Business Plan

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ContentExecutive Summary Background Indian Automobile

Mayank Agarwal (46) Sujay Kr. Tiwari (--) Puneet Chaurasia (59) Gopal Saxena (26) Shishir Kumar (71) Anshul Jain (13) (Sec:-F-8)

...03 .....05 History

.06 AUTOMOBILES INDUSTRY....07 Indian Automobile Industry Growth.08 MISSION AND VISION FOR FUTURE.........09 MARKET ANALYSIS Overall Market..09 Competitive..11 Micro Environment Influence......15 PRODUCTS AND ITS DEVELOPMENT Product Development ..16 Production Process,..17 Resource Requirement..17 MARKETING MARKRTING STRATEGY18 Action20 Distribution...25 Financial27 ORGANIZATION & MANAGEMENT LOCATION...33 Key Personal.33 HR Policy and Strategy34 Critical Risk342 | Page BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

Summary 35 Bibliography...36

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Executive SummaryAs we know that The Indian automobile industry is the tenth largest in the world with an annual production of approximately 2 million units. Indian auto industry, promises to become the major automotive industry in the upcoming years and the industry experts are hopeful that it will touch 10 million units mark. Indian automobile industry is involved in design, development, manufacture, marketing, and sale of motor vehicles. There are a number of global automotive giants that are upbeat about the expansion plans and collaboration with domestic companies to produce automobiles in India. Now that we see serious cracks in the walls protecting the traditional automotive distribution model, what will the future bring? Both the underlying drivers of change in automotive retailing and the trends already under way help answer that question. In addition, it is helpful to compare the automobile industry with other industries that have experienced distribution-channel evolution and look at the lessons they learned. Most consumer-durable industries have undergone substantial distribution-channel evolution resulting from changes in economics, regulations or technologies. Each one has unique circumstances, but we can see three relatively common, distinct stages in these channel restructurings: 1. The Indian Automotive Industry after de-licensing in July, 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has now attained d a turnover of Rs. 1, 65,000 crores (34 billion USD, assuming 1$ = Rs. 46) and an investment of Rs. 50,000 crores. Over Rs. 35,000 crores of investment is in pipeline. The industry is providing dire c t and indirect employment to 1.31 crore people. It is also ma king a contribution of 17% to t he kitty of indirect taxes. The exp or t in automotive s e c tor has grown on an average CAGR of 30% per year for t he last ve years. The exp or t earnings from t his s e c tor are 4.08 bi l lion USD out of which t he share of auto component s e c tor is 1.8 bi l lion USD during the year 2005-06. 2. Even with his rapid growth, t he Indian Automotive Industrys contribution in g lob a l terms is very low. This is evident from t he fact that even though passenger and commercial vehicles have crossed t he product ion gure of 1.5 million in the year 2005-06, yet Indias share is about 2.37% of world production of 66.46 mi l lion passenger and commercial vehicles. Indian automotive exp or t constitutes only about 0.3% of global automotive trade. 3. It is a well accepted fact that the automotive industry is a volume driven industry and certain critical mass is a pre-requisite for attracting the much needed investment in Res e arch and Development and Ne w Product Design and Development. R&D investment is ne e de d for innovations which is t he life-line for achieving and retaining the competitiveness in the industry. This competitiveness in turn depends on t he capacity and t he speed of t he industry to innovate and upgrade. The most important indices of competitiveness are productivity of both lab our and capital. 4. The concept of attaining competitiveness on t he basis of low cost and abundant lab our, favorable exchange rates, low interest rates and concessional duty structure is b e coming inadequate and therefore, not sustainable. In light of t he above, it is felt t hat a greater emphasis is re quire d on t he development of the factors which can ensure competitiveness on a long-term basis. The automotive s e c tor wit h its deep backward linkages (such as metals like steel,4 | Page BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

aluminum, copper etc., plastics, paint, g lass, electronics, capital quipment, trucking, warehousing and logistics) and forward linkages including (dealership retails, credit and nancing, logistics, advertising, repair and maintenance, petroleum products, gas stations, insurance, service parts) has been recognized and identied at dierent fora (Development Council of Automobile and Allied Industries, Planning Commission, National Manufacturing Competitiveness Council and Investment Commission etc.) as a sector with a very high potential to increase the share of manufacturing in GDP, exports and employment. The sector is also seen as a multiplier of industrial growth. It helps in attaining two critical goals of the Common Minimum Programme, that of increasing manufacturing output and providing employment. Although indirectly, it also facilitates the third objective of increasing agricultural productivity through farm mechanization and the needs of agricultural product transportation. 5. India with its rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, availability of trained manpower at competitive cost, fairly well-developed credit and nancing facilities and local availability of almost all the raw materials at a competitive cost has emerged as one of the favorite investment destinations for the automotive manufacturers. These advantages need to be leveraged in a manner to attain the twin objective of ensuring availability of best quality product at lowest cost to the consumers on the one hand and developing and assimilating the latest technology in the industry on the other hand. The Government recognizes its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance. The Government wants to create a policy environment to help companies gain competitive advantage. The government policies target to encourage growth, promote domestic competition and stimulate innovation. 6. It is also felt that a general improvement in availability of trained manpower and good infrastructure is required for sustainable growth of the industry. Besides, specialized and industry specic initiatives can lead to enhanced competitiveness. Keeping in view the above factors, the Government has launched a unique initiative of National Automotive Testing and R&D Infrastructure Project (NATRIP) to provide specialized facilities for Testing, Certication and Homologation to the industry. A similar initiative is required for creating specialized institutions in automotive sector for education, training and development, market analysis and formulation and dissemination of courses. 7. The issues relating to scal incentives for the industry to promote R & D is under study of Mashelkar Committee and the issues pertaining to R & D related duty structures is being examined by the Hoda Committee. The concerns of the industry will be suitably addressed in the above fora. 8. It has been noticed that the Auto Industry has grown in clusters of interconnected companies which are linked by commonalities and complementarities. The major clusters are in and around Manesar in North, Pune in West, Chennai in South, Jamshedpur-Kolkata in East and Indore in Central India. The Department is envisaging in the Eleventh Five-Year Plan period to create a National Level Specialized Education and Training Institute for Automotive Sector and to enhance the transportation, communication and export infrastructure facilities through concerned Ministries in and around these clusters. The Government will make attempts to streamline the relevant Government Institutions and Educational and Research Institutions in and around the clusters to meet the growing needs of the automotive sector.


