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PROJECT REPORT

ON

ANALYSIS OF INDIAN

AUTOMOBILE INDUSTRY

ABHISHEK CHAUDHARY

MBA 1 SEM

127603


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ACKNOWLEDGEMENT

The satisfaction and joy that accompanies the successful completion of a task is

incomplete without mentioning the name of the person who extended his help

and support in making it a success.

I am greatly indebted to Dr. Akshay satsangi my Project Guide and entor for

de!oting his !aluable time and efforts towards my project. I thank him for being

a constant source of knowledge" inspiration and help during this period of

making project.


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PREFACE

Indian automobile industry has grown leaps and bounds since #$%$" a time whena car had touched the Indian streets for the first time. At present it holds a

promising tenth position in the entire world with being & # in Two 'heelers and

& ( in commercial !ehicles. 'ithstanding a growth rate of #$) per annum and

an annual production of more than * million units" it may not be an exaggeration

to say that this industry in the coming years will soon touch a figure of #+

million units per year.

The automobile industry in India , the ninth largest in the world with an annual

production of o!er *.- million units in *++$ , is expected to become one of the

major global automoti!e industries in the coming years.

In this project we ha!e undergone a detailed analysis of India automobile

industry by using undamental and Technical tools. In order to better understand

the performance of the industry we ha!e made comparati!e analysis of twoplayers Tata motors as /leading player0 and aruti 1u2uki.

The project report is di!ided into 3 chapters. The first two chapters include

4xecuti!e 1ummery 5 objecti!e of the research. The third chapter deals with

analysis of automobile Industry which entails fundamental and technical analysis

of Indian Automobile Industry. The fourth chapter deals with 6onclusion 5

7ecommendations and the last chapter includes 8ibliography


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TABLE OF CONTENT

S.NO. PARTICULARS PAGE NO.

Chapter 1 Executive Summary of the

Project

5

Chapter 2 . Objective of the Project 7

Chapter 3 .Analysis of Indian AutomobileIndustry

9 undamental Analysisa. 4conomy

b. Industryc. 6ompany

9 Technical Analysisa. 1hare Price Analysis

b. o!ing A!eragec. o!ing A!erage 6rosso!er

8

11-50

51-56

Chapter 4 Concu!ion "#ecommen$ation! 57-58

Chapter % &ibiography'nnexure

59


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.

EXECUTIVE SUMMARY

The automobile industry" one of the core sectors" has undergone metamorphosis

with the ad!ent of new business and manufacturing practices in the light of

liberali2ation and globali2ation. The sector seems to be optimistic of posting

strong sales in the couple of years in the !iew of a reasonable surge in demand.

The Indian automobile market is gearing towards international standards to meet

the needs of the global automobile giants and become a global hub.

A detailed analysis of Automobile industry has been co!ered in respect of past

growth and performance.

:nder this project to better understand the Industry we ha!e used undamental

and Technical tools tomake it more authentic n meaningful. An 4.I.6 approach

has been followed under undamental Analysis which co!ered effect of

7ecession" the impact of inflation" DI;s" 4xport" GDP etc. on Automobile

Industry. The Industry Analysis has been done with the help of fi!e forces

model" 86G atrix" 1'


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mo!ing a!erage crosso!er" 8ollinger bands and .A.6.D. of both the company

by keeping TATA otors as our leading company.

At the end conclusion and recommendations ha!e been specified so as to make

the research work more meaningful and purposeful.

Li!"#$"! R!%i!&

6ompetiti!eness of manufacturing sector is a !ery broad multi>dimensional

concept that embraces numerous aspects such as price" ?uality" producti!ity"

efficiency and macro>economic en!ironment. The chain and industrial

structure and technology and other aspects.


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OB'ECTIVE OF THE PRO'ECT

The objecti!e of this project is deeply analy2e our Indian Automobile Industry

for in!estment purpose by monitoring the growth rate and performance on the

basis of historical data.

The main objectives of the Project study are:

Detailed analysis of Automobile industry which is gearing towards

international standards

Analy2e the impact of ?ualitati!e factors on industry;s and company;s

prospects

6omparati!e analysis of two tough competitors TATA otors and aruti

1u2uki


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I()i#( A$*+*,i-! M#".! S/!(#"i*

De>licensing in #%%# put the Indian automobile industry on a new growth

trajectory" which attracted foreign auto giants to set up their production facilitiesin the country to take ad!antage of the !arious benefits it offers. @arge middle

class population" growing earning power and strong technological capability

ha!e been boosting automobile demand for the past few years.

Despite economic slowdown" the Indian automobile sector has recorded

phenomenal growth" especially in passenger cars segment. The passenger !ehicle

market" which constitutes around $+) of automobile sales" has immense growth

potential. Anticipating the future market potential" the production of passenger

!ehicle is forecasted to grow around #+) till *+#*>#-.

Tata =ano has brought about a new re!olution in the country;s small car

segment. 1eeing the good initial response from consumers" many other players in


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the industry are chalking out their plans to launch cars in this segment in the next

few years. A 6AG7 analysis shows growth of around #(.3) in domestic !olume

sales of passenger !ehicles during the coming years. purpose !ehicle and light commercial !ehicle" are also

expected to witness fast growth in coming years. The research co!ers !arious

aspects of the Indian automobile market and gi!es a detailed analysis of its

!arious segments such as passenger !ehicle" commercial !ehicle" utility !ehicles"

multi>purpose" two wheelers and three wheelers. 4ach section concisely explains

the current and future market trends" and de!elopments in the Indian automobile

market. There are immense opportunities for !arious industry players including

automobile manufacturers and players of automobile components.

According to new research report Indian Passenger 6ar arket AnalysisB" the

passenger car market" which constitutes around C$.3) of passenger !ehicle sales

/in *+#+0" has immense growth potential as passenger car stock stood at

around ##.E per #"+++ people in *++%. 7eali2ing booming passenger car demand

in the country" many domestic and foreign automobile giants are formulating

capacity expansion strategies" and billions of dollar worth of in!estments is

already in pipeline. 6onsidering huge market potential" production of passenger

cars is projected to grow at a 6AG7 of around ##) between *+#+>## and *+#->

#(.


