Professional Documents
Culture Documents
Chapter 1 and 2
Chapter 1 and 2
Chapter 1 and 2
LIMITED”
Submitted to
BACHELOR OF BUSINESS
ADMINISTRATION
Jointly submitted by
BALAMURALI SURESH
REG NO:
BASIL BABY
REG NO:
BASIL ELDHO
REG NO:
BIBETTO BABU
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DEPARTMENT OF MANAGEMENT
BONAFIDE CERTIFICATE
Principal
DEAPARTMENT OF MANAGEMENT
CERTIFICATE
This is certify that the study report entitled, "A STUDY REPORT ON TATA
MOTORS LIMITED” is an authentic record of work jointly done by Mr.
BOBIN RAJ, Mr. BONIE THANKACHAN, Mr. CHELS BENJAMIN, Mr. DHILAN
DCRUZ in partial fulfilment of the requirement for the bachelor of
business Administration under the guidance of Prof. JOE PETER.. This
work has not been submitted for the award of any degree or title of
recognition earlier.
Prof. RAJAMOHAN S
HEAD OF THE DEPARTMENT AND PROJECT GUIDE
EXTERNAL EXAMINER:
DECLARATION
Place: Aluva
Date:
BOBIN RAJ
BONIE THANKACHAN
CHELS BENJAMIN
DHILAN DCRUZ
ACKNOWLEDGEMENT
We proudly utilize this great respect and love to express our sincere
thanks and gratitude to our esteemed guide Prof. JOE PETER for
great encouragement and valuable suggestions and above all for the
excellent guidance.
BOBIN RAJ
BONIE THANKACHAN
CHELS DCRUZ
DHILAN DCRUZ
CHAPTER 1
INTRODUCTION
INTRODUCTION
Tata Motors' principal subsidiaries include English premium car maker Jaguar Land
Rover (the maker of Jaguar and Land Rover cars) and the South Korean commercial vehicle
manufacturer Tata Daewoo. Tata Motors has a bus-manufacturing joint venture
with Marcopolo S.A. (Tata Marcopolo), a construction-equipment manufacturing joint
venture with Hitachi (Tata Hitachi Construction Machinery), and a joint venture with Fiat
Chrysler which manufactures automotive components and Fiat Chrysler and Tata branded
vehicles.
HISTORY
Tata launched the Indica in 1998, a fully indigenous Indian passenger car tailor-made
to suit Indian consumer needs though styled by I.D.E.A, Italy. Although initially criticised by
auto analysts, its excellent fuel economy, powerful engine, and an aggressive marketing
strategy made it one of the best-selling cars in the history of the Indian automobile
industries. A newer version of the car, named Indica V2, was a major improvement over the
previous version and quickly became a mass favourite. Tata
Motors also successfully exported large numbers of the car to
South Africa. The success of the Indica played a key role in
the growth of Tata Motors.
On 26 January 2014, the Managing Director Karl Slym was found dead. He fell from
the 22nd floor to the fourth floor of the Shangri-La Hotel in Bangkok, where he was to
attend a meeting of Tata Motors Thailand.
On 2 November 2015, Tata Motors announced Lionel Messi as global brand
ambassador at New Delhi, to promote and endorse passenger vehicles globally.
On 27 December 2016, Tata Motors announced the Bollywood actor Akshay
Kumar as brand ambassador for its commercial vehicles range.
On 8 March 2017, Tata Motors announced that it has signed a memorandum of
understanding with Volkswagen to develop vehicles for India's domestic market.
On 3 May 2018, Tata Motors announced that it sold its aerospace and defence business
to another Tata Group Entity, Tata Advanced Systems, to unlock their full potential.
On 29 April 2019, Tata Motors announced a partnership with Nirma
University in Ahmedabad to provide a B.Tech. degree programme for employees of its
Sanand plant.
On 24 March 2020, Tata Motors Ltd announced that it would spin off its passenger
vehicles arm as a separate unit within the company.
On 5 March 2021, Tata Motors’ shareholders approved hiving off its passenger
vehicles business into a separate entity.
DAIRECTORS
Mr. O P Bhat
from general insurance to custodial services. Mr. Bhatt led SBI during challenging times.
Under his leadership, SBI rose on the global list rankings of Fortune 500.
Mr. Bhatt has served as Chairman of Indian Banks' Association, the apex body of Indian
banks. He also served as India's economic diplomacy as government's nominee on the India-
US CEO Forum, Indo-French CEO Forum and Indo-Russia CEO Forum, forging links with a
cross section of the world's business leaders. He serves as an Independent Director on
Boards of several companies.
Mr. Bhatt is Independent Director of the Company since May 9, 2017.
Ms. Hanne
Ms. Hanne Birgitte Sorensen is a Danish national and holds an MSc in Economics and
Management from the University of Aarhus. During the period
1994-16, she was engaged in various roles within the A.P.Moller
Maersk A/S Group in Denmark, a conglomerate comprising of 8
main companies, primarily specializing in the energy and
transportation segment, inter-alia designated:
From 2014-16 as the CEO of Damco, the Hague, Netherlands, a
Supply Chain Management company specializing in retail, lifestyle,
FMCG, technology and chemicals;From 2012-13 as the CEO of
Maersk Tankers, Copenhagen, the world's largest product tanker company;
From 2008-12 as the Senior VP and Chief Commercial Officer of Maersk Line, Copenhagen,
the world’s largest container shipping company;Ms. Sorensen is presently on the Board of
Directors and Committees thereof of various International Companies.
Ms. Sorensen is Independent Director of the Company since January 3, 2018.
technologies to support Nissan's goal of achieving zero fatalities and zero emission. In 2015,
he was appointed as the Technical Advisor to the Board of Directors.
In 2016, Mr. Yamashita was appointed as Member of the Board and Executive Vice
President (Development, Quality) for Mitsubishi Motors Corporation. In 2019, he was
appointed as the Technical Advisor to Chairman, Mitsubishi Motors Corporation.
Mr. Yamashita has served on the Advisory Panel of Science and Technology for the Ministry
of Foreign Affairs and several committees in Ministry of Economy, Trade and Industry
(METI). Mr. Yamashita was the President of the Society of Automotive Engineers of Japan,
Inc from 2012-2014.
Mr. Yamashita has been appointed as Non-Executive, Non-Independent Additional Director,
with effect from September 27, 2020 for a tenure of 5 years.
Mr. Chowdary
Mr. Chowdary has done his graduation in Mathematics from Loyola
College Chennai and Post Graduation in Mathematics from IIT,
Chennai.He started his career in 1976 as a probationary officer in
Andhra Bank and later joined the Indian Revenue Service in 1978. On
deputation, he went to the Department of Revenue as Under Secretary
and thereafter to the Department of Company Affairs as Deputy
Secretary.
He held several executive positions and retired as Chairman of Central
Board of Direct Taxes. On Superannuation, he was appointed as an Advisor to the
Department of Revenue, Ministry of Finance.
