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PROFILE OF AUTOMOBILE INDUSTRY

HISTORY OF INDUSTRY

In 1897, the first car ran on an Indian road. Through the 1930s, cars were only

imported, and in very small numers.

!n emryonic automotive industry emerged in India in the 19"0s #industan was

launched in 19"$, long%time competitor &remier  in 19"",

 uilding '( and )iat products respectively. (ahindra * mahindra was estalished

 y two rothers in 19"+, and egan assemly of eep -%3! utility vehicles.

)ollowing independence  in 19"7, the 'overnment of India and the private sector 

launched efforts to create an automotive%component manufacturing industry to

supply to the automoile industry. In 19+3, an import sustitution programme was

launched, and the import of fully uilt%up cars egan to e restricted.

#owever, growth was relatively slow in the 19+0s and 190s, due to

nationalisation and the license ra/, which hampered the Indian private sector. !fter 

1970, with restrictions on the import of vehicles set, the automotive industry

started to grow ut the growth was mainly driven y tractors, commercial vehiclesand scooters. -ars were still a ma/or luury item. In the 1970s, price controls were

finally lifted, inserting a competitive element into the automoile mar2et.104 #owever, y the 1980s, the automoile mar2et was still dominated

 y #industan and &remier , who sold superannuated products in fairly limited

numers. 5uring the eighties, a few competitors egan to arrive on the scene.

In 198, to promote the auto industry, the government estalished the 5elhi !uto

6po. The 198 6po was a showcase for how the Indian automotive industry was

asoring new technologies, promoting indigenous research and development, andadapting these technologies for the rugged conditions of India. The nine%day show

was attended y then &rime (inister a/iv 'andhi .

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INTRODUCTION OF INDUSTRY

The automotive industry in India is one of the largest automotive mar2ets in the

world. It was previously one of the fastest growing mar2ets gloally, ut it is

currently eperiencing flat or negative growth rates. In $009, India emerged as

!sias fourth largest eporter of  passenger cars, ehind apan, outh :orea, and

Thailand,  overta2ing Thailand to ecome third in $010. !s of $010, India was

home to "0 million passenger vehicles.

(ore than 3.7 million automotive vehicles were produced in India in $010 ;an

increase of 33.9<=, ma2ing India the second fastest growing automoile mar2et inthe world ;after -hina=. Indias passenger car and commercial vehicle

manufacturing industry recently overtoo2 >ra?il to ecome the sith largest in the

world, with an annual production of more than 3.9 million units in $011. )rom

$011 to $01$, the industry grew 1%18<, selling around three million

units. !ccording to the ociety of Indian !utomoile (anufacturers, annual

vehicle sales are pro/ected to increase to " million y $01+, not + million as

 previously pro/ected.

In $011, there were 3,9+ factories producing automotive parts in all of 

India. The average firm made @A million in annual revenue with profits close to

@A"00 thousand.

India is a very favorale mar2et for small cars e it production, sales or eport.

ince the Indian automoile industry is the largest manufacturer of small cars

companies li2e #yundai and Bissan (otors eport aout $,"0,000 and $,+0,000

annually. India emerged as !sias fourth largest eporter of automoiles, ehindapan, outh :orea and Thailand. The Indian automoile eports registered a

$$.30 percent growth in the year $009. The growth trend was as followsC Two

Dheelers% 3$.31 percent, -ommercial Eehicle % 19.10 percent and &assenger -ars.

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INDIAN AUTOMOBILE EXPORT MARKET

India is a very favorale mar2et for small cars e it production, sales or eport.

ince the Indian automoile industry is the largest manufacturer of small cars

companies li2e #yundai and Bissan (otors eport aout $,"0,000 and $,+0,000

annually. India emerged as !sias fourth largest eporter of automoiles, ehind

apan, outh :orea and Thailand. The Indian automoile eports registered a

$$.30 percent growth in the year $009. The growth trend was as followsC Two

Dheelers% 3$.31 percent, -ommercial Eehicle % 19.10 percent and &assenger -ars

grew y 19.10< .

