AAKASH SETHI

Let’s

PRESTIGE INSTITUTE OF MANAGEMENT & RESEARCH

ASSINGMENT ONYEAR 2013-14

PRODUCT LIFE CYCLE

GUIDED BYPROF. KHUSHBOO MAKWANA

SUBMITED BYAAKASH SETHI

APPROCHES TO KNOW

INTRODUCTION

GROWTH

MATURITY

DECLINE

ITS ABOUT THE GOLDANPERIOD OF INDIAN AUTOMOBILE INDUSTRIES

THE LEGEND

INTRODUCTION

1) IMPORTANT FACTS ABOUT

COMPANY

2) STANDARD

INTRODUCTION OF

COMPANY

3) PRODUCTS

OF THE COMPANY

1) IMPORTAN FACTS ABOUT THE COMPANY

HINDUSTAN MOTORS LIMITED (HML) are India's first car makers, came into existence prior to the country’s independence AUGEST (1947).

B.M. BIRLA founded HML in 1942 and it went on to flagship company C.K. Birla group.

HML started their operations at port okha, Gujarat and then shifted to UTTARPARA ,WEST BANGAL IN 1948. Now this place is called Hind motor.

Hindustan motors was the face of Indian cars.

The company was the largest car manufacturer in India before the rise of MARUTI UDYOG.

HML also have a successful venture with Mitsubishi science 1998, both the partner’s started off with the philosophy of “one country one price”

It is the producer of the Ambassador car, widely used as a taxicab and as a government limousine.

STANDARD INTRODUCTION OF COMPANY TYPE PUBLIC BSE(500500)

INDUSTRY AUTOMOTIVE

FOUNDED 1942

HEAD QUATER KOLKATA,W.B.,INDIA

KEY PEOPLE UTTAM BOSE (MD) 2012

PRODUCTS AUTOMOTIVE PARTS AUTOMOBILE

REVENUE 799 CRORE 2011

PARENT C K BIRLA

GENREL MOTORS JOINT VENTURE 1967

ISUZU JOINT VENTURE 1980-1993

MITSUBISHI JOINT VENTURE 1998

PLANT- HINDMOTOR WEST BANGAL

PLANT –PITHAMPUR MADHYA PRADESH

PLANT -THIRUVALLUR TAMILNADU

PLANT -HOSUR BANGLORE

PRODUCTS OF THE COMPANY

General Motors Joint Venture

Isuzu Joint Venture

Mitsubishi Joint Venture

Hindustan Models

Earthmoving Equipment Division (HMEED)

Hindustan Tractors

Bad ford trucks, opel astra .

All kind of equipment division

All type of tractors but company sold to Mahindra in 2001.

Isuzu F series trucks, contessa .

Mitsubishi Lancer Evolution X , Lancer , Cedia , Pajero , Montero ,Outlander.

Hindustan Ambassador, winner, mascott truck, RTV ranger truck(OKA motor co. Australia)

Models of Hindustan Motors

Hindustan 10 - based on 1947 Morris 10

Hindustan 14 based on 1948 Morris Oxford MO Series

Hindustan Landmaster- based on Morris oxford Series II – 1954

Hindustan ambassador Mark I, II, Station Wagon, III, IV, Nova -based on the British Morris Oxford Series III – 1956

Hindustan contessa - based on the British victor Vauxhall with Isuzu diesel or petrol engines.

Hindustan Pushpak , Trekker and Porter – Multiutility Vehicles based on Ambassador chassis and engines (Half Ton Driveway Chassis).

GENREL MOTORS JOINT VENTURE MODELS

BAD FORD TRUCK OPEL ASTRA

EARTH MOVING EQUIPMENT DIVISON – ALL TYPES

HINDUSTAN TRACTORS

ISUZU JOINT VENTURE

ISUZU F SERISE TRUCK CONTESSA

MITSUBISHI JOINT VENTURE

OUTLANDERLANCER - 7

CEDIA - 9 PAJERO

MITSUBISHI JOINT VENTURE

LANCERMONTERO

THE KING OF INDIAN ROADS

HINDUSTAN AMBASSADOR

HINDUSTAN- 10 HINDUSTAN -14 HINDUSTAN WINNER

HINDUSTAN BADFORD HINDUSTAN PUSHPAK HINDUSTAN PORTER

HINDUSTAN RTV RANGER

HINDUSTAN- VEER

HINDUSTAN LANDMASTER

GROWTH

COMPETITORS

EXPANSION

PROGRESS

COMPETITORS

THERE ARE SOME MAJOR REASONS FOR THE GROWTH OF THE COMPANY-

Manufacturing is licensed – this period of time is called LICENSE RAAJ(till 1993).