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M#".! S#"! * P#!(4!" V!i/-! I()$"5

Fi4 3 P!"/!(#4! M#".! S#"! * P#!(4!" V!i/-!

The increasing scenario of passenger car segment has shown positi!e effect on

the sales of the

segment because of the tourist industry growth. Passenger car production in

India is projected to cross three million units in *+#(>#3. 1ales of passenger cars

during the period *+#3>#E are expected to grow around #+). 4xport of

passenger cars is anticipated to raise more than the domestic sales *+#3>

#E.Passanger car segment is dominated by the share of aruti 1u2uki India and


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it has recorded a percentage of (E percent" second position has grabbed by the

Tata otors which has a share of #E.(3 percent. Third position is of Fyundai

otors of India. The rest of the

companies ha!e not recorded a significant sales increase during the period and

their sales are less than #+ percent. /ig.-0

The sales of aruti 1u2uki of India has increased because of its !alue added

ser!ice like after sales ser!ices which includes regular check camps of the

!ehicles and free lubricants to the customers. aruti 1u2uki of India has a team

of experts and they are always ready to gi!e their expert ad!ice to the customers

regarding the !ehicle problems. aruti has maintained its ?uality and it has good

mileage per liter of diesel and petrol too. The life of !ehicle is also a positi!e

point to increase sales of the !ehicles.

ANALYSIS OF AUTOMOBILE INDUSTRY


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been dri!ing its own growth through phases. 'ith comparati!ely higher rate of

economic growth rate index against that of great global powers" India has

become a hub of domestic and exports business. The automobile sector has been

contributing its share to the shining economic performance of India in the recent

years.

To understand this industry for the purpose of in!estment we need to analy2e it

by following two approaches

#0. undamental Analysis /4.I.6 Approach0

a. 4conomy

b. Industry

c. 6ompany

*0.Technical Analysis

1- /0'E0' '0'5S6S

a). ECONOMY

4conomic analysis is the analysis of forces operating the o!erall economy a

country. 4conomic analysis is a process whereby strengths and weaknesses of an

economy are analy2ed. 4conomic analysis is important in order to understand

exact condition of an economy.

GDP an A!"#$#%&'( In!)"*+


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In absolute terms" India is #Eth in the world in terms of nominal factory output.

The ser!ice sector is growing rapidly in the past few years. This is the pie> chart

showing contributions of different sectors in Indian economy. The per capita

Income is near about 7s-$"+++ reflecting impro!ement in the li!ing standards of

an a!erage Indian.

Today" automobile sector in India is one of the key sectors of the economy in

terms of the employment. Directly and indirectly it employs more than #+

million people and if we add the number of people employed in the auto>

component and auto ancillary industry then the number goes e!en higher.

As the world economy slips into recession hitting the demand hard and the

banking sector takes conser!ati!e approach towards lending to corporate sector"

the GDP growth has downgraded it to C.# percent for *++$>+% and predicted it to

be E.3 per cent for *++%>#+ r. ontek 1ingh /Planning 6ommission of

India0. ollowing is the graph showing a trend of Indian GDP trend in past -

years.


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R!/!i*(

All the major auto companies enjoyed the high growth ride till the mid *++$. 8ut

at the end of the year" industry had to face the hard truth and witnessed the fall in

sales compared to last year. In December *++$" o!erall production fell by ** )

o!er the same month last year. Global recession has hit the Indian auto industry"

India is strong and growing industry but the impact of recession is e!ident now

on industry as sales 5 growth of automobile companies ha!e declined. Passenger

Hehicles segment registered negati!e growth.


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more pri!ate in!estment. The fall in wholesale prices from a year earlier is

mainly due

to a statistical base effect and doesn;t suggest contraction in demand" the

7eser!e 8ank of India said few week back" while re!ising its inflation forecast

for the through arch to around 3) from ().

In last despite of skyrocketing oil prices /crude oil price has already up to

J#-+ compared to J*+ per barrel fi!e years back0" Indian automobile Industry

was not as much affected and experts think that Indian automobile industry will

continue to grow this year despite all obstacles> oil price hike" higher interestrates. Fowe!er" the effect of inflation has affected e!ery sector which is related

to car manufacturing and production. The increase in the price of fuel and the

steel due to inflation has led to a slower growth rate of the car industry in India.

The effect of inflation has taken the rise in the price rate of the cars by ->()

which in turn suffices the need to meet the rise inprice of the raw materials to

build a car. The car market and the car industry witnessed a fall of $>%).

FDI

In India DI up to #++ percent" has been permitted under automatic route to this

sector" which has led to a turno!er of :1D #* billion in the Indian auto industry

and :1D - billion in the auto parts industry. India enjoys a cost ad!antage with

respect to casting and forging as manufacturing costs in India are *3 to -+ per

cent lower than their western counterparts the In!estment 6ommission has set a

target of attracting foreign in!estment worth :1J 3 billion for the next se!en

years to increase IndiaKs share in the global auto components market from the

existing +.% per cent to *.3 per cent by *+#3. DI inflows in Automobile


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Industry *++$>+% was 7s.3"*#* 6r an increase of (C.*3) compare to *++C>+$"

while in April>ay *++% it was around 7s.(%C 6r.

E8*"

1ociety of Indian Automobile anufacturers /1IA0" automobile sales

/including passenger !ehicles" commercial !ehicles" two>wheelers and three>

wheelers0 in the o!erseas markets increased to #.3- million units in *++$>+%

from #.*- million units in *++C>+$. 4xport of passenger !ehicles increased from

*#$"(+# in *++C>+$ to --3"C-% units in *++$>+%.

There is a continuous increase in the export of automobiles since the financial

year *++*>+-" except for the decline in the export of commercial !ehichles in the


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financial year *++$>+%" which may be attributed to the global economic

recession.

Despite recession" the Indian automobile market continues to perform better than

most of the other industries in the economy in coming future" more and more

=6;s coming in India to setup their !entures which clearly shows the scope of

expansion.

%., INDUSTRY ANALYSIS 7'/OO&6E-

The current trends of the global automobile industry re!eal that in the de!eloped

countries the automobile industries are stagnating as a result of drooping

markets" whereas the automobile industry in the de!eloping nations" ha!e been

consistently registering higher growth rates e!ery passing year for their domestic

flourishing domestic automobile markets.

