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The four wheeler industry in India has grown significantly over the years. It started with the import of cars in 1898 and the establishment of major car manufacturers like Hindustan Motors and Premier Automobiles in the 1940s. Now India is one of the largest automobile markets in the world, producing over 3.7 million vehicles annually as of 2010. The major car manufacturing hubs are in Chennai, Gurgaon/Manesar, and the Pune region, which together account for the majority of India's car production and exports. The Indian car market is expected to continue growing rapidly, potentially becoming the largest in the world by 2050.
Deskripsi Asli:
The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12.[2] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India reached as Asia's third largest exporter of passenger cars, behind Japan and South Korea beating Thailand.
Judul Asli
Consumer’s Perception Towards FOUR WHEELER INDUSTRY
The four wheeler industry in India has grown significantly over the years. It started with the import of cars in 1898 and the establishment of major car manufacturers like Hindustan Motors and Premier Automobiles in the 1940s. Now India is one of the largest automobile markets in the world, producing over 3.7 million vehicles annually as of 2010. The major car manufacturing hubs are in Chennai, Gurgaon/Manesar, and the Pune region, which together account for the majority of India's car production and exports. The Indian car market is expected to continue growing rapidly, potentially becoming the largest in the world by 2050.
The four wheeler industry in India has grown significantly over the years. It started with the import of cars in 1898 and the establishment of major car manufacturers like Hindustan Motors and Premier Automobiles in the 1940s. Now India is one of the largest automobile markets in the world, producing over 3.7 million vehicles annually as of 2010. The major car manufacturing hubs are in Chennai, Gurgaon/Manesar, and the Pune region, which together account for the majority of India's car production and exports. The Indian car market is expected to continue growing rapidly, potentially becoming the largest in the world by 2050.
On Consumers Perception Towards FOUR WHEELER INDUSTRY
IN PARTIAL FULFILLMENT OF BACHELER OF BUSINESS ADMINISTRATION M.J.P.R.U BARIELLY (2011-2014)
SUMITTED TO: - SUBMITTED BY: - Mr. Harpreet Singh Dharmendra Pal (Asst. Professor SIMT) BBA 4 th Semester Roll No-12514519 2
CERTIFICATION
This is to certify that Dharmendra Pal student of BBA 4 th semester has prepared his project report under my guidance for the fulfillment of degree of Bachelor of Business Administration (BBA) from M.J.P. Rohilkhand University.
Signature Mr. Harpreet Singh (Prof. SIMT)
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ACKNOWLEDGEMENT
I acknowledge with gratitude and appreciation, my indebtedness to my mentor & guide, Mr. Harpreet Singh (Assistant Professor) for allowing me to work on a very intrinsic part of automobile sector, "CONSUMER PERCEPTION ABOUT FOUR WHEELER INDUSTRY".I also thank him for the ideas and basic concepts they delivered and shared with me, as she helped me a lot in accomplishing this project of mine. It gave me enormous gratification to articulate my thankfulness heart full sense of indebtedness to my dearest friend, Shubham Pr. Singh. I also put forward my heartiest thanks to Mr. Pankaj Bhargava (Director SIMT) for his great support in completion of this project.
(Dharmendra Pal)
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PREFACE
Market provides a key to gain actual success only to those brands which match best to the current environment i.e. imperative, which can be delivered what, are the people needs and they are ready to buy at the right time without any delay. It is perfectly true but this also depends on availability of good quality products and excellent taste and services. Which further attract and add a golden opportunity for huge sales? This also depends on the good planning approach and provide ample opportunity plus sufficient amount of products for sales in the coming next financial year. This survey report also provides the various factors attracting the services. Marketing division of Tata Motors has to keep in mind various factors specially while preparing a plan for marketing its product or services. Detailed description along with analysis of surveyed data is being presented in this report. The study report will also provide an opportunity to delineate its market potential business areas products & services are to be offered by the company to the customers.
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TABLE OF CONTENTS S.No. Topic Page No. Chapter 1
Introduction 6-24 1.1 Executive summary
25-26 1.2 Objective
27 Chapter 2
Industry overview 28 2.1 Companies profiles 29-40 2.2 History 41-50 2.3 A complete overview of four wheeler industry 51-54 Chapter 3 Research Methodology 55-60 Chapter 4 Data Analysis & Findings
BIRTH OF THE CAR In 1769 the very first self-propelled car was built when Nicolas Cugnot, a French military engineer designed a steam powered road-vehicle. The vehicle was built at the Paris Arsenal, and was used by the French Army to move cannons. It had three wheels with the engine in the front along with the boiler. While Cugnot's 'car' was capable of attaining speeds of upto 6 kms/hour, it was far too heavy and slow to be of practical use.
In 1771 he again designed another steam-driven engine that ran so fast that it rammed into a wall, recording the worlds first accident.
In 1807 Francois Isaac de Rivaz designed the first internal combustion engine. He to develop the worlds first vehicle to run on such an engine, one that used a mixture of hydrogen and oxygen to generate energy, subsequently used this. This spawned the birth of a number of designs based on the internal combustion engine in the early nineteenth century with little or no degree of commercial success. In 1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas driven engine. In 1862 he again built an experimental vehicle driven by his gas-engine, which ran at a speed of 3 kms/hour. These cars became popular and by 1865 could be frequently espied on the roads. The next major leap forward occurred in 1876 when the four-stroke engine was devised. GottilebDamlier and Nicolas Otto worked together on the mission till they fell apart. 8
Daimler created his own engines that he used both for cars and for the first four wheel horseless carriage. In the meanwhile, unknown to them, Karl Benz, was in the process of creating his own advanced tri-cycle, which proved to be the first true car. After all this experiments we can say that the complete car was birth only in 1885 that the first real car rolled down on to the streets. The earlier attempts, though successful, were steam-powered road-vehicles. The season of experiments continued across the seas in the United States where Henry Ford began work on a horseless carriage in 1890. He went several steps forward and in 1896, completed his first car, the Quadricycle in 1896. This was an automobile powered by a two- cylinder gasoline engine. The Ford Motor Company was launched in 1903 and in 1908 he catapulted his vehicle, Model T Ford to the pinnacle of fame. Continuing with his innovations, he produced this model on a moving assembly line, thus introducing the modern mass production techniques of the automobile industry. The modern car therefore comes from a long list of venerated associates, and its heredity will, hopefully. BEGINNING OF CAR IN INDIA
From the singsong rhythm of the bullock cart to the jet-age, India has traveled a long way. An average Indians dream car may not be the design Honda or the stately limousine, but he sure can dream, and afford, the Maruti now. It was in 1898 that the first motorcar rode down Indias roads. From then till the First World War, about 4,000 cars were directly imported to India from foreign manufacturers. The growing demand for these cars established the inherent requirements of the Indian market that these merchants were quick to pounce upon. 9
The Hindustan Motors (HM) was set up in 1942 and in 1944, Premier Autobackmobile (PAL) was established to manufacture automobiles in India. However, it was PAL who produced the first car in India in 1946, as HM concentrated on auto components and could produce their first car only in 1949. It was left to another company, Mahindra and Mahindra (M&M) to manufacture utility vehicles, namely the American Jeep. In the 50s, the Government of India granted approval to only 7 car dealers to operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco. he protectionist policies continued to remain in place. The 60s witnessed the establishment of the two-three wheeler industry in India and in the 70s, things remained much the same.
