Automobile Sector in India Essay

The car fabrication in India is one of the largest in the world and one of the fastest growing globally. India manu occurrenceures over 17. 5 one million million vehicles (including 2 wheeled and 4 wheeled) and exports about 2. 33 million every year. It is the worlds second largest manufacturer of motorcycles, with annual gross sales exceeding 8. 5 million in 2009. Indias rider car and commercial vehicle manufacturing manufacturing is the seventh, with an annual production of more than 3. 7 million units in 2010. consort to recent reports, India is set to evanesce Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around iii million units in the course of 2011-12. In 2009, India emerged as Asias fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. We atomic number 18 all well aw are of the fact that, for decades the Indian automobile pains was way behind some of the close influential econ omies in the world like USA and Japan. The Indian automobile perseverance, though in its nascent stage, is expected to set the ball rolling in the Indian Economy as well.Coming to the automotive slides, today, the Indian automobile patience is one of the most vibrant, modern and upbeat automobile markets in the world. It is similarly the second largest dickens-wheeler market in the global map. With the emergence of the financially sound ticker class, the four-wheeler subdivision is set for tremendous outgrowth and one can expect of more impetus to the economy from this sector. No wonder then that this industry has become the centre of attraction for most of the global automotive giants the world over.The factors playing a key role in the Indian automobile industry trends are as follows Government Unlike in the past, the Indian Government has gone through a total role reversal by comme il faut the enabler rather than the controller. In the recent past it has started providin g better infrastructure and a conducive atmosphere to attract investments and implementing growth oriented economic policies. Competition With the culmination of the multinationals, an immense pressure has grown on the Indian companies.As a result, a lot of joint ventures have mastermindn place, some others have invested intemperately on R&D to build their own empires and the rest have perished. Customer Armed with broad(prenominal)er buying power and an ever change magnitude lookout from products and services, the customer is undoubtedly the king and has propelled a fierce competition among the major players in the market. Pollution and Safety Norms cars as well as two-wheelers have met the most stringent international norms of pollution. Euro II vehicles have become the norm of the day all over India.Unfortunately, in the Indian context, safety in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of adequate safety features in the vehicles such as airbag and crumple zone unavoidably ready attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory. Bikes Keeping apace with the global trends the two-wheeler segment has witnessed tremendous growth both qualitatively and quantitatively. Bikes with higher engine capacities have done commendably well on the Indian roads. Bike styling and fuel efficiency has also seen major developments.In short, the Indian automotive industry is set for exponential growth in the future. Consistent growth and dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan Motors, Maruti Udyog, Fiat India closed-door Ltd, Tata Motors, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating the vehic le industry.A few of the foreign players like Toyota Kirloskar Motor Ltd. , Skoda India Private Ltd. , Honda Siel Cars India Ltd. have also entered the market and have catered to the customers needs to a large extent. Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are culmination up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the scientific advancements.Besides, there are many reinvigorated projects coming up in the automobile industry leading to the growth of the sector. Year All Vehicles (in 000) Two Wheelers (in 000) Cars, Jeeps and Taxis (in 000) Buses (in 000) Goods Vehicles (in 000) Other Vehicles (in 000) 200154,99138,5567,0586342,9485,795 200258,92441,5817,6136352,9746,121 200367,00747,5198,5997213,492 6,676 200472,71851,9229,4517683,7496,828 200580,04557,41710,4608224,0537,337 200688,06863,48711,5718794,3457,891 200796,80870,14112,8109364,6528,464 2008106,59177,58814,2221,0035,0189,065.Total Number of Vehicle Registrations in India from 2001 to 2008 Investment in Automobile Sector Nearly every automobile company is investing at a higher rate than ever before to achieve a high growth trajectory. The overall investment in the sector has been increasing quite rapidly. It is expected that by the end of 2010 Indian automobile sector will be investing a huge amount as Rs. 30,000 crores. Top ten players in the Indian automobile sector- The domestic players as well as the foreign players dominate the Indian automobile sector.The key players contributing to the growth of the sector are discussed below. The key players in Indian automobile industry are 1) Maruti Udyog Limited 2) Hero Motors Limited 3) Tata Group 4) Bajaj Auto Limited 5) Mahindra Group 6) Ashok Leyland 7) Yamaha Motor India 8) Hyundai Motors India Limited 9) Toyota Kirloskar Motor Private Limited 10) Honda Siel Cars India Limited Growth in the Sector At present the industry is enjoying a growth rate of 14-17% per annum, with domestic sales growth at 12. 8%. The growth rate is predicted to recur by 2015.As it is seen, the total sales of passenger vehicles cars, utility vehicles and multi-utility vehicles in the year 2005 reached the mark of 1. 