INTRODUCTION

The Indian automobile industry is the fourth largest in the world with an annual turnover of
$100 billion and employs 32 million people. The two-wheeler industry in India is the largest
in the world. India is also the largest tractor manufacturer and the eight largest commercial
vehicles manufacturer in the world. The automobile sector currently contributes about 50 per
cent of the manufacturing gross domestic product (GDP) in India, 26 per cent of the industry
GDP and 7.1 per cent of overall GDP, up from 2.7 per cent in 1992-93. The sector
contributes approximately 13 per cent of excise revenue to the government. The total
investment in this sector is around $40 billion in the last decade. The decade of 2001-2010
saw a compounded annual sales growth of 15.67 per cent, which included 10 per cent
exports. The yearly growth of exports was 23 per cent from 2000 to 2015 due to constant
government support.

The automobile industry includes two-wheeler, four-wheeler, passenger vehicle and

commercial vehicles. In 2018-19, 4.06 million cars were manufactured and at present around
32 million cars run on Indian streets. The two-wheeler segment dominates the industry with a
share of 80 per cent. In 2019-20, however, the sector faced troubles in maintaining sales and
profitability numbers on quarterly and even yearly basis. In August 2019, there was a 35.9
per cent drop in domestic sales for market leader Maruti Suzuki with 94,728 units being sold
due to subdued market confidence, slow economic growth and crisis in the non-banking
financial companies (NBFCs).

MARKET STRUCTURE OF THE INDUSTRY

Indian automotive industry has grown up very fast in last one decade due to rising family
income, changing lifestyle, low vehicle penetration, easy finance availability, rapid
urbanization and poor public transport system. But current year auto market growth is in flat
to negative due to slowdown in economy growth.
In FY 2018-19, sale of passenger vehicles has increased by 2.70%, two-wheeler by 4.86%
and three-wheeler by 10.27% as compared to FY 2017-18.
In April-March 2019, overall automobile exports grew by 14.50%. The overall Commercial
Vehicles segment registered a growth of 17.55% in April- March 2019.
Market size: Domestic automobiles production increased at 2.36 per cent CAGR between
FY16-20 with 26.36 million vehicles being manufactured in the country in FY20. Overall,
domestic automobiles sales increased at 1.29 per cent CAGR between FY16-FY20 with
21.55 million vehicles being sold in FY20.
Two wheelers and passenger vehicles dominate the domestic Indian auto market. Passenger
car sales are dominated by small and mid-sized cars. Two wheelers and passenger cars
accounted for 80.8 per cent and 12.9 per cent market share, respectively, accounting for a
combined sale of over 20.1 million vehicles in FY20.
Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of
6.94 per cent during FY16-FY20. Two wheelers made up 73.9 per cent of the vehicles
exported, followed by passenger vehicles at 14.2 per cent, three wheelers at 10.5 per cent and
commercial vehicles at 1.3 per cent.
Premium motorbike sales in India recorded seven-fold jump in domestic sales, reaching
13,982 units during April-September 2019..

THE DEMAND AND SUPPLY CONDITIONS IN THE INDUSTRY

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 industry attracted Foreign Direct
Investment (FDI) worth US$ 24.21 billion during April 2000 to March 2020 according to the
data released by Department for Promotion of Industry and Internal Trade (DPIIT).
Domestic automobile production increased at 2.36 per cent CAGR between FY16-FY20 with
26.36 million vehicles being manufactured in the country in FY20. Overall, domestic
automobiles sales increased at 1.29 per cent CAGR between FY16-FY20 with 21.55 million
vehicles being sold in FY20.Two wheelers and passenger vehicles dominate the domestic
Indian auto market. Passenger car sales are dominated by small and mid-sized cars. Two
wheelers and passenger cars accounted for 80.8 per cent and 12.9 per cent market share,
respectively, accounting for a combined sale of over 20.1 million vehicles in FY20.Overall,
automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94 per
cent during FY16-FY20. Two wheelers made up 73.9 per cent of the vehicles exported,
followed by passenger vehicles at 14.2 per cent, three wheelers at 10.5 per cent and
commercial vehicles at 1.3 per cent.
The electric vehicle (EV) market is estimated to be a Rs 50,000 crore (US$ 7.09 billion)
opportunity in India by 2025.
The Government aims to develop India as a global manufacturing and research and
development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure
Project (NATRiP) centres as well as National Automotive Board to act as facilitator between
the Government and the industry. The Indian Government has also set up an ambitious target
of having only EVs being sold in the country. The Ministry of Heavy Industries, Government
of India, has shortlisted 11 cities in the country for introduction of EVs in their public
transport system under the FAME scheme. Under Union Budget 2019-20, Government
announced to provide additional income tax deduction of Rs 1.5 lakh (US$ 2146) on the
interest paid on the loans taken to purchase EVs.EV sales, excluding e-rickshaws, in India
witnessed a growth of 20 per cent and reached 1.56 lakh units in FY20 driven by two
wheelers.The Government of India expects automobile sector to attract US$ 8-10 billion in
local and foreign investment by 2023.