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THE INDIAN FOUR WHEELER INDUSTRY The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. [2] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India reached as Asia's third largest exporter of passenger cars, behind Japan and South Korea beating Thailand. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020. [ By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster near Chennai is the biggest with 35% of the revenue share. The western hub near Maharashtra is 33% of the market. The northern cluster is primarily Haryana with 32%. Chennai, is also referred to as the "Detroit of India" with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors [ having assembly plants in the area. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol 11
and further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat.Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country .
MILESTONES A behind- the- scenes look into the making of one of India's most vibrant industries. The landmarks along the way... 1928- The first imported car was seen on Indian roads 1942- Hindustan Motors incorporated 1944- Premier automobiles started 1948- First car manufactured in India 1953- The Government of India decreed that only those firms which have a manufacturing program should be allowed to operate 1955- Only seven firms, namely, HM, API, ALL, SMPIL, PAL, M& M and TELCO received approval. 1960 - 1970 - The two, three wheeler industry established a foothold in the Indian scenario. 1970 - 1980 - Not much change was witnessed during this period. The major factors affecting the industry were the implementation of the MRTP Act( Monopolies and Trade Restrictive Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973 and 1979. 1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the liberalization of the Government's protectionist policies, the advantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear. This period is also marked by the entry of a large number of firms in the market. 4 Japanese manufacturers entered the Commercial Vehicle and Two- Wheeler market. The Government agreed to the demand for allowing foreign collaboration in the automobile sector 12
The industry witnessed a resurgence due to major policy changes like relaxation in MRTP and FERA, delicensing of some ancillary products, broad banding of the products and modification in the licensing policy. Also, the concessions it gave to the private sector and the new foreign collaboration policy, all resulted in higher growth and better performance of the industry than in the earlier decades. The Government of India tied up with Suzuki Inc. of Japan which produced India's most successful car- the Maruti. 1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed with, and the automobile industries were allowed to expand freely. 1993 - With the winds of liberalization sweeping the Indian car market, many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into the Indian car market. 1997 - The National Highway Policy was announced which will hopefully have a positive impact on the automobile industry. The Government also laid down the emission standards to be met by car manufacturers in India in the coming millennium. There were two successively stringent emission levels to be met by April 2000 and April 2005, respectively. These norms were benchmarked on the basis of those already adopted in Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region (NCR) of Delhi. The deadline was later extended to 1st June, 1999.
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OVERVIEW The Indian Automobile Industry manufactures over 11 million vehicles and exports about 1.5 million each year. The dominant products of the industry are two-wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three-wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has a turnover of more than USD $35 billion and provides direct and indirect employment to over 13 million people. ] ??? The supply chain is similar to the supply chain of the automotive industry in Europe and America. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition in the sector is high and increasing, and its life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged. With a high cost of developing production facilities, limited accessibility to new technology, and increasing competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%. The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, India's increasing 14
per capita disposable income which is expected to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of the industry. Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero MotoCorp is occupying over 41% and sharing 26% of the two-wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three-wheeler market. Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of car they buy. The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India. Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favourable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.
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HISTORY The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys. The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment of MarutiUdyog. A number of foreign firms initiated joint ventures with Indian companies. In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the license raj, a number of Indian and multi-national car companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands. Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant India-specific investment by multinational automobile manufacturers. In February 2009, monthly sales of passenger cars in India exceeded 100,000 units and have since grown rapidly to a record 16
monthly high of 182,992 units in October 2009. From 2003 to 2010, car sales in India have progressed at a CAGR of 13.7%, and with only 10% of Indian households owning a car in 2009 (whereas this figure reaches 80% in Switzerland for example) this progression is unlikely to stop in the coming decade. Congestion of Indian roads, more than market demand, will likely be the limiting factor. SIAM is the apex industry body representing all the vehicle manufacturers, home-grown and international, in India.
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Industry Definition This class consists of units mainly engaged in manufacturing motor vehicles or motor vehicle engines. Products and Services The primary activities of this industry are: Motor cars manufacturing Motor vehicle engine manufacturing The major products and services in this industry are: Passenger motor vehicle manufacturing segment (Passenger Cars, Utility Vehicles & Multi Purpose Vehicles) Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles) Two Wheelers Three Wheelers
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Supply Chain of Automobile Industry The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. The orders of the industry arise from the bottom of the supply chain i.e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channeled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry. The description and the role of each of the contributors to the supply chain are discussed below. Third Tier Suppliers: These companies provide basic products like rubber, glass, steel, plastic and aluminium to the second tier suppliers. Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. They work on designs provided by the first tier suppliers or OEMs. They also provide engineering resources for detailed designs. Some of their services may include welding, fabrication, shearing, bending etc. First Tier Suppliers: These companies provide major systems directly to assemblers. These companies have global coverage to follow their customers to various locations around the world. They design and innovate to provide "black-box" solutions for the requirements of their customers. Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers. First tier suppliers are responsible not only for the assembly of parts into complete units like dashboard, breaks-axle-suspension, seats, or cockpit but also for the management of second-tier suppliers. Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After researching consumers' wants and needs, automakers begin designing models which are tailored to consumers' demands. The design process normally takes five years. These companies have manufacturing units where engines are manufactured and parts supplied by first tier suppliers 19
and second tier suppliers are assembled. Automakers are the key to the supply chain of the automotive industry. Examples of these companies are Tata Motors, Maruti Suzuki, Toyota, and Honda. Innovation, design capability and branding are the main focus of these companies. Dealers: Once the vehicles are ready they are shipped to the regional branch and from there, to the authorised dealers of the companies. The dealers then sell the vehicles to the end customers. Parts and Accessory: These companies provide products like tires, windshields, and air bags etc. to automakers and dealers or directly to customers. Service Providers: Some of the services to the customers include servicing of vehicles, repairing parts, or financing of vehicles. Many dealers provide these services but, customers can also choose to go to independent service providers.