BackgroundMinistry of Industry formulated the Master Plan for Indians industrial Development for each industrial sector, which included the automotive sector. Under the Master Plan, the action plans were laid out for five years. To continuously proceed the plans and adjust the vision, strategies and action plans according to the rapidly changing situation of the global industry, the Ministry has assigned Indian Automotive Institute to undertake the Master Plan for Indian Automotive Industry to be in accordance with the ninth National Social and Economic Development Plan, The objectives are: 1. To set clear vision, mission and direction for the development of Indian automotive industry in the next 10 years. 2. To identify problems and obstacles facing the development of Indian automotive industry. 3. To formulate policy framework that encourages international trade and other potential businesses. 4. To design strategies, measures and action plans for the development of Indian automotive industry which are in compliance with the National Economic and Social Development Plans. 5. To recommend roles and responsibilities of Ministry of Industry and other agencies responsible for the automotive industry.


INDIAN AUTOMOBILE HISTORY The origin of automobile is not certain. In this section of automobile history, we will only discuss about the phases of automobile in the development and modernisation process since the first car was shipped to India. We will start automotive history from this point of time. The automobile industry has changed the way people live and work. The earliest of modern cars was manufactured in the year 1895. Shortly the first appearance of the car followed in India. As the century truned, three cars were imported in Mumbai (India). Within decade there were total of 1025 cars in the city. The dawn of automobile actually goes back to 4000 years when the first wheel was used for transportation in India. In the begining of 15th century Portuguese arrived in China and the interaction of the two cultures led to a variety of new technologies, including the creation of a wheel that turned under its own power. By 1600s small steam-powered engine models was developed, but it took another century before a full-sized engine-powered vehicle was created. The actual horseless carriage was introduced in the year 1893 by brothers Charles and Frank Duryea. It was the first internal-combustion motor car of America, and it was followed by Henry Ford's first experimental car that same year. One of the highest-rated early luxury automobiles was the 1909 Rolls-Royce Silver Ghost that featured a quiet 6-cylinder engine, leather interior, folding windscreens and hood, and an aluminum body. It was usually driven by chauffeurs and emphasis was on comfort and style rather than speed. . During the 1920s, the cars exhibited design refinements such as balloon tires, pressed-steel wheels, and four-wheel brakes. Graham Paige DC Phaeton of 1929 featured an 8-cylinder engine and an aluminum body. The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back door that suited more to the needs of families. In 1930s, vehicles were less boxy and more streamlined than their predecessors. The 1940s saw features like automatic transmission, sealed-beam headlights, and tubeless tires. The year 1957 brought powerful high-performance cars such as Mercedes-Benz 300SL. It was built on compact and stylized lines, and was capable of 230 kmh (144 mph). This was the Indian automobile history, and today modern cars are generally light, aerodynamically shaped, and compact.


AUTOMOBILE INDUSTRY Industry Overview Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories : Cars, two-wheelers and heavy vehicles. Snippets The first automobile in India rolled in 1897 in Bombay. India is being recognized as potential emerging auto market. Foreign players are adding to their investments in Indian auto industry. Within two-wheelers, motorcycles contribute 80% of the segment size. Unlike the USA, the Indian passenger vehicle market Is dominated by cars (79%). Tata Motors dominates over 60% of the Indian commercial vehicle market. 2/3rd of auto component production is consumed directly by OEMs. India is the largest three-wheeler market in the world. India is the largest two-wheeler manufacturer in the world. India is the second largest tractor manufacturer in the world. India is the fifth largest commercial vehicle manufacturer in the world. The number one global motorcycle manufacturer is in India. India is the fourth largest car market in Asia - recently crossed the 1 million mark.

INDIAN AUTOMOBILE INDUSTRY GROWTH


Market Share At present major Indian, European, Korean, Japanese automobile companies are holding significant market shares. In commercial vehicle, Tata Motors dominates over 60% of the Indian commercial vehicle market. Tata Motors is the largest medium and heavy commercial vehicle manufacturer. Among the two-wheeler segment, including scooters and mopeds- motorcycles have- major share in the market. Hero Honda contributes 50% motorcycles to the market in which Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. In the three wheeler industry in India, Piaggio holds 40% of the market share. Bajaj is the leader by making 68% of the three-wheelers. Car manufacturers in India dominate the passenger vehicle market by 79%. Maruti Suzuki is the largest car producer in India and has 52% share in passenger cars and is a complete monopoly in multipurpose vehicles. In utility vehicles Mahindra holds 42% share. Hyundai and Tata Motors is the second and third car producer in India. The passenger car and motorcycle segment in Indian auto Industry is growing by 8-9 per cent. Current Scenario The Indian automobile industry crossed a landmark with total vehicle production of 10 million units. Car sales was 8,82,094 units against 8,20,179 units in 2004-05. The two-wheeler market grew by 13.6 per cent with 70,56,317 units against 62,09,765 units in 2004-05. Commercial vehicles segment grew at 10.1 per cent with 3,50,683 units against 3,18,430 units in 2004-05. Overview Snippets India, sourcing base for global auto majors. Passenger car and motorcycle segment is set to grow by 8-9%. The two-wheeler segment will clock 11.5% rise by 2007. Commercial vehicle to grow by 5.2 per cent. Estimated component market size is US$ 6.7 bn.

MISSION AND VISION FOR THE FUTURE Now that we see serious cracks in the walls protecting the traditional automotive distribution model, what will the future bring? Both the underlying drivers of change in automotive retailing and the trends already under way help answer that question. In addition, it is helpful to compare9 | Page BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

