new automobile

7/31/2019 New Automobile

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1.1: The Beginning of New Era

With the invention of the wheel in 4000 BC, mans journey on the road of

mechanized transport had begun. Since then he continually sought to devise an

automated, labor saving machine to replace the horse. Innumerable attempts reached

conclusion in the early 1760s with the building of the first steam driven tractor by a

French Captain, Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb

Damlier to produce the first vehicles powered by the internal combustion engine in

1885. It was then that the petrol engine was introduced, which made the car a

practical and safe proposition. Then onwards, it has been one big journey...on the

roads.

1.2: History of Automobile Industry

Historians, who accept that early steam-powered road vehicles were

automobiles, feel that Nicolas Cugnot was the inventor of the first automobile.

1880's & early 1900's

About hundred years ago

-The first motor car was imported

-Import duty on vehicles was introduced.

-Indian Great Royal Road (Predecessor of the Grand Trunk Road) was

conceived.

First car brought in India by a princely ruler in 1898. Simpson & Co established in 1840.

-They were the first to build a steam car and a steam bus, to attempt motor car

manufacture, to build and operate petrol driven passenger service and to

import American Chassis in India.

In 1928 assembly of CKD Trucks and Cars was started by the wholly owned

Indian subsidiary of American General Motors in Bombay and in 1930-31 by

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Canadian Ford Motors in Madras, Bombay and Calcutta In 1935 the proposals

of Sir M Visvesvaraya to set up an Automobile Industry were disallowed.

1942 Hindustan Motors Ltd incorporated and their first vehicle was made in

1950.

In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle

was produced.

Only seven firms namely Hindustan Motors Limited, Automobile Products of

India Limited, Ashok Leyland Limited, Standard Motors Products of India

Limited., Premier Automobiles Limited, Mahindra & Mahindra and TELCO

received approval. M&M was manufacturing jeeps. Few more companies came

up later.

1960's

In sixties 2 and 3 Wheeler segment established a foothold in the industry.

Escorts and Ideal Jawa entered the field in the beginning of sixties.

Association of Indian Automobile Manufacturers formally established in 1960.

Standard Motors Products of India Ltd. moved over to the manufacture of

Light Commercial Vehicles in 1965.

1970's

During this decade there was not much change in the four wheeler industry

except the entry of Sipani Automobiles in the small car market.

Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian

Automotive Ltd and Sen & Pandit Engg products Ltd entered the market

during 1971-75. They ultimately withdrew in early eighties.

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1980's - The period of liberalized policy and intense competition

Lots of new Foreign Collaborations came up in the eighties. Many companies

went in for Japanese collaborations. Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the

Isuzu truck in early eighties.

ALL entered into collaboration with Leyland Vehicles Ltd. for development of

integral buses and with Hino Motors of Japan for the manufacture of W Series

of Engines.

TELCO after the expiry of its contract with Daimler Benz, indigenously

improved the same Benz model and introduced it in the market.

Government approved four new firms in the LCV market, namely, DCM,

Eicher, Swaraj and Allwyn. They had collaborations with Japanese companies

namely, Toyota, Mitsubishi, Mazda and Nissan respectively.

In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a

Japanese firm.

Other three Car manufacturers namely, Hindustan Motors Ltd., Premier

Automobiles Ltd., Standard Motor Production of India Ltd. also introduced

new models in the market.

At the time there were five Passenger Car manufacturers in India - Maruti

Udyog Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard

Motor Production of India Ltd. and Sipani Automobiles.

Ashok Leyland Ltd. and TELCO were strong players in the Commercial

Vehicles sector.

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1990's

In 1991 new Industrial Policy was announced. It was the death of the License

Raj and the Automobile Industry was allowed to expand.

The Indian Automobile market in general and Passenger Cars in particular

have witnessed liberalisation. Many multinationals like Daewoo, Peugeot,

General Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat

entered the market.

TELCO has diversified in Passenger Car segment with Indica.

.1.3: Preview of Automobile Industry

The automobile industry, one of the core sectors, has undergone

metamorphosis with the advent of new business and manufacturing practices in the

light of liberalization and globalization. The sector seems to be optimistic of posting

strong sales in the next couple of years in view of a reasonable surge in demand.

The Indian automobile market is gearing towards having international

standards to meet the needs of the global automobile giants and become a global

hub.

Indian automobile sector being a driver of product and process technologies, and has

become a excellent manufacturing base for global players, because of its high

machine tool capabilities, extremely capable component industry, most of the raw

material locally produced, low cost manufacturing base and highly skilled manpower

Not only a large number of world manufacturers have set up production bases in

India but also a large number of foreign companies are collaborating with the auto

component suppliers and vendors.

Indian Automobile Components Industry has been making rapid strides

towards achievement of world-class Quality Systems by imbibing ISO 9000/QS 9000

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Quality Systems whereby the Indian Automotive industry has become more

competitive in the export market due to its technological and quality advances, so

much so that in quality conscious markets such as Europe and America, it is

emerging as a major player, based on its performance.

India today exports: Engine and engine parts, electrical parts, drive

transmission & steering pats, suspension & braking parts among others.

Government will encourage setting up of independent auto design firms by

providing them tax breaks, concessional duty on plant/equipment imports and

granting automatic approval. Allocations to automotive cess fund created for R&D

of automotive industry shall be increased and the scope of activities covered under it

enlarged.

1.5: Background of Automobile Industry

The automobiles industry for many years operated in a seller's market. In such a

scenario the manufacturer could offer outdated models and also raise prices at

will. Little or no attempt was made to control costs or to offer new products. Lack

of innovation restricted the consumers options to the models offered by these

companies.

The number of manufacturers (domestic and foreign) increased dramatically after

the de-licensing of the sector. Increased competition has forced companies to

focus on cutting costs, improve technology and styling through research. It has

also constrained them to limit price increases.

Availability of easy credit facilities also resulted in creating demand for

automobiles. The car financing market has boomed from a turnover of Rs 7,000 m

in FY95 to nearly Rs 35,000 m in FY97.

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Structure

The Indian automobile industry can be broadly classified into:

2 /3 Wheelers

Passenger Cars

Commercial Vehicles (LCV/HCV/MCV)

UV (Utility vehicles)

Tractors

The models in the car market can be fitted to different segments as given below:

Category Models

Economy segment (upto Rs 0.25mn) Maruti Omni, Maruti 800 etc.

Mid-size segment (Rs 0.25-0.45 mn) Fiat Uno, Hyundai Santro, tataIndica, Maruti Alto etc.

Luxury car segment (Rs 0.45- 1mn) Tata Indigo, Honda City, Mitsibushi

Lancer, Ford Ikon, Opel Astra,Hyundai Accent & others

Super luxury segment (above Rs1mn)

Mercedes Benz & other importedmodels

The economy segment has a very large foothold over the Indian automobile marketas compared to the mid-size and luxury segment.