Mr. Chowdary was the Central Vigilance Commissioner from June 2015 to June 2019. He
was elected as a Member of the Executive Committee of International Association of Anti-
Corruption Agencies. He is a Member on the Advisory Board of Comptroller and Auditor
General of India.
He holds directorship in CCL Products (India) Limited, Divi’s Laboratories Limited and
Reliance Industries Limited.
Mr. Chowdary has been appointed as an Additional and Independent Director, with effect
from October 27, 2020 for a tenure of 5 years.
Mr. Bolloré
Mr. Bolloré was appointed to the role of Jaguar Land Rover's Chief
Executive Officer in September 2020.
Having started his leadership career in 1990 as Shop Manager of
Michelin’s Heavy Truck tyre factory, Mr. Bolloré has more than 30 years’
experience of international business.
After 12 years with Michelin, he then joined global automotive supplier
Faurecia in 2005 as Vice President, Asia, Exhaust Systems Product Group,
based in China. After successful tenures in a variety of senior positions including worldwide
Vice President in charge of Industry, Quality and Purchasing for Faurecia Emissions Control
Technologies (FECT), Mr. Bolloré joined Groupe Renault in 2012.
Joining as the global OEM’s Industry and Supply Chain Group EVP, Mr. Bolloré then took on
the role of Chief Competitive Officer in 2013 before becoming Chief Operating Officer in
2018 and finally Chief Executive Officer, Groupe Renault in 2018. He was also a member of
the Groupe Renault Executive Committee while also sitting on the Board of Directors for
both Avtovaz and DRAC (Dong Feng Renault Automotive Company).
Mr. Bolloré has an MBA from Paris-Dauphine University, specialising in Finance. In addition
to his native French, he is fluent in English and German while also enjoying extensive
experience of the Japanese languagMr. Bolloré has been appointed as an Additional and
Non-Executive Director, with effect from October 27, 2020.
Mission
We innovate mobility solutions with passion to enhance the quality of life.
Vision
By FY 2024, we will become the most aspirational Indian auto brand, consistently winning,
by
Delivering superior financial returns
Values
Integrity
Teamwork
Accountability
Customer focus
Excellence
Speed
QUALITY POLICY
Provide independent and professional services in product design which delight our
customers and fully satisfy their requirements.
Use our Quality Management System (QMS) to provide a framework for setting objectives.
Comply with all relevant compliance obligations within those countries that we operate,
adopting the highest standard whether that is UK or local legislation.
Promote the use of the process approach and risk-based thinking to mitigate potential
issues in our products.
Promote a purchasing policy which favours those products and services that deliver the
optimum technical solutions, at an affordable cost.
Embrace the Tata Code of Conduct (TCoC) in all that we do and require our suppliers and
contractors to abide by the TCoC.
The TMETC Board is responsible for implementing the Policy and will:
o Set and review measurable quality objectives.
o Ensure all staff are trained in respect to quality processes, ensuring that
business and interested party requirements are met.
o Conduct regular reviews of the effectiveness of the QMS, ensuring
opportunities for its continual improvement are implemented as appropriate.
o A commitment to support Tata Motors Limited in achieving the requirements of
World Class Quality (WCQ).
o This policy is publicly available via our website and will be regularly reviewed
and updated, as we continue to evolve as a business.
With over 8.5 million Tata branded vehicles plying globally, Tata Motors is
among the select companies in the world to offer an extensive portfolio to its
consumers. Tata Motors have expanded their international footprint through
exports since 1961. In passenger vehicles, the company has a strong presence
in the hatchback and the sedan segment, going up to SUVs and MUVs. In
commercial vehicles, Tata Motors offers a wide spectrum of vehicles that are
customized for local conditions and meet the highest standards for quality,
safety, environment norms and user comfort. Today, the Tata Motors group is
present in over 125 countries, with a worldwide network comprising over 8,400
touch points. Tata Motors has R&D centres in UK, Italy, India and South Korea.
With vast global experience, the company brings deep understanding of
customer expectations from diverse markets, and is well positioned to cater to
ever changing automotive norms and consumer trends across the globe.
Tata Motors have 576 car dealers across 424 cities in India, TATA Motors holds
a robust dealers network in the country through it sells more than 56,000 in the
month of July 2020. Brand registered a staggering growth of 64% in its domestic
sales for the first quarter (April-June 2020), FY19 at 164,579 units compared to
100,141 units over the previous year due to its strong network of dealers.
Mostly, customers of TATA Motors in India are the middle groups who are
looking to switch to 4-wheeler from 2-wheeler who are looking to purchase a
car for a family purpose at affordable prices. Customers of the brand also
include youth and high-class business professional who is looking for
innovative, trending vehicles with world-class safety features.
The policies and regulations for the automobile sector in the country along with
the least expensive automobile parts availability are the some of the major
conditions which help the brand in its business expansion.
The excellent innovation and research and development at TATA Motors have
set up an example for its competitors. With its various research centres across
the country, the brand is working on the improvement of the engine efficiency,
design, style and instrumentation of vehicles.
With the Indian automotive market being overcrowded with a lot of national
and international players following a red ocean strategy. Companies like
Hyundai, Fiat, Maruti Suzuki, Toyota & Honda are giving a stiff competition to
the brand with everyone eating each other’s market share.
TATA Motors
Tata Motors is a foremost automobile industry which is headquartered in Mumbai,
India. Its main business operations focus on producing many products related to
automobiles like trucks, cars, buses, utility vehicles, and defense vehicles. Their
vehicles are customized and it provides and it focuses on quality, safety, and user
comforts.
1 .Maruti Suzuki
There is no doubt that one of Tata Motors’ biggest competitors is
Maruti Suzuki. The famous automobile manufacturing company, Maruti Suzuki is
headquartered in New Delhi, India. This company has rich experiences that are
powered by innovations and commitment to producing the best vehicles for Indian
roads.
The company experienced a great change after the production and launching of
Maruti 800. It had turned the intention of people for the need of driving into love
for driving. Their great design and technology have taken its car production to
meet the expectations of the current trend in the automobile industry.
Maruti Suzuki have good product lines and their vehicles focus on good fuel efficiency
like Alto, Maruti Swift etc. Due to their great market share and the highest number of
domestic sales,
Maruti is considered one of the top Tata Motors competitors.
2.Hyundai
Hyundai motor company is an automotive manufacturing company which is
popular across the world. It is headquartered in South Korea. It produces high-
quality automobile products and also provides great services for their millions
of customers across the globe.
Hyundai is the largest exporter of cars from the Asian market. It is popular
for their quality products which have better performance. Due to their rich
experiences in the automobile industry, Hyundai motor company is
regarded as one of the top Tata Motors competitors.
3 .Volkswagen
Volkswagen is an automotive manufacturing company recognized globally is
headquartered in Germany. Their business operations focus on design and
manufacturing various automobile vehicles like commercial vehicles,
motorcycles, engines, and turbomachinery.
One of the main strength of this company is the well-structured brands. It has a
strong presence in all places. Due to their excellent brand recognition and well-
managed operations, Volkswagen is considered as one of the top Tata Motors
competitors.
