NEXT SLIDE Aluminium cars weigh half as much as similar steel vehicles so fuel economy is improved by approximately 40%. CO2 reduced by 20% over vehicles lifetime.
Fashions and taste - W.European trend towards convertibles and MPV’s(people carriers) Redundancies - Layoffs at Longbridge and Dagenham ( has been on a 4 day week). Ford - 8000 job losses 2000 in Europe.
lower prices SEE NEXT SLIDE
Safety - Safety sells, air bags for passengers. Plant efficiency - UK plants 20% less productive than best US plants because of work practices, indirect labour costs and infrastructure Gizmos - New Daewoo MPV has a Playstation option for passengers. Use gadgets to differentiate.
Many foreign competitors entered the market in the early 1980s. During this time the UK car industry had a very high strike rate, almost ten times the national average, firms such as Nissan entered and negotiated strike-free deals. (taken from online report – Productivity and foreign car ownership in the UK car industry). Aside: possibly could add the state of relations in the UK under threat of entry. East Asian companies/labour: Investment per employee was over five times as high in foreign-owned establishments as in domestic owned in 1992 more than in 1980. The human relations seem to be much better in foreign owned establishments, possibly encouraging better employees toward those institutions and away from indigenous. This ultimately may reduce the competitiveness of domestic firms and make it easier for foreign firms to enter. Quotas reduced or abolished - EU quotas on Japanese cars are due to decrease next year.
High - price reduction - resistance to before as would have lead to rationalisation and plant closure Imports By Individuals - buying from continent Distribution Channels - P and O importing cars from the continent. Large Number Of Substitutes Second Hand Market- prices in free fall after the reduction in price of new cars. Trend for private car owners to buy low mileage, second cars. Largest depreciation occurs as soon as drive a new car out of the show room.
New Registrations – now new registration letter twice a year. Dealerships:GM is buying up independent dealers in order to sell cars through its own retail outlets
Alternative Fuels – gas in petrol stations appearing in the UK. Alcohol used in Brazil. Indian food manufacturer in NW England uses the oil from frying to power the delivery vehicles.
HistoryThe first car ran on Indias roads in 1897. Until the 1930s, cars wereimported directly, but in very small numbers.
* 1897 First Person to own a car in India - Mr. Foster ofM/s Crompton Greaves Company, Mumbai * 1901 First Indian to own a car in India - Jamshedji Tata* 1905 First Woman to drive acar in India - Mrs. Suzanne RD Tata
The Growth Journey Pre 1983 1983-1993 1993-2007 2007-PreClosed market Japanisation - GOI- Suzuki Delicensing of sector in joint venture to form Maruti 1993 Udyog • Global major OEMs start• Growth of market assembly in India (Toyota,limited by supply • Joint ventures with GM, Ford, Honda, companies in commercial Hyundai)• Outdated models vehicles and components • Imports allowed from Era of globalisationPlayers and Players April 2001; alignment of• Hindustan Motors duty on components and evolution of India as • Maruti Udyog a global• Premier parts to ASEAN levels • Hindustan Motors manufacturing hub• Telco • Implementation of VAT • Premier• Ashok Leyland • Telco• Mahindra & Mahindra • Ashok Leyland • Mahindra & Mahindra
About Automobile IndustryIn recent years the automobile industry in India has grown by leaps and bounds.In India it is one of the largest in the world and one of the fastest growing globally. The Indian Automobile Industry ismanufacturing over 11 million vehicles and exporting about 1.5 million every year.
Automotive Companies in India Major Indian Companies Major Multi-national companies
Top Automobile Players in IndiaMaruti Suzuki India LimitedHyundai Motor India Limited Tata MotorsMahindra & Mahindra Limited
General Motors India Private Limited Honda Siel Cars Inia LimitedToyota Kirloskar Motor Private Limited Hindustan Motors