Internal

What is PESTEL Analysis and Why PESTEL Analysis is Important?

PESTEL Analysis is a strategic management tool that JBM Auto Ltd management can use to make better
decisions. PESTEL stands for – Political, Social, Economic, Technological, Environmental and Legal factors that
impact the macro environment of the enterprise that it operates in.

JBM Auto Ltd operates in a dynamic environment where it is influenced by – collective social trends, increasing
regulatory framework for environmental factors, government decisions, regulatory framework, increasing
environmental activism among consumers, technological changes, consumer spending behavior, and ever
evolving legal system.

Political (P) Economic (E) Social (S)

 Existing government coming to Center again,
Continue existing policies and framework
 Policy support: FAME -II, (EV push)
 PLI-Scheme (Production linked Incentive),
100% FDI
 Export opportunities - By FY28, the Indian
auto industry aims to invest US$ 7 billion (Rs.
58,000 crore)
 Relaxation in regulatory policies in terms of
JV and FDI into auto sector and expected
relaxation in taxation policies/GST (on auto
parts from 18% to 12% bracket)
All above factor favors JBM auto
Technological (T)
 New Auto Regulation
 Demand for better technological and
innovative product to meet new regulation
requirement
 20# + Strategic Alliance / tie-ups with foreign
brands Dassault systems, Sumitomo, SNIC
CO. Ltd. Daiwa Excel, Yorozu corporation –
Alliance company offer JBM auto technology
access, making it strong player in Fabrication,
Auto and EV business
 Steady GDP growth
 Cut in Repo-rates, promoting more spending
by consumer in urban and rural areas
 Continue Employment generating sector
 Competitive and cost-effective
manufacturing base, helps to keep cost lower
from European, American counter parts on
account of skilled labour, steel and Auto Hub
All above factors argue well for JBM auto
Environmental (E)
 Government focus on reduction in carbon
footprint, auto being one of the major
pollutants to environment
 New Strict Emission Regulation in place, BS6
in 2020 and BS7 expected in 2026-27
 New Fuel policy and Public transport convert  Business
to EV base, argus well for JBM auto and
support JBM auto diversification strategy
 Penetration of Car per 1000 people in India is
very low, huge head room for car industry to
grow, so for auto component industry (this
will benefit JBM auto)
 Young and Aspiration Population, base
Legal (L)
 Legal regulation plays important role in Auto
Business
 Labour laws, Employment laws working
hours and minimum wags for blue collar
employees
/ Trade laws…support OEM or
customers having parts supply till 10-15
years parts availability in market
 Intellectual property rights

Inference from PESTEL Analysis: JBM Auto is well placed when it comes to PESTEL. They are expected to
benefits from Existing government coming to power, as existing policies, frame work expected to continue,
Steady GDP growth, Expected Repo-cut to infuse more spending, Lower penetration of cars per 1000 people
(enabling more sell of cars), translating more sale of auto components, New Auto Regulation will forces
competitors to invest in new technology and manufacturing base (where JBM auto long industry experience,
16# manufacturing base and 20# Strategic Alliance going to come handy to develop new product as per
regulation at low cost) and JBM auto has already diversify itself as EV bus manufacturers and ready to take
advantage of FAME-II policies and strong in Labour/Employment Laws.

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 Internal

What are PORTERS 5- Forces and Why PORTERS 5-Forces Analysis is Important?

The Porter 5-forces model has become one of the most popular business strategy tools that organizations use
to understand more about the main competitive forces at work in their industry. The model guides businesses
in determining the intensity of competition and potential profitability within their market, helping them better
understand where power lies in their sector and further helps to determine an industry’s weakness and
strengths.

Threat of New Entrants

New Players barrier to entry are HIGH on account

of high investment in setting up plant, sales &
distribution network
Meeting the cost target due to new plant, high
administrative expenses, sales & distribution
expenses
Strong Brand connection & Supply chain
Bargaining Power of Suppliers

Bargaining Power of Buyers

HIGH Rivalry in the Sector with presence of
multiple players
No. of competitors (15#)
LOW due to Multiple players in the HIGH on basis volume and size
Products (Casting, Fabrication, Forging)
segment, ready to supply at New platform launch and
Mfg. Location: Gurgaon, Faridabad, Pune, Nashik
competitive rates differentiation or sole supplier to the
Growth FY'24: +30% vs FY'23
Need to part of Industry Top players group
Supply to leading Auto companies in India
suppliers (associate with large players)
Products are priced similar, differentiation is limited
Quality differ from supplier to supplier
Exit barrier is difficult as governed by regulator
frame work of (OE, Distributors, Channels)

LOW, all the competitors are manufacturing similar

products for auto motive requirement
High cost, Quality, Validation and performance of
substitute product may be limited vs tried and tested
product in the industry

Threat of Substitute Products

Inference from PORTERS 5-Forces Analysis: JBM Auto is well placed when it comes to PORTER’s 5-Forces. JBM
auto has vast Indian auto industry experience. Over 5 decades experience in the industry. Leaders in Auto
components. JBM Auto is among the top suppliers of Maruti Suzuki, Tata Motors, Ashok Leyland, Mahindra
Group, Eicher Motors, Hero, Bajaj, TVS which forms 75-80% of the Market in any segment. Strategically located
near India's auto hubs, JBM focuses on technology, innovation, and diversification to meet market demand and
aims to be an OEM and complete ecosystem provider. Strong Relationships with OE and Strong client base and
20+ Strategic Alliance boost on the R&D front.