Hyundai Report v 1.0

8/15/2019 Hyundai Report v 1.0

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Hyundai

Motors IndiaLimited:Analysis ofBusiness

Model

CBM Project, Sec A,Group 5

Arti am !at"B"a#in ParmarBijay $ramSaideep SS"%eta &aderaSoni 'umari

(a)na Sri*ant" A


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Hyundai Motors India Limited: Analysis of Business Model

Table of Contents

1 Evolution of Indian Automotive Industry.............................................................................................................

2 Trends in the Industry..........................................................................................................................................1

3 Company Brief....................................................................................................................................................1

4 Critical uccess !actors "C!#............................................................................................................................2

5 $alue Chain.........................................................................................................................................................2

% $alue &oop...........................................................................................................................................................2

' Business (odel...................................................................................................................................................2

)eferences...................................................................................................................................................................2

CBM Project, Group 5, Section A Pa)e


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1 Evolution of Indian Automotive Industry

The +enesis of Indian Automotive Industry can ,e traced to the 1*4-s ho/ever distinct +ro/th started in th1*'-s.

1*'- and 1*04

Cars /ere considered a luury product.

(anufacturin+ /as licensed.

Epansion /as restricted.

uantitative restriction ")# /as imposed on imports.

Tariff structure /as desi+ned to restrict the maret.

1*05 to 1**5

(aruti dyo+ entered the passen+er car se+ment.

apanese manufacturers entered the t/o /heelers and li+ht commercial vehicle se+ments.

1**161**3

Economic li,erali7ation started in 1**1.

8assen+er car se+ment /as de6licensed in 1**3.

Emer+ence of (aruti dyo+ as the maret leader in the passen+er car se+ment

1**5 and 2---

everal international players entered the maret.

Advanced technolo+y /as introduced to meet competitive pressures and environmental and safe

imperatives. Automo,ile companies started investin+ in service net/or to support maintenance of on6road vehicles.

Auto financin+ started emer+in+ as an important driver for demand.

2---

uantitative restrictions ")# and 1-- percent !9I /ere removed throu+h automatic route.

Indi+enously developed "(ade in India# $ehicles /ere introduced in the domestic maret and eports /e

+iven a thrust. Auto companies started colla,oration /ith financial firms to provide auto financin+ and insurance servic

to customers. (anufacturers also introduced systems to improve capacity utili7ation and adopted :uality an

environmental mana+ement systems.



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In 2--3 Core6+roup on Automotive );9 "C.A.).# /as set up to identify priority areas for automotiv

);9 in India. This +ro/th /as fuelled further ,y the increasin+ Auto component manufacturers.

1.1 Auto Components

8re61*05 era

The auto component sector /as a protected maret /ith hi+h import tariffs.

The maret /as oriented primarily to/ards supply of components to domestic manufacturers.

1*0-s

A num,er of Indian companies entered into ri+inal E:uipment (anufacturers ">E(s# and Tier 1 suppliers started operations in India.

This paved the /ay for a lar+e num,er of ne/ oint $entures in the component industry /ith European an

American component manufacturers. This +ave the Indian component industry an all6round epertise to manufacture components for application

in apanese European as /ell as American vehicles.

1**1

=overnment introduced the (emorandum >f nderstandin+ "(># system that continued to pla

emphasis on the aspect of locali7ation of components. ?ith support from the (> policy the component industry developed further capa,ility to manufactur

the ne/ ,reed of auto6components re:uired for the ne/ +eneration vehicles. As a result of successful locali7ation of these components $ehicle manufacturers started outsourcin+ mor

and more components rather than manufacturin+ in6house. Entrepreneurs /ere encoura+ed to develop components and set up facilities.

>E(s supported component manufacturers throu+h e:uity participation technical colla,oration etc.