Segment Market Share (%)

Economy 90.2

Mid-size and luxury 9.8

Source: SIAM/ Auto Car India

.

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Figure -Structure of Passenger Vehicle Market (India)

Trends in Passenger Car / Utiltity Vehicle Sales

The passenger car segment has seen rapid growth on the back of rise in disposable

income, increased availability of consumer finance, and reduction in excise and

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customs duties. Post-1991, this segment has seen maximum foreign investment.

There is a clear segmentation of passenger cars based on price and size. While the

lower and medium range cars (Maruti, Ford, Cielo) have been moderately

successful, luxury cars such as Mercedes have found the going tough.

Demand for utility vehicles and tractors come from rural India. These vehicles

have witnessed steady demand growth over the past few years due to successive

monsoons, better procurement prices, improved irrigation facilities, and

availability of finance.Availability of quality components is another factor that determines smooth

production without bottlenecks. High rejection rate of auto components has prompted

several global majors like Ford, to get their international suppliers.

1.7: The landmarks along the way...

1928- The first imported car was seen on Indian roads

1942- Hindustan Motors incorporated

1944- Premier automobiles started

1948- First car manufactured in India

1953- The Government of India decreed that only those firms which have a

manufacturing program should be allowed to operate

1955- Only seven firms, namely, Hindustan Motors Limited, Automobile Products of

India Limited, Ashok Leyland Limited, Standard Motors Products of India

Limited. Premier Automobiles Limited, Mahindra & Mahindra and TELCO

received approval.

1960 - 1970 - The two, three wheeler industries established a foothold in the Indian

scenario.

1970 - 1980 - Not much change was witnessed during this period. The major factors

affecting the industry were the implementation of the MRTP Act (Monopolies

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and Restrictive Trade Practices Act), FERA (Foreign Exchange Regulation

Act) and the Oil Shock of 1973 and 1979.

1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the

liberalization of the Government's protectionist policies, the advantages

hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly,

slowly began to disappear.

1991 - Under the Govt.'s new National Industrial Policy, the license raj was

dispensed with, and the automobile industries were allowed to expand freely.

1993 - With the winds of liberalization sweeping the Indian car market, many

multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat

came into the Indian car market.

1997 - The National Highway Policy was announced which will hopefully have a

positive impact on the automobile industry. The Government also laid down the

emission standards to be met by car manufacturers in India in the coming

millennium. There were two successively stringent emission levels to be met by

April 2000 and April 2005, respectively. These norms were benchmarked on

the basis of those already adopted in Europe, hence the names Euro I

(equivalent to India 2000) and the Indian equivalent of Euro II.

1999 - The Honble Supreme Court passed an order directing all car manufacturers

to comply with Euro I emission norms (India 2000 norms) by the 1st of May,

1999 in National Capital Region(NCR) of Delhi. The deadline was later

extended to 1st June, 19992004 - Tata Motors becomes the first Indian auto company to be listed on the New

York Stock Exchange.

2.2: Role of Government in Automobile Industry

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The government is making efforts to overcome the constraints at their research

centers for automobile industry. India can also learn from countries like Japan that

are already using these technologies for a wide number of applications. The Indian

auto industry should launch programmes for market development and a wider

acceptance of alternative energy-driven vehicles in India. It should also work in

tandem with the government to make India a world leader in this area.

With the growing number of vehicles, the pollution in the cities is ever

increasing. Government initiated controls by notifying emission standards from the

year 1992 which were further tightened under the Motor Vehicle Act. For meeting

these norms, unleaded petrol was also introduced in metropolitan cities from 1995,

which enabled fitments of catalytic convertors on new petrol driven vehicles..

The policy of broadbanding capacities in the eighties led to increased

utilization of capacity for four-wheelers in the industry.

The liberal policy on foreign participation through technical and financial

collaboration in early eighties led to substantial product upgradation and

introduction of new models. But it was alleged that the policy was discriminatory in

favor of MUL, while others like Telco, PAL, HM were denied permission to produce

cars in collaboration with Japanese companies.

The GOI controls the car sector by way of framing policies on depreciation

norms, import duty on cars and parts used in it, petrol prices and import duty of steel.

During the era of socialist inspired controls, the government protected the car

industry from new entrants by making effective use of licenses. However, after

liberalization and with the consequent opening up of the auto sector in 1992-93, the

license raj ceased to exist .

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The perception of a car as a luxury good lead to heavy excise duty on cars.

The excise duty doubled from 25% in FY87 to 55% in FY91. Till 1987, the GOI

followed a discriminatory policy so as to charge lower duty on fuel efficient car with

engine capacity of less than 1000cc. This helped MUL to price its car at a lower price

in comparison to others. But with lobbying from PAL and HM government withdrew

the provision in 1987.

In line with its treatment for luxury items import duties for car have been

maintained highThe import duty on cars and components has come down in the last

few years in line with general reduction in import tariffs. The import duty on catalytic

converters and parts thereof has been reduced from 25% to 5%.

The import duty on auto components will be a key factor in deciding the final

pricing of cars as new ventures start with about 50% indigenisation levels. The

reduction in import duty on steel in the last few years has helped the industry in

reducing raw material costs as major steel requirement of car industry was imported.

Even today, all CKD/SKD imports include metal pressed body panels.

Indian Automobile Industry

An Indian car as one which has been conceived and designed in India, has at

least 85% of its components 'Made in India', by an Indian company.

The official mascot of the Indian political system, the Triassic-era Ambassador

has little Indian-ness in it.

. The entry of Maruti Udyog Ltd, a GoI JV with Suzuki of Japan, in 1983 with

a so-called "peoples" car and a more favorable policy framework resulted in a

growth rate of 18.6% in car sales from FY81-FY90

Starting with the official one, i.e. Maruti, the company, since its inception has

changed the automobile scene in India completely. It's has been the number one

manufacturer, churning out close to 300,000 cars last year. Every year it rakes in

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multi-billion rupee profits, and, yet the company is nothing more than Suzuki India

Ltd.

Telco is a completely Indian carmaker with no major foreign collaborations.

Their Indica was much touted as 'The Indian car', but it was styled by I.D.E.A of

Italy. The engine technology had inputs from 'Moteur Modern' of France..

India is also the largest manufacturer of agricultural tractors, motor scooters

and the world's fifth largest commercial vehicle manufacturer. Each of these sectors

experienced rapid growth during the last three years Demand in these sectors is

driven by industrial, individual and agricultural consumers respectively. The

increases have resulted from improved overall economic trends in India including

large doses of foreign investment a more liberalized economy and higher

productivity.However, in India, price is the main factor determining the choice of car.