COMPETITIVE STRATEGIES FOLLOWED BY ATUOMOBILE

INDUSTRIES
Achieving and maintaining a coherent strategy takes discipline and a willingness to chart an
unorthodox path. We have found that to build and maintain coherence, a company needs to
undertake five unconventional acts of leadership:
 Commit to an identity: Coherent companies don’t get trapped on a growth treadmill,
chasing multiple market opportunities, many of which they have no hope of gaining
an advantage in. Instead, they are clear-minded about what they do best, developing a
solid value proposition and building distinctive capabilities that will last for the long
term.
 Translate the strategic into the everyday: Many managers assume they should adopt
the best practices of their industry and treat external benchmarking as the established
path to success. But coherent companies view things differently. They translate the
strategic into the everyday. They design and build their own bespoke capabilities that
set them apart from other companies. Then they bring those capabilities to scale in
their own distinctive ways.

 Put your culture to work: A standard business practice for solving execution problems
is structural change: reworking the organizational chart and rethinking incentives. The
culture of the enterprise, if considered at all, is seen as a hindrance. But coherent
 companies resist disruptive reorganizations and instead put their current culture to
work. They tap the power of the ingrained thinking and behavior that already exists
below the surface in their company, using culture, not structure, to drive change.
 Cut costs to grow stronger: A conventional company might try to reduce costs across
the board by going lean everywhere. But the most successful companies cut costs to
grow stronger. They marshal their resources strategically, doubling down on the few
capabilities that matter most and pruning back everything else.
 Shape your future: Coherent companies are not trying to simply become agile. They
don’t respond to external change as rapidly as possible. Instead, they shape their
future by creating the change they want to see.

IMPACT OF COVID -19 ON THE INDUSTRY

The March 2020 numbers show the effect of lockdown due to the COVID-19 pandemic. The
last month of any financial year is usually the peak period for inventory clearance for the
industry. Maruti Suzuki India saw its total domestic passenger vehicle sales fall 47.4 per cent
to 76,240 units in March 2020 compared with 145,000 units in March 2019. The export sales
were down almost 55 per cent to 4,712 units from 10,463 a year ago. With overall sales down
by 16 per cent, the company ended FY20 with total sales of 1.563 million units, down from
1.862 million in the previous fiscal. Similarly there was a 40 per cent decline in domestic
sales of Hyundai Motor India to 26,300 units in March 2020. Similar trend was seen
in Mahindra and Mahindra's domestic passenger vehicle sales, which drastically plunged 88
per cent to 3,384 units in March 2020 from 27,637 units in March 2019.The switch from
Bharat Stage 4 (BS4) to Bharat Stage 6 (BS6) emission norms has also added to the woes of
the sector as BS6 was to be implemented from April 1, 2020. This brought in long-term
problems to the automobile industry from both manufacturing end to sales point.0As new
BS6 vehicles were few in the market and the switch to BS6 saw the overall demand sales of
BS4 vehicles drop, this led to an increase in inventory of old (BS4) vehicles both in two-
wheeler and four-wheeler segments.

Hence many automobile plants of leading players were closed for few days to halt
production, which led to loss of jobs of the contractual workforce. Macroeconomic issues that
added to this crisis include the decline in demand/consumption both from the rural and urban
markets, and a liquidity crunch in the financial markets. In July 2019,
NBFCs financed almost 70 per cent of new two-wheelers and 60 per cent of new commercial
vehicles sold in the country comprising of Infrastructure Leasing & Financial Services
(IL&FS) and Dewan Housing Finance Ltd (DHFL) which were leading NBFCs. When
IL&FS and DHFL went into financial distress, they transmitted this contagion from the
financial services sector to automobile sector dragging it down.