8eing one of the fastest growing sectors in the world its dynamic growth phases

are explained by the nature of competition" Product @ife 6ycle and consumer

demand. The industry is at the crossroads with global mergers and relocation of

production centers to emerging de!eloping countries.

In *++%" estimated rate of growth of India Auto industry is going to be %) .The

Indian automobile sector is far from being saturated" lea!ing ample opportunity

for !olume growth.

S($(n"a"n # A!"#$#%&'( In!)"*+

The automobile industry comprises of Fea!y !ehicles /trucks" buses" tempos"

tractors0L passenger carsL Two>wheelersL 6ommercial HehiclesL and Three>


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wheelers. ollowing is the segmentation that how much each sector comprises of

whole Indian Automobile Industry.

I()$"i#- A(#-5i * #(5 i()$"5 /#( ,! )*(! ,#!) *( ! *--*&i(4

!#)i(4

#. i!e orces odel

*. 86G atrix

-. Industrial @ife 6ycle

(. 1'


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Porter8! ive orce!

Porter;s i!e orces of 6ompetition framework !iews the profitability of an

industry as determined by fi!e sources of competiti!e pressure. These fi!e forces

of competition include three sources of hori2ontalB competition competition

from substitutes" competition from entrants" and competition from established

ri!alsL and two sources of !erticalB competition the bargaining power of

suppliers and buyers. The strength of each of these competiti!e forces is

determined by a number of key structural !ariables" as shown in igure -.-.

FIGURE 392 P*"!" Fi%! F*"/! * C*+8!ii*( "#+!&*".


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C#$/("&"n *#$ S!%)"&"!"()

The price customers are willing to pay for a product depends" in part" on the

a!ailability of substitute products. The absence of close substitutes for a product"

as in the case of automobiles" means that consumers are comparati!ely

insensiti!e to price /i.e." demand is inelastic with respect to price0. The existence

of close substitutes means that customers will switch to substitutes in response to

price increases for the product /i.e." demand is elastic with respect to price0.

The extent to which substitutes limit prices and profits depends on the propensity

of buyers to substitute between alternati!es. This" in turn" is dependent on their

price performance characteristics. The more complex the needs being fulfilled by

the product and the more difficult it is to discern performance differences" the

lower the extent of substitution by customers on the basis of price differences.


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FIGURE 393 T! "$/$"#- )!!"+i(#( * ! Fi%! F*"/! * C*+8!ii*(

R&a'*+ %("((n E)"a%'&)2( C#$/("&"#*)

or most industries" the major determinant of the o!erall state of competition and

the general le!el of profitability is competition among the firms within the

industry. In some industries" firms compete aggressi!ely sometimes to the


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A//! * )i"i,$i*( :1ince in India there is no well established distribution

network. 1o threat of new entrants islo.

Ba*a&n&n P#(* # B!+(*)

The firms in an industry operate in two types of markets in the markets for

inputs and the markets for outputs. In input markets firms purchase raw

materials" components" and financial and labor ser!ices. In the markets for

outputs firms sell their goods and ser!ices to customers /who may be

distributors" consumers" or other manufacturers0. In both markets the transactionscreate !alue for both buyers and sellers. Fow this !alue is shared between them

in terms of profitability depends on their relati!e economic power. The strength

of buying power that firms face from their customers depends on two sets of

factors buyers; price sensiti!ity and relati!e bargaining power.

P"*)$/ Di!"!(/! : 1ince there is hardly any difference in the offerings of the

!arious pro!iders" so product differentiation is low. 1o bargaining power of buyers is

i4.

B$5!" I(*"+#i*( :Today;s customers are well educated about the !arious product

offerings in the sector. 1o bargaining power of buyers ishi!h.

B$5!" S&i/i(4 C* : 1ince customers don;t ha!e to pay a fat premium to be

registered for pro!ision of ser!ices " so bargaining power of buyers ishi!h.

B"#() I)!(i5 :Figh 8rand Identity and trustworthiness reduce the bargaining

power of buyers but" otherwise the bargaining power of buyers ishi!h.

B$5!" P"*i : 1ince dealers offers discounts and !arious bundling ser!ices like +)

insurance" old car sale" etc" on different items. Fence bargaining power of buyers is

hi!h.


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Ba*a&n&n P#(* # S!//'&(*)

Analysis of the determinants of relati!e power between the producers in an

industry and their suppliers is precisely analogous to analysis of the relationship

between producers and their buyers. The only difference is that it is now the

firms in the industry that are the buyers and the producers of inputs that are the

suppliers. The key issues are the ease with which the firms in the industry can

switch between different input suppliers and the relati!e bargaining power of

each party.

P"*)$/ Di!"!(/! : 1ince there is hardly any difference in the offerings of the

!arious suppliers" so product differentiation is low. 1o bargaining power of 1uppliers is

lo.

S$88-i!" I(*"+#i*( :Today;s automobile manufacturers are well educated about

different 1uppliers. 1o bargaining power of 1uppliers islo.

S$88-i!" S&i/i(4 C* : 1ince different 1uppliers hold resources as per buyer;sre?uirements and a large in!entory has to be maintained. 1o bargaining power of

1uppliers isloas they would ha!e to incur a huge cost on switching 9 8ut if they get

automobile manufacturers for similar products who can pay higher 1upplier switching

cost is low. In such case" bargaining power of 1uppliers is hi!h.

B"#() I)!(i5 :Figh 8rand Identity and Trustworthiness of a 1upplier increases the

bargaining power of 1uppliers9 8ut" otherwise the bargaining power of suppliers is

lo.