Hence, cars are segmented on the basis of price into three segments :

Segment

PriceRange

(Rs.000)

Main ModelsFeatures ofthe segment

ApproximateMarket Shareof the

Segment

Economy < 250

M-800, Omni,

Uno,Ambassador

Price, FuelEfficiency

46.9%

Medium 250-500

Zen, Uno, 118-

NE,Ambassador1800 ISZ,Contessa,

Indica, Santro,Matiz

Price,Performance,Diesel Option

43.1%

Premium500 &above

Lancer, Esteem,Cielo, Accent,City, Opel Astra,

Ikon

Status Value,Performance,Features.

10.1%

Sources : various sources

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4.3: Indian Automobile Market

The Indian market confounds global carmakers simply because of the way it is

segmented. In the West, automobiles are generally segmented according to platforms

-- that is chassis-engine combinations.. In India, though, price plays the primary role

in segmentation..

The Indian market, of course, is quite differently segmented. The Maruti 800

and Zen fall in a class by their own -- and are referred to as the sub-Rs 2.5-lakh cars.

The next is the Rs 3-4 lakh segment -- which includes all the other cars that would

normally be classified as city cars in Europe. Strictly speaking, the Tata Indica

should fall in the super-mini category because of its specifications -- but because of

price, it competes in the same segment. Above Rs 4 lakh and all the way up to Rs 10

lakh is the luxury car range. It is loosely divided into two halves -- with Maruti

Esteem, Ford Ikon, Hyundai Accent, Daewoo Cielo, Opel Corsa and Honda City 1.3

falling in the bottom layer, and the Opel Astra, Honda City 1.5 and Ford Escort in

the upper range. The last segment is of premium car segment, which includes cars

like Mercedes Benz and BMW.

5.1: Strengths of the Automobile Industry

Low labor cost:

India enjoys a comparative cost advantage in labour as compared

to western countries.

Skilled Manpower:

India has vast pool of skilled manpower and qualified

engineers among the largest in the world.

On a scale of 1-10, 1 = low, 10 = high.

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Availability of Skilled labour.

Sr No Country Points.

1 India 8.5

2 Brazil 7.5

3 US 7.4

4 Germany 6.6

5 Mexico 6.6

Availability of Qualified Engineers.

Sr No Country Points.

1 Germany 7.5

2 India 7.4

3 US 7.2

4 Brazil 6.4

5 Mexico 6.3

Reference: Competitiveness of Indian automotive industry Feb 2004.

5.2: Weaknesses of the Automobile Industry

Low labor productivity:

Cost advantage in labor wages is nullified by the fact that we have lowerlabor productivity.

Defect rates high:

We have a higher defect rate about 10 times the world average.

Low Investment in R & D:

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The Industry has a very low investment in R & D as compared to their

foreign counterparts which will their sustainability in the future.

Not reached critical mass:

Indian companies are in nascent stage and hence not able to cater to the

requirements of OEMs. Our auto- ancillary industry is of 2.4 bn $ while Fords

outsourcing budget is 86 bn $.

5.3: Opportunities for the Automobile Industry

Global automobile companies are setting up manufacturing facilities in India..The year 2002-03 has already seen a significant 65% increase in export volumes

during the period April to March. This trend is expected to continue with more global

OEMs sourcing vehicles from their Indian plants.

Additionally, the introduction of newer technologies such as Electronic Diesel

Control Systems to reduce emission levels, safety devices such as Air Bags, Anti-lock

Braking Systems, etc. augur well for the Company and the automotive sector as a

whole. These technologies not only offer increased safety for drivers and passengers,

but also result in greater comfort and better drivability.

5.4: Challenges for the Indian automobile industry

As we move into the new millennium, the Indian Automobile Industry faces

some tremendous opportunities and also great challenges. The growth in automobile

sales has been impressive for the past ten years since liberalization began. However,

with liberalization, the Indian customer has been presented with a wide range of

choices in automobiles, to suit every requirement and budget. The market has turned

into a buyers market where the customer is being wooed by the manufacturers and

the dealers with a range of freebies unheard of before in India. Financing has

become so easy that an automobile is within every aspirant's reach.

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To add to the problems, come April 2001, under the WTO agreement, India

will have to permit import of fully built automobiles, which hitherto was not

permitted.

The challenge before the industry is to figure out the strategy for survival and

growth. One way to achieve this will be to go for exports in a big way. Maruti is

already exporting vehicles, as are Mahindra, Telco, Daimler Chrysler and more

recently Daewoo.

The second opportunity is to become contract manufacturers for overseas

companies. Hindustan Motors is said to be considering this option. The third

opportunity is to overcome the vulnerability of the automobile market to oil prices by

designing vehicles, which can offer lower fuel consumption. .

The inadequacy of road infrastructure in India is well known. This is

compounded by the fact that traffic management is very poor or non-existent and the

drivers are mostly ill trained and in disciplined. As more vehicles come on the road,

this will become a major bottleneck. The industry will need take initiatives firstly to

train all drivers in safe driving and proper road discipline and manners. They will

also need to assist government agencies in better road design and in building of

multilevel parking lots.

8: Different players in the Indian Automobile industry

1: Maruti Udyog Ltd.

Maruti Suzuki Sales in April 2012

Car market leader Maruti Suzuki India Limited sold a total of 100,415 units in

April 2012 a growth of 3.4 per cent. This includes 10,160 units for export, a growth of1.5 per cent. TheCompany had sold a total of 97,155 units in April 2011.

The sales figures for April 2012 are given below:

Category : Sub- Models April 2012 April'11 -

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Segment March'122012 2011%

Change

Passenger Vehicles

Mini M800, Alto, A-Star,WagonR

30720 41744 -26.4 % 491389

Compact Swift,Estilo,Ritz 26072 18227 43.0% 235754

Super Compact Dzire 15510 11797 31.5% 110132

Mid-Size SX4 634 2102 -69.8% 17997

Executive Kizashi 3 35 -- 458

Total A: Passenger Vehicles 72939 73905 -1.3% 855730

B: UtilityVehicles

Gypsy,Grand Vitara,

Ertiga*5593 217 --% 6525

C: Vans Omni, Eeco 11723 13022 -10.0% 144061

Total Domestic Sales 90255 87144 3.6% 1006316

Total Export Sales 10160 10011 1.5% 127379

Total Sales (Domestic + Export) 100415 97155 3.4% 1133695

Models of MUL

Alto

Maruti 800

Zen

Wagon R

Omni

Esteem

Baleno

2: Tata Motors JLR Sales for April 2012

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JLR sales for the month of April 2012 came in at 25,143 units which

is 29.4% YoY growth. But it is down 31% QoQ. In March Companysold 36,471 units.