KEY AUTOMOBILE MANUFACTURS IN INDIA

• (aruti @dyog

• 'eneral (otors

• )ord India Fimited

• 6icher (otors

• >a/a/ !uto

• Tata (otors

• 5aewoo (otors india

• #ero (otors

• #industan (otors

• #yundai (otors India Fimited

• oyal 6nfield (otors

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• Telco

• TE (otors

• 5- 5esigns

• wara/ (a?da Fimited

PROFILE OF THE COMPANY

INTRODUCTION OF TATA MOTORS

Tata Motors Limited ;formerly TELCO, short for Tata Enineerin andLo!omoti"e Com#an$= is an Indian multinational  automotive manufacturing

company headGuartered in (umai, (aharashtra, India and a susidiary of 

the Tata 'roup. Its products include passenger cars, truc2s, vans, coaches, uses,

construction eGuipment and military vehicles. It is the worlds 17th%largest motor 

vehicle manufacturing company, fourth%largest truc2 manufacturer, and second%

largest us manufacturer y volume.34

Tata (otors has auto manufacturing and assemly plants in amshedpur ,

&antnagar , Fuc2now, anand, 5harwad, and &une in India, as well as in !rgentina,

outh !frica, Thailand, and the @nited :ingdom. It has research and development

centres in &une, amshedpur, Fuc2now, and 5harwad, India, and in outh :orea,

pain, and the @nited :ingdom. Tata (otors principal susidiaries include the

>ritish premium car ma2er aguar Fand over  ;the ma2er of aguar, Fand over,

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and ange over cars= and the outh :orean commercial vehicle manufactuer Tata

5aewoo. Tata (otors has a us%manufacturing /oint venture with (arcopolo

.!. ;Tata (arcopolo=, a construction%eGuipment manufacturing /oint venture

with #itachi ;Tata #itachi -onstruction (achinery=, and a /oint venture

with )iat which manufactures automotive components and )iat and Tata randedvehicles.

)ounded in 19"+ as a manufacturer of locomotives, the company manufactured its

first commercial vehicle in 19+" in a collaoration with 5aimler%>en? !', which

ended in 199. Tata (otors entered the passenger vehicle mar2et in 1991 with the

launch of the Tata ierra, ecoming the first Indian manufacturer to achieve the

capaility of developing a competitive indigenous automoile."4 In 1998, Tata

launched the first fully indigenous Indian passenger car, the Indica, and in $008

launched the Tata Bano, the worlds cheapest car. Tata (otors acGuired the outh

:orean truc2 manufacturer 5aewoo -ommercial Eehicles -ompany in $00" and

 purchased aguar Fand over from )ord in $008.

Tata (otors is listed on the >omay toc2 6change, where it is a constituent of 

the >6 6B6H inde, the Bational toc2 6change of India, and the Bew or2 

toc2 6change. Tata (otors is ran2ed 31"th in the $01$  Fortune 'loal

+00 ran2ing of the worlds iggest corporations.

Beinnins

Tata entered the commercial vehicle sector in 19+" after forming a /oint venture

with 5aimler%>en? of 'ermany. !fter years of dominating the commercial vehicle

mar2et in India, Tata (otors entered the passenger vehicle mar2et in 1991 y

launching the Tata ierra, a multi utility vehicle. Tata suseGuently launched

the Tata 6state ;199$ a station wagon design ased on the earlier Tata(oile

;1989=, a light commercial vehicle=, the Tata umo ;199" F-E= and the Tata

afari ;1998 Indias first sports utility vehicle .

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car.

!lthough initially critici?ed y auto analysts, its ecellent fuel economy, powerful

engine, and an aggressive mar2eting strategy made it one of the est%selling cars in

the history of the Indian automoile industry. ! newer version of the car, named

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Indica E$, was a ma/or improvement over the previous version and Guic2ly

 ecame a mass favourite. Tata (otors also successfully eported large numers of 

the car to outh !frica. The success of the Indica played a 2ey role in the growth of 

Tata (otors.

