Final Report_Auto Sector Analysis

7/24/2019 Final Report_Auto Sector Analysis

http://slidepdf.com/reader/full/final-reportauto-sector-analysis 1/43

Project Report

“Analysis of Indian Automobile Sector”

Submitted By

Rohit Khot

PGDBM

Acknowledgement



At the onset of mking creer in !innce" n e#perience in the sme ws e#tremely necessry

in the form of Project$

Prefce

%ndin utomobile industry hs grown leps nd bounds since &'('" time when cr hd

touched the %ndin streets for the first time$ %t is mjor industril sector in %ndi$ Subse)uent to

the liberli*tion" the utomobile sector hs been ptly described s the sunrise sector of the

%ndin economy s this sector hs witnessed tremendous growth$

At present it holds promising ninth position in the entire world with being number + in ,wo

-heelers nd number . in commercil /ehicles$ -ithstnding growth rte of &'0 per nnum

nd n nnul production of more thn + million units" it my not be n e#ggertion to sy tht

this industry in the coming yers will soon touch figure of &1 million units per yer$ ,he

utomobile industry in %ndi" the se/enth lrgest in the world with n nnul production of o/er

+$2 million units in +11( is e#pected to become one of the mjor globl utomoti/e industries in

the coming yers$

%n this project we h/e undergone detiled nlysis of %ndi utomobile industry by using

fundmentl tools$ %n order to better understnd the performnce of the industry we h/e mde

comprti/e nlysis of two mjor plyers in the utomobile industry" ,t motors s 3leding

plyer4 nd Mruti Su*uki$ ,he project ends with our recommendtions bsed on the nlysis we h/e

crried out$

2



Table of Contents

1. Executive Summary.............................................................................................06

2. Objectives of the project......................................................................................07

3. Company rofi!e.................................................................................................0"

#. $na!ysis of the %n&ian $utomobi!e %n&ustry........................................................10

#.1. Economic ana!ysis.......................................................................................10

#.1.1. '(....................................................................................................10

#.1.2. )(%* )orex an& Exports......................................................................11

#.1.3. Current Scenario.................................................................................13

#.2. %n&ustry ana!ysis.........................................................................................1#

#.2.1. Sectora! $na!ysis.................................................................................1#

#.2.2. )ive )orce +o&e!................................................................................2#

#.2.3. S,O-..................................................................................................2

#.2.#. %n&ex $na!ysis.....................................................................................26

#.3. Company $na!ysis.......................................................................................2"

#.3.1. )inancia!.............................................................................................2"

#.3.2. /on )inancia!.....................................................................................37

. %n&ian $uto Sector $ month!y up&ate for $pri! 2010.......................................#0

6. Conc!usion..........................................................................................................#

7. ecommen&ations...............................................................................................#6

". ib!ioraphy........................................................................................................#7

3



5#ecuti/e Summry,he utomobile industry" one of the core sectors" hs undergone metmorphosis with the d/ent

of new business nd mnufcturing prctices in the light of liberli*tion nd globli*tion$ ,he

sector seems to be optimistic of posting strong sles in the couple of yers in the /iew of

resonble surge in demnd$ ,he %ndin utomobile mrket is gering towrds interntionl

stndrds to meet the needs of the globl utomobile gints nd become globl hub$

A detiled nlysis of Automobile industry hs been co/ered in respect of pst growth nd

performnce$ 6nder this project to better understnd the %ndustry we h/e used fundmentl

tools to mke it more uthentic nd meningful$ An 5$%$7 pproch hs been followed under

fundmentl nlysis which co/ers effect of !D%8s" 5#port" GDP etc$ on Automobile %ndustry$

,he %ndustry Anlysis hs been done with the help of sectorl nlysis" fi/e forces model" S-9,

nlysis nd the industry specific inde#$ !or 7ompny Anlysis s prt of !undmentl tool we

h/e undergone with the comprti/e nlysis of ,A,A Motors s our leding compny with

Mruti Su*uki %ndi8s lrgest 7r mnufcturer$ ,he fundmentl spect consists of finncil nd :on;!inncil nlysis of both the compny$

At the end conclusion nd recommendtions h/e been specified so s to mke the reserch work

more meningful nd purposeful$

4



9bjecti/es of the project,he objecti/e of this project is to deeply nly*e our %ndin Automobile %ndustry for in/estment

purpose by monitoring the growth rte nd performnce on the bsis of historicl dt$

,he min objecti/es of the Project study re<

• Anlysis of Automobile industry which is gering towrds interntionl stndrds

• Anlysis of impct of )ulitti/e fctors on industry8s nd compny8s prospects

• 7omprti/e nlysis of two tough competitors of the industry

• Appliction of /rious fundmentl nlysis tools

5



Anlysis of the %ndin Automobile %ndustry

9/er period of more thn two decdes the %ndin Automobile industry hs been dri/ing its own

growth through phses$ -ith comprti/ely higher rte of economic growth rte inde# ginst

tht of gret globl powers" %ndi hs become hub of domestic nd e#ports business$ ,he

utomobile sector hs been contributing its shre to the shining economic performnce of %ndi

in the recent yers$

,o understnd this industry for the purpose of in/estment we need to nly*e it by the

=5conomy" %ndustry nd 7ompny 35$%$7$4> pproch$

A$ 5conomic nlysis

9/er period of more thn two decdes the %ndin Automobile industry hs been dri/ing its own

growth through phses$ -ith comprti/ely higher rte of economic growth rte inde# ginst

tht of gret globl powers" %ndi hs become hub of domestic nd e#ports business$ ,he

utomobile sector hs been contributing its shre to the shining economic performnce of %ndi

in the recent yers$ ,he economic nlysis is done in the following order<

&$ GDP

+$ !D%" !ore# nd 5#ports

?$ 7urrent Scenrio

6



1. GDP and automobile industry

,he Role of Automobile %ndustry in %ndi GDP hs been phenomenon$ ,he Automobile %ndustry

is one of the fstest growing sectors in %ndi$ ,he increse in the demnd for crs" nd other

/ehicles" powered by the increse in the income is the primry growth dri/er of the utomobile

industry in %ndi$ ,he introduction of tilor mde finnce schemes" esy repyment schemes hs

lso helped the growth of the utomobile sector$

2. FDI F!"#$ #%&orts and automobile industry

%n %ndi !D% up to &11 percent" hs been permitted under utomtic route to this sector" which

hs led to turno/er of 6SD &+ billion in the %ndin uto industry nd 6SD ? billion in the uto

prts %ndustry$ %ndi enjoys cost d/ntge with respect to csting nd forging s mnufcturing

costs in %ndi re +@ to ?1 per cent lower thn their western counterprts the %n/estment

7ommission hs set trget of ttrcting foreign in/estment worth 6S @ billion for the ne#t