This sales number is a huge disappointment as it is 9% lower thanthe Sep 2011 sales figures of 27,639 units, which was the first month

of Evoque launch. If we exclude Evoque sales figure of 8,300 units, sales are down by

13% YoY to 16,843 units in April 2012. China which account for 25% of the sales did well with wholesale

volumes growing 150% YoY. US sales were a bit disappointing as retail volumes grew by 3% YoY.

Jaguar sales grew 17% YoY to 3,603 units in April 2012. MoM itdeclined 33%.

Land Rover sales grew 31.7% YoY to 21,540 units in April 2012.

MoM it declined 31%.

Chery Automobile Co. Ltd. has applied for government approval to

establish a joint venture with Jaguar Land Rover in China. Chinarequires environmental reviews before allowing automakers to build

new assembly plants.

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3: Telco-The HomeGrown Challenger

Telco did not boast a great reputation for developing even world-class commercialvehicles, forget passenger cars. When the Indica hit the market, the consensusopinion was that Telco had goofed up again.. The Indica was riddled with quality

problems. A year down the line, almost everyone grudgingly admits that the Indicahas been a success. The Telco formula of pushing the biggest small car with arugged diesel engine has been a major hit in the semi-urban and rural markets.

The Indica cost $400 million from start to finish whereas the Hyundai Accent issaid to have cost $1.6 billion to develop. But the flip side is that all global giants

can amortise the costs of development by selling the same car across differentworld markets, Telco can't afford to capture.At the moment though, the Telcostrategy is to tap the niches first. The Indica, with the diesel engines being pushedhard, was clearly aimed at a segment none of the rivals was addressing. Similarly,the new car Magna it is planning to launch is again expected to be a niche caraddressing a particular need in the Rs 12-16 lakh car segment. And in the SUVmarket, Telco has already introduced the premium Safari, which again focuses ona small niche.

It is a smart strategy as it avoids taking any of the big guns head on. But in the

long run, Telco knows it has to take on its rivals in the mainstream markets aswell. It is ramping up capacity to 160,000 from the current 120,000 cars

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anticipating that it will get the demand. But Telco is also the weakest player in thesmall car market -- and unless it keeps springing

surprises, it could be the first casualty in this round of the car battles.

4: Hindustan Motors

Hindustan Motors Ltd (HML) is the oldest passenger car manufacturer in thecountry. It also has a small presence in the multi-utility vehicle and the heavycommercial vehicle segments. The later is generally manufactured for exports. Otherthan the automotive sector, the company has diversified into earth moving

equipments and power products. In the passenger car segment, the company has thewell known Ambassador and Contessa models. It has recently tied with Mitsubishiof Japan for manufacturing the Lancer range of cars. At present, the company has

a market share of 4.2% in the car segment.

HML, incorporated in 1942, is the flagship company of the C.K. Birla group ofcompanies The company became the first manufacturer of cars in India when it setup its plant at Port Okha in Gujarat. In 1948, it shifted its activities in Uttarpara nearCalcutta and set up facilities to manufacture cars and trucks. Over the years, HMLhas diversified into heavy engineering equipment like excavators, cranes, presses andsteel products under the heavy engineering division (HED). With the divisionbecoming a loss making one, it was hived off to Hyderabad Industries Ltd, a groupcompany, in FY92. In 1971, HML further diversified its activities to include earth-

moving equipment such as dumpers, front-end loaders etc by setting up a plant nearChennai. In 1985, HML set up a plant at Hosur in Tamil Nadu for manufacturingheavy-duty transmission required for earth moving equipments.

In 1986, a project was undertaken to produce HCVs at Vadodara. A part ofthe assets was later sold to a JV between GM and HML, General Motors India Ltd. In1987, HML commenced the production of petrol engines in collaboration with Isuzu

Motor Company, Japan. Recently, the company has entered into a technicalcollaboration with Mitsubishi of Japan for the manufacture of the Lancer car.Commercial production of the car started in October 1998. HML also entered into

collaboration with OKA Motor Company of Australia to produce custom-designedrural transport vehicle.

Models of Hindustan Motors

Ambassador 1800 ISZ

Ambassador 2000 DSL

Ambassador Nova Diesel

Contessa motors

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5:Mahindra & Mahindra

India's largest sports utility vehicles manufacturer Mahindra & Mahindrayesterday reported 27 percent increase in sales at 40,719 units for April, 2012 incontrast with 32,090 units in the year ago period.

Mahindra had sold 39,299 vehicles in the domestic market, registering 29 percentincrease in sales, in comparison with 30,558 units sold in the year ago period.

Total sales of passenger vehicles, including Mahindra Scorpio, MahindraXUV500, Mahindra Xylo, Mahindra Bolero and Mahindra Verito were 20,558units last month, as against 15,459 units in April 2011, up 33 percent. Thecompany, however, said sales of its three-wheelers stood at 4,659 units, up from4,411 units during the same month last year.

6: Premier

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Fiat India and Premier have signed a three-year agreement for the supply of Fiats1.3 litre Multijet diesel engine to be used in Premiers compact SUV Rio. Initially,

Fiat will supply 28,000 engines to Premier, although this volume may rise furtherwith increased demand for the Rio.

The engines will be made at Fiats facility in Ranjangaon and will be supplied toPremiers factory at Chichwad, Pune, which is located 60 kilometres away fromFiat's plant. Fiats 1.3 litre Multijet diesel engine will enhance the Rios power from

64.8PS to 76PS and fuel efficiency from 16kmpl to 18 kmpl, according to an officialrelease from Premier.

Commenting on Premiers decision to opt for Fiats 1.3 litre Multijet engine to powerits new Rio model, Maitreya Doshi, Premiers Chairman and MD said, Premier

greatly values its past association with Fiat. We are delighted to once again havecommercial ties with them.

The engine supply will also enable Premier to sell its SUVs in cities that require the

vehicle to be Bharat Stage 4 compliant. So far, the sales have been confined to Tier IIand Tier III cities. According to industry sources, the Rio with the Bharat Stage 4

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engine will be costlier by Rs 45,000, although we are yet to receive a final word onthis from the company.

Priced at Rs 5.35 lakh, (ex-showroom, Pune) the Rio currently sports a Peugeot

TUD5 diesel engine. Deliveries of the Rio with Fiats 1.3 litre Multijet engines arelikely to begin in August. Premier currently sells the model through a network of 60outlets across India. It aims towards increasing the number of its dealerships to 100by December 2012.

Apart from this there are several others players in Indian automobile

industry:

1:Hyundai: Can The Dream Run Continue?

South Korea's largest and the world's sixth biggest automobile company, Hyundaiwas initially founded as a construction company by Chung Ju-yung in 1947. Thecompany entered India market with Santro in 1998 and met with huge success withthe product. With the launch of Sonata and Accent the company .