High custom duty on export of any vehicle .

High excise duty with sales tax.

There are only 3 players in the automobile industries HINDUSTAN MOTORS , PRIMIER AUTOMOBILE , PADMINI AUTOMOBILE.

Only Hindustan motors and premier motors are two major player in the market.

EXPANSIONMile stones of Hindustan motors-

1) In 1942, Hindustan Motors Limited was established by B. M. Birla on February 11. (Gujarat)

2) In 1945, company issued 45,75,000 shares in the market.

3) In 1948, all production operations of this company were shifted to Uttarpara, West Bengal and the Ambassador was the first model which was produced in this plant.

4) In 1954, production of the Landmaster began and this vehicle was based on the Morris Oxford.

5) In 1959, HM and Caterpillar Tractor Company, USA joined hands for the production and sale of bulldozers and scrapers.

6) In 1967, Hindustan Motors was collaborating with the General Motors Corporation, USA, for manufacturing earthmoving equipment at its assembly plant, Trivellore.

7) In 1978, diesel engine version of Ambassador Model became available in vehicle market.

8) In late 1980s, Hindustan Motors began a joint venture with Isuzu. Till the end of this year, this brand was the leader in car sales.

9) In 1983, the government accepted the proposal of HM to increase the manufacturing capacity of passenger car models to 50,000 units per annum out of which 20,000 models were to be manufactured in Madhya Pradesh.

10) In 1984, Hindustan Motors launched its new Contessa model.

11) In 1985 company established a plant in hosur, tamil nadu for manufacturing heavy duty transmission.

12) In 1997, Hindustan Motors tied up with Mitsubishi Motors for production of 20,000 Lancer passenger MMC sedan cars.

13) After a Memorandum of understanding(MOU), PNB would offer attractive and easy finance schemes for at least three years.

PROGRESSTHERE ARE SOME FACTORS WHICH MADE HM PROGRESSIVE ARE FOLLOWING -:

1) Parent company of C.K. BIRLA give it a high jump in the market.

2) During the license raj company get a lot of profit in the market.

3) Holding in the market is more then 70 percent till 1980 because of low competition.

4) Best quality and low custom duty and British model design attract people.

5) In 1983 government accepted the proposal to increase the sales of HM 20000 to 50000.

6) Joint ventures with different companies improve the quality and variety of its product.

7) It became the face of Indian automobile industries, people used to buy this product mostly.

8) Working in almost all segment improves the sells of HM.

MATURITY

1) It’s a one million turnover major company manufacturing passenger cars,

utility vehicle ,earthmoving equipment.

2) Ambassador- the first car to be manufacture in India has been ruling the

Indian roads and only automobile to ply Indian roads for more then 6

decades.

3) According to the perception of the people its truly indainised car because of

its time tasted and practical characteristics .

4) Hindustan ambassador has a vast service network the whole market of HM is

attendant by 115 strong dealer, 50 service and parts dealer, 60 exclusive parts

dealer, regional office.

BRAND IMAGE

1) All cars are manufactured according to EURO-1EMISSION GOV.

norms.

2) The biggest USP of ambassador is its sturdy & tough model.

3) Ambassador most popular for its taxi segment , 65 % of the sales

of ambassador is just because of this segment, for its safety,

comfort ,and best structure for Indian roads .

4) BHARAT RATAN awarded our president A.P.J. Abdul kalam used to

travel by old ambassador car for its simplicity ,also without VIP

cap .

5) There is no government order to buy this car but all politician ,

senior , top civil servant, judges and generals used to buying it as

a prestige to own it.

CONTINUE……

ADVERTISEMENT OF HM

ADVERTISEMENT OF HM

REASONS FOR DIMINISHING OUTPUT – Rising of MUL

1) Tough and sturdy ambassador dose not find many takers in India with people

looking more fancy car its export has been steadily increasing mainly in the

British and Japanese market.

2) During early 80’s it need 6 month to 1 year for delivery from company.

3) In 1981 entry of MUL change the scenario drastically because of MUL’s small,

fuel efficient, and well designed car, Maruti 800 became huge success.