7



se/en yers to increse %ndis shre in the globl uto components mrket from the e#isting 1$(

per cent to +$@ per cent by +1&@$

%ndi holds the third lrgest stock of reser/es mong the emerging mrket economies fter 7hin

nd Russi$ ,he o/erll pproch to the mngement of %ndis foreign e#chnge reser/es in

recent yers reflects the chnging composition of the blnce of pyments nd the li)uidity risks

ssocited with different types of flows nd other re)uirements$

,king these fctors into ccount" %ndis foreign e#chnge reser/es continued to be t

comfortble le/el nd consistent with the rte of growth" the shre of e#ternl sector in the

economy nd the si*e of risk;djusted cpitl flows$ !ollowing is the tble shows the trend of

foreign reser/es held by centrl bnk in lst !C$ Reser/es cme down cuse of recession ll o/er

the world howe/er %ndi still ble to mintin its reser/es hence minor fll ws seen compre

to ll other country which shows gret strength in long;term for %ndin 5conomy$ %ncrese in

5#ports specilly from uto industry shows n e#pecttions of huge income from western

countries nd new +11 bl$ trget for e#ports by +1&& helps in incresing$

8



'. Current scenario of automobile industry in economy

,he rpid d/ncement in the utomobile industry in de/eloped countries hs boosted up the

demnd for loclly produced multipurpose crs nd mde the utomobile industry of %ndi to

strongly focus on e#terior design nd fre)uent introduction of new models nd on products with

good )ulity nd strong technology$

9



B$ %ndustry nlysis9/er the lst fi/e yers" %ndi hs estblished itself s one of the f/oured globl destintions for

utomobile mnufcturing$ A rpidly growing middle clss" rising per cpit incomes nd

relti/ely esier /ilbility of finnce h/e been dri/ing the /ehicle demnd in %ndi in the

current decde" which" coupled with lrge go/ernment in/estment in rods infrstructure hs led

to the estblishment of /ibrnt industry$

10



Riding on the scrppge scheme in 5uropen 6nion" e#ports for the uto industry" primrily in

the pssenger cr segment h/e surged in the current fiscl$ ,he scheme tht ws lunched in

April+11' ws imed t promoting smller nd energy efficient crs by llowing people trde

their old /ehicles for new one with go/ernment pro/iding si*eble discount on such

trnsctions$

,he country hs become the second;lrgest mker of smll crs" o/ertking Br*il" nd trils

closely behind pn$ Prospects of the uto industry re e/en brighter in the medium to long run$

Gi/en tht the country hs middle clss lrger thn the popultion of the 6S nd much lower

/ehicle popultion s compred to other de/eloped ntions" there is huge growth potentil$

,he industry nlysis is done in the following order<

&$ Sectorl Anlysis

+$ !i/e !orce Model

?$ S-9,

.$ %nde# Anlysis

1. Sectoral Analysis

Eere" we h/e minly concentrted on nlysis of ? sectors< Pssenger crs" Ancillry nd

7ommercil Fehicles s discussed further$

(I) Passen*er cars

%ndi is one of the few utomobile mrkets tht h/e continued to grow through the globl

downturn$ 5/en in the fce of rising prices" demnd for crs remins strong s it is witnessed by

the robust sles figures$ -ith the %ndin economy reco/ering fster;thn;e#pected" uto sles re

likely to touch mny more heights in the coming months$

,he uto industry reported better numbers in !ebrury compred with nury$ ,he !ebrury

sles surpssed the pre/ious record of &&"&."&@ units chie/ed in nury this yer$ ,his surgein sles is belie/ed to be primrily due to the pre;buying scenrio" which ws rightly triggered by

e#pecttions of rollbck in e#cise duty in the nnul budget nd implementtion of the new

emission norms$ As per the ltest dt relesed by the Society of %ndin Automobile

Mnufcturers 3S%AM4" totl sles in domestic mrket stood t &&"+("'? units in !ebrury +1&1"

up ?.$('0 o/er '"?"1& units in the corresponding period yer go$

11



,he domestic pssenger cr segment grew for the &&th stright month in !ebrury nd posted the

highest e/er sles t &"@?"'.@ units ginst &"&@"@1@ units during the corresponding month of

+11($ 5rlier" cr mnufcturers hd touched the pek t &".@"(1@ units in nury of the current

finncil yer$

%n the two;wheeler segment" the totl sles surged by ?+$'0 in !ebrury to '"?"2@? units from

2"?1"'?' during the sme month lst yer$ Similrly" three;wheeler sles during the month under

re/iew were up ?&$'@0 t ?("@@' units s compred to ?1"11+ units in !ebrury" +11($

During the April;!ebrury period of the current finncil yer" pssenger crriers registered

yer;on;yer growth of ?&$'?0$ Similrly" three;wheelers nd two;wheelers sles grew by

+2$?@0 nd +.$@'0 compred to the corresponding period in lst fiscl$ Goods crriers lso

witnessed y;o;y growth of '$@&0 during the sid period$

12



Auto e%&orts remained buoyant+ During April;!ebrury +1&1" o/erll utomobile e#ports

registered growth rte of &2$1(0 with the pssenger /ehicles segment growing by ?.$.+0$

5#ports of three;wheelers nd two;wheelers segments grew by &&$0 nd &&$@0 respecti/ely

during this period$

Auto sector breat,es easy on bud*et announcements+ %n the wke of the &2;yer high fiscl

deficit of 2$'0 in !C&1" the go/ernment ws determined to bring the economy bck into fiscl

consolidtion$ During the nnouncement of the nnul budget" finnce minister Prnb

Mukherjee proposed +0 hike in the e#cise duty on ll non;petroleum sectors to &10 from '0"

besides rising duty on big crs" S6Fs 3sport utility /ehicles4 nd M6Fs 3multi utility /ehicles4

to ++0 from +10$ Ee lso proposed for &?0 increse to Rs &('$(. billion in fund lloction

for the rod sector$

!utloo-+ %n /iew of the strong industril output growth nd the persistent infltion rte" rte

hike by the RB% looks imminent$ Subse)uently" significnt interest rte hike by pri/te nd

public sector bnks my jolt the growth of the uto industry in the ner;term$ Any such interest

rte hike will ct s deterrent to both customers nd uto mnufcturers s the cost of

borrowing will go up$

,he industry is e#pected to continue the robust uphill dri/e in following months lso s

customers would try to /oid nother ob/ious price hike in future on ccount of shifting to

stricter emission norms$

(II) Ancillary

After witnessing strong pce of growth for mny yers" %ndi8s uto ncillry industry fced

serious demnd shock in the lst fiscl$ ,he %ndustry ws in the in/estment phse in second hlf

of !C1' s demnd from both %ndin s well s globl uto mkers hd incresed stedily in

preceding ?;. yers$ Eowe/er" the relti/ely sudden contrction in utomoti/e demnd tht

followed the e/ents of September +11' left the uto prt mkers too fcing jitters$ Besides shrp

decline in demnd" the industry fced whole rnge of other issues including fluctutions in

foreign e#chnge rtes" nd the drying up of li)uidity in the mrket$

13



Eowe/er" e/en s globl uto industry ws still fcing difficulties" %ndin uto mkers strted

chnging gers with the strt of !C&1$ Riding on stimulus mesures tken by the go/ernment"

the originl e)uipment mnufcturers 395Ms4 witnessed impro/ement in demnd conditions nd