%OINT &ENTURE ' OTHER ANNOUNCEMENT

In ())*, Tata (otors acGuired 5aewoos outh :orea%ased truc2 manufacturing

unit, 5aewoo -ommercial Eehicles -ompany, later renamed Tata 5aewoo.

On (+ Se#tem,er ())*, Tata (otors rang the opening ell at the Bew or2 toc2 

6change to mar2 the listing of Tata (otors.

In ())-, Tata (otors acGuired a $1< controlling sta2e in the panish us andcoach manufacturer #ispano -arrocera. Tata (otors continued its mar2et area

epansion through the introduction of new products such as uses ;tarus and

'lous, /ointly developed with susidiary #ispano -arrocera= and truc2s ;Bovus,

 /ointly developed with susidiary Tata 5aewoo=.

In ())., Tata formed a /oint venture with the >ra?il%ased (arcopolo, Tata

(arcopolo >us, to manufacture fully uilt uses and coaches.

In ())/, Tata (otors acGuired the >ritish car ma2er aguar Fand over,

manufacturer of the aguar, Fand over, and 5aimler luury car rands, from )ord

(otor -ompany.

In Ma$ ())0, Tata unveiled the Tata Dorld Truc2 range /ointly developed with

Tata 5aewoo the range went on sale in outh :orea, outh !frica,

the !!- countries, and the (iddle 6ast at the end of $009.

Tata acGuired full ownership of #ispano -arrocera in $009.

In ())0, its Fuc2now plant was awarded the J>est of !llJ a/iv 'andhi Bational

Kuality !ward.

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In ()1), Tata (otors acGuired an 80< sta2e in the Italian design and engineering

company Trili for L1.8+ million. The acGuisition formed part of the companys

 plan to enhance its styling and design capailities.

In ()1(, Tata (otors announced it would invest around illion in thedevelopment of )uturistic Infantry -omat Eehicles in collaoration with 55M.

In ()12, Tata (otors announced it will sell in India, the first vehicle in the world

to run on compressed air ;engines designed y the )rench company (5I= and

dued J(ini -!TJ.

In ()1*, Tata (otors introduced first Truc2 acing championship in India JT1

&rima Truc2 acing -hampionshipJ.

On (. %an3ar$ ()1*, the (anaging 5irector :arl lym was found dead. #e fell

from the $$nd floor to the fourth floor of the hangri%Fa #otel in >ang2o2, where

he was to attend a meeting of Tata (otors Thailand.

MANUFACTURIN4 FACLITIES

Tata (otors owes its leading position in the Indian automoile industry to itsstrong focus on indigeni?ation. This focus has driven the -ompany to set up world%

class manufacturing units with state%of%the%art technology. 6very stage of product

evolution%design, development, manufacturing, assemly and Guality control, is

carried out meticulously. Mur manufacturing plants are situated at amshedpur in

the 6ast, &une and anand in the Dest and Fuc2now and &antnagar in the Borth .

%AMSHEDPUR 

The amshedpur facility, Tata (otors first, was estalished in 19"+ to manufacture

steam locomotives. It led the companys foray into commercial vehicles in 19+". It

has een moderni?ed through the decades, with a particularly intense scale in the

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last 10 years and has led the companys evolution into a manufacturer of gloal

repute.

PUNE

The &une unit is spread over two geographical regions% &impri ;800 acres= and-hinchwad ;130 acres=. It was estalished in 19 and has a &roduction

6ngineering 5ivision, which has one of the most versatile tool ma2ing facilities in

the Indian su%continent. Industry eperts rate the fully automated )oundries at

-hinchwad and (aval among the est, worldwide. The Iron )oundry at

-hinchwad produced $933" Tons of high precision castings in $01$%13 while the

Iron )oundry at (aval produced 10" Tons of spheroidal Iron castings in $01$%

13.