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"ource@ http@///.cy,ersteerin+.comautomaershyundaihyundaiindia.html#


http://www.cybersteering.com/auto_makers/hyundai/hyundai_india.htmlhttp://www.cybersteering.com/auto_makers/hyundai/hyundai_india.htmlhttp://www.cybersteering.com/auto_makers/hyundai/hyundai_india.html


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1.2 Present Scenario

Auto component Industry manufactures a /ide ran+e of products in India for ,oth domestic consumptio

and eports. Industry is +ro/in+ at a CA=) of 23.

The total si7e of the component industry is close to 9 3- ,illion out of /hich 9 5.- ,illion are from

the direct eports of components. (ore than %- of the eports of auto6components are to Europe and A.

(ore than '- of the eports +o to the >E(s and Tier 1s and only 3- to the +lo,al aftermaret.

It has attained hi+h level of maturity in uality and Technolo+y.

1.3 Porter’s 5 Forces: Worksheet on Industry Structure

1. Threat of new entrants:

Yes (+) NA No

(-)

Remarks

1. 9o lar+e firms have a cost or performance advanta+e in your se+ment of the industryD

(anufacturer can increase their operation efficiency and save cost

2. Are there any proprietary productdifferences in your industryD

Each model is different than other vehicle.

3. Are there any esta,lished ,rand

identities in your industryD

Eitin+ is reco+ni7ed /ith their stron+

,rand.4. 9o your customers incur anysi+nificant costs in s/itchin+suppliersD

Fo

5. Is a lot of capital needed to enteryour industryD

9evelopment of manufacturin+ plantsconsume hu+e investments

%. Is servicea,le used e:uipmentepensiveD

Fo information

'. 9oes the ne/comer to yourindustry face difficulty in accessin+distri,ution channelsD

ettin+ up ne/ distri,ution channel isvery epensive and time tain+

0. 9oes eperience help you tocontinuously lo/er costsD

Gi+her eperience "learnin+ curve# helpsto reco+ni7e the consumer need andloopholes in operations



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*. 9oes the ne/comer have any pro,lems in o,tainin+ the necessarysilled people materials or suppliersD

In most situations +ettin+ eperiencedand silled people is a tou+h verall ratin+ H stron+ly favora,le for the incum,ents

2. ar!a"n"n! power of bu#ers: to what e$tent are #our %ustomers lo%ke& "nto #our'

Yes (+) NA No

(-)

Remarks

1. Is there a lar+e num,er of ,uyersrelative to the num,er of firms in the

,usiness

tron+ entry ,arriers allo/ less competitionrelative to the num,er of customers.

2. 9o you have a lar+e num,er ofcustomers each /ith relatively small purchasesD

Investment is su,stantially hi+h for purchaseof vehicle.

3. 9oes the customers face anysi+nificant costs in s/itchin+ suppliersD

Fot at all

4. 9oes the ,uyer need a lot of importantinformationD

Buyer need to no/ a,out the specification ovarious models

5. Is the ,uyer a/are of the need foradditional informationD

Jes information is re:uired.

%. Is there anythin+ /hich prevents yourcustomers from tain+ your product inhouseD

There are alternative products availa,le inmaret.

'. Jour customers are not hi+hlysensitive to priceD

(a


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*. Jour customers ,usinesses are profita,leD

Buyers are purchasin+ for their personal and professional usa+e.

1-. Jou provide incentives to thedecision maersD

8romotional campai+ns and interest discountto customers.

Fote @ Gi+h ,arriers to entry H factors "favora,le to industry# &o/ ,arriers to entry H 6 factors "unfavora,le to industry# >verall ratin+ H stron+ly favora,le for the incum,ents

. Threat of subst"tutes: (some other pro&u%ts or ser"%es wh"%h perform the same *ob as #ours)

Yes

(+)

NA No

(-)

Remarks

1. u,stitutes have performance limitations /hichdo not completely offset theirlo/est price or their performance advanta+e is not verall ratin+ H tron+ly favora,le for the incum,ents

. ar!a"n"n! ,ower of uppl"ers

Yes (+) NA No (-) Remarks

1. (y inputs "materials la,or suppliesservices etc#. are standard rather thanuni:ue or differentiated.

