 Industry Value Chain & Structure

 Market Size & Growth

 Industry Segment
 Competition

 Growth Drivers
 Issues & Concern
 Industry Overview

 Industry Value Chain

 Industry Structure

 Industry Components
 AUTOMOBILE CONTRIBUTION TO GDP IS AROUND 4.2% .

 SIZE OF THE INDUSTRY EXPECTED TO TOUCH $155.12 BN

BY 2015.

 AUTOMOBILE INDUSTRY HAS GROWN TO 11.12 MN UNITS

AT CAGR OF 15.5%.

 IT PROVIDE D EMPLOYMENT OF AROUND 1.31 CRORE IN

2007.

 INCREASE IN CONSUMER SPENDING

 Value Chain

Bharat
Forge Steel

Apollo Automobile
Tier I Compone Tier II
nts
Asahi
India Oil Alloys
OEM Bank
Compani
s
MRF es

Dealer
Spare Parts Customer

Paint Second Body

Exports Companie Hand Builders, Exports
s Service Chasis
 AUTOMOBILES

2 3 PASSENG FARM COMMERCIA

WHEELER WHEELER ER EQUIPMEN LS
S S VEHICLES TS VEHICLES
SCOOTE PASSENGE UTILITY SUV
R LCV
R VEHICLE
MPV
MOPED PASSENGE MCV
GOODS
R CAR
MOTOR HCV
CYCLE

> 350C A A
A2 A4 A5 A6
100CC C 1 3
< 125C
100CC C
Source:
acmainfo.com
 MARKET
SEGMENTATION

Source: SIAM
Rising interest rates leads to
slowdown in sales

Source: SIAM, other

companies websites
Source: SIAM, other
companies websites
Source: SIAM Source:
ACMA
Source:
Source: SIAM,
SIAM other
companies websites
It measures Industry concentration. It
is arrived as under:
HI= ∑ (Market Share of Each
Player)²
Segment Value Comments

Value of Herfindahl
Two Wheelers
2929 Index
Major competition
many players
in this sector due to

Three Wheelers 3533 Competition is there between Bajaj and

Passenger 2750 Piaggio
Competition on the basis of price
Vehicles
Commercial 3890 Tata is dominating over others having
Vehicle market share of 57.33%
THREAT OF NEW ENTRANTS – HIGH AND MODERATE
High susceptibility to technology changes
High level of working capital
Cost differentiation

SUPPLIER POWER – LOW AND MODERATE

Quality method used
JIT method being used

POWER OF BUYERS - MODERATE

Buyer’s choice to shift to other competitors
Can go for backward integration
TREAT OF SUBSTITUTE - MODERATE
Railways for commercial and passengers use
Airlines for passengers

COMPETITIVE STRATEGY – HIGH COMPETITION

Too many firms
Brand identity
Better growth opportunities
 M & A riding the Indian automobile sector.
 Shift in the strategy, to penetrate into new
markets.
 Growth in disposable income.
 Development of highways & other roads.
 State Economic Policies-lower excise duty on
small cars, Implementation of VAT
 Product Innovations-Like low cost small car-
NANO
 Improving Technology.
 Budget
segment Previous New Impact
Provision

Reduction In Commercial Manufacturers to absorb raw material price

16% 14%
CENVAT Vehicles hikes

Excise Duty
Small Cars 16% 12% Excise duty cut to drive sales volumes
Cut

Hybrid Cars 24% 14% Promote vehicles run on alternate source

Vehicles
Carrying More Manufacturers to absorb raw material price
16% 12%
Than 13 hikes
Persons
 100% FDI permitted.

 Equity Participation of 51%.

 Automobileadvertisements should
promote safe driving.

 EURO-III & IV norms.

 EMISSION NORMS IN
FUTURE

* National Capital
Region
^ Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad, Pune,
Surat, Kanpur and Agra.
Source-SIAM
• Increasing interest rates becoming a
concern because most vehicles are
bought on loan.

• Rise inflation leading to decrease in

the disposable income.

• High oil prices cause for decrease in

demand.

• Rising steel prices cause for increase

Thank You