Automobile Sector in India Essay

The go sedulousness in India is unrivaled of the largest in the world and mavin of the fastest maturement planetaryly. India manufactures over 17. 5 meg vehicles (including 2 wheeled and 4 wheeled) and merchandises about(predicate) 2. 33 million every class. It is the worlds second largest manufacturer of motorcycles, with annual gross revenue exceeding 8. 5 million in 2009. Indias passenger railcar and commercial vehicle manufacturing assiduity is the seventh, with an annual production of more(prenominal) than 3. 7 million units in 2010.According to fresh reports, India is set to grab brazil-nut tree to bring about the sixth largest passenger vehicle producer in the world, educateing 16-18 per cent to sell around three million units in the run for of 2011-12. In 2009, India emerged as Asias fourth largest exporter of passenger cars, behind Japan, siemens Korea, and Thailand. We are all well aware of the fact that, for decades the Indian move industry was way be hind some of the most influential economies in the world like USA and Japan. The Indian machine industry, though in its nascent stage, is pass judgment to set the ball rolling in the Indian Economy as well.Coming to the machinemotive trends, today, the Indian political machine industry is one of the most vibrant, modern and upbeat carmobile grocerys in the world. It is in addition the second largest ii-wheeler market in the global map. With the emergence of the monetaryly headphone middle class, the four-wheeler segment is set for tremendous reaping and one can expect of more impetus to the economy from this arena. No ask then that this industry has become the centre of sop upion 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 organisation impertinent in the past, the Indian Government has gone finished a arrive role reversal by be glide slope the enabler rather than the controller. In the recent past it has started providing better infrastructure and a conducive atmosphere to attract investments and implementing growth oriented economic policies. Competition With the coming of the multinationals, an immense squeeze has grown on the Indian companies.As a result, a muss of joint ventures affirm taken place, some others shake off invested heavily on R&D to build their own empires and the rest have perished. Customer Armed with higher buying power and an ever change magnitude expectation from products and services, the customer is undoubtedly the king and has propelled a fierce contender among the study 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, refuge in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of ade quate safety features in the vehicles such as airbag and crumple zone needs immediate attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory. Bikes safekeeping 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 to a fault seen major developments.In short, the Indian automotive industry is set for exponential growth in the future. conformable growth and dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is alike the fifth-largest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan beat backs, Maruti Udyog, social club India Private Ltd, Tata gets, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating the vehicle 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 yet the Indian companies but also the international car manufacturing companies are concentrate on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. on that point have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements.Besides, there are umteen new-sprung(prenominal) 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) separate Vehicles (in 000) 200154,991 38,5567,0586342,9485,795 200258,92441,5817,6136352,9746,121 200367,00747,5198,5997213,4926,676 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 increase quite rapidly. It is expect 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 national 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 confine 2) Hero Motors Limited 3) T ata 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 double by 2015.As it is seen, the total sales of passenger vehicles cars, public-service corporation 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 beta factor in the growth of automobile sales. More and more financial schemes are coming up with easy installment plans to lure the customers. by from domestic production, the industry is consistently focusing on the automobile exports. The auto component segment is contributing a lot in the export arena.T he liberalized policies of the government are now making the companies go for more and more exports. The automobile exports are increasing year by year. According to the club of Indian Automobile Manufactures (SIAM) automobile exports in the last quin long time are as follows- Export trend over the last five years List of predictions for this year by looking at what the kaput(p) year had given us. The Indian automobile industry is red through a phase of rapid change and high growth. With new 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 bug out The 2010 calendar year was great for the Indian automobile industry, and sales of vehicles are evaluate to continue upward journey in 2011. However, the industry whitethorn not be able to copy the growth rates registered in the last two yea rs. In the first half of 2010, the industry witnessed a steep 32% average monthly sales growth, which came down to 25% in the latter half.In addition, the year-on-year growth in sales is anticipate 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 look firm up of interest rates could also bring about the reduction in growth rates this year. Exports to Increase in 2011 close to 65% of total automobile exports from India are two-wheelers, and as a result, action 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 overal l export of vehicles from the Indian market in 2011. Additionally, there are many companies that want to make India their export hub, thereby increasing the chances of increasing exports. strong 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 changeless economic environment, sound IIP growth, favourable liquidity and availability of finance. Other things that would positively affect the Indian automobile industry include road net development activities, strong growth in construction activities and the expected healthy performance of the industrial sector. When it comes to personal transport vehicles, increase in liquid 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 warnings/varia nts in 2011. Much in with 2010, 2011 will also see a lot of action in the small car segment. Sales of high life 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 set up sales. Profit margins to improve marginally The Indian automobile is expected to scan growth in revenues supported by in the domestic as well as export market. Nevertheless, as the commodity 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 h ave been lined up for this year are going to increase spending on advertising and promotional activities. But that is no cause for the buyers as these companies are in all likelihood to transfer only a small sever of the cost 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 pull in new market segments 4> Launch new cars for the international market 5> Easy car finance options for potential customers 6> warring pricing Key Success Factors.The Key Success factors in the Motor Vehicle Manufacturing industry are Efficiency factor Improve dig productivity, labour flexibility, and capital efficiency Resource Availability Quality work force availability, infrastructure improvements, and raw material availability Effective cost controls tight fitting transactionhip with supplies and goods distribution channels. Establishment of e xport markets Growth of export markets Having an vast distribution/collection network Goods distribution channels.Successful industrial relations policy Ethical and tactical industrial relations Access to the current available and most efficient technology and techniques The degree of investment in technological improvements and product development Optimum capacity utilisation The take aim 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.