=iven the financial resources it is possi,leto hire competitorKs supplier. (ost of themuse standardi7ed materials supplies.



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2. I can s/itch ,et/een suppliers:uicly and cheaply.

./itchin+ is not very costly and manyoptions are availa,le in maret

3. (y suppliers /ould find it difficult to

enter my ,usiness or my customers/ould find it difficult to perform myfunction in house

uppliers tend to ,e professional creative

and technolo+y6focused. The competenciesre:uired in the automo,ile industry "e.+.technical sills :uality# are different.

4. I can su,stitute inputs readily. Jes

5. I have many potential suppliers. Bein+ a +lo,al industry you have access tosuppliers around the +lo,e.

%. (y ,usiness is important to mysuppliers.

Jes

'. (y cost of purchases has nosi+nificant influence on my overallcosts.

(ost of the purchases are re+ular. Based omaret situation and customer re:uirementmy cost of purchase varies.

Fote @ Gi+h ,arriers to entry H factors "favora,le to industry# &o/ ,arriers to entry H 6 factors "unfavora,le to industry# >verall ratin+ H tron+ly favora,le for the incum,ents

. /eterm"nants of r"alr# amon! e$"st"n! %ompet"tors

Yes (+) NA No (-) Remarks

1. The industry is +ro/in+ rapidly. The +ro/th of the industry is increasin+rapidly /ith India estimated to overtaeChina ,y 2-15.

2. The industry is not cyclical /ithintermittent overcapacity.

till there is enou+h demand in maretand manufacturer is not a,le to supply ontime.

3. The fied costs of the ,usiness are arelatively lo/ portion of total costs.

!ied costs are hi+her as plants normallydo not run of full capacity.

4. There are si+nificant productdifferences and ,rand identities ,et/eenthe competitors.

Brand identities eist and the product isdifferentiated to meet customerKs differenneeds.

5. The competitors are diversified rather

than speciali7ed.

(ostly they provide various models as

per different consumer se+ments.%. It /ould not ,e hard to +et out of this ,usiness ,ecause there are no speciali7edsills and facilities or lon+6term contractcommitments etc.

Eit is hard since there are ma


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detailed understandin+ on the part of mycustomer.

understand ,y normal consumers. Theyonly focus on features.

*. (y competitors are all ofapproimately the same si7e as I am.

There are +aps amon+ competitors interms of revenues and num,er of unit sol

,ut not much difference in terms of products. Fote @ Gi+h ,arriers to entry H factors "favora,le to industry# &o/ ,arriers to entry H 6 factors "unfavora,le to industry# >verall ratin+ H tron+ly favora,le for the incum,ents

>verall industry ratin+

0aorable o&erate nfaorable

1. Threat of ne/ entrants * 1 2 The hi+h cost of capital involved allo/sfe/ players in the industry. Alsoesta,lished ,rands and economies of

scale are favora,le to the industry. o ,arriers to entry are very stron+ in theindustry. Thus it can protect the profita,ility for incum,ents.

2. Bar+ainin+ po/er of ,uyers

5 2 3 Buyer po/er is relatively lo/Consumers are not hi+hly price sensitiv

3. Threat of su,stitutes 3 1 - u,stitutes are a not a threat as customehas to sacrifice either time money orcomfort

4. Bar+ainin+ po/er ofsuppliers

5 2 - upplier po/er is relatively lo/. Thesuppliers do not affect the profita,ilitylevels si+nificantly.

5. Intensity of rivalryamon+ competitors

4 1 4 tron+ focus on variety of products lessoperatin+ cost product characteristicsand si7e difference reflect stron+competition amon+ hotel firms.