06 million. The current growth rate indicates that by 2012 India will overtake Germany and Japan in sales volumes. Financing schemes have become an important factor in the growth of automobile sales. More and more financial schemes are coming up with easy installment plans to lure the customers. Apart from domestic production, the industry is consistently focusing on the automobile exports. The auto component segment is contributing a lot in the export arena.The liberalized policies of the government are now making the companies go for more and more exports. T he automobile exports are increasing year by year. According to the Society of Indian Automobile Manufactures (SIAM) automobile exports in the last five years are as follows- Export trend over the last five years List of predictions for this year by looking at what the bygone year had given us. The Indian automobile industry is going through a phase of rapid change and high growth. With sassy projects coming up on a regular basis, the industry is undergoing technological change.The major players are expanding their plants and focusing on mass customization, mass production, etc. Domestic Sales Volumes Will Rise but Growth Could Come big money The 2010 calendar year was great for the Indian automobile industry, and sales of vehicles are expected to continue upward journey in 2011. However, the industry may non be able to copy the growth judge registered in the last two years. In the first half of 2010, the industry witnessed a steep 32% average monthly sales growth, which came do wn to 25% in the latter(prenominal) half.In addition, the year-on-year growth in sales is expected to be higher during the latter half of 2011 as compared to the growth in the first half of the year. Along with the high base effect of 2010, the awaited firm up of interest rates could also bring about the reduction in growth rates this year. Exports to Increase in 2011 Almost 65% of total automobile exports from India are two-wheelers, and as a result, performance of this segment has a major influence on overall auto export volumes. And after experiencing over 30% jump in exports in 2010, the industry is expected to register moderate growths in two-wheeler exports in 2011.Nonetheless, a competitive and aggressive approach from the original equipment manufacturers vehicle categories (commercial vehicles, passenger vehicles and two & three wheelers) would help bring an increase in overall export of vehicles from the Indian market in 2011. Additionally, there are many companies that wan t to consume India their export hub, thereby increasing the chances of increasing exports. Healthy Economic Growth to Uplift Sales Healthy growth of the economy would drive the automobile sales in the domestic market.The chief growth drivers of the automobile industry in the Indian market would be stable economic environment, healthy IIP growth, favourable liquid and availability of finance. Other things that would positively affect the Indian automobile industry include road network development activities, strong growth in social system activities and the expected healthy performance of the industrial sector. When it comes to personal transport vehicles, increase in disposable income and a strong line up of upcoming new launches is expected to boost demand and sales.The passenger vehicle industry (cars + utility vehicles) is expected to witness launch of as many as 30 new models/variants in 2011. Much in with 2010, 2011 will also see a lot of action in the small car segment. Sal es of luxury cars is also going to grow at a fast pace. Sports utility vehicles (SUV), which have a relatively smaller market share in the Indian passenger vehicle market is also going to grow up tremendously as manufacturers have lined up 10 new model launches for the coming year.Indian car manufacturers are also doubling up their efforts to push their passenger vehicles into the rural and semi-urban markets, which would greatly enhance sales. Profit margins to improve marginally The Indian automobile is expected to record growth in revenues supported by in the domestic as well as export market. Nevertheless, as the goodness prices are expected to remain constant, the pressure on margins would increase largely. Besides, the entry of several other OEMs that have lined up elaborate investment plans is also going to benefit the industry in the domestic market.The new car launches that have been lined up for this year are going to increase disbursement on advertising and promotional activities. But that is no cause for the buyers as these companies are likely to transfer only a small part of the terms burden by increasing the car prices. Strategies that manufacturers are likely to adopt are 1 Commercial vehicles 2 New model launches 3 Product innovation would take prime importance to create new market segments 4 Launch new cars for the international market 5 Easy car finance options for potential customers 6 Competitive price Key Success Factors.The Key Success factors in the Motor Vehicle Manufacturing industry are Efficiency factor Improve labour productivity, labour flexibility, and crownwork efficiency Resource Availability Quality manpower availability, infrastructure improvements, and raw material availability Effective cost controls Close relationship with supplies and goods distribution channels. asylum of export markets Growth of export markets Having an extensive distribution/collection network Goods distribution channels.Successful industria l relations policy Ethical and tactical industrial relations Access to the latest available and most efficient technology and techniques The degree of investment in technological improvements and product development Optimum potentiality utilisation The level of plant utilisation Management of high quality assets portfolio Understanding implications from Government policies References- Wikipedia Rcnos. com Managementparadise. com www. carazoo. com siamindia. com automobileindia. com.