LUCKHNO5

Tata (otors Fuc2now ;TML-Lucknow= is an important production facility of Tata

(otors Fimited, which was estalished in 199$ to meet the growing demand for 

-ommercial Eehicles in the Indian mar2et. The state of art plant is strongly ac2ed

up y an 6ngineering esearch -entre ;6-= * ervice set%up to support with

latest technology * cater to the compleities of automoile manufacturing. )ully

>uilt Eehicle usiness ;)>E=, which is one of the fast growing areas of usiness, is

also head Guartered here. This plant rolls out commercial vehicles * is speciali?edin the designing * manufacturing of a range of modern uses which includes Fow%

floor, emi Fow%floor, and #igh 5ec2 * -B' >uses. Fuc2now plant also

speciali?es in integral us manufacturing * has recently commissioned E

-ompany, Tata (arcopolo (otors Ftd. in the premises.

DHAR5AD

Tata (otors 5harwad &lant, Focated on the &une% >angalore highway around "$+

2m northwest from >engaluru, ecame operational on J)ounders 5ayJ 3rd (arch

$01$. This is the latest green field pro/ect y Tata (otors eing commissioned for 

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 production of !ce Nip. 5harwad plant in a record time rolled out 1+,000 !ce Nips

in first year of operations

SANAD

Tata (otors plant for the Tata Bano at anand, in !hmedaad district of 'u/arat,mar2s the culmination of the -ompanyOs goal of ma2ing the Tata Bano availale to

hundreds of thousands of families, desirous of the car a safe, affordale and

environmental friendly mode of transport. The capacity of the plant, to egin with,

will e $+0,000 cars per year to e achieved in phases, and with some alancing is

epandale up to 3+0,000 cars per year. &rovision for further capacity epansion

has also een incorporated in this location.

PANTNA4AR 

The -ompany has set up a plant for its mini%truc2 !ce and the passenger carrier 

(agic ;ased on the !ce platform= at &antnagar in @ttara2hand. The plant egan

commercial production in !ugust $007. This is the companys fourth plant, after 

amshedpur ;commercial vehicles=, &une ;commercial vehicles and passenger 

vehicles= and Fuc2now ;commercial vehicles=. The plant is spread over 9+3 acres,

of which 337 acres is occupied y the vendor par2.

A5ARDS

A6ards 6on ,$ Tata Motors in!73de8

• -ustomer upport -E>@ conferred with the 94o7den Pea!o!: Nationa7

Trainin A6ard9$011

• an2ed 9No; 1 in Nie7sen9s Cor#orate Imae Monitor S3r"e$ ()1(9 in

India ;for innovative techniGues, providing reliale products * striving for ecellence=

• an2ed No;1 Em#7o$er in the 6ngineering * !utomotive ector and Bo.

10 overall for $011 in a survey conducted y >usiness Today, for 9Best

Com#anies to 5or: <or in India9

• -onferred with the prestigious 94o7den Pea!o!: A6ard9 for 6cellence in

-orporate 'overnance for $011

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  Don the 94o7den Pea!o!: En"ironment Manaement A6ard9 for 

-orporate ocial esponsiility for $011

  was conferred with the 9S6ord o< Hono3r A6ard9 y the >ritish afety

-ouncil, @: 

  won the prestigious 9Sa<et$ Inno"ation A6ard9 $011  Fuc2now plant won the 94reente!= En"ironment Si7"er A6ard9$011

  the 94o7den Pea!o!: Nationa7 >3a7it$ A6ard9 $011

  the 9Nationa7 Ener$ Conser"ation A6ard ?NECA@9 for two consecutive

years

  the 9CII E!e77ent Ener$ E<<i!ient Unit A6ard9 $011 for the third

consecutive year 

&ario3s a6ards 6on ,$ %a3ar Land Ro"er and #rod3!ts <rom its sta,7e

in!73de8

  aguar Fand over campaign, 9U7timate Destination9 received two awards

for its innovative multi%platform recruitment .

INTRODUCTION OF THE TOPIC

INTRODUCTION TO ANALYSIS

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! systematic eamination and evaluation of data or information, y rea2ing it into

its component  parts to uncover their interrelationships. Mpposite of synthesis.

!n eamination of data and facts to uncover and understand cause%

effect relationships, thus providing asis for prolem solving and decision ma2ing.