4) By 1980 MUL became the market leader.

5) MUL became more successful when they get 1st ISO CERTIFICATE by JV with

SUZUKI, they need 14 hours to make a car.

6) Marketing is not much developed at that time.

HM PASSENGER CAR SALES

YEAR 1993-94 1994-95 1995-96 1996-97 1997-98

SALES 25150 27517 25942 25711 20109

PREMIUM SEGMENT COMPARISON

Period Sales Sales Sales

Lancer HM Esteem MUL Honda city HONDA

1998-99 2866 16744 9631

1999-2000 8300 16031 9772

2000-01 7635 12000 10011

1) HM PREMIUM SEGMENT market share were being eaten up drastically by MUL& HONDA.

2) Mostly due to advertising and effective marketing strategies of the competitor

MARUTI HYUNDAI

TATA HONDA

OTHERS

50.37 %

19.17%

17.19%

5.3%

5.7 %

17.19 %

THE KEY PLAYER CAR SEGMENT BY ….2K

BY THE YEAR PASSING HM WAS CONSIDERD AS OTHERS

5.3

%

DECELINE STAGE

OVERVIEW

REASONS FOR DECLINE ACTIONS IN DECLINE STAGE SURVIVAL STRETEGIES

REASONS FOR DECLINE

COMPETITIVE RIVALERY WITHIN THE INDUSTRIES

1) THREATS OF NEW ENTRANTS -HM was unable to create barriers for potential new entrants ,many foreign collaborated entrants like Maruti Suzuki ,GM ,Toyota launched HM was unable to compete with their existing strategies.

2) BARGAINING POWER OF SUPPLIERS – Even supplier were not Looked into deep ,company was in a snail pace and couldn't take up the challenge of new potential entrants in the market, including the suppliers of it’s different parts.

3) THREAT OF SUBSITUTE –HM was only focused to one segment till 1997 and within the that time MUL was able to bring out brand for each segment with in the nation substitute for the brand was quite visible in the economy.

4) COMPETITIVE RIVALERY WITHIN THE INDUSTRIES – Rivalry within the company also lead to downfall of the company and ultimately leading to less market share.

Example- Internal problem , Union problem etc

5) LACK OF NEW TECHNOLOGY – HM was unable to improve the technology in engine and features according to time and new competitors technology. That’s why they are unable to satisfy their customer.

2000-01 2001-02 2002-03 2003-04 2004-050123456789

PRODUCTION SALES EXPORT

PRODUCTION OF AUTOMOBILE

1) Domestic sales have been growing strongly.

2) Export have nearly trapped in this years.

3) HM was unable to hold the position in market due to their drop in market strategies.

HM didn’t now where they fit in the existing economy.

ACTION IN DECLINE STAGE

1) HM decide to tap new segments ease the competitive pressure from other giants.

2) HM collaborated with OKA MOTORS CO. to develop targeting at rural market.

3) HM launched trekker in 1995 in 3 northern states (state on hills).

4) In 1999 HM launched the re-designed trekker and upgraded version of amby.

5) Cost cutting measure – company also do some cost cutting exercise and announce a voluntary retirement scheme. For workers in April 1998. and offer (0.01) million rupees

6) HM sold the earthmoving equipment company to caterpillar company in 2001.

SURVIVAL STRATGIES1) HM decide to look beyond its existing portfolio and company explored the global

auto component business in 2000 and start a plant in indore to assemble engines & gear boxes.

2) By this time many foreign companies entered into the market and establish tie-ups/ JV with various companies.

3) HM start supplying components in both domestic and global market.

4) HM executive director (SARKAR NARAYAN) said- we are open to such opportunities it brings in extra cash and its an expansive way to upgrade our skills by working with different customers.

5) HM overhauled the distribution system in order to become more market friendly – Green – rural market - trekker Blue – semi urban - contessa Red – metro – lancer(selling and services)

1942-50 1950 -80 1980-00 2000-13

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-10%

1942-50-INTRODUCTION STAGE 1950-80-GROWTH STAGE 1980-00-MATURITY STAGE 2000-13-DECLINE STAGE

PRODUCT LIFE CYCLE –GRAPH

TIME PERIOD

COMPANY

GROWTH

BUT IT’S NOT THE END OF HM

THE KING IS COMING BACK

COMING SOON…..

THANK YOU

REGARDS AAKASH SETHI