Resurrecting Indian Automobile Industry

Resurrecting Indian Automobile IndustryBy:Vivek YadavBatch 2014-16SIMS,Pune

Overview7th-largest in the world with an average annual production of 17.5 million vehicles, of which 2.3 million are exportedAccounts for 22 per cent of the country's manufacturing GDP2nd largest manufacturer of two wheelers5th largest manufacturer of commercial vehicles Largest manufacturer of tractorsLargest 3 wheeler marketCompetitive Landscape

3Reason for Stagnation of Sales and ProductionSales in 2011 slowed down substantially due to:

Unattractive macro economic factorsInflationAll time high Crude oil prices led to highest retail petrol prices (34 % increase)Close to decade high interest ratesSlowdown in growth of real disposable income to 2.4% from 6.3% in 2010Huge production losses suffered by the countrys largest carmaker (Maruti Suzuki - 48% share) owing to labour unrest4TATA MOTORSPROBLEM:Sale of Passenger cars in domestic market dropped by 39 % from 2013 to 2014 (maximum in the segment)

SolutionsMARKETINGFINANCIALOPERATIONALRepositioning TATA Motors brand, no more relating it as only a small car brandInvesting in R&D New innovative designs Identifying new markets Developing countries in AFRICAAcquiring companies having rare patents to provide additional featuresSetting up manufacturing plants at strategic locations Better segmentation of cars in income groups greater than 6 lakhsFurther expanding via mergers & acquisitions on the lines of Land Rover & JaguarManufacturing cars using Hybrid TechnologyGiving discounts to employees working in TATA companiesOpening more after sales service centersIncreasing production capacityInitiating buy back policy in case customer wants to switch to higher end TATA carsIncrease exportsLaunch more new cars and variants6Indian Automobile Industry7Across SegmentsWhat can the industry do?Automobile Industry on a whole can set guidelines on:

Environment:Setting a benchmark for making fuel efficient, environment friendly cars.

QualityEnsuring every car manufacturer assures the customer certain fixed benefits

3.PolicyFormulating policies for exchanging Technological inputs

4.Price Fixing the maximum and minimum prices for selling cars across a segmentBibliographyhttp://business.gov.in/Industry_services/automobile_industry.phphttp://www.ibef.org/industry/india-automobiles.aspxhttp://automobiles.mapsofindia.com/automobile-industry-in-india/http://www.eiu.com/industry/article/611154645/india-key-player---tata-motors/2013-11-08http://www.autocarindia.com/auto-news/auto-industry-in-fy-2013-14-a-look-back-in-numbers-382632.aspxhttp://in.reuters.com/article/2014/08/12/tata-motors-ltd-india-launch-idINKBN0GC13O20140812

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