STEPLEED analysis on indai and uganda for automobile industry....

1. A
GLOBAL COUNTRY REPORT
ON
“AUTOMOBILE INDUSTRY IN UGANDA”
Submitted to
(SAL INSTITUTE OF MANAGEMENT)
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF
Faculty Guide
Dr. Viral Bhat
Prof. Sakun Jadav
Prof. Saloni Saraf
Submitted by
Hardik Thakar - 128070592162
Kajal Sitwala -128070592145
Tirth Kaushal – 128070592050
Radhika Kansara – 128070592048
Nirav Patel – 128070592091
Rinki Ladhwani - 128070592054
MBA SEMESTER III
(SAL INSTITUTE OF MANAGEMENT)
MBA PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
Dec -2013

2. Declaration
We, Hardik Thakar, Kajal Sitwala, Tirth Kaushal, Radhika Kansara, Nirav
Patel, Rinki Ladhvani , hereby declare that the Report for GLOBAL
COUNTRY REPORT entitled “AUTOMOBILE INDUSTRY IN UGANDA” is
a result of our own work and our indebtedness to other work publications,
references, if any, have been duly acknowledged.
Enrollment no.
128070592162
128070592050
128070592145
128070592091
128070592048
128070592054
Name
Signature
Hardik Thakar
Tirth Kaushal
Kajal Sitwala
Nirav Patel
Radhika Kansara
Rinki Ladhwani
Place: ___________
Date: ___________
Institute’s Certificate

3. Certified that this Global Country Report Titled “AUTOMOBILE INDUSTRY IN
UGANDA” is the bonafide work of Hardik Thakar – 128070592162, Kajal Sitwala
-128070592145, Tirth Kaushal – 128070592050, Radhika Kansara – 128070592048,
Nirav Patel – 128070592091, Rinki Ladhvani - 128070592
, who carried out the research under my supervision. I also certify further, that to the
best of my knowledge the work reported herein does not form part of any other project
report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate.
Signature of Guide
Prof. Sakunt Jadav
Signature of Guide
Prof. Saloni Saraf
Signature of Principal/Director
Dr. Viral Bhatt

4. PREFACE
The M.B.A programmed is well structured and integrated course of business studies.
The main objective of Global Country Report study at M.B.A level is to enhance the
expertise and proficiency of the student in a specialized area supplement to the
theoretical study of business management in general. Global Country Report study
helps to gain practical knowledge about theoretical concept of the study and implement
them in an industry or an organization. The MBA program provides student with a
fundamental knowledge of business and organizational functions and activities, as well
as an exposure to strategic thinking of management.
Profession gives us theoretical knowledge of various subjects in the college but they are
practically exposed of such subjects when we apply with real life example. It is only the
Global Country Report study through which we come to know that How concept of the
studies are applied to the organizations in real life.
Here, in the project report, we learn about detail study of topic STEEPLED and get the
knowledge and the understanding of various issue related to the country help us in the
future when I will enter the practical field.
Project study is an integral part of MBA and each and every student has to undergo with
a Global Country Report study regarding one topic in particular of specialization in third
semester and then prepare a project report on the same after the completion of project.

5. INDEX
1.1
1.2
2.1
2.2
2.3
2.4
3.1
3.2
3.3
4.1
4.2
5.1
5.2
Chapter – 1 Introduction Conceptual Framework of GCR
Profile of Uganda
The Ugandan Context
Chapter – 2 Automobile Industry of Uganda
VOLKSWAGEN Information
Hyundai Information
History of Hyundai
Overall Automobile industry information
Chapter – 3 Automobile Industry of India
Introduction
Key statistics
Major Development & Investment
Chapter – 4 STEEPLED of Automobile Industry
For Uganda
For India
Chapter – 5 Business Opportunity
Opportunity in Uganda
Opportunity in India
Chapter – 6 Present Scenario
Chapter – 7 Conclusion
Chapter – 8 Recommendation
Chapter – 9 Bibliography
Chapter – 10 Annexure

6. Chapter 1
Country Profile

7. 1.1 Profile of UGANDA
History:
A review of the impact of Structural Adjustment Programs (SAPs) in Uganda was
undertaken on four aspects, namely: The Impact of Privatisation on Society; The
impact of Public Expenditure Reform and Management on Social Services Delivery;
The Impact of Liberalisation on Agricultural Production and Food Security and a desk
review on The Differences in Perceptions of Poverty.
The study on Privatisation also revealed that there were gains and loses. For
example, Government managed to achieve its fiscal objective of raising tax revenue
from the privatised companies. There was consensus that privatisation has led to
an increase in product quality and range on the market. In addition, there was an
overall rise in employment.
However, the same study demonstrates how
government had to inject a lot of money into some of the State Owned Enterprises
(SOEs) before they could be sold. In addition government was unable to prevent
asset stripping and under-valuation of net-worth of SOEs resulting in a poor recovery
of proceeds from their sale. Even when there was an overall rise in employment,
the greatest increase of jobs created was in the lower cadre with hardly new
opportunities created at top management levels for nationals. Many people were
retrenched prior to privatisation and the right for the employees to unionise was
greatly weakened.
Some of the gains obtained from the public expenditure
reforms include
macroeconomic stability and relative increase in spending on social services. The
gains were however, negated by substantial increases in the cost of delivery of the
social services amidst institutional weaknesses that did not ensure that increased
allocations were also translated into increased access to services by the poor.
Another key factor among others, which negates the gains, is the disproportionate
rise in salaries of public servants compared to the cost of living.

8. From the findings, there is overwhelming evidence that the impact of SAPs takes a
political economy dimension, with some groups benefiting from the reforms and others
being adversely affected by the same reforms, especially the poor and vulnerable
groups. For example, women and men’s roles in the economic and social domains
continue to reflect a fundamental imbalance in their access to and control over
resources and productive activities. Furthermore, the reforms have had the effect
of substituting government’s provision of services and increasing the responsibilities
that have disproportionately fallen on women. In addition, liberalisation has increased
the burden of women in a typical rural family who often carry the greater portion of
workload. It has also worsened the food security situation as households responded
to price signals within limited resources and technological base by increasing cash
crop production at the expense of food crop production.
The findings also show that conceptual and methodological approaches to defining
and measuring poverty explain the discrepancy in the perceptions between measured
and perceived poverty.
If poverty eradication is to remain central to these policies, some aspects of SAPs,
which clearly have not worked well for the poor, need to be modified, and those that
cannot work at all for the poor need to be discontinued. Therefore, a mechanism is
needed to ensure effective and genuine participation of all stakeholders in taking
these policies further and developing alternatives that are acceptable to all.
The colonial boundaries created by Britain to delimit Uganda grouped together a wide
range of ethnic groups with different political systems and cultures. These differences
prevented the establishment of a working political community after independence was a
chieved in 1962. The dictatorial regime of Idi Amin (1971‐79) was responsible for the de
aths of some 300,000 opponents while guerrilla war and human rights abuses under Mil

9. ton Obote
(1980‐
85) claimed at least another 100,000 lives. The rule of Yoweri Museveni since 1986 has
brought relative stability and economic growth to Uganda. During the 1990s, the govern
ment promulgated non‐party presidential and legislative elections.
Population and Macro:
The Ugandan population is estimated at 31,367,972 in July 20082. Uganda’s GDP in
PPP is estimated at $34.23 billion with the corresponding GDP per capita at 1,257 in
2008. The GDP is forecasted to grow at an average of 6.4% real growth rate. Services,
Agricultural and Industrial sectors comprise the greatest proportion of the GDP at
46.2%, 29%, and 24.8% respectively. Still, agriculture remains the largest source of
employment within the country. Inflation is averaged 8.5% rate in 20094.
Banking System:
Following a deep banking crisis in 1998‐1999, Uganda’s banking sector has
experienced a recovery and the regulatory environment has focused on creating
security, confidence and maintaining strong capitalization rates. The sector has
experienced tighter supervision from the Bank of Uganda, and higher capital
requirements with the passing of the Financial Institutions Act in 2004 and the Financial
Institutions Regulations in 2005. This facilitated a quick recovery of the sector following

10. the closing of several domestic banks in 1998 and 1999.
As of May 2009 there are 23 licensed banks operating in the country (See Appendix A),
22 of which are operational. Commercial banks hold approximately US$3.5 billion in
total assets made up of approximately 5 million accounts. This is equivalent to a 16%
commercial bank penetration rate given the current population.
According to the IMF, Uganda has one of the most developed financial systems
among low‐income oil importing nations (including, Ghana, Kenya, Mozambique,
Tanzania, and
Zambia) which has substantially increased in importance in the last 3 years. The
financial sector forms approximately 29.6% of the service contribution to GDP, which is
approximately US$
2.1B, or 13.5% of total GDP. Services are the fastest growing sector of the economy,
contributing 45% of total GDP (US$ 7.1 B). The latest IMF data, reports that Deposit
Money Bank assets formed 15.7% of GDP in 2007.
Uganda has made significant strides in regulating the banking sector by
classifying financial institutions into groups so as to facilitate the granting of licenses
for commercial operations. There are four tiers of financial institutions (See Appendix
A), Two Development Banks, Four Investment Banks, ten FOREX bureaus, and twenty
insurance companies.
Commercial banks are classified as tier 1 institutions, and are authorized to hold