4 .Toyota
Their various product categories include hybrids, cars, SUVs, and 4WDs. The
main strength of this company is the huge human power across the world.
They have a strong brand image which people look at it while making their
choice of purchase. Their cars make use of great technology to meet the rising
demands of technology. Due to their design and popularity across the globe,
Toyota is considered one of the top Tata Motor competitors.
5 .aHonda
Honda Company is well-known for manufacturing of automobiles, motorcycles,
aircraft, and power equipment and headquartered in Japan. They make use of
great technologies for their products that take the company to a great level. It
provides great services to their customers.
The main reason for Honda greatest achievement is their excellent R&D. It focuses on
R&D and because of this; it comes up with great designs that are a great hit in the
market.
It also makes use of high technology products and the company is strong in
technology. Due to their great market share and product line, Honda is
considered as one of the top Tata Motors competitors.
6 .Ford
It provides excellent design, sales, and services with the prime focus to enhance
customer satisfaction. It makes use of innovative technologies for developing
vehicles which provide safety for usage. The company’s main strength is their
brand value. It focuses on R&D thereby improving the performance of their
vehicles.
7 .Renault
Renault is a French automobile manufacturing company that was established in
the year 1899. It manufactures many ranges of vans and cars and also
manufactured tractors, trucks, buses, coaches, and auto rail vehicles.
The main strength of this company is a strong customer base. It has a strong
presence in the international market and has a variety of options. Due to its
affordable prices and collaboration with popular brands, Renault is considered
as one of the top Tata Motors competitors.
8 .Mahindra
The company focuses greatly on R&D to develop new products. To meet the
road conditions of India, it manufactures great powered SUVs. It is the market
leader in many automotive segments. Due to their great vehicles, Mahindra is
considered as one of the top Tata Motors competitors.
9 .Nissan
Conclusion
Tata motors is a leading automobile brand. It is most widely known for its
commercial vehicles such as buses and trucks. However, TATA motors has also
started an excellent expansion in passenger cars and it is rapidly gaining market
share.
TATA aims to fulfil the emerging needs of the automobile industry by coming up
with a new range of products. These products are manufactured with the purpose
of providing comfort, reliability, safety, capacity and value to the end customers. In
order to stay ahead of the competition, the company is going for huge investments
in the area of product development. TATA Nano carries an image of the cheapest
car in the world, TATA Ace is being introduced in the commercial vehicle market for
snatching the market share of its rivals. Another sporty vehicle Nexon with both
diesel and petrol engine is also attracting customers already.
Electric vehicles
Tata Motors has unveiled electric versions of the Tata Indica passenger car powered
by TM4 electric motors and inverters, as well as the Tata Ace commercial vehicle,
both of which run on lithium batteries.
In December 2019, Tata Motors unveiled the Nexon EV, an SUV with a 30.2KWh
lithium-ion battery and a consistent range of 312 km on a single charge. It is also
equipped with fast charging technology, which can charge the vehicle from 0% -
80% in 60 minutes. With 525 units of Nexon EV sold in India last month, Tata Nexon
EV was the best-selling electric car in the month of April 2021 in India.
Tata has a very wide range of products it has passenger cars, utility vehicles, Trucks,
Commercial passenger Carriers And Defence Vehicles
The prices of Tata motors are generally affordable acceptable by the general public
at large. Tata always have something for the lower class people with Nano being
their trump card. Giving discount every month and special promotion for certain
type of vehicle also one of the strong strategy use by Tata Motors. Discount can be
made from Company’s profit or from dealer’s profit at certain range.
Tata Motors has an extensive dealer network covering Indian and International
markets. Wherever you are, there is a Tata Motors Sales and Service dealership
close to you. The channel of distribution, physical location, and dealership method
of distribution and sales is generally adopted. The distribution of vehicle must be in
a very systematic way, from the plant to dealership and to end user. This is not only
in India itself but also to the world-wide dealership.
Tata motors promote their products via Advertising and after sales services
Society activities
Corporate display activities
Tata Motors owe our success to the highly motivated and talented staff. Our recruitment
division picks the crème-de-la-crème from premier universities, management and
engineering institutes in India. they put them through rigorous training programs to hone
their entrepreneurial skills and impart comprehensive product knowledge.
Tata motors follow Balanced Scorecard Collaborative, Inc for achieving excellence in overall
Company performance.
The management of the company has managed to keep their hopes alive even in this
recession and hopes that the worse is behind Tata Motors recently launched the most
awaited car of the year, Tata Nano and the company has already received 203,000
booking that are fully paid and 70 percent of the applicants are ready to wait till the end
of 2010 for the car to be manufactured.
At Tata Motors, all our Corporate Social Responsibility initiatives focus on improving the
quality of life of underprivileged communities, neighbouring our business operations.
Keeping up with the Sustainability Development Goals (SDGs), our interventions focus on
health, education, employability and environment, with a special focus on the historically
and socially deprived Scheduled Caste and Scheduled Tribe communities. In the year 2019-
20, our CSR interventions have touched over 8.3 lakh lives in India
Overview
Global automobile manufacturer Tata Motors Limited acknowledges its roots and tirelessly
works to address the needs and aspirations of the community, pushing others onwards to
development. We have a six-pronged CSR strategy that attends to the societal needs
starting from pre-natal care to education, and serves across the spectrum – helping with
high-school level courses to professional ones, leading to employability and employment.
Furthering our Sustainable Development Goals (SDGs), our corporate social responsibility
initiatives in FY 2019-20 touched 830300 lives, of which 41% belong to the SC and ST
communities. We have been catering to domains, starting with sustainability initiatives
through community engagement, to social upliftment and environmental transformation,
addressing healthcare and sanitation issues, strengthening household income, making
women self-reliant and more.
Aarogya
Kaushalya
Amrutdhara
Seva
Vidyadhanam
Holistic educational initiatives and financial support – Touched lives of 1,52,558 students
Vasundhara
Planted 1,17,464 saplings, and reached out to create awareness in 91,025 people
Aadhaar
Rural focussed programmes for integrated development approach – Committed to better lives
of 3000 tribal communities
Social Investment
CSR at Tata Motors is influenced by ‘More from Less for More’ philosophy.
22.9 crores of rupees (₹) have been spent for CSR in FY2019-20
Tata Motors has mobilised over 59% of the resources through multi stakeholder
partnerships.
1.8 EXPORT/IMPORT
EXPORT
Markets
With manufacturing operations in the UK, South Korea, Thailand, South Africa, Indonesia,
Austria and Slovakia, our international footprint has expanded through joint ventures like
the strategic alliance with Fiat and Brazil-based Marcopolo.
Overview
With over 8.5 million Tata branded vehicles plying globally, Tata Motors is among the select
companies in the world to offer an extensive portfolio to its consumers. We have expanded
our international footprint through exports since 1961. In passenger vehicles, the company
has a strong presence in the hatchback and the sedan segment, going up to SUVs and MUVs.