uto sles incresed stedily in first hlf of !C&1$ ,he second hlf hs been e/en more bullish

nd most of the uto compnies h/e hit their record e/er sles or production numbers in lst

couple of months$ ,his hs resulted in significnt impro/ement in demnd side for uto prt

mkers s well in !C&1$ %n fct" lst few months h/e been so bullish for the uto industry tht

the ncillry industry hs nerly run out of cpcity in cse of mny prts$

Demand side im&roes+ Auto component mkers h/e seen significnt impro/ement in demnd

in the current fiscl fter fcing serious depression in second hlf of +11';1($ ,he impro/ement

hs been owing to strong uto sles riding on stimulus mesures tken by the go/ernment$Bring the medium nd he/y commercil /ehicle segment" ll other segments strted

performing right from strt for the fiscl nd the upwrd trend only gthered the momentum

month;fter month$ 5/en the commercil /ehicle segment strted performing in the second hlf

of the +11(;&1 while pssenger crs nd two;wheelers sw record sles s economic outlook

impro/ed nd deferred demnd retuned into the mrket$

A lot of pent up demnd hs been seen pushing cr sles to record le/els since nury$ ,his

generted substntil impro/ement in the demnd side for ncillry industry s well$ ,here hs

14



lso been some impro/ement in mrgins nd the surging sles in recent months h/e pro/ided

greter pricing power which will help uto prt mkers further impro/e the profitbility$

:ote< Aggregte figures for '. smple compnies

"ural mar-ets su&&ort recoery+ 9ne of key spect of the reco/ery hs been the rurl mrkets

which showed little de/ition from the trend despite the urbn %ndi witnessing brkes in the

second hlf of !C&1$ 5/en s the monsoon lst yer ws wy below the norml le/el" two

wheeler nd trctor sles continued strongly$ ,he rurl mrket pro/ed to be key source of

sustined utomoti/e demnd owing to higher disposble surplus ccruing from o/er four yers

of good monsoon" rising minimum support prices 3MSP4 of crops" nd increse in lnd prices$

:ow tht demnd is bck in urbn %ndi too" rurl %ndi still continues to be key segment"

prticulrly for the two wheeler nd smll commercil /ehicle mnufcturers$

"e&lacement demand remains stron*+ Replcement demnd is lso mjor source of re/enue

for uto ncillry compnies$ %n fct the replcement mrket often pro/ides greter sles stbility

nd stronger operting mrgins thn the 95M segment$ Eowe/er" strong 95M sles increse

brnd /isibility nd llows greter pricing power in replcement mrket$ ,herefore most uto

ncillry compnies stri/e to get n optimum blnce in 95M nd replcement segments which

15



help compnies optimi*e in/estments by e#ploiting the entire product cycle from product lunch

to replcement$

-hile the 95M mrket suffered substntil demnd shock in the ftermth of globl economic

downturn" the replcement mrket remined more or less resilient$ Stble replcement demnd

ws one of the /enues tht helped mny uto prt mkers get o/er the crisis$ Going forwrd" the

strong demnd for utomoti/es now will further push the replcement demnd with some lg nd

most utomkers will continue to enjoy stble sles in this segment$

#%&orts to remain under &ressure+ 5#ports constitute key source of re/enue for the %ndin

utomoti/e component industry$ Eowe/er" right from the strt of globl economic downturn"

demnd from the key res like the 6S nd 56 declined shrply$ Shrp contrction witnessed in

the utomoti/e sles in these two regions" which ccounts for o/er 2@0 of %ndi8s totl uto prt

e#ports" ws bound to h/e d/erse impct on component mkers$

Eowe/er" while there h/e been considerble impro/ements in the domestic demnd conditions"

e#ports of uto components continue to remin under pressure despite impro/ement in sles seen

in recent months in both the 6S nd 56$ %n the first hlf of current fiscl" mrket si*e of crs nd

light trucks contrcted by ?@0 while the sme in 5urope went down by +?0$ -hile growth hs

returned in both the plces in uto sles in second hlf" o/erll figure for !C&1 is e#pected to

remin &+;&.0 down on yHy bsis" which will lso led to contrction in totl e#ports of uto

prts to these regions$ %n the ne#t yer e#ports demnd will strt growing gin" but possible

gins will be cpped by potentil pprecition in the %ndin currency going forwrd$

16



Surging %mports Medium ,erm 7hllenge< A mjor thret being fced by the %ndin utomoti/e

component industry is surging imports$ %ndin go/ernment hs been lowering the import duty on

/rious uto prts in line with its commitments t bilterl nd multilterl trde greements$

,his howe/er hs resulted in surge in imports" prticulrly from 7hin$ !rom bout Rs ?1 crore

in +111" imports of 7hinese mde uto prts hs incresed to o/er Rs +"@11 crore in +11($

7hinese products now ccount for &10 of the totl %ndin uto components mrket compred

with just &0 in +111$

According to the Automoti/e 7omponent Mnufcturers Assocition of %ndi 3A7MA4" imports

of components from 7hin hd registered (0 compounded nnul growth rte o/er the pst

se/en yers$ 7hinese producers enjoy number of d/ntges" the biggest of them being lower

wge bill nd cheper cost of steel nd power$

-hile the 7hinese products often fil to mtch the )ulity of their %ndin counterprts"

prticulrly in the precision prts segment" the cost d/ntge enjoyed by the 7hinese is likely to

hurt the %ndin compnies if the current trend continues$ %n fct the industry hs been urging the

go/ernment for n import duty on 7hinese components but there hs been no finl decision on

the issue yet$

!utloo-+ %ndi8s uto ncillry industry is once gin on growth pth$ After fcing difficult

period in lst fiscl" things h/e been impro/ing in the current yer nd both the 95M nd

17



replcements segments re witnessing strong demnd$ Going forwrd" s the %ndin uto sector

growsI the uto ncillry sector will e#pnd$ ,he industry is lso grduting towrds the world;

clss technology$ %ndi is becoming the globl mnufcturing hub for the smll crs nd the trend

will certinly help boost the prospects of uto prt mkers$

,he mjor issue for the industry is from e#port side$ 5#port sles h/e been on n /erge

round &(;+10 of re/enue to the uto prt industry s whole$ Eowe/er" the segment witnessed

contrction lst yer nd growth is not likely to be significnt this yer either$ Eowe/er"

incresed locl demnd nd lso incresing uto e#ports from %ndi itself should help the

industry ddress slowdown in e#port demnd for uto components$

(III) Commercial e,icles

,he commercil /ehicle 37F4 industry ws one of the worst hit sectors during the globl

finncil crisis$ ,he industry took he/y beting in +11' nd +11( due to lesser demnds for

these /ehicles$ ,his industry hd witnessed n impro/ement in sles of buses nd trucks towrds

the end of +11( nd is looking forwrd to register +10 growth in +1&1$ ,he impro/ed sles