FUNDAMENTAL ANALYSIS

)undamental analysis is the eamination of the underlying forces that affect the

well eing of the economy, industry groups, and companies. !s with most analysis,

the goal is to derive a forecast and profit from future price movements. !t the

company level, fundamental analysis may involve eamination of financial data,

management, usiness concept and competition. !t the industry level, there might e an eamination of supply and demand forces for the products offered. )or the

national economy, fundamental analysis might focus on economic data to assess

the present and future growth of the economy. To forecast future stoc2 prices,

fundamental analysis comines economic, industry, and company analysis to

derive a stoc2s current fair value and forecast future value. If fair value is not eGual

to the current stoc2 price, fundamental analysts elieve that the stoc2 is either over 

or under valued and the mar2et price will ultimately gravitate towards fair value.

)undamentalists do not heed the advice of the random wal2ers and elieve thatmar2ets are wea2 form efficient. >y elieving that prices do not accurately reflect

all availale information, fundamental analysts loo2 to capitali?e on perceived

 price discrepancies.

T5O APPROACHES OF FUNDAMENTAL ANALYSIS

Dhile carrying out fundamental analysis, investors can use either of the

following approachesC

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TOP DO5N APPROACH

In this approach, an analyst investigates oth international and national economic

indicators , such as economy rates energy price , inflation and interst rates. Thesearch for the est security then tricles down to the analysis of total sales, price

level and foreign competition in a sector in order to identify the est usiness in the

sector.

BOTTOM UP APPROACH

In this approach, an analyst start the search with specific usinesses,

irrespective of their industryPregion.

HO5 DOES FUNDAMENTAL ANALYSIS 5ORKS

)undamental analysis is carried with the aim of predicting the future performance

of a company. It is ased on the theory that the mar2et price of a security tends to

moves towards its real value or intrinsic. Thus the intrinsic value of a security

 eing higher than the security mar2et value represent a time to uy. If the value of 

the security is lower than its mar2et price, investor should sell it.

Ste#s in"o7"ed in <3ndamenta7 ana7$sis are 8

• (acroeconomic analysis.

• Industry sector analysis, which involves the analysis of companies that are a

 part of the sector.

• ituational analysis of a company.

• )inancial analysis of a company.

LON4 TERM TRENDS

)undamental analysis good for long term investments ased on long

term. The aility to identify and predict longterm economic,

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demographic, technological or consumer trends can enefit patient

investors who pic2 the right industry group or companies.

BUSINESS INSI4HT

Mne of the most ovious, ut less tangile, rewards of fundamental analysis is thedevelopment of a thorough understanding of the usiness. !fter such pain ta2ing

research and analysis, an investor will e familiar with the 2ey revenue and profit

driver ehind a company. 6arnings and earnings epectation can e potent drivers

of eGuity prices even some technicians will agree to that.

! good understanding can help investor avoid companies that are prone to

shortfalls and identify those that continue to deliver. In addition to understanding

of the 2ey value drivers and companies with in an industry. ! stoc2 price is

heavily influenced y its industry group. >y studying these groups, investor can

 etter position themselves to identify opportunities that high ris2 ;tech=, low ris2 

;utilities=, growth oriented ;computer=, value driven ;oil=, non cyclical ;consumer 

staples=, cyclical ;transportation= or income oriented ;high yield=.

THE FUNDAMENTAL ANALYSIS CAN BE DI&IDED IN THREE

PARTS

6conomic analysis

Industry analysis

-ompany analysis

ECONOMIC ANALYSIS

6conomic !nalysis covers the study of the countrys economic indicators such as

new orders, money supply, stoc2 price indices, stoc2s of unfinished goods, new

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 usiness formations, consumer price inde and unit laour costs. Important

economic considerations would include interest rates and inflation and its impact

on the stoc2 mar2et, the level of government det, the level of corporate dets,

monetary and fiscal policy.

