FUNDAMENTAL AND MARKET ANALYSIS OF INDIAN SMALL CAR INDUSTRY IN REFERENCE TO COMPARISION OF INDIAN AND FOREIGN SMALL CAR

INDUSTRY

Presented By: Bhupendra Kumar Pandey

 The small car sector is one of the core industries of the

Indian economy, whose prospect is reflective of the economic resilience of the country. The small car sector in India is growing at around 18 per cent per annum. The small car sector has been contributing its share to the shining economic performance of India in the recent years.. Due to its deep frontward and rearward linkages with several key segments of the economy, a small car industry has a strong multiplier effect and is capable of being the driver of economic growth

 The small car sector has been contributing its share

to the shining economic performance of India in the recent years.. Side by side with fresh vehicle sales growth, the small car sector has witnessed big growth. India is on the peak of the Foreign Direct Investment wave due to the growth opportunities of the small car Industry.

 Chinkara Motors: Beachster, , Roadster 1.8S

Rockster, Jeepster, Sailster

Hindustan Motors: Ambassador Mahindra: Thar, Verito, Genio

Premier Automobiles Limited: Sigma, RiO

San Motors: Storm TataMotors:Nano, Indica, Vista, Indigo, Manza, Indigo

CS, Venture, , Xenon, Aria

 Tata

Mahindra
Honda Daimler Chrysler

Suzuki
Ford Fiat

Hyundai
General Motors

 Fiat India

Ford India
General Motors India Chevrolet

Honda Siel
Hyundai Motor India MarutiSuzuki

Nissan Motor India

Volkswagen India

 The production of small car has greatly increased in

the last decade 29.39 % change has recorded in last year. India had over 100 million vehicles registered on its roads in the year 2011. This is a growth of about 100% in the past 9 years. Over 77% and about 77 million of these vehicles and about 14 million are cars, jeeps and taxis. In recent years, India has emerged as a leading center for the manufacture of small cars. Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually from India.

 India's automobile exports have grown consistently

and reached $4.5 billion in 2011, with United Kingdombeing India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014.

 Indian domestic demand has been fuelled by ultra-low-

cost cars. The Indian Small Car Industry has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD $35.8 billion,and an investment of USD 10.9 billion. Determinants of demand for this industry include vehicle prices and exchange rates, preferences, the running cost of a vehicle (mainly determined by the price of petrol), income, interest rates, scrapping rates, and product innovation.

 The Indian Small Car industry embarked a new

journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). International Markets Exports The level of trade export is medium The level of trade export is increasing International Markets Imports The level of trade import is low The level of trade import is increasing

 Economy

One of the most visible impacts cars have on the

economy is the creation of jobs at automakers and car dealers. Transporting new cars to dealerships and marketing them to consumers are additional employment opportunities created by cars. cars represent savings goals for many people and a car is a useful asset, especially if it is used as part of a small business and may be used as a taxdeductible expense.

GDP The market value of Small Car Industry is more than US$8 bl. and Contribution in Indian GDP is near about 5% and will be double by 2016. Recession India is strong and growing industry but the impact of recession is evident now on industry as sales & growth of automobile companies have declined. Inflation Despite of negative inflation these days (-.21% on 22-Aug-11) we saw an increasing trend of sales in small car sector. A moderate amount of inflation is important for the proper growth of an economy like India because it attracts more private investment.

FDI In India FDI up to 100 percent, has been permitted under automatic route to this sector, FDI inflows in Small Car Industry 2010-2011- was Rs.5,212 Cr an increase of 47.25% compare to 2009-10, while in April-May 2011 it was around Rs.497 Cr.

 SWOT analysis of the Indian small car sector gives the following points: Strengths Large domestic market Sustainable labor cost advantage Competitive auto component vendor base Government incentives for manufacturing plants Strong engineering skills in design etc Weaknesses Low labor productivity

High interest costs and high overheads make the production uncompetitive
Various forms of taxes push up the cost of production Low investment in Research and Development Infrastructure bottleneck

 Opportunities Commercial vehicles: SC ban on overloading

Heavy thrust on mining and construction activity

Increase in the income level Cut in excise duties Rising rural demand Threats Rising input costs Rising interest rates Cut throat competition

TATA Motors
Strengths Strong domestic player. Tata

General Motors
Strengths

Motors is Indias largest automobile manufacturer by revenue Tata Motor has strong research and development (R&D) capability. Weaknesses Tata Motors recorded decline or marginal growth in its vehicle sales in the last financial year. Tata Motors posted weak revenues in proportion to the total number of its employees.

Large Market Share Global Experience Variety of Brand Names GMAC Customer Financing Program OnStar Satellite Technology Weaknesses Behind on Alternative Energy Movement This is GM's biggest weakness. Poor Organizational Structure Stagnant Profitability Overly Dependent on US market. Poor Credit Status

Opportunities Tata Motors has launched various new products during the last two year period (201011). Acquisition of JLR provides the company with a strategic opportunity to acquire iconic brands, and increase the companys business diversity across markets and product segments. Threats Tata Motors face intense competition from its domestic as well as foreign competitors including General Motors, Honda Motor, Maruti Udyog, Mitsubishi Motors, Fiat, Ford and so on. The company is subjected to extensive governmental regulations regarding vehicle emission levels, noise, safety and levels of pollutants generated by its production facilities

Opportunities
Alternative Energy Movement

Continuing to Expand Globally.

Low Interest Rates Develop New Vehicle Styles and

Models
Threats Rising Fuel Prices

Growth of Competitors
Pension Payouts Increased Health Care Costs Rising Supply Costs, i.e. Steel

 Indian small Car has a lot of scope for four wheelers due

to development in infrastructure of the country. The Indian auto market is still untapped the majority of the people in country dont own a four wheeler and all the major auto companies are trying to increase their sales by several moves. The growing mobility needs of the people in India augur well for four wheeler industry. India has gained as a cost effective manufacturing base for small cars is fuelling creation of capacities by all major manufacturers in the country

Thank you