Sunday, March 3, 2019

Market Analysis of Automobile Industry in India 2013 Essay

1. IntroductionAutomobile labor is the recognise driver of any growing saving. Due to its deep forward and backward relation with or so every section of the economy, the diligence has a string and positive multiplier factor effect and thus propels progress of a nation. With the falling demands for vehicles in closely of the mature foodstuffs due to the world-wide recession, high fuel costs and urban driving restrictions, the industry is focusing its attention on expanding middle classes in the new powerhouses of China, India, Brazil, and other growing nations. Indias per capita real GDP evolution at 8.6% (CAGR) over the six year period 2005-2011 had contributed triggermanstantially towards rearing the standard of living of households, which in turn had been one of the key drivers of branch for the countrys travel industry. But over 2011-12 and 2012-13, inflationary conditions, loyal interest ordinates, rising petrol prices as well as easy monsoons adversely impact ed disposable incomes causing a consumption squeeze. 1 correspond to the global automotive executive survey 2013 done by KPMG, 86% of the respondents feel commercialise growth in emerging nations is an weighty trend- a view shargond by auto executives from both the TRIAD market(Japan, Hesperian Europe and North America) and the BRICs. The developing markets along with e-mobility and the changing urban milieu had brought about a change in the automobile industry. 56% of the respondents in the BRICs feel innovative urban vehicle design concepts atomic number 18 an important trend comp ared to 55% from the TRIADs. The Indian automobile market is one of the belligerent markets with low costs, which make it an showy assemble base for foreign automobile manufacturers. India is also the second fastest growing automobile market in the world later on China.2 2. grocery store SegmentationThe automobile industry has been broadly dual-lane into the two wheelers, passenger vehicles, commercial vehicles and three wheelers. The various sub divisions of each particle is shown in the following figure 2.1. run crosswise 2.1. grocery Segmentation of Automobile Industry inception http//www.ibef.org/download/Automotives-March-220313.pdf book of factsFigure 2.1. mart Segmentation of Automobile IndustrySource http//www.ibef.org/download/Automotives-March-220313.pdfSourceThe two wheelers dominate the production volumes in FY 2012, which contributed for more(prenominal) than three quarter of the total automobiles production in the country. India is the worlds 2nd largest two wheeler producer and the 4th largest commercial vehicle producer.Figure 2.2. Market share by volume (FY12) Source http//www.siamindia.com/scripts/market-share.aspx 2. rider Vehicle SegmentsThe segments in the passenger vehicle industry are done base on the price, utility and the length of each vehicle. There are different parameters based on which the machines available in the Indian market are categorized. The technically defining parameters are based on the length of the car, engine capacity, features offered, lay capacity and structure of the car and so forth SIAM or Society of Indian Automobile Manufacturers divides the Indian passenger vehicles in the segments A1, A2, A3, A4, A5, A6, B1, B2 and SUV. The classification is done but based on the length of the automobiles. The details of the segments are mentioned as in table 2.1. cable car Segment Length of the car/Model pillow slip Car model be to the segment A1 Up to 3400mm NanoA2 3401 to 4000mm alto, i10, Zen, Wagon RA3 4001 to 4500mm Manza, Logan, Dzire, CityA4 4501 to 4700mm Corolla, Octavia, OptraA5 4701 to 5000mm Accord, Camry, SonataA6 More than 5000 mm Mercedes S classB1 Vans Versa, OmniB2 MUV/MPV Sumo, InnovaSUV SUV Vitara, CRV skirt 2.1. rider car breakdown based on lengthHowever, though it is simpleton and easy to divide the passenger cars based on their length, it is not at all practical. The price o f a car isnt determined by length only. A shorter car might be priced higher than a lengthier model. Also the features and configuration of the car models doesnt depend on the car length. Hence, to avoid all the confusions the Indian passenger cars are popularly divided into the below mentioned segments according to the following properties, as in table 2.2.Car Segment Distinguishing feature of the cars in this segment Car model belonging to the segment A Cars priced below Rs. 3.5 hundred thousand Alto, Spark, Nano, Eon A1 Hatchback priced swallow than Rs. 6 lakh Santro, Indica, Beat A2 Hatchback priced amongst Rs. 6 