/olumes cn be ttributed to the strong domestic demnd creted by in/estments in infrstructure

sector nnounced by the go/ernment$ ,he sector lso got boost from the continution of fiscl

stimulus pckges$

,he pssenger /ehicle sector ws )uick to reco/er from the downturn riding on go/ernment8s

stimulus pckge$ ,he go/ernment8s stimulus pckge ensured cut in e#cise duty" reduction in

interest nd greter li)uidity which brought down the c)uisition cost$ 9n the other hnd" stricter

pprisl norms for getting truck lons hit /ehicle finncing$ ,ruck opertors" prticulrly" first

time buyers" found it difficult to get the re)uired finnce$

%ndustry e#perts rgue tht the slowdown in construction nd mining nd delys in wrding

mining licenses nd construction projects ffected sles of tippers nd dumpers$ ,he yer +11(

lso sw mnufcturers either keeping projects on hold or wlking out of joint /entures$ ,he

18



Eero group prting wys with Dimler in their proposed commercil /ehicle llince is cse

for instnce$

,he o/erll commercil /ehicles segment registered positi/e growth t ?1$?(0 during April;

nury of the current finncil yer compred to the corresponding period in the lst finncil

yer$ Medium J Ee/y 7ommercil Fehicles 3MJE7Fs4 registered growth t +1$@'0" ight

7ommercil Fehicles 37Fs4 grew t ?($220$ Eowe/er" Medium J Ee/y 7ommercil Fehicle

sles during the period re still lower thn +112;1$

,otl commercil /ehicle sles" seen s brometer of business cti/ity" more thn doubled to

@?".. units in nury +1&1$ ,he growth ws led by sles of medium J he/y commercil

/ehicles tht lmost tripled s compred to nury +11($

Commercial e,icles e%&orts still in t,e ne*atie /one+ ,he e#ports of commercil /ehicles"

howe/er" registered negti/e growth of $@+0 during April;nury of the current finncil

yer$

!utloo-+ ,he growth of the commercil /ehicle industry is closely relted with the economic

e#pnsion cti/ities in the country$ -ith the high nd persistent inflow of foreign cpitl" the

infrstructure sector is set to get mjor boost" which will further enhnce the commercil

/ehicle industry$ Most of the commercil /ehicles mking compnies re upbet on +1&1" riding

19



on se/erl fctors like ::6RM scheme" stimulus by the go/ernment" booming infrstructure

sector nd its llied industries" lenient finncing" re/i/l in the economy nd new world;clss

lunches$

,he impro/ing industril production nd economic growth rtes" coupled with re/ersl of more

thn two yers of downtrend" re likely to spur positi/e trck for commercil /ehicles

mnufcturers in +1&1$

2. Fie Forces 0odel

Michel Porter8s fi/e forces tht influence the utomobile industry cn be listed down s follows<

• Degree of Ri/lry

Despite the high concentrtion rtio seen in the utomoti/e sector" ri/lry in the %ndin uto

sector is intense due to the entry of foreign compnies in the mrket$ ,he industry ri/lry is

e#tremely high with ny being product being mtched in few months by the competitors$ ,his

instinct of the industry is primrily dri/en by technicl cpbilities c)uired o/er yers of

gesttion under the technicl collbortion with interntionl plyers$

• ,hret of Substitutes

,he thret of substitutes to the utomoti/e industry is firly mild$ :umerous other forms of

trnsporttion re /ilble" but none offer the utility" con/enience" independence nd /lue

offered by utomobiles$ ,he switching cost ssocited with using different mode of

trnsporttion" my be high in terms of personl time" con/enience nd utility$

• Brriers to entry

,he brriers to enter utomoti/e industry re substntil$ !or new compny" the strtup cpitl

re)uired to estblish mnufcturing cpcity to chie/e minimum efficient scle is prohibiti/e$

Although the brriers to new compnies re substntil" estblishing compnies re entering the

new mrkets through strtegic prtnerships or through buying out or merging with other

compnies$ Eowe/er" domestic compny" with locl knowledge nd e#pertise" hs the potentil

to compete its home mrket ginst the globl firms who re not well estblished there$

• Supplier8s power

20



%n the reltionship between the industry nd its suppliers" the power #is is tipped in industry8s

f/or$ ,he industry is comprised of powerful buyers who re generlly ble to dictte their terms

to the suppliers$

• Buyers8 Power

%n the reltionship between the utomoti/e industry nd its ultimte consumers" the power #is is

tipped in the consumers8 f/or$ ,his is due to the firly stndrdi*ed nture nd the low switching

costs ssocited with selecting from mong competing brnds$

'. S!T Analysis

A scn of the internl nd e#ternl en/ironment is n importnt prt of the strtegic plnning

process$ 5n/ironmentl fctors internl to the firm usully cn be clssified s strengths 3S4 or

weknesses 3-4" nd those e#ternl to the firm cn be clssified s opportunities 394 or threts

3,4$ Such n nlysis of the strtegic en/ironment is referred to s S-9, nlysis$ S-9,

nlysis of the %ndin utomobile sector gi/es the following points<

Stren*t,s

•rge domestic mrket

• Sustinble lbor cost d/ntge

• 7ompetiti/e uto component /endor bse

• Go/ernment incenti/es for mnufcturing plnts

• Strong engineering skills in design etc

ea-nesses

• ow lbor producti/ity

• Eigh interest costs nd high o/erheds mke the production uncompetiti/e

• Frious forms of t#es push up the cost of production

• ow in/estment in Reserch nd De/elopment• %nfrstructure bottleneck

!&&ortunities

• 7ommercil /ehicles< S7 bn on o/erloding

• Ee/y thrust on mining nd construction cti/ity

• %ncrese in the income le/el

21



• 7ut in e#cise duties

• Rising rurl demnd

T,reats

• Rising input costs

• Rising interest rtes• 7ut throt competition

. Industry S&ecific Inde%

%ndustry specific inde# lso clled s sectorl inde# re those indices" which represent specific

industry sector$ All stocks in sectorl inde# belong to tht sector only$ Eence n inde# like the

BS5 uto inde# is mde of uto stocks$ Sectorl %ndices re /ery useful in trcking the

mo/ement nd performnce of prticulr sector$

BS5 Auto %nde# comprises ll the mjor uto stocks in the BS5 @11 %nde#$

Code 3ame

@+11 Amtek Auto td$

@11' Apollo ,yres td$

@11. Ashok eylnd td$

@?+( Bjj Auto td$

@11.(? Bhrt !orge td$

@11.'1 7ummins %ndi td$

@111'2 5#ide %ndustries 7o$ td$@11&'+ Eero Eond Motors td$

@11@+1 Mhindr J Mhindr td$

@?+@11 Mruti Su*uki %ndi td$

@11+(1 MR! td$

@11@1 ,t Motors td$

4ear 2556 2557 2558 2559 255: 2515

Auto Inde% .+@2$.@ @@&'$@ @22$.@ +...$& .?@$'? '2&$.