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Key Statistics The production of automobiles has greatly increased in the last decade. It passed the 1 million mark during 2003-2004 and has more than doubled since. Million mark during 2003-2004 and has more than doubled since. YEAR Car Production% change commercial % change Total vehicle production% change 2010 2,814,584 29.39 722,199 54.86 3,536,783 33.89 2009 2,175,220 17.83 466,330 -4.1 2,641,550 13.25 2008 1,846,051 7.84 486,277 -9.99 2,332,328 3.35 2007 1,713,479 16.33 540,250 -1.2 2,253,999 10.39 2006 1,473,000 16.53 546,808 50.74 2,019,808 19.36 2005 1,264,000 7.27 362,755 9 1,628,755 7.22 2004 1,178,354 29.78 332,803 31.25 1,511,157 23.13 2003 907,968 28.98 253,555 32.86 1,161,523 22.96 2002 703,948 7.55 190,848 19.24 894796 8.96 2001 654,557 26.37 160,054 -43.52 814611 1.62 2000 517,957 -2.85 283,403 -0.58 801360 -2.1 1999 533,149 285,044 818193
Year 2004-05 2005-06 2006-07 2007-08 2008-09 Exports (Revenue) 1,915 2,231 2,552 3,008 3,718 Exports (Units) 629,544 806,222 1,011,529 1,238,333 1,530,660 Industry Revenue USD Million 24,379 26,969 30,507 32,383 33,342 Motor Vehicle Production 8,467,853 9,743,503 11,087,997 10,853,930 11,175,479
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Automobile Production Type of Vehicle 2005-06 2006-07 2007-08 2008-09 2009-10 Passenger Vehicles 1,209,876 1,309,300 1,545,223 1,777,583 1,838,697 Commercial Vehicles 353,703 391,083 519,982 549,006 417,126 Three Wheelers 374,445 434,423 556,126 500,660 501,030 Two Wheelers 6,529,829 7,608,697 8,466,666 8,026,681 8,418,626 Total 8,467,853 9,743,503 11,087,997 10,853,930 11,175,479
Product and service segmentation The automotive industry of India is categorised into passenger cars, two-wheelers, commercial vehicles and three-wheelers, with two-wheelers dominating the market. More than 75% of the vehicles sold are two-wheelers. Nearly 59% of these two-wheelers sold were motorcycles and about 12% were scooters. Mopeds occupy a small portion in the two-wheeler market however; electric two-wheelers are yet to penetrate. The passenger vehicles are further categorised into passenger cars, utility vehicles and multi- purpose vehicles. All sedan, hatchback, station wagon and sports cars fall under passenger cars. Tata Nano, is the world's cheapest passenger car, manufactured by Tata Motors - a leading automaker of India. Multi-purpose vehicles or people-carriers are similar in shape to a van and are taller than a sedan, hatchback or a station wagon, and are designed for maximum interior room. Utility vehicles are designed for specific tasks. The passenger vehicles manufacturing account for about 15% of the market in India. Commercial vehicles are categorised into heavy, medium and light. They account for about 5% of the market. Three-wheelers are categorised into passenger carriers and goods carriers. Three- wheelers account for about 4% of the market in India.
1.1 EXECUTIVE SUMMARY Introduction: Demographically and economically, Indias automotive industry is well-positioned for growth,servicing both domestic demand and, increasingly, export opportunities. A predicted increase in Indias working-agepopulation is likely to help stimulate the burgeoning market for private vehicles. Rising prosperity, easier access tofinance and increasing affordability is expected to see four-wheelers gaining volumes, although two wheelers willremain the primary choice for the majority of purchasers, buoyed by greater appetite from rural areas, the youthmarket and women.Domestically, some consolidation or alliances might be expected, driven by the need for access to bettertechnology, manufacturing facilities, service and distribution networks.The components sector is in a strongposition to cash-in on Indias cost- effectiveness, profitability and globally-recognized engineering capabilities. As thebenefits of collaborations become more apparent, super-specialists may emerge in which the automobile is treatedas a system, with each specialist focusing on a sub-system, akin to the IT industry. Though this approach is radical, itcould prove an important step in reducing complexity and investment requirements, while promotingstandardization and meeting customer demands. Manufacturers are already planning for the future: early advocates of technological and distribution alliances haveyielded generally positive results, enabling domestic OEMs to access global technology and experience, andpermitting them to grow their ranges with fewer financial risks.This exciting outlook for the industry is set against a backdrop of two potentially game- changing transportationtrends the gradual legislative move towards greener, gas-based public transport vehicles, and a greaterrequirement for urban mass mobility schemes to service rapidly- expanding cities. Green Revolution: In a price-conscious economy such as Indias, the shift towards green vehicles will be slow unless spurred bygovernment mandates. Although the major players are already equipped with the necessary capabilities to develop cleaner vehicles,they do not see much merit in commercializing these technologies until the green revolution gains momentum most likely throughchanges in political legislation and it achieves the market scale required for commercial viability. 26
Manufacturers are placing greater faith in dual-fuel technologies than in battery-powered alternatives because the necessary supportinfrastructure, such as recharge stations, is not yet in place for the widespread adoption of the latter. The launch of electric motorcyclescould have a significant impact on the market, given that motorcycles account for the majority of two-wheeler sales in India.Manufacturers of four-wheelers and commercial vehicles in particular stress the importance of optimizing conventional combustionengines before experimenting too radically with costly new technologies. Mobility Revolution: Use of public transport in India has waned as private vehicle ownership has boomed, but increasing strain on theroad infrastructure in major cities means public investment is likely in Urban Mass Mobility Schemes such as metro systems andbuses.The automotive industry is unlikely to lose much of its customer base in the near-term, even as these schemes become moreprevalent, because the socio-economic statement of car ownership will continue to make private vehicles desirable.At present there is a lack of clarity in the automotive industry over the role it will play in any mobility revolution. Although someindustry experts believe the impact of the mobility revolution will be minimal in the short-term, there may be opportunities formanufacturers to become involved with the public sector in areas such as improving links between different modes of transport. Conclusion: Current low car penetration, rising prosperity and the increasing affordability of private vehicles offera healthy prognosis for the Indian automotive industry.The companies benefiting most from this evolving landscapewill be those who forge judicious alliances and resource-sharing agreements, who prepare for the growingimportance of green technologies, and who remain flexible enough to respond to the twin needs of private lighttransport and mass transport schemes.