1.4 PEST Anaysis o! Auto"o#ie Industry in India:

The economic li,erali7ation in India in the year 1**1 has helped the automotive sector in ,rin+in+ a,outsustained +ro/th ,y enhanced competitiveness and relaed restrictions prevailin+ in the policies. A num,er oIndian automo,ile manufacturers includin+ Tata (otors (aruti u7ui and (ahindra and (ahindra hav



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dramatically epanded ,oth their domestic and international operations. The country as active economic +ro/thas paved a solid road to the further epansion of its domestic automo,ile maret.8ET "8olitical Economical ocial Technolo+ical# (odel@

,ol"t"%al3le!al 0a%tors:

• In 2--2 Indian +overnment auto policy aimed at promotin+ an inte+rated phased and conducive +ro/th

the Indian automotive industry.

• =overnment Allo/ed automatic approval for forei+n e:uity investment up to 1-- per cent /ith n

minimum investment criteria.

• =overnment Esta,lished India as an international hu, for manufacturin+ small afforda,le passen+er cars

/ell as tractors and t/o /heelers.

• pecific fiscal incentives for cars less than 4 metres in len+th to ena,le India to emer+e as the Asian hu, f

the eport of small cars and multi6utility vehicles "($s#.

• They put heavy emphasis on );9 activities carried out ,y companies in India ,y +ivin+ a /ei+hted tadeduction of up to 15- per cent for in6house research and );9 /ei+hted ta deduction of up to 15- pe

cent for in6 house research and );9 activities

• =overnment has increased investment in road infrastructure and availa,ility of cheaper finance has led to

+ro/th in multi6ale vehicles

• Incentives to manufacture automo,iles usin+ alternative fuel technolo+y such as compressed natural +

"CF=# and electric ,atteries.



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4%onom"%al

• )isin+ per capita Income and the chan+in+ demo+raphic distri,ution are conducive for +ro/th.

• Gi+her disposa,le incomes coupled /ith availa,ility of easy finance options have driven the 8assen+

vehicle se+ment.

• (ost of the vehicles are financed hence helpin+ other ,usiness as /ell.• Both product and production processes have developed /ith the entry of +lo,al companies into the India

maret.

o%"al

• Avera+e family si7e is 4 in India hence ,uyin+ a car is al/ays ,etter option for them.

• The trends indicate that small and medium cars /ould remain dominant and a shift to/ards hi+h end cars

epected at a faster rate.

• &ar+e num,er of /orers ,oth silled and unsilled /ill ,e re:uired to sustain increased level

production.

• Indian customers are hi+hly discernin+ educated and /ell informed. They are price sensitive and put a lof emphasis on value for money preference for small and compact cars.

Te%hnolo!"%al@

• ?ith the development or evolution of alternate fuels hy,rid cars have made entry into the maret.

• =overnment initiatives in esta,lishin+ FAT)I8 net/or across the country /ill further lead to enhancin

);9 and technolo+ical advancements.

• Technolo+ical solutions lie i i+ma &ean manufacturin+ inte+ratin+ the supply chain he

manufacturers to reduce losses and increase profita,ility.

• =overnment initiativesK re+ardin+ ta re,ates has led to +lo,al players settin+ up their );9 centres in Ind



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2 Trends in the Industry

$han%e in custo"er &re!erences:

In 2--06-* customer sentiment dropped /hich ,urned on the au+mentation in demand of cars. teel is the ma


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• Be+innin+ in the latter half of 2--0 a +lo,al6scale recession adversely affected the economy of the nited

tates.

• A com,ination of several years of declinin+ automo,ile sales and scarce availa,ility of credit led to a more

/idespread crisis in the nited tates auto industry in 2--0 and 2--*.

• The .. automaers /ere more heavily affected ,y the crisis than their forei+n counterparts such asToyota.