the automobile industry with other industries that have experienced distribution-channel evolution and look at the lessons they learned. Most consumer-durable industries have undergone substantial distribution-channel evolution resulting from changes in economics, regulations or technologies. Each one has unique circumstances, but we can see three relatively common, distinct stages in these channel restructurings: Stage One: This is marked by major improvements in value delivered, mostly reductions in cost. Usually the cost reductions stem from consolidation and rationalization in the channel as better concepts or bigger players drive out marginal or small players. The bigger players use their cost advantage to reduce prices and often to improve service, variety and convenience. Stage Two: Here channel evolution is focused on meeting the needs of specific customer segments. Channel functions are unbundled and restructured into more efficient or more appealing formats for defined groups of customers. Customer value is further enhanced through lower prices, better service or greater variety. Stage Three: This brings dramatic new paradigms not just for distribution but for the entire value chain. Full-service leasing ("power by the hour") in the heavy-duty-truck market is an example of this type of game-changing concept. MARKET ANALYSIS Overall Market India, in auto sector, is turning to be a sourcing base for the global auto majors. The passenger car and the motorcycle segment is set to grow by 8-9 per cent in coming couple of years, says the ICRA report. The industry is likely to maintain the growth momentum picked up in 2002-03. The ICRA's analysis points on the auto sector that the passenger car market in the country was inching towards cars with higher displacements. The sports-utility-vehicle (SUV) that was getting crowded everyday, would witness intense competition as many SUVs had been competitively priced, the report said. Honda, Suzuki, General Motors and Hyundai, the global automakers had already launched their premium SUVs in the market to broaden their portfolio and create product excitement in the segment estimated at about 10,000 units annually. In the two-wheeler segment, according to the report, the motorcycles would clock 11.5 per cent rise during 2004-2007 over its siblings-scooters and mopeds. Scooters sales would decelerate and mopeds would also see the same. Overseas market would present huge opportunities for the two-wheeler makers. The commercial vehicles are likely to grow at a CAGR of 5.2 per cent. Heavy commercial vehicles market would rise at 5.5 per cent and sales of light buses and trucks would achieve 4.7 per cent growth. For the tractors, the report predicts a growth at 4.6 per cent.

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Indian Auto Market Growth for the year 2005-06 The domestic automobile industry sales grew 12.8 per cent at 89,10,224 units as against 78,97,629 units in 2004-05. The automotive industry crossed a landmark with total vehicle production of 10 million units. According to the Society of Indian Automobile Manufacturers (SIAM), car sales was 8, 82,094 units against 8,20,179 units in 2004-05. The growth of domestic passenger car market was 7.5 per cent Car exports stood at 1,70,193 units against 1,60,670 units in 2004-05. The two-wheeler segment, the market grew by 13.6 per cent with 70,56,317 units against 62,09,765 units in 2004-05. Motorcycles had the upward march, 17.1 per cent in domestic market touching 58,15,417 units against 49,64,753 units in 2004-05. Scooter segment grew by 1.5 per cent, fall at 9,08,159 units against 9,22,428 units in 2004-05. Commercial vehicles segment grew at 10.1 per cent with 3,50,683 units against 3,18,430 units in 2004-05. Medium and heavy commercial vehicles managed a growth of 4.5 per cent against 23 per cent growth in the year ended March 31, 2005. Light commercial vehicles sales growth was 19.4 per cent at 1,43,237 units against 1,19,924 units in 2004-05. Three-wheelers sales rose by 17 per cent at 3,60,187 units against 3,07,862 units in 200405.


Competitive Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda contributes 50% motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. 40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers. Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multi purpose vehicles. In utility vehicles Mahindra holds 42% share. In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer.


Indian automobile companiesCompany Description Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. In 1948, Ashok Motors was set up in what was then Madras, for the assembly of Austin Cars. The Company's name changed soon with equity participation by British Leyland and Ashok Leyland commenced manufacture of commercial vehicles in 1955. Ashok Leyland has six manufacturing plants: a plant at Ennore near Chennai, two plants at Hosur (called Hosur I and Hosur II, along with a press shop), and the assembly plants at Alwar and Bhandara. Product

Ashok Leyland

18 seater to 82 seater double-decker buses, 7.5 tonne to 49 tonne in haulage vehicles, special application vehicles, and diesel engines for industrial, marine and genset applications.


Force Motors

Force Motors, formerly Bajaj Tempo, is a Pune-based manufacturer of a number of commercial vehicles

Gas-cylinder carrier, copied from 3-wheel Vidal & Sohn Tempo-Werke (German) Hanseat; Matador, a version of Hanomag van and light-truck (1.5 tonne payload); Tempo-traveller, Indian version of Daimler-Benz T-1 transporter; Man-Force Trucks, licensed version of MAN AG trucks; and UV's copied from Daimler-Benz. Trekker (discontinued), Landmaster (discontinued), Contessa (discontinued)5th generation Vauxhall Victor, and the Ambassadora version of the 1950s Morris Oxford.

Hindustan Motors

Hindustan Motors is one of the oldest Indian car manufacturers in India. It is perhaps best known for the Ambassador which has remained virtually unchanged for about 30 years. It is still very popular as a taxi and is widely used by Indian politicians.

Mahindra & Mahindra Limited

The automotive section of Mahindra started off when a first batch of Armada (discontinued), Voyager (discontinued), seventy five Utility Vehicles (UVs) was imported in CKD condition from Bolero. Commander, CL, MaXX, Scorpio, and Willys in 1947. It presently manufactures Jeeps along with agricultural Mahindra and Mahindra Classic. equipment and light trucks.

Maruti Suzki (formerly Maruti Udyog) was formed as a partnership between the Government of India and Suzuki of Japan. It brought India its first "affordable" car, the Maruti 800. It is the biggest car manufacturer in India and especially dominant in the small car sector. Then it brought out the Maruti 1000, made by Maruti Udyog was the first ever 800, Omni, Alto, Gypsy, Swift, SX4, Wagon-R, Maruti Suzuki contemporary sedan-type car launched in India. The car (which Suzuki Versa, Zen Estilo, Grand Vitara, and Swift Dzire. sold in other countries as the Cultus/Swift/Geo Metro with a 1.3 L or 1.6 L engine) was introduced in October, 1990. Sold at Rs. 3.81 lakh, it was back then the costliest car released in the Indian market. Then the company replaced it with Esteem and from that days on a line of Suzuki cars rolled out in the Indian market. Walchand Hirachand started Premier Automobiles Ltd. (PAL) in 1942. They assembled DeSoto and Plymouth cars in 1946 in association with Chrysler from the United States. They also manufactured the Premier Padmini which was a version of the Fiat 1100. REVA Electric Car Co. is the producer of the Reva (G-Wiz), an electric car intended for use as a City car. More REVAs have been produced than any other currently selling electric car and sales are increasing. It is currently the world's leading electric car manufacturing company.

Premier Automobiles Limited

Padmini (discontinued), 118 NE (discontinued), and Premier Sigma.

REVA

REVA (G-Wiz).