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29< BCG M#"i

In an economy" different industries are present and different industries ha!e

different growth rate as compared to the growth of the economy. In an economy"there are a number of major industries and they all occupy different positions in

the 86G matrix according to their growth and contribution towards the

economy. In the Indian economy" some of the major sectors are 6G"

automobiles" banking and insurance" steel" telecom" software" pharmacology and

retail sectors and these can be placed in the different positions in the matrix as

shown below


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86G matrix is used to determine the relati!e position of the companies of an

industry or different 18:;s of any institution" in terms of the market growth rate

and the market share of the company in the industry. In the Indian automobile

sector" the major players are aruti 1u2uki @imited" General motors" ahindra

and ahindra" Tata otors" Fero Fonda and 8ajaj auto. In the 86G matrix" the

companies are placed in one of the following four categories 1tar" 6ash 6ows"

Dogs and Muestion marks. In the 1tars we place the companies with high market

growth and high market share" cash cows are the companies who ha!e low

market growth rate and high relati!e market share" the category of the ?uestion

marks include the companies with low relati!e market share and high market

growth rate and dogs include the companies who ha!e low relati!e market share

and low market growth rate.


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39< I()$"i#- Li! C5/-!

The industrial life cycle is a term used for classifying industry !itality o!er time.

Industry life cycle classification generally groups industries into one of four

stages pioneer" growth" maturity and decline.

In the pioneer phase" the product has not been widely accepted or adopted.

8usiness strategies are de!eloping" and there is high risk of failure. Fowe!er"

successful companies can grow at extraordinary rates. The Indian automobile

sector has passed this stage ?uite successfully.

In the growth phase" the product market has been established and there is at least

some historical guide to ground demand estimates. The industry is growing

rapidly" often at an accelerating rate of sales and earnings growth. Indian

Automoti!e Industry is booming with a growth rate of around #3 ) annually.


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The growth rate of the automobile industry in India is greater than the GDP

growth rate of the economy" so the automobile sector can be !ery well be said to

be in the growth phase.

As the product matures" growth slows as penetration reaches practical limits.

6ompanies began to focus on market share rather than growth. Industry demand

tends to follow the o!erall economy" but the scope of growth of the automobile

sector is !ery much possible in India due to the increasing income of the middle

class and their income as well as standard of li!ing.

3., S4OT Ana'+)&)

A scan of the internal and external en!ironment is an important part of the

strategic planning process. 4n!ironmental factors internal to the firm usually can


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O88*"$(ii!

6ommercial !ehicles 16 ban on o!erloading

Fea!y thrust on mining and construction acti!ity

Increase in the income le!el

6ut in excise duties

7ising rural demand

T"!#

7ising input costs

7ising interest rates

6ut throat competition


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5., In!)"*+ S/(&& In(

Industry specific index also called as sectoral index are those indices" which

represent a specific industry sector. All stocks in a sectoral index belong to that

sector only. Fence an index like the 814 auto index is made of auto stocks.

1ectoral Indices are !ery useful in tracking the mo!ement and performance of

particular sector. 814 Auto Index comprises all the major auto stocks in the


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8143++ Index.

PESE 'nay!i!


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P41T@4 Analysis is a simple" useful and widely>used tool that helps you

understand the Nbig pictureN of your Political" Economic" Socio>6ultural and

Technological" Legal and En!ironmental aspects. As such" it is used by business

leaders worldwide to build their !ision of the future.

P41T@4 analysis is concerned with the en!ironmental influences on a business.

Identifying P41T@4 influences is a useful way of summari2ing the external

en!ironment in which a business operates. Fowe!er" it must be followed up by

consideration of how a business should respond to these influences.

It is important for these reasons

irst" by making effecti!e use of P41T@4 Analysis" you ensure that what

you are doing is aligned positi!ely with the powerful forces of change that

are affecting our world. 8y taking ad!antage of change" you are much

more likely to be successful than if your acti!ities oppose itL

1econd" good use of P41T@4 Analysis helps you a!oid taking action that

is doomed to failure from the outset" for reasons beyond your controlL and

Third" P41T@4 is useful when you start operating in a new country or

region. :se of P41T@4 helps you break free of unconscious assumptions"

and helps you ?uickly adapt to the realities of the new en!ironment.

The table below lists some possible factors that could indicate important

en!ironmental influences for a business under the P41T@4 headings


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PESE 'nay!i! of 'utomobie

Sector

P#'&"&a'

Q In *++*" the Indian go!ernment formulated an auto policy that aimed at

promoting integrated" phased" enduring and self>sustained growth of the

Indian automoti!e industry

Q Allows automatic appro!al for foreign e?uity in!estment up to #++) in

the automoti!e sector and does not lay down any minimum in!estment

criteria.

Q ormulation of an appropriate auto fuel policy to ensure a!ailability of

ade?uate amount of appropriate fuel to meet emission norms

Q 6onfirms the go!ernment;s intention on harmoni2ing the regulatory

standards with the rest of the world

Q Indian go!ernment auto policy aimed at promoting an integrated" phased

and conducti!e growth of the Indian automobile industry.

Q Allowing automatic appro!al for foreign e?uity in!estment up to #++)

with no minimum in!estment criteria.

Q 4stablish an international hub for manufacturing small" affordable

passenger cars as well as tractor and two wheelers.


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Q 4nsure a balanced transition to open trade at minimal risk to the Indian

economy and local industry.

Q Assist de!elopment of !ehicle propelled by alternate energy source.

Q @ying emphasis on 75D acti!ities carried out by companies in India by

gi!ing a weighted tax deduction of up to #3+) for in house research and

75D acti!ities.

Q Plan to ha!e a terminal life policy for 6Hs along with incenti!es for

replacement for such !ehicles.

Q Promoting multi>model transportation and the implementation of mass

rapid transport system.

E#n#$&

Q The le!el of inflation 4mployment le!el per capita is right.

Q 4conomic pressures on the industry are causing automobile companies to

reorgani2e the traditional sales process.

Q 'eighted tax deduction of up to #3+) for in>house research and 7 5 D

acti!ities.

Q Go!t. has granted concessions" such as reduced interest rates for export

financing.


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Q The Indian economy has grown at $.3) per annum.

Q The manufacturing sector has grown at $>#+ ) per annum in the last few

years.

Q ore than %+) of the 6H purchase is on credit.

Q inance a!ailability to 6H buyers has grown in scope during the last few

years.

Q The increased enforcement of o!erloading restrictions has also contributed

to an increase in the no. of 6Hs plying on Indian roads.

Q 1e!eral Indian firms ha!e partnered with global players. 'hile some ha!e

formed joint !entures with e?uity participation" other also has entered into

technology tie>ups.

