EXTERNAL ANALYSIS OFAUTOMOBILE INDUSTRY

GROUP:5

DILEEP

VAIBHAV

FIROZ

JITENDRA

OBJECTIVE OF THE STUDY

To know that what external factors affects the automobile industry and upto what extent.

To identify the degree of influence of the five most influential factors for the industry.

To identify most suitable strategy after this analysis.

INDUSTRY OVERVIEW

Indian automobile industry has grown leaps and bounds since 1898,

a time when a car had touched the Indian streets for the first time.

At present it holds a promising sixth position in the entire world

with being # 1 in Two Wheelers and # 4 in commercial vehicles.

Withstanding a growth rate of 13% per annum and an annual

production of more than 2 million units, it may not be an

exaggeration to say that this industry in the coming years will soon

touch a figure of 10 million units per year.

It is expected that the Automobile Industry in India would be the

2nd largest automobile market within the year 2015.

AUTOMOBILE

2 WHEELER 3 WHEELERPASSENGER

VEHICLECOMMERCIAL

VEHICLE

Categories of Automobile Industry

AUTOMOBILE INDUSTRY

POLITICAL

ECONOMICALSOCIAL

TECHNICAL

IMPACT OF UNION BUDGET 2010-11 ON AUTO SECTOR The auto sector has seen significant rise in sales and the 22% rise

in sales for April-December 2009 period over the previous year.

The partial roll back of stimulus measures is anticipated very

much and so, the rise in excise duty from 8 to 10% across

board

The hike in excise duty on petrol and diesel may weigh negative on

the auto industry as such. But the rise in disposable income for the

consumer is expected to more than compensate for the above

negative factors as the demand for passenger vehicles and two

wheelers rises.

Neutral for stocks like Ashok Leyland, Mahindra & Mahindra.

Positive for stocks like Hero Honda, Bajaj, Maruti.

PORTER’S FIVE FORCES ANALYSIS

Automobile industry

Rivalry among

Competitors :>Rivalry in the

Indian auto sector is intense due to the entry

of foreign companies in the

market.>Product being

matched in a few months by the competitors  

Threat of substitutes:>The threat of substitutes to

the automotive industry is fairly

mild. >The switching

cost may be high in terms of

personal time, convenience and

utility.

Bargaining Power of

Suppliers:>The industry is

comprised of powerful buyers

who are generally able to

dictate their terms to the

suppliers.

Barriers to entry :

>Regulatory framework

>The startup capital required

to establish manufacturing

capacity to achieve minimum efficient scale is

prohibitive.  

Buyer/Customer Power :

>Buyer is having bargaining power

due to low switching costs associated with selecting from

among competing brands. 

MARUTI SUZUKI INDIA LTD. Maruti Suzuki India Limited is a publicly listed

automaker in India. It was the first company in India to mass-produce

and sell more than a million cars. It is the market leader in India and on 17

September 2007, Maruti Udyog was renamed Maruti Suzuki India Limited.

SWOT ANALYSIS OF MARUTI SUZUKISTRENGTHS Established distribution and after-sales networks Understanding of the Indian market and ability to

liaison with the government Ability to design products with differentiating

features Brand Image Large product line

WEAKNESSES Foreign competitors with deep pockets Heavy Import tariffs

OPPORTUNITY  Increased purchasing power of Indian middleclass

category Govt. subsidies Foreign collaboration

THREATS Threats from Chinese manufacturers Indian as well as foreign competitors

CONCLUSION They should come up with small cars like of Nano’s

segment. Repositioning of that model as a second car and

beginners car. Increased IT-enabled Automobile support systems

like GPS,ABS,ASR and Safety systems. Alternate fuel (Bio fuel, electricity) and environment

friendly green engines (Bharat emission norms). They have to meet challenges of newer

technologies, alternative fuels and affordability of automobiles by consumers.

REFERENCES:

www.google .com www.economywatch.com www.automobileindia.com automobiles.mapsofindia.com From “Hill & Jones”

Thank you