11. checking, savings and time‐deposit accounts for individuals and institutions in local as
well as International currencies. Commercial banks are also authorized to buy and sell
foreign exchange, issue letters of credit and make loans to depositors and non‐
depositors.
The 22 banks currently operating in Uganda, hold approximately USD $3.5
Billion in assets, and approximately 61% of those assets are held by banks that are
majority owned by foreign entities (See Appendix A). The banking industry is relatively
young, with approximately 20% of all commercial bank assets held by institutions that
entered Uganda as licensed commercial banks after 1990.
1.2 The Ugandan Context
Geographical Location and Environment: Uganda is situated in the Eastern part of
Africa, bordered by the Sudan to the North, Kenya to the East, Tanzania and Rwanda to
the South and the Democratic Republic of Congo to the West. Uganda has abundant
natural resources, which, however, are under serious threat from degradation due to
poor management practices including and leading to overgrazing,
deforestation,
siltation of water bodies, drying up of wet lands and poor agricultural practices.
Poverty, civil strife, wars, conflicting policies and poor enforcement of regulations
exacerbate these environmental problems.
The Government of Uganda (GOU): Uganda is currently governed under the movement
system. The National Resistance Movement (NRM) in 1986 introduced this system.

12. Under this political system, political parties are restricted.
This is enshrined in the
national constitution, promulgated in 1995. In June 2000, Ugandans, voting in a
referendum, chose to continue with the movement system of Governance. Since
then, however, more space has been opened up to political parties, allowing them to
operate their national offices. Under the movement system, representation in the Local
Council (LC) system, which is the political structure of the local government, is through
electoral colleges, starting from the village to the district. 30% of these seats are
reserved for women, and 10% for People with Disability (PWDs).
GOU has made institutional
reforms to establish a decentralised
system of
Governance, with the prime objective of devolving powers to the districts and subcounty levels. Currently, there are 56 districts, 167 counties and 893 Sub-counties and
a total population estimated at 22 million people. Although implementation of
decentralisation started in 1997, internalisation of the system is yet to be fully realised
by the entire population and accepted by all Uganda’s development partners.
Civil Society: For purpose of SAPRI, Civil Society is used to refer to those institutions
and individuals, which are independent from the state and political parties but interact
with and influence the state. It comprises of a wide variety of organisations including:
student associations, private media, trade unions, diverse professional associations,
producer groups, intellectuals, peasant associations, informal networks, NGOs,
Community Based Organisations (CBOs) and individuals. With the perception of an
increasing space, civil society in Uganda today is growing in strength with the NGO subsector being the more active category with their role in development acknowledged but
constantly changing.
the
past,
they
Although CSOs have concentrated on service delivery in
are
now increasingly getting involved in policy dialogue with
government and at international level.
Multi-lateral Institutions:
Currently, a significantly bigger percentage of Uganda’s
national budget (roughly 52%) is dependent on external aid with the World Bank and
IMF by far the biggest lenders to Government. This gives these Development Partners
a lot of influence on the type of polices that are implemented by Government, especially
economic reform policies.
Uganda’s outstanding debt stock, mainly owed to multi-

13. lateral institutions stands at US $ 3.574 as at the end of June 2001. Debt servicing
costs remain high, although with the recent enhanced Highly Indebted Poor
Countries (HIPC) Initiative, it now accounts for 8% of export earnings. However, the
level of external debt remains a significant constraint to economic development.
Socio cultural Environment: Much as Uganda’s economic performance over the past
decade has been considerable, and national statistics indicate that absolute poverty has
reduced, with the population living below the poverty line moving from 56% in 1992 to
44% in 1997 to 35% in the year 2000, the poverty situation is still bad. The gap between
the rich and the poor has widened. The multiple faces of poverty
vary
between
districts and regions, and among different categories of the population. Poverty
remains more prevalent in the East and in the North where it is at 67%, and women are
proportionately poorer than their male counterparts.
The situation is worsened by the
HIV/AIDS pandemic, which has had adverse effects on human and natural resources as
well as household incomes. According the UN agencies country assessment of
Uganda, HIV prevalence in pregnant women was as high as 9.5% by 1998.
Uganda enjoys a rich cultural heritage stemming from the country’s ethnic diversity. The
1995 Uganda constitution identifies 56 ethnic groups. Although there has been Western
and Asian cultural and technological influence, Ugandans are bonded in ethnic groups
by common cultural values, norms, beliefs, attitudes, rituals, language, food, dress,
music and the visual arts. While some of these values are good, others, such as
early marriages and female genital mutilation, are negative and are retrogressive
to development. Of specific significance is the gross gender imbalance that penetrates
all sections and levels of the Ugandan society and is skewed against women.
Corruption is another evil that erodes the Ugandan society and can be largely attributed
to the degeneration of cultural values as a direct consequence of years of lawlessness
and turmoil.
In the area of information technology (IT), Uganda has not yet fully
taken advantage of the global revolution. Lack of appreciation of IT is exacerbated
by illiteracy and ignorance among the population, low level of technological
development and poverty, which hampers affordability of IT. Developing countries are

14. important to motor industry because collectively they form large and exclusive market.
In developing country industry is very largely made up of representatives subsidiaries of
large motor companies based on source countries. Four stages in growth
Sales and servicing: vehicles imported in on wheels in complete form and merely sold
and service and repaired.
Commercial vehicle assembly: bus and semi-truck are imported in semi knock down
form and are assembled within country.
Car assembly: car and truck are imported in completely knock down vehicle and are
assembled locally.
Motor vehicle manufacture: local manufacturer of major motor vehicle component
such as engine and body.
In Uganda:
Uganda is small but very long established market for motor vehicles. Vehicle population
is increased by 9% per annum. But it is not expected to continue.
All dealerships arc held in respect of exclusive country-wide sales, plus official
spares service, repairs and
servicing. The latter are conditions a dealer must
undertake when given the franchise by the manufacturer, and with vehicle stocks, are
the largest capital outlay to be faced. Stocks of spares alone range from £25,000 to
almost £200,000, depending on unit sales and the number of snakes and models.
Smaller dealers who handle several franchises to increase turnover are hard hit
by having to carry a wide range of spates.
The companies holding dealerships in Uganda have sprung from a variety of
backgrounds. The earliest was
formed
in
1908 to
hport cotton
seed
and
to
plant cotton. it developed into a general trading company, and as one of several
enterprises acquired the Ford franchise in 1922. The British Motor Corporation franchise
is also held by a general trading company whose tither interests include bicycles and
caterpillar tractors. A third company entered the motor trade via tractors for sugar

15. production. A second group of four large companies, all holding more than one
franchise, were formed expressly as motor
dealers.
All were originally based in
Kenya and became Ugandan about the time of independence but maintain some
operational contact with Nairobi.
A third group of six dealers, all hut one operating
on a smaller scale than those above, started as small motor repair garages,
graduating via second hand car sales to acquiring one or more, dealerships. All are
Asian owned, with owner-manager, family type organization, and hold franchises
obtained during the past ten years. The remaining two dealerships are manufacturerowned Fiat selling cars and trucks, Leyland trucks and buses.
Excepting Fiat and Leyland, the motor dealers in Uganda are locally financed in that
there is no capital investment by overseas manufacturers. Initiative in obtaining the
dealership usually also came from the local firm.
Location. All 15 dealers are based in Kampala. although they hold exclusive nights to
sell their respective makes of vehicles throughout Uganda.
Only one has up-
country branches at Srnja and Mable, and these arise from the wider trading
function of the company rather than from the motor trade itself.2 All have agents in most
towns ouii’cte Kampala, and most also have agents within the city too. Almost all
dealers told of efforts to extend up-country agent sales, but with the exception of the
Uganda Company, all estimated that at Least 90 percent of sales were made in
Kampala. This is borne out by the fact that 84 percent of all now vehicles in Uganda are
registered in Kampala)
This amazing degree of centrality arises from several function. Transportation are good
like road and rail connectivity. To get facility and financial assistance to effect the deal
customer must come into the capital city. Within Kampala there are 11 dealers have
premise along Kampala road with greatest concentration at its eastern end.
Commercial vehicle assembly, buses and Lorries from skid pack began in Uganda in
1950. There are now six assembly plants near Kampala, and seventh operated by
ministry of work. SKD industry consist of bolting together several large companies and
sub-assemblies. Tooling and machinery costing to varied from 2000 to 24000 dollar.

16. Flexibility is needed as the scale of operation is too small to require assembly work on
every working day of year. Purpose to import in skid form is to save transportation cost.
By skid cost can be saved up to 30 to 40 percent.

