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Economic Position of India
Despite the slowdown in growth, investment remained relatively buoyant, growing at a rate
higher than that of GDP. The ratio of fixed investment to GDP consequently increased to 32.2
per cent of GDP in 2008-09 from 31.6 per cent in 2007-08. This reflects the resilience of Indian
enterprise, in the face of a massive increase in global uncertainty and risk aversion and freezing
of highly developed financial markets. A decline in all major elements of private demand,
including exports and consumption, necessitated a compensating widening of the fiscal deficit
above the Fiscal Responsibility and Budget Management Act (FRBMA) target. The new, higher
expenditures announced during the 2008-09 budget, which would have been offset by greater
revenue mobilization, had to be supplemented by an additional fiscal expansion. This got
reflected in an increase of 20.2 per cent in government final consumption expenditure during2008-09. The effect of this and subsequent fiscal stimuli (e.g. excise and service tax reduction)
on private demand would be expected to appear gradually with a lag. Needless to say it is an
imperative to return to the FRBM targets for the fiscal deficit at the earliest, possibly by 2010-11.
GDP of India
The Indian economy is the 12th largest in USD exchange rate terms. India is the second fastest
growing economy in the world. Indias GDP has touched US$1.25 trillion. The crossing of
Indian GDP over a trillion dollar mark in 2007 puts India in the elite group of 12 countries with
trillion dollar economy. The tremendous growth rate has coincided with better macroeconomic
stability. India has made remarkable progress in information technology, high end services and
knowledge process services.
However cause for concern would be this rapid growth has not been an inclusive in nature, in the
sense it has not been accompanied by a just and equitable distribution of wealth among all
sections of the population. This economic growth has been location specific and sector specific.
For e.g. it has not percolated to sectors were labor is intensive (agriculture) and in states were
poverty is acute (Bihar, Orissa, Madhya Pradesh and Uttar Pradesh).
Though India has the second highest growth rate in the world, its rank in terms of human
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Result: Unfavorable
5. The amount of rivalry among competitors
High. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.
Result: Unfavorable
India's auto industry is much like China's, as far as Porter's Five Forces is concerned. Like
China's, the P5F analysis ignores the massive future prospects which could indeed render this
analysis irrelevant.
Role of Automobile Industry in India GDP
The Role of Automobile Industry in India GDP has been phenomenon. The Automobile Industry
is one of the fastest growing sectors in India.
The increase in the demand for cars, and other vehicles, powered by the increase in the income is
the primary growth driver of the automobile industry in India. The introduction of tailor made
finance schemes, easy repayment schemes has also helped the growth of the automobile sector.
Some Facts
India has become one of the international players in the automobile market
In the year 2006-07, the Indian Automobile Industry produced 2.06 million four wheelers
and 9 million two and three wheelers
The four wheelers include passenger cars, multi-utility vehicles, sports utility vehicles,
light, medium and heavy commercial vehicles, etc
The three wheelers include mopeds, motor-cycles, scooters, and three wheelers
India ranks 2nd in the global two-wheeler market
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Industry Background
In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to
export 250,000 vehicles manufactured in its India plant by 2011. Similar plans are for GeneralMotors.
Turnover of Automobile Manufacturers (In USD Million)
Year In USD Million
2002-03 14,880
2003-04 16,544
2004-05 20,896
2005-06 27,011
2006-07 34,285
The figures show that the automobile sector in India has been growing robustly. The market
shares of the different types of vehicles will clearly depict the demand pattern in this sector.
Domestic Market Share for 2008-09
Passenger Vehicles 15.96%
Commercial Vehicles 3.95%
Three Wheelers 3.6%
Two Wheelers 76.49%
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COMPANY
Bajaj Auto Ltd.
The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a
wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home
appliances, lighting, iron and steel, insurance, travel and finance.
The group's flagship company, Bajaj Auto , is ranked as the world's fourth largest two- and
three- wheeler manufacturer and the Bajaj brand is well-known in over a dozen countries in
Europe, Latin America, the US and Asia.
Activities
Bajaj Auto Ltd. is the largest exporter of two and three wheelers. With Kawasaki Heavy
Industries of Japan, Bajaj manufactures state-of-the-art range of two-wheelers. The brand, Pulsar
is continually dominating the Indian motorcycle market in the premium segment. Its Discover
DTSi is also a successful bike on Indian roads .
Since 1986, there is a technical tie-up of Bajaj Auto Ltd. with Kawasaki Heavy Industries of
Japan to manufacture state-of-art range of latest two-wheelers in India. The JV has already given
the Indian market the KB series, 4S and 4S Champion, Boxer, the Caliber series, and Wind125.
Bajaj Auto & Allianz have signed their third joint venture partnership, ' Bajaj Allianz Financial
Distributors Ltd. ', encouraged by the tremendous performance of the Bajaj Allianz Life
Insurance & Bajaj Allianz General Insurance and by the strong trust of consumers in the Bajaj
Allianz brand.
Bajaj Auto's two and three wheelers are manufactured in three modern mass production facilities
at Pune, Aurangabad and at a state of the art plant at Chakan. The combined installed capacity at
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Equity share capita, Preference shares other than redeemable, Reserves and surplus, Losses and
Fictitious assets increased by Rs.282.1 cr. in 2009 tear.
(iii) Inventory Turnover Ratio.
Inventory turnover ratio = Sales
Inventory
Year Sales Turnover Inventory Inventory Turnover
Ratio
2008 9856.66 349.61 28492009 9310.24 338.84 27.47
Analysis:-
The inventory' turnover ratio in the year 2008 was 28.19 which indicate that 28.19 times in a
year the inventory of the firm is converted into receivables or cash. However, in 2009, the
inventory turnover ratio slightly decreased to 27.47. This was due to the fact that the Bajaj Auto
Ltd. in 2009 invested more then 0.72 times the inventory in 2008.
(v) Fixed assets Turnover
Fixed asset Turnover = Sales
Fixed Assets
Year Sales
(Rs.
in cr.
Fixed
Assets (Rs.
in cr.)
Fixed Assets Turnover
2008 8827.15 4906.42 1.79 %20O9 8700.17 5752.26 1.51 %
Analysis:-
According to the calculations above the productivity of fixed assets in year 2009 is not better
than it was in previous years. In 2008, it was 1.79% and now it has been slightly decreased to
1.51%. This change was brought about by decreased in total sales by Rs.126.98 cr. where as
the fixed assets increased only by Rs.845.84 cr.
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Bibliography
http://www.bajajauto.com/
http://www.economywatch.com/indianeconomy/indian-economy-
overview.html
http://www.ibef.org/economy/economyoverview.aspx
http://business.mapsofindia.com/automobile/
http://www.bajajauto.com/http://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://www.ibef.org/economy/economyoverview.aspxhttp://business.mapsofindia.com/automobile/http://www.bajajauto.com/http://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://www.ibef.org/economy/economyoverview.aspxhttp://business.mapsofindia.com/automobile/Top Related