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1.2 OBJECTIVE OF STUDY
The main objective of this study is to study the consumer buying behavior regarding four wheeler industries.
To know which criteria consumer take in to consideration while purchasing cars.
To know which type of payment they prefer while purchasing car.
Consumer attitude towards the FOUR wheeler industry.
Assessing the main criteria to make FOUR wheeler more marketable.
To study the growth and expansion of four wheeler industry.
To study the structure and workings of automobile sector.
To understand the perception of customers towards various four wheelers.
To study the achievements of automobile sector.
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Chapter 2
Industry overview
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2.1Companies profiles
Maruti Suzuki India Limited
Type Public Traded as BSE: 532500 NSE: MARUTI BSE SENSEX Constituent Industry Automotive Predecessor(s) Maruti Udyog Limited Founded 1981 Headquarters New Delhi, India Key people RC Bhargava (Chairman) Kenichi Ayukawa (CEO & MD) Products Automobiles 30
Revenue 369.34 billion (US$6.8 billion) (2012) Net income 16.81 billion (US$310 million) (2012) Employees 6,903 (2011) Parent Suzuki Website www.marutisuzuki.com
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Type Public Traded as NSE: Tata Motors BSE: 500570 NYSE: TTM BSE SENSEX Constituent Industry Automotive Founded 1945 Founder(s) J.R.D. Tata Headquarters Mumbai, Maharashtra, India Area Served Worldwide Key People P.M. Telang, (M.D.) C. Ramakrishnan, (C.F.O.) Products Automobiles Commercial Vehicles Automotive parts Services Vehicle leasing Vehicle service Revenue US$ 27.629 billion (2011) Profit US$ 1.653 billion (2011) Total assets US$ 23.131 billion (2011) Total equity US$ 4.683 billion (2011) Employees 53,151 (2011) Parent Tata group 32
Subsidiaries Jaguar Land Rover TDCV TATA Hispano Website www.tatamotors.com
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Hyundai
Former type Chaebol Industry Conglomerate Fate Broken up Founded 1947 Founder(s) Chung Ju-yung Defunct 2003 Headquarters Seoul, South Korea Area served Worldwide Products Automobiles Heavy industry Finance and Insurance Construction Engineering Retail Aerospace Defense Steel 34
Type Public Traded as BSE: 500520 BSE SENSEX Constituent Industry Automotive Founded 1945 (Ludhiana) Headquarters Mumbai, Maharashtra, India Area served Worldwide Key people Anand Mahindra (MD) Products Automobiles, commercial vehicles, two-wheelers Revenue 598.53 billion (US$11 billion) (2012) Net income 31.26 billion (US$570 million) (2012) Total assets 483.50 billion (US$8.8 billion) (2012) Employees 15,147 (2012) 36
Parent Mahindra Group Subsidiaries Mahindra Two Wheelers limited Website Mahindra.com
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Volkswagen Volkswagen
Industry Automotive Founded 28 May 1937 (75 years) Founder(s) Ferdinand Porsche Headquarters Wolfsburg, Germany Area served Worldwide Key people Martin Winterkorn: Chairman of the Board of Management, Ferdinand Pich: Chairman of Volkswagen Supervisory Board Products Cars Production output 5,771,789 units (2012) Revenue 103.942 billion (2012) 38
Profit 3.64 billion (2012) Parent Volkswagen Group Website www.volkswagen.com
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Ford Ford Motor Company
Type Public company Traded as NYSE: F (S&P 500 Component) Industry Automotive Founded June 16, 1903 (109 years ago) Founder(s) Henry Ford Headquarters Dearborn, Michigan, U.S. Area served Worldwide Key people William C. Ford, Jr. (Executive Chairman) Alan R. Mulally (President & CEO) Products Automobiles Automotive parts Services Automotive finance 40
Vehicle leasing Vehicle service Revenue US$136.26 billion (2011) Operating income US$8.681 billion (2011) Net income US$20.21 billion (2011) Total assets US$178.35 billion (2011) Total equity US$15.07 billion (2011) Employees 164,000 (2011) Divisions Ford Lincoln Motorcraft Subsidiaries List Website Ford.com
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2.2 History
Maruti Suzuki Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto keicarwhich at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan. The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually. Its manufacturing facilities are located at two facilitiesGurgaon and Manesar in Haryana, south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually. About 35% of all cars sold in India are made by Maruti. The company is 54.2% owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India. During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 15 models, Maruti 800, Alto, Maruti Alto 800, WagonR, Estilo, A-star, Ritz,Swift, SwiftDZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi and the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built 42
units(CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant. The company is believed to be moving towards introduction of a new version of Maruti 800 by November 2012, which will be more fuel efficient, though slightly costlier than Alto and existing Maruti 800 The Suzuki Motor Corporation, Maruti's main stakeholder, is a global leader in mini and compact cars for three decades. Suzukis strategy is to utilize light-weight, compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific. Maruti Suzuki will be introducing new 800 cc model by Diwali in 2012.The model is supposed to be fuel efficient, hence more expensive.