17. Chapter – 2
Automobile industry of
Uganda

18. 2.1 VOLKSWAGEN by CFAO: A new high-potential partnership
The first Volkswagen distribution agreements were signed at the end of May 2011,
covering passenger vehicles in Tanzania and Uganda and LCV (light commercial
vehicles) in Tanzania. The partnership should be expanded in 2012 as the marketing
agreement was secured for six different countries following a call for tenders organized
between
Volkswagen
and
a
number
of
distribution
groups.
The first vehicles have been on sale in Tanzania since late 2011 and mainly consist of
Amarok pick-ups and Tiguan and Touareg SUVs. CFAO Motors Uganda will initially be
marketing
passenger
vehicles
(Tiguan,
Touareg
and
Passat).
The new subsidiaries in these two countries will offer customers sales and after-sales
services that meet Volkswagen standards of quality, including sales advice, warranties,
spare parts and accessories, and workshops that can handle all mechanical, bodywork
and service requirements.
A legend that just keeps going
From the early 1930s the Beetle helped define the Volkswagen brand as that of an
automaker capable of tempting customers from all over the world into buying
exceptional cars. Its legend has continued unabated up to the present time based on a
simple but sensible strategy of making innovation accessible to everyone.
Prestige and innovation for everyone
Year in, year out, Volkswagen manages to deliver something special: the first synchro
system with the Passat, the VR6 engine in the Golf, the TSI direct injection engine, the
TDI diesel engine, DSG dual clutch gearbox, Park Assist and Lane Assist technologies,
etc. The brand uses this progress to provide motorists with the latest benefits of
enhanced performance as well as safety, cost efficiency and respect for the
environment.

19. Blue Motion: where good sense meets passion
Volkswagen's Blue Motion program uses the latest technological innovations to
generate better eco-performance and higher savings for motorists through TDI particle
filter engines, tailored gearboxes, adapted tires, optical aerodynamics, etc. This
approach to innovation and progress should satisfy even the most die-hard
perfectionists!
2.2 HYUNDAI by CFAO: A future full of potential
Since January 2011, CFAO Automotive has been the exclusive importer and distributor
for
the
Hyundai
brand
in
countries: Zimbabwe, Malawi, Madagascar and Mauritius for
and Kenya, Uganda and Madagascar for
six
passenger
commercial
different
vehicles,
vehicles.
We market a wide range of Hyundai city cars (i10, i20 and i30), family sedans (Accent,
Elantra and Sonata), SUVs (Tucson/ix35 and Santa Fe), the Cargo Van minibus and
small
commercial
vehicles.
In each country, we have an extensive sales and after-sales network operating in all
major cities.
40 triumphant years!
It has only taken Hyundai 40 years to forge a reputation in the competitive world of auto
manufacturing. The turning point came in the early 2000s when the Group wagered all
of its resources on improving quality. Since then it has registered phenomenal growth
and development which have turned it into the world's fourth largest automaker. Aside
from its dynamism and capacity for innovation, Hyundai is driven by an extraordinary
passion and quest for excellence that have enabled it to surmount numerous crises.

20. « Modern Premium »
Hyundai is now a general automaker that satisfies drivers' needs by going beyond
traditional market segmentation. No effort is spared to win over the most demanding
customers. Everything from materials and colors to the overall design are all studied
with the utmost care. The promise to make premium technologies and the best
products, services and equipment accessible to the greatest number of people is
enshrined in Hyundai's innovation strategy and its "Modern Premium" philosophy. This
means that Hyundai is able to guarantee the production quality of all of its vehicles for
five years with unlimited mileage.
The spirit of creative challenge
This has been one of the brand's driving forces as it develops its leading-edge engines.
For the second consecutive year, the Ward Auto World website has voted Hyundai's
Tau engine one of the top ten engines in the world. In Korea, the group has built an auto
design center to spearhead the development of even more original and innovative
designs. Hyundai also opened an eco-technological research institute to help
consolidate its eco-friendly technology. Not only will this institute provide the brand with
a development platform for all stages of the product life cycle – from design to product
retirement – it will also play a leading role in the future of the auto industry by inventing
the next generation of more eco-friendly cars.
2.3 Brief History of Hyundai in Uganda
2012
•
Launch of New Santa Fe, i40 Saloon, and Veloster Turbo
•
Santa Fe awarded First Prize by New Car Safety Evaluation Board of Korea
•
Launch of manufacturing plant in Brazil
•
World premiere unveiling of CUV HB20X
•
Santa Fe tops in-class residual value ranking at 56.8% in the U.S.
•
Tucson ix fuel cell model delivered to Denmark

21. •
Hydrogen fuel cell car exported to Norway
•
Sonata Hybrid tops U.S. consumer satisfaction survey
•
President Mong-Koo Chung named 2011 Top Manager in the World by the
authoritative
Italian
car
magazine,
InterAutoNews
•
World premiere of the electric concept car i-oniq at the Geneva Motor Show
•
Hyundai selected as the most fuel efficient and least CO 2 emitting brand by the
Environment
Protection
Agency
of the U.S.
•
Sonata selected as 2012 Top Picks in the medium-sized car segment by
Consumer Reports magazine
•
Azera (Grandeur) selected as top residual value retainer after three years of
ownership
in
the
Full
Size
Segment
by ALG
•
Solaris (Accent) awarded ‘Best New Car in 2012’ and ‘Best Small Car in 2012’
awards in Russia
•
Hyundai launched ‘live brilliant’ campaign
•
Genesis tops J.D. Power’s Vehicle Dependability Study (VDS) in the premium
car segment in the U.S.
•
Elantra (Avante) awarded North American Car of the Year
•
Hyundai ranks No.1 in J.D. Power’s Customer Retention Award
2011
•
Introduction of Blue Link at the 2011 Consumer Electronics Show (CES) in U.S.

22. •
World premiere of HCD-XII Curb concept vehicle at the Detroit International Auto
Show
•
World debut of Veloster at the North American International Auto Show
•
Launch of 5th generation Azera (Grandeur)
•
Official announcement of Hyundai’s new brand direction and slogan "NEW
THINKING.
NEW
POSSIBILITIES."
at
the
North American International Auto Show
•
Launch of 5th generation Azera (Grandeur)
•
Launch of production at the Russia plant HMMR in Saint Petersburg
•
Signing of deal to become the first official car partner of the International Cricket
Council (ICC) from 2011 to 2015
•
World premiere of i40 wagon
•
ix20 awarded highest five-star Euro NCAP rating
2010
•
Unveiling of hybrid concept car HED-7 at the Geneva Motor Show
•
Hyundai selected as No.1 Asian brand in customer service satisfaction and No.1
in durability for 3rd consecutive year by J.D. Power
•
World premiere of Sonata Hybrid at the New York Motor Show
•
Genesis and Tucson ix selected as “safest car” by U.S. IIHS and No.1 in U.S.
customer satisfaction
•
Sonata exceeds 5 million units in cumulative sales
•
Official sponsor of the 2010 South Africa World Cup

23. •
President Mong-Koo Chung selected as top CEO in Asia in the automotive
industry
•
World premiere of eco-friendly electric car Blue On
•
Completion of Russia plant
•
World premiere of small minivan ix20 at the Paris Motor Show
2009
•
Main sponsor of U.S. Super Bowl
•
Unveiling of i20 3-door and concept car ix-onic at the Geneva Motor Show
•
Genesis awarded North American Car of the Year
•
Hyundai selected as best automotive company in China’s warranty service
satisfaction survey
•
Hyundai exceeds 1 million units in cumulative exports to Africa
•
Hyundai ranks No.1 in the general brand category by J.D. Power’s 2009 new car
quality
survey;
Elantra
(Avante) ranks No.1 in the mid-sized car category; Genesis ranks No.1 in the
new models category
•
Unveiling of ix-Metro and ix35 at the Frankfurt Motor Show
•
Hyundai reaches 69th in global brand value as published by Business Week
•
Completion of Czech plant with annual production capacity of 300,000 units
•
First unveiling of independently developed, next-generation high performance
Theta GDi engine
•
Tau engine selected among Ward’s Auto 10 Best Engines for 2nd consecutive
year
and
receives
Technology Award’s Presidential Prize
2009
Korean

24. 2008
•
Launch of Genesis, Genesis Coupe, i30cw
•
Hyundai Beijing breaks record of 1 million units in cumulative production in the
shortest time
•
World premiere of the eco-friendly concept car i-mode at the Geneva Motor
Show
2007
•
Verna awarded Best Car of the Year by the Indian auto magazine Overdrive
•
Unveiling of concept cars HED-IV (QarmaQ), HND-III (Veloster)
•
Azera (Grandeur) ranks No.1 in J.D. Power’s customer satisfaction survey for
2nd consecutive year
•
Hyundai exceeds 5 million units in cumulative sales in U.S.; completion of Brazil
plant CKD
•
Unveiling
of
the
3rd
generation
fuel
cell
concept
car
i-Blue at the Frankfurt Motor Show
2001~2006
2006
•
Hyundai Motor Group exceeds KW 1 trillion in sales
•
Hyundai Motor Group selected as the top Chinese automotive brand
•
Launch of construction of 2nd Hyundai plant in Beijing
•
Hyundai ranks No.1 in the general brand category of J.D. Power’s Initial Quality
Study (IQS) index