TOOLS FOR ECONOMIC ANALYSIS

'M 5M(6TI- &M5@-T

(MBITM &MFI- !B5 FIKI5IT IB)F!TIMB

IBT6T !T6

IBT6B!TIMB!F IB)F@6B-6

)I-!F &MFI-

4ROSS DOMESTIC PRODUCT

4ross domesti! #rod3!t ;4DP= is defined y the Mrgani?ation for 6conomic -o%

operation and 5evelopment;M6-5= as Jan aggregate measure of production eGual

to the sum of the gross values added of all resident, institutional units engaged in

 production ;plus any taes, and minus any susidies, on products not included in

the value of their outputs=

INFLATION

In economics, in<7ation is a sustained increase in the general price level of goodsand services in an economy over a period of time.

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INTEREST RATES

!n interest rate is the rate at which interest is paid y orrowers ;detors= for the

use of money that they orrow from lenders ;creditors=. pecifically, the interest

rate is a percentage of principal paid a certain numer of times per period for all periods during the total term of the loan or credit. Interest rates are normally

epressed as a percentage of the principal for a period of one year, sometimes they

are epressed for different periods li2e for a month or a day. 5ifferent interest rates

eist parallelly for the same or comparale time periods, depending on the default

 proaility of the orrower, the residual term, the payac2 currency, and many

more determinants of a loan or credit. )or eample, a company orrows capital

from a an2 to uy new assets for its usiness, and in return the lender receives

rights on the new assets as collateral and interest at a predetermined interest rate

for deferring the use of funds and instead lending it to the orrower. ! commercial

 an2 can usually orrow at much lower interest rates from the central an2 than

the rate at which companies can orrow from the commercial an2.

FISCAL POLICY)iscal policy is the means y which a government ad/usts its spending levels and

ta rates to monitor and influence a nations economy. It is the sister strategy

to monetary policy through which a central an2 influences a nations money

supply. These two policies are used in various cominations to direct a countryseconomic goals. #ere we loo2 at how fiscal policy wor2s, how it must e

monitored and how its implementation may affect different people in an economy.

>efore the 'reat 5epression, which lasted from ept. ", 19$9 to the late 1930s or 

early 19"0s, the governments approach to the economy was laisse?%faire.

)ollowing Dorld Dar II, it was determined that the government had to ta2e a

 proactive role in the economy to regulate unemployment, usiness cycles, inflation

and the cost of money. >y using a mi of monetary and fiscal policies ;depending

on the political orientations and the philosophies of those in power at a particular 

time, one policy may dominate over another=, governments are ale to control

economic phenomena.

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&MT6 )IE6 )M-6 (M56F

)IB!B-I!F T!T6(6BT M) T#6 -M(&!B

M!

MI

M6

6&

5&

5IEI56B5 I6F5

!TIM !B!FI

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RE&IE5 OF LITERATURE

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RESEARCH METHODOLO4Y

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DATA ANALYSIS AND INTERPRETATION

ECONOMIC ANALYSIS

The E!onom$ o< India is the seventh%largest  in the world y nominal '5& and

the third%largest y purchasing power parity;&&&=. The country is one of the '%$0

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ma/or economies, a memer of >I- and a developing economy among the top

$0 gloal traders according to the DTM.

!ccording to the Indian )inance (inistry the annual growth rate of the Indian

economy is pro/ected to have increased to 7."< in $01"%1+ as compared with .9<in the fiscal year $013%1". In an annual report, the I() forecast that the Indian

6conomy would grow y 7.+< percent in the $01+%1 fiscal year starting on !pril

1, $01+, up from 7.$< ;$01"Q1+=.

India was the 19th%largest merchandise and the th largest services eporter in the

world in $013 it imported a total of A1.7 illion worth of merchandise and

services in $013, as the 1$th%largest merchandise and 7th largest services importer.3$4 The agricultural sector is the largest employer in Indias economy ut

contriutes a declining share of its '5& ;13.7< in $01$%13=. 4 Its manufacturing

industry has held a constant share of its economic contriution, while the fastest%

growing part of the economy has een its services sector R which includes, among

others, the construction, telecommunications, software and information

technologies, infrastructure, tourism, education, health care, travel, trade, and

 an2ing industries.

