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  1. 1. The design of the Cugnot Steam Trolley (1769)History of the automobile begins as early as 1769, with the creation of steam-powered automobiles capable of human transport In 1806. The first cars powered by internal combustion engines running on fuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern gasoline or petrol-fueled internal combustion engine.
  3. 3. Globally Diesel cars are less in demand vs the demand in India. Prices of cars globally are cheaper compared to the prices in India Eg: Toyota Fortuner in Thailand 11 lakhs approx vs Toyota Fortuner in India 27 lakhsEmission norms very strict abroad compared to India Global market turning green as compared to the Indian market.
  4. 4. In India high end cars are only imported.Indian fuel prices are regulated. Developed countries fuel prices are unregulated.Poor road condition in the country is a big challenge for the automobile industry.India is more prone to hatch back and small cars while developed countries are inclined towards spacious and luxurious cars.Safety norms in the Indian automobile industry is yet to pick up while internationally there are high safety standards and norms.
  5. 5. Hindustan Motors the first Indian Car company to start production in India founded in 1942 by Mr. B.M. Birla; Ambassador The flagship car Establishment of other car manufacturing companies like Premier Automobiles(1944); Premier Padmini The flagship car, now also used for cab services
  6. 6. Growth very slow because of Low Demand and Low Economic Status of the countryGovernment restrictions provided no motivation or incentive for firms to do technological upgradation.Supply was low and there werent many competitorsImpact on Consumers Consumers did not have many choices; the Demand was fairly low as Cars were still a Luxury and availability of same models
  7. 7. Sanjay Gandhi owned Maruti Technical Services Limited which was liquidatedAfter his death, Indira Gandhi government collaborated with Suzuki Motors, a Japanese firm, for collaboration Formation of Maruti Udyog Limited and renamed later Maruti Suzuki in 2007+=
  8. 8. Policy changes introduced in 2 doses: 1. Partial de-regulation in 1985 eased licensing requirements, allowed selective capacity-expansion, partial relaxation of controls with regard to foreign collaboration, imports. However, trade and investment regulations continued, constraining growth of big business houses. 2. 1991 policy changes Dispensed with bulk controls and regulationsPartial de-regulation allowed technology inflow into India
  9. 9. New Industrial Policy in July 1991 by Congress Government led by Mr. Narsimha Rao: It introduced Liberalization policies Abolishment of License RajApril 1993 Government removed motor cars from list of industries reserved for compulsory licensing
  10. 10. New firms, including foreign players, entered with modern engineering, efficient processes and modern shop-floor layouts Indian automobile industry grew at 14.31% per annum in post-1991 era compared to 8.56% per annum during 1985-91 Delicencing of sector attracted many major Global OEMs (GM, Ford, Honda, Hyundai etc.) to start assembly in India
  11. 11. Finance Bill 2006 reduction of excise duty on small motor vehicles, reduction in duty of raw materials from 10% to in-between 5%7.5% - Infrastructure boostExtension of 150% weighted tax deduction on R&D expenditure increase in budgetary allocation towards R&D Allowing automatic approval for foreign equity investment upto 100%, with no minimum investment criteria
  12. 12. Key Segment Of The EconomyIt Contributes About 4% In India's GDP And 5% In India's Industrial Production.Generates About 4.5 Lakh Of Direct Employment And About One Crore Of Indirect Employment.Developed Globally Competitive Auto Ancillary Industry And Established Automobile Testing And R&D Centers.The Lowest Cost Producers Of Steel In The World.
  13. 13. Intense competition amongst various players30th December 1998 - Indica launched by Telco for `2,59,000 (petrol) and `2,85,000 (Diesel)31st December 1998 Maruti slashes prices by 5-12%; Maruti 800 price slashed to `1,85,000 from `2,09,000Ratan Tata Even for those who do not own or buy an Indica, good news, weve triggered price drops in Maruti and made the car market a friendlier place
  14. 14. Tata has come up with ` 1 Lakh car Tata NanoThis again has created price warNissan-Renault to develop a $3000 car using Indias frugal engineering expertiseBajaj to experiment with the idea of a small car
  15. 15. In the Passenger Car category, Maruti Suzuki is still the market leader with around 50% market share
  16. 16. Considering huge market potential, production of passenger cars is projected to grow at CAGR of 11% between 2010-11 and 2013-14. Comparison: 19822009:Number of manufacturers: 3 Vehicle sales: 20000 Number of models: 3 Number of manufacturers: 15 Vehicle sales: 19,80,000 approx. Number of models: 53
  17. 17. Passenger Cars52%17%19%-1%5%2%2%2%1%-