• Banruptcy of Chrysler and =(

Toyota has announced plans for a second plant to ,e+in operations in 2-1- havin+ an initial annual productioncapacity of around 1----- vehicles. Fissan (otor Co. identified India as one of the five economical countries tomanufacture ne/ +eneration compact cars includin+ the (icra. $ols/a+en has invested in an 11----6unit passen+er car assem,ly plant /hich /as made operational in April 2--*. $ols/a+enLs India plans include themanufacture of small cars ,ased on the 8olo platform.



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Company Brief

5#un&a" otor Compan#

Gyundai motor company is an automo,ile manufacturin+ company founded in 1*4' ,y Chun+ u Jun+ as GyundaEn+ineerin+ and Construction Company. It /as esta,lished as Gyundai (otor Co. in 1*%'. It is an auto sales leadin Qorean domestic maret and eport vehicle to 1*- countries.

In 1*%0 Gyundai si+ned a licensin+ a+reement /ith !ord to manufacture automo,iles. &ater ,y 1*'% developed io/n in6house models of cars car+o and trucs. The company also esta,lished partnership /ith (itsu,ishi in 1**1to develop proprietary en+ines. In 1**0 Gyundai ac:uired Qia (otors. Gyundai and Qia (otors to+ether formedthe /orldKs fifth lar+est automotive +roup after Toyota =( $ols/a+en and !ord. It also formed an alliance /i9aimler Chrysler in 2---.

Gyundai has its lar+est manufacturin+ facility in lsan located in Qorea. In 1**% it opened its )esearch centre at

Famyan+ and Asan. Gyundai opened a ne/ research and development center in 2--* at Gydera,ad in India this/as companyRs fourth overseas );9 center.

In 1**- Gyundai (otor !inance Co. "G(!C# /as launched /ith a capital investment of P15 million. Gyundai(otor !inance Co. serves Gyundai dealers nation/ide /ith individual customer financin+ and dealer inventoryfinancin+.

GyundaiKs entered into the .. maret in 1*0%.At that time most of the automo,ile manufacturers /ere tar+etin+the hi+h6end and hi+h6priced vehicle. Gyundai came up /ith the vehicles for the first time ,uyers such as colle+estudents and youn+ families. In the early years Gyundai concentrated its sales efforts primarily on the ?est andEast coasts as /ell as in the southern states. In 1*0' Gyundai epanded into the central portion of the nited

tates openin+ a central re+ion office near Chica+o. At present Gyundai is present in four re+ions and is havin+%-- Gyundai dealerships nation/ide.

5#un&a" otors 6n&"a 7t&

After independence the car maret /as havin+ only t/o models O Am,assador from Gindustan (otors "G(# andthe !iat from 8ioneer Automo,iles "8A#. Initially the car /as meant for =ovt sector and /as desi+ned andmanufactured accordin+ to their demand.

In 1*0- the =ovt allo/ed a $ ,et/een (& "'4# and u7ui "2%# for a ,etter technolo+y developmentespecially tar+etin+ the middle class. This drove the +ro/th of industry ,et/een 1*01 and 1**- and (& /as

maret leader holdin+ 05 of maret share.

8ost li,erali7ation in 1**1 many forei+n players entered Indian Car (aret. !ord (otors =( Toyota (otors9ae/oo (otors Gonda (otors.

Gyundai o,served the Indian (aret for around 1 year. They contacted vendors dealers and customers tounderstand the industry. In 1**% they esta,lished their first plant at Irrun+attuottai near Chennai. G(C /as the



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first company to set up a su,sidiary in India /hile other forei+n companies /ere in $s. Also G(C /as the first esta,lish a manufacturin+ unit in India. 9river@ &o/ manufacturin+ cost and lo/ la,or cost.

G(I& /as the first company to launch a ne/ product antro in India /hile the competitors the eistin+ ,rand

already introduced in forei+n maret. It /as priced lo/er than the eistin+ top model (aruti Men. The model /as ,i+ success and made Gyundai the second lar+est car manufacturer in India.