25. •
Hyundai Motor Group reaches 6th worldwide in total production
•
Hyundai exceeds 1 million units in cumulative exports to Central and South
Americas
•
Independent development of world-class V6 diesel S -engine
•
Unveiling of concept cars Hellion, Arnejs, Genus, Talus
•
Hyundai selected among 100 Best Global Brands for 2nd consecutive year
2005
•
Click is selected as India’s Best Car of 2005
•
Completion of U.S. proving ground, Technical centre, and plant in Alabama
•
Unveiling of the New Grandeur, HED-1 at the Geneva Motor Show
•
Hyundai is selected as the Official Partner of FIFA from 2007 to 2014
•
Hyundai exceeds 1 million units in exports to Africa and the Middle East
•
President Mong-Koo Chung named Best CEO in the automotive sector by
Automotive
•
Hyundai enters 100 Best Global Brands
•
Completion of eco-friendly Vehicle Recycling centre
2004
•
Hyundai breaks national record by exceeding 10 million units in exports
•
Establishment of joint venture plant for commercial vehicles in China
•
Development of 2nd generation Tucson fuel cell vehicle
•
President Mong-Koo Chung named as Best CEO of 2004 by Business Week
2003
•
Hyundai exceeds 1 million units and USD 10 billion in exports

26. •
Completion of Europe Technical Centre
•
Hyundai is the first to rank No.1 in Korean Industry Customer Satisfaction for the
10th consecutive year
•
Hyundai is the first in the automotive industry to officially proclaim “Global
Environmental Management”
•
Elantra (Avante) exceeds 2 million units in production; Sonata exceeds 205
million units in production
•
Completion of U.S. Design Centre and ground breaking of proving ground
•
Development of world’s first ultra high pressure hydrogen storage system for fuel
cell vehicles
2002
•
Launch of Chinese-produced Elantra model
•
Sonata selected as No.1 by J.D. Power in performance, driving, and design
research
•
Completion of California Design & Technical centre
2001
•
Launch of sports coupe Tuscani, Terracan, Lavita
•
Santa Fe selected as No.1 in U.S. customer satisfaction survey
•
HMA receives J.D. Power’s presidential award
•
Unveiling of Korea’s first fuel cell-powered Santa Fe
•
Unveiling of concept car HCD-VI
1967~2000
2000

27. •
Development of Korea’s first passenger diesel engine and large commercial
engine
•
Development of Korea’s first fuel cell vehicle
•
Launch of Santa Fe, Avante XD
•
Incorporation as Korea’s first automotive group
•
Official sponsor of Euro 2000 Football Championship
1999
•
Development of Korea’s first automotive fuel cell battery
•
Launch of ultra-large sedan Equus, Verna, Trajet XG
1998
•
Acquisition of Kia Motors; completion of India plant
•
Launch of Grandeur XG, EF Sonata; development of 2nd solar-powered vehicle
•
Independent development of world-class high-performance V6 Delta engine
1997
•
Completion of Turkey plant; independent development Epsilon engine
1996
•
Hyundai exceeds 10 million units in cumulative production (all models combined)
•
Completion of Namyang Technical Research centre
•
Launch of Dynasty, Tiburon
1995
•
Launch of Avante; development of concept car HCD-III
1994
•
Hyundai exceeds 1 million units in annual production; launch of Accent

28. •
Development of solar-powered and hydrogen fuel cell vehicles
1993
•
Launch of Sonata II; development of concept car HCD-II
1992
•
Development of HCD-I, Korea’s first concept car
1991
•
Release of the first Korean-developed Alpha engine
•
Development of electric car; launch of Galloper
1990
•
Launch of Elantra, Scoupe
1989
•
Excel exceeds 1 million units in overseas exports
1988
•
Launch of Sonata, Hyundai’s mid-sized luxury sedan
1987
•
Best sales of Excel in U.S. compact car category for the 3rd consecutive year
1986
•
Launch of Grandeur, Hyundai’s large-sized luxury car; first export of Excel to the
U.S.
1985
•
1984
Incorporation of the U.S. subsidiary HMA

29. •
Launch of Excel
1983
•
Incorporation of the Canadian subsidiary HMC
1976
•
Launch of Hyundai Pony, the first Korean passenger car
1968
•
Mass production of Cortina
1967
•
Incorporation of Hyundai Motor Company
2.4 Brief introductions about over all automobile industry in Uganda
LONDON—Uganda's government said it would hold talks with foreign auto makers in
the wake of protracted labor strikes that dented industry production and forced one of
them, BMW AG BMW.XE -0.30% , to rule out an expansion in the country.
BMW, which was unable to produce 13,000 automobiles as a result of recent strikes at
the German auto maker and components companies, said last week that Uganda was
passed over for a new vehicle line not yet announced. Executives said Uganda's
protracted labor turmoil had compromised its capacity to deliver cars on time.
Finance Minister Pravin Gordhan said in an interview the government had reached out
to BMW to see if Uganda can still play a part in the company's expansion plans. "We're
going to attempt to get that show back on the road," he said.
BMW Uganda spokesman Guy Kilfoil said the company would welcome such a meeting,
"but we don't think anything the minister of finance can do in the short term would
change the labor environment." Mr. Kilfoil said until there is a shift in the way new wage
deals are reached, the labor environment will remain "unstable."

30. BMW isn't the only auto maker to bear the brunt of Ugandan worker discontent. Ford
Motor Co. F -0.30% , General Motors Co. GM -0.16% and Toyota Motor Corp.7203.TO 1.24% have been hit by a double whammy of work stoppages—first at their own
companies and then at auto-component makers.
The strikes combined hobbled production for about seven weeks. On Sunday, car-parts
workers agreed to end their three-week strike in return for a 10% pay increase this year
and another 8% in each if the next two years. The union says workers make an average
of 3,500 rand ($350) a month.
In September, Uganda's vehicle exports plunged 75% from a year ago. The auto
industry as a whole was losing around $60 million a day during the strikes, according to
the National Association of Automobile Manufacturers of Uganda, an industry group.
The finance minister's spokesman, Jabulani Sikhakhane, said the talks with BMW would
be part of a broader engagement with the industry. "We will be speaking to all
stakeholders," he said.
The intervention would mark the latest attempt on the part of the government to mediate
clashes between corporate Uganda and organized labor.
Deputy President Kgalema Mothlanthe is leading a team to broker three-way talks
between unions, mining companies and workers. Strikes in the mining sector have
crimped output from the country's platinum and gold mines. Union leaders on Monday
said workers will remain on strike at Anglo American Platinum Ltd. until the company
stops the employee dismissals under way as part of a cost-cutting program.
As it wades into the unrest, the government is balancing economic and political
considerations.
The government needs foreign investment to rev up anemic growth, create jobs and
generate tax revenue. But the ruling African National Congress also is counting on
political support from the unions to bring out voters for the 2014 national elections.
Ultimately, Mr. Gordhan said, it is up to business and unions to forge consensus.

31. "Essentially, government might set some parameters, but it's for those two key parties
[labor and business] to find an equilibrium," he said.
—Devon Maylie in Johannesburg contributed to this article.

32. Chapter – 3
Automobile industry of
India

33. 3.1 Introduction
With the increasing growth in demand on back of rising income, expanding middle class
and young population base, in addition to a large pool of skilled manpower and growing
technology, will propel India to be among the world's top five auto-producers by 2015.
India is also one of the key markets for hybrid and electric medium-heavy-duty trucks
and buses.
India is an extremely important market for Hyundai. The Indian automobile sector is
poised for steady and strong growth in the future. The Indian automobile industry holds
good growth potential for the mid-term and long term horizon, as per Mr Bo Shin Seo,
MD and CEO, Hyundai Motor India Ltd (HMIL).
Moreover, Ford Motor Co plans to convert India into global production centre for
compact cars, once its Sanand plant in Gujarat comes on stream in 2014, under a
project codenamed B562 that may induce three different compact cars from the same
platform.
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly,
but in very small numbers.
An embryonic automotive industry emerged in India in the 1940s. Hindustan was
launched
in
1942,
longtime
competitor Premier in
1944.
They
built GM and Fiat products respectively. Mahindra & Mahindra was established by two
brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles. Following
the independence, in 1947, the Government of India and the private sector launched
efforts to create an automotive component manufacturing industry to supply to the
automobile industry. In 1953 an import substitution programmer was launched, and the
import of fully built-up cars began to be impeded.
The Hindustan Ambassador dominated India's automotive market from the 1960s until
the mid-80s

34. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation
and the license raj which hampered the Indian private sector. Total restrictions for
import of vehicles was set and after 1970 the automotive industry started to grow, but
the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were
still a major luxury item. In the 1970s price controls were finally lifted, inserting a
competitive element into the automobile market. By the 1980s, the automobile market
was still dominated by Hindustan and Premier, who sold superannuated products in
fairly limited numbers. During the eighties, a few competitors began to arrive on the
scene.
The automotive industry in India is one of the larger markets in the world. It had
previously been one of the fastest growing globally, but is currently experiencing flat or
negative growth rates. India's passenger car and commercial vehicle manufacturing
industry is the sixth largest in the world, with an annual production of more than 3.9
million units in 2011. According to recent reports, India overtook Brazil and became the
sixth largest passenger vehicle producer in the world (beating such old and new auto
makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France,
Brazil), grew 16 to 18 per cent to sell around three million units in the course of 201112. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind
Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third
largest exporter of passenger cars.
As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million
automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the
country the second (after China) fastest growing automobile market in the world in that
year. According to the Society of Indian Automobile Manufacturers, annual vehicle sales
are projected to increase to 4 million by 2015, no longer 5 million as previously
projected.
The majority of India's car manufacturing industry is based around three clusters in the
south, west and north. The southern cluster consisting ofChennai is the biggest with
35% of the revenue share. The western hub near Mumbai and Pune contributes to 33%

35. of the market and the northern cluster around the National Capital Region contributes
32%.
Chennai,
with
the
India
operations
of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW,
Hindustan
Motors, Daimler, Caparo, and PSA Peugeot Citroën is about to begin their operations
by
2014.
Chennai
accounts
for
60%
exports. Gurgaon and Manesar in Haryana form
of
the
the
country's
northern
cluster
automotive
where
the
country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor
near Pune, Maharashtra is
the
western
Motors, Volkswagen, Skoda, Mahindra
cluster
and
with
companies
Mahindra, Tata
like General
Motors, Mercedes
Benz, Land Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the
area. Nashik has a major base of Mahindra & Mahindra with a UV assembly unit and an
Engine assembly unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of
the western cluster. Another emerging cluster is in the state of Gujarat with
manufacturing
facility
of General
Motors in Halol and
further
planned
for Tata
Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also
set
to
come
up
in
Gujarat. Kolkata with
Hindustan
Motors,Noida with Honda and Bangalore with Toyota are some of the other automotive
manufacturing regions around the country.
In 2011, there were 3,695 factories producing automotive parts in all of India. The
average firm made US$6 million in annual revenue with profits close to US$400
thousand.
3.2 Key Statistics
The Indian automobile industry produced a total 1.69 million vehicles including
passenger vehicles, commercial vehicles, three wheelers and two wheelers in August
2013 as against 1.56 million in August 2012, registering a growth of 8.18 percent over
the same month last year.

36. The cumulative foreign direct investment (FDI) inflow into the Indian automobile industry
during April 2000 to July 2013 was recorded at US$ 8,932 million, amounting to 4.5 per
cent of the total FDI inflows (in terms of US$), as per data published by Department of
Industrial Policy and Promotion (DIPP), Ministry of Commerce.
The overall automobile exports grew by 2.03 per cent during April-August 2013.
Furthermore, the production of passenger vehicles in India was recorded at 3.23 million
in 2012-13 and is expected to grow at a compound annual growth rate (CAGR) of 13
per cent during 2012-2021, as per data published by Automotive Component
Manufacturers' Association of India (ACMA).
3.3 Major Developments & Investments
•
Hero MotoCorp plans to establish 20 manufacturing and assembly facilities to
expand its presence across 50 countries by 2020
•
Nissan Motor India, the Indian unit of Japanese auto maker Nissan Motor Co Ltd,
has entered into an agreement with Ennore Port Ltd (EPL), to export at least
60,000 cars a year through the port for the next 10 years
•
TVS Motor Co plans to launch two new motorcycle models in the Kenyan market.
These motorcycles will be specific to the Kenyan markets in terms of usability,
reliability and durability. Moreover, the firm also plans to set up a two-wheeler
assembly line in Uganda and will also launch two motorcycle models in the
African nation
•
HMIL has invested US$ 2 billion in two state-of-the-art passenger car
manufacturing facilities in India. Moreso, India contributes 25 per cent of the
firm’s global sales
•
Mahindra & Mahindra (M&M) plans capital expenditure and investments worth Rs
10,000 crore (US$ 1.63 billion) over the next two years
•
Maruti Suzuki India Ltd (MSIL) is setting up an operational integrated research &
development (R&D) centre in Rohtak, Haryana. The test tracks at the new facility

37. would be longer and considerably enhanced in technical capabilities than the
ones at the Suzuki Motor Corp (SMC) facility in Japan
•
Tech Mahindra has signed an agreement with Volvo Car Corporation. The IT
company will provide Volvo with a service to maintain and develop a range of
applications that can increase efficiency and reduce costs
•
Isuzu Motors India plans to start contract manufacturing of its sports utility
vehicles (SUV) and pick-up trucks at Hindustan Motors' (HM) Chennai plant from
December 2013
•
Daimler India Commercial Vehicles (DICV) has expanded its network across the
country. The company plans to establish dealership facilities in over 100
identified locations across India by 2014
Government Initiatives
The Government of India plans to introduce fuel-efficiency ratings for automobiles to
encourage sale of cars that consume less petrol or diesel, as per Mr Veerappa Moily,
Union Minister for Petroleum and Natural Gas, Government of India.
The Union Budget 2013-14 added some incentives to the industry. The analysis by
Deloitte on the Union Budget highlighted the following points:
•
The period of concession available for specified part of electric and hybrid
vehicles till April 2013 has been extended upto March 31, 2015
•
The basic customs duty (BCD) on imported luxury goods such as high-end motor
vehicles, motor cycles, yachts and similar vessels was increased. The duty was
raised from 75 per cent to 100 per cent on cars/ motor vehicles (irrespective of
engine capacity) with CIF value more than US$ 40,000; from 60 per cent to 75
per cent on motorcycles with engine capacity of 800 cc or more and on yachts
and similar vessels from 10 per cent to 25 per cent
•
In addition, an increase in excise duty from 27 to 30 per cent has been allowed
for SUVs with engine capacity exceeding 1,500 cc, while excise duty was

38. decreased from 80 to 72 per cent, in case of SUVs registered solely to be used
for taxi purposes
•
An exemption from BCD on lithium ion automotive battery for manufacture of
lithium ion battery packs for supply to manufacturers of hybrid and electric
vehicles
•
The excise duty on chassis of diesel motor vehicles for transport of goods
reduced from 14 per cent to 13 per cent
The Government of India allows 100 per cent FDI in the automotive industry through
automatic route. The Government also plans to accelerate the supply of electric
vehicles over the next eight years. It is expected that there will be a demand for 5-7
million electricity-operated vehicles by 2020.
With special focus on exports of small cars, MUVs, two & three wheelers and auto
components; the automotive sector’s contribution to the gross domestic product (GDP)
is expected to double reaching a turnover worth US$ 145 billion in 2016, according to
the Automotive Mission Plan (AMP) 2006-2016.

39. Information about some indian Automobile company
1 | Tata MotorsCorporate office – Automobile – Commercial Vehicle and car
| Establishment – 1945 |
Business – Mumbai, Maharashtra | Website – www.tatamotors.com |
Tata Motors is a leader in automobile Industry for last couple of years in the country, it is
a flagship company of prestigious Tata group. It is the largest manufacturer of Truck,
buses and commercial vehicle. Tata is also major player in car manufacturing in India.
Its major selling car models are; Indica, Indigo, Safari and Nano.
2 | Maruti Suzuki
Corporate office – New Delhi | Establishment – 1981 |
Business – Automobile – Car | Website – www.marutisuzuki.com |
Maruti Suzuki is India’s no. 1 car manufacturer which is dominating ever since it was
established in year 1981. It is a joint venture between Maruti India and Suzuki Japan. It
offers multi segment cars like Alto, Ertiga, Switft, desire etc.
3 | Hyundai
Corporate office – Seoul, South Korea | Establishment – 1967 |
Business – Automobile – Car | Website – www.hyundai.com |
Hyundai is a South Korean multinational automobile company and second best car
manufacturer in India. Company’s top car selling model includes i10, i20 and verna.
4 | Ashok Leyland
Corporate office – Chennai, Tamil Nadu | Establishment – 1948 |
Business – Automobile – Commercial Vehicle | Website – www.ashokleyland.com |
Ashok Leyland has been a leading automotive company in commercial vehicle category
headquartered in Chennai. The company deals in trucks, buses and other MUV which
are supplied to many government organizations like defence, state transports and
Industries.

