0

Marketing Research
Automotive Industry

14.06.2019
─

Tarun Sachdeva
Motherson Sumi Systems Limited (MSSL)
Sector-1
Noida,201301,UP

-Tarun Sachdeva

14.06.2019
 1

Overview
To research on the auto segment of India, classifying the auto segment and analyzing the
market share of the different segments. Also, throwing some light on Wiring Harness (Auto
Component).

Goals
1. To study the Passenger Vehicle Segment and its market share.

2. To study the Commercial Vehicle Segment and its market share.

3. To analyze the market segments.

4. To study about Wiring Harness.

Market Research:

Definition: The Marketing Research is the systematic collection, analysis, and

interpretation of data pertaining to the marketing conditions. The basic reason for
carrying out the marketing research is to find out the change in the consumer
behavior due to the change in the elements of the marketing mix (product, price,
place, promotion).,marketers need to know about the changing trends in the market
viz. Changes in the customer’s tastes and preferences, the new products launched in
the market, prices of the competitor’s product, the close substitutes of the product,
etc.

-Tarun Sachdeva

14.06.2019
 2

Marketing Research Process

To begin with the marketing research, following steps has to be followed:

Define the Problem-The foremost decision that every firm has to undertake is to find out the problem for which the
research is to be conducted. The problem must be defined adequately because if it is too vague, then it may result in the
wastage of scarce resources and if it is too narrow, then the exact conclusion cannot be drawn. In order to define the
problem appropriately, each firm must have a clear answer to the questions viz. What is to be researched (content and the
scope)? And Why the research is to be done (decisions that are to be made)?

Develop the Research Plan– This step involves gathering the information relevant to the research objective. It includes:

Data Sources: The researcher can collect the data pertaining to the research problem from either the primary source or the
secondary source or both the sources of information. The primary source is the first-hand data that does not exist in any
books or research reports whereas the secondary data is the second-hand data which is available in books, journals,
reports, etc.

Research Approaches: The Secondary data are readily available in books, journals, magazines, reports, online, etc. But the
primary data have to be collected and to do so, the following research can be conducted:

Observational Research: The researcher can collect the information by just observing the happenings in the market and
sometimes having a friendly conversation with the customers to know about their purchase experiences.

Sampling plan: Once the research approach is decided, the researcher has to design a sampling plan.

Collect the Information: This is one of the most expensive methods of marketing research. At this stage, the researcher has
to adopt the methods to collect the information, he may find it difficult to gather the correct information because of the
respondent’s biasedness, unwillingness to give answers or not at home.

Analyze the Information: Once the information is collected the next step is to organize it in such a way that some analysis
can be obtained. The researchers apply several statistical techniques to perform the analysis, such as they compute
averages and measures of dispersion. Also, some advanced decision models are used to analyze the data.

Present the Findings: Finally, all the findings and the research are shown to the top management level viz. Managing
director, CEO, or board of directors to make the marketing decisions in line with the research.

Make the Decision: This is the last step of the marketing research, once the findings are presented to the top level
management it is up to them either to rely on the findings and make decisions or discard the findings as unsuitable.

-Tarun Sachdeva

14.06.2019
 3

Introduction
The Indian auto industry became the 4th largest in the world with sales increasing
9.5percent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the
7th largest manufacturer of commercial vehicles in 2017.

The automotive industry can be classified into two distinct types of vehicles:

1. Passenger Vehicles:
Indian motor vehicle exports in 2018 consisted of 0.70 m passenger car. Major car models
exported include Hyundai Verna and Creta, Nissan Micra and Sunny, GM Beat, Ford
EcoSport and Volkswagen Vento. Ford India was the largest car exporter for FY18 having
shipped over 181 000 cars overseas.The luxury car segment is relatively small with sales of
just over 40 000 cars in 2018. The total number of registered motor vehicles reached
approx. 230 million in March 2016.

The Indian automobile market is going through one of its worst phases in terms of sales.
This has affected both passenger cars as well as two-wheeler manufacturers. According to
the latest SIAM report, the sales of passenger vehicles have dropped by 20.55 per cent at
2,39,347 units in May 2019, which was 3,01,238 units in May 2018. It is being said that this
is the lowest decline that the Indian passenger vehicle segment has ever faced.

Classification of Cars based on body Shape:

ONE BOX (VAN/MPV) – It means Engine area, Passenger area & luggage area all in one
box. There won't be separate compartment. For eg. Omni, Ace Magic, Versa

TWO BOX (HATCHBACK) – It means Engine has a separate cabin while Passenger area and
luggage areas are together. For eg. M800, Alto, Santro, i10, A*, Swift etc.

-Tarun Sachdeva

14.06.2019
 4

THREE BOX (SEDAN/SALOON/NOTCHBACK) – It means Engine area, Passenger area &

luggage area all are having different cabin. For eg. SX4, City, Fiesta, Dzire, Ambassador,
Indigo CS etc.

ESTATE/STATION WAGON – Its nothing but sedan whose roof is extended till the rear to
create more boot space. For eg. Indigo Marina, Octavia Combi, etc.