Q 4stablishment of India as a manufacturing hub" for mini" compact cars"


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Q $3) of cars are financed in India.

Q 6ar priced below :1D #*+++ accounts for nearly $+) of the market.

Q Hehicles priced between :1D C+++>#*+++ form the largest segment in the

passenger car market.

Q Indian customers are highly discerning" educated and well informed. They

are price sensiti!e and put a lot of emphasis on !alue for money.

Q Preference for small and compact cars. They are socially acceptable e!en

amongst the well off.

Q Preference for fuel efficient cars with low running costs.

T(2n#'#&a'

Q ore and more emphasis is being laid on 7 5 D acti!ities carried out by

companies in India.

Q 'eighted tax deduction of up to #3+) for in>house research and 7 5 D

acti!ities.

The Go!ernment of India is promoting =ational Automoti!e Testing and

75D Infrastructure Project /=AT7IP0 to support the growth of the auto

industry in India

Technological solutions helps in integrating the supply chain" hence

reduce losses and increase profitability.


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P a g e | 4,

6ustomi2ed solutions /designer cars" etc0 can be pro!ided with the

proliferation of technology

Internet makes it easy to collect and analyse customer feedback

'ith the entry of global companies into the Indian market" ad!anced

technologies" both in product and production process ha!e de!eloped.

'ith the de!elopment or e!olution of alternate fuels" hybrid cars ha!e

made entry into the market.

ew global companies ha!e setup 7 5D centers in India.

ajor global players like audi" 8'" Fyundai etc ha!e setup their

manufacturing units in India.

En&*#n$(n"a'

Physicalinfrastructure such as roads and bridges affect the use of

automobiles. If there is good a!ailability of roads or the roads are smooth

then it will affect the use of automobiles.

Physical conditions like en!ironmental situation affect the use of

automobiles. If the en!ironment is pleasant then it will lead to more use of

!ehicles.

Technological solutions helps in integrating the supply chain" hence

reduce losses and increase profitability.


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P a g e | 41

'ith the entry of global companies into the Indian market" ad!anced

technologies" both in product and production process ha!e de!eloped.

'ith the de!elopment or e!olution of alternate fuels" hybrid cars ha!emade entry into the market.

ew global companies ha!e setup 7 5D centers in India.

ajor global players like audi" 8'" Fyundai etc ha!e setup their

manufacturing units in India.

L(a'

@egal pro!ision relating to en!ironmental population by automobiles.

@egal pro!isions relating to safety measures.

6onfirms the go!ernment;s intention on harmoni2ing the regulatory

standards with the rest of the world

Indian go!ernment auto policy aimed at promoting an integrated" phased

and conducti!e growth of the Indian automobile industry.

4stablish an international hub for manufacturing small" affordable

passenger cars as well as tractor and two wheelers.

4nsure a balanced transition to open trade at minimal risk to the Indian

economy and local industry.


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P a g e | 42

M#".! S#"! * C*++!"/i#- V!i/-! I()$"5

6ommercial !ehicle segment has dominated by the Tata group of motors in India

and stood first in automobile industry. It has a share or E-.%( percent. Ashok

@eyland has its brand name in market and known for the ?uality product. The

price section of Ashok @eyland is higher than the other automobile companies

but still it has second position in commercial !ehicle segment and has garbed

#E.(C percent share of the market. Third largest market share is captured by the

ahindra and ahindra automobiles it has #+.+# percent share in market. The

other Automobile

companies ha!e shown their presence in market but it is not significant in nature.

Their share is in between E percent to one percent /figure -0. There are so many

reasons why these companies ha!e not performed in market. It may be the price

war" ?uality of the product" durability of the product and performance of the

product. The customers of this segment always think about the ser!ice pro!ided

by the company after sales. Fence it is most important to impro!e ?uality"

durability and after sales ser!ice along with competiti!e price of the Product.


43/67

P a g e | 43

M#".! S#"! * T&* W!!-!" I()$"5

Fi4 > P!"/!(#4! M#".! S#"! * T&* W!!-!"


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P a g e | 44

Fero Fonda has a remarkable share in the market of the two wheeler industry of

India. It has recorded more than (# percent share in the segment during the

period. 'here 8ajaj the local manufacturer of two wheelers has recorded second

position sales percentage *E.C+ but it is a significant growth during the period.

Third place has grabbed by the TH1 motors in the segment which has a share of

#$.#( percent. 7est of the two wheeler manufacturer has a share of less than #+

percent and it is due to the ?uality of the product and the ser!ices pro!ided by

them to the customers. All the parameters like price" ?uality" after sales ser!ices"

marketing strategy of the company leads to the increase of sales. As per the

sur!ey of the industry" otorcycle sales will perform positi!ely in future" which

will exceed #+ illion units by *+#*>#-.

M#".! S#"! * T"!! W!!-!" I()$"5


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P a g e | 4(

otors has operations in the :nited Ringdom" 1outh Rorea" Thailand and 1pain.

Among them is Saguar @and 7o!er" a business comprising the two 8ritish brands

which was ac?uired in *++$. In *++(" it ac?uired the Daewoo 6ommercial

Hehicles 6ompany" 1outh RoreaKs second largest truck maker. The rechristened

Tata Daewoo 6ommercial Hehicles 6ompany has launched se!eral new

products in the Rorean market" while also exporting these products to se!eral

international markets. Today two>thirds of hea!y commercial !ehicle exports out

of 1outh Rorea are from Tata Daewoo. In *++3" Tata otors ac?uired a *#)

stake in Fispano 6arrocera" a reputed 1panish bus and coach manufacturer" and

subse?uently the remaining stake in *++%. FispanoKs presence is being expanded

in other markets.