The reverse gear of the India auto industry came immediately after the government declared a
nationwide lockdown on March 24, 2020 to contain the spread of COVID-19. SIAM declared
that the plant closure of auto original equipment manufacturers and component manufacturers
will lead to a loss of INR 2,300 crore per day and a cumulatively three-week shut down of the
automotive industry will translate into a total revenue loss of INR 48,300 crore.

Supporting the lockdown, all automakers immediately temporarily closed down. A minor
support came on March 27, 2020, when the Federation of Automobile Dealers Associations
appealed to the Supreme Court to allow the sale of BS4 vehicle inventory which has piled up
amid the COVID-19 crisis. The Supreme Court gave an extension of ten days, post the
ongoing 21-day lockdown to sell the old inventory of BS4 vehicles with a caveat that only 10
per cent of the unsold BS4 inventory could be sold in India excluding Delhi-NCR region
where none can be sold. The unsold stock includes around 700,000 two-wheelers, 15,000
passenger cars and 12,000 commercial vehicles.

The Indian automobile industry, which had been accelerating for the last two decades has
now gone into reverse gear and has seen the worst. But the present global pandemic with the
lockdown, job losses and declining demand casts a spell of gloom for the industry in the near
future.

NUMBER OF PLAYERS IN THE INDUSTRY

 Maruti Suzuki

 Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an

automobile manufacturer in India.
 It is a 56.21% owned subsidiary of the Japanese automotive manufacturer Suzuki
Motor Corporation. As of July 2018, it had a market share of 53% of the Indian
passenger car market.
 Maruti Udyog Limited was founded by the Government of India in 24 February
1981, only to merge with the Japanese automobile company Suzuki in October 1982.
 The first manufacturing factory of Maruti was established in Gurugram, Haryana, in
the same year.

Hyundai India

 The Hyundai Motor Company, commonly known as Hyundai Motors is a South

Korean multinational automotive manufacturer headquartered in Seoul.

 Hyundai Motor Company was founded in 1967 and, along with its 32.8 percent
owned subsidiary, Kia Motors, and its 100 percent owned luxury subsidiary, Genesis
Motor, and electric vehicle subsidiary, Ioniq, altogether comprise the Hyundai Motor
Group.

 Hyundai operates the world's largest integrated automobile manufacturing

facility in Ulsan, South Korea which has an annual production capacity of 1.6 million
units

TATA Motors

 Tata Motors Limited, formerly Tata Engineering and Locomotive

Company (TELCO), is an Indian multinational automotive manufacturing company
headquartered in Mumbai, Maharashtra, India.
 It made its first car in 1945.

Mahindra & Mahindra

 Mahindra & Mahindra Limited is an Indian multinational vehicle manufacturing

company headquartered in Mumbai, Maharashtra, India.
 It was established in 1945 as Muhammad & Mahindra and later renamed as Mahindra
and Mahindra. 
HONDA Cars
 Honda Motor Company, Ltd. is a Japanese public multinational
conglomerate corporation primarily known as a manufacturer of automobiles,
motorcycles, and power equipment.

 Honda has been the world's largest motorcycle manufacturer since 1959.

GROWTH OF INDUSTRY OVER A PERIOD OF TIME

 A TOTAL GROWTH OF 25.44% WAS RECORDED
2012

A GROWTH RATE OF 26% WAS RECORDED

2013

AUTOMOBILE EXPORT OVERALL GREW BY 3%

2015

TREMENDOUSLY
2017 ELECTRIC VEHICLES CAME TO INDIA BUT WERE NOT SOLD

ALONG WITH IT MANY OTHER CARS WERE ALSO LAUNCHED

2018 KIA MOTORS MADE DEBUT

VIRUS PANDMIC IT COULDNOT GROW AS IT WAS EXPECTED

THE AUTO SECTOR WAS EXPECTED TO GROW BUT DUE TO THIS CORONA 2020

Manufacturers in the Automobile industry

Current Indian Manufacturers

Mahindra TUV Force Motors (1958– Reva (1994–present)

present)

Tata Nano Hindustan Motors Premier (1944–present)

(1942–present)

Ashok Leyland(1948- Hradyesh (2011– Tara International

present) present) (1978–present)

Bajaj Auto (1945– ICML (2003–present) Tata Motors (1945–

present) [A subsidiary of present)
Sonalika Group]