SUV (Sports Utility Vehicle) – These vehicles have large tyres, higher seating, higher
ground clearance. The engine area is separate, but the passenger & luggage area are
enclosed together. Most of these vehicles are equipped with either 4 wheel drive system or
has the option for that. For eg. CRV, SAFARI, GRAND VITARA, PAJERO etc

SEMI NOTCHBACK – It's a sedan whose boot door can be opened like a hatchback (wagon
r, swift), where the rear windshield too opens along with the boot door. Unlike sedan
whose rear windshield is always fixed. There are only a few examples for SEMI
NOTCHBACK – Skoda Octavia, Accent Viva.

Market Share of Passenger Vehicles 2017 & 2018 :

Manufacturer Market Share(2017) Market Share(2018)

Maruti Suzuki 49.7% 51.0%

Hyundai Motor 16.4% 16.2%

Mahindra & Mahindra 7.5% 7.3%

Tata Motors 5.9% 7.0%

Honda Cars 5.9% 5.2%

Toyota Kirloskar 4.3% 4.5%

Ford India 2.7% 2.9%

Nissan Motors 1.7% 1.2%

-Tarun Sachdeva

14.06.2019
 5

Analysis:
Top 4 carmakers Maruti, Hyundai, M&M, and Tata accounted for over 82 percent of the
Indian PV market.Passenger vehicle sales recorded single digit growth of 5.32 percent at
33,93,705 units when compared to 32,22,220 units in the calendar year 2017.

The reason for the decline in sales can be credited to floods in Kerala and rise in the price
of Petrol. This further led to weak festive season sales which ended early November with
Diwali. During the 42-day long festive period, the retail sales of passenger vehicles were
down by 14 per cent. Four carmakers mainly Maruti Suzuki, Hyundai India, Mahindra &
Mahindra, and Tata Motors accounted for over 82 percent of the Indian passenger vehicle
market.

Factual Description :
Among all the largest gainer was Tata Motor which posted 24.13 percent growth at
2,37,217 units in the calendar year 2018 recording a market share of 7 percent from earlier
5.9 percent in 2017. Riding on the success of Nexon and Tiago.

While the largest passenger vehicle manufacturer Maruti Suzuki recorded 8.05 percent at
17,31,450 units recording 51 percent market share in the calendar year 2018. Similarly,
Ford and Toyota witnessed growths of 10.91% and 8.54%, respectively.

-Tarun Sachdeva

14.06.2019
 6

2. COMMERCIAL VEHICLES:
India was the largest manufacturer of three-wheelers (1.02 m units) and seventh largest
commercial vehicle (0.66 m units) manufacturer in 2018 while India's two-wheeler
manufacturers rolled out 23.1 m units during 2017/18. The tractor industry sold ca 0.58 m
units or around a third of the global output during 2016/17. Construction vehicle
production was approx. 59 000 units in 2014.Over 43 000 medium and heavy duty trucks
were exported from India in 2016-17 incl. makes such as Daimler, Mitsubishi Fuso, Tata
Motors and Ashok Leyland.

Among all the largest gainer was Tata Motor which posted 24.13 percent growth at
2,37,217 units in the calendar year 2018 recording a market share of 7 percent from earlier
5.9 percent in 2017. Riding on the success of Nexon and Tiago.

While the largest passenger vehicle manufacturer Maruti Suzuki recorded 8.05 percent at
17,31,450 units recording 51 percent market share in the calendar year 2018. Similarly,
Ford and Toyota witnessed growths of 10.91% and 8.54%, respectively.

However, the South Korean carmaker Hyundai India which launched its much-awaited
hatchback Santro witnessed a slow growth of 4.30 percent at 550002 units in 2018. It also
saw a decline of 0.2 percent in market share to 16.2 per cent.

-Tarun Sachdeva

14.06.2019
 7

Commercial Vehicle Market Share 2018 & 2017 :

Manufacturer Market Share Market Share

(2018) (2017)

Tata Motors Limited 44.2% 43.5%

Eicher Trucks and Buses 5.8% 6.5%

Ashok Leyland Limited 16.8 18.7%

Force Motors Limited 7.8% 2.8%

SML Isuzu Limited 1.1% 1.4%

Mahindra and 22.6% 25.7%

Mahindra

Maruti Suzuki Limited 1.1% 0.8%

-Tarun Sachdeva

14.06.2019
 8

WIRING HARNESS
Global automotive wiring harness market was valued at $66,543 million in 2015, and is
expected to reach $93,069 million by 2022, growing at a CAGR of 5.1% from 2016 to 2022.
Automotive wiring harness is an electrical assembly of various components in a vehicle that
transmits power and information to a single system. It plays an important role in
transmitting information about the operation of the vehicle, sending & receiving sensor
signals, and supplying power.

-Tarun Sachdeva

14.06.2019
 9

The leading players operating in the automotive wiring harness market is focused to
expand their business operations in emerging countries by consistently introducing
innovative solutions to enhance their product portfolio. These players include Delphi
Automotive LLP, Furukawa Electric Co. Ltd, Sumitomo Electric Industries, Ltd., Lear
Corporation, THB Group, SPARK MINDA, Samvardhana Motherson Group, Nexans
Autoelectric, Yazaki Corporation, and Yura Corporation.