4;o;4 "eturn (<)

+($2@ +$ ;@2$'2 +1.$&2 &$'+

Aera*e "eturn (<)?($.(

Sense% (?($(? &?@2$(& +1+'2$(( (2.$?& &.2.$'& &'1@1$'

4;o;4 "eturn (<).2$?' .$. ;@+$.@ '&$1? ?$?2

Aera*e "eturn (<)+@$&2

Source4 SE %n&ia

22



2005 2006 2007 2008 2009 20100.00

5000.00

10000.00

15000.00

20000.00

25000.00

Auto Index

Sensex

23



7$ 7ompny Anlysis

,he compny nlysis shows the long term strength of the compny tht wht is the finncil

Position of the compny in the mrket where it stnds mong its competitors nd who re the key

dri/ers of the compny" wht re the future plns of the compny" wht re the policies of

go/ernment towrds the compny nd how the stke of the compny di/ested mong different

groups of people$ ,he compny nlysis is done in the following order<

&$ !inncil

+$ :on !inncil

1. Financial Analysis

Profile of 0aruti Su/u-i+

Mruti Su*uki %ndi imited 3MS%" formerly Mruti 6dyog imited4" subsidiry of Su*uki

Motor 7orportion of pn" is %ndis lrgest pssenger cr compny" ccounting for o/er @1 per

cent of the domestic cr mrket$ %t is mrket leder in the cr segment" both in terms of /olume

of /ehicles sold nd re/enue erned$ 6ntil recently" &'$+'0 of the compny ws owned by the

%ndin go/ernment" nd @.$+0 by Su*uki of pn$ ,he %ndin go/ernment held n initil public

offering of +@0 of the compny in une +11?$ As of &1 My +11" Go/t$ of %ndi sold its

complete shre to %ndin finncil institutions$ -ith this" Go/t$ of %ndi no longer hs stke inMruti 6dyog$ 9n BS5" Mruti hs the highest mrket cpitlistion in the uto sector$ ,hey re

the lrgest cr compny in the country$

Recently" the compny hs nnounced further in/estment of Rs&"11 crore 3Rs & billion4 for

enhncing the production cpcity by +@1"111 units nnully$ ,he compny hs portfolio of &?

brnds nd o/er &@1 /rints cross Mruti '11" 9mni" interntionl brnds Alto" A;str"

-gonR" Swift" Rit* nd 5stilo" off;roder Gypsy" S6F Grnd Fitr" sedns SL. nd Swift

Dire nd the newest entrnt 5eco$

At the end of Mrch +1&1" Mruti hd mrket shre of @?$?0 of the %ndin pssenger cr

mrket$ ,he compny sold record &1"&'"?2@ /ehicles in +11(;&1 including &"."@@ units of

e#ports$ Mruti Su*ukis re/enue hs grown consistently o/er the yers$ %n +11?;1." it recorded

24



net sles of Rs (?".@2 million tht rose to Rs &1("&1' million in +11.;1@$ %n +11@;12 net sles

touched Rs &+1"1?. million nd further rose to Rs &.@"(++ million in +112;1$ %n +11;1'

Mruti Su*ukis net sles ws Rs &'"21? million" rising further to Rs +1?" @'? million in +11';

1($ During the lst fiscl 3+11(;&14" the compny posted re/enue of Rs ?1&"&( million$ ,he

7AGR o/er two yers is +0 for net sles$ ,he Go/ernment of pn hs honoured Mruti

Su*uki with the M5,% Awrd for promotion of pnese brnd in %ndi$ Mruti Su*uki is one of

the si# compnies" s lso one mong two outside pn" to h/e recei/ed this prestigious wrd$

Profile of TATA 0otors+

,t Motors imited is %ndis lrgest utomobile compny" with consolidted re/enues of Rs$

(+"@&( crores 36SD +1 billion4 in +11(;&1$ %t is the leder in commercil /ehicles in ech

segment" nd mong the top three in pssenger /ehicles with winning products in the compct"

midsi*e cr nd utility /ehicle segments$ ,he compny is the worlds fourth lrgest truck

mnufcturer" nd the worlds second lrgest bus mnufcturer$

,t Motors8 totl sles 3including e#ports4 of ,t commercil nd pssenger /ehicles in Mrch

+1&1 were 2"?1 /ehicles" growth of .(0 o/er .@"..1 /ehicles sold in Mrch +11($ ,he

compny8s domestic sles of ,t commercil nd pssenger /ehicles for Mrch +1&1 were

2+"21+ nos$" .@0 growth o/er .?"+'. nos$ sold in Mrch lst yer$7umulti/e sles 3including e#ports4 for the compny for the fiscl re &'&"1' nos$" growth

of .'0 o/er &+?"&&. nos$ sold lst yer$ ,he cumulti/e sles from e#ports for the fiscl t

&+"+.? nos$ re higher by &?.0 o/er @"++& nos$ in the sme period lst yer$

%t is the leder in commercil /ehicles in ech segment" nd mong the top three in pssenger

/ehicles with winning products in the compct" midsi*e cr nd utility /ehicle segments$ ,he

compny is the world8s fourth lrgest truck mnufcturer" nd the world8s second lrgest bus

mnufcturer$

,t Motors tody reported consolidted re/enues 3net of e#cise4 t Rs$ (+"@&($+@ crores posting

growth of ?1$@0 o/er Rs$ 1"''1$(@ crores in the pre/ious yer$ ,here hs been strong /olume

growth both t ,t Motors nd t gur nd Ro/er$ ,he 7onsolidted Profit before ,# 3PB,4

for the yer ws Rs$ ?"@++$2. crores compred to oss before ,# of Rs$ +"&+($+@ crores$ ,he

25



7onsolidted Profit fter t# 3PA,4 for the yer ws Rs$ +"@&$12 crores" significnt turnround

from loss of Rs$ +"@1@$+@ crores in the pre/ious yer$ ,he consolidted finncil performnce is

not comprble to the pre/ious yer +11';1( on ccount of the c)uisition of gur nd Ro/er

in une +11'$

,he re/enues 3net of e#cise4 t Rs$ ?@"@(?$1@ crores representing growth of ?'$(0 o/er

Rs$+@"2+($? crores in the pre/ious yer$ ,he PB, for the yer is Rs$ +"'+($@. crores" n increse

of &($&0 o/er Rs$ &"1&?$2 crores pre/ious yer$ ,he PA, for the yer is Rs$ +"+.1$1' crores" n

increse of &+?$0 o/er Rs$ &"11&$+2 pre/ious lst yer 3fter e#ceptionl item of loss of

Rs$'@1$'2 crores recogni*ed on redemption of preference shres by ,M Eoldings Pte td"

Singpore" wholly owned subsidiry of the compny4$

"atio Analysis

&$ 5PS 35rning Per Shre4

5PS mesures the profit /ilble to the e)uity shreholders per shre" tht is" the mount tht

they cn get on e/ery shre held$

5PS N 3:et %ncome O Di/idends on Preference stocks4 H 3A/erge 9utstnding Shres4

,ill +11' both the compnies hd rising 5PS but in +11( both of them fell minly due to

recession nd the effect more on ,t motors s they bought two brnds !ord Motors nd fll in

sles resulting in low 5PS$ But s trend shows ,A,A motors h/e potentil so shreholder cn

e#pect 5PS better in future$ ,he sme ws seen in the current yer +1&1 where 5PS of both the

compnies hs more thn doubled thn pre/ious yer 5PS$

#PS 0ar = 15 0ar = 5: 0ar = 59 0ar = 58 0ar = 57 0ar = 56

Su*uki '2$.@ .+$'& @@$(. @?$2( .?$' +'$'@

,M ?($+2 &$(? .+$(& .?$2 ?@$@ ?.$1'

