AUTOMOBILE INDUSTRY Presented by:- Ashutosh Mandeep Singh Manpreet Singh Smriti Sharma Ravneet Singh

During early 60s & 70s, automobiles came largely in twos.  In scooters, you had a Lambretta or a Vespa.  In motorcycles, you had a Bullet or a Java.  In cars, you had to choose between an Ambassador and a Fiat.  In trucks, it was either an Ashok Leyland or a Tata.  In tractors, it was between a Swaraj and a Mahindra.

Introduction  India is second largest in two wheeler manufacturer in the world  India is second largest in tractor manufacturer in the world  India is fourth largest in commercial vehicle manufacturer in the world  India is third largest in car manufacturer in Asia  eleventh largest passenger car market globally, expected to be the seventh largest by 2016.

 Economic reforms and deregulation have transformed that scene  Automobile industry has written a new inspirational tale  going through a technological change where each firm is engaged in changing its processes and technologies  the Indian automobile industry has achieved splendid achievement in the recent years.  The automotive sector in India is growing at around 18 per cent per annum.

Major players in the automobile sector are:  Tata Mahindra Ashok Leyland Bajaj Hero Honda Daimler Chrysler Suzuki Ford Fiat Hyundai General Motors Volvo Yamaha Mazda

PRE INTERNET SCENERIO  ADVERTISEMENT  INCREASING SALES  AUCTION  SECOND HAND MARKET  CAR REPAIR OR AFTER SALE SERVICE & SPARE PARTS

PRE INTERNET SCENERIO  the only cars that were available in India were the Ambassador and the Premier Padmini  Maruti Suzuki 800 car in 1983 a joint venture between Government of India and Suzuki Motors  Post liberalization, India is on every car manufacturer map

 who have set up base in India are Audi, BMW, Chevrolet Fiat, Ford, Honda, Hyundai, Mahindra, Maruti, Mercedes, Mitsubishi, Skoda, Suzuki, Tata, Toyota, Volkswagen, and Volvo.  companies like Ford are planning to make India a regional hub for exports of both small cars as well as engines.

Reasons for the impressive growth of the Indian car industry  easy availability of vehicle finance,  attractive rates of interest,  convenient instalments.

 Competition has forced manufacturers to be innovative and responsive to customer demands and needs.  Depending upon customers needs, four segments - small, midsize, premium and sports utility vehicles currently represent the car market in the country.

POST INTERNET SCENERIO  the internet has changed the way the automotive industry communicates  research on cars, not by magazines anymore, but mostly by their online internet connection  Magazines jumped into the online world with their review services  Now getting paid by advertisers.

 Several websites now offer services that allow best price on a car or truck like Car Auctions Inc  Second hand market is also emerging  Spare parts at your doorstep  RECENT EXAMPLE :- Peugeot launched in France the Peugeot Webstore

PRE INTERNET SUPPLY CHAIN

 supply chain assembler or manufacturer were dependent on tier 1 suppliers for their parts or components  Inventory levels were very high because of uncertain demand or unknown point of sales  Example :- Ford & Bosch Case

POST INTERNET SUPPLY CHAIN:  automotive industry supply chains have become increasingly complex  Automotive manufacturers and suppliers need to better orchestrate efforts from design through discontinuation  a lack of transparency and effective connectivity to partners often makes this impossible

Porter’s 5 Forces Model (Pre/Post)

Threat of New Entrants PRE/POST INTERNET  very low in the automobile industry  industry is very mature and it has successfully reaching to economies of scale.  takes an incredible amount of capital  Access to distribution channels is another high barrier to entry  Must find a dealership or have their own dealership

Bargaining Power of Suppliers PRE INTERNET  very low in the automobile industry  When there are many suppliers in an industry, they do not have much power POST INTERNET –  decreasing on & on

Bargaining Power of Buyers PRE INTERNET-  is moderately high  The buyers have low switching cost POST INTERNET-  bargaining power increasing  switching cost is decreasing further

Threat of Substitute Products Pre/post internet  not many substitute products  Some of the substitutes are walking, riding bike or taking a train  depend on the geographic location of the consumer

Intensity of Rivalry among Competitors Pre-internet  very strong is this industry  Reason is a lack of differentiation opportunities Post-internet  Rivalry is increasing

CHALLENGES  Increasing diversified consumer aggregate patterns of behaviour  Accelerated modification and diversification of the product portfolio  Enabling automobiles with digital technology