Escolar Documentos
Profissional Documentos
Cultura Documentos
1
Profile of the Automotive Industry
Vehicle sales in India in 2005 - 06
(in million)
0.36
0 2 4 6 8
Cars CVs Two wheelers Three Wheelers
The industry has grown at a CAGR of 14% p.a over the last 5 years, with total sales of
vehicles reaching around 9 million vehicles in 2005-06
The Indian auto industry has the potential to emerge as one of the largest in the world.
Presently, India is
– 2nd largest two wheeler market in the world
– 4th largest commercial vehicle market in the world
– 11th largest passenger car in the world and is expected to be the 7th largest market
by 2016
2
The industry has emerged as a key contributor to the Indian economy
Players in the Auto industry
Auto
Industry
•GM •Tata Motors
•Toyota Global Domestic •Mahindra &
•Ford OEM OEM Mahindra
•Hyundai •Bajaj Auto
•Maruti Suzuki •TVS Motors
•Honda •Hero Honda
•Skoda •Bajaj Tempo
Global Domestic
•Volvo •Ashok Leyland
Suppliers Suppliers
•Mercedes
Engineering
&
Development
Companies
3
Current Scenario
4
Automobile Production Trends
Category 2001-02 2002-03 2003-04 2004-05 2005-06
5
Automobile Domestic Sales Trends
Category 2001-02 2002-03 2003-04 2004-05 2005-06
Passenger Cars 509088 541491 696153 820179 882094
6
Key Players in the Indian Auto Industry -
Passenger Cars
MUL is the largest passenger car manufacturer in India
The largest player in the Indian industry. Plans to launch new and
exciting products in the Indian markets, including the ‘1 – lacs’ car
The third largest passenger car manufacturer in India and one of the
largest exporters of vehicles. Has established India as one of its
manufacturing bases in the world. Is planning to invest heavily to
boost exports from India.
North/Central
Hindustan Motors
Honda SIEL
Delhi-Gurgaon-Noida-Ghaziabad
Maruti Suzuki
Tata Motors East
Pithampur
Tata Motors
Rajkot-Halol Jamshedpur
Hindustan Motors
Kolkata
Rs. 3-5 Lakhs Ambassador Fiat Palio Hyundai Santro Getz Chevrolet Opel Corsa Maruti Zen Wagon R
Versa Esteem Gypsy Ford Icon & Fiesta Tata Indica Indigo Mahindra Bolero
Rs. 5-10 Lakhs Chevrolet Swing Optra Tavera Hyundai Accent Elantra
Mahindra Scorpio Maruti Baleno Toyota Corolla Innova
Tata Safari Mitsubishi Lancer Lancer Cedia Honda City
Rs. 10-15 Lakhs Ford Mondeo & Endeavour Chevrolet Forester Skoda Octavia Classic & Combi Honda Civic
& CR-V
Rs. 15-30 Lakh Maruti Suzuki Grand Vitara Hyundai Sonata Embera Terracan & Tucson Mitsubishi Pajero
Audi A4 Opel Vectra Honda Accord Mercedes C Class Toyota Camry
Rs. 30-90 Lakhs Audi A6 A8 & TT BMW X5 5 Series & 7 Series Mercedes E Class, S Class, SLK, SL &
CLS-Class Porsche Boxster Cayenne 911 Toyota Prado
10
Regulations - Auto Policy
In 2002, the Central Government formulated an auto policy that
aimed at promoting an integrated, phased, enduring and self-
sustained growth of the Indian automotive industry.
The Auto Policy allows automatic approval for foreign equity
investment upto 100% in the automotive sector and does not lay
down any minimum investment criteria.
The auto policy lays emphasis on R & D activities carried out by
companies in India.
• Weighted tax deduction of upto 150% for in-house research and R & D
activities.
Formulation of an appropriate auto fuel policy to ensure availability
of adequate amount of appropriate fuel to meet emission norms.
The auto policy confirms the government’s intention on harmonizing
the regulatory standards with the rest of the world.
11
Automotive Regulations
Indian automotive regulations are closely aligned to the ECE regulations. The table
below shows the level of alignment of the Indian regulations with the ECE regulations.
The key regulations that are likely to impact the auto industry in the future are:
Crash-related regulations
Introduction of Bharat Stage IV norms
12
Future Regulations
Approach
Regulation Road Map Targets Harmonization with ECE
Industry challenges to development standards
Better vehicles: more safer and Homologation and
environmental friendly certification testing
agencies and centres
Presently, Bharat Stage III ( Equivalent to Euro III) is mandated in Metro and other
large cities and Bharat Stage II ( Equivalent to Euro II) is mandated for rest of the
country
Bharat Stage IV ( equivalent to Euro IV) is expected to be introduced in the large
Metros around 2009 and Bharat Stage III in the rest of the country
13
Demand Drivers
The growth in domestic demand is driven by a number of
factors including:
• Overall economic growth
• Rising income levels
• Low cost of finance and easy availability of finance
• Increased consumer awareness
• Closer linkages with global auto trend leading to introduction of
contemporary models
• Government’s specific policy initiatives such as lower excise duties on
smaller cars
• Increased job demands
• Growth of satellite towns
• Onset of consumerism and travelling culture
• Completion of Golden Quadrilateral project
14
Key Success Factors – Market Leaders
Presence across segments - Manufacturers with presence across
various segments can ensure higher volumes and better capacity
utilization by using common manufacturing facilities.