26



0

10

2030

40

50

60

70

80

90

Suzuki

TM

+$ :et Profit Mrgin

,he :et Profit Mrgin is the rtio of :et Profit mde by the compny s compred to its sles for

tht prticulr yer$

:et Profit mrgin N 3:et Profit &114 H 3Sles4

,he trend shows tht ,t8s net profit mrgin is )uite stble until it flls to ?$ in +11(" while

the net profit of %ndi8s no$& cr mnufcturer Mruti Su*uki shows negti/e trend from +11

onwrds$ But the future prospect for both the compny8s profit is higher$ Profit mrgins come

down s recession hits economy bdly hence sles get reduced nd profits reduced due to

increse in costs$ %n the yer +1&1 the net profit mrgin of both the compnies hs impro/ed due

to increse in the respecti/e net profits erned$

3et Profit 0ar*in 0ar = 15 0ar = 5: 0ar = 59 0ar = 58 0ar = 57

Su*uki '$+( @$2' ($+. '$ $'?

,M @$(' ?$ 2$?1 @$(2 2$+(

27



02

4

6

8

10

Suzuki

TM

?$ Sles

Both gints of Automobile industry shows positi/e trend in Sles Re/enue o/er the pst @yer$

Eowe/er recession brought hurdles in their sles in +11'$ But both the compnies hd potentilto grow in future which is seen in the current yer +1&1" where sles figures h/e reched the

highest in lst @ yers$ ,his ws becuse of both" incresed domestic demnd nd foreign

demnd$

Sales 0ar = 15 0ar = 5: 0ar = 59 0ar = 58 0ar = 57

Su*uki +("2+?$1& +1"'@+$@+ &"'21$+' &"+1@$'' &."@?$&1

,M ?@"@(?$1@ +@"221$( ?&"''.$2( +."11.$&+ +1".'+$@

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

Suzuki

TM

28



.$ 7urrent Rtio

,he current rtio is con/enient nd relible tool for mesuring compnys le/el of li)uidity$

7urrent Rtio N 37urrent Assets4 H 37urrent ibilities4

,he rtio cts s n indiction tht the firm is ble to generte funds to mke ll needed pyments

in the futureI thus" the rtio indictes whether the firm is likely to be going concern$ 7urrent

rtio of +<& is considered to be idel for firm$ -e cn see in grph tht Mruti hs more

li)uidity thn ,A,A Motors s its current rtio is lwys greter thn &$ Mruti is more

successful in pying off its libilities$ 5#pnsion plns of ,A,A brought down its csh J Bnk

Blnce nd increse of outside libilities nd hence the reduction in the current rtio$

Current "atio 0ar = 5: 0ar = 59 0ar = 58 0ar = 57 0ar = 56

Su*uki &$@? &$1? &$.+ &$ &$2',M 1$'. 1$'( &$+. &$+. 1$((

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Suzuki

TM

@$ Quick rtio

,he )uick rtio is /ery stringent mesure of sol/ency$

Quick Rtio N 37urrent Assets O %n/entories4 H 37urrent ibilities4

A generl rule of thumb suggests tht the )uick rtio should be round &$ Mruti is lwys

showing positi/e trend s its rtio is lwys greter thn & e#cept in +11'" while ,A,A motors

ws doing good till +11" but the performnce decresed from +11' onwrds due to shortge of

free csh in hnd nd increse in current libilities by '11 7r$

29



>uic-

"atio0ar = 5: 0ar = 59 0ar = 58 0ar = 57 0ar = 56

Su*uki &$+2 1$22 &$&? &$?& &$+@

,M 1$@' 1$22 1$(& 1$(2 1$2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Suzuki

TM

2$ Debt 5)uity rtio

,he debt e)uity rtio shows the proportion of debt nd e)uity used by the compny s source of

funds$

Debt 5)uity rtio N Debt H 5)uity

A high debt to e)uity rtio suggests tht compny hs finnced its growth mostly /i debt$ -e

see tht the debt Oe)uity rtio of ,A,A motors is /ery high compred to tht of Mruti$ %t mens

tht lot of debt is used by ,A,A8s to finnce its incresed opertions$ ,he c)uisition of )ur

nd nd Ro/er by ,t in +11' ws the mjor reson for such high debt tken by ,t Motors$

Sometimes the cost of the debt finncing my outweigh the return tht the compny genertes on

the debt through in/estment nd business cti/ities nd cn led to bnkruptcy$ Mruti is going

/ery swiftly in this field$

Debt #?uity "atio 0ar = 5: 0ar = 59 0ar = 58 0ar = 57 0ar = 56

Su*uki 1$1 1$& 1$1( 1$1& 1$1

,M &$12 1$' 1$@' 1$@? 1$2

30



Mar 09 Mar 08 Mar 07 Mar 06 Mar 05

0

0.2

0.4

0.6

0.8

1

1.2

Suzuki

TM

$ Di/idend per Shre

DPS N Di/idend Distributed H ,otl number of shres

,t motors nd Mruti Su*uki h/e both shown positi/e trend in pying di/idends till +11'"

but the scenrio chnged in +11( s both the compny8s di/idend per shre fell$ According to the

grph ,A,A8s di/idend ws much higher thn tht of Mruti" it lwys pro/ided di/idend of

bo/e &1 per shre to its shreholders while mruti stick to below @ per shre$ Both the

compnies h/e gi/en high di/idends to their shreholders in the current yer$

DPS 0ar = 15 0ar = 5: 0ar = 59 0ar = 58 0ar = 57 0ar = 56

Su*uki 2 ?$@ @ .$@ ?$@ +,M &@ 2 &@ &@ &? &+$@

Mar 10Mar 09Mar 08Mar 07Mar 06Mar 05

0

2

4

6

8

10

12

14

16

Suzuki

TM

Com&arison of t,e com&any stoc- &erformance @it, S# inde%

31



2. 3on Financial Analysis

32



3%4 Shre Eolding Pttern

,t Motors td$

%ndin promoter shre in the compny is ?0$7ompny hs rised huge mount of money by

selling their lrge stke to institutionl in/estors bout ?@$0$ Generl Public lso hs )uite

lrge stke in the compny$

Mruti Su*uki td$

Being /enture of pnese compny Su*uki big stke of the compny is held by foreign

promoters 3@.$+&04 which shows tht they cn di/est their prt 3smll prt4 to rise money in

future$ Eowe/er institutionl in/estors lso held ?'0 mjor stke in the compny$ Generl

public hs /ery smll prt which indictes low presence of shres in the secondry mrket nd

