SURGE IN FUEL PRICE AFFECTING AUTOMOBILE SECTOR

7/29/2019 SURGE IN FUEL PRICE AFFECTING AUTOMOBILE SECTOR

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Surge In Fuel Prices and Its

Effect on Automobile Industry

Group3

Shreyash .S

Seran P.KDonatus Hendrix Fernando

Rajeshwari .V

ManiBharathi

Arun Kumar

Khyati SaxenaRaj Kumar

Gopal . D

Priyanka Jain


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Importance & Why the topic

The automobile sector is one of the high performing sectors of

the Indian economy.

This has contributed largely in making India a prime

destination for many international players in the automobile

industry who wish to set up their businesses in India.

When there is Recession , Automobile Sector is the one which

gets affected earlier.


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Objectives

Primary Objective:

To study the surge in fuel prices and its effect on Automobile

Sector in India.

Secondary Objective:

To analyze the factors for such increase and its effect on the

consumers and the taxation policies by the government.


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Introduction Crude oil Import100 Ton's

Stability of Indian economy is directly co-

related with Crude oil

Increasing demand is not met by substantialsupply

Direct impact on Consumers which has a

negative impact on Automobile sector

PESTEL analysis


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Methodology


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Bike

Car

Others

Type

ofVehicle

Used

33

54

13

Type Of Vehicle Used

1-500

30%

500-1000

26%

1000-1500

19%

1500-2000

12%

Above 2000

13%

Travelling distance per month


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35%

53%

12%

Fuel Price Hike Effect

BADLY AFFECTED

AFFECTED

NOT AFFECTED

BELOW 10001001-2000

2001-30003001-4000

ABOVE 4000

12

30

24

12

22

Amount Spent for Fuel For a Month


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Tata NANO

Tata SAFARI

Maruthi 800

Maruthi SWIFT

43

3

9

133

13

4

4

95

Effect in 4-Wheeler Industry

1.7.11 to 30.6.12 1.7.10 to 30.6.11

HERO MOTO CORP BAJAJ AUTO TVS MOTOR

473033

200535140806

475363

202336160354

Slowdown Effect in the 2 wheeler industry

Jul-12 Jul-11


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32%

25%

17%

14%

12%

Reason For Change Of Vehicle

PRICE HIKE

MILEAGE

DESIGN

OBSELETE

OTHERS

PERSONAL CAR

PERSONAL BIKE

PUBLIC TRANS

OTHERS

30

36

29

5

Preferred Mode of Transport


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VAT

Rs 14.40

TransportationCharge

Rs 3.72

Education

Tax

Rs 0.43

Excise

Duty

Rs 14.35

Basic

Price

Rs 31.91

Petrol

Custom

Rs 5.76

Dealer

Commission

Rs 1.05

Crude oil

Custom

Duty

Rs 1.54

TAX

56.39 %

(Rs 41.25)


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Findings

Lower middle class people are affected.

Automobile production cuts down

Taxation is more

People started using public transportations


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Contd

Increasing fuel rates is directly proportional to FMCG,

Groceries etc

People have the capacity to purchase a vehicle but are hesitantdue to hike in fuel

Many households have vehicles for every individuals

Electric/hybrid vehicles can cut down a major portion of their

expense


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Suggestions

TemporaryPlans:

Public Transports.


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FuturePlans:

Government has signed agreement

between Turkmenistan-Afghanistan-

Pakistan to bring fuel to India

through a pipe line by 2018

Bio- fuel is one very good substitute

, very eco-friendly and very cheaper


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Conclusion

By 2050 it is predicted that ,there will be no fuel in the planet

With 10% rise in crude oil price it will impact on agriculture at8%, transport on 4%, and household items on 4% and other

items 2%

Use electronic car , bike which is very economical and thiseven the automobile sector to grow but not to fall

There is a high rate of taxation on fuel prices which needs tobe cut down


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Contd.

In long term shift to alternative fuel (hydrogen / Electricity) or

the living standards will decline increasingly

Government should make stringent NORMS as to allowingonly those vehicles which are fuel efficient

If price of fuel keeps on increasing people will permenantly

shift to public transport where automobile industry can go todisaster.


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Survival Code

SAVE OIL ,SAVE MONEY

SAVE OIL ,SAVE INDIA

SAVE OIL ,SAVE EARTH

SAVE OIL ,SAVE OURSELVES


19/20


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SURGE IN FUEL PRICE AFFECTING AUTOMOBILE SECTOR

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