The post independence%era Indian economy ;from 19"7 to 1991= was a mied

economy with an inward%loo2ing, centrally planned, interventionist policies andimport%sustituting economic model that failed to ta2e advantage of the post%war 

epansion of trade and that nationali?ed many sectors of its economy.334 Indias

share of gloal trade fell from 1.3< in 19+3 to 0.+< in 1983. 3"4 This model

contriuted to widespread inefficiencies and corruption, and it was poorly

implemented.

!fter a fiscal crisis in 1991, India has increasingly adopted free%mar2et principles

and lierali?ed its economy to international trade. These reforms were started y

former )inance minister (anmohan ingh under the guidance of &rime (inister 

&.E. Barasimha ao. They eliminated much of Ficense, a pre% and post%>ritish era

mechanism of strict government controls on setting up new industry. )ollowing

these economic reforms, and a strong focus on developing national infrastructure

such as the 'olden Kuadrilateral pro/ect y former &rime (inister !tal >ihari

Ea/payee, the countrys economic growth progressed at a rapid pace, with relatively

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  #uge demand for 5omestic Industrial goods.

  !vail of Fow%cost, 2illed #uman esources.

  &roactive government continued thrust on reforms% )urther lierali?ationunder process.

  Increasing investment in real assets ;-apacity 6panding=, Inflow of )5I

;)oreign 5irect Investment= across Industrial sector .

5EAKNESSES

  &resence of East Industrial sic2ness

•  Mutdated laor laws, and presence of too many political laor and trade

union.

•  Bascent egulatory systems to chec2 misuse of mar2et power y firms.

•  5ependency of usidies;I Q mall scale industries=

•  InadeGuate and poor Guality infrastructure cost and time delays.

OPPORTUNITIES

'rowing -ompetition of Indian industry due to focus on efficient and

Guality.

  East eport mar2ed to eplore.

  'rowing recognition of S(ade in India rand in gloal mar2et

  (a/or growth through outscoring opportunities

  &resence of 5eming award winning firms ;)ocus on Guality=

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  'rowing numer of overseas investment and acGuisition y Indian )irms.

THREATS

• #eavy competition in manufacturing field from china.

• &ower crises and the virtuous growth cycling manufacturing sector.

• Farge informal sector, &oor wor2ing condition and low wages.

• Inclusion of social ;Faor= issues in trade dialogues could happens

eports ;e.g., -hild laor=

• #igh corruption and inadeGuate environmental safety norms could affect

sustainaility.

ECONOMIC SUR&EY ()1*()1-

• ! 'rowth ate of over 8 &er -ent 6pected for the -oming ear 

• 6conomic urvey highlights the need for alance etween U(a2e in IndiaO

and U2illing IndiaO

• (a/or eform Initiatives @nderta2en y 'overnment in >an2ing, Insurance

and )inancial ector 

• Diping 6very Tear from 6very 6yeC The an 5han o/ana, !adhaar and

(oile Bumers &rovide the olution

•

Improvement in )emale Fiteracy and 6ducational -hallenges

• 2ill 5evelopment and 6mployment are ma/or -hallengesC 6conomic

urvey

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• 6conomic urvey ecommends eform of ailwayOs tructure, -ommercial

&ractices, Mverhaul of Technology

• India needs to create additional )iscal paceC 6conomic urvey $01" Q 1+

• IndiaOs Bational olar (ission >eing caled up )ive%)old to 100,000

(egawatts

• Infrastructure 'rowth in terms of 6ight -ore Industries #igher than

Industrial 'rowth since $011%1$

• 'overnment emains -ommitted to )iscal -onsolidation 6conomic urvey

says 6nhanced evenue 'eneration is a &riority

• 6ternal ector is returning to the path of strength and resilienceC 6conomic

urvey

• ervices ector -loc2s 5oule 5igit 'rowth

• #yper%'rowth in Tech start ups in India, says 6conomic urvey on ervices

ector 

• The )ourteenth )inance -ommission ;))-= will enhance )iscal )ederalism

in IndiaC 6conomic urvey $01"%1+

• 'overnment approves a s. $00 crore -entral ector cheme for 

implementing e%platform for agri%mar2eting

• 6conomic urvey $01"%1+ #ighlights

• evive pulic investment to improve investment climateC 6conomic urvey$01" Q 1+

• -reate Bational -ommon (ar2et in !gricultural -ommoditiesC 6conomic

urvey $01"%1+

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• )rom -aron usidy to -aron TaC IndiaOs 'reen !ctions