Tata Motors

Tata Motors, formerly known as TELCO, is the largest automobile manufacturer in India and commands more than 70% of the commercial vehicle market in India and has also increased its share of passenger Indica, Indigo, Indigo Marina, Safari, Sumo, TL, and vehicle market. It was responsible for developing India's first indigenous Tata Nano. vehicle, the Indica. It has proved to be a success in the market after initial quality problems. The company also exports the car to many countries. Tata owns major stake in Jaguar and Range Rover.

Multi-national companies in India

Company Audi

Description In January 2008, Audi started production with the Audi A4 and

Product A4, A6, A8, R8, Q7, and TT.


A6 at its factory in Aurangabad in the state of Maharashtra. BMW is a manufacturer of sport sedans. BMW enjoys good brand recognition in India. It has set up a plant in Chennai, Tamil Nadu, to manufacture cars locally exclusively for the local 3 Series, 5 Series, 6 Series, 7 Series, X3,X5and X6. market with no plans for export. It set up the plant to circumvent high import duties. It roped in Sachin Tendulkar as one of its brand ambassadors. Even Michael Schumacher appeared in an ad for the Palio. It has entered now into an alliance with Tata Motors to jointly manufacture cars at its plant in Ranjangaon, near Pune. The facility will enable the two companies to make about 2,00,000 cars per annum, and also house an engine manufacturing unit with a capacity of 2,50,000 units per annum. The alliance will also see Tata Motors use Fiat's diesel technologythe 1.3 litre multijet diesel enginefor its own vehicles. The two companies also have a distribution and service partnership.

BMW

Fiat

The Fiat Uno was one of the first products to be introduced. The Fiat Palio/Fiat Siena was later introduced and was initially a success with its style and ride comfort coupled with solid build but has slowly lost its sheen due to low fuel efficiency. Other models were introduced such as the Palio Weekend, Palio Stile and Adventure. Fiat tried re-branding of the Fiat Siena to Fiat Petra without much success. Fiat Bravosold in collaboration with Tata Motors, Fiat 500sold in collaboration with Tata Motors, and Fiat Lineasold in collaboration with Tata Motors.

Ford entered India in collaboration with Mahindra & Mahindra Ford Motor in 1995 with a plant in Tamil Nadu. The first model was the Company Escort. Chevrolet has been a recognized brand in India for several decades. The model lineup consists of vehicles from cheaper sister brands like Daewoo. General Motors initially entered India with the Opel brand, but the Opel brand was dropped in March 2006 because sales were at an all time low due to high prices and General Motors wanted to focus more on their Chevrolet brand. Since the Chevrolet brand was introduced in India, there have been no new Opel products. GM's Indian operations were originally a JV between Hindustan Motors and GM, with most of GM's vehicles assembled at Hindustan's plant in Halol, Gujarat. Since then, GM India is now wholly owned by GM.

Escort (discontinued), Ikon, Endeavour, Fusion, and Fiesta.

General Motors

Taverarebadged Isuzu Panther,[[First Generation Subaru Forester, Aveosecond Generation Daewoo Kalos sedan, Aveo UV-Afirst Generation Daewoo Kalos hatchback, Optra rebadged Daewoo Lacetti, SRVrebadged Daewoo Lacetti, Sparkformerly Daewoo Matiz in India, and Captivarecent launch in India.

Honda

Honda Siel Cars entered India in 1995. It sells 4 cars in India the City, Civic, Accord, and CR-V. The manufacturing plant of Honda Siel is located in Greater Noida. The model of Accord Accord, City, Civic, and CR-V. sold in India is the 2003 model. The most inexpensive car from HondaThe City. The most expensiveThe Honda Accord V6. Santrosecond generation Hyundai Atos, Accentsecond generation Hyundai Accent sedan, Sonatasold as the Sonata When Hyundai entered India, the brand was virtually unknown Embera, Vernathird generation Hyundai Accent sedan, Getz in the Indian market. But now Hyundai has good market because sold as the Getz Prime, Elantra3rd generation Hyundai Elantra of its models like SANTRO, Accent etc.. sedan, Terracan (discontinued), Tucson, i10brand new small car, global launch in India in 2007, and i20.

Hyundai

RenaultNissan MercedesBenz

-

Logan (in partnership with Mahindra & Mahindra Limited).

Mercedes-Benz has had to cater to the ever gowning luxury segment in India, especially after the arrival of the other luxury German manufacturers. Now, Mercedes-Benz cars are launched in India soon after the worldwide launch and homologation as

C-Class, E-Class, S-Class, ML-Class, SL-Class, CL-Class, SLKClass, CLK-Class, GL-Class, and CLS-Class.


opposed to earlier, when Mercedes-Benz had monopolized the niche Indian market. In 2007 they launched the SLK-Class and CLS-Class. Lancer - Sixth Generation Mitsubishi Lancer, Cediaseventh generation Mitsubishi Lancer, Pajerosecond generation Mitsubishi Pajero, Monterothird generation Mitsubishi Pajero, and Outlander.

Mitsubishi Motors

-

koda

koda Auto is an important car manufacturer of India. It recently launched the Laura, the Octavia still continues to exist. koda Fabia, Octavia/Laura, and Superb. also offers the Superb in India but it's not too popular. Toyota Kirloskar sells 4 car models in India. It stopped producing the Toyota Qualis to make way for the Toyota Innova, which was launched in India in 2005. The most expensive car from Toyota is the Land Cruiser Prado. Toyota Kirloskar Motors Ltd. is a joint venture between Toyota and the Kirloskar Group.

Toyota

Toyota Qualis, Camry7th generation Toyota Camry (the latest generation Camry), Corolla9th generation Toyota Corolla, Innova, and Land Cruiser Prado VXlatest generation Toyota Land Cruiser (PRADO).