Chinkara Motors Kerala Automobiles Jaguar Land Rover

Limited (1984–present) (Subsidiary of Tata
Motors)

Eicher Motors (1948- Mahindra & Mahindra Vehicle Factory Jabalpur

(1945–present)
present) (1969–present)
  Foreign manufacturers building in a joint venture, in India

Maruti Suzuki Dzire Mercedes-Benz India Hyundai Motor India

(1994–present) (1996–present)

Renault Kwid Toyota Kirloskar Motor Renault India (2005–

(1997–present) present)

BMW India (2006– Volkswagen Group Sales Audi India (2007–

present) India (2001–present) present)

FCA India Automobiles Isuzu Motors India Lexus India (2020-

(1997–present) (2012–present) present)

Jeep India (2016–present) Porsche India (2004– MG Motor India (2017–

present) present)

Ford India (1995–2019) Maruti Suzuki (1981– Skoda India (2001–

present) present)

Honda Cars India (1995– Volkswagen India (2007– Kia Motors India (2018–
present) present) present)

Renault Nissan India Volvo Group India Nissan Motor India

(2010–present) (2005–present)

 Defunct manufacturers

Tamo Racemo San Motors (1996–2013) Swaraj Mazda (1983–

2011)

Multix (2015–2018), a Standard Motor Products Tata Motors (discontinued

joint venture by Eicher (1948–2006) marques and subsidiaries)
Motors and Polaris
Industries

Sipani (1978–1997) Tamo (2016–2017) Rajah Motors (1981–

2009)
 Top 10 players in the Industry

 Tata Motors

 Maruti Suzuki India Limited (MSIL)

 Hyundai Motor India Limited (HMIL)

 Mahindra & Mahindra Limited (M&M)

 TVS Motors

 Hero MotoCorp Limited

 Bajaj Auto

 Honda Cars India Limited

 Toyota Kirloskar Motor Private Limited (TKM)

 Hindustan Motors

Market Share

Brand Market share (April-June) Difference %

2019 2018

Maruti Suzuki 51% 52.54% -1.55

Hyundai 17.75% 15.70% 2.06

Mahindra 8.34% 6.93% 1.4

Tata Motors 5.90% 6.75% -0.85

Honda 4.63% 4.88% -0.24

Toyota 4.61% 4.49% 0.12

Ford 2.56% 2.86% -0.3

Renault 2.47% 2.38% 0.09

Volkswagen 1% 1.05% -0.05

Nissan/Datsun 0.75% 1.21% -0.46

Entry Barriers

 It is like how easy or how difficult it could be for the new player to enter the industry.
Designing the automobiles is completely dependent on the customer tastes and
thoughts.

 They should develop their product according to the customer satisfactions and the
trends followed by them.

 To survive in the industry, they must be strongly regulated to follow safety measures
and also have to concentrate on the fuel efficiency of the product.

 Must be strongly innovative in developing a product as there is a high competitor in

the industry already spending a lot on their research and development.

 Require a high capital, management skills and high technology involvement to

compete in the sector.

 When we enter into the market it is first important to consider the customer and
business confidence rather than considering the earnings growth.

 Have to consider the Government rules and their polices..

 The product designed should attract the customers and should be accepted by them.

Exit barriers

 The reasons that prevents the company from exiting the industry.

 As the company makes a high investment to start and to develop a product even
though the product fails the investment made on to develop the product acts as a
reason to prevent the company from exiting the industry.

 Warrantees provided to the customers may also prevent the company from exiting.

 It is also difficult to sell the assets acquired for the process of manufacturing.

 Loss of customer good opinion is also an exit barrier.

Threat of Substitute Products

 The first major factor is the consumer preference whether to purchase a vehicle or to
prefer the public transportation as operating cost would be high.

 Due in increases in the petroleum prices may lead to decrease in the sales of the
automotive.

 The buyer shifts from one product to other product if there is either increase or
decrease in the price of the particular product.

 Buyer’s willingness is the major factor on the performance of industry.

 Also, on the product performance how well it performs and in what it is good
comparing to the other players.