South Korea's largest and the world's sixth biggest automobile company, Hyundaiwas initially founded as a construction company by Chung Ju-yung in 1947. Thecompany entered India market with Santro in 1998 and met with huge success withthe product. With the launch of Sonata and Accent the company established itself

firmly in the Indian market. The company has come up with new products likeTerracan, Elantra, Getz Prime and Verna for the Indian market.

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2:Honda

Honda Siel Cars India Ltd. (HSCI), one of the leading premium car manufacturer inIndia posted a tremendous growth of 252 per cent in April 2012. The company

registered sales of 7,075 units in the month of April 2012 against 2,012 units in theprevious year.The Honda cars sold 71 per cent more during the January-April 2012 period of 2012with 16,789 units sold against the 28,731 units sold last year.

Model wise break-up of sales:

Brio 3590Jazz 1300City 2092Civic 51

Accord 25CRV 17

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3:Nissan

Nissan Evalia which was unveiled at the Auto Expo, 2012 will barge in the market by

August, 2012, as confirmed by industry sources. Earlier the van was popular with thename Nissan NV200, however, the Japanese car manufacturer has christened it as

Evalia now. Now Renault-Nissan plans to expand their vehicle-cum-enginemanufacturing factory with a second production line at their Oragadam plant nearChennai. Since the manufacturing of Evalia will be localized at Nissans factory nearChennai, the company will be able to price it competitively near its arch rival-Innova.

Nissan Evalia price will be no less than Rs lakh. Built on Nissans B-platform, theEvalia is a seven-seater with a 2+3+2 configuration and will also compete with upcoming Maruti Ertiga.

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Mercedes :

The Mercedes-Class C200 CGI BlueEfficiency (the cheapest C-Class) costs Rs

28.44lakh (ex-showroom, Mumbai) which is a little expensive considering its overallfeatures, but let us not forget that this is also your passport into the elite Three-Pointed Star club. The C200 CGI is the most basic Mercedes-Benz sold in India. It isa perfect car for those wanting it merely to enhance their status in society. In India,

Mercedes-Benz is considered to one of the biggest luxury car makers and has a betterresale value than most its competition. If a chauffer drives you to work during the dayand you are a boy racer by night, this is undoubtedly the Mercedes for you at this

price tag.

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Skoda:

Price Rs 1,800,000* - 2,576,383*

If you are looking for a good Skoda car, Skoda Superb Cars will really amaze youwith its quality performance and comfort.

It is a best Skoda car stuffed with the features and great mileage. Skoda Superb carsare huge in demand. If you are sure to buy this Skoda Superb car in India, check outthe available Skoda Superb car models, their list of features and detailedspecifications.

If you buy Skoda Superb car, you will never regret your decision of buying a Skodacar.

Audi:

Price Rs 3,894,000* - 4,494,000*

If you are looking for a good Audi car, Audi Q5 Cars will really amaze you with itsquality performance and comfort.

It is a best Audi car stuffed with the features and great mileage. Audi Q5 cars are

huge in demand. If you are sure to buy this Audi Q5 car in India, check out theavailable Audi Q5 car models, their list of features and detailed specifications.If youbuy Audi Q5 car, you will never regret your decision of buying a Audi car.

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Mitsubishi Lancer Cars :

Price Rs 733,000* - 1,050,000*

If you are looking for a good Mitsubishi car, Mitsubishi Lancer Cars will reallyamaze you with its quality performance and comfort.

It is a best Mitsubishi car stuffed with the features and great mileage. Mitsubishi

Lancer cars are huge in demand. If you are sure to buy this Mitsubishi Lancer car inIndia, check out the available Mitsubishi Lancer car models, their list of features anddetailed specifications.

If you buy Mitsubishi Lancer car, you will never regret your decision of buying aMitsubishi car.

Rolls-Royce Ghost :

Rolls-Royce Ghost - one of the models of cars manufactured by Rolls-

Royce. Rolls-Royce Ghost received many good reviews of car owners for

their consumer qualities

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Land Rover:

The Range Rover Sport Supercharged is packaged as the ultimate road-going LandRover that doesn't lose any of the brand's legendary off-road capability. Powered by a390-horsepower supercharged 4.2-liter V8 engine, 6-speed automatic transmissionand permanent all-wheel drive, the Ranger Rover Sport Supercharged is as quick as anearly 3-ton vehicle can be, with the signature supercharger whine on tap with eachdip into the throttle. While not exactly nimble, the Range Rover Sport Superchargedis tuned for the street, with electronic air suspension, Brembo front brake calipersand 20-inch wheels and tires. The interior features all the luxury expected from a

Land Rover, with leather sport seats, Harman Kardon Logic7 surround sound,heated windshield and heated front and rear seats.

Upcoming cars in India 2012 and 2013:

S.No.

Make Model Body StyleExpectedLaunch(mm-yy)

Expected Price

1 Audi A3 Hatchback Jun-11 Rs. 25 lakh

2 Audi A5 Coupe Jun-11 Rs. 39 lakh

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3 Audi A7 Sedan May-11 Rs. 60 lakh

4 Audi Q1 SUV Jul-11 Rs. 28 lakh

5 Audi RS5 Sedan Jun-11 Rs. 45 lakh

6 Audi S5 Coupe May-11Rs. 40 to 45lakh

7 Audi A8 W12 Sedan Oct-11 Rs. 1.1 crore

8 BMW Mini Hatchback Jan-12 Rs. 20 lakh

9 Chevrolet Baojun Sedan Oct-11 Rs. 6 to 8 lakh

10 Chevrolet Beat Diesel Hatchback Early 2011Rs. 4.5 to 5.5lakh

11 Chevrolet Camaro Coupe May-11Rs. 20 to 25lakh

12 Chevrolet Corvette Coupe Apr-11 Rs. 50 lakh

13 Chevrolet Lumina Sedan Jul-11 Rs. 16 lakh

14 Chevrolet M300 Hatchback Dec-11 Unknown

15 Chevrolet New Tavera SUV Early 2011 Rs. 5 to 6 lakh

16 Chevrolet Orlando Minivan Apr-11 Rs. 10 lakh

17 Chevrolet Sail Sedan End 2011 Rs. 6 to 7.5 lakh

18 Chevrolet Sonic Sedan Feb-12 Rs. 7 lakh

100 Chevrolet Spark 800 Hatchback Nov-11 Rs. 3 lakh

101 Chevrolet Volt Sedan May-11 Unknown

19 Chevrolet Agile Hatchback Nov-11 Unknown

20 Dacia Duster SUV Jun-11 Unknown

21 Fiat Alfa Romeo Coupe Late 2011 Rs. 25 Lakh

22 Fiat Linea 1.6 Multijet Sedan Late 2011 Rs. 11 lakh

23 Fiat Mio Hatchback Dec-12 Unknown

102 Fiat Palio CNG Hatchback May-11 Rs. 4.5 lakh

24 Fiat Uno Hatchback Early 2012 Rs. 3 to 5 Lakh

110 Fiat Bravo Hatchback Mid 2011 Rs. 15 lakh

108 Ford Fiesta (Hatchback) Hatchback End 2011 Rs. 6.5 lakh

25 Ford Focus Hatchback Jul-11 Rs. 11 lakh

26 Ford Kuga SUV May-11 Rs. 15 Lakh

27 Ford New Fiesta Sedan End of 2011 Rs. 6.5 to 9 lakh

28 GM SAIC-Wuling HongGuang

MUV Mid 2011 Rs. 7 to 9 Lakh

29 GM

SAIC-Wuling

Sunshine MUV Mid 2011 Rs. 4 to 5 Lakh

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30 Honda Accord Diesel Sedan UnknownRs. 20 to 25lakh