Cost-competitive operations - Higher localization, reduction in the
vendor base, use of common components, manufacturing a larger
number of models on a single platform have helped bring down prices.
Wide dealer network - After sales service and access to original spare
parts act as distinct advantages in the marketing of a model.
Easy availability of finance - MUL tied up with State Bank of India
(SBI) in June 2003 to offer finance to its rural and semi-urban
customers through the latter's 13,000 plus strong branch network.
Strong support from parent companies:
• Strong brand
• Strong financial and technological support
• Access to latest technology for launching new models, enhanced export capability
15
Customer Segmentation (by car ownership and use)
Individual customer Self employed persons Corporate Commercial
segment
Common people who don't Car is purchased in the Car is registered in the Includes taxi and tourist
fall under any specific name of the company -use name of the company at (TT) segment and the lease
category/not covered by any could be personal, official the time of purchase. rental segment.
corporate scheme. or both.
Share Around 15% in the 15% to the overall car 12% share in the overall car
Around 55% in the overall overall car market sales - sales - 28% of the sales in sales with a greater share in
car demand - being the relatively large share in the mid-size segment with the compact and mid-size
highest in the mini and the executive and a greater presence in the segment.
compact segments. premium segment. HMS.
Demand Driver Running cost instead of Business expansion or Fuel cost per km, driven
Cost of ownership-price, financing cost stagnation by fuel efficiency (km per
taxation, running cost New models and Changes in depreciation litre) and cost of fuel (Rs
,finance cost (highest variants with improved and tax rules per litre) drives demand, as
sensitivity) technology (improved Marketing schemes well as model preference
Promotional efforts diesel technologies – Brand image of the car
-discounts, advertising CRDi & TDi) manufacturer
New model launches
16
Changing Dynamics of Segmental
Demand
17
Player-wise Market Share
18
Cars: Sales Trend and Market Share
(key segments)
20
Hot Hatch Face-Off
Suzuki Swift versus Hyundai Getz
21
Background
22
Marketing: Swift
23
Marketing: Getz
24
C – Segment Cars Competition
25
Marketing: City
26
Marketing: Fiesta
Newest in the line of “made for India” Ford cars
Exists as a hatchback in Europe, suitably modified for
India
Abhishek Bacchan (movie star in India) was hired as
brand ambassador
“Go fida” campaign: a car that will bowl you over –
this was the message communicated
Mileage: 31 kilometers/litre record (published
recently in an auto magazine)
27
Marketing: Verna
Latest car from Hyundai, India.
(Originally) Intended as replacement for the Accent –
sandwiched on both sides
Good features: Diesel economy with high technology
(VGT) and power (110 bhp / 24kgm).
Market response – time will tell!
28
D – Segment Cars
29
Marketing: Octavia
Skoda’s first car in India: need to build the Skoda
brand first
Quality differentiator: “Obsessed with quality, since
1895” – this was the tagline used
Built on the golf platform – Skoda is part of the VW
group
USP: Diesel economy (users have reported 19 km per
litre mileage)
Replacement of the Octavia (Skoda Laura) falls in the
next segment, i.e. competes with Honda Accord
30
Marketing: Corolla
Best selling car in the world (over the years)
Not as successful as Toyota would like
Marketing changed over time
• Initial: Successful people use Corolla
• Now: Trying to cash in on its worldwide acceptance
Quality niggles (on a Toyota!) in the interior have
been a cause for complaint among owners
31
Marketing: Civic
One of Honda’s best selling brands worldwide:
eagerly awaited before its launch in India
Currently outsells the Corolla – in markets abroad,
too.
Brand communication: “Pure Exhilaration” tagline
used to communicate sporty nature
Scores on the styling front – especially the interior
Aggressive salespeople
Already the leading seller in the segment
32
Future Trends
Individual buyers, lease rental-based bulk buyers for high volume growth
More importance to fuel efficiency, adaptability with road condition, heavy traffic
Not many crave a status symbol small car is the choice of the hour
Government regulations favouring manufacturing of small cars
The development of a vibrant used car market will drive the growth of new car and
UV sales by
• Helping owners: Dispose old car; Upgrade to a new car
• Creating potential customers for new cars: Used car owners upgrade to new models
• Demand from two-wheeler owners who want to upgrade to used cars
All major players to launch diesel variants and models with increasing frequency.
However, the following player initiatives will have a significant impact on diesel
share:
• Maruti setting up an initial 100,000 diesel engine capacity by the end of 2006, which it
eventually plans to expand to 300,000 units
• Tata Motors' Rs 100,000 car, targeted for launch by mid-2008
33