Micro Environment Influence A number of carmakers and utility vehiclemakers have vehemently expressed their dissatisfaction for being saddled with 20 per cent excise duty imposed by the govt. It is to be mentioned that all the compact cars are cheaper to to the consumer as they are less than 4 metres in length and sport engines below 1200cc in petrol and 1500cc in diesel, as they do not come under the specific duty imposed by the government. Smaller cars like Santro, A-star, i10, Wagon R, Alto, Indica, Palio, Spark attract an smaller excise duty of Rs. 24,000-Rs 32,000 per unit, while top-end cars attract up to Rs. 1-2 lakh. The Society of Indian Automobile Manufacturers (Siam) had earlier objected to this, saying a car category based on length or engine displacement should not be encouraged as the other segments would suffer. SIAM had also stated the fact that had it not been for the stimulus packages, passenger vehicle sales would have been down 3 per cent or no growth, while commercial vehicles would have witnessed a massive decline of 30-40 per cent. While incentives for small cars are welcome, the government is discouraging big cars. Also, utility vehicles that are primarily used in rural areas are being hit badly, said Siam director Sugato Sen. The automotive lobby has asked the government to introduce concessional tax structure for vehicles used in rural areas to revive demand. It has also demanded that poststimulus excise duty, after the 4 per cent cut, be made permanent and all investments in R&D by automakers be exempt from tax. However, with the Congress led-United Progressive Alliance (UPA) winning a fresh mandate, the automobile industry is hoping the system will find some much-needed stability. It also hopes the new government will treat auto as a priority sector and attend to some pressing concerns, mainly differential excise duty, lack of retail finance and lack of focus on infrastructure. Another serious concern plaguing the auto companies is the high interest rates.However, the industry hopes that retail finance will pick up with more participation from private banks.


According to The Economic Times, the senior representatives of the leading auto companies in India, most of them are of the view that removal of specific duty on big cars, tax sops on vehicles for rural markets and revival of the duty-free credit scheme for boots exports are imperative at this juncture. Furthermore, luxury car makers are of the view that passenger safety, emission norms and fuel efficiency standards should be the criteria for giving lower duties, instead of the cars length, adding that the government should provide more incentives for technological upgradation and introduction of better products in the country. Pawan Goenka, president, automotive sector, Mahindra & Mahindra, said first and foremost there should be no reversal of the financial stimulus packages announced over the last six months. The government must also review and amend large differences in excise duty on different sizes of vehicles. PRODUCTS AND ITS DEVELOPMENT PRODUCTS: Production Process The design and development of vehicles requires a large team of specialists from a wide variety of disciplines working over a period of years to achieve the goal of a highperformance, competitive product. Engineers are involved in all phases of this highly interdisciplinary process - from the initial concept through manufacture and even into marketing. As a result, engineers from all disciplines can find a role in the automotive industry process. Styling and Packaging Phase The first stage of the automotive development process is two-fold: styling (exterior as well as interior design) and packaging. Styling begins with sketches. Those that are selected for further development are then rendered in more detail - first digitally and finally as clay models. Exterior and interior designers work closely together, consulting with aerodynamics and ergonomic engineers as the design progresses. Packaging is the process by which all the component parts are fit together within the close dimensions of the vehicle. Today's design concepts place a premium on the use of space, and components must fit together within these design constraints but in such a way that the strength and safety of the system is never compromised. Once the overall design is set, there is little room for change. With the detailed drawings and models resulting from the styling and packaging phases of development in hand, the development or feasibility engineer begins the challenging work of finding the right balance between desired product design and real-world achievability. Thanks to the wide variety of computer simulation and 3-D modeling technologies available, testing that once would have been difficult or even impossible this early in the process is now common practice. Issues such as environmental efficiency, compact design, safety, and style all have to be accommodated in the design segment. This means that, to a large extent, the success of an automotive company is often in its design and development process. With so much riding17 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

on this phase, it's not surprising to find that in addition to the designers, cross-disciplinary teams include scientists, graphic artists, and, of course, engineers.

Resource Requirement The automotive industry changed people's ideas of boundaries, limits, and distance. With the arrival of the automobile, people suddenly had the freedom to go farther faster than ever before. It changed where people lived and worked. It changed how and where they shopped and traveled. It changed how they thought about distance and time, making a significant impact on how people live their lives and how they behave on a daily basis. Engineering played a great part in making the automotive industry the important force that it is today. Engineering breakthroughs and innovations in the field are found throughout the industry's history, beginning with components such as shock absorbers, disc brakes, tilt steering, and windshield wipers, and followed by systems such as the self-starting internal combustion engine, electronic fuel injection systems, anti-lock brakes, and air bags. Many of these innovations not only made vehicles more userfriendly, but also made them a good deal safer. And, engineering innovation was more than just the improvement and development of automobile parts. The production process itself was an innovation and one whose impact can hardly be overstated. The face of the industry (and manufacturing as a whole) was changed forever when the Ford Motor Company introduced the first moving assembly line. The new process meant that more cars could be produced and that prices would drop, changing the car from a luxury item into an affordable means of transportation for the masses. As motor vehicles became more accessible, they played an increasingly prominent role in everyday life and it quickly became clear that a more robust infrastructure was needed to support the new mode of transportation. Here too, engineers played their part. The Office of Public Roads started an engineer trainee program in 1904, and the Federal Aid Road Act of 1916 required each state to have a highway agency staffed with engineering professionals in order to carry out its subsidized road construction projects. The industry and its place in the public consciousness grew exponentially as roads grew more crowded and a wider variety of motorized vehicles were offered. Commercial vehicles like buses and trucks became prominent, changing the face of public transportation and bringing goods and services to new and wider areas. Consumers were soon choosing from sedans or station wagons, hatchbacks or convertibles, motorcycles or recreational vehicles. And, with all these vehicles on the roads, the environment and public safety became issues of great importance and necessary considerations for engineers.


And there are still plenty of innovations to come. Even now, the automotive industry is in

the midst of an engineering revolution with government regulations, environmental concerns, and the need to lower costs. New vehicle designs, the use of new and different materials, and improved engine design are needed to increase fuel efficiency, improve safety, continue cutting down on harmful emissions, and manage production efficiency and costs. Automotive engineering thus remains important for the industry and offers a challenging career with the potential to make a significant impact on society.

MARKETINGMARKRTING STRATEGY

Creating predictable environment for business operations in Indian automotive industry Business Intelligence Unit Monitor micro and macro economy in the country and abroad. Develop an updated market information system (rules and regulations in the country and international rules and regulations) 1.1.3 Study and analyze the automotive industry with policy recommendations 1.2 Automotive human resources development 1.2.1 Study the evaluation method and set criteria to evaluate the human resources capability 1.2.2 Design incentives for training Master Plan for Indian Automotive Industry Project Executive Summary 1.3 Market expansion by opening market through Free Trade Area 1.3.1 Domestic market 1.3.1.1 Stimulate local demand by means of taxes and interest rates 1.3.1.2 Search for cost reduction methods in production and distribution processes 1.3.1.3 Conduct a study on market (demand) gap 1.3.2 Export market 1.3.2.1 Push for negotiations to integrate ASEAN into one market 1.3.2.2 Bilateral agreements with targeted trading countries i.e. Australia, China and India (Free Trade Area)


1.3.2.3 Negotiate on Non-Tariff Measures 1.4 Good Governance Policy 1.4.1 Restructure what procedures from raw materials, intermediate parts to finished goods. 1.4.2 Set clear long-term government policy and inform this to the private sector for self adjustment before its effectiveness 1.5 Infrastructure Development 2. Enhancing competitiveness of Indian auto parts industry 2.1 Trade promotion and networking 2.1.1 Promote Indian brand products 2.1.2 Promote international trade cooperation projects to enhance capability of Indian parts exporters 2.1.3 Establish a system for auto parts transactions 2.1.4 Cluster-based development 2.1.5 Supply chain development and e-business 2.2 Standardization development 2.2.1 Accelerate the formulation of product standards and safety standards Indian Automotive Industry Project Executive Summary 2.2.2 Establish product testing laboratories and certification system 2.2.3 Assist the auto parts manufacturers to get certified under quality systems 2.3 Upgrading of manufacturing technology and management 2.4 Development of product technology 2.4.1 Set up an automotive research and development center to strengthen the R & D capability of the auto parts makers 2.4.2 Develop R & D capabilities of auto parts makers to be internationally recognized. 2.5 Automotive human resources development


Action Plan 6.1 Industry Situation Analysis Project 6.1.1 Study and analyze the automotive industry in order to recommend and design measures for sustainable industry development 6.1.2 Monitor micro and macro economy in the country and abroad 6.3.1 Provide systematic training to the industry from workers to management level 6.3.2 Skill training 6.3.3 Provide training to engineers in the field of advanced engineering and specialized technology 6.4 Automotive Engineer Developmen 6.4.1 Outline curriculum to develop engineers to have capability to enter the industry 6.4.2 Joint cooperation to award scholarships to university students in pilot projects 6.4.3 Appraisal of university students by India Automotive Institute and the industrial sector 6.5 Competency certification system development project 6.5.1 Outline curriculum in management and technology 6.5.2 Provide training for teachers on teaching techniques 6.5.3 Establish the vocational certification system 6.6 Market Responsiveness Project 6.6.1 Stimulate local demand by means of taxes and interest rates 6.6.2 Search for cost reduction methods in production and distribution processes 6.6.3 Conduct a study on market (demand) gap 6.6.4 Conduct a feasibility study on linkages of second handed cars and new cars 6.6.5 Conduct market research to search for supportive measures 6.7 Automotive tax structure research project 6.7.1 International comparison study on tax structure for the automotive industry 6.7.2 Provide recommendations on the automotive industrys tax restructuring 6.7.3 Study benefit of bilateral agreements under Free Trade Zone (FTZ)21 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

6.8 Plan the expansion of infrastructure necessary for the industrial development i.e. deep sea port 6.9 Cluster-based Development Project 6.9.1 Study on linkages in the automotive cluster 6.9.2 Develop and strengthen cluster linkages 6.9.3 Develop business networking 6.10 Automotive standards projects 6.10.1 Study, plan and determine automotive standards 6.10.2 Set up automotive standards 6.10.3 Study investment in testing equipment and testing procedures 6.11 Automotive products standard testing center 6.11.1 Examine and maintain equipment and facilities 6.11.2 Develop and train human resources in the field of testing procedures 6.12 Automotive research and development center 6.12.1 Set up Automotive R&D center (comprises of testing, R&D in automotive vehicles and automotive parts) 6.12.2 Develop and train human resources to have testing facilities and develop auto vehicles 6.12.3 Encourage and develop personnel in education institutes to have participation in testing and vehicles development 6.13 Export promotion center for auto parts 6.13.1 Set up export promotion center for auto parts to assist and give advice on exports procedures 6.13.2 Build up network for auto parts for exports 6.13.3 Coordinate with international and domestic trade organizations 6.14 Supplier development program 6.14.1 Set up supplier development center to provide suppliers advice to upgrade production technology of auto parts 6.14.2 Coordinate with international and domestic trade organizations for technology assistance22 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

6.14.3 Supporting any skilled workers to work on assigned job 6.14.4 Provide suppliers consulting services on management, production processes and quality systems 6.15 Product development project 6.15.1 Promote product design and development of suppliers 6.15.2 Develop and train human resources to have product design and development capabilities 6.15.3 Encourage personnel in education institutes to participate in product design and development


We anticipate five major changes in future automobile distribution patterns and practices: 1. Multiple channels and formats will coexist to satisfy different market segments. Channels are distinct paths between a manufacturer and a customer through similar economic entities (in new car sales, for example, traditional dealers vs. factory-direct Internet sales or a multi-brand discount outlet). Formats are distinct combinations of points of sale, service offerings and business processes within a general channel definition (for example, the Lexus format versus the Chevrolet format). We expect much more variation in channels and formats in a physical sense and more distinct positionings in terms of the purchase and ownership experience they provide, further shifting the basis of competition from product to services and brand attributes.


Undoubtedly, the traditional dealer channel will continue to play a major role, although most of the innovation and volume growth will occur elsewhere. In many other consumer-durables markets, multiple channels with different value propositions coexist quite happily. (See Exhibit III.) 2. The six separate businesses under the roof of the traditional dealership will be unbundled. The integrated model -- new-car sales, used-vehicle sales, finance and insurance, service, parts, fieets -- was established early on when automobile retailing was still a new industry. In today's world it makes little sense. Different operational structures will be required to serve a variety of customer needs and economics. 3. The cost of distributing and marketing automobiles will be cut significantly. New formats and channels will discipline the current system to drive out non-value-adding cost. Dealer consolidations may unlock substantial economies of scale in back-office functions and purchasing leverage. Much larger savings are possible, however, by driving out inventory; reducing investment in brick-and-mortar and real estate investments, and optimizing the delivery of services. 4. Marketing and distribution will concentrate on establishing durable customer relationships. Customer acquisition costs are high and going higher; it is logical for manufacturers and their channels to work harder to hold on to the customers they have. We see these relationships developing on two axes: "follow the car" and "follow the customer." The "follow the car" axis will take manufacturers more actively into the second and third transactions in a vehicle's lifetime. Used-car certification programs are a "follow the car" concept increasing in popularity today as a means of supporting initial sale prices. The "follow the customer" axis means building more direct relationships with a targeted set of customers to define their needs, develop tailored marketing programs and stake out unique brand25 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