to 7.5 Lakh Ritz, i10, i20, Swift, Figo B1 Vans Versa, OmniB2 MUV/MPV Sumo, InnovaC1 ginmill models priced below Rs. 8 Lakh Indigo, Fiesta, Sunny C2 Sedan models priced between Rs. 8 to 9.5 Lakh Verna, Manza, Linea D1 superior Sedan models priced below Rs. 15 Lakh Fluence, Corolla D2 sumptuousness Sedan models priced below Rs. 25 Lakh Sonata, Camry, Kizashi SUV SUV Vitara, CRVTable 2.2. Passenger car segmentation based on priceBody fibre is the other most popular factor for classification of passenger vehicles. This segmentation process is not only limited to the Indian sub-continent, this is a harsh method that enjoys popularity throughout the world. The segments we suggest according to the car body types and the determine are mentioned as in table 2.4. Range Pricing launching Below 5 lakhsEconomy 5-15 lakhsPremium 15-30 lakhs sumptuosity 30-60 lakhs exceedingly Luxury 60 lakhs and aboveTable 2.3. Segment pricingCar segment Range Cars in Indian marketHatchback A1 Entry Maruti Alto 800, Nano, Hyundai Eon, Maruti WagonR A2 Economy Hyundai i20, Maruti Swift, Fiat Punto, Volkswagen Polo A3 Premium BMW MiniCooper, Fiat 500, Volkswagen Beetle A4 Luxury N.A. A5 Super Luxury MUV/MPV B1 Entry Maruti Eeco B2 Economy Maruti Ertiga, Toyota Innova, B3 Premium Mercedes Benz A-class, B-class B4 Luxury N.A. B5 Super Luxury SUV/Crossover C1 Entry Mahi ndra Thar C2 Economy Ford Ecosport, Renault Duster, Force One C3 Premium Skoda Yeti, Mitsubishi Pajero, Toyota Fortuner, Maruti Grand Vitara C4 Luxury BMW X1, Audi Q3, Landrover Freelander 2 C5 Super Luxury Audi Q7, BMW X6, Volkswagen Tourareg Sedan D1 Entry HM Ambassador D2 Economy Maruti Dezire, Nissan Sunny, Toyota Ethios D3 Premium Maruti Kizashi, Skoda Superb, Hyundai Sonata D4 Luxury Volvo S60, Audi A4, BMW 3 series, Audi S4 D5 Super Luxury Mercedes Benz S class, Audi S6, Audi A7, puma XJ Van E1 Entry Maruti Omni, Tata jeopardy E2 Economy Tata Winger, Tata Winger Platinum E3 Premium N.A. E4 Luxury E5 Super Luxury Table 2.4. Passenger car segments3. Market AnalysisThe various aspects involved in the automobile industry, namely the market size, market trends, penetration count, growth rate, etc. are analyzed in this chapter. The distribution channel involved for the passenger vehicle segment is also discussed here. 3.1. Market SizeIn the passenger vehicle segment, there has been an increase in sales by 1.20% in the FY 2012-13 compared to that of FY 2011-12 with figures of 20,626,227 units of production of passenger vehicles, as shown in figure 3.1. The cumulative intermediate growth rate (CAGR) for the period from 2008-12 was 14% compared to the estimated CAGR for the period from 20013-21 which is 13%.3.2. Market TrendsOne of the major player in the world automotive industry is Indian car market. It is the second in automobile industry after China. Indian car industry is facing a serious problem is present year. Car sales are down by more than 6% in FY 2012-13 compare to last year of FY 2011-12. The main reasons are high interest rates, fuel price, high inflation, low movement in other sectors etc. But irrespective of the sales slump, Utility vehicle segment is having the maximum growth in this segment at 52%. Ertiga has put successful foot print this segment.This vehicle is giving darling competition to Innova. SUV segment also grown due to it s fuel economy and price combination became top choice for larger families. Kerala now accounts for 10 per cent of Indias luxury car sales. Kochi in particular has emerged as Indias strongest growing market for luxury car markings like BMW, Audi, Mercedes and Jaguar Land Rover. Another major trend in the automobile industry is the age of the potential customers are decreasing with the role of IT and other industries. 3.3.Market yield rateThe growth in passenger vehicle segment is at 2.15% for the FY 2012-13 compared to that of FY 2011-12. Cars kick in a negative growth of -6.69% when compared to that of utility vehicles which has an increase by 52.20% and vans with a minor growth of 1.08%.Figure 3.3. Passenger Vehicle segment growth rate for FY 2012-13 Source http//autobei.com/blog/passenger-vehicle-analysis-fiscal-year-2012-13/3.4. Market PenetrationIndia has shown a great potential in passenger vehicle segments withpenetration rate of 13 vehicles per deoxycytidine monophosphat e0 existence compared to the other BRIC countries making it the most attractive market for the industry presently. Figure 3.4. Market penetration for BRIC countries FY2010 per 1000 population Source WorldbankFigure 3.4. Market penetration for BRIC countries FY2010 per 1000 population Source Worldbank3.5. Market