In *++E" Tata otors formed a joint !enture with the 8ra2il>based arcopolo" a

global leader in body>building for buses and coaches to manufacture fully>built

buses and coaches for India and select international markets. In *++E" Tata

otors entered into joint !enture with Thonburi Automoti!e Assembly Plant

6ompany of Thailand to manufacture and market the companyKs pickup !ehicles

in Thailand. The new plant of Tata otors /Thailand0 has begun production of

the enon pickup truck" with the enon ha!ing been launched in Thailand in

*++$. Tata otors is also expanding its international footprint by franchises and

joint !entures assembly operations in Renya" 8angladesh" :kraine" 7ussia"

1enegal and 1outh Africa. 'ith o!er -"+++ engineers and scientists" thecompanyKs 4ngineering 7esearch 6entre" established in #%EE" has enabled

pioneering technologies and products. The company today has 75D centres in

Pune" Samshedpur" @ucknow" Dharwad in India" and in 1outh Rorea" 1pain" and

the :R. It was Tata otors" which de!eloped the first indigenously de!eloped


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P a g e | 4)

@ight 6ommercial Hehicle" IndiaKs first 1ports :tility Hehicle and" in #%%$" the

Tata Indica" IndiaKs first fully indigenous passenger car. 'ithin two years of

launch" Tata Indica became IndiaKs largest selling car in its segment. In *++3"

Tata otors created a new segment by launching the Tata Ace" IndiaKs first

indigenously de!eloped mini>truck.

In Sanuary *++$" Tata otors un!eiled its PeopleKs 6ar" the Tata =ano" and a

de!elopment which signifies a first for the global automobile industry. =ano

brings the comfort and safety of a car within the reach of thousands of families.

The standard !ersion has been priced at :1D *"*++ or 7s.#++" +++ /excluding

HAT and transportation cost0. The Tata =ano has been subse?uently launched as

planned" in India in arch *++%.

M#"$i S$?$.i I()i#

arket 1hare Passenger Hehicles (E.+C). aruti 1u2uki India @imited" a

subsidiary of 1u2uki otor 6orporation of Sapan" is IndiaKs largest passenger car

company" accounting for o!er (3) of the domestic car market. The company

offers a complete range of cars from entry le!el aruti>$++ and Alto" to stylish

hatchback 7it2" A star" 1wift" 'agon>7" 4stillo and sedans DUire" 1( and

1ports :tility !ehicle Grand Hitara 1ince inception in #%$-" aruti 1u2uki India

has produced and sold o!er C.3 million !ehicles in India and exported o!er

3++"+++ units to 4urope and other countries. The company;s re!enue for the

fiscal *++$>*++% stood o!er :1D ( billion and Profits After Tax at o!er :1D

*(- million.


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P a g e | 4*

"yundai Motor #ndia:

arket 1hare Passenger Hehicles #(.#3). Fyundai otor India @imited is a

wholly owned subsidiary of world;s fifth largest automobile company" Fyundai

otor 6ompany" 1outh Rorea" and is the largest passenger car exporter.

Fyundai otor presently markets (% !ariants of passenger cars across segments.

These includes the 1antro in the 8 segment" the i#+" the premium hatchback i*+

in the 8V segment" the Accent and the Herna in the 6 segment" the 1onataTransform in the 4 segment. Fyundai otor" continuing its tradition of being the

fastest growing passenger car manufacturer" registered total sales of 33%"$$+

!ehicles in the year *++%" an increase of #(.() o!er *++$. In the domestic

market it clocked a growth of #$.#) as compared to *++$ with *$%"$E- units"

while o!erseas sales grew by #+.C)" with export of *C+"+#C units. Fyundai

otor currently exports cars to more than ##+ countries across 4uropean :nion"

Africa" iddle 4ast" @atin America and Asia. It has been the number one

exporter of passenger car of the country for the sixth year in a row.

In a little o!er a decade since Fyundai has been present in India" it has become

the leading exporter of passenger cars with a market share of EE) of the total

exports of passenger cars from India" making it a significant contributor to the

Indian automobile industry. In *++%" in spite of a global slowdown" Fyundai

otor India;s exports grew by #+.C). In *+#+ Fyundai plans to add #+ new

markets with Australia being the latest entrant to the list. The first shipment to

Australia is of 3++ units of the i*+ and the total i*+ exports to Australia are

expected to be in the region of #3"+++ per annum.


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P a g e | 4+

Mahindra $ Mahindra:

arket 1hare 6ommercial Hehicles #+.+#)" Passenger Hehicles E.3+)" Three

'heelers #.-#) ahindra 5 ahindra is mainly engaged in the ulti :tility

Hehicle and Three 'heeler segments directly. The company competes in the

@ight 6ommercial Hehicle segment through its joint !enture subsidiary

ahindra =a!istar Automoti!es @imited and in the passenger car segment

through another joint !enture subsidiary ahindra 7enault. In the year *++%" on

the domestic sales front" the 6ompany along with its subsidiaries sold a total of

**+"*#- !ehicles

/including (("3-- three wheelers" $"E+- @ight 6ommercial Hehicles through

ahindra =a!istar Automoti!es and #-"(*- cars through ahindra 7enault0"

recording a growth of +.E) o!er the pre!ious year.

"ero "onda Motors:

arket 1hare Two 'heelers (#.-3). Fero Fonda has been the largest two

wheeler company in the world for eight consecuti!e years. The company crossed

the #3 million unit milestone o!er a *3 year span. Fero Fonda sold more two

wheelers than the second" third and fourth placed twowheeler companies put

together. As one of the worldKs technology leaders in the automoti!e sector"

Fonda has been able to consistently pro!ide technical know>how" design

specifications and 75D inno!ations. This has led to the de!elopment of world

class" !alue > for> money motorcycles and scooters for the Indian market.


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P a g e | %,

manufacturing facilities with robust processes" building the supply chain" setting

up an extensi!e distribution networks and pro!iding insights into the mind of the

Indian customer. 1ince both

partners continue to focus on their respecti!e strengths" they ha!e been able to

complement each other. In the process" Fero Fonda is recogni2ed today as one

of the most successful joint !entures in the world. It is therefore no surprise that

there are more Fero Fonda bikes on this countryKs roads than the total population

of some 4uropean countries.