In commercial vehicles, Tata Motors offers a wide spectrum of vehicles that are customized
for local conditions and meet the highest standards for quality, safety, environment norms
and user comfort. Today, the Tata Motors group is present in over 125 countries, with a
worldwide network comprising over 8,400 touch points. Tata Motors has R&D centres in UK,
Italy, India and South Korea. With vast global experience, the company brings deep
understanding of customer expectations from diverse markets, and is well positioned to
cater to ever changing automotive norms and consumer trends across the glob
Middle East
Tata Motors has been present in the Middle East geography since 1971 when our trucks
were first sold in Bahrain. Today, our vehicles are sold in the UAE, Oman, Kuwait, Qatar,
Saudi Arabia, Iraq and Turkey. The region accounts for a tenth of our export market. We
offer products with the reliability and ruggedness that are necessary for operating in local
weather conditions and terrains. We have achieved a leadership position in the medium bus
segment, and we are now expanding into the pickup and truck sectors. The Tata Elanza,
Xenon and Prima are our latest launches in this region.
APAC
Tata Motors first ventured into other Asia Pacific markets with its foray into Sri Lanka in
1961. In addition, Tata Motors has a substantial presence in Bangladesh, Nepal, Myanmar,
Bhutan, Afghanistan, Indonesia, Malaysia, Philippines, Thailand and Vietnam. With an
established presence in most geographies, and a dominant share of the commercial vehicle
segment in various markets, Tata Motors is well on its way to realising its global expansion
strategy
Russia
Russia and the CIS form a large part of our global expansion strategy. Our manufacturing
base in Ukraine gives us access to local geographies and facilitates customisation and speed
of delivery. Our wide range of trucks and buses allows us to provide customers with the best
fit vehicle. Our local tie-ups with dealers and distributors give us the ability to provide our
customers with superior service experience.
Latin America
Tata Motors has been wooing customers in Latin America since 2009. Our most popular
vehicles here are our compact and mid-sized sedans including the Indigo and the Manza, our
hatchback Vista, and the Tata Xenon, our bestselling pickup. What our vehicles bring to the
market are a winning combination of power-packed performance and lower lifecycle cost of
ownership
Import
Tata are present in over 125 countries. Explore the global connect
Tata Motors is looking to source more auto components from Korea that are both good in
quality and more cost-effective than those imported from the US, Europe and Japan.
To offset the rising labour cost in Korea, the Indian auto major is also actively encouraging
Korean auto parts makers to set up base in India, either independently or through joint
venture with local partners, S.B. Borwankar, Executive Director, Tata Motors, said.
Korean imports
During FY’13, the company expects its Korean imports to be valued at $85 million against
$70 million during FY’12.
“These parts are around 10-15 per cent cheaper than Japanese components of the same
quality,” Borwankar said, adding that while parts sourced from China were cheaper, the
quality is nowhere so good.
Currently Tata Motors’ total imports stand at Rs 2,000 crore, with China being the number
one supplier followed by Korea.
“We want to increase imports from Korea and other South-East Asian countries like
Vietnam, Thailand and Indonesia by 20-25 per cent over the next two to three years,” he
said.
Among the Korean companies expected to establish manufacturing bases in Pune through
joint ventures are CTR (with ZF India) for suspension parts, plastic granules maker Cepla with
TACO, and brake manufacturer Sanchen with the RSB group.
Tata Daewoo Commercial Vehicles
Speaking about its Korean joint venture Tata Daewoo Commercial Vehicles, Borwankar said
that the sales of high commercial vehicles and medium commercial vehicles stood at 500
units a month, a drop of 25-30 per cent over the same period of last year.
With the aim to steer innovation through collaboration, Tata Motors today formally
announced the launch of Tata Motors AutoMobility Collaboration Network 2.0 (TACNet 2.0),
a platform that will help develop a centre of AutoMobility innovation through partnerships
for new technologies and/or business models. It will also allow Tata Motors to engage with
start-ups and technology companies to easily connect with them, spark innovative solutions
in the automotive technologies and mobility ecosystem and explore synergies.
According to Mr. Shailesh Chandra, President – Electric Mobility Business & Corporate
Strategy, Tata Motors Ltd., "The automotive industry is undergoing a rigorous
transformation phase with new and advanced technologies in manufacturing, digitization
solutions to optimize the operations and supply-chain, innovative and advanced product
technologies and disruptive business/service models for engaging the customer and other
related stakeholders. Today, almost every segment of the automotive value-chain is required
to drive its own innovation story. As a leading Indian automotive brand, we need to
constantly keep innovating for better serving the market, our customers and the categories
we cater to. In the current age of uncertainty and speed of change, the above effort of
sourcing solutions will need to be driven both through in-house initiatives as well as
collaborating with external partners. TACNet will enable the outside world in connecting
with us for such innovation and collaboration opportunities. We are looking forward to
unlocking the potential of India’s finest startups and technology and solution based
companies."
TACNet, is a platform for connecting aspiring mature start-ups with Tata Motors to solve
existing and anticipated challenges in the cargo and people mobility. The themes for TACNet
2.0 are centered on areas that are of immediate interest to Tata Motors. The company is
looking for directly applicable solutions for block chain in automotive, parking marketplace,
NLP native chatbot, demand prediction algorithm, real time monitoring of fuel quality (BSVI)
and authenticating genuine spare parts. Interested applicants can apply by filling out the
application form on the company’s web page – tacnet.tatamotors.com. Last date for entries
will be September 29, 2019. This program will commence from inviting participations from
aspiring start-ups, to pitching of their business and then culminating into a potential for a
strategic partnership with an opportunity to even pilot a project.
Expansion plans
The company will increase the production of commercial vehicles from 30,000 units per
annum to 1,00,000 units per annum with an investment of Rs. 350 crore. The expansion will
include setting up a paint shop, welding shop and a new assembly line for commercial
vehicles.
Acquisition Strategies
Mergers and acquisitions, if adequately implemented, increase the profits due to the
synergy effect. TATA Motors has the most significant history of acquiring Jaguar Land Rover,
Daewoo, Hispano, etc., and making profits from those acquisitions.
Strong Management team
MR. Guenter Butschek, the former COO of Airbus, heads Tata Motors and has a strong
leadership team consisting of stalwarts like MR. N. Chandrashekaran, M. O. P Bhatt, etc., is
the biggest asset in the tough times. TATA motors have reached 52-week record high share
price and gain a quarter on quarter profits from the last three quarters after recovering
from its poor performance from the previous five years.
Rivalry
The automotive industry is the oldest in our country. Big brands like Maruti, Mahindra &
Mahindra, Hero, and Bajaj Auto are both experienced in the industry and innovative in their
solutions. This stiff competition is always a threat for TATA Motors.
The government's decision to introduce Basel -VI norms from Basel- IV is creating confusion
in users' minds over the purchase decision from the last year. To make the vehicles
compliant with new standards, automakers have to move to new technology. This increases
the cost of production and decreases the profit margin for players across the Auto industry.