31 Honda Brio Hatchback Sep-11 Rs. 5 lakh

32 Honda City Diesel Sedan Mid 2011 Rs. 10 Lakh

103 Honda CR-V Diesel SUV Apr-11 Rs. 24 lakh

33 Honda Jazz 1.5 Hatchback Jul-11Rs. 7.2o to 7.7lakh

34 Honda TIF Hatchback Jan-12 Rs. 5 lakh

35 Hyundai Avante Sedan Jun-11 Rs. 11 Lakh

36 Hyundai Elantra Sedan Late 2011Rs. 11 to 14lakh

104 Hyundai Genesis Sedan Mid 2011 Rs. 35 lakh

37 Hyundai H800 Hatchback End of 2011 Rs. 1.6 lakh

38 Hyundai Ha Hatchback Mid 2011 Rs. 2 to 3 lakh

39 Hyundai i10 Diesel Hatchback Jun-11 Rs. 3.5 to 6 lakh

105 Hyundai i30 Hatchback Mid 2011 Rs. 7.5 lakh

40 Hyundai i40 Hatchback Dec-11 Rs. 18 lakh

41 Hyundai ix35 SUV Mid 2011Rs. 35 to 53

lakh

42 Hyundai Santro Xing Diesel Hatchback Apr-11 Rs. 2.8 to 4 lakh

43 Hyundai Verna RB Sedan Early 2011 Rs. 6.7 to 9.4lakh

44 Kia Picanto Hatchback Late 2011 Rs. 4 to 5 lakh

45 Kia Proceed Hatchback Late 2011 Rs. 5 to 7 lakh

46 Kia Sorento SUV Late 2011 Rs. 11 Lakh

47 Land Rover Range Rover Evoque SUV Dec-11 Rs. 35 lakh

48 Lexus ES Sedan Dec-12 Rs. 35 lakh

49 Lexus GS Sedan Dec-12 Rs. 45 lakh

50 Lexus GX SUV Dec-12 Rs. 45 lakh51 Lexus IS Sedan Dec-12 Rs. 35 lakh

52 Lexus LS Sedan Dec-12 Rs. 50 lakh

53 Lexus LX SUV Dec-12 Rs. 78 lakh

54 Lexus RX SUV Dec-12 Rs. 28 lakh

55 Mahindra Mini-Xylo Hatchback Mid-2011 Rs 4 to 5 lakh

111 Mahindra Xylo mHAWK MPV 3rd qtr 2011 Rs. 8 lakh

56Mahindra

RenaultSandero Hatchback Nov-11 Rs. 5 lakh

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57 Maruti APV Minivan Jul-11 Rs. 4 lakh

58 Maruti Cervo Hatchback May-11 Rs. 1.5 lakh

59 Maruti Grand Vitara Diesel SUV Aug-11Rs. 17 to 19lakh

60 Maruti Jimny SUV Aug-11 Rs. 7.5 lakh

61 Maruti XL7 SUV Aug-11 Rs. 20 lakh

62 Maruti Suzuki RIII Hatchback Mid 2012 Rs. 7 to 8 Lakh

63 Maruti Suzuki Swift 2011 Hatchback Mid-2011Rs. 4.5 to 6.5

lakh

64 Mercedes-Benz A-Class Hatchback Late 2012 Rs. 15 lakhs

65 Mini Cooper Hatchback Early 2011 Rs. 20 lakh

112 Mitsubishi Colt Hatchback Mid 2011 Rs. 4.5 lakh

66 Mitsubishi Grandis MUV Sep-11 Rs. 15 lakh

67 Mitsubishi New Pajero Sport SUV Late 2010 Rs. 20 lakh

68 Mitsubishi RVR SUV Jun-11Rs. 14 to 16lakh

69 Nissan GTR Coupe Jun-11Rs. 65 to 70lakh

70 Nissan Juke Hatchback Mid 2011 Rs. 8 to 10 lakh

71 Nissan Leaf Hatchback Aug-12 Unknown

109 Nissan Murano SUV May-11 Rs. 40 lakh72 Nissan NV200 Vanette MUV Apr-11 Rs. 5 to 8 lakh

73 Nissan Pixo Hatchback Aug-11 Rs. 3 to 4 lakh

74 Nissan Qashqai SUV Apr-11Rs. 21 to 23lakh

75 Nissan Serena Minivan Dec-11 Unknown

76 Nissan Sunny Sedan May-11 Rs. 7 lakh

118 NissanUltra Low Car

( ULC)Hatchback Mar-12 Rs. 1.5 lakh

77 Renault Fluence Sedan Jul-11 Rs. 12 lakh

78 Renault Koleos SUV Jun-11 Rs. 19 lakh

79 Renault Laguna Sedan May-11Rs. 19 to 20lakh

80 Renault Yeni Hatchback Jun-12 Rs. 1.5 laks

81 Renault Megane MUV Early 2011 Rs. 8 to 9 Lakh

82 Reva NXR Hatchback Apr-11 Rs. 16 lakh

83 Rolls Royce Ghost Sedan Jun-11 Rs. 2.5 crore114 Skoda Fabia Combi Hatchback Jul-11 Rs. 10 lakh

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84 Skoda Fabia Scout SUV End 2011 Rs. 6 to 9 lakh