%ajaj &uto:

arket 1hare Two 'heelers *E.C+)" Three 'heelers 3$.E+). 8ajaj Auto is

ranked as theworldKs fourth largest two and three wheeler manufacturer and the

8ajaj brand is well>known across se!eral countries in @atin America" Africa"

iddle 4ast" 1outh and 1outh 4ast Asia. Despite falling demand in the

motorcycle segment" the company has succeeded in maintaining an operating

48ITDA /earnings before interest" taxes" depreciation and amortisation0 margin

of

#-.E) of net sales and other operating income. rom #.EE million motorcycles in

*++C>*++$" the company;s domestic sales fell by *-) to #.*$ million units in

*++$>*++%. 8ajaj Auto is the country;s largest exporter of two> and three>

wheelers. During *++$>*++%" 8ajaj Auto;s international sales achie!ed an all>

time high of CC*"3#% units of two and three wheelers" representing a growth of*3) o!er the pre!ious year. The growth was dri!en by the export of two>

wheelers" which increased by -#) o!er *++C>*++$ to achie!e sales of E--"(E-

units in *++$>*++%. The company expanded its footprint in Africa and iddle

4ast" where the region;s share rose from -+) of the export business in *++C>


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P a g e | %1

*++$ to (-) in *++$>*++%. The total !alue of exports was :1D 3*$ million"

representing a growth of *%).

., COMPANY ANALYSIS Ma*!"& S!!& : TATA M#"#*),

The company analysis shows the long term strengh of the company that what is

the financial Position of the company in the market where it stand among its

competitors and who are the key dri!ers of the company" what is the future plans

of the company" what are the policies of go!ernment towards the company and

how the stake of the company di!ested among different groups of people.

P"*i-! * M#"$i S$?$.i

aruti 1u2uki is one of IndiaKs leading automobile manufacturers and the market

leader in the car segment" both in terms of !olume of !ehicles sold and re!enue

earned. :ntil recently" #$.*$) of the company was owned by the Indian

go!ernment" and 3(.*) by 1u2uki of Sapan. As of ay #+" *++C" Go!t. of India

sold its complete share to Indian financial institutions. 'ith this" Go!t. of India

no longer has stake in aruti :dyog.


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P a g e | %2

The turno!er for the fiscal *++$>+% stood at 7s. *+-"3$- illion 5 Profit After

Tax at 7s. #*"#$Cml.aruti 1u2uki India @td. has sold a total of $("$+$ !ehicles

in August *++%" an increase of (#.E)" compared to 3%"%+$ !ehicles in the same

period of *++$. The companyKs domestic sales in August *++% increased *%.-)

to E%"%E# !ehicles" compared to 3("##- !ehicles in August *++$. Total passenger

car sales in August *++% increased -+.3) to E%"E*% units" compared to 3-"-3#

units in August *++$ The companyKs exports increased #3E.*) to #("$(C units"

compared to 3"C%3 units in August *++$.

P"*i-! * T## M**"

Tata otors @imited is India;s largest automobile company" reported gross

re!enue /stand>alone0 of 7s.*$3%%.*C crores /*++C>+$ 7s.--+%-.%- crores0 in

*++$>+%" a year marked by se!ere demand contraction in the automobile

industry. 7e!enues /net of excise0 for the year were 7s. *3EE+.C% crores

compared to 7s.*$C-%.(# crores in *++C>+$" a decline of #+.C). The Profit

before Tax was 7s.#+#-.CE crores compared to 7s.*3CE.(C crores in *++C>+$" a

decline of E+.C). The Profit after Tax for the year was 7s.#++#.*E crores

compared to 7s.*+*$.%* crores" a decline of 3+.C).

It is the leader in commercial !ehicles in each segment" and among the top three

in passenger !ehicles with winning products in the compact" midsi2e car and

utility !ehicle segments. The company is the world;s fourth largest truck

manufacturer" and the world;s second largest bus manufacturer.


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P a g e | %3

RATIO ANALYSIS OF TATA MOTORS AND MARUTI

SUZUKI

EPS ; N(" &n#$(- D&&(n) #n P*((**(

)"#

EPS mea!ure! the profit avaiabe to the e9uity !hareho$er! per

!hare: that i!: the amount that they can get on every !hare

he$. i 2,,* both the companie! ha$ a ri!ing EPS but in 2,,+

both of them fa an$ the effect more on ata motor! a! they

boughtt;o bran$! or$ otor! an$ fa in !ae! re!ut! in o; EPS. &ut

a! tren$ !ho;! '' motor! have potentia !o an !hareho$er

expect better in future.


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P a g e | %4

NET PROFIT

he tren$ !ho;! that ata8! net profit margin i! 9uite !tabeunti it fa! to 3.)) in 2,,+. i !ho;! a negative tren$ from

2,,) on;ar$!. &ut the future

pro!pect for both the company8! profit i! higher. Profit margin!

come $o;n a! rece!!ion hit! economy ba$y hence !ae! get

re$uce$ an$ co!t get increa!e$ very much.


55/67

P a g e | %%

ratio i! a very !tringent mea!ure of !ovency. '

genera rue of thumb !ugge!t! that the 9uic> ratio !hou$ be

aroun$ 1. aruti i! a;ay!

!ho;ing a po!itive tren$ a! it! ratio i! a;ay! greater than 1

except in 2,,*: ;hie '' motor! ;a! $oing goo$ ti 2,,): but

the performance

$ecrea!e$ from 2,,* on;ar$! a! !hortage of ca!h ;a! there

an$ current iabiitie! an$ provi!ion increa!e$ by #!*,,Cr.


56/67

P a g e | %(

In#$( S"a"($(n")

Ma*!"& S!!&

TATA M#"#*)


57/67

P a g e | %)

>., TEC?NICAL ANALYSIS

echnica anay!t! trac> price movement! an$ tra$ing voume!

in variou! !ecuritie! to i$entify pattern! in the price behavior of

particuar !toc>!: mutua fun$!: commo$itie!: or option! in

!pecific mar>et !ector! or in the overa financia mar>et!.he

goa i! to pre$ict probabe: often !hort?term: price change! in

the inve!tment! that they !tu$y: ;hich ao;! them to choo!e

an appropriate tra$ing !trategy. oo;ing i! the echnica

'nay!i! of '' otor! " aruti Su=u>i to un$er!tan$ their

pattern an$ behavior of !hare price! in the mar>et.

Resistance & Support Leve

hi! echnica too hep! in teing that ;hat ;ou$ be the price

ban$ of !hare price in ;hich it move in near future on the ba!i!

of pa!t high an$ o; eve! ma$e by a particuar !crip.