CHAPTER 2
AN OVERVIEW OF THE
INDUSTRY
The Indian automobile market is one of the largest in the world, both in terms of sales
volume and production. Talking about historical roots of the car market in India, the first
time that a vehicle came on road was in 1897. Till 1930, India did not have any
manufacturing facility and cars were imported directly from other countries. The landmark
decade in the manufacturing process was that of 1940s, in which Indian companies like
Hindustan Motors and Premier started to manufacture cars of other firms. During the same
decade, Mahindra & Mahindra also started to produce utility vehicles.
after independence
1947, Government of
India tried to create an
automotive component
manufacturing industry in
order to supplement
the automobile
fraternity. From 1960 to
1980s, the Indian market
was dominated by
Hindustan Motors, which gathered a large amount of share due to its Ambassador model. However,
during 1950s till 1960s, the overall industry moved at a slow pace due to trade restrictions set on
imports. Soon after this repressive phase, demand surged but to a smaller extent, which was mainly seen
in the tractor and commercial vehicles segment.
It was in 1980s that the two firms, Hindustan Motors and Premier, were challenged by a
new entrant, Maruti Udyog Limited. Soon after liberalisation period, car makers that were
previously not allowed to invest in Indian market due to stringent policies arrived in the
country. Post liberalisation, the alliance between Maruti and Suzuki was the first joint
venture between an Indian company and foreign one. Slowly and steadily, the economic
reforms brought in the led to the entry of major foreign companies like Hyundai and Honda,
which expanded their bases to the country. From 2000 to 2010, almost every major car
company expanded its presence to India by establishing manufacturing facilities across
different parts of the country.
As the manufacturing process during early 2000 decade gained traction, exports of cars was
quite slow in that period. Maruti Suzuki was among the first car brands that started shipping
vehicles to major European markets. During the same decade, the Government of India
introduced mandatory emission norms in order to reduce pollution arising out from
vehicles. The updated guidelines were known as 'Bharat Stage' came into effect in major
cities as these standards were based on stringent European norms. At present, Bharat Stage
IV is implemented in 13 cities that include Delhi (NCR), Mumbai, Kolkata, Chennai,
Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Lucknow, Solapur, and Agra while
the rest of the nation is still under Bharat Stage III.
Over the years, the car market in India has evolved by leaps and bounds as almost all major
companies are present in the country. India has now become a hub for auto makers to set
up their plants for manufacturing vehicles intended for domestic and international markets.
The three prominent regions in which the majority of Indian car industry is concentrated lies
in south, west and north. In the southern region, Chennai is the hub for manufacturing
vehicles while Mumbai and Pune belt comes in second place. For the north, the NCR holds a
fair share as far as concentration of production facilities is concerned.
To list a few commendable feats of the Indian car industry, it emerged as the fourth largest
exporter of passenger cars behind Japan, South Korea, and Thailand in 2009. While in 2010,
India emulated its previous year's performance to become the third largest exporter of cars
in Asia. The biggest reward came for the Indian car market in 2011 as it became the sixth
largest country in the world in terms of production.
Large or small, every business can gain from efficient streamlined processes, educational
business intelligence, and systems that are flexible enough to grow with changing business
needs. But the solutions that deliver these advantages can strain the budgets of even large
businesses.
Automotive Software comprise of business scenarios that cover the most important
requirements of the automotive supplier industry. These requirements include:
• Business Intelligence (BI) – Business process scenarios in this area provide the flexible
reporting and analysis tools you need for decision-making support
The business processes for automotive in focus on production planning, procurement, and
sales. Some of the Key features in automotive ERP Software process:.
Consignment: External service provider (ESP) or logistics service provider (LSP) scheduling
with consignment store deals with component supply processing. The vendor produces the
finished product in repetitive manufacturing. Assemblies, on the other hand, are produced
using kanban and purchased parts are procured using kanban.
Stock transfer: Stock transfer between plants describes a collaborative stock transfer
scenario between the production plant and receiving plant within one company.
Sales processing: Sales order processing describe when a customer orders goods from the
sales organization.
Supplier relationship management (SRM) business process scenarios that allow you to
rapidly set up procurement processes that are internet-based for requisitioning and
purchasing of indirect and direct materials.
• The indirect procurement scenario is the procurement of indirect material over the
Internet.
• The local procurement scenario is indirect procurement with limited access to a back-end
system.
Business Intelligence business process allows you to analyze data from operative ERP
applications, as well as all other business applications and external data sources, such as
databases, online services, and the Internet. The administrator functions within Business
Intelligence control, monitor, and maintain all data retrieval processes.
Business Intelligence makes possible online analytical Processing (OLAP), which processes
information from large amounts of operative and historical data. This enables
multidimensional analyses from various business perspectives.
Some of the use case scenarios include accounts receivable analysis, accounts payable
analysis, general ledger analysis, purchasing analysis, production plan/actual analysis,
production period/specific analysis, capacity load utilization, cost center accounting analysis,
product cost controlling analysis, and sales analysis.
in the domestic markets., India is the largest tractor manufacturer, second largest two-
wheeler manufacturer, second largest bus manufacturer, fifth largest heavy truck
manufacturer, sixth largest car manufacturer, and eighth largest commercial vehicle
manufacturer.
Contribution to GDP
The Automotive sector in India is valued at $93 billion currently and is growing at a steady pace. The
automotive industry contributes a whopping 49% of India’s manufacturing GDP. In 2018, the
Automotive Sector contributed to 7.5% of India’s total Gross Domestic Product (GDP). While this
percentage dropped to 7% in the current year, owing to COVID-19, new emission norms and the
economic downturn, experts believe that it may show an increase towards the end of this year.
From March 2020 to April 2020, all automotive manufacturers and dealers were shut down for a
period of 40 days, further contributing to the decline in GDP.
As a result, the GDP, which saw an increasing trend began to feel the pinch of an unexpected and
unforeseeable downfall.
Revenue Generation
Automobile manufacturers in India recorded a turnover of over 67 billion U.S. dollars in financial year
2017. This was about the same value in fiscal year 2013. The automotive market produced over 26 million
vehicles in 2020, a decline compared to the previous year. Domestic sales saw a loss of 18 percent, while
exports grew at nearly three percent.
The auto component segment is equally robust, supplying the entire range of parts required by the
domestic automobile industry and currently employs about 250,000 people. Although small by global
standards, this segment is growing rapidly as a result of its low costs and rising quality. Over 300 small
and medium companies directly service the OEMs assembling vehicles in India. Downstream, close to
5,000 other micro firms are working for these Tier 1 suppliers, as well as for the replacement market
Competition in India: competition in India's automobile and parts sector had been heating up
in the recent years. Many global players in the automobile and parts industry have already set up
presence in India. Most of them are through tie-ups with dominant local players, while some are done
entirely on their own.
