The document discusses the Indian automobile sector's significance, revealing its contribution of 22% to the country's manufacturing GDP. It highlights substantial growth in vehicle production and sales, particularly in the two-wheeler segment, along with substantial foreign direct investment. Key players, market trends, product variety, cost structures, and government regulations are also examined, indicating a cautiously optimistic outlook for the industry's future.

1. Cost and Management Accounting
PGDM Semester- 1
Batch 2014-2016
TITLE: Automobile Sector
Presented to Prof. CMA Arun D. Chandarana
Group-IX
Sr. No. Roll No. Name
1 86 Amit Sharma
2 77 Dhrumit Shah
3 75 Harpreet Singh
4 76 Jash Sangoi
5 96 Pintu Singh
6 85 Roshan Shanbhag (GROUP LEADER)

2. INTRODUCTION
• The Indian automobile sector is one of its most vibrant
industries. The industry accounts for 22 per cent of the
country's manufacturing gross domestic product (GDP)
• The Indian auto market has the potential to dominate the global
auto industry, provided a conducive environment is created for
potential innovators to come up with new pilot projects.
• The next few years are projected to show solid but cautious
growth due to improved affordability, rising incomes and
untapped markets

3. INTRODUCTION (CONTD……)
MARKET SIZE
• The automobile industry produced a total of 1,861,849
vehicles including passenger vehicles, commercial vehicles,
three-wheelers and two-wheelers in April 2014 as against
1,687,243 in April 2013, registering a growth of 10.35 percent
over the corresponding month of 2013.
• Two-wheeler sales registered growth of 11.67 percent in April
2014 over April 2013.
• The cumulative foreign direct investment (FDI) inflows into
the Indian automobile industry during the period April 2000 -
May 2014 was recorded at US$ 9,885.21 million, according to
data published by Department of Industrial Policy and
Promotion (DIPP).

4. MAJOR PLAYERS
• TATA MOTORS
• MARUTI SUZUKI INDIA
• HYUNDAI MOTOR INDIA
• MAHINDRA & MAHINDRA

5. PRODUCT RANGE
• Product range is defined as the number of vehicle permutations
offered to the customer of a particular model
• The main impact of variety is that the more variety is offered, the less
likely the customer will find the right vehicle amongst finished car
stock. Hence the more variety offered, the less successful sales
sourcing from stock will work, or the higher the discounting risk,
whereby the customer is sold a vehicle which compromises on his
original specification, using sales incentives
• The Indian auto components industry can be broadly classified into the
organized sector and the unorganized sector. There is a clear
demarcation with respect to products in these two sectors, the
organized sector caters to high value-added precision engineering
products and accounts for around three fourth of the total production.
The unorganized sector caters to the lower value-added segments.

6. GOVERNMENT REGULATIONS
• BOOST TO GST (GENERAL SALES
TAX)
• REDUCTION OF EXCISE DUTY TILL
DECEMBER 2014
• DEVELOPMENT OF ROADS AND
INFRASTRUCTURE
• DEVELOPMENT OF AGRICULTURAL
SECTOR

7. COST STRUCTURE
Segment wise cost structure in the auto-component sector (2013-2014):
Equipment
Parts
Braking
Parts
Steering
Parts
Electrical
Parts
Engine
Parts
Raw Material
Cost
62% 72% 70% 66% 47%
Power and
Fuel Cost
3% 3% 5% 2% 4%
Employee
Cost
17% 8% 11% 12% 23%
Consumable
Stores
1% 4% 4% 1% 7%
Selling Cost 6% 4% 3% 1% 5%
Others 11% 9% 7% 18% 14%

8. COST STRUCTURE (CONTD….)
Cost Structure in the auto-component sector (2013-2014):
Cost Item %
Material Cost 51.3
Power and Fuel Cost 3.8
Employee Cost 12.5
Other Manufacturing Expenses 6.9
Selling expenses 3.3
Interest & Finance Costs 6.4
Depreciation 15
Tax 10
Operating Profit Margins 15.3
Net Profit Margins 4.2

9. CONCLUSION
• Through applying different analysis we come to know about
the company’s product, government rules & regulations
and their market positions
• A fall in interest rates and stable fuel prices are expected to
create an environment conducive for growth in this industry
• The Automotive industry is the key driver of any growing
economy