-Tarun Sachdeva

14.06.2019
 10

Motherson Sumi Systems Limited

Motherson Sumi Systems Limited (flagship company of the Samvardhana Motherson

Group) is the leading player in the wiring harness markets in India with a share of
around 56.7% of the market. Japan based Furukawa and Sumitomo have a good
presence in the Indian market through partnership with domestic manufacturers.

In a recent development of interest, in Jan 2017, Motherson Sumi Systems Ltd (MSSL)
signed an agreement to acquire Finnish wiring harness maker PKC Group Plc. The deal is
valued at around INR 41.5 billion. PKC Group is a leading Tier 1 supplier of wiring harness
and associated components to original equipment manufacturers (OEMs) in the heavy &
medium duty commercial vehicles and locomotive segments across North America,
Europe, Brazil and China.

The wiring harness business of the Group is done by Motherson Sumi Systems Ltd., the
flagship company of SMG. MSSL was established as a joint venture partnership with
Sumitomo Wiring Systems, Japan for wiring harnesses manufacturing. Today, it
manufactures Wiring Harnesses, High tension cords, battery cables and high level
assemblies.

Wiring Harness Manufacturing Process:

To observe the production process, I visited the company's shop floor in Sector-84
Noida. I was there for a two day visit, while on a visit to the plant I observed the
following things:
● Daily production is 5.5 lacs (circuits) and 14000 (harnesses).
● Daily sales is around 2 crore rupees.
● Number of employees in each shift are 800- 900 and there are two shifts.
● Maintenance is done by the maintenance department .

-Tarun Sachdeva

14.06.2019
 11

● Quality management is done by yet another department which is concerned just for the
quality is known as the QPC.
● Main suppliers: Sumitomo from Japan .
● Main customers which this Shop floor serves is Maruti Suzuki, Maruti Suzuki sends
weekly plan to the marketing department which the department forwards to PPC and
PPC forwards it to different departments.

The manufacturing process consists of the following activities:

Storage PPC LPC Assembly QPC

Store department
Material is received from supplier and a physical verification of the material is conducted, a
good received note is prepared. A FIFO slip with all the details of the product is taped on to

-Tarun Sachdeva

14.06.2019
 12

the product or material or box, the material is yet again placed under inspection after the
inspection a QC passed stamp is placed on the boxes and the boxes are then placed in the
designated slots in the storage area.

If the box is damaged when received, then if the box is acceptable as per the limit sample
the damaged area is marked and goods are moved to the designated location. If box is not
acceptable then box is shifted to The Red square area and a hold sticker is placed on it. The
package is inspected if material is damaged it is checked with the inspection standards if it
is not damaged then the box is changed and a C sticker is placed on it and the changes are
recorded and goods are shifted to the designated place, if material is rejected in inspection
then the hold sticker is removed and the rejection tag is place and is shifted to the rejection
location the material is sent back to the supplier or scrapped.

The goods are dispatched to the concerned department on FIFO basis that is first in first
out basis.

Production Planning and Control(PPC):

It bridges the gap between the marketing department and production. Customer place
order with the marketing department, marketing department forwards the order to PPC,
PPC generates work orders according to demand and daily and fortnightly schedules the
work orders are issued to LPC and assembly. PPC also issues material request slips or MRS
to store department for them to issue materials to assembly. They also handle inventory
and place orders for new materials. they also handle the logistics and take care of
shipments to the customers.

Lead preparation cell

Product/material are received from store as per request, PPC generate barcode slip which
stores all the necessary data for production of circuit wires. Circuit wires are chopped and
crimped as per the product requirements, the joints are also crimped and are taped
together for the protection from jerks and water / rain. Products are then transferred to
assembly department for further processing.

-Tarun Sachdeva

14.06.2019
 13

Assembly
The circuits are obtained from LPC department and are used for fuse box preparation.
Different sub-stations for different parts are present for smooth functioning. Then every
product from different sun-stations are assembled at different stages with the help of
conveyor belts. Material is dispatched from Store on FIFO basis . Every different
components are connected together, are taped, the markings are placed on each harness
for identification, quality inspection and testing of the circuits are done manually and with
machines. Final product is then packed in crates and stored in the bonded department.

Five types of hardness are produced:

● IP HARNESS
● ENGINE HARNESS
● MAIN HARNESSED
● FLOOR HARDNESS
● LEAD HARNESS.

Quality and Process Control (QPC):

Responsible for quality check throughout the plant. Also maintain interactions with the
marketing department to get a hold on quality complaints or new requests from customers
They are responsible for new product development which goes through a lot of stages.
They even maintain contact with the HR departments for the on the job and development.
Includes different types of quality checks at different levels of production, department is
divided into different categories each category is responsible for different quality
inspection (assembly, LPC, ETC). They you are in contact with customers with regard to
quality related issues and suggestions. They also conduct feasibility studies for different
products.

-Tarun Sachdeva

14.06.2019
 14

-Tarun Sachdeva

14.06.2019