In the absence of strong competition in the past, the local car manufacturer Maruti Udyog Ltd (MUL) has
virtually dominated the Indian automotive market in the passenger segments since the 1980s. As the
automotive manufacturing sector rapidly evolved through the dynamics of open market and
deregulation, many new joint ventures (both technical and financial) were formed between local players
with leading global manufacturers. In 1982, MUL, then a wholly government-owned company, signed up
a collaboration agreement with Suzuki of Japan to establish the volume production of contemporary
models. Subsequently, the licensing regime was scrapped in 1993 paving way for 17 new ventures, of
which 16 are now manufacturing cars
Since then, there has also been an emergence of new competition for higher value segments of the
passenger car market. Hence, local players like MUL also began to face competition from new foreign car
makers. Ford entered the mid-range market with the Ikon model in April 1998, a move which was
followed by Honda, Mitsubishi, Hyundai, and Daewoo. Other players, Hyundai and Daewoo, have since
improved their share of the passenger car market with new models
Market Share in the Automobile Sector: For the 4-wheelers segment, MUL/Suzuki
dominates the automotive landscape holding a 33% share of the passenger car market in 2004/05. In the
second place is Tata Motors, a local company, commanding 26% share, while Hyundai Motor ranked third
with 15% share and the rest split amongst close to 2 dozen other manufacturers.
Market Share in the Auto parts sector: The auto parts sector in India is highly
fragmented and yet to overcome quality related problems. Despite this, India has also managed to attract
leading players in the auto parts manufacturing to locate in India. These players include Delphi Systems,
Bosch, Visteon, Denso, Johnsons Controls, and TRW Automotive to name a few. As a result of such
successful localization of these components, vehicles manufacturers started outsourcing more and more
components rather than manufacture in-house. For example, GM expects to source more auto parts a
year from India by 2008, increasing to US$1 B from US$120 B in 2007. Hence, local firms are encouraged
to develop components and set up facilities. Whenever required, OEMs and these global tier 1 part
makers supported through equity participation or technical collaboration etc
Firms Operating in The Industry During its early days, most of the Indian automobile
manufacturers banked upon foreign technologies. But the scene has changed over the years and
presently, the Indian auto manufacturers are using their own technology to manufacture brilliant
masterpieces. The Indian automobile industry has grown by leaps and bounds. The automobile industry is
one of the fastest growing industries in India. There was a time when there was no variety of cars
available in the Indian market. However, the statistics have changed completely. Today, the Indian
market is blessed with a diverse array of cars, ranging from hatchbacks, SUVs, sedan to MPVs. There are
several top car manufacturing companies running their operations in India. A few big names are Tata
Motors, Mahindra and Mahindra, Hero MotoCorp, etc. Let's learn briefly about some of the largest car
manufacturing companies in India
Revenue: Rs 296,917 Cr
Employees: 82,797
Promoter holding: 38.37 %
Tata Motors is one of the leading Automobile Companies in India and the world, providing
mobility solutions to over 175 countries. The portfolio includes a wide range of cars, utility
vehicles, trucks, and buses. The company is the largest automobile company in the list Top
10 Automobile Companies in India based on the Turnover
Market share
Revenue: Rs 83,281 Cr
Market Cap: Rs 199,130 Cr.
Employees: 33,180
Promoter holding: 56.21 %
Market leader in the passenger vehicle segment in
India. The Company was established in 1981. A joint
venture agreement was signed between the Government of India and Suzuki Motor Corporation
(SMC), Japan in 1982. The Company became a subsidiary of SMC in 2002. Maruti is the Second
Largest Automobile Companies in India by the Revenue
Market share
Passenger Vehicles: 53 %
In terms of production volume and sales, the Company is now SMC’s largest subsidiary. SMC
currently holds 56.21% of its equity stake. Maruti Suzuki largest car company in India based on
Market share.
The Company has two state-of-the-art manufacturing facilities located in Gurugram and Manesar in
Haryana, with a combined annual production capacity of ~1.58 million units per annum.
Revenue: Rs 28,476 Cr
Market Cap: Rs 20,314 Cr
Employees: 11,966
Promoter holding:51.13 %
Headquartered in Chennai, 9 manufacturing plants give an international footprint – 7 in India, a bus
manufacturing facility in Ras Al Khaimah (UAE). Ashok Leyland has a well-diversified portfolio across
the automobile industry. Ashok Leyland has recently been ranked as the 38th best brand in India.
Market share
Ashok Leyland launched India’s first electric bus and Euro 6 compliant truck in 2016. Over millions
of passengers use Ashok Leyland buses to get to their destinations every day and 7,00,000 trucks
keep the wheels of the economy moving.
Turnover: Rs 3,487 Cr
Market Cap: 1,155 Cr.
ROE: 7.67 %
Sales Growth (3Yrs): 6.48 %
Today, its range includes Small Commercial Vehicles (SCV), Multi-Utility Vehicles (MUV), Light
Commercial Vehicles (LCV), Special Utility Vehicles (SUV) and Agricultural Tractors. So no matter
what the need be, Force has a solution to offer
SML Isuzu Ltd. (SMLI) is a trusted and reliable commercial vehicle manufacturer since 1985. It has
over 33 Years of experience in producing Light & Medium commercial vehicles to meet Indian
customer needs. SMIL is the first company to manufacture and supply state of the artfully built
Buses, Ambulances, and customized vehicles. It is the last in the list of top Automobile Companies in
India
Turnover: Rs 1,312 Cr
Market Cap: 555.36 Cr.
Dividend Yield: 0.78 %
ROE: 4.79 %
Sales Growth (3Yrs): 6.51 %
PRICE POSITIONING
Setting the overall price position against other products
in the assortment, or against competitors, is always a key
challenge in automotive.
If you need to price a product (or service) in a new market, it makes all the difference in the world if you
understand customers' willingness-to-pay.
Demand / WtP curves like the ones above, show the optimal price point where the curve peaks. In this
example, the best price to optimize quantity is 10, whereas the optimal price for optimizing revenue is
15.
In the old days when research was expensive, this could be difficult to get through a corporate approval if
launching in many markets at once. These days, with cost-effective research options from e.g. PriceBeam,
the cost of getting these crucial insights should no longer be an issue.
Understand consumers’ willingness-to-pay for different product features and use such
insights to optimize your product offering through add-ons and identification of salient
features wanted by your target customers. you can identify for which of your product
features or benefits are customers willing to-pay, and how much. Understanding customer
value of such attributes is essential in order to customize your product as necessary,
wherever there is a potential fit. This is crucial to drive sales up, through attraction of target
audience and additional features, as well cutting down on losses from features that aren’t
valued.
In automotive, innovation is crucial for many brands. It is quite common that 20-30% of all
products sold are recently launched. Companies spend many millions in launch marketing
and advertising across multiple channels. However, they often struggle to set the right price.
you can test different concepts and communication strategies before launching, and
understand consumers' willingness-to-pay for those options. This provides solid facts and
improves the likelihood of success of the launch, when launch prices are aligned with value
Pricing Managers, Marketing Managers, and Sales teams often find it more difficult to get pricing right
when launching a product in a new market, as opposed to pricing the same product in an existing market.
In theory existing-market pricing should go through the same steps as new-market pricing and look at
value drivers and willingness-to-pay, but in many situations existing markets mean there is a reference
point to base the price on. Such a reference point is lacking if pricing for a new market.