hence low /olume trding in stock mrket$

3%%4 Mngement

33



A$ ,t Motors

3ame Desi*nation 3ame Desi*nation

Rtn : ,t

7hirmn H 7hir

Person R/i Knt

Fice

7hirmn

7rl;Peter !orster

Mnging

Director J 759 P M ,elng

Mnging

Director

%rni Director R

Goplkrishn

n

Director

: : -di Director S M Pli Director

R A Mshelkr Director S Bhrg/ Director

: Munjee Director F K irth Director

Rnendr Sen

%ndependent

Director

34

http://connect.in.com/ratan-n-tata/profile.html

http://connect.in.com/ravi-kant/profile-354340.html

http://connect.in.com/carlpeter-forster/profile.html

http://connect.in.com/p-m-telang/profile-498918.html

http://connect.in.com/j-j-irani/profile-494715.html

http://connect.in.com/r-gopalakrishnan/profile-499975.html



http://connect.in.com/n-n-wadia/profile-497985.html

http://connect.in.com/s-m-palia/profile-501884.html

http://connect.in.com/r-a-mashelkar/profile-499868.html

http://connect.in.com/s-bhargava/profile.html

http://connect.in.com/n-munjee/profile.html

http://connect.in.com/v-k-jairath/profile.html

http://connect.in.com/ranendra-sen/profile.html

http://connect.in.com/ravi-kant/profile-354340.html

http://connect.in.com/carlpeter-forster/profile.html

http://connect.in.com/p-m-telang/profile-498918.html

http://connect.in.com/j-j-irani/profile-494715.html




http://connect.in.com/n-n-wadia/profile-497985.html

http://connect.in.com/s-m-palia/profile-501884.html

http://connect.in.com/r-a-mashelkar/profile-499868.html

http://connect.in.com/s-bhargava/profile.html

http://connect.in.com/n-munjee/profile.html

http://connect.in.com/v-k-jairath/profile.html

http://connect.in.com/ranendra-sen/profile.html

http://connect.in.com/ratan-n-tata/profile.html



B$ Mruti Su*uki td$

3ame Desi*nation 3ame Desi*nation

R 7 Bhrg/

7hirmn H 7hir

Person

Shin*o

:knishi

Mnging

Director J

759

Aml Gnguli Director ,suneo 9hshi Director

Keiichi Asi Director Shuji 9ishi Director

9smu Su*uki Director

Kenichi

Ayukw Director

D/inder Singh Brr Director Pll/i Shroff Director

Mn/inder Singh

Bng Director

3%%%4 Go/ernment Policies ,owrds %ndin Automobile %ndustry

Automobile industry in %ndi recei/ed n unintended boost from stringent go/ernment uto

emission regultions o/er the pst few yers$ ,his ensured tht /ehicles produced in %ndi

conformed to the stndrds of the de/eloped world$ ,hough it hs n d/ntge in %ndi" thnks

to low costs nd go/ernment policies it soon fces stiff competition from it multintionl

competitors ll eyeing for shre in the e/er growing %ndin uto sector$ ,he policies dopted by

Go/ernment will increse competition in domestic mrket" moti/te mny foreign commercil

/ehicle mnufctures to set up shops in %ndi" whom will mke %ndi s production hub nd

e#port to nerest mrket$

• Bring in minimum foreign e)uity of 6S @1 Million if joint /enture in/ol/ed

mjority foreign e)uity ownership

• Automtic ppro/l for foreign e)uity in/estment up to &110 of mnufcture of

utomobiles nd component is permitted

• !%%s including o/erses corporte bodies 397Bs4 nd :R%s re permitted to in/est up to

.( per cent of the pid;up e)uity cpitl of the in/estee compny" subject to ppro/l of the bord of directors nd of the members by wy of specil resolution$

• %n/estments in mking uto prts by foreign /ehicle mker will lso be considered

prt of the minimum foreign in/estment mde by it in n uto;mking subsidiry in %ndi$

,he mo/e is imed t helping %ndi emerge s hub for globl mnufcturing nd

sourcing for uto prts$

35

http://connect.in.com/r-c-bhargava/profile-499901.html

http://connect.in.com/shinzo-nakanishi/profile-483.html


http://connect.in.com/amal-ganguli/profile-490463.html

http://connect.in.com/tsuneo-ohashi/profile-504320.html

http://connect.in.com/keiichi-asai/profile.html

http://connect.in.com/shuji-oishi/profile-503233.html

http://connect.in.com/osamu-suzuki/profile.html

http://connect.in.com/kenichi-ayukawa/profile.html


http://connect.in.com/davinder-singh-brar/profile.html

http://connect.in.com/pallavi-shroff/profile-499181.html

http://connect.in.com/manvinder-singh-banga/profile.html


http://connect.in.com/r-c-bhargava/profile-499901.html



http://connect.in.com/amal-ganguli/profile-490463.html

http://connect.in.com/tsuneo-ohashi/profile-504320.html

http://connect.in.com/keiichi-asai/profile.html

http://connect.in.com/shuji-oishi/profile-503233.html

http://connect.in.com/osamu-suzuki/profile.html



http://connect.in.com/davinder-singh-brar/profile.html

http://connect.in.com/pallavi-shroff/profile-499181.html





• Specific component of e#cise duty pplicble to lrge crs nd utility /ehicles will be

reduced to &@"111 rupees per /ehicle from +1"111 rupees erlier$

• ,he Proposl by the Go/t$ to set up n e#pert group to d/ise on /ible nd sustinble

system of pricing petroleum products" s this will surely hd n impct on the

Automobile %ndustry$

• ,he nnounced reduction on the bsic customs on bio;diesel is gret news for ll

compnies working on en/ironmentl s/ing technologies$

%ndin Auto Sector ; A monthly updte for April +1&1Auto Sles touched record highs in !C+1&1 on positi/e consumer sentiment nd prtilly due to

d/nced buying t the delers end in nticiption of price hike due to chnge in the 5mission

norms from April &" +1&1$ Eowe/er" first month of !C+1&& begn with mom slippge in

/olumes owing to increse in product prices nd short;supply of spre prts$ ,his ws lrgely

due to the sustined hike in commodity prices" chnge in 5mission norms nd e#cise duty hike$

Eence" most uto mjors pssed on the cost impct with the hike in prices$ Folumes of most

plyers showed signs of tpering off growth for the month$ :onetheless" pick up in economic

cti/ities is e#pected to keep demnd strong" lbeit more normli*ed cross segments"

considering demnd my h/e peked in the pst few months prior to the e#pected price hikes

post the e#cise duty hike nd spurt in rw mteril prices$

Tata 0otors (T0B)

,M grew robust 2?$&0 yoy led by the MJE7F Segment" ided by strong industril growth$

• ,M registered @+$@0 yoy growth in ,otl sles to @"+1+ units 3?"@&'4 in April +1&1$

• ,he 7F Segment recorded robust .1$(0 yoy growth ided by the MJE7F Segment"

registering substntil yoy growth of 2?$&0$

• %ndic sles stood t ("1?2 units" while %ndigo recorded sles of "+1& units" up @0 yoy

nd &'10 yoy" respecti/ely$

• ,he SumoHSfriHLenon L, rnge ccounted for sles of ?"?.1 units" rise of @&0 yoy$

• ,he PF Segment reported decent +$'0 yoy growth" with the :no selling ?"@+@ units$

36



Source4 Share5han t&.

