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SCP Analysis of Automobile Industry.
SCP - Structure Performance Conduct

Published in: Automotive
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  1. 1. AUTOMOBILE INDUSTRY GROUP 5 Gaurav Agarwal 527 Vivekkumar Degamadiya 556 Nitin Bhardwaj 566 Toshaan Kakkar 581 Arham Wahab 603
  2. 2. Indian Automobile Market Segmentation
  3. 3. Indian autoindustry:Among thetop10inworld 3rd 2nd 5th Two Wheelers Small Cars Commercial Vehicles
  4. 4. Automobile Sector At a Glance
  5. 5. Automobile Industry – A Global Hub • 15 manufacturers of passenger cars and multi-utility vehicles, • 9 manufacturers of commercial vehicles, • 16 manufacturers two/ three wheelers, • 14 manufacturers tractors, • 5 manufacturers of engines.
  6. 6. Current Market Leaders
  7. 7. Market Share in Automobile Industry
  8. 8. SWOTAnalysis Strengths Inflow of FDI. Increase in exports. Low cost & Cheap labour. Rising middle class incomes. Large Pool of engineers. Weakness Technology Constraints. Low Investment in R&D. High level of competition. Ex China. High Overheads. Opportunities Growing Popularity of vehicles. Focus from government in improving infrastructure. Increase in income & standard of living. Increasing rural demand. Women Drivers growth. Threats Low skilled labour. High import tariff. High cost of foreign technology. Not fulfilling International standards. High congestion in cities.
  9. 9. -InitialYears -1960’s and 1970’s -Late 1980’s multinational automakers, such as, Suzuki andToyota of Japan and Hyundai of South Korea, were allowed to invest in the Indian market -100% FDI THE JOURNEY
  10. 10. CONTRIBUTION TO GDP The automotive industry in India is one of the largest in the world with an annual production of 23.37 million vehicles in FY 2014-15 The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP) in 2015.
  11. 11. The twin phenomena of low car penetration and rising incomes, when combined with increasing affordability of cars, are expected to contribute to an increase in India’s automobile demand. THE BEST ISYETTO COME
  12. 12. PARAMETERS DETERMINING EMISSION FROM VEHICLES • VEHICULAR TECHNOLOGY The vehicle technology is at par with the international bench marks as Indian safety standards are being aligned with global technical regulations (GTR) and UN regulations. India is a signatory to UN WP 29 1998 agreement which develops GTR. India actively patriciates in the UN WP 29 body and contributes significantly so that the GTR reflect the driving conditions and requirements of the developing countries. • FUEL QUALITY In India we are yet to address the vehicle and fuel system as a whole. It was in 1996 that the ministry of environment and forests formally notified fuel specifications. Maximum limits for critical ingredients like benzene level in petrol have been reduced continuously and was specified as 5% m/m and 3% m/m for petrol in the country and metros respectively and stands now at 1% in line with international practices. • INSPECTION & MAINTENANCE OF IN-USE VEHICLES It has been estimated that at any point of time, new vehicle comprise only 8% of the total vehicle population. In India currently only transport vehicles, that is, vehicles used for hire or reward are required to undergo periodic fitness certification. The large population of personalized vehicles are not yet covered by any such mandatory requirement. • ROAD AND TRAFFIC MANAGEMENT Inadequate and poor quality of road surface leads to increased vehicle operation costs and also increased pollution. It has been estimated that improvements in roads will result in savings of about 15% of vehicle operation costs.
  16. 16. VEHICULAR SAFETY STANDARDS & REGULATIONS In India the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic, construction & maintenance of motor vehicles etc are governed by the Motor Vehicles Act 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR). The Ministry of Shipping, Road Transport & Highways (MoSRT&H) acts as a nodal agency for formulation and implementation of various provisions of the Motor Vehicle Act and CMVR. In order to involve all stake holders in regulation formulation, MoRT&H has constituted three Committees to deliberate and advise Ministry on issues relating to Safety and Emission Regulations, namely – CMVR- Technical Standing Committee (CMVR-TSC) Standing Committee on Implementation of Emission Legislation (SCOE) Automotive Industry Standards Committee (AISC)
  17. 17. INDIAN AUTOMOBILE INDUSTRY MARKET STATUS  The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI).  Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years.  The exports in automotive sector have grown on an average compound annual growth rate of 30% per year for the last seven years. The export earnings from this sector are over USD 6 billion.  Even with this rapid growth, the Indian automotive industry's contribution in global terms is very low.  This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2.3 million in the year 2008,  yet India's share is about 3.28% of world production of 70.53 million passenger and commercial vehicles.  India's automotive exports constitute only about 0.3% of global automotive trade.
  18. 18. REVIEW OF AUTOMOTIVE MISSION PLAN 2006 - 2016 “To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.” • 7.1% of India’s GDP • 27% of India’s industrial GDP • 4.3% of overall exports (second only to textiles & handicrafts) • 13% of excise revenues • Incremental employment generation in excess of 19 million since FY06 • Total investment in excess of US$ 35 bn of which US$ 24 bn is contributed by automobile companies while US$ 11 bn is contributed by automotive component companies • 8% of the country’s R&D expenditure • Improvement in fuel efficiency of passenger vehicles resulting in fuel savings of 8.6 bn litres between FY06 and FY14
  19. 19. Expected changes in market conditions and barriers
  20. 20. Prediction on the bases of GDP
  21. 21. The Road Ahead Contribution in GDP to increase from 10% to 13% Creation of incremental 100 million jobs Projected $80 billion in capex investments. BSV emission norms to be adopted by 2019 & BSVI by 2023 AMP envisages to implement ‘end of life policy’ for old vehicles