85 Skoda Joyster Concept End 2011 Rs. 3 to 4 lakh

106 Skoda Roomster MPV UnknownRs. 14 to 16lakh

86 Skoda SK215 Hatchback Sep-11 Rs. 8 to 10 lakh

116 Skoda Small Car Hatchback Jan-12 Rs. 4 lakh

113 Tata Indicruz MUV Unknown Rs. 11 lakh

87 Tata Nano Hybrid Hatchback Apr-11 Rs. 1.2 to 2 lakh

88 Tata Prima Sedan Oct-11Rs. 12 to 15lakh

89 Tata New Safari SUV Mid-2011 Rs. 7 to 11 lakh

90 Toyota Avanza MUV Oct-11 Rs. 6 to 9 lakh

91 Toyota Etios Diesel Sedan Mid-2011 Rs. 6.2 lakh

92 Toyota Etios Liva Hatchback Apr-11Rs. 4.2 to 5.5lakh

107 Toyota Yaris (hatchback) Hatchback Unknown Unknown

93 Volkswagen Golf Hatchback Apr-11 Rs. 6 to 7 lakh

94 Volkswagen Jetta 2011 Sedan Apr-11 Rs. 15 to18 lakh

95 Volkswagen Rocktan SUV Apr-11Rs. 12 to 14lakh

96 Volkswagen Scirocco Hatchback Jul-11 Rs. 30 Lakh97 Volkswagen Tiguan SUV Oct-11 Rs. 22 lakh

117 Volkswagen UP Hatchback Sep-11 Rs. 3.5 lakh

115 Volvo C70 Convertible Aug-11 Rs. 35 lakh

98 Volvo S90 Sedan Jul-11 Rs. 35 lakh

99 Volvo XC30 SUV Oct-12Rs. 25 to 30lakh

9.2: Innovation in Automobile Industry

Innovation has brought about a sea change in the Indian automotive sector,

where slick styling, technology and new models have become the formula for success.

These very factors led to the instantaneous success of Suzuki when it first rolled out

the technologically superior Maruti 800 into the traditional Indian market. Even

today it is the technology and a high degree of indigenisation, which have helped

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With the entry of new models, medium sized cars segment is further divided

into low prestige and high prestige cars. Customers are upgrading from entry

level small cars to sophisticated small cars and from sophisticated small cars to

prestige car segment.

Stricter Pollution norms are likely to force vehicle manufacturers to adopt

latest technology in maintaining emission standards. This is likely to curtail the

average life span of vehicle on road while the maintenance cost and the

genuine parts consumption per vehicle is expected to increase.

Due to free imports local industry is expected to face increased competition

from international automotive companies.

With the increasing number of vehicle population the two wheeler owners will

have viable option of used cars. The vehicle with higher resale value and good

service network is likely to dominate the market.

All the trends derived out of present dynamics of the Indian automotive vehicle

market are indicators of internationalization of this market. India has become focus

of international growth seeking companies as not only a cost competitive sourcing

base but also a growing high potential market. In the near future the competition will

be prominent in all the functions of business and only the companies with global

standards are likely to survive. Indian manufacturers are gearing up for the

challenge but surely the current

scenario is apparently in favor of international players. The early movers are likely to

secure a position to command the global competition

Local market trends

Sales, particularly in the small car segment, will drive passenger car sales in

the near term. However, within the next two years, capacity is expected to be

twice the total demand for cars.

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With developments in the small car segment acquiring a degree of stability in

terms of price competition, the action is shifting to the mid-size car segment.

Sales in this segment will pick up as new models come in and income levels rise

but it is still some time till it comes anywhere close to the economy sized

segment.

What will also drive car sales is the wide availability of finance schemes by a

variety of banks and FI's.

Sales in the used car market is also expected to do well as more and more older

models get replaced by newer ones at a faster pace. The coming in of Euro III

and IV norms will also increase scrap page rates.

In view of expected surplus in the domestic market, India will emerge as one of

the leading car sourcing point in the Indian subcontinent.

Consumers will be the beneficiaries as a result of marketing war, as they will

be offered technologically superior products at better prices and terms and

conditions. But the customer has a risk of model discontinuation as a result of

shake-out expected in the industry.

10.1: A Study of Motor Industries Company

Motor Industries Company (MICO) held its 51st Annual General Meeting on

8th May, 2003 at Bangalore.

MICO is India's largest auto-ancillary company. German-based Robert Bosch

group hold 60.5% after the company brought back its shares in February 2002. The

company is the pioneer of automotive Spark Plugs and Diesel Fuel Injection

Equipment in India. It had been bearing the brunt of the recession in the tractor and

commercial vehicle (CV) segment in the past few years. However the, sharp recovery

in sales of CV in FY 2002 has compensated for the continued fall in tractor sales.

For the full year ended Dec. 2002, the company had registered a growth of 7%

in sales to Rs 1550.71 crore. This was achieved mainly due to the better performance

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in the quarter ended June 2002 and Sept. 2002. Net profit after adjusting for EO

expenses rose 64% stood at Rs 134.06 crore. Very recently, Andreas Nobis, managing

director of the company has taken over new responsibility in Robert Bosch GmbH

with effect from 1st May 2003 to oversee the recent acquisition and integration of

Buderus AG and hence could not attend the AGM. Robert Bosch has entered into an

agreement to buy 30.2% of the share capital of Buderus AG in addition to 17%

already held by the company. The successor to Andreas Nobis is expected to be

known at a later date.

MICO registered a 104% jump in bottom line to Rs 52.29 crore for the first

quarter ended March 2003. Net sales during the quarter rose 17% to 432.08 crore.

In continuation of the strategy to boost exports, focused efforts were made to

get additional business from Robert Bosch, Germany. This led to a significant 29%

growth in exports during the year, accounting for 16% of total turnover. From this,

MICO expects to touch 20% in three years. Its spark plug business is growing in the

US and expects an increase in turnover from new products, from the common rail

system and the Electronic control units, which are based on the Euro II norms and

potential navigation systems from Blaupunkt.

The Union Budget 2003-04 is also positive for the sector as it has increased its

thrust on infrastructure (especially roadway) projects, which is sure to usher in

increased demand for the CV sector especially in the multi-axle segment.

Performance of the CompanyThe recovery in the automotive sector, led by the strong growth in commercial

vehicles segment has enabled the Companys sales turnover to rebound in 2002. The

overall sales turnover of the Company grew by around 7%. Despite sales declining by

7% in the 1st quarter 2002 over the 1st quarter 2001, quarter 2 and quarter 3 showed

an increase of 21% and 14% respectively. This, together with a steady 4th quarter,

enabled the Company to post the 7% growth in sales for the entire year.

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Sales to OEMs, which constitute nearly 45% of the total sales, increased by

6.8%. This growth was mainly due to increase in volumes of Multi Cylinder Pumps,

Nozzle Holder Assemblies, Starters and Alternators.

The general decline in the service business of the transport sector led to a fall

in demand for fuel injection components in the Aftermarket. In spite of all counter

measures, overall sales in this area declined by 3.6% as compared to 2001.

In continuation of our strategy to boost exports, focused efforts were made to

get additional business from Robert Bosch, Germany. This has led to a significant

29% growth in exports during the year, accounting for 16% of total turnover.

The non-automotive businesses comprising of Power Tools and Packaging

Machines, grew by 18% due to a strategic marketing thrust and introduction of new

products such as "Marble Cutters" and "Terra 25" packaging machines.