VALUE COMMUNICATION
While overall willingness-to-pay is a useful start, for really professional new market pricing, the next step
should be to break down the willingness-to-pay into the individual value drivers. For what features or
benefits are customers willing to-pay, and how much.
A good method for understanding the individual value-drivers is to use choice-based conjoint analysis. In
this type of research respondents are shown a set of product choices. He/she then chooses his
preference and is shown a new set of choices with other configurations; and again; and again. Through
the choices it is possible to determine how much value the respondent puts on the individual features.
The outcome: a series of value-drivers and the value potential customers put on them in the new market.
The answer should really lie in what the expected willingness-to-pay is over time. In most businesses and
industries, it is likely to be a more solid strategy to start high and then over time reduce the price is
necessary. This is often associated with human psychology, where it is easier to accept a price reduction
than a price increase. Especially start-ups get this wrong, where they value themselves too low to begin
with, and then struggle to increase prices later. But also big corporations get it wrong from time to time.
in most industries there is a marked difference in prices between countries. This for a good reason:
customers are willing to pay a higher price in some markets than others. So while it can in certain
instances be tempting to introduce a single, global price to simplify IT systems or manage customers who
exploit price differences, the upside and benefit from differentiated pricing around the world is
significant. So don't fall in the trap of harmonizing prices.
PriceBeam market research can be run seamlessly in 109 countries around the world, with results ready
and comparable in less than a week. Use our cost-efficient research to monitor WtP and optimize prices
globally.
or manage customers who exploit price differences, the upside and benefit from
differentiated pricing around the world is significant. So don't fall in the trap of harmonizing
prices. .
ASSORTMENT OPTIMIZATION
How many products or services in an assortment, and their individual prices, are challenges
faced by many brand managers, product managers, or customer insight executives.
PROMOTIONAL OPTIMIZATION
Understand consumers' potential reaction to
different promotional mechanisms or discount
levels, and optimize the overall revenue.
Discounting and promotions are prevalent in most industries. Running a promotion or giving
a discount can, when done properly, deliver incrmental sale or help gaining access to new
customers. With PriceBeam's Willingness-to-pay research you can quickly research what
your customers really are willing to pay for a product or service in a given market.
Investments
In order to keep up with the growing demand, several auto makers have started investing
heavily in various segments of the industry during the last few months. The industry has
attracted Foreign Direct Investment (FDI) worth US$ 25.85 billion between April 2000 and
March 2020, according to the data released by Department for Promotion of Industry and
Internal Trade (DPIIT).
Some of the recent/planned investments and developments in the automobile sector in
India are as follows:
In FY21, passenger vehicles sales reached 27.11 lakhs units, two-wheelers reached
151.19 lakhs units, commercial vehicles sales reached 5.69 lakhs units and for three-
wheelers it was 2.16 lakhs units.
In 2019-20, the total passenger vehicles sales reached ~2.8 million, while ~2.7 million
units were sold in FY21.
In February 2021, the Delhi government started the process to set up 100 vehicle
battery charging points across the state to push adoption of electric vehicles.
In January 2021, Fiat Chrysler Automobiles (FCA) announced an investment of US$
250 million to expand its local product line-up in India.
A cumulative investment of ~Rs. 12.5 trillion (US$180 billion) in vehicle production
and charging infrastructure would be required until 2030 to meet India’s electric
vehicle (EV) ambitions.
In January 2021, Lamborghini announced it is aiming to achieve sales in India higher
than the 2019-levels, after recovering from pandemic-induced disruptions.
In January 2021, Tesla, the electric car maker, set up a R&D centre in Bengaluru and
registered its subsidiary as Tesla India Motors and Energy Private Limited.
In November 2020, Mercedes Benz partnered with the State Bank of India to provide
attractive interest rates, while expanding customer base by reaching out to potential
HNI customers of the bank.
Hyundai Motor India invested ~Rs. 3,500 crore (US$ 500 million) in FY20, with an eye
to gain the market share. This investment is a part of Rs. 7,000 crore (US$ 993
million) commitment made by the company to the Tamil Nadu government in 2019.
In October 2020, Kinetic Green, an electric vehicles manufacturer, announced plan
to set up a manufacturing facility for electric golf carts besides a battery swapping
unit in Andhra Pradesh. The two projects involving setting up a manufacturing facility
for electric golf carts and a battery swapping unit will entail an investment of Rs.
1,750 crore (US$ 236.27 million).
In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide
US$ 1 billion (Rs. 7,400 crore) to SBI (State Bank of India) for funding the
manufacturing and sales business of suppliers and dealers of Japanese automobile
manufacturers and providing auto loans for the purchase of Japanese automobiles in
India.
In October 2020, MG Motors announced its interest in investing Rs. 1,000 crore (US$
135.3 million) to launch new models and expand operations in spite of the anti-China
sentiments.
In October 2020, Ultraviolette Automotive, a manufacturer of electric motorcycle in
India, raised a disclosed amount in a series B investment from GoFrugal
Technologies, a software company.
In September 2020, Toyota Kirloskar Motors announced investments of more than
Rs 2,000 crore (US$ 272.81 million) in India directed towards electric components
and technology for domestic customers and exports.
During early September 2020, Mahindra & Mahindra singed a MoU with Israel-based
REE Automotive to collaborate and develop commercial electric vehicles.
In April 2020, TVS Motor Company bought UK’s iconic sporting motorcycle brand,
Norton, for a sum of about Rs. 153 crore (US$ 21.89 million), making its entry into
the top end (above 850cc) segment of the superbike market.
In March 2020, Lithium Urban Technologies partnered with renewable energy
solutions provider, Fourth Partner Energy, to build charging infrastructure across the
country.
In January 2020, Tata AutoComp Systems, the auto-components arm of Tata Group
entered a joint venture with Beijing-based Prestolite Electric to enter the electric
vehicle (EV) components market.
Achievements
Following are the achievements of the Indian automotive sector:
On 29th July 2019, Inter-ministerial panel sanctioned 5,645 electric buses for 65 cities.
NATRiP’s proposal for “Grant-In-Aid for test facility infrastructure for EV
performance Certification from NATRIP Implementation Society” under the FAME
Scheme was approved by Project Implementation and Sanctioning Committee (PISC)
on 3rd January 2019.
Under NATRiP, following testing and research centres have been established in the
country since 2015.
o International Centre for Automotive Technology (ICAT), Manesar
o National Institute for Automotive Inspection, Maintenance & Training
(NIAIMT), Silchar
o National Automotive Testing Tracks (NATRAX), Indore
o Automotive Research Association of India (ARAI), Pune
o Global Automotive Research Centre (GARC), Chennai
SAMARTH Udyog - Industry 4.0 centres: ‘Demo cum experience’ centres are being
set up in the country for promoting smart and advanced manufacturing helping
SMEs to implement Industry 4.0 (automation and data exchange in manufacturing
technology).
Road Ahead
The automobile industry is supported by various factors such as availability of skilled labour
at low cost, robust R&D centres, and low-cost steel production. The industry also provides
great opportunities for investment and direct and indirect employment to skilled and
unskilled labour.