OpportunitiesCar sales in India may be on a downside at the present but the total automobile market size testament triple to 9.3 million units by 2020, according to global marketing information services party JD power. Driven by intensify demand as the number of people with disposable income increases, the sector will grow at a compounded annual growth rate of 16% during the period as per the market research firm. They forecast India to have a consistent and gradual growth such that the automobile market will triple from the present size of about 9.3 million units.3.6. controversy Intensity3.7. Pricing Structure3.8 Market Profitability4. Distribution impart* Company has 246 local suppliers and 20 global ones they all function in a seamless manner. The accompany strictly receives their supplies ordered the previous shadow in a two hour slot the next day. A far cry from the initial 30 day supply period. * The company had adopted Just In Time (JIT) to achieve higher functional efficiencies and reduce inventory carrying cost. Maruti Suzuki has adopted the e-Nagare system of electronic flow which has in all transformed its supplier chain. * To achieve JIT material supplies, the company has given choice to locally based suppliers. Over 76% of the companys 246 suppliers are located within 100 kms of radius. They have strategically located the suppliers of ample components such as instrument panels, fuel tanks, bumpers, seats, etc. adjacent to the companys manufacturing facilities in the Suppliers Park.* In order to enter new markets, Maruti Suzuki has ventured into set about manufacturing. For example vehicles manufactured in India are sold under the Nissan brand in European market. * Using a combination of Unix Shell programming, vaticinator forms, .Net, and Windows FTP technology, the internal team brought transparency to the export supply chain. * Maruti Suzuki has 933 dealerships across 666 towns and cities in India. It has 2,946 service stations in 1,395 towns and cities throughout India. It has 30 stockpile service stations on 30 National Highways.5. CompetitionMaruti Suzuki is Indias largest OEM of passenger cars, netting about 55% of domestic sales. The biggest competitor for Maruti is Hyndai Motors. property Product/service 0 50 100 Maruti / Hyundai Reputation in eyes of customers 0 40 50 100 Hyundai Maruti Prices 0 40 50 100 Maruti Hyundai New productslaunch/development 0 50 100 Maruti / Hyundai Table 5.15.1. Success factors of Hyundai* Refreshing the brand image is one of the key success factor of Hyundai. In the last decade, Hyundai Motor has make epoch-making inroads in building its brand from the Worst Ca r Ever make to a 72nd ranking in the 2007 Best Global Brand survey. * Efforts were made from Hyundai in this aspect and as a result, Hyundai Motor has been recognized as a producer of quality cars which are reliable and affordable * fashionable design of the products and tagline new thinking new possibilities made the company to join with its branding. * Global presence for Hyundai is high when compared to Maruti.5.2. Competitors for MarutiHyundai, Toyota, Honda and Chevrolet are the main competitors for Maruti, with Hyundai and Chevrolet the main competitors in small car segment and Toyota and Honda joining in the race lately with the launch of Ethios and Brios respectively. 5.3. New competitors* Honda is coming up with new cars which are targeting the similar group of Maruti products Ex Amaze, Dzire * Hyundai is coming up with Grand i10 as a competition for Swift. * Other car makers like Nissan, M&M are also releasing products in hatchback car segment rigorously which has to b e faced by Maruti. 6. Reference1) http//www.kpmg.com/KZ/ru/IssuesAndInsights/ArticlesAndPublications/Documents/KPMGs-Global-Automotive-Executive-Survey-2013.pdf 2) http//www.icra.in/Files/ticker/SH-2013-Q2-1-ICRA-Two-Wheeler.pdf 3) http//profit.ndtv.com/ news show/corporates/article-5-facts-about-indias-growing-two-wheeler-market-305607 4) http//autobei.com/blog/passenger-vehicle-analysis-fiscal-year-2012-13/ 5) http//www.strategy-business.com/article/00162?gko=8346f 6) http//www.cardekho.com/compare/hyundai-elantra-and-maruti-kizashi.htm 7) http//www.motorbeam.com/cars/maruti-suzuki/maruti-suzuki-ranks-highest-in-customer-satisfaction/ 8) http//cars.pricedekho.com9) http//www.cardekho.com10) http//www.prokerala.com/automobile/cars/11) http//autoenthu.blogspot.in/2012/08/passenger-car-segments-india.html 12) http//profit.ndtv.com/news/industries/article-indian-auto-market-size-to-triple-to-9-3-million-units-by-2020-jd-power-319349 13)

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