03-04manegerial Economics Ppt

8/14/2019 03-04manegerial Economics Ppt

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SMALL CARS INDUSTRY

Presented by:

Anand Ganpaa-003

Annie Patro-004


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Evolution Of Small Car IndustryIn INDIA

Joint venture between Government of INDIA andSuzuki Motors of JAPAN

First car manufactured in 1983 , Maruti Suzuki 800

Biggest car manufacturers came into play like Tata,Ford, Skoda, Volkswagen, Mitsubishi, Suzuki, Honda,

Hyundai, Chevrolet and Fiat


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Why?Availability of highly skilled engineersLow cost laborTechnical know how

Less investmentCheap machinery and raw materialsEstablished quality systems and rewarding returns


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SUV

SUV

www.researchandmarket .com


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CONCEPT

Quantity

Pr

ice

P1

P2

0 Q1 Q2

DemandQ

P

Price Elasticity - It is

defined as the percentage

change in quantity

demanded that resultsfrom one percentage

change in price

Ep = % Q/ % P

A

B


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Cross Elasticity It is defined as the

percentage change in quantity demanded ofgood X per one percent change in price ofgood Y

EC = % Qx /% PY

PY

Q

PY

QSubstitutes

Distant sub: 0


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KEY ENABLERS- Car Industry

1.AUTO FINANCE BOOM- MOREPLAYERS(FOREIGN BANKS & NON BANKINGCOMPANIES, BETTER SCHEMES.

2.IMPROVING INCOME CURVE

3. REDUCING INTEREST RATES

4.INCREASE AFFORDABLITIY ON ACCOUNTOF REDCUTION IN ENTRY LEVEL PRICES

5.VARIOUS TAX RELIEF POLICIES


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Key Enablers (Cont..)

5. INCREASE IN DISPOSABLE INCOME

6. BUYERS MARKET

7. INCREASE IN INDIGENIZATION

8. INSURANCE AND USED CAR MARKET

Key Challenges

1. Cost Pressure2. High Expectations

3. Lack of inadequate infrastructure facilities

4. Rising fuel prices


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PRICE COMPARISION

Starting Price tag(ex-showroom price, Delhi)

Maruti A-Star -----------------------------RS.3.41Lakhs

Hyundai i10 -----------------------------RS.3.48Lakhs

Fiat Palio Stile -----------------------------Rs.3.35Lakhs

Chevrolet Spark-----------------------------Rs.3.25Lakhs

Tata Indica Vista----------------------------Rs.3.15Lakhs


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MARUTI A-Star

The starting price tag is Rs3.41 Lakh (ex-showroom Delhi)

Three spoke steeringwheel, an auto lock system,enhanced front power

windows, and rear doorpockets

Hyundai i10

The starting price tag is Rs3.48 Lakh (ex-showroom Delhi)

Number of convenient featureslike upscale interior, andsuperior technology like anti-

lock braking system

Strategies:

1.Mp3players

2.Lucky draws

3.Gold coin

4.Color Selection if booked early

5.Holiday packages

6.Down Payments(e.g.Rs.5555)

7.Discounts Offers


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FACTIn August 2004, a leading business newspaper reported that

Hyundai Motors India Limited (HMIL), an Indian subsidiary of the

South Korea- based Hyundai Motors Company (HMC) was

expected to reduce the price of its flagship car - Santro - by as

much as Rs 40,000. Industry experts were expecting a reduction inSantro's price in response to the price war being waged by the

market leader in India - Maruti Udyog Limited (MUL),which had

reduced the price of its largest selling car in the B segment - Alto -

by Rs 58,000 in two price cuts starting from September 2003. This

move had resulted in Alto replacing Santro as the largest selling carin the B segment in the period January to June 2004 (Refer Exhibit I

for the market segmentation of the Indian car industry)

source: www.theeconomist.com


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ITS NOT OVER YET.......


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THANK YOU!!!

03-04manegerial Economics Ppt

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