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Tata Motors Limited is India's largest automobile company, with consolidated revenues of INR 1,23,133 crores (USD 27 billion) in 2010-11. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. It is the world's fourth largest truck and bus manufacturer. The company's over 25,000 employees are guided by the vision to be ''best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics.'' Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 6.5 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company's dealership, sales, services and spare parts network comprises over 3,500 touch points; Tata Motors also distributes and markets Fiat branded cars in India. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, Spain and South Africa. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. JLR supports two state of the art engineering and design facilities and three manufacturing plants (Solihull, Castle Bromwich & Halewood) in the UK. In 2004, Tata Motors acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and 44
subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors (SA) (Proprietary) Ltd., Tata Motors' joint venture with Tata Africa Holding (Pty) Ltd., has its assembly plant in South Africa at Rosslyn, north of Pretoria, in the Gauteng province of South Africa. The plant can assemble, from semi knocked down (SKD) kits, light, medium and heavy commercial vehicles ranging from 4 - 50 tonnes. Tata Motors is also expanding its international footprint, established through exports since 1961. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia, CIS, Russia and South America. It has franchisee/joint venture assembly operations in Bangladesh, Ukraine, and Senegal. The foundation of the company's growth over the last 65 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. With over 4,500 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile 45
industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. Designed with a family in mind, it has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Its mono-volume design will set a new benchmark among small cars. Its safety performance exceeds regulatory requirements in India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being manufactured in India today. The lean design strategy has helped minimise weight, which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint. In May 2009, Tata Motors ushered in a new era in the Indian automobile industry, in keeping with its pioneering tradition, by unveiling its new range of world standard trucks called Prima. In their power, speed, carrying capacity, operating economy and trims, they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost. In October 2010, Tata Motors launched the Tata Aria, the first Indian four-wheel drive crossover. The Tata Aria redefines several benchmarks with its design and technologies, offering class leading features that take comfort and safety to a new height. Tata Motors is equally focussed on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation.Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. 46
Tata Motors is committed to improving the quality of life of communities by working on four thrust areas employability, education, health and environment. The activities touch the lives of more than a million citizens. The company's support on education and employability is focused on youth and women. They range from schools to technical education institutes to actual facilitation of income generation. In health, our intervention is in both preventive and curative health care. The goal of environment protection is achieved through tree plantation, conserving water and creating new water bodies and, last but not the least, by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care.With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.
HYUNDAI Hyundai was founded as a small construction firm by Chung Ju-yung in 1947. Hyundai Construction began operating outside of South Korea in 1965, initially entering the markets of Guam, Thailand and Vietnam. Hyundai Motor Company was founded in 1967. Hyundai Heavy Industries was founded in 1973, and completed the construction of its first ships in June 1974. In 1983 Hyundai entered the semiconductor industry through the establishment of Hyundai Electronics (renamed Hynix in 2001). Hyundai announced a major management restructuring in December 1995, affecting 404 executives. In April 1999 Hyundai announced a major corporate restructuring, involving a two-thirds reduction of the number of business units and a plan to break up the group into five independent business groups by 2003.
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Mahindra Mahindra & Mahindra was set up as a steel trading company in 1945. It eventually saw business opportunity in expanding into manufacturing and selling larger MUVs, starting with assembly under licence of the Willys Jeep in India. Soon established as the Jeep manufacturers of India, the company later commenced upon the task of expanding itself, choosing to utillise the manufacturing industry of light commercial vehicles (LCVs) and agricultural tractors. Today, Mahindra & Mahindra is a key game player in the utility vehicle manufacturing and branding sectors in the Indian automobile industry with its flagship UV Scorpio and swiftly exploits India's growing global market presence in both the automotive and farming industries to push its products in other countries. Over the past few years, the company has taken interest in new industries and in foreign markets. They entered the two-wheeler industry by taking over Kinetic Motors in India. M&M also has controlling stake in REVA Electric Car Company and acquired South Korea's SsangYong Motor Company in 2011. The US based Reputation Institute once ranked Mahindra amongst the top Ten Indian companies in its 'Global 200: The World's Best Corporate Reputations' list.
Volkswagen 193745: People's Car project becomes Kbelwagen
From 1948, Volkswagen became a very important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff (18991968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was 48
recruited to run the factory in 1948. In 1949 Major Hirst left association with the company, as it had now been re-formed as a trust, controlled by the West German government, and the government of the State of Lower Saxony. Apart from the introduction of the Volkswagen Type 2 commercial vehicle (van, pick-up and camper), and the VW KarmannGhia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968. Volkswagens were first exhibited and sold in the United States in 1949, but sold only two units in America that first year. On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to standardise sales and service in the United States. Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955.
Volkswagen began introducing an array of new models after Bernd Pischetsrieder became Volkswagen Group CEO (responsible for all Group brands) in 2002. The sixth-generation VW Golf was launched in 2008, came runner-up to the Opel/Vauxhall Insignia in the 2009 European Car of the Year, and has spawned several cousins: VW Jetta, VW Scirocco, SEAT Len, SEAT Toledo, koda Octavia and Audi A3 hatchback ranges, as well as a new mini-MPV, the SEAT Altea. The GTI, a "hot hatchback" performance version of the Golf, boasts a 2.0 L Turbocharged Fuel Stratified Injection (FSI)direct injection engine. VW began marketing the Golf under the Rabbit name once again in the U.S. and Canada in June 2006. (The GTI had arrived to North America four months earlier). The fifth-generation Jetta, and the performance version, the GLI, are also available in the United States and Canada. The sixth- generation Passat and the fifth-generation Jetta both debuted in 2005, and VW has announced plans to expand its lineup further by bringing back the Scirocco by 2008. Other models in Wolfgang Bernhard's (Volkswagen brand CEO) "product offensive" include the Tiguan mid- sized SUV in 2008 and a Passat Coup. In November 2006 Bernd Pischetsrieder announced his resignation as Volkswagen Group CEO, and was replaced by Audiworldwide CEO Martin Winterkorn at the beginning of 2007. Winterkorn is credited with making Audi a challenger to the dominance of BMW and Mercedes, and his design-led strategy has led to Audi being considered one of the most important brands in the world. Nevertheless, Volkswagen continues 49
to have complicated relations with both unions and shareholders. The German state of Lower Saxony owns 20% of the stock.
Ford Henry Ford's first attempt at a car company under his own name was the Henry Ford Company on November 3, 1901, which became the Cadillac Motor Company on August 22, 1902, after Ford left with the rights to his name. The Ford Motor Company was launched in a converted factory in 1903 with $28,000 in cash from twelve investors, most notably John and Horace Dodge (who would later found their own car company). During its early years, the company produced just a few cars a day at its factory on Mack Avenue in Detroit, Michigan. Groups of two or three men worked on each car, assembling it from parts made mostly by supplier companies contracting for Ford. Within a decade the company would lead the world in the expansion and refinement of the assembly line concept; and Ford soon brought much of the part production in-house in a vertical integration that seemed a better path for the era. By 2005, both Ford and GM's corporate bonds had been downgraded to junk status, as a result of high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding market share, and an over dependence on declining SUV sales. Profit margins decreased on large vehicles due to increased "incentives" (in the form of rebates or low interest financing) to offset declining demand. In the latter half of 2005, Chairman Bill Ford asked newly appointed Ford Americas Division President Mark Fields to develop a plan to return the company to profitability. Fields previewed the Plan, named The Way Forward, at the December 7, 2005 board meeting of the company and it was unveiled to the public on January 23, 2006. "The Way Forward" included resizing the company to match market realities, dropping some unprofitable and inefficient models, consolidating production lines, closing 14 factories and cutting 30,000 jobs. Ford moved to introduce a range of new vehicles, including "Crossover SUVs" built on unibody car platforms, rather than more body-on-frame chassis. In developing the hybrid electric powertrain technologies for the Ford Escape Hybrid SUV, Ford licensed similar Toyota hybrid technologies to avoid patent infringements. [16] Ford announced that it will team up with 50
electricity supply company Southern California Edison (SCE) to examine the future of plug-in hybridsin terms of how home and vehicle energy systems will work with the electrical grid. Under the multi-million-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings", according to Ford
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2.3 A complete overview of four wheeler industry BIRTH OF THE CAR In 1769 the very first self-propelled car was built when Nicolas Cugnot, a French military engineer designed a steam powered road-vehicle. The vehicle was built at the Paris Arsenal, and was used by the French Army to move cannons. It had three wheels with the engine in the front along with the boiler. While Cugnot's 'car' was capable of attaining speeds of upto 6 kms/hour, it was far too heavy and slow to be of practical use.
In 1771 he again designed another steam-driven engine that ran so fast that it rammed into a wall, recording the worlds first accident.
In 1807 Francois Isaac de Rivaz designed the first internal combustion engine. He to develop the worlds first vehicle to run on such an engine, one that used a mixture of hydrogen and oxygen to generate energy, subsequently used this. This spawned the birth of a number of designs based on the internal combustion engine in the early nineteenth century with little or no degree of commercial success. In 1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas driven engine. In 1862 he again built an experimental vehicle driven by his gas-engine, which ran at a speed of 3 kms/hour. These cars became popular and by 1865 could be frequently espied on the roads. The next major leap forward occurred in 1876 when the four-stroke engine was devised. GottilebDamlier and Nicolas Otto worked together on the mission till they fell apart. Daimler created his own engines that he used both for cars and for the first four wheel horseless carriage. In the meanwhile, unknown to them, Karl Benz, was in the process of creating his own advanced tri-cycle, which proved to be the first true car. 52
After all this experiments we can say that the complete car was birth only in 1885 that the first real car rolled down on to the streets. The earlier attempts, though successful, were steam-powered road-vehicles. The season of experiments continued across the seas in the United States where Henry Ford began work on a horseless carriage in 1890. He went several steps forward and in 1896, completed his first car, the Quadricycle in 1896. This was an automobile powered by a two- cylinder gasoline engine. The Ford Motor Company was launched in 1903 and in 1908 he catapulted his vehicle, Model T Ford to the pinnacle of fame. Continuing with his innovations, he produced this model on a moving assembly line, thus introducing the modern mass production techniques of the automobile industry. The modern car therefore comes from a long list of venerated associates, and its heredity will, hopefully.
BEGINNING OF CAR IN INDIA
From the singsong rhythm of the bullock cart to the jet-age, India has traveled a long way. An average Indians dream car may not be the design Honda or the stately limousine, but he sure can dream, and afford, the Maruti now. It was in 1898 that the first motorcar rode down Indias roads. From then till the First World War, about 4,000 cars were directly imported to India from foreign manufacturers. The growing demand for these cars established the inherent requirements of the Indian market that these merchants were quick to pounce upon. The Hindustan Motors (HM) was set up in 1942 and in 1944, Premier Autobackmobile (PAL) was established to manufacture automobiles in India. However, it was PAL who produced 53
the first car in India in 1946, as HM concentrated on auto components and could produce their first car only in 1949. It was left to another company, Mahindra and Mahindra (M&M) to manufacture utility vehicles, namely the American Jeep. In the 50s, the Government of India granted approval to only 7 car dealers to operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco. he protectionist policies continued to remain in place. The 60s witnessed the establishment of the two-three wheeler industry in India and in the 70s, things remained much the same.
EVENTS AND MILESTONES A behind- the- scenes look into the making of one of India's most vibrant industries. The landmarks along the way... 1928- The first imported car was seen on Indian roads 1942- Hindustan Motors incorporated 1944- Premier automobiles started 1948- First car manufactured in India 1953- The Government of India decreed that only those firms which have a manufacturing program should be allowed to operate 1955- Only seven firms, namely, HM, API, ALL, SMPIL, PAL, M& M and TELCO received approval. 1960 - 1970 - The two, three wheeler industry established a foothold in the Indian scenario. 1970 - 1980 - Not much change was witnessed during this period. The major factors affecting the industry were the implementation of the MRTP Act( Monopolies and Trade Restrictive Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973 and 1979. 54
1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the liberalization of the Government's protectionist policies, the advantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear. This period is also marked by the entry of a large number of firms in the market. 4 Japanese manufacturers entered the Commercial Vehicle and Two- Wheeler market. The Government agreed to the demand for allowing foreign collaboration in the automobile sector The industry witnessed a resurgence due to major policy changes like relaxation in MRTP and FERA, delicensing of some ancillary products, broad banding of the products and modification in the licensing policy. Also, the concessions it gave to the private sector and the new foreign collaboration policy, all resulted in higher growth and better performance of the industry than in the earlier decades. The Government of India tied up with Suzuki Inc. of Japan which produced India's most successful car- the Maruti. 1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed with, and the automobile industries were allowed to expand freely. 1993 - With the winds of liberalization sweeping the Indian car market, many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into the Indian car market. 1997 - The National Highway Policy was announced which will hopefully have a positive impact on the automobile industry. The Government also laid down the emission standards to be met by car manufacturers in India in the coming millennium. There were two successively stringent emission levels to be met by April 2000 and April 2005, respectively. These norms were benchmarked on the basis of those already adopted in Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region(NCR) of Delhi. The deadline was later extended to 1st June, 1999. 55
Chapter 3 Research Methodology
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Research Methodology Meaning of Research A broad definition of research is given by Martin Shuttleworth - "In the broadest sense of the word, the definition of research includes any gathering of data, information and facts for the advancement of knowledge." Another definition of research is given by Creswell who states - "Research is a process of steps used to collect and analyze information to increase our understanding of a topic or issue". It consists of three steps: Pose a question, collect data to answer the question, and present an answer to the question. The Merriam-Webster Online Dictionary defines research in more detail as "a studious inquiry or examination; especially : investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws". Objectives of Research:- 1. Gaining Knowledge 2. Explanation 3. Prediction 4. Understanding of Subject 5. Evaluation & Control
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Research Methodology Research methodology is a way to systematically solve the research problem. It may understand as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods or techniques but also the methodology. Data Sources: -The data can be collected from two sources, i.e. primary & secondary. I have collected some of the data of this project on FOUR WHEELER INDUSTRY from secondary sources and some of the data is collected from primary sources. The mode of collection of data can be survey method (QUESTIONNAIRE) is used in this project. Research methodology involves the following research process- Step 1: Problem Definition The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly. Step 2: Development of an Approach to the Problem Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with 58
management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations. Step 3: Research Design Formulation A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study. More formally, formulating the research design involves the following steps- 1. Secondary data analysis 2. Qualitative research 3. Methods of collecting quantitative data (survey, observation, and experimentation) 4. Definition of the information needed 5. Measurement and scaling procedures 6. Questionnaire design 7. Sampling process and sample size 8. Plan of data analysis Step 4: Field Work or Data Collection Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with prerecruited households). Proper selection, training, supervision, and evaluation of the field force helps minimize data-collection errors.