 Due to increase in the competition as the player have to consider the benefits that their
product provides other than the other competitor’s product
 DEMAND AND SUPPLY FACTORS OF AUTOMOBILE INDUSTRY

Increasing working population and a developing middle-class have been the key demand
drivers for automobiles in India. India has the second largest road network in the world at
4.7 million kilometres. Road development activity has gradually raised over the years with
an advancement in connectivity between villages, town and cities in the country. The
Government of India’s policy to set aside substantial investment layout for infrastructure
development in every 5-year plan has included the focus on the development of country’s
roads. This has given a fillip to the demand for cars and other vehicles. India has second
largest population in the world. The estimated population is about 1.3 billion people. The
GDP per capita has grown from approximately US$ 1432 in 2010 to US$ 1500 in 2012 and
US$ 1939 in 2017. Factors like increasing net incomes in the rural agriculture sector,
presence of a large pool of skilled and semiskilled workers, and a well-built educational
system will continue to raise vehicle demand in future. It is estimated that by 2020,
migration on account of urbanization will be over 140 million. India is estimated to add
over 68 million households to its already important middle-class by 2030, which would
drive an increased demand for automobiles.These facts point to a huge potential of
increasing private vehicle ownership penetration in the future.

DEMAND FACTORS

1. Financing Options
Auto industry observers cite car loans as the biggest factor for the development of the
Compact Car segment. According to the current scenario almost 85% of new car sales are
backed by auto finance as compared to 65% five years ago.Interest rates on car loans have
come down drastically in the past four or five years, which helps prospective buyers, take the
plunge. The growth of the CC-segment during last few years can be mostly credited to factors
such as rise in income levels that leads to increase in affordability and simultaneous reduction
in interest rates leading to lower EMIs. The drop in interest rates helps very few people to
shift from the base model to a deluxe model. A larger shift happens if people are willing to
takelong-term loans, like five years instead of the earlier three-year loans.

2. Advertising and Marketing

Due to the advertising techniques acquired by all the manufacturers in the CC Segment the
sales have increased drastically. It is all because the companies are now using even
aggressive selling techniques and are even coping with the Film celebrities and Cricket stars,
for instance Maruti has contracted with Varun Dhawan as the brand ambassador and Hyundai
has contracted with Shah Rukh Khan. The companies are even trying to approach to the
customer to meet their demands for a vehicle at special interest loans, etc. They are using data
in accordance to the customers return and earning capacity for attracting the customers.

3. Price of the Car

One of the main factors that affect the demand for any commodity  within the market is
the price of the commodity. Because the law of demand also states that with a rise in
price the demand for the commodity decreases and the other way around. Since within
the compact segment market even there are only a few competitors there's a stiff price
war. Because the price of Zen in 2001 was Rs. 3.93 lacs which increased to Rs. 4.01 lacs
in 2005, but still the sale of the Maruti brand keeps on increasing  it had been thanks
to the company’s reputation with the purchasers.

4. Income of Consumer / Buyer

The income of the buyer or buyer of the car may be a vital think about demand.
In recent times we've seen that thanks to a rise within the Income of the overall public,
there has been a shift from the Lower CC-segment cars to the Upper CC-segment
cars. Thanks to the recent increase within the number of multinationals in India, the
income level of the workers has risen drastically and has made CC-segment cars an
entry-level car for tons of individuals. 

5. Availability of Easy Financing Options

A lion's share of PV buys is financed through budgetary establishments. Over the past
4-5 years of the car industry has been benefited through a big increase in
affordability thanks to the decrease in EMIs. Vehicle money rates dropped from 17% in
2000-01 to 11% in 2005-06. However, it's increased and averaged 13.75% in 2006-07. 

6. New Offerings

Car sales increase when a replacement model hits the market. thanks to the escalation in
competition within the Indian car market, the frequency of the latest model launches has
increased. Within the past one year, only the Indian car market has seen many launches
namely SX4, Swift Diesel, Zen Estilo, Spark, Logan, etc.

7. Exports

The share of exports from domestic production is currently at 12-13%, which  is far
lower than current export hubs. Currently, India’s share of worldwide coach
the export volume stands at but 1%. But India is fast emerging as a producing
a hub for leading global carmakers and several other manufacturers have already firmed
up plans for fixing manufacturing bases in India, which can even be used for exports.

SUPPLY FACTORS

1. Presence across Segments

Makers with presence across different item portions can guarantee higher volume and better
limit usage by utilizing the basic assembling limit. Typically, a customer upgrades from one
segment to a better segment and therefore the presence across various segments.