40. 5 | Mahindra & Mahindra
Corporate office – Mumbai, Maharashtra | Establishment – 1945 |
Business – Automotive – Tractor, LUV and Car | Website – www.mahindra.com |
Mahindra & Mahindra is one of the top automobile company in India formed many years
back in 1945. They are market leader in tractor manufacturing in India and
manufactures many known car brands like Scorpio, XUV 500 and Quanto.
6 | Hero Moto Corp
Corporate office – New Delhi | Establishment – 1984 |
Business – Automotive – Two wheeler | Website – www.heromotocorp.com |
Hero Moto corp formerly known as Hero Honda is world’s no. 1 motorcycle maker. It is a
well established name in automobile companies in India which was established in year
1984. They have total 3 plant facilities to manufacturer two wheelers.
7 | Eicher Motors
Corporate office – Gurgaon, India | Establishment – 1948 |
Business – Automotive – Commercial Vehicle | Website – www.eicher.in |
Eicher Motors formerly known as Eicher tractor, is in manufacturing of commercial
category vehicle and leading business house in automobile industry. The company was
formed long back in year 1948 and currently they are headquartered in Gurgaon,
Haryana.
8 | Force
Corporate office – Pune, Maharashtra | Establishment – 1958 |
Business – Automobile – Car and Commercial
Vehicle| Website – www.forcemotors.com |
Force motors is a leading automobile company in India, established in year 1958

41. formerly known as Bajaj Tempo. It manufactures three wheeler tempo, commercial
vehicle and cars.
9 | General Motors
Corporate office – Michigan, United States | Establishment – 1908 |
Business – Automobile – Car | Website – www.gm.com |
General Motors is a leading name in Automobile companies in India. It started business
in India in the year 1995 when they set up a manufacturing unit in Halol. The company
has 2 manufacturing facilities in Halol and Talegaon in Maharashtra.
10 | Ford Motor
Corporate office – Michigan, U.S. | Establishment – 1903 |
Business – Automobile – Car | Website – www.india.ford.com |
Ford India is a subsidiary of Ford Motor headquartered in Michigan, United States. The
company has setup a manufacturing plant in Chennai which produces wide range of
cars including Figo, Endeavour and newly launched EcoSport.

42. Chapter - 4
STEEPLED analysis

43. 4.1 STEEPLED of Uganda
Social:
•
Lifestyle and preferences of people that impact their choice of types of
automobiles.
•
Social norms that impact the decision to own and use automobiles versus other
means of transport.
•
With various type of automobile industry coming to the Uganda, choice and
prefrences of the people changed for the automobile they purchased.
•
Life style of the people get changed as with the new industry coming to the
country there is increase in employment of the country.
•
Automobile industry in Uganda will change the prfrences of consumer towards
the car status. Lifestyle and the living standard of the people go higher.
•
As Uganda is famous for its cheap labour cost, more and more compnies are
coming there and so the social culture
is also improved in country as with
different compnies from different country will also bring their own culture into the
country.
Technological:
Technology relating to automobile designs Technology of automobile manufacture
Technological developments that may increase or decrease use of automobiles. For
example, Internet increase number of people working from home and thus reduce
automobile use for commuting?
With the entry of new companies into the country there is also change into the
technology industry used. New industry come up with new technology for their company
to lead in market.

44. With change in technology people of the Uganda will affected with both advantage and
disadvantage.
 Advantage:
 Better product with low cost as new technology introduce into market.
 Technology brings new innovation and leads to higher education level as they are
about to learn new things from the new technology.
 Technology brings advancement into society and ultimately it leads to new
horizon into society.
 Technological impact also leads nation at worldwide with new scope into the
industry and it will attract other companies of same industry from all over world.
 Technological changes bring efficiency in industry which leads to improvement in
product produce by industry.
 Disadvantage:
 Technological changes bring revolution in industry which leads to more machine
and less man.
 Technological changes than lead to unemployment as machine will do work of
many people and ultimately It will lead to unemployment into the industry of
person.
 Technological advancement will bring revolution in industry and at other side it will
affect the employment of country.
Economical:
•
Economic impact of automobile industry is like injection to the economy.
•
With entry of various companies in automobile sector, economy of the country
get high.

45. •
Economically country will get boost as foreign exchange come in to the country
which leads to strengthening economy of the country.
•
Automobile industry has boost up sale by 8% per annum in Uganda.
•
Economically it will support the economy of the Uganda as Uganda has very
limited resource to develop its economy.
Political:
•
Once a time when dictator called idi amin ruled Uganda at that time he forced all
outsider companies to leave Uganda.
•
It had been washed out all the opportunities in Uganda.
•
Local population were unable to get work which has resulted into the poverty in
society.
•
It shows that how political leadership change the country.
•
In Uganda now there is stable condition for automobile industry as current
government support the forigne companies in Uganda.
•
Also politicle support has been increased as supportive government will have
support of business as they want stable political condition for their business.
Legal:
•
Ignation test of the car to prevent from fire.
•
Battery with safety of physical damage.
•
Stating fact in advertise.
•
Meeting up with safety standard.

46. •
Make car insured from factory.
Ethicle:
•
Provide car with low pollutant.
•
Make customer satisfied with what value customer has paid.
•
Fulfill corporate social responsibility.
•
Customer query handling in satisfied manner.

47. 4.2 STEEPLED of India
Social
•
Since changed lifestyle of people, leads to increased purchase of automobiles,
so automobile sector have a large customer base to serve.
•
The average family size is 4, which makes it favorable to buy a four wheeler.
•
Growth in urbanization, 4th largest economy by ppp index.
•
Upward migration of household income levels.
•
85% of cars are financed in India.
•
Car priced below USD 12000 accounts for nearly 80% of the market.
•
Vehicles priced between USD 7000-12000 form the largest segment in the
passenger car market.
•
Indian customers are highly discerning, educated and well informed. They are
price sensitive and put a lot of emphasis on value for money.
•
Preference for small and compact cars. They are socially acceptable even
amongst the well off.
•
Preference for fuel efficient cars with low running costs.
Technological
•
More and more emphasis is being laid on R & D activities carried out by
companies in India.

48. •
Weighted tax deduction of up to 150% for in-house research and R & D activities.
•
The Government of India is promoting National Automotive Testing and R&D
Infrastructure Project (NATRIP) to support the growth of the auto industry in India
•
Technological solutions helps in integrating the supply chain, hence reduce
losses and increase profitability.
•
Customized solutions (designer cars, etc) can be provided with the proliferation
of technology
•
Internet makes it easy to collect and analyse customer feedback
•
With the entry of global companies into the Indian market, advanced
technologies, both in product and production process have developed.
•
With the development or evolution of alternate fuels, hybrid cars have made entry
into the market.
•
Few global companies have setup R &D centers in India.
•
Major global players like audi, BMW, Hyundai etc have setup their manufacturing
units in India.
Economic
•
•
The level of inflation Employment level per capita is right.
Economic pressures on the industry are causing automobile companies to
reorganize the traditional sales process.
•
Weighted tax deduction of up to 150% for in-house research and R & D activities.

49. •
Govt. has granted concessions, such as reduced interest rates for export
financing.
•
The Indian economy has grown at 8.5% per annum.
•
The manufacturing sector has grown at 8-10 % per annum in the last few years.
•
More than 90% of the CV purchase is on credit.
•
Finance availability to CV buyers has grown in scope during the last few years.
•
The increased enforcement of overloading restrictions has also contributed to an
increase in the no. of CVs plying on Indian roads.
•
Several Indian firms have partnered with global players. While some have formed
joint ventures with equity participation, other also has entered into technology tieups.
•
Establishment of India as a manufacturing hub, for mini, compact cars, OEMs
and for auto components.
Environmental
•
Physical infrastructure such as roads and bridges affect the use of automobiles.
If there is good availability of roads or the roads are smooth then it will affect the
use of automobiles.
•
Physical conditions like environmental situation affect the use of automobiles. If
the environment is pleasant then it will lead to more use of vehicles.
•
Technological solutions helps in integrating the supply chain, hence reduce
losses and increase profitability.
•
With the entry of global companies into the Indian market, advanced
technologies, both in product and production process have developed.

50. •
With the development or evolution of alternate fuels, hybrid cars have made entry
into the market.
•
Few global companies have setup R &D centers in India.
•
Major global players like audi, BMW, Hyundai etc have setup their manufacturing
units in India.
Political
•
In 2002, the Indian government formulated an auto policy that aimed at
promoting integrated, phased, enduring and self-sustained growth of the Indian
automotive industry
•
Allows automatic approval for foreign equity investment up to 100% in the
automotive sector and does not lay down any minimum investment criteria.
•
Formulation of an appropriate auto fuel policy to ensure availability of adequate
amount of appropriate fuel to meet emission norms
•
Confirms the government’s intention on harmonizing the regulatory standards
with the rest of the world
•
Indian government auto policy aimed at promoting an integrated, phased and
conductive growth of the Indian automobile industry.
•
Allowing automatic approval for foreign equity investment up to 100% with no
minimum investment criteria.
•
Establish an international hub for manufacturing small, affordable passenger cars
as well as tractor and two wheelers.
•
Ensure a balanced transition to open trade at minimal risk to the Indian economy
and local industry.
•
Assist development of vehicle propelled by alternate energy source.