Gyundai (otor India &imited "G(I is a /holly o/ned su,sidiary of Gyundai (otor Company outh Qorea anis the second lar+est car manufacturer and the lar+est passen+er car eporter from India. G(I& presently mare54 variants of passen+er cars across se+ments. The company has a fully inte+rated state6of6the6art manufacturin plant near Chenna

1**0 &aunched Gyundai antro

1*** Emer+ed as the second lar+est auto6manufacturer in the country.&aunched Gyundai Accent

2--- &aunched antro Mip 9rive

2--1 &aunched edan onataR in luury se+ment

2--2 &aunched RAccent $I$AR RAccent C)9iR.

2--36-4 Increased capacity to 1%---- Fos.Commenced eportin+ car to ?estern Europe and Eastern Europe.

2--46-5 Increased capacity to 25---- Fos. &aunched Elantra and =et7

2--56-% Epanded its eports marets to nited Qin+dom (alta er,ia Africa TureyAf+hanistan atar and &atin America

2--%6-' &aunched ne/ mid6si7e se+ment model R$ernaR and also introduced onata C)9i69iesel variant ; =et7 prime.Eported =et7 to European countryIncreased capacity to 3----- num,ers

2--'6-0 Introduced ne/ service line &aunched Li1-K

2--06-* &aunched i2- for domestic and eport marets



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.1 89T Anal#s"s

tren!ths

The uality Advanta+e

Gyundai o/ners eperience fe/er pro,lems /ith their vehicles than any other car manufacturer in India ".98o/er I tudy#. The antro /as chosen the ,est in the premium compact car se+ment and the =et7 in the entrlevel mid 6 si7e car se+ment across several parameters. This study measures o/ner in terms of desi+n contenlayout and performance of vehicles across several parameters.

A Buyin+ Eperience &ie Fo >ther

Gyundai has a sales net/or of 25- state6of6the6art sho/rooms across 10* cities /ith a /orforce of over %--trained sales personnel to +uide their customers in findin+ the ri+ht car. Their hi+h sales and customer car

standards led to achieve hi+her nameplate in the .9. 8o/er I tudy.

uality ervice across 1-3% Cities

In the .9. 8o/er CI tudy Gyundai scored the hi+hest across all ' parameters@ least pro,lems eperienced /ivehicle serviced hi+hest service :uality ,est in6service eperience ,est service delivery ,est service advisoeperience most user6friendly service and ,est service initiation eperience. The *2 of Gyundai o/ners feel th/or +ets done ri+ht the first time durin+ service. The .9. 8o/er CI study also reveals that *' of Gyundo/ners /ould pro,a,ly recommend the same mae of vehicle /hile *- o/ners /ould pro,a,ly repurchase thsame mae of vehicle.

8eaknesses

Commodity 8rice )iss

Gyundai commodity price riss to hi+her costs due to chan+es in prices of inputs such as steel aluminum plasticand ru,,er /hich +o into the production of automo,iles. In order to miti+ate these riss the company continues tattempt to enter into lon+ term contracts ,ased on its pro


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&eadin+ =ro/th

As the maret leader Gyundai led the +ro/th in the passen+er car sector last year. The sales /ent up 3- t4'2--- units. This is the hi+hest annual sale since company ,e+an operations 2- years a+o. Gyundai also +aine

maret share mainly on account of its performance in the competitive A2 se+ment /here it increased its sharfrom 4-.3 in 2--56-% to 4'.' in 2--%6-'. The record sales performance /as reflected in the financials. Fales "ecludin+ ecise# +re/ ,y 31 to )s *345% million. >peratin+ 8rofit (ar+in increased from -.0 in 2--5-% to 4.' in 2--%6-'. 8rofit after Ta


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uly 7,7888

1irst major e9port2s"ipment of ;

$ctoer6, 788?

