Introduction Automobile Dealers Network in India In terms of Car dealer networks and authorized service stations, Maruti leads

the pack with Dealer networks and workshops across the country. The other leading automobile manufacturers are also trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the customers in the form of reduced interest rates. India is the second fastest growing automobile market in the world after China. Passenger vehicle production during the period April 2010 to August 2010 increased by nearly a third from a year ago. For the year ending March 2011, passenger vehicle output is expected to exceed 2.5 million.

India is emerging as a major production base for small cars, with output expected to reach 3 million units by 2016. The country is building a reputation in designing and manufacturing low cost cars.

Production of trucks and buses increased by nearly 66% between April 2010 and Aug 2010. An expanding highway network and overall economic growth is pushing up demand. India is the second largest market for motorcycles worldwide. Output of over 4.5 million units was registered during April 2010 Aug 2010, marking growth of over 27%. The auto parts industry is also scaling up, as global car manufacturers are increasing their component sourcing from India, due to cost and engineering competencies. Competition is intense as most global firms have entered the market.

Major Manufacturers in Automobile Industry

Maruti Udyog Ltd. General Motors India Ford India Ltd. Eicher Motors Bajaj Auto

Daewoo Motors India Hero Motors Hindustan Motors Hyundai Motor India Ltd. Royal Enfield Motors Telco TVS Motors DC Designs Swaraj Mazda Ltd

EVEN GROWTH Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8 times compared to the 2.2 times increase in passenger cars. Furthermore, two-wheeler output continues to dominate the volume statistics of the sector.

Changes happening in the industry the reduction of custom duty on raw steel. Green cars & technology received a shot in the arm from the Finance Minister as he announced a National Mission for hybrid & electric vehicles to promote their adoption as well as incentivise them. A concessional rate of 5% excise duty will be granted to hybrid vehicles if manufactured locally. In a nutshell, the budget has helped in the creation of a growth-conducive environment for the Indian automotive industry. Apart from not increasing the excise duty rates and hence not making cars more expensive the

budget will also help the manufacturers to improve their profitability due to reduction of excise duty for raw steel. The focus on green technology along with promoting their adoption is also a welcome move and even though the effects might not be visible right now a continued focus on the sector will ensure growth in the medium and long-term.

Reference

Environment analysis using PESTLE Political 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.

 F ormulation of an appropriate auto fuel policy to ensure availability of adequate amountof appropriate fuel to meet emission norms Confirms the governments 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. 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.

 P lan to have a terminal life policy for CVs along with incentives for replacement for such vehicles. P romoting multi-model transportation and the implementation of mass rapid transport system 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. W eighted tax deduction of up to 150% for inhouse research and R & D activities. 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.

 F inance 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 tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.

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. P reference for small and compact cars. They are socially acceptable even amongst the well off. P reference for fuel efficient cars with low running costs. 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. P reference for small and compact cars. They are socially acceptable even amongst the well off. P reference 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. W eighted tax deduction of up to 150% for inhouse research and R & D activities. The Government of India is promoting National Automotive Testing and R&D InfrastructureProject (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 W ith the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. W ith the development or evolution of alternate fuels, hybrid cars have made entry into the market. F ew global companies have setup R &D centers in India. Major global players like audi, BMW, Hyundai etc have setup their manufacturing units in India. Environmental y 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. y Physical conditions like environmental situation affect the use of automobiles. If the environment is pleasant then it will lead to more use of vehicles.

y Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. y With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. y With the development or evolution of alternate fuels, hybrid cars have made entry into the market. y Few global companies have setup R &D centers in India. y Major global players like audi, BMW, Hyundai etc have setup their manufacturing units in India. Legal y Legal provision relating to environmental population by automobiles. y Legal provisions relating to safety measures. y Confirms the governments intention on harmonizing the regulatory standards with the rest ofthe world y Indian government auto policy aimed at promoting an integrated, phased and

conductive growth of the Indian automobile industry. y Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheelers. y Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry.