A PROJECT REPORT

ON

In partial fulfillment of
Integrated Master of Business Administration

Submitted By-
Sandeep Khalkho
CUJ/I/2015/IMBA/29
Semester VI

Under the supervision of

Assistant Professor
Centre for Business Administration
Central University of Jharkhand, Ranchi
 DECLARATION
I, Sandeep Khalkho, undersigned, the student of IMBA declare that the project report is my
own and has been carried out under the guidance and supervision of Dr

Assistant Professor, Centre for Business Administration, Central University

Of Jharkhand, Brambe, Ranchi.

This report documents the work done during the academic session 2014-2019.
This report shall give an overview of the task completed with all the details.

I have tried my best to keep the report simple yet correct. I hope I succeed in my attempt.

Sandeep Khalkho
 ACKNOWLEDGEMENT
Every project big or small is successful largely due to the effort of a number of wonderful
people who have always given their valuable advice or lent a helping hand. I sincerely
appreciate the inspiration, support and guidance of all those people who have been
instrumental in making this project a success.

I, Sandeep khalkho, student of Central University of Jharkhand (Centre for Business

Administration), am extremely grateful to Dr. ( ), Assistant Professor, Central
University of Jharkhand for the confidence bestowed in me and helping in my project
report entitled “(tital)”with special reference to (co.name).

I would like to express my gratitude to Prof. Ashoke Kumar Sarkar, Dean, School of
Management Sciences and Head, Centre for Business Administration for the guidance,
support and mentoring provided during our Integrated MBA Program.

At this juncture, I place a deep sense of gratitude to my faculty, other team members and
friends who have been constant source of inspiration and help during the preparation of this
project.
 TABLE OF CONTENTS

Page No.

i
Acknowledgement ii
Table of contents
CHAPTER 1. EXECUTIVE SUMMARY 1

CHAPTER 2. OBJECTIVES OF THE REPORT 2

CHAPTER 3. INTRODUCTION 3
 EXECUTIVE SUMMARY
The present study deals with the analysis of financial performance of Selected companies of
automobile industry in India, which are based on the segment that the companies which
produce both passenger cars and commercial vehicles. This study is examined financial
performance of selected companies of automobile industry in India industry in
India.Automobile industry is become one of the important industry of the economy.
Automotive Industry, globally, as well in India, is one of the key sectors of the economy. Due
to its deep forward and backward linkages with several key segments of the economy,
automotive industry has a strong multiplier effect and acts as one of the drivers of economic
growth. The well-developed Indian automotive industry produces a wide variety of vehicles:
passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as
jeeps, scooters, motor-cycles, mopeds, three wheelers, tractors and other agricultural
equipments etc. The sector has tremendous potential for providing employment. It has close
linkages with the other part of the economy and with the strong multiplying effect. The
Indian Automobile industry includes two - wheelers, trucks, cars, buses and three – wheelers
which play a vital role in development of the Indian economy. One of the major industrial
sectors in India is the automobile sector. Subsequent to the liberalization, the automobile
sector has been rightly described as the sunrise sector of the Indian economy as this sector
has witnessed tremendous growth.

For study of financial performance of selected companies of Indian Automobile Industry five
Companies of automobile industry have beenselected. The present study covers the period of
Eleven (11) years spanning from the year 2002-03 to 2012-13. Using various techniques
such as ratio analysishas made analysis of selected units.The Financial performance of
selected companies of Indian Automobile Industry is analyzed on the basis of Profitability
analysis, financial structure analysis, Activity analysis and Liquidity analysis.This study is
based on financial statements of companies, which is secondary data. Data are collected from
annual reports of the selected companies. Further information obtained from Society of
Indian automobile manufacturers (SIAM), Magazines,
 OBJECTIVES OF THE REPORT
This project has been carried out to understand the (----------------------) with special reference
to (____). The main aim of this project is to identify and satisfy certain objectives which are
as follows:

 To study the SWOT Analysis and BCG Matrix of Toyota

 To make a Comparative Analysis
 To study the New Product Strategy of Toyota
 To analyse its
 INTRODUCTION
Automotive industry, all those companies and activities involved in the manufacture of
motor vehicles, including most components, such as engines and bodies, but excluding tires,
batteries, and fuel. The industry’s principal products are passenger automobiles and light
trucks, including pickups, vans, and sport utility vehicles. Commercial vehicles (i.e., delivery
trucks and large transport trucks, often called semis), though important to the industry, are
secondary. The design of modern automotive vehicles is discussed in the
articles automobile, truck, bus, and motorcycle; automotive engines are described in gasoline
engineand diesel engine. The development of the automobile is covered in transportation,
history of: The rise of the automobile.

The history of the automobile industry, though brief compared with that of many other
industries, has exceptional interest because of its effects on 20th-century history. Although
the automobile originated in Europe in the late 19th century, the United States completely
dominated the world industry for the first half of the 20th century through the invention
of mass production techniques. In the second half of the century the situation altered sharply
as western European countries and Japan became major producers and exporters.
 History
The automobile was first invented and perfected in Germany and France in the late 1800s,
though Americans quickly came to dominate the automotive industry in the first half of the
twentieth century. Henry Ford innovated mass-production techniques that became standard,
and Ford, General Motors and Chrysler emerged as the “Big Three” auto companies by the
1920s. Manufacturers funneled their resources to the military during World War II, and
afterward automobile production in Europe and Japan soared to meet growing demand. Once
vital to the expansion of American urban centers, the industry had become a shared global
enterprise with the rise of Japan as the leading automaker by 1980 .

Although the automobile was to have its greatest social and economic impact in the United
States, it was initially perfected in Germany and France toward the end of the nineteenth
century by such men as Gottlieb Daimler, Karl Benz, Nicolaus Otto and Emile Levassor

Before 1900: The Auto Industry Begins

Prior to 1900, the automobile was really a novelty item, not yet a major force that represented
an industry. While many developments contributed to the birth of the modern automobile,
most automotive history buffs and the Library of Congress credit German inventor Karl Benz
with creating the first modern automobile. The three-wheeled "Motorwagen," first created by
Benz in 1886, became the first production automobile. Benz made several improvements in
the Motorwagen, which eventually featured four wheels, a fuel tank, and rear brakes.

1900s: Cars Are Marketed to the Average Family

During the first few years of the twentieth century, automobiles had a fairly limited audience.
Because they were expensive and time consuming to produce, most cars were too costly for
the general public. However, Colorado State Universityreports that between 1904 and 1908,
241 different firms began producing cars aimed at the American consumer. In 1908, Ford
Motor Company created the Model T, the first car aggressively marketed to the average
family. By widening the sales base for the automobile, Ford did a great deal to create an
industry for cars and car products.

1910s: The Assembly Line Lowers Car Prices

The Model T, which was originally built individually, was the first car to be mass-produces
on the assembly line. When Henry Ford invented the assembly line in 1913, he was able to
make the Model T even more affordable and accessible. By 1918, Bryant University reports
that half of American car consumers owned Model Ts. Meanwhile, William C. Durant
established General Motors in 1908, combining Buick, Oakland, and Oldsmobile. Later, he
added Cadillac and Chevrolet. The Dodge brothers, both bicycle builders, created the four-
cylinder Dodge Model 30 in 1914.

1920s: The Automobile Takes Off

The roaring 20s were a time of great growth for the auto industry, as more and more
consumers bought their first car. The Chrysler Corporation was started in 1925, and many
other small car companies began during this decade. By 1929, the year of the stock market
crash that began the Great Depression, car companies were producing and selling 5.3 million
vehicles a year according to the University of Michigan.

1930s: Sales Slow During the Depression

The Great Depression hit the car industry hard, according to the GM Heritage Center. Many
automotive historians estimate that up to half of all car companies failed during the 1930s. At
the start of the Great Depression, car companies were mostly small and specialized. By the
end of the decade, they had been consolidated into larger, stronger corporations. There was
less specialization, but the "Big Three" emerged as an important force. The Great Depression
was also an important time for organized labor. Auto companies were laying off workers, and
there were increased demands on the workers who remained employed. Amid these tensions,
organizers created the United Auto Workers Union (UAW) in 1935. The union would play a
major role in the auto industry from that time onward

1940s: Auto Industry Changes During World War II

World War II helped the American economy emerge from the Great Depression, and
prompted growth in the auto industry. According to 1940s.org, the government shut down all
the major car factories in 1942 and converted existing stock for use by the armed services.
Consumers could buy cars, which were heavily rationed, if they could demonstrate significant
need. During the period when new vehicle production was frozen, many companies began to
create vehicles for the armed forces, leading to great technological advancements.

1950s: Freeways Mean More Cars for Americans

After the end of World War II, Americans began a great love affair with the automobile. The
freeway network, first begun in the 1920s, grew dramatically during the 1950s. Cars were a
permanent part of the American way of life. According to PBS, the 1950s saw cars with
innovative new technologies and rocket-inspired designs. The American public was buying
more cars than ever before.

1960s: Carmakers Focus on Safety

In the 1960s, the auto industry focused on making safer vehicles that could meet the needs of
the modern consumer according to Bryant University. In 1964, Studebaker-Packard was the
first company to introduce seat belts as standard equipment on all of its vehicles. In addition
to safety, car buyers of this era expected vehicles to be powerful and spacious, and fuel
economy was not a major concern.

1970s: Oil Crisis Forces Temporarily Improved Fuel Economy

In the 1970s, a major oil crisis forced automakers to create vehicles that were more fuel-
efficient. According to Live Science, 20 percent of gas stations in 1974 had no gas to sell to
consumers. This focus on gas mileage wouldn't last long, however. When the oil embargo
ended, carmakers returned to producing fast, powerful vehicles.

1980s and Beyond: Car Production Goes Global

After the 1980s, the most significant impact of the growth of the global auto industry was the
influence of globalization. The high demand for vehicles, combined with the low cost of
skilled workers in countries like China and India, led to a situation where manufacturers in
those countries could produce cars at a fraction of the cost of unionized U.S. manufacturers.
Recent Auto Industry History
During the first few years of the new millennium, car companies catered to consumers who
expected powerful vehicles. The sport utility vehicle (SUV) was king, and it was easy for
consumers to obtain credit to purchase one of these expensive automobiles. However, in
2008, a major economic downturn prompted banks to tighten financing requirements. Fewer
people could afford to buy an expensive vehicle. At the same time, fuel became more
expensive. In the summer of 2008, record fuel prices caused many consumers to sell their
large vehicles and buy smaller, more efficient cars. Hybrids and gas-sipping compacts now
ruled the road. As the recession lifted, this focus on fuel efficiency and practicality remained.
This trend is expected to affect the auto industry in years to come.
 Milestone of automobile industry

Since arriving on the scene in the late 1800s, the automobile has come a long way. As know-
how and technology have improved, so has the automobile. From appearance to speed and
advanced capabilities, the vehicles of today are smart, more energy efficient, and constantly
evolving. These changes resulted in some of the biggest automotive manufacturing
milestones over the years. Here is a rundown of some of the most significant markers

The Detroit Automobile Factory

Around 1900, Ransom E. Olds brings an automobile manufacturing factory to Detroit,
producing his namesake car, the Oldsmobile. Production and sales were less than stellar, and
the company went bankrupt. However, this milestone marks the first automotive factory in a
place that later became known as the “Motor City.”

Ford’s Model T Hits the Scene

On October 1, 1908, Henry Ford debuted the first production Model T Ford at the company’s
Piquette Avenue plant in Detroit. Building a brand based on quality and affordability, the
Model T appealed to a wide range of American consumers. From 1908 to 1927 Ford built
some 15 million Model T cars making it the longest production run of any automobile model
in history until the Volkswagen Beetle surpassed it in 1972.

The Electric Starter

A cumbersome hand crank start-up process was improved upon with the electric starter,
developed by Charles Kettering and Henry M. Leland in 1911. This electric starter was made
small enough to fit under the hood of a car; quite an engineering feat. The starters were first
installed by Cadillac in production models in 1912.
 Automobile Assembly Line
The ability to make cars faster was another milestone, thanks to the first moving assembly
line by Ford Motor Company in 1913. The assembly line enabled Ford to crank out thousands
of cars in one year. Plus, the efficiency of the mass production assembly line made cars
affordable for more people.

Material of Construction

Around 1914, car bodies were made of steel versus wood. Automotive manufacturer, Dodge,
introduced their first vehicle to the market on November 14, 1914, which featured what was
then a real novelty – an all steel body. Today, steel is used for making most car bodies.

Automatic Transmission

In 1939, General Motors debuted “Hydra-Matic” – an automatic transmission using hydraulic

fluid, which allowed vehicle gears to shift automatically during vehicle operation. This
upgrade meant drivers could forego manual gear shifting. This introduction has remained one
of the most important innovations in the history of the automobile.

Air Conditioning
According to Automobile Magazine, in-car air conditioners came on the scene around 1940.
The Packard was the first car to have it, and by 1969 more than half the cars manufactured
included A/C units. Today, more than 99 percent of all new cars are air-conditioned.

Electronic Fuel Injection

1966 was the year of the electronic fuel injection system. This milestone meant better fuel
delivery to the car engine and improved engine efficiency and eliminated the need to pump
your accelerator or pull a choke knob to get fuel to the engine. The 1967 Volkswagen 1600
was the first car to sport the new technology from Bosch.

Seat Belts

Safety became a major focus in automobile manufacturing in 1968. Government standards

required car manufacturers to equip front seats with shoulder and lap seat belts and back seats
with lap belts. The shoulder and lap belts became standard in front and rear seats over time.

Airbags
The installation of airbags in cars became a manufacturing mandate for passenger cars due to
a 1991 law, according to History.com. While major automotive manufacturers added air bags
in the 1970s, the technology was improved and widely accepted in the late 1990s.

Hybrids

While hybrid cars have a long history, these vehicles didn’t become a commercial success in
America until the late 1990s and early 2000s. Hybrid technology makes cars less dependent
on gasoline and more environmentally friendly. Honda and Toyota are well-known for
manufacturing award winning hybrid vehicles.

Smart Technology and Smart Cars

Building better cars requires better technology. Perhaps one of the biggest milestones in
automobile manufacturing is the use of state-of-the-art technology to yield intelligent
cars. Mechatronics, a hybrid of multiple engineering disciplines, is widely used in automotive
manufacturing and enables the production of quality cars integrated with smart technology,
such as automatic braking systems, collision sensors, and self-driving capabilities.

Top 10 automobile companies in the world in 2017.

1) Toyota Motor Corporation

This is arguably the top most automotive manufacturer by revenue and volume. The
company designs manufactures and markets diverse automobile product ranges from SUVs,
minivans, luxury & sport utility vehicles, trucks and buses among others. Toyota car engines
are fixed with either combustion or lately the hybrid engines such as the one in the Prius.

Toyota Motor Corporation has other vehicle manufacturing subsidiaries which include
Daihatsu Motor for the production of mini-vehicles and Hino Motors for the production of
buses and trucks. The market, which is mainly comprised of middle income to low-income
earners prefer Toyota because of its relatively low price to buy and to run. The wide range of
vehicles within their products also gives you a wide option to select from and Toyota’s have a
very handsome resale value.

2) Bayerische Motoren Werke (BMW) AG Co.

BMW comes second on the list of the top 10 automobile companies in the world
in 2017. The company is known to manufacture premium car brands as well as
off-road vehicles under the Rolls-Royce, MINI and BMW names.

BMW also manufactures motorcycles under the Husqvarna and BMW names. The company
offers customers with financial services that include credit financing and car leasing as well
as dealer financing, deposit banking and car insurance services. Quality, durability, and class
are what drive many of the high incoming earners to be inclined to the BMW brands.

3) Mercedes-Benz Company

Mercedes-Benz is a premium Germany brand manufactured by Daimler AG. In fact, if there

is a car brand that can give its owner a particular social standing, Mercedes-Benz is the car.
The brand is loved because it comes with a class and model that suits the high-end earners.

Mercedes-Benz automobiles include luxury vehicles, buses, automobiles and trucks with the
producing company also offering automobile repair and financial services. The cars and
automobiles are sold through the Mercedes-Maybach and Mercedes-AMG divisions. Ever
since its inception, Mercedes-Benz has won the hearts of many by its quality and class, a
position it seems to be holding till forever
4) Volkswagen AG Company

Another German car making company, Volkswagen has a wide assortment of cars. Most of
its cars are known to feature unique patterns such as those of insects, small mammals, and
amphibians i.e. the tortoise. When it comes to vehicle sales per volume, Volkswagen comes
number two in the world only second to Toyota.

Some of its well-known brands include Tuareg, Beetle, Passat, Golf and Fox etc. Volkswagen
cars are also loved because of their durability and there is a certain social status aspect that
comes with driving a Volkswagen brand.

5) Nissan Motor Co Ltd. Company

This is a leading Japan automobile brand that has been very popular especially in
the second and third worlds. The company’s small-car initiative has been
responsible for the brand’s dream of getting big by going small.

The initiative primarily ensures that low-cost vehicles that are fuel-efficient, have standard
comfort, style, performance, and safety are offered to the market. They produce off-road
vehicles, SUVs, and pickups under models such as Maxima, Altima, and Sentra among
others. If you want something small but great and at an affordable cost, go for Nissan.

6) Ford Motor Company

Ford is yet another automobile manufacturer that ranks high among the top 10 automobile
companies in the world in 2017. Some of its most staple brands include Lincoln, Taurus,
Focus, Mustang, and Fiesta etc. The company’s automobiles are characterized with luxury
under the Lincoln Marque brand, with other brands being good for sports and off-road
performances. In the past, Ford manufactured some of the best, trucks, buses and tractors.
Today, its concentration is mostly on sports and luxury cars.

7) Honda Motor Co Ltd. Company

Honda is a world leading automaker and the largest motorcycle producer in the world. Its
motorcycle lines feature everything from super bikes to scooters, with the company also
being dedicated to the production of personal watercrafts and ATVs.

The company’s car models include some seven luxury vehicle models as well as SUVs and
others. Within its lines are also Honda Power products and machinery such as snow blowers,
tillers, lawn mowers, outboard motors and portable generators. Engine quality, durability
and economic fuel consumption are the main reasons why customers prefer Honda machines.
8) AUDI AG Company

AUDI is a subsidiary of Volkswagen, no wonder it is commonly known as the other Bavarian

car maker. Its line of products is mainly luxury automobiles with its lines including the Q5 &
Q7 SUVs and the A-series cars. Other luxury models include the TT Coupe, the TTS
Roadster, and the all-wheel-drive A6 all-road Quattro Wagon. Amor-plated security vehicles
are also made by AUDI.

9) Porsche

Together with its subsidiaries; Porsche Consulting Group and Mieschke Hofmann und
Partner, Porsche offers investment management, engineering services, and automotive
financial services among its automobile products that it has to offer the market. Under the
automobiles, Porsche specializes in SUVs, sports cars, and sedans. Porsche is owned by
Volkswagen AG and has a current product lineup that includes Cayenne, Macan, 911, 718
Boxster/Cayman and Panamera.

10) Chevrolet

This is an American division of the General Motors. The company has an array of trucks,
automobiles and commercial vehicles as the products it offers with its services including oil
changing, vehicle insurance, vehicle financing, vehicle sales and vehicle
repairs. Chevrolet has the reputation of being a car of all the purses and all the purposes. Its
wide range of vehicles includes subcompact automobiles and medium duty commercial
trucks among others.

Above were the top 10 automobile companies in the world in 2017

 Global Scenario
The passenger car segment has emerged as a major driving force for upstream industries like
steel, iron, aluminum, rubber, plastics, glass, and electronics and down stream industries like
advertising and marketing, transport and insurance. The car industry generates large amount
of employment opportunities in the economy. For example in the US, every sixth worker is
involved in the making of an automobile.

The global automotive car market is growing at a rate of only 2 percent per annum and is not
expected to pick up in the near term. Growth has dropped due to the increasing levels of
saturation in the larger car markets of the world. Worldwide the trend is towards ensuring that
one's products are superior in terms of quality

This will enhance the useful life of cars and, hence, slow down growth in sales.The world car
production has increased from 44.66 mn in 1996 to an estimated 48.3 mn cars in 1999. Japan,
Canada and USA brought about the major increases, which contribute to53% of the world's
car production. The largest car market - the US market expects car sales to decline 8 to 9 per
cent to 16 million cars in 2001, as compared to 17.4 million cars sold in 2000.

The USA and Japan are the leaders with around 42% of the total world market. However,
since the last two to three years, the international passenger car industry has been witnessing
an over capacity of more than 30%. The trend suggests that industry volumes may grow by
just 2% or around 10 mn vehicles per year.

If this situation continues for the next few years the world car market may witness shakeout
in the near future. Already signs towards this are being observed as the phenomenon of
mergers catches on. The recent mergers in the international car market are Ford-Volvo,
Renault-Nissan, Daimler-Chrysler. A few more players are expected to join the fray in the
next few years so as to strengthen their hold in the world market. Among the top car
manufacturing companies General Motors and Ford Motors group of USA lead with a
contribution of 15.8% and 11.6%, of world car production, respectively. Volkswagen and
Toyota stand third and fourth with more than 9% contribution each to the world car
production.

The global domination of the larger automotive manufacturers is slowly on the wane and the
trend in sales is shifting towards more "regio-centric" products. Automakers that have been
enjoying a generally prosperous spell would have to rethink on the way vehicles are
designed, manufactured, distributed or sold.

Already, players like General Motors Volkswagen and Toyota have begun to re-examine
their dealer relationships and pricing strategies. Car makers would now have to think in terms
of a new customer focus and provide better financing and servicing. Strategic tie-ups,
mergers and acquisitions have become the talk of the day.

A few instances are Daimler Benz's tie-up with Chrysler of the US, Ford's acquiring of
Daewoo and tie up with Volvo Car Corporation and Renault acquiring a stake in Nissan.
Such deals will certainly lead to economy in terms of costs but it remains to be seen whether
they will also create significant new opportunities for growth

With global consolidation in the car industry, it is expected that more international players
will work closely to bring about operational efficiencies. By nature, the car industry is highly
capital-intensive and vast amounts of money are being spent on R&D. With the players
getting together to produce more technologically superior cars, they can derive greater
benefits from their R&D efforts. Profits, which are under pressure due to wafer thin margins
will be boosted due to greater economies of scale.

Moreover, bigger capacities among players means lesser fixed costs per car produced. Even if
mergers are not on the cards in the near future (one can see that the Daimler-Chrysler merger
has not brought about synergies as expected by automobile experts), technology-sharing and
the offering of equity stakes is inevitable

In India, the car market has become extremely competitive and come April 2001, India's
automobile market will be thrown open to imports of completely built up vehicles, which
hitherto was prohibited. With the international acquisitions and alliances, one can expect to
see a dramatic change in the auto market

If GM were to acquire Daewoo in Korea, then GM would be in a commanding position in

India with its alliance with FIAT and Suzuki motors as well. Already Daimler Chrysler and
Ford are contemplating introducing new models in India from their various associate
companies through their local subsidiaries.

The situation could become very difficult for the purely Indian automakers such as Telco,
Mahindra and Hindustan Motors unless they rethink their strategy. It can easily be seen why
TELCO has been in the news on rumors that it wants to hive off its car division and bring in
an overseas partner. Reports suggest that HM is thinking of exporting parts from its
manufacturing units and also assembling and distributing other makes of vehicles who may
wish to enter into India, but cannot enter full scale manufacture due to the small market sizes.

Clearly exports will be the big opportunity for Indian automobile companies if they can
control costs and deliver good quality output. Already Maruti, Hyundai and Ford as well as
Mercedes Benz have started exports in a small way and this can grow. Majors like TELCO
and Ashok Leyland are already exporting their products in reasonable volumes.

Availability of easy financing options has been a major reason for the dramatic growth the
automobile market has witnessed in recent times. Maruti has set up a separate financing unit
in association with banks. GM has one of the largest financing companies in the US and can
easily bring them into India should it so decideClearly the customer is in for some good times
with a wide range of models to choose from, better quality and prices and easy financing
options - a far cry indeed from the days when one had to book a Premier car and wait for
years after paying an advance.