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Step 5: Data Preparation and Analysis Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or input directly into the computer. Verification ensures that the data from the original questionnaires have been accurately transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected. Univariate techniques are used for analyzing data when there is a single measurement of each element or unit in the sample, or, if there are several measurements of each element, each RCH variable is analyzed in isolation. On the other hand, multivariate techniques are used for analyzing data when there are two or more measurements on each element and the variables are analyzed simultaneously. Step 6: Report Preparation and Presentation The entire project should be documented in a written report which addresses the specific research questions identified, describes the approach, the research design, data collection, and data analysis procedures adopted, and present the results and the major findings. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. In addition, an oral presentation should be made to management using tables, figures, and graphs to enhance clarity and impact. For these reasons, interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature, where it is relatively easy to identify and approach the experts. This method is also helpful in situations where little information is available from other sources, as in the case of radically new products.
Data analysis For finding the result of Marketing Strategy in purchase of car we have to go through the customers perception and attitude. As for example age group, house holds annual income and purchase. These things focus the Marketing Mix. Then we have to go in details of all factors of coaster of Marketing Strategy as family, gender, geographic location, social, cultural, income age, sex etc. consumer behaviour are quite different their prepurchase, purchase decision and post purchase behaviour. For different product consumer behaves in different way. For buying the small car consumer prefer look robustness, Mileage and comfortable. Brand image of the products is very important. Finding through the consumer survey through questionnaire as follows. Approximately 60% user is between the age group of 18 to 25, then 25-35. Thus mostly the young prefer to ride the car generation.
Most of the customer are in the annual income group 60,000 to 1 lakh. It means high income group mostly preferred four wheeler.
Most of the customer between the age group of 25 to 35 use car office going purpose and 18 to 25 for college going or maintain their friend circle.
Brand of the product most affects the behavior of the consumer.
Customer known about the brand mostly through T.V. and word of month.
Price a not effect the consumer it the quality, availability and after sales Services are good.
In case of decision making friends, parents players an important role.
Consumer buying decision affected by physical feature and technological feature of the small cars.
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1. Using four wheeler according to age group
Age group Percentage (%) 14-18
17 18-25 23 25 to 35 28 above 35 32
Age group 14-18 18-25 25 to 35 above 35 64
2. Using four wheeler according to family size
Family size Percentage (%) Single 13 2 to 3 27 3 to four 29 Above 4 31
Family size single 2 to 3 3 to four above 4 65
3. Using four wheeler according to household annual income
Household annual income
Percentage (%) Below 100000 8 100001 to 200000 20 200001 to 500000 31 Above 500001 41
Household annual income Below 100000 100001 to 200000 200001 to 500000 Above 500001 66
4. Which of following companys car do you have?
Company Percentage (%) Hyundai 22 Maruti Suzuki 38 TATA 18 Mahindra 14 Any other 8
Companys car Hyundai Maruti Suzuki TATA Mahindra Any other 67
5. For which purpose you purchase the car?
Purpose
Percentage (%) Commercial (Taxi) 32 Office going 38 Maintain friend circle 18 Other purpose 12
Purpose Commercial (Taxi) Office going Maintain friend circle Other purpose 68
6. How come you know about that brand?
Medium Percentage (%) T.V. 23 Newspaper 21 Dealer effort 17 World of mouth 12 Internet 21 Any other 6
T.V. Newspaper Dealer effort World of mouth Internet Any other 69
7. Influencer of your purchase
Influencer Percentage (%) Brand image of the product
33 Price
21 After sales service
12 Quality and feature of product
11 Easy availability
13 Money value
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Purchase influencer Brand image of the product Price After sales service Quality and feature of product Easy availability Money value 70
8. Which option you prefer when you purchase a car?
Mode of payment
Percentage (%) One time payment 29 Financial option 35 Exchange offer 25 Any other 11
Mode of payment One time payment Financial option Exchange offer Any other 71
9. Who was the decision maker in your purchase of car?
Conclusions Indias automobile industry is poised at the start of an exciting phase of growth, not all of which may derive from manufacturing conventional fuel-based vehicles. Various possibilities ranging from developing vehicles based on alternate fuels to collaborating with some-time rivals, have the potential to open fresh avenues for growth. In order to capitalize on the emerging scenarios in the future, the following are a few key action points for each of the industrys key stakeholders: Policy Makers
India has no duty benefits for even hybrid cars, which need to be imported due to low volumes. If Indias automobile industry wants to play a role in the global arena for alternative fuel based vehicles, such limiting measures need to be reexamined and an appropriate redesign of the framework needs to be enacted immediately
While global companies are pursuing innovations in third and fourth generation biofuels, India is yet to decide on a purchase price for the fuel. Such a delay in key policy decisions, which have the potential to unlock innovation, need to be remedied based on the recommendations of industry associations/participants
Demand for nascent technologies and fuel efficient cars needs to be encouraged by offering consumers incentives to adopt these products, such as an expansion of the policy of little or no duty being payable on electric vehicle parts. This can in turn spur innovation for better products. Likewise, manufacturers could be encouraged to commercialize their green technologies, which are currently expensive and under-utilized by the market, by being offered subsidies where appropriate
Increase dialogue with manufacturers and oil marketing companies to establish a better infrastructure for greener vehicles. The government should consider finalizing a short, mid and long-term blueprint for the development of this infrastructure, encompassing elements such as battery recharge stations or CNG pumps, through public-private partnerships
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The government should stimulate debate on how the public and private sectors can collaborate on the establishment of Urban Mass Mobility Schemes. Manufacturers could become key players in terms of developing new technologies, or inter-system mobility.