HMIL crossed t"e @)ure of la*" #e"icles in e9ports and emer)ed as t"e lar)este9porter in t"e Indian automoile industry>

$ctoer, 7885

HMI e9ported its 7 la*" car to t"e o#erseas mar*et>

!o#emer7, 7885

HMI e9ports its @rst s"ipment to 3'>

$ctoer6, 788<

Hyundai Motor India rolls out t"e fastest 688,888t" e9port car

Marc" 7 +"e @rst e9portconsi)nment comprised 7,78 units of Di78E>

4ecemer

1eruary, 788

Hyundai Motor India conferred t"e +op .9porter of t"e (ear for 788

Marc" 75,788

Hyundai Motor India "onored %it" D.=IM Ac"ie#ed A%ardE for t"e year 788 y +amilC"amer of Commerce

Au)ust 7,788

Hyundai Motor India Ltd> recei#es t"e ..PC D!ational A%ard for .9port .9cellence for788;28> Hyundai %on t"e Gold +rop"y in t"e DLar)e .nterpriseE cate)ory>



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1eruary77, 788

1astest .9ports of 8 la*" cars

CBM Project, Group 5, Section A Pa)e 2


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Critical Success Factors (CSF)

.1 Cr"t"%al u%%ess 0a%tors "n the Automob"le 6n&ustr#

> Technoo%y - It determines t"e aility of t"e company to constantly inno#ate7> *e+ Product ,aunch - It ma*es t"e customer ent"usiastic aout t"e company 78

786> Financia Position - It "elps company to acFuire t"e reFuired resources?> -istri#ution - It enales t"e company to e9tend t"e reac" to customer en"ancin

customer satisfaction5> -i(ersi)cation2 It enales t"e company to ser#e lar)er customer ase %it" dieren

pricin) points ,ocation 2 It enales t"e capital intensi#e automoile industry to reduce t"e operation

and transportation cost;> anu!acturin% ca&a#iity/ It enales t"e automoile company to ramp up productio

to meet customer demand> 'o#a E0&ansion/ India "as ad#anta)e of c"eap laor and s*ills %"ic" can e le#era)e

y e9portin) #e"icles produced in India

.No Cr"t"%al u%%ess

0a%tors

8e"!hta!e 5#un&a" otors arut" u


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5 9iversification 15Compact O22.3 (id i7e 6*.%

8remium

e+ment61.%

(ini 6 2'.3Compact6 55.0(id i7e O 35.0Eecutive e+ment

6-.3

(ini6'2.*Compact 6%.0(id i7e O 24

% &ocation 5 Chennai (anesar =ur+oan

Garyana

8une8antna+ar anand

' (anufacturin+

capa,ility

1- '----- 12----- 55----

0 =lo,al epansionBased on volumes 1- %5 of 2--*62-1- eportsEurope Africa

(iddle east

&atin America

and Asia

33 of 2--*61-eports&atin America

Africa outh East

Asia and >ceana.

Indiansu,continent Italy

spain and outh

Africa



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.2 arket hare of 5#un&a" "n %ompa%t an& "& Ran!e e!ments

Gyundai (otor India has a +ood presence in the Compact and (id i7e e+ment.

Gyundai (otor India has a +ood presence in the compact and mid si7e se+ment.

In the compact se+ment (aruti is the maret leader /ith 55 maret share due to its /ift ?a+on ) Alto an)it7 models. A star and )it7 the recently launched vehicle is also +ainin+ maret share. Tata (otors has only Indivehicle in this se+ment and there is a slo/ decline in maret share over the last five years. Gyundai has antro i1

and i2-. The declinin+ maret share of antro is replaced ,y i1- and i2-. !ord /hich has recently launched !i+has attained a maret share of 5 in 2-1-611.