Indian automotive industry (including component manufacturing) is expected to reach Rs.
16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026.
The Indian auto industry is expected to record strong growth in 2021-22, post recovering
from effects of COVID-19 pandemic. Electric vehicles, especially two-wheelers, are likely to
witness positive sales in 2021-22.
A study by CEEW Centre for Energy Finance recognised US$ 206 billion opportunity for
electric vehicles in India by 2030.
References: International Organization of Motor Vehicle Manufacturers, Media Reports,
Press Releases, Department for Promotion of Industry and Internal Trade (DPIIT),
Automotive Component Manufacturers Association of India (ACMA), Society of Indian
Automobile Manufacturers (SIAM), Union Budget 2021-22
The Indian automobile sector has strong linkages with the overall economy and is a major
source of revenue for many industries such as Media, Rubber, Steel, Paint, Aluminum and so
on. Indian auto industry today is capable of end-to-end product design, prototyping, mass
manufacturing & selling (domestically & internationally). Today, it is one of the biggest
success stories which Indian manufacturing ecosystem has seen in the past decades. This
sector has been one of the largest recipients of FDI with an inflow of $24.5 billion in the last
two decades, accounting for 5.1% of the total FDI inflows to the country. We have come a
long way since the zero sales of April 2020 (national lockdown days). The partnership
between the government and Industry has been the key to coming out of these uncharted
times. Timely re-opening of manufacturing plants, favorable monetary policies and
government support packages for farmers further supported demand revival. Prior to the
second Covid wave, the Auto industry had been witnessing a V shape recovery. Sales were
on an upswing month on month since August 2020, compared with the same month of the
previous fiscal year. In fact, march’21 saw almost doubling of sales viz a viz March’20 sales.
Some of the reasons for this resilience include preference towards personal mobility during
covid, traction in rural markets, pent-up demand and so It is expected that we should see
about 75% of normal vehicle sales by July 2021 and almost 100% of normal vehicle sales by
August 2021 for most of India’s leading automakers. During the 1st covid wave, rural
demand played a key role in the overall auto demand revival for the industry however, this
time it should be a mix of rural and urban demand which will bring in the overall revival ,In
fact, FY21 has been a remarkable year for the Indian passenger car industry. We touched 1
million SUV sales for the first time ever and SUV sales is one of the few segments which
showed a growth in sale numbers in FY21. To put things into perspective, Kia Seltos took
merely 11 months to cross the milestone of 1 lac unit sales viz a viz a Maruti Alto, which
could not even cross sales of 50k units in any of the initial 3 years of its launch. This clearly
shows us that the aspirations & purchasing power of the new young India are growing at a
pace like never.
In the past few months, we have already witnessed Capex announcements from Indian and
global players across areas of sunroof manufacturing, tires, electric scooter manufacturing,
battery assembly, auto electronics etc. A lot of global investors and fund houses, we are
working with, are looking to invest into both greenfield and brownfield opportunities,
specifically into the areas of EV ecosystem and Auto Electronics.
Production Linked Incentives for Auto and Advanced Cell Chemistry will further drive
localization in the country and contribute to India’s emergence as a global manufacturing
hub. PLI for ACC has already been notified and we expect the final RFP document to be out
very soon. Further, aggressive vaccination drives along with stringent regional lockdowns
should further reduce the covid caseload and restore the economy again. India is expected
to grow to USD 5 Tn by 2025-26 and to USD 8-10 Tn in the next 10-12 years. This means that
the incremental USD 5-7 Tn of India’s economy is yet to come. Manufacturing is going to be
the core of this growth in the same way as IT was in the early 2000’s. 20% plus of India’s
GDP by 2025 will come from manufacturing which means India’s manufacturing sector will
need to grow by over 13% for the next 10 years and auto sector will be at the core of this
growth. The future of vehicles will be electric, shared and connected to make driving
greener, easier, and safer.
First half of the year has already ended and the WHO has confirmed that the COVID-19 is
here to stay. The outbreak of the novel virus that started from China has now spread
worldwide. Economies enforced lockdown but customer footfall post reopening is still
low, which is majorly due to decline in consumer confidence and halted automotive
production. Companies such as Tesla, General Motors and Volvo have opened their
production plants but shortage of auto components and workforce is negatively affecting
the production. Shortage of auto components is primarily due to heavy reliance on China.
In fact, push by governments of various economies to cut GHGs by incentivizing adoption
of electric vehicles has further pushed the imports from China as the country holds
dominant position in electric vehicle and electric vehicle components market. For
instance, several tier I suppliers and OEMs have increased imports from China as it is the
major hub for battery technology, drive transmission and steering, which are utilized in
electric vehicle production, thereby, contributing to the increased trade deficit with China
execution and manufacturability of the vehicles nowadays is greater than ever. The
reaction of the vehicle industry is primarily dependent on the choice of lightweight
materials that meet these executions and cost prerequisites and improve the
effectiveness and fuel economy of vehicles.
An electric vehicle produces 50% less CO2 emission than an average automobile and as
part of reducing carbon footprint, automakers are retorting to electric vehicles and
governments are offering subsidies to promote that. Increasing consumer awareness and
technological advancements are expected to boost the sales of electric vehicles although,
inadequate electric charging infrastructure is still a challenge.
Modifications in Supply Chain and Business Model:
Disrupted supply chain has also brought the production of vehicles to a standstill. For
instance, below mentioned figure indicates Chinese exports of motor vehicle parts and
components in 2018.
Novel coronavirus outbreak has not only affected exports but also impacted the working
mechanism inside production plants. Maintaining social distancing inside production
facility will involve movement of complex machineries, which stresses on the demand for
digitization of supply chain. Digitization in turn, is expected to automate the process
while improving the productivity and safety of workers.
Additionally, companies need to modify their business models. For instance, Tesla, a
leading electric vehicle company, sells vehicles through digital retailing. Doing so helps
the company to cut cost by reducing or removing dealer commissions. Also, it helps to
improve the customer engagement and experience as they are directly in touch with the
customers without any third party. Surging sales of electric vehicle companies in Q1, 2020
may encourage other automakers to follow similar path.
Increasing Y-o-Y Unsold Inventory
With new consumers being tech savvy, automakers are consistently introducing
new technologies with improved fuel economy and reduced GHGs, to maintain
their competitive position in the market. Due to continued product development,
unsold inventory is also increasing on Y-o-Y basis. American International
Automobile Dealers Association (AIADA) reported unsold 3.95 million vehicles on
dealership lot at the end of January 2019, which was 4% higher from the 2018’s
3% unsold inventory. Besides, economic slowdown amidst SARS COV-2 is expected
to further aggravate the situation. The solution to the problem can be
introduction of automotive scrappage policy by the government for encourage
buyers to replace old vehicle and purchase new ones.
Automotive companies must begin thinking beyond their traditional benefit offerings and
overcome the deterrents standing within the way of speedy adoption of new technology
in order to stay afloat in the market. Effectively bringing innovative connected vehicles to
market is expected to open new income streams as well as offer more productive, more
cost-effective, and more customized transportation opportunities for customers.