Hindustan Motors is an Indian automobile manufacturer established in 1942. It manufactured India's first car, the Ambassador, which is still in production today and is widely used as a taxi and government vehicle. The company has a joint venture with Mitsubishi and produces various models of cars, SUVs, and MUVs. While it has a long history and brand recognition in India, Hindustan Motors has experienced financial losses in recent years and faces challenges from increasing competition in the domestic automobile market.

1. Team -7
Chang Fu
Rizwan Chand
Natsuko Matsuda
Kyeung Ah Lee
Sindhu Nagalingam

2. Background
• Automobile Manufacturer established in 1942
• Manufactured the first ever car in India called the Ambassador
• The famous Ambassador car is used as a government limousine widely
used as a taxicab
• Hindustan has a joint venture with Mitsubishi, producing versions of the
Lancer and Pajero
• The Company currently manufactures passenger cars, multi utility vehicles
and sports utility vehicles and has a total of 8 models
• Manufacturing facilities are situated in the states of Madhya Pradesh,
Tamil Nadu and West Bengal

3. Financials
Rs. Lacs
Year ending 31/03/2010 31/03/2009 31/03/2008 31/03/2007
Revenue 73,599 77,070 85,300 80,637
PBIT (459) (952) 8,698 5,275
PAT (5,110) (3,885) 3,084 1,329
Equity Share Capital 16,125 16,125 16,125 16,125
Total No- Car Sales 1,949,776 1,552,703 1,549,882 1,379,698
25.57% 0.13% 12.17% 20.70%

4. PEST Analysis
Political • Environmental legislation explorations
• Taxes and Duty
• High concentrations of market ownership
• Subsidies
Economical • Overcapacity
• Industry at the whim of the business cycle
• Few independent car makers
• Difficulty in sustaining competitive ads.
• Economies Of Scale
• Mergers and strategic alliances
Social • Erosion of brand extras
• Market movement from petrol to diesel
• Manufacturing to a consumer dictated market (Culture,
Fashions and taste)
• Environment
Technological • Discoveries spurred by govt. legislation
• Rising costs of developments
• New model development is cautious
• New technology for development
• Ecommerce

5. Porter’s five forces - Indian car market
0
1
2
3
4
5
Rivalry
Buyer Power
Supplier Power
new entrants
Substitutes
IndustrialForces - Indian car market
Middle
High
Middle
High
Middle
Overall, Indian car market could be attractive in terms of high growth rate.
But, substitutes force and competition are high.

6. Competitive Rivalry
• Strong
• The market is dominated by a few number of
large-scale companies(Maruti Suzuki, Hyundai,
Tata have about 60% of market share).
• Rivalry is somewhat reduced due to a degree
of differentiation, luxury and budget.
• Since industry competitiveness is high, HM
will have to differentiate its products and have
a clear position in the market

7. Buyer Power
• Middle
• A large number of buyers
• Price-sensitive
• Low-switching cost
• Emergence of used car market could increase
buyer power

8. Supplier Power
• Middle
• Fairly low differentiation of raw materials
could reduce supplier power.
• The importance of quality of raw material
could enhance supplier power
• A each car company’s contribution for
supplier’s overall revenue is not high, so it
could increase supplier power.

9. New Entrants
• Middle
• Brand and reputation are highly important, it
could be hard to enter.
• High levels of capital investment required
• Highly growth market could be attractive for
new entrants.
• Entry of established foreign brands could be
relatively easy

10. Substitutes
• High
• Emergence of used car market
• Public transportation
• Personal transportation
• Hybrid cars

11. Capability analysis
Resources Competences
Threshold
capabilities
Threshold resource
(Tangible/Intangible)
- Safety
- Durable
Threshold competence
- Production system and
network in India
Capabilities for
Competitive
advantage
Unique resources
(Tangible/Intangible)
- Network with foreign car
companies
Core competences
- Identity of Ambassador as a
Indian symbolic car
- History
- Customer belief
(ex. political users)

12. Company PERCEPTION Matrix
1 2 3
5
4
7
6
9
8
High
Medium
Low
B
R
A
N
D
P
E
R
C
E
P
TI
O
N
Functional Some Product
Differentiation
Luxury
PRODUCT RANGE
VW
TOYOTA
Ford
TATA
Hindustan
motors
Hyundai
Mercedes
AUDI

13. BRAND PERCEPTION Matrix
1 2 3
5
4
7
6
9
8
High
Medium
Low
B
R
A
N
D
P
E
R
C
E
P
TI
O
N
Functional Some Product
Differentiation
Luxury
PRODUCT RANGE

14. Positioning
• Ambassador offers unique design, unmatched
space, comfort, safety & sturdiness, which no
other new age car of this segment
(Taxi/tourist) offers.
• Tap new segments and through customer
relations enhancement initiatives with the
launch of the ‘click and customize’ service for
Lancer customers.

15. Positioning
• Further consolidate its position in the SUV
segment.
• Explored the global auto components business.
• In order to use its design and engineering
skills to enter new businesses.

16. Key Success Factors
 The first Indian Car Company to start production in
India in 1942
 Through the collaboration with Mitsubishi of Japan, the
manufacture of the new Mitsubishi Lancer
 HM has a vast service network in The Passenger Car
and Utility Vehicle market:
 115 strong dealer network, 50 Service and Parts dealers and
additional 60 exclusive Parts dealers.
 The support by 4 Regional Offices and Nation-wide Territory
Offices

17. Key Success Factors
 To own an auto components subsidiary which makes
automotive castings, forgings and stamping.
 Over a period of time, sales from auto components could
be as high as 30-40%
 First mover advantage in several areas like Internet
selling and customisation

18. Key Success factors
1 2 Pajero
Luxury & Comfort
Tough & Reliable
Prestige
3
4 Ambassador
Sturdy & Tough
5 Outlander
Lancer:
Fuel-efficient
Value for money
Comfortable
6 Montero
Evolution:
State of symbol
High level comfort
7
Winner:
Functional &
Reliable
B
R
A
N
D
P
E
R
C
E
P
T
I
O
N
Functional Some Product Luxury
Differentiation
PRODUCT RANGE
High
Medium
Low
(Some export)

19. Further research
• Financial analysis
• Company position in industry
• Competitor analysis
• Current internal issues
• Problems facing the industry
• Strategic Options

20. Thank You