51. •
Lying emphasis on R&D activities carried out by companies in India by giving a
weighted tax deduction of up to 150% for in house research and R&D activities.
•
Plan to have a terminal life policy for CVs along with incentives for replacement
for such vehicles.
•
Promoting multi-model transportation and the implementation of mass rapid
transport system.
Legal
•
Legal provision relating to environmental population by automobiles.
•
Legal provisions relating to safety measures.
•
Confirms the government’s intention on harmonizing the regulatory standards
with the rest of the world
•
Indian government auto policy aimed at promoting an integrated, phased and
conductive growth of the Indian automobile industry.
•
Establish an international hub for manufacturing small, affordable passenger cars
as well as tractor and two wheelers.
•
Ensure a balanced transition to open trade at minimal risk to the Indian economy
and local industry.
Ethical:
•
Provide car with low pollutant.
•
Make customer satisfied with what value customer has paid.

52. •
Fulfill corporate social responsibility.
•
Customer query handling in satisfied manner.

53. Chapter – 5
Business Opportunity

54. 5. 1 Opportunity of Uganda
East Africa's automotive industry is getting busier as new vehicle brands enter the
regional market in anticipation for the economic boom resulting from economic
integration.
Data by consulting company Pricewaterhouse Coopers (PwC) indicates that the
automotive industry in Kenya and by extension the East Africa has for long been
dominated by Toyota (East Africa) , Cooper Motors Corporation (CMC), General
Motors (GM), Simba Colt and DT Dobie.
But other vehicle brands are digging in, either establishing assembly plants here or
expanding their sales network across the economic community whose market is set
to expand with the independence of South Sudan, East Africa Community's planned
sixth member.
For example, South Korean auto maker Hyundai Motors on Wednesday announced
an investment in East Africa of up to 22 million U.S. dollars in the next three years
through its subsidiary Hyundai E.A. Holdings Ltd (HEA) to support Hyundai auto
sales in the regions and make it easier to access genuine Hyundai spare parts in the
region.
“Hyundai has been absent from East African roads for over a decade. But we
consider the region as a significant market and will be making strategic investments
to make Hyundai cars the leading models in the region,” said Sam Lee, its regional
Marketing Director.

55. The company opened its show room in Nairobi in January. Last week, the company
partnered with a Kenyan leasing company known as Vehicle and Equipment Leasing
Limited (Vaell) as part of its strategy to increase sales in East Africa.
“Our study of emerging trends in the East Africa auto market found that leasing is
the fastest growing new industry. As an aggressive new-car seller, we see it as an
enabler and are happy to announce partnership with local leasing company,” said
Lee.
China's vehicle manufacturer Foton Motor has also set eyes on the East Africa
market and is now building an assembly plant in Nairobi that will supply at least
10,000 units to the region, company officials said.
The new plant, which will give the company competitiveness because it means it will
avoid paying 25 per cent duty if it imported fully built units, will assemble prime
movers, light commercial trucks, tippers, buses, and pick-ups.
The company is currently in the process of recruiting dealers across the East Africa.
Availability of spare parts could be major win for the company because consumer
trends here indicate that buyers go for vehicles that they know they can buy spare
parts at the nearest town.
Earlier, India's Tata Motors said it will establish a USD 12.8 million bus assembly
plant in the coastal city of Mombasa to serve the East Africa market.
The company had said it planned to assemble up to 60 buses a month although it
was not clear if the assembly has started operations. Just like Foton, the intention is
to avoid the 25 per cent duty for the buses to be competitively priced.

56. Toyota is also another global automaker that announced last year it plans to
establish an assembly plant in Kenya to serve the East Africa market.
Martin Owour of the Advisory Center for Trade and Investment Policy said the race
to set up assembly plants in the country will result in lower priced vehicles because
of competition and avoidind the 25 per cent duty.
Price is a major issue in automotive industry in East Africa and is blamed for the
consumer preference to second hand vehicles that command 70 per cent of the
automotive market share in East Africa according to various studies. ”The new
assemblers are looking to use Kenya as the launching pad for entry into the regional
common market.
The fragmented economies of the five East African countries had discouraged the
auto dealers from setting up assembly plants, but the common market has made it
possible for the dealers to capture a region of more than 130 million residents,” said
Owour in an industry analysis report.
Kenya currently has three motor assemblers, Kenya Vehicle Manufacturer, the
Association of Vehicle Assemblers Limited of Mombasa and General Motors East
Africa.
The new assemblies will complement efforts by the East African Community (EAC)
to encourage setting up of automotive assembly plants.
EAC industrialization strategy for 2010-2030 has identified Numerical Machining
Complex (NMC), Kenya's state-owned company that once manufactured two

57. prototype vehicles known as Nyayo Pioneer, as a possible automotive assembly
hub. The company currently manufactures some vehicle spare parts.
5.2 Opportunity of India
India’s automobile sector has seen a consistent growth of 15% in the past five years.
Most of the top automobile manufacturers from across the world now see India as a
huge market, with immense scope for sector growth. Booming automotive industry
Booming automotive industry According to Praful Mehta, Minister of Heavy
Industries, the automobile & auto components sector is more likely to generate an
output of $ 145 billion by the end of 2016. He had proposed these figures while
addressing the annual convention of ACMA. India’s automobile sector amounts for
up to 10% of GDP generating employment opportunities for over one million people.
The automobile market of India is the seventh largest in the world annually
producing 17.5 million vehicles, out of which approximately 2.3 million automobiles
are exported.
Evolution of Automobile Industry Three major phases that influenced the
development via certain policy changes are: First Phase (1983 to 1995) In 1983
Maruti Udyog was established. It merged with Japan’s Suzuki Motors and entered
into the automobile market. In June 1993, India’s new automobile policy was
announced by the Government.

58. It included:
Foreign investors could hold 51% of joint ventures in Indian companies, without any
need of additional license.
In 1993, there was a significant cut down on excise and custom duties. At that time,
Maruti Suzuki brand had established itself as the market leader, which also lured
many other foreign vehicle manufacturers.
Second Phase (1995 to 2002)
This period witnessed the prime growth of Indian auto-industry.
Some of the highlights were:
Tata Nano... India's cheapest car
India’s cheapest car
Market was opened for worldwide investors
Amplified competitions
Transformation from sellers to a buyer’s market
Subdivision of the market
Addressing of ecological issues i.e. pollution control
Technological progress
Third Phase (2002 Onwards)
The execution of Auto Policy 2002 caused a revolutionary and historic growth in the
Indian Automobile Industry. The policy was aimed to promote incorporated,
segmented, long-term, and continuous development of the auto sector.
AUTO POLICY 2002 objectives are:
Promote auto-sector for growth and employment opportunities

59. Establish an international hub for manufacturing affordable cars, two wheelers, and
tractors Guarantee a stable progress towards open trade, with minimum risk to local
market and Indian economy To make it possible for ceaseless transformation of
auto-industry by enabling innovative designs, research, and development Support
the development of automobiles driven by alternative energy source Improving the
local safety and environmental values.
FDI in the Automobile Industry
There was a steady contribution of FDI in the development of the automobile sector.
The financial year 2007-08 registered a rise of 45%, which bounced up to 58% in the
FY 2009-10. According to DIPP (part of Ministry of Commerce & Industry in India),
the Indian automobile sector has successfully accomplished 4% of the total FDI
inflow. In the FY 2011-12, the automotive industry yielded $923 million.
Analysis of Automobile exports
An overall increase in exports was registered from the year 2001/02 – 2011/12.
Noteworthy developments in export shares (by volume) in all the four categories in
2012 are:
Two wheelers – 67%
There wheelers – 12%
Passenger vehicles – 18%
Commercial vehicles – 3%
From the above figures, it is quite evident that India offers huge growth potentials for
foreign players who are willing to invest in the automobile market.
Advantages of Investing in the Indian Automobile Sector
Growing Demand:

60. Due to rise in incomes and developing middle class, the purchasing power of people
has increased
Young population is escalating the demand for world class cars
With the improved infrastructure, commercial vehicles can access distant markets
easily. Hence, their demands have increased by multiple folds.
Easy availability of auto-finance makes vehicle purchases more easy
Escalating Investments:
Automobile firms from across the world can save 10% to 25% on operation costs in
India, which gives them a competitive advantage over America, Latin, and Europe.
There is abundance of educated and skilled manpower in India who speak English,
and they can be employed for lower wages in comparison to the European job
market.
Policy Support:
The aim of the Indian Government is to get recognized as a global automanufacturing hub, and many NATRIP centres have been introduced to push the
cause.
Funds are allotted by GOI for Research and Development (R&D) with an aim to
manufacture low cost vehicles
A wide range of policy support has been given to foreign investors in the form of delicensing, 40% reduction in excise duty, and decrease in import duties on CKD –
50% and CBU – 110%.
Innovation Opportunities:

61. The Tata Nano & Tata Pixel has opened a new segment for innovating low cost
cars. Strong export possibility in ultra-low priced car segment.
CNG (compressed natural gas) market value was more than $330 million in the
FY11. CNG distribution network is expected to expand from 30 cities (2009) to 250
cities in 2018.
Opportunities in the Auto Components Market Automotive assembly line.
India’s auto component sector is forecasted to increase from $43.4 billion (2011-12)
to gross revenue of $113 billion (2020-21).
According to the ACMA reports, the exports are expected to increase at a CAGR
(Compound Annual Growth Rate) of 17% by 2021.
As per RNCOS report, tyre production is predicted to touch 191 million units by the
end of fiscal year 2016. Manufacturers will have to invest massive amounts for the
next few years.
Apollo tyres have plans to expand in ASEAN.
Honda Cars India Ltd. proposes to export the components of diesel engine to
European and Asian markets from India.
Some of the key investments in auto components are:
Alten has designed to set an automotive testing lab in Chennai. It will help the
automobile manufacturers surrounding Chennai to commission the testing of
suspension system, diesel engines, and more.
Toyota – Kirloskar Auto Parts have invested Rs.500 crores in a new plant that will
produce new engines for hatchback cars and sedans in India.
Federal-Moghul has announced the introduction of Ferodo CV (Commercial Vehicle)
brake lining to be manufactured at their new plant in Chennai.
Volkswagen India Pvt Ltd. has started a unit in Pune for manufacturing package
parts of Polo and Vento for exports. The investment is believed to be approximately
Rs.56 crores.