2. Efficient Operations
Competition within the PV segment is extremely intense and this needs the prevailing players
to initiate steps to scale back their cost of production. Effective operational methods such as
reduction in vendor base, platform commonality and workforce rationalization can help
corporate.

3. Wide Dealer Network and Availability of Finance

A wide dealer network helps the corporate serve customers over a good geographical
area. E.g. Maruti has used its available wide service network as some extent of the difference
over competitors. The businesses are docking with the financial institutions having
a rural presence to supply additional financing options to customers in such areas.

4. Access to Latest Technologies

Indian PV segment is extremely with as many 14 players operating in it and

more than 80 models on the offering. But still, any new model launch meets with
an increase in sales volume for the corporate. Moreover, during a time when a considerable
a portion of Indian customer is looking to upgrade within in the higher segment, companies
with the latest technologies and latest models will catch more attentions

5. Price of the Car

The price of the car is one of the main factors that affect availability also because of
the demand for a car. If the price of the car is high within the market, the manufacturer
or the supplier will want to provide more units within the market so he can earn more
profits. In the automotive industry where the market type is an oligopoly, if one company
drops its price for the car, there's a huge impact on the sales of the other cars also
because of the same car. Within the market, the price of 1 car is inter-related to the
price of the other cars within the same segment. the simplest solution is that market
equilibrium should be achieved so that the number of the quantity demanded should
be adequate to the quantity of the number supplied to realize maximum profits.
A Market Equilibrium is achieved at the aim of the intersection of the demand line and
the supply line. 

6. Government Policies and Taxes

If there is a change in the government policies regarding the increase in the road tax
charged or the tax which is to be paid per unit sold, the availability of a car will fluctuate
with the nature of the change.
Recently the government has reduced the customs duty on inputs and raw material
from 20% to 15% which has increased the supply.
References
http://www.wikinvest.com/industry/Auto_Makers
http://en.wikipedia.org/wiki/Automotive_industry
http://business.mapsofindia.com/automobile

COMPETITIVE STRATEGIES FOLLOWED BY AUTOMOBILE

INDUSTRY

 Pricing Strategy:
1) Penetration & psychological pricing strategies

In order to gain a great market share, many companies embrace the penetration pricing
strategy. The company aims to set up a customer-based price in the market. This is
primarily achieved by providing a free to low price for their products or services to a
limited period of time. This later on, with a revised version comes into the market as a
premium product with a little raise in the price. This strategy is implied to meet the
expectation that consumers will hop on to new brands when they're priced low. On the
other hand, a psychological pricing strategy is a method that embraces a consumer's
emotional response rather than considering their rational one. Here consumer ignores the
quality of a service/ product but sticks on to the costing price.

2) Product line & economy pricing strategies

The product line pricing strategy is nothing but, providing service with an option to
upgrade upon choosing higher value packs. Consumers are pushed to compare the
packages and choose a wise plus cost-effective product or service. The other purpose of
the product line strategy is to bring a product or service to the spotlight which had low
visibility or recognition earlier. Whereas, economy pricing strategy embraces no to the
low marketing cost in product or service promotion. It's more like the budget pricing of a
product or service. A great example would be promoting only a certain range of products
or services that shall gain specific and quick attention among people. 

3) Customer value-based pricing strategy

This is the most effective method that is followed by many successful automobile
companies. Value-based pricing is a nothing but, price setting strategy that exclusively
 focuses on consumer perceived value of a service or product. This is entirely based on
how consumers value the product and how they find it worth buying. Many companies
that offer unique and high-value products choose this strategy in setting the price. The
value-based pricing embraces customer's abilities to buy a product by considering the
unparalleled experience upon buying a particular service or a product. Many luxury
automakers find customer-value based pricing strategy an effective method of approach.
A value-based strategy will enable manufacturing companies to extend the life-cycle of
existing products and will help to establish a great bond with value-added suppliers.

 Non – Pricing Strategy (Advertising Strategy)

1) Video marketing

Video content is king in the auto industry. For many car shoppers, seeing is believing, so they
need to understand the complete look and feel of a vehicle before they can envision
themselves in a new car. Whether you’re adding video to your website, sharing it on social
media, or uploading it on YouTube, online video can offer your potential customers an
experience that persuades them to buy before they leave the house.The effectiveness of video
in encouraging consumers to take action is proven. Research from Google shows that over
40% of auto shoppers who watched a video about cars or trucks ended up visiting a
dealership as a direct result. With your video doing much of the work, your on-site sales pros
will simply need to give a final push to persuade visitors to buy.Online videos that produce
the most results for car dealerships typically showcase a vehicle’s build and major features.
These may include video test drives, accessory demos, and even 360 virtual reality videos
that fully immerse viewers inside the car setting.Overall, this automotive marketing strategy
is all about creating proof that your cars function as claimed and showing, rather than telling,
viewers why the given vehicle provides the experience they want and need.