In the (id i7e e+ment (aruti is maret leader /ith 35 maret share follo/ed ,y Tata motors 24 marshare. (arutiKs 97ire is +ainin+ maret share in mid si7e se+ment. Tata (otors Indi+o provides +ood competitioto (arutiKs midsi7e se+ment. GyundaiKs contri,ution of $erna and accent has decreased over the years resultin+ drop of maret share from 13 in -06-* to *.5 in 1-611.$ol/a+esan has +ained si+nificant maret share of 5.1in 1-611.



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The eport /ise share of Gyundai motors peaed in 2--06-* declined due to com,ination of recession in /estercountries as /ell as shift of i series production from Chennai to Turey.Also the capacity constraint /ill preverise in the maret share in eports. The eport maret is slated to +ro/ at a CA=) of 14615 in the net fivyears. >f late there is an increase in eports of Fissan (otors due to eport of Fissan (icra (odel from India.

. Compet"t"e ,erforman%e atr"$

Cr"t"%al u%%ess

0a%tors (C0)

?ei+hta+e 5#un&a"otors

arut" u


25/29


Value Chain

!irm

Infrastructure

&ean structure of

or+anisation

&ar+e Capacity

production plants

Guman)esource(ana+ement

8erformance ,ased pay scale ; promotion"(B> pro+ram#

&ot of frin+e ,enefits provided toemployees

!reedom to puttheir ideas /hile/orin+

Technolo+y9evelopment

Gi+h Investment in);9

Gi+h IT securityin every plant

Testin+modellin+ on$irtual soft/areKs

8rocurement Centralised ra/material

procurement

&ar+e no ofsuppliers present

in house68lant leveleconomics of scale68lant are profitcentreCentrali7ed plants

6IT delivery6&ocationadvanta+e of themanufacturin+ plants

69ealer selection; location6?ide dealernet/or 68romotiontrate+y6Eportsepansion invarious location; se+ments

6&ar+eservicecentres6Timelyavaila,ilityof spare parts6 (o,ileervice vans

>perations &o+istics (aretin+ ;ales After aleservice



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Value oop


Installed ,ase

8roduct

Innovation

Gi+h?T8

Gi+h$olum

e

Gi+h 8rofit

Investment

in );9

Gi+huality8roduct

(oreerviceCenters

Increase in

customersatisfaction

A/areness (aretin+


27/29


> Business !odel

The company operates throu+h t/o ,usiness se+ments@ non financial industry and financial industry. The nofinancial industry se+ment of Gyundai deals /ith the desi+n development and manufacturin+ of automo,iles. Thcompany divides this se+ment into three cate+ories@ passen+er vehicles recreational vehicles and commercivehicles. GyundaiRs product line6up includes su,compact and compact carsN mini6vehiclesN mid6si7e luury sporand specialty carsN recreational and sport6utility vehiclesN picup trucsN minivansN trucs and ,uses.

GyundaiKs financial services ,usiness provides financin+ to dealers and their customers for the purchase or lease othe companyRs vehicles. The company also provides retail leasin+ throu+h the purchase of lease contracori+inatin+ from Gyundai dealers.

Business model diagram:



28/29




29/29


"eferences

http@/orld/ide.hyundai.com

I,ef Automotive report 2-1-

Crisil )eport 2-1-

Capitaline

G(I& Annual )eport 2--0 2-1-

http@///.dhi.nic.indraftautomotivemissionplan.pdf

Technology_wg11_automaive.pdf O 8a+e 1- 6 FAT)I8

India: Automotive_171109.pdf (in 2009

9ata (onitor

Crisil

Gyundai (otor India Annual )eport 2--02-1-

Automotive policy plan

trate+ic alliance and restructurin+ for survival @ Fe/ (ana+erial trate+ies of Gyundai (yeon+ ee chun+

=lo,ali7ation trate+ies of Qorean (otor $ehicle Industries@ A Case study of Gyundai (yeon+ ee chun+
http://www.dhi.nic.in/draft_automotive_mission_plan.pdfhttp://www.dhi.nic.in/draft_automotive_mission_plan.pdf

Documents

Hyundai Report v 1.0