positions. Identifying these customers and keeping them happy will require substantial investments in market-understanding capabilities that go far beyond the functional, demographic and pyschographic information that most manufacturers study today. 5. Manufacturers will seek and attain much closer contacts with consumers. We have no doubt that someone will figure out the riddle of consumers' needs, aspirations and experiences as they relate to cars; the tenuous part of this prediction is that manufacturers, and not other channel players, will get there first. Manufacturers are surprisingly -- if not shockingly -- cut off from their consumers today. Their dealer partners spend much of their energy figuring out ways to disguise the product-push allocation system in a way that conceals true market demand from the manufacturer. Manufacturers spend small fortunes on advertising, sponsorships, customer clinics and surveys but continue to introduce market duds. Internet technology enables more effective and efficient direct contact between manufacturers and their ultimate customers. If, however, manufacturers fail to exploit this and other technologies to establish meaningful relationships with consumers, more powerful channel intermediaries will gain the upper hand and end up dictating customer needs to their suppliers -the manufacturers. These transformations will not be easy, and many of today's players will fight them aggressively. But the revolution in automotive retailing has begun, and now that it is under way it will be impossible to stop and nearly as difficult to contain. DISTRIBUTION CHANNEL STRATEGY Cost and customer-service improvements are necessary but not sufficient to transform auto retailing channels. Realizing the full potential of these programs is not possible without a reasonable view of the different customer segments that should be targeted; the appropriate mix and level of marketing and distribution functions needed for each segment, and the best portfolio of distribution formats and channels to reach the targets. Just as specific groups of customers have their own product requirements, different consumer segments have their own requirements for the purchase and ownership experience. These requirements can be effectively targeted with channel, format and "soft offer" package variations such as service contracts, financing or sales incentives. Ultimately, the consumer-segment requirements will drive the service requirements and in turn help determine the best cost and operating structure for the specific distribution format and customer-value proposition. Creating purchase and ownership experiences to meet the needs of specific consumers has two other significant implications. First is the need for parallel formats and channels in a given region, each with its own pricing and bundle of service offerings. Parallel sales channels can range from the traditional dealer to the Internet or to direct sales. Similarly, parallel service channels could be created through specialized quick-fix workshops, independent dealers and doit-yourself stores/garages. (See Exhibit VI.) Parallel channels and formats raise the possibility of channel confiict and the need for expanded skills to manage and reduce it. The second implication of serving multiple, service-based customer segments is the need to avoid cannibalization. For example, a Mercedes "A" class owner with a limited guarantee and no branded service must be recognized as such and managed appropriately. This requires a system for identifying and distinguishing the "soft offer" packages sold to individual consumers. Mercedes is testing such a system in the form of a chip card. The chip card stores a description of the "soft offers" purchased and requires an explicit payment for additional services.26 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

Creating a more fiexible and targeted mix of channels and formats will be hard to do. But it will also require manufacturers to collect continuous and rapid feedback for new retailing ideas and approaches, consistent with a strategic path that is fiexible enough to change as the organization learns over time.


Financial Plan Year 1 Owner Foreman Sheet Metal & Body Technician(s) Automotive Mechanic(s) Painting Technician Admin Asst. Total People $21,000 $17,400 $12,831 $15,162 $6,750 $9,000 6 Year 2 $40,000 $22,400 $45,000 $52,000 $24,000 $20,800 8 Year 3 $45,000 $30,000 $50,000 $58,000 $27,000 $22,800 8

Total Payroll

$82,143

$204,200

$232,800

To maintain costs of goods sold to 60% or less. To increase sales within an 18 month period to 37% of the target market. To maintain financial records according to GAAP.

GoalsObjectives Purchase and use Machinery and Equipments Train employees proper handling to prevent waste Material Maintain a weight system for Auto, car etc. Check for quality of Machine and raw materials from suppliers when Material is delivered Maintain storage equipment in proper working condition Hire an experienced and qualified accounting firm Contract out payroll Purchase a High Speed computer 28 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

Utilize Business Plan equipment Use Accounting software

Financing Plan and Exit StrategyThe total needed capital for automobiles Circus is Rs500 Crore. Owner's cash contribution is Rs100 crore and other investors and family members is Rs200 crore. The amount needed in loans is Rs200 Crore. FUNCTIONAL IMPROVEMENTS In the conventional dealer networks, tremendous improvement opportunities exist along two basic functional paths: reducing costs and raising customer satisfaction. Most manufacturers and many large channel players are jumping at these opportunities, given their magnitude. However, these players tend to select a limited number of programs, and they typically concentrate on single functional improvements independently or on a single functional path. A better approach is to address systematically the whole realm of possibilities with an integrated view of benefits within and across specific functions. This is not easy. Even programs with moderate scope and ambition typically require reforming entrenched business philosophies; coordinating several organizational groups with disparate incentives; managing complex and imposing legalities, and facing up to dealers resistant to change. But manufacturers must recognize that new players unencumbered by these constraints are raising the bar and traditional players must reach higher or fall behind. Based on our experiences and analyses, we estimate that about 7 percent of the total cost to serve consumers, or nearly one-quarter of automotive marketing and distribution costs, can be reduced based on a typical traditional dealer operation. (See Exhibit IV.) The cost reductions derive from three sources:

1. The consolidation and rationalization of channel activities to achieve economies of scale and eliminate inefficient operations. Large numbers of small competing dealerships impose significant cost penalties.