#e!i!tance eve !ho;! the price above ;hich !hare price ;i

not move in norma ca!e on the other han$ Support eve !ho;!

the minimum !hare price ;hich can be touche$ by !hare or

cro!!ing of thi! !hare ;i not be there in norma mar>et


58/67

P a g e | %*

con$ition oo;ing i! the #e!i!tance " Support eve of aruti

Su=u>i " '' otor! for the perio$ of 2 month!@

#e!i!

tance eve #!.142%

Support eve #S.12)% approx.


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P a g e | (,

MARUTI SU@U=I


61/67

P a g e | (1

oving 'verage i! an in$icator that !ho;! the average vaue of

a !ecurityA! price over a perio$ of time. he metho$ of

interpreting a moving average i! to compare the reation!hip

bet;een a moving average of the !ecurityA! price ;ith the

!ecurityA! price it!ef. 6n above figure ;e have compare the

!hare price of ata otor an$ aruti ;ith moving average of %,

perio$ of ata otor!: aruti re!pectivey.

' buy !igna i! generate$ ;hen the !ecurityA! price ri!e! above

it! moving average an$ a !e !igna i! generate$ ;hen the

!ecurityA! price fa! beo; it! moving average. 6t i! $e!igne$ to

>eep you in ine ;ith the !ecurityA! price tren$ by buying !horty

after the !ecurityA! price bottom! an$ !eing !horty after it


62/67

P a g e | (2

!top!. 5eo; area in the graph in$icate! buy !igna an$ Breen

area in$icate! !e !igna. 6n the near future both the companie!

!ho; buy !igna a! their !ecurity price! ri!e! above it! moving

average. 6t !ho;! that both companie! are performing better: !o

in$u!try a! ;hoe i! a!o performing out!tan$ing. So >eeping a

ho$ po!ition for the companie! ;ou$ be profitabe in future.

TATA MOTORS MACD

'bove graph !ho;! the 'C of '' motor! for the perio$ of (

month!. he 'C i! the $ifference bet;een a 2(?$ay an$ 12?

$ay exponentia moving average. ' +?$ay exponentia moving

average7E'-: cae$ the !igna 7or trigger- ine i! potte$ on

top of the 'C to !ho; buyD!e opportunitie!. ere are three

popuar ;ay! to u!e the 'C@ cro!!over!:

overboughtDover!o$: an$ $ivergence!.


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P a g e | (3

Cro!!over!@ 5eo; area !ho;! that there ;a! !ituation ;hen

!e po!ition occurre$ in the en$ of month Fune ti mi$ of Fuy a!

'C curve beo; E' or Signa ine !ho;! a !e !ituation

other;i!e ;e !a; a buy po!ition of '' otor! mo!t of the

time ight Breen area !ho;! that inve!tor ;ant to buy an$ ;ant

to be in ho$ po!ition. he tren$ of buying i! !eem! to be over

here or in coming fe; $ay! an$ a !eing or boo>ing of profit

cou$ be !een hence 'C ine cou$ fa beo; E' in coming

time.

MARUTI SU@U=I MACD

C*#))#(*he above graph !ho;! the 'C of aruti Su=u>i:

here 5eo; area !ho;! the !eing po!ition a! 'C ine i!

beo; E' ine the ight Breen area !ho;! the buy po!ition

;hich occur a!t time in the en$ of Fuy but no; buy po!ition for


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P a g e | (4

aruti i! create$ a! E' or !igna ine !eem! to be beo; 'C

ine an$ it ;i probaby continue in near future.

CO0C/S6O0

6n$ian 'utomobie 6n$u!try i! in the gro;th pha!e an$ the

expecte$ gro;th rate i! +?1,G for 52,,+?1, compare! to a!t

year gro;th rate ;hich ;a! ju!t ,.)G an$ the above fact! an$

figure! in our !tu$y a!o !upport thi! truth. 6n$ian 'utomobie

ha! a ot of !cope for both t;o ;heeer! an$ four ;heeer! $ue

to $eveopment in infra!tructure of the country an$ e!peciay

the rura !ector in ;hich $eman$ of t;o ;heeer ha! increa!e$

even in rece!!ion. 'ccor$ing to 6n$ian Stati!tica Organi=ation

the per capita income 7#!.3*,,,- i! increa!ing an$ nationa

income at the rate of 14.4G ;hich !ho;! potentia to buy

vehice in auto in$u!try. he 6n$ian auto mar>et i! !ti untappe$

the majority of the peope in country $on8t o;n a four ;heeer

an$ a the major auto companie! are trying to increa!e their!ae! by !evera move!. i>e '' ha! aunch 0'0O the

peope8! car an$ no; '' motor! i! a!o panning to come out

;ith an eectric car a!


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P a g e | (%

;e a! hybri$ car: moreover in t;o ;heeer !egment many

companie! i>e ahin$ra an$ ahin$ra gro; even more than

expectation!.

rom the echnica 'nay!i! of both companie! ;e come to

>no; that the !hare price of aruti ;i move in the ban$ of

#!.12)% to #!.142% an$ that of '' otor! ;i move in the

range of #!. 43, to #!. 4+, if certain correction ma$e in the

mar>et &y anay=ing the current tren$ of 6n$ian Economy an$

'utomobie 6n$u!try ;e can !ay that being a $eveoping

economy there i! ot of !cope for gro;th an$ thi! in$u!try !ti

have to cro!! many eve! !o there i! huge opportunitie! to

inve!t in an$ thi! i! proving a! more an$ more foreign

Companie! !etting up there venture! in 6n$ia.

#ecommen$ation!

&y anay=ing the in$u!try on variou! parameter! ;ith the hep

of impementing un$amenta an$ echnica too! ;e came to

>no; that thi! in$u!try ha! a ot of potentia to gro; in

futurehe return! ;hich came out of thi! in$u!try ;ere very

impre!!ive recenty: a! if ;e ta>e an exampe of '' motor!it give! approx +,G return in a perio$ of ju!t 3 month! ;hie

aruti Su=u>i !ho;! a;ay! a buy an$ ho$ po!ition becau!e

there i! po!!ibiity of gro;th in future: !ame !ituation i! in t;o


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P a g e | ()

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