surge in fuel price affecting automobile sector
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7/29/2019 SURGE IN FUEL PRICE AFFECTING AUTOMOBILE SECTOR
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Surge In Fuel Prices and Its
Effect on Automobile Industry
Group3
Shreyash .S
Seran P.KDonatus Hendrix Fernando
Rajeshwari .V
ManiBharathi
Arun Kumar
Khyati SaxenaRaj Kumar
Gopal . D
Priyanka Jain
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Importance & Why the topic
The automobile sector is one of the high performing sectors of
the Indian economy.
This has contributed largely in making India a prime
destination for many international players in the automobile
industry who wish to set up their businesses in India.
When there is Recession , Automobile Sector is the one which
gets affected earlier.
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Objectives
Primary Objective:
To study the surge in fuel prices and its effect on Automobile
Sector in India.
Secondary Objective:
To analyze the factors for such increase and its effect on the
consumers and the taxation policies by the government.
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Introduction Crude oil Import100 Ton's
Stability of Indian economy is directly co-
related with Crude oil
Increasing demand is not met by substantialsupply
Direct impact on Consumers which has a
negative impact on Automobile sector
PESTEL analysis
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Methodology
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Bike
Car
Others
Type
ofVehicle
Used
33
54
13
Type Of Vehicle Used
1-500
30%
500-1000
26%
1000-1500
19%
1500-2000
12%
Above 2000
13%
Travelling distance per month
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35%
53%
12%
Fuel Price Hike Effect
BADLY AFFECTED
AFFECTED
NOT AFFECTED
BELOW 10001001-2000
2001-30003001-4000
ABOVE 4000
12
30
24
12
22
Amount Spent for Fuel For a Month
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Tata NANO
Tata SAFARI
Maruthi 800
Maruthi SWIFT
43
3
9
133
13
4
4
95
Effect in 4-Wheeler Industry
1.7.11 to 30.6.12 1.7.10 to 30.6.11
HERO MOTO CORP BAJAJ AUTO TVS MOTOR
473033
200535140806
475363
202336160354
Slowdown Effect in the 2 wheeler industry
Jul-12 Jul-11
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32%
25%
17%
14%
12%
Reason For Change Of Vehicle
PRICE HIKE
MILEAGE
DESIGN
OBSELETE
OTHERS
PERSONAL CAR
PERSONAL BIKE
PUBLIC TRANS
OTHERS
30
36
29
5
Preferred Mode of Transport
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VAT
Rs 14.40
TransportationCharge
Rs 3.72
Education
Tax
Rs 0.43
Excise
Duty
Rs 14.35
Basic
Price
Rs 31.91
Petrol
Custom
Rs 5.76
Dealer
Commission
Rs 1.05
Crude oil
Custom
Duty
Rs 1.54
TAX
56.39 %
(Rs 41.25)
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Findings
Lower middle class people are affected.
Automobile production cuts down
Taxation is more
People started using public transportations
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Contd
Increasing fuel rates is directly proportional to FMCG,
Groceries etc
People have the capacity to purchase a vehicle but are hesitantdue to hike in fuel
Many households have vehicles for every individuals
Electric/hybrid vehicles can cut down a major portion of their
expense
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Suggestions
TemporaryPlans:
Public Transports.
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FuturePlans:
Government has signed agreement
between Turkmenistan-Afghanistan-
Pakistan to bring fuel to India
through a pipe line by 2018
Bio- fuel is one very good substitute
, very eco-friendly and very cheaper
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Conclusion
By 2050 it is predicted that ,there will be no fuel in the planet
With 10% rise in crude oil price it will impact on agriculture at8%, transport on 4%, and household items on 4% and other
items 2%
Use electronic car , bike which is very economical and thiseven the automobile sector to grow but not to fall
There is a high rate of taxation on fuel prices which needs tobe cut down
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Contd.
In long term shift to alternative fuel (hydrogen / Electricity) or
the living standards will decline increasingly
Government should make stringent NORMS as to allowingonly those vehicles which are fuel efficient
If price of fuel keeps on increasing people will permenantly
shift to public transport where automobile industry can go todisaster.
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Survival Code
SAVE OIL ,SAVE MONEY
SAVE OIL ,SAVE INDIA
SAVE OIL ,SAVE EARTH
SAVE OIL ,SAVE OURSELVES
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