2. The unbundling of dealer businesses, for instance used-car selling, to optimize the operating model for a specific business. 3. The application of best practices across outlets. Given the wide variation and the resulting large differences in efficiency and effectiveness in operations among dealers, the application of best practices is a powerful cost-reduction lever. Here are some examples of potential functional improvements: Reduce inventory costs. Dealers can cooperate among themselves and with the manufacturers to pool inventory in regional centers. Also, analytical methodologies, information- systems tools and best practices can be used to evaluate the dealer-level sales history to determine the best amount and mix of vehicles, including option packages, to hold in inventory. Finally, to improve future demand visibility and forecasting accuracy, dealers can use improved information systems and marketing techniques to track customer and sales-promotion information, lease-renewal marketing campaigns and historical data on sales-promotion effectiveness. Leverage purchasing power. Dealers can also capitalize on economies of scale. The economies result from lower costs in areas such as financing, advertising, management personnel, payroll handling, insurance, supplies, administrative functions and parts purchases. The reported cost savings from these economies alone can be as high as 20 percent of a dealer's total costs. B.B. Hollingsworth Jr., chairman of Group 1 Automotive Inc., one of the leading consolidators in the country, says that his company has "discovered more economies-of-scale savings than [it] initially expected." Manage used-car values. Most manufacturers today have some sort of certified used-car program, although the programs vary in effectiveness. These programs are critical to managing the risk of large losses from infiated lease residuals that have become commonplace, and to minimizing the huge cost of incentives. There is a direct link between the value of the used car and new car prices for the same model. In one case for two comparable high-end sedans, we found a difference of 8 percent in the used-car price between the make with a certified used-car program and the one without, despite the fact that they were priced the same when new. This used-car relative discount was then refiected directly in the new-car pricing differential between the two models in subsequent years. Unbundle used-car sales. A large-scale operation designed specifically for used cars can achieve efficiencies relative to the conventional dealer's used-car format. These include economies of scale in areas such as advertising, management, personnel, facilities and systems. In addition, there is the obvious savings of a lower-cost location. Joint ownership and operation by dealers and manufacturers can make an unbundled used-car operation plausible for existing franchised dealers. Use best practices to sell cars. The traditional selling approach for new cars is replete with cost (and effectiveness) opportunities. The car-buying process entails six successive phases: continuous, subconscious information intake; active, focused information collection; test driving; vehicle selection; purchase/negotiation, and post-purchase support. Manufacturers and dealers typically use expensive shotgun approaches to these phases; alternative, more cost-effective information exchange mechanisms are available for each. These include information technology tools and approaches such as: Direct marketing databases30 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

Kiosks for interactive customer information exchange, vehicle selection, pricing, delivery-date promise, order checking and "soft offers" (warranties, financing, insurance, service packages, etc.) Internet sites for some of these same functions

Benefits include reduced mass-media advertising expenditures, more effective targeted marketing and reduced sales force resources for almost every phase of the process. (See Exhibit V.) Use best practices in service and parts. Techniques for parts inventory management, service personnel staffing practices, service bay scheduling and repair and maintenance procedures typically vary greatly from one dealership to the next. Systematically identifying the differences and meticulously implementing revised practices results in an average parts and service cost reduction of 15 percent to 20 percent with only nominal investment.


Increase customer satisfaction. Customer satisfaction and loyalty are rich veins of potential functional improvement. Manufacturers' efforts are usually unsuccessful when they try to bribe the channel to improve customer service. Good performers in the channel end up getting paid for what they are already doing and the poor performers undertake short-lived, superficial steps to "manage the measurements." Customer service in auto retailing is mostly about executing the basics well -- fixing cars right the first time, keeping commitments, offering conveniences like32 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

pick-up and delivery where feasible. Service advisors and computer-driven follow-up calls will not regain ground lost to sloppy execution. ORGANIZATION & MANAGEMENT Location: The industry will be setup in Noida in Up because there are some reasons: There is Cheaper Workers Close to NCR Quick Link with Indian Government Large Production area Good transportation system and distribution Cooperate Polices of UP Government No shortage of workers Available Facilities (Raw Material, Electricity, water supply) Educated People Key Personal CEO: Puneet Chaurasia Chairman: Sujay Tiwari CMO: Mayank Aggarewal CFO: Gopal Saxena CPO: Ansul Jain CHrO: Shishir Singh


HR Policy and StrategyGoalTo have a competent and knowledgeable management staff which functions as a team?Objectives Hire experienced, qualified persons Conduct weekly management meetings On-going training to include outside classes in maintaining the vichele, management, etc. Reviews every six months Performance incentives Encourage creativity

OrganizationAutomobiles Circus will be operated as a Sole Proprietorship. There will be private investors. However, these investors will be silent investors with a payoff of investment within three years. These investments will be paid twice-yearly in equal installments including interest. Overall management will be the responsibility of the owner. There will be a general manager and shift supervisors. Critical Risk There are risks inherent with any business. However, the Automobile business carries with it very unique risks. Most critical is the customers' changing vehicle. Another is the economy. Automobile rely heavily on serving persons who have expendable income. When the economy takes a down turn, people change their spending priorities. A problem also in Automobile is finding dependable help who will stay with the business. Many Automobile employees tend to be younger and are attempting to move into a career. When either their schooling ends or they find their "dream job," they move on. Often servers filling the positions are non-skilled, and tend to be single mothers or lower educated persons. These persons come with specific circumstances which must be accounted for by management. A single mother may experience child-care problems, or a bus person may have problems with reading.


Summary1. Manufacture and export of small cars, MUVs, two & three wheelers, tractors, components To be promoted. 2. Negative list of items and rules of origin for FTAs/ RTAs to be followed 3. Appropriate Tari Policy will be followed to attract investment 4. Specic measures will be taken for expansion of domestic market 5. Incremental Investment of US$ 35-40 Billion in the Automotive Industry during the next ten years to be encouraged 6. Exports to be encouraged 7. Policy initiatives for competitiveness and development of technology would be taken 8. National Road Safety Board to act as the coordinating body for promoting safety 9. Inspection and Certication system to be strengthened by encouraging Public-private partnership 10. Fleet Modernisation to be encouraged 11. Implementation of GST should be time bound 12. National level Automotive Institute for training on automobiles at ITIs and ATIs to be set up 13. Centers for automotive manufacturing excellence to be created 14. Adoption of ITIs and ATIs by OEMs, Tier I component manufacturers to be encouraged 15. An Auto Design Centre to be established at NID, Ahmedabad 16. NATRIP to act as Centre of Excellence for Technical Design Data 17. Integration of IT in manufacturing and in Automotive infotronics to be promoted 18. Infrastructure development around identied automotive clusters to be undertaken 19. Closer partnership between Industry, research institution and academia for innovation and IPR to be encouraged 20. R & D for product, processes and technology to be incentivised 21. Continuous investment in road, port, railways and power to be encouraged 22. Strive for Labour reforms. 23. Road Map for Auto Fuel Policy beyond 2010 would be drawn 24. Rationalisation of motor vehicle regulations to be undertaken 25. Setting up of virtual SEZ and Auto Parks for auto component industry wou35 | P a g e BUSINESS PLAN FOR AUTOMOBILES INDUSTRY

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