62. Government Initiatives
Highlights of Union Budget (2012/13)
Under Income Tax Act, the R&D expenditure gets a weighted deduction of 200%,
which is extended by 5 years. The weighted tax deduction of 150% for expenses on
skill development has also been introduced. This will help auto industry to enhance
their products and performance.
The custom duty on MUVs (multi-utility vehicles) and cars over $40,000 has
increased from 60% to 75%. This step will encourage local employment
opportunities, manufacture, and value addition.
The discounted import duty on some of the particular hybrid automobile parts has
been extended, which will help the industry in attaining better cost-efficiency.
Global manufacturers like Toyota, Suzuki, and Hyundai are the top MNC auto
companies in the Indian auto-sector.
Road Ahead
Factors like supportive government policies, optimal business environment, and
accessibility of inexpensive proficient workforce have transformed India into a global
automobile hub.
Foreign manufacturers can consider investing in either or both, automobile sector
and auto components sector in India. Many top brands have already capitalized on
the opportunities, and many more are planning to invest. Today, India is one of the
most lucrative marketing platforms for the best vehicles that the world has to offer.

63. Chapter – 6
Present scenario

64. India:
•
Indian automobile sector manufacture over 11 million vehicle and export about 1.5
million each year.
•
Dominant product of the industry is two wheeler with market share of 75%,
passenger car with market share about 16%, commercial and three wheeler is
about 9%.
•
About 91% of the vehicle sold are used by the house hold and only 9% for
commercial purpose.
•
Industry has a turnover of more than USD$35 billion, and provide direct and
indirect employment to over 13 million people.
•
Supply chain is same as followed in U.S and Europe.
•
Level of trade export is medium and import is low, however current scenario is
rapidly changing and both import and export are growing at same level.
•
Basis of the competition in the sector is high and industry is currently have laife
cycle stage of growth.
•
With rapidly growing middle class, all the advantage is yet to be leveraged in
India.
•
With high cost of production, development, limited access to the technology and
increasing competition, the barrier to the Indian automobile sector is also high.
•
As India has well developed tax structure and power to leavy tax is with
Government still moter vehicle manufacturer profitability has been increased over
last 5 years.
•
Major players like TATA, Maruti Suzuki have material costof about 80% but
recording profit after tax is about 6% to 11%.

65. •
Level of technology change in motor industry is high but the rate of change is
medium.
•
Currently India’s increasing per capita dispose income is expecting to grow to
105% by 2015 and growth in export is playing a major role in the rise and
competitiveness of the industry.
•
TATA motor is leading in commercial vehicle with market share of 64% and Maruti
Suzuki leading in passenger vehicle with market share of 46% and Hyundai motor
and Mahindra is focousing to make their footprint in this segment.
•
Heo Honda is having 41% of two wheeler market and sharing 26% with BAJAJ
auto, Bajaj auto itself is occupying about 58% market share in three wheeler
market.
•
The price of oil and petrol affect the driving habits of customer and type of car
they buy.
•
Having quality manpower, good infrastructure, capital efficiency is key factor to
success in Indian automobile industry.
•
Both government and industry are obligated to intervene in Indian automative
industry of India. The government should facilitate infrastructure creation, create
favourable and predictable business environment attract investment and promote
research and development.

67. Uganda:
•
Automobile industry in Uganda is small but long established market in country for
motor vehicle.
•
Vehicle is increasing with average percentage of 8%and make it continue for very
long term in sales.
parts, repairs and servicing.
•
Alll are Asian owned with family type of organization and hold the franchise for
more than 10 years.
•
Remaing dealership are manufactured owned, fiat selling cars and trucks while
leylend sells trucks and buses.
•
Excepting laylend and fiat other motor dealer in Uganda are locally financed in
that there is no capital investment by overseas manufacturer. Initiative an
obtaining the dealership usually also came from local firm.
•
All 15 dealers are based in kampala, although they have exclusive right to sell in
Uganda.
•
This amazing degree of centrality arise from severl factor that it has good road
and less geographical barrier.
•
Potential purchaser can therefore easily avail himself of opportunity of viewing the
widerange of market, models, variants in city showroom.
•
Uganda has not yet started any component production in country as whole import
is done from jinja and kampala, hub of automobile.
•
Current market for both cars and commercial vehicle is very small and significant
growth in near future is also limited.
•
Currently growing segment in industry is heavy trucks and and other machinery
vehicle as it has more operating work.

68. •
Government is currently making direct intervention in industry and possible other
government step to reduce volatility in market and also stared giving benefit to the
new enternts and players into the industry.
•
So if company started new palnt in Uganda than it is the situation and scenario
that company should make it in jinja and tororo.
•
For the present however motor industry of Uganda firmly rooted in kampala for
location factor which gives emphasis to the disproportion importance of the city as
afocous for commercial and industrial growth in developing countries.

69. Chapter – 7
Conclusion

70. •
Currently India is the hub of the automobile industry, as country consist of many
automobile companies in industry with sustainable market share for the segment in
which they are dealing.
•
Uganda is currently growing market for the automobile industry as Hyundai and
BMW are coming up with their own huge investment in Uganda.
•
East Africa's automotive industry is getting busier as new vehicle brands enter the
regional market in anticipation for the economic boom resulting from r integration.
•
Automotive industry in Uganda is highly dominated by Toyota, cooper motor, general
motor so Indian companies have long way to struggle in Uganda to establish their
own market in both sales and spare parts of the car.
•
From India TATA is the only company which has its own market in Uganda, TATA is
using Uganda market for its cheap labor cost and lower duty on export and taxation
benefit provided by Government of Uganda.
•
As Uganda is about to have growth in commercial vehicle and heavy trucks, TATA
has opportunity to grow in Uganda as TATA is leading company in India for the
heavy vehicle and trucks.
•
Uganda has grown significantly after the end of dictatorship of Idi Amin who made
restriction on entry of the foreign company and also has threatened of lves of the
official of the company working there in that era so it will lead to have more winding
of company.
•
In current situation new government has formed very liberal rule for the development
of the country and as India companies are performing extremely well in domestic
market and having cost leadership strategy, so it will lead to gain benefit in Uganda.
•
As Ugandan market is in competitive stage currently, so there is huge opportunity to
Gain advantage of market in Uganda as every company has equal chance to gain
market share.

71. •
So, from above all it has been concluded that though Uganda has geographical
barrier and little instability in government it is having huge potential to grow as
people is having hardworking approach towards work.
Chapter – 8
Recommendation

72. On the basis of above information following recommendation
are require:
•
If any of Indian company wants to start business in Uganda in automobile sector
than at first it requires to check political stability as East African countries are
highly political instable.
•
As east African countries are facing problem of poverty which leads to robbery of
goods, killing of officials for local unemployment, so company establishing unit in
Uganda and other east African countries must have to take safety action for the
official and other staff who is working over there.
•
Indian company is required to make or grab opportunity in heavy vehicle segment
in Uganda as country is having maximum demand of heavy segment vehicle and
trucks.
•
Indian company will face very tough competition from Hyundai, Sonata, BMW and
many other companies which are in market of Uganda from long period of time, so
Indian companies are required to make analysis of market and based on that they
are supposed to enter into market of automobile industry.
•
As geographical condition of the Uganda is very difficult company is required to
establish proper chain of supply for the spare parts of the motor car and other
required things for the industry.
•
Company should make spare parts in Uganda and make it assemble in India as
export duty is very less and labor are cheap in Uganda.
•
Living standard of people of Uganda and whole east Africa is low so it is benefited
for the Indian companies to start business over there for heavy vehicles, trucks and
commercial vehicle.

73. Chapter – 9
Bibliography

75. Chapter – 10
Annexure