Cost cutting has now become integral to staying competitive. During the year,

cost reduction measures such as strict control on additions to fixed assets, programs

for rationalization and reduction of asset base, reduction in material cost through

import substitution, rationalization of supplier base, improvement in labour

productivity, budgetary control on overheads, etc. were further intensified. This has

significantly contributed to an improvement in operational efficiency. As a result of

growth in sales accompanied by the various cost reduction initiatives, the Profit

Before Tax increased by more than 50% and stood at Rs. 200.5 crore. The Profit

After Tax also increased by more than 60%. After taking into account the proposed

dividend and transfer to capital redemption reserve, an amount of Rs. 90 crore isproposed to be transferred to general reserve, retaining a balance of Rs. 29.3 crore in

the Profit & Loss Account.

In 2002, the investments in fixed assets amounted to Rs. 94 crore, accounting

for 6.1% of sales, as compared to Rs. 1,13.3 crore in 2001, which accounted for 7.8%

of sales. 94% of the total investments made in 2002 are in Plant and Machinery. Of

this 34% is for new products, 26% for quality improvement, 9% for R&D activities

and the balance 31% for auxiliary and other services.

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in the domestic market, the underlying sales in 2003 are expected to grow by around

7% only.

On the cost front, recent spurt witnessed in the prices of steel, aluminium,

crude oil, fuel and power will exert severe pressure on the profitability of the

Company. The Company will, of course, further intensify its cost reduction measures

and pursue other initiatives to counter the adverse impact of the rise in input costs

and to maintain its profitability.

In the automotive aftermarket the focus areas include aggressive marketing

and promotional initiatives to increase sales turnover, strengthening of 4-wheeler

dealer network, increasing the number of 2-wheeler dealers, expanding the product

range through introduction of Bosch branded products and further intensification of

anti-spurious activities.

Exports continue to be a strategic thrust area for the Company. Continuous

and vigorous efforts are being made to increase the share of exports to 20% of the

overall sales turnover of the Company by 2005. This would mean that the Company

must be in a position to continuously offer state-of-the-art products of international

quality at a competitive price.

In the Power tools business, our focus will be on gaining additional market

share through expansion of product range, superior service levels and offering value

for money products.

In the Packaging machines business, the Company plans to further consolidate

its position after the successful launch of "Terra 25" packaging machine.

11.1: Automobile industry at a glance

Key Positives

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Competition from imports: With India coming under the WTO purview, competition

is expected to rise multifold. Indian companies also have to contend with imports in

the future. Already a number of companies are introducing vehicles in the CKD

route.

Taxation anomalies: Duties on some select and key raw materials including steel and

components are still pretty high and are thus hurting profit margins of the

companies. Also, multiple tax rules that exist in different states are eroding the

comparative advantage of a large domestic market thus making it important to

implement VAT (Value Added Tax) as soon as possible.

India: A value-adding automotive and manufacturing hub

The future of manufacturing in India, including the automobile sector, would

undoubtedly be affected by the outcome of the Non-Agricultural Market Access

(Nama) discussions. The challenge is to get an agreement that would make India a

value-adding automotive and manufacturing hub.

The manufacturing sector is going through a period of revival, growth and

investment. The automobile sector is set to grow from a projected 7.5 million this year

to over 10m in the year 2007. Investment in this sector is over Rs 65,000 crore. The

turnover of the component industry is set to double over the current level of Rs 25,000

crore. By 2012, their combined output would exceed Rs 2,00,000 crore. Indian

industry has been able to acquire, assimilate and develop technology. It is this

capability, production capacity, value addition and employment potential that should

be kept in mind during trade negotiations.

For some sectors, including the automotive sector, the treatment for completely built

products and SKD kits would be critical.

11.2: Future Outlook

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The passenger car segment has continued to report a strong 30%+ growth in the first

month of FY04, partly due to low base effect. The transporters strike had impacted

volumes in April 2003. The car segment is likely to grow by 20-22% during the

current year. Commercial vehicle segment is expected to grow at a higher pace on the

low base of the previous year and accelerated GDP growth in the current year.

Growth in the short term is likely to be higher following increased consumer

spending (improved economic performance) and launch of new models. The midsize

segment is expected to record the highest growth followed by the premium and

economy segments.

In the economy and medium segments, it is estimated that total capacity is expected to

more or less match the expected demand by 2003-04. The premium segment of the

industry is however expected to witness acute over-capacity. The premium segment is

likely to emerge as the largest segment over the very long term as people graduate to

more expensive models. It is worth mentioning that the car production capacity has

increased significantly in the last three years.

The prospective buyer will be the main beneficiary of the marketing war in the

industry not only in terms of prices but also better technology..

India would have the largest young population of the world in next 20 years - If India

is to achieve a sustainable 7-8% GDP growth and 9-10% growth of industrial

production, This defines the future vehicle owners of the country.

Based on SIAM analysis, it is estimated that we should have a healthy growth of sales

(including exports) in the automobile sector in 2004-05. Segment wise growth

expectations, provided the Government takes necessary steps that promote growth

are:

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Passenger vehicles : 10 15%

Commercial vehicles : 12 15%

Two wheelers : 10 15%

Three wheelers : 10 15%

Firstly, the international car market is growing by around 2% pa and this set tocontinue for the next few years.. Analysts from EIU state that this saturation levelmay give the recent trend of carmakers to increase the vehicles useful life. Secondly,the South-East Asian crises has been a dampener to the collective fortunes of variouscarmakers worldwide. Thirdly, the global domination by the large automotive players

has slowly abated with local manufacturers getting hold over the market.

11.3: Conclusion

Automobiles have become an indispensable part of our lives, an extension of the

human body that provides us faster, cheaper and more convenient mobility every

passing day. Behind this betterment go the efforts of those in the industry, in the form

of improvement through technological research.

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What actually lie behind this betterment of the automobiles are the opinions,

requirements, likes and dislikes of those who use these vehicles.

These wheeled machines affect our lives in ways more than one. Numerous surveys

and research are conducted throughout the world every now and then to reveal one

or the other aspect of automobiles, be it about the pollution caused due to vehicle

population in cities, or rising motor accidents and causes, vehicular technology,

alternative medicine and so on.

This section keeps you updated on the latest and the most interesting

researches conducted in the field of automobiles, and help you draw the right

conclusion.

Bibliography

Websites

www.altavista.com

www.askjeeva.com

www.google.com

www.aol.com

www.hindustan.com

www.projecthubs.com

Newspapers

Times of India

The Economic Times.
http://www.yahoo.com/http://www.google.com/http://www.aol.com/http://www.hindustan.com/http://www.yahoo.com/http://www.google.com/http://www.aol.com/http://www.hindustan.com/

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