As,o- Beyland (ABB)

Ashok eylnd clocked robust +&$.0 yoy growth in April +1&1$

• A reported ,otl sles of 2"@11 units 3&"@14" growth of +&$.0 yoy$

• ,he Bus Segment grew &+($&0 yoy" wheres the ,ruck Segment grew by stupendous

?@$&0 yoy" led by domestic sles$


37



0aruti Su/u-i

Mruti reported +($0 yoy growth in /olumes in April +1&1 on low bse$

• Mruti registered record high Sles in April +1&1 registering +($0 yoy growth to (?"1@'

units 3&".'4$

• ,he A+ Segment grew +1$@0 yoyI 7 Segment sles incresed ?$(0 yoy following

lunch of its the 5eco$

• ,he compny reported '(0 yoy increse in 5#ports to &?"1+. units 32"'(&4$

• During the month" Mruti Su*uki lunched the ll new -gonR" which ided growth in

the A+ Segment$

• ,he compny registered mrginl growth in the Domestic mrket" while 5#port sles fell

by round &0 mom$

Source4 Share5han t& $

0a,indra 0a,indra (00)

MJM grew +&$'0 yoy on the bck of robust ,rctor nd 5#port /olumes$

• MJM reported helthy monthly sles" with growth of +&$'0 yoy to .+"&( units

3?."2.@4$

• ,he ,rctor Segment grew by helthy .1$&0 yoy" ided by strong 2'$@0 yoy growth

in ,rctor 5#ports$

• ,he Automoti/e Segment grew &+$20 yoy led by the ($0 yoy growth in the

• Domestic ,hree;-heeler Segment nd &+&$+0 yoy growth in the Auto;5#port Segment$

38



• ,he 6F 3including the Lylo" Bolero nd Pick;6ps4 reported mrginl decline of +$.0

yoy" while the 7F Segment reported ?+$0 yoy growth$


aa Auto (AB)

BA led the ,wo;-heeler pck registering robust '@$.0 yoy growth in Sles ided by strong

sles of Pulsr nd Disco/er$

• BA reported o/erll Sles growth of '@$.0 yoy to ?&?".+ units 3&2("&&(4$

• ,he Motorcycle Segment grew '.$.0 led by the two gme;chnger brnds" Pulsr nd

Disco/er$

• ,he ,hree;wheeler Segment reported helthy ('0 yoy growth to ?"?@1 units 3&'"'24$

• Strong sles growth ws supported by the increse in mrket shre in the lst ?;. months$

Source4 Share5han t& $

Eero Eonda (EE)

39



• EE sold ?&"2@+ units 3?1"@@4" registering mrginl growth of 1$?0 yoy$

• Mngement hs indicted tht" in April" the compny hd shortge of btteries" which

negti/ely impcted disptches by round @1"111 units$ ,he problem is e#pected to be

sorted out by the second week of My$

• EE lunched two new models ; Glmour nd Glmour !% ; in April +1&1$• EE crossed & lkh /illges under its rurl co/erge inititi/e$


TS 0otor

,FS clocked +$(0 growth on the bck of good growth in the Scooter nd Moped Segments$

• ,FS clocked +$(0 yoy growth to &.."2'? units 3&&?"&&(4

• Domestic sles grew +&$'0 yoy to &+@".2@ units 3&1+"('@4

• ,he Scooter Segment recorded .+$0 yoy growth to +2"'21 units 3&'"'&(4

• ,he Motorcycle Segment grew +.0 yoy to 22"111 units 3@?"+?@4

• 5#ports grew '($20 to &("+&' units 3&1"&?.4

• :ewly lunched ,FS i/e nd ,FS -eg supported the better /olume growth

• ,hree;wheeler sles continued to e#cel" registering sles of +".'? units 3124


7onclusion

40



%ndin Automobile %ndustry is in the growth phse nd the e#pected growth rte is (;&10 for

!C+1&1;&&$ ,he fcts nd figures e#hibited in the report lso support this$

%ndin Automobile hs lot of scope for both two wheelers nd four wheelers due to

de/elopment in infrstructure of the country nd especilly the rurl sector in which demnd of

two wheeler hs incresed e/en in recession$ According to %ndin Sttisticl 9rgni*tion the

per cpit income 3Rs$?'1114 is incresing nd ntionl income t the rte of &.$.0 which

shows potentil to buy /ehicle in uto industry$ ,he growth rte of %ndin Automobile is so fst

tht by +1&2 %ndin %ndustry will be world th lrgest mnufcturer in ll sections$

,he %ndin uto mrket is still untpped the mjority of the people in country don8t own four

wheeler nd ll the mjor uto compnies re trying to increse their sles by se/erl mo/es$

ike ,A,A hs lunch :A:9 the people8s cr nd now ,A,A motors is lso plnning to come

out with n electric cr s well s hybrid cr" moreo/er in two wheeler segment mny compnies

like Mhindr nd Mhindr grow e/en more thn e#pecttions$

,here lso e#ists more or less direct correltion between the BS5 Sense# nd the BS5 Auto

%nde#$ ,he stock prices of the two compnies studied lso /ry in proportion to the stock inde#$

,he Auto %nde# hs lwys shown y;o;y growth since +11@" e#cept for the recession period"

nd hs n /erge yield of round .10 for lst @ yers$

By nly*ing the current trend of %ndin 5conomy nd Automobile %ndustry we cn sy tht"

being de/eloping economy there is lot of scope for growth of this industry$ Automobile

industry still hs to cross mny le/els of progress nd thus there is huge opportunity to in/est in

which cn be supported by the fct tht more nd more foreign compnies re setting up there

/entures in %ndi$

Recommendtions

41



By nly*ing the %ndin Automobile industry on /rious prmeters with the help of

implementing fundmentl tools we cn definitely conclude tht this industry hs lot of

potentil to grow in future$ So recommending to in/est in Automobile %ndustry is no doubt going

to be good nd smrt option becuse this industry is booming like ne/er before not only in

%ndi but ll round the world$

,he returns which cme out of this industry were /ery impressi/e$ %t cn be seen tht the uto

inde# hs gi/en return of &0 for the finncil yer +1&1 s compred to the lst yer$

9/er the longer term" comprti/ely low penetrtion le/els" helthy economic en/ironment nd

f/ourble demogrphics" supported by higher per;cpit income le/els re likely to help the

Auto compnies in sustining their ,op;line growth$ %n/esting in stocks like ,t Motors" Mruti

Su*uki nd Mhindr J Mhindr will certinly pro/e to be fruitful$

,hus" looking t the fundmentls of the utomobile industry" the growth in the %ndin economy

s whole" nd the rising demnd for utomobiles in %ndi s well s brod" we suggest tht it is

sfe" profitble nd the right time for in/estors to in/est in this booming sector$

Bibliogrphy

www$bseindi$com

42



www$simindi$com

www$indi;reports$in

www$yhoofinnce$com

www$moneycontrol$comwww$worldfct$com

www$rbi$org$in

www$shrekhn$com

www$finmin$nic$in

www$mospi$go/$in

Final Report_Auto Sector Analysis

Documents

Transcript of Final Report_Auto Sector Analysis