Industry Participants
The market for greener vehicles opens up a whole new world of possibilities for Indian companies, even outside the automobile sector (such as leaders in renewable energy), to make a global foray.
A greater focus on export opportunities could tap into a worldwide market hungry for green technology, which India can provide cost-effectively and to global standards. Business models of global green vehicle manufacturers should be examined to see how mass market penetration can be enhanced.. Collaboration is likely to be the theme for the next decade as new markets and products are created by companies forging previously unimagined partnerships. Companies will need to think beyond existing business models Concentrations of resources an technical ingenuities may be vital to generate workable economies of scale. There may be merit in greater specializations, such as that witnessed in the IT industry, to simplify processes and reduce investment need.
Across all vehicle types, under-served demographics such as young people, women and rural customers could be targeted by making greater overtures to these markets and by improving distribution networks
Better links should be forged with support industries such as battery manufacturers to help drive down costs of making and maintaining green vehicles.
Manufacturers should form a greater consensus than exists at present on the most appropriate focus for emerging green technologies. The industry is slightly fragmented currently, with numerous options being explored ranging from battery power to hybrid fuels, from biodiesel to LPG. 82
Recommendations Study is not complete without suggestions. Some suggestion is as follows.
The company should try to give more & more after sales services because it may be helps to improve sales.
The company should introduce various promotion schemes for brand building.
According to my view, every Automobiles should give more advertisement in local news paper like a magazine because majority person read local newspaper then magazine.
Many respondents said that every Automobile have to appoint respected & responsible person who can complete work on time.
In todays competitive market company should analyze strategy of rival company before making our strategy.
The first recommendation is obviously about the customer care. Presently the company has a customer relation department but it has to be made stronger and more service provider to help the customers.
The distribution network should be made stronger so that the customers dont feel dissatisfied for services, sales, and stocks.
This is a age of customer delight and the company should not forget that customer is the king
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Everywhere there is a game of production and volumes, the company that produces more can save more and prices could be made more competitively
The company should always go for quality
The R & D base should be made stronger as the level of indigestion should come down.
After doing market research I would like to suggest or recommend to the Companys that there are certain outcomes of research, which followed through the formal and informal procedure during the research. Thus we are bound to draw the attention of Company to certain points which are ought to be perceived by the Company with full care.
Publicity and advertisement should be broad, because competition is more.
Size and weight of car should be match with their C.C.
Companies should follow worldwide strategies for increasing their global revenue.
Car should have stepping facility. Which may help during critical situation
Company should provide promotional schemes to the customers.
All the protective parts of wheels should make of plastic and leg guard also be strong.
Now Company is required to recover the faith of customers towards the brand image.
Companies should improve the mileage of the Bikes.
Prices of the car must be set as it can be approved by major part of the population.
Fuel tank portion can be changed. 84
Limitations Every study has certain limitations. In my survey I found some limitations are as follows:
The research was conducted in a very small area.
The customer filled the questionnaire mostly in careless manner, so it was difficult to make them hold for time.
We had only found the upper-middle class family to fill up the questionnaire, but generally, an average middle class family was required for the study.
The sample size is also very small which represent my research on consumer behavior
Time was limited.
Material on internet is very limited.
Some customers were in hurry so they were not given proper opinion.
Foreign data is not available on the net.
Cars are exporting to very limited country
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Chapter 6 Bibliography
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Bibliography
Books & Magazines
Kothari, C.R, "Research Methodology" Wishwa Prakashan, Delhi, 2004 Sawyer, A.G and Howard, David J, Journal of Marketing Research 1999 Business World and Business India Magazine Auto India Magazine For Two and Four Wheeler
Four wheeler is a luxury it has become the necessity in 21st century. I would like take few minutes of your precious time, Just to know about your views for different cars. I assure you that your information will be confidential and it would not be share by other organization.
Name: .. Gender: Occupation:
1. Which of the following best describe your age group? a) 14-18 b) 18-25 c) 25 to 35 d) above 35
2. What is the size of your family (Including children)? a) Single b) 2 to 3 c) 3-4 d) above 4
3. Which of the following best identifies your house hold annual income? a) Below 100000 b) 100001 to 200000 c) 200001 to 500000 d) Above 500001
4. Which of following companys car do you have? a) Hyundai b) Maruti Suzuki c) TATA d) Mahindra e) Any other
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5. For which purpose you purchase the car? a) Commercial (Taxi) b) Office going c) Maintain friend circle d) Other purpose
6. How come you know about that brand? (Can make more than one) a) T.V. b) Newspaper c) Dealer effort d) World of mouth e) Internet f) Any other
7. Rank the following in order of influence you purchase a car? (1-6, max. 1 least. 6) a) Brand image of the product [ ] b) Price [ ] c) After sales service [ ] d) Quality and feature of product [ ] e) Easy availability [ ] f) Money value [ ]
8. Which option you prefer when you purchase a car? a) One time payment b) Financial option c) Exchange offer d) Any other.
9. Who was the decision maker in your purchase of car? a) Parents b) Friends c) Yourself d) Spouse e) Other
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10. Which physical features contributed most in your buying decision? a) Looks b) Body build c) Style d) Robustness e) Price
11. What technological feature effected in your buying decision? a) Power economy mode b) Mileage c) Security features d) Any other
12. From where did you purchase your car? a) Authorized outlet b) Near by dealer c) Online d) Any other
13. How much you satisfied with the after sales service of four wheeler companies? a) Highly dissatisfied b) Dissatisfied c) Neither Satisfied nor Dissatisfied d) Satisfied e) Highly satisfied
14. Are you satisfied with your decision? a) Highly satisfied b) Satisfied c) Neither satisfied nor dissatisfied d) Dissatisfied
15. Which companys car do you prefer for buying in future and why? a) Hyundai b) Maruti Suzuki c) TATA d) Mahindra e) Any other 91