2) Online review management

As trust in car dealerships continues its steady decline, keeping up with your online

reputation management is a great opportunity to get more car buyers to your dealership. A big
part of this is responding to your online reviews (even giving professional responses to the
negative ones) and actively working to increase the amount of positive reviews you have.In
addition to general review sites like Google and Facebook, auto marketers should also be
paying close attention to feedback on auto dealership review sites, including CARFAX
reviews. These platforms are destinations for serious car buyers, who are more likely to
choose your dealership if your customers have good things to say. After all, online reviews
are just as powerful as a peer recommendation—but they also can reach thousands of
consumers at once.When you pair you’re automotive marketing strategy with Podium
Reviews, your customers will automatically receive invites to review you on all the platforms
that matter. As you start getting more reviews, you can respond to all your customers on a
single platform for a more streamlined process.

3) Creating a user-friendly web experience

Building a website designed for the consumers who need it is essential to capturing their
attention. The website would load quickly and be easy to navigate for all consumers, whether
they’re on their smartphones, tablets, or computers.Your website should also take search
engine optimization (SEO) into consideration. Inserting keywords throughout your site
and blog copy will not only help you rank higher for relevant terms, but it will also allow you
to give car shoppers the answers they need. Consider what features they may be looking for
—for example, “best gas mileage” or “best luxury cars,” depending on your target
audience.When developing a user-focused SEO strategy, you should always take into account
local SEO. Car buyers tend to shop for dealers near them, which means a complete Google
My Business listing can make a big difference. You can get our local SEO checklist to ensure
your listing is set for attracting nearby buyers.In addition to organic SEO, you can also add
Google pay-per-click (PPC) campaigns to your automotive marketing strategy. Google
actually offers a Model Automotive ad format, which is designed specifically to target car
buyers and lead to a 30% higher engagement rate. These search engine ads will catapult your
company to the top of search results pages for the keywords you’re targeting, helping you
generate more leads faster.

4) SMS marketing

With nearly 80% of the population own smartphones and the majority of all online traffic
coming from mobile devices, catering to this consumer behaviour can put you ahead of the
competitors. Smartphone users spend hours each day on their phones, leading to an
average 82% open rate for all text message marketing campaigns. Using SMS marketing will
help you reach your potential customers on a platform where they’re actively looking for
messages.In fact, 68% of car shoppers are very open to chatting online with car dealers. This
means car buyers want to interact with experts—as long as it’s convenient to them. This is an
opportunity for the representatives to have a direct influence on shoppers while they’re still
deciding where to visit.With Podium Webchat, one can blend the best of live chat and SMS
by adding a button to your site that captures leads and allows you to continue your
conversation through text. This powerful tool enables the dealership to build relationships
while helping shoppers move further through the customer journey in real-time.

 Price Discrimination Strategy

We can find a number of price discrimination related strategies by a different player in the
automobile industry. Some of these are

Maruti Suzuki providing loyalty cards to consumers who have been long associated with the
companies. These cards provide a discount in service and parts which are to be used in due
course of time. This system of discrimination has helped Maruti to keep customers stuck to
the company even after the sales.

Hyundai had also once come up with a kind of discriminated pricing by segmenting and
targeting specific populations which also helped them to boost their growth. For example,
zero down payment financing vehicles for senior citizens and women. This helped the
particular population as well as their families.

We have also seen such strategies being followed by Hero Motor Corp as well. Benefits to
people belonging to financially weaker sections of the society have also helped the brand to
be a market leader in the budget segments of vehicles.
 IMPACT OF COVID -19 ON INDUSTRY
The Indian Automobile industry is expected to generate loss of ₹13,000-15,000 crore. The
industry contributes.The manufacturers have to wait for the launch of new models and
upgraded BS6 model to revitalize production.12000 dealer outlets were shut during the
lockdown and also faces an additional issue of BS4 inventory worth ₹6400 crore which
remains unsold due to the impact of Covid-19.The Indian auto sector is more likely to suffer
major job losses specially the contractual workers who constitute over 55% of the overall
workforce.

SUPPLIERS

 Possible decrease in export orders due to shorts in USA/Europe

 Reallocation of production parts to Indian suppliers due to bottlenecks in global
supply chain.
 Shortage in components as China's production slowly coming up but supply chain
remains disturbed.
 Possible increase in the Make in India program.
 Decrease in exports as global firms diversify the supply risk.

DEALERS

 Decline in customer footfalls

 Drop in automotive demand due to increase in price for BS VI transition, slowing
economy, slow loan availability & lower consumer confidence.
 Increase in demand for spares as pent up demand during lock-down.
 Delay in availability of Certified & Ready for sale vehicles.

OEM
  Potential decline in planned BS IV sales as it was expected to pick up in March.
 Decline in production of BS VI due to supply chain / labor disruption because of lock-
down.
 There may be sustained drop in demand due to drop in consumer confidence.
 There may be spike in consumer demand due to social distancing.

MOBILITY & ONLINE PLAYERS

 Possibility of decrease in demand due to shift in employer's behavior because of Work

from Home policy by various organizations.
 Decrease in Ola/Uber demand due to lock-down and work from home.
 Rise in online platforms & increase in traffic (CarDekho, Carwale).

IMPACT OF COID-19 ON MAJOR PLAYERS

TATA MOTORS

 First time in the history of TATA there was a 20% pay cut for the top management.
 Possibility of the pickup in demand but the challenges of intermittent demand and
supply disruptions from Covid-19.
 Retail sales were stronger than wholesales by 27%
 Deep impact on PV industry sales in the 1st quarter of 2021 fiscal.
 Partial sales recovery in May
 There was a pent up demand which indicates a steeper recovery of retail.
 There was a decline in Revenue from operations by 14%.
 There‘s liquidity stress and stock corrections due to the BSVI transition.
 Total net loss of Rs 12,000 crore
 MHCV sees steep volume decline
 Tata motors launched a cash improvement program with the fund of Rs 60 billion
which includes Rs 15 Billion with an expectation of positive free cash flow at the end
of FY.
 Jaguar land Rover sees decline in revenue of 44% and suffered a loss Rs 40.44 billion.
  Closures of plants and retailers.
 Retail unit sales also plunged 42% due to the coronavirus impact.

MAHINDRA & MAHINDRA

 They are focusing on reducing the variable and fixed costs and absorbing all the idle
overheads.
 Adoption of work from home policy.
 79% steep decline in total sales at 9560 units.
 All of its suppliers are now operational but there are facing issues in terms of working
capital & manpower due to new guidelines for limited working hours.
 There is resumption in services/production at the vendors.
 The sales in the domestic market were down 79% to 9,076 units in the month of May
as compared to 43,056 units in May 2019.
 The passenger vehicles segment which includes UVs, cars, and vans sold 3,867
vehicles in May shows it's down by 81% as compared to the same period last year.
 Exports were down by 80%.

BAJAJ AUTO LTD.

 It has been able to ramp-up its production to almost 70% of normal levels.
 Due to sporadic local shutdowns in various parts of the country in the mid-summer
made an unstable recovery impacting both, demand as well as supply chain.
 Due to restrictions on the production, exports and domestic sales were impacted.
 No fresh capital was raised during the shutdown of the operations as it has an
adequate working capital and financial resources to manage out its business and
continues to remain debt-free.
 Bajaj Auto's net profit more than halvetto Rs528cr in June 2020 (Q1FY21) quarter,
compared to a profit of Rs1126 cr in the corresponding period of the previous year.
TVS MOTORS

 During the lockdown the production and sales were severely impacted.
 But durinh Unlock 1.0 it witnesses a positive uptake in both domestic retails as well
as international markets.
 Measures taken by the management to overcome supply chain disruptions and
stabilize operations.
 In order to minimise the impact on production of BS-VI vehicles, consistently
monitoring developments with the suppliers who are sourcing certain components
from China.
 Started with exploring suppliers in other regions and looking to localise within India.
 Dip in the two-wheeler sales to 2.55 lakh units compared to 8.84 lakh units.
 Total three-wheeler sales stood at 0.12 lakh units in the quarter ended June 2020
against sales of 0.40 lakh units in the quarter ended June 2019.