• )ood usidy >ill stands at s. 1078$3.7+ crore during $01"%1+ ;upto

anuary, $01+=, shows an increase of $0< over previous year 

• )oodgrains production for $01"%1+ estimated at $+7.07 million tonnes will

eceed average food grain production of last five years y 8.+ million tones

• Inflation shows a declining trend during the year $01"%1+ ;!pril%5ecemer=

O&ER&IE5 OF INDIAN ECONOMYThe comination of protectionist, import%sustitution, )aian socialism, social

democratic%inspired policies governed India for sometime after the end of >ritish

occupation. The economy was then characteri?ed y etensive

regulation, protectionism,  pulic ownership of large monopolies, pervasive

corruption and slow growth. ince 1991, continuing economic lierali?ation has

moved the country towards a mar2et%ased economy.384394 >y $008, India had

estalished itself as one of the worlds faster%growing economies. 'rowth

significantly slowed to .8< in $008Q09, ut suseGuently recovered to 7."< in$009Q10, while the fiscal deficit rose from +.9< to a high .+< during the same

 period."04 Indias current account deficit surged to ".1< of '5& during K$ )11

against 3.$< the previous Guarter. The unemployment rate for $01$Q13, according

to 'overnment of Indias Faour >ureau, was ".7< nationwide, y @& method1$4 and 3< y BM method.134 Indias consumer price inflation has ranged

 etween 8.9 to 1$< over the $009%$013 period.

.

4ROSS DOMESTIC PRODUCT

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In India, the growth rate in '5& measures the change in the seasonally ad/usted

value of the goods and services produced y the Indian economy during the

Guarter. India is the worldOs tenth largest economy and the second most populous.

The most important and the fastest growing sector of Indian economy are services.

Trade, hotels, transport and communication financing, insurance, real estate and usiness services and community, social and personal services account for more

than 0 percent of '5&. !griculture, forestry and fishing constitute around 1$

 percent of the output, ut employs more than +0 percent of the laor force.

(anufacturing accounts for 1+ percent of '5&, construction for another 8 percent

and mining, Guarrying, electricity, gas and water supply for the remaining +

 percent.

A!t3a7 Pre"io3s Hi=est Lo6est Dates Unit Fre3en!$

1.0 $.$0 +.80 %1.90 199%$01" < Kuarterly

INDIA INFLATION RATE

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The inflation rate in India was recorded at +.17 percent in (arch of $01+. Inflation

ate in India averaged 8.9 percent from $01$ until $01+, reaching an all time

high of 11.1 percent in Bovemer of $013 and a record low of ".38 percent in

 Bovemer of $01". Inflation ate in India is reported y the (inistry of tatistics

and &rogramme Implementation ;(M&I=, India.

6! IB)F!TIMB

;in <=

$01+ .7"

$01" .37

$013 10.9$

$01$ 9.30

$011 8.87

$010 1$.11

$009 8.3$

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$009 $010 $011 $01$ $013 $01" $01+

0

$

"

8

10

1$

1"

in<7ation

inflation

In $013, the consumer price inde replaced the wholesale price inde ;D&I= as a

main measure of inflation. In India, the most important category in the consumer 

 price inde is )ood and everages ;"+.8 percent of total weight=. #ousing

accounts for 10 percent Transport and communication for 8. percent )uel and

light for .8" percent -lothing and footwear for .+ percent (edical care for +.9

 percent and education for ".+ percent. -onsumer price changes in India can e very

volatile due to dependence on energy imports, the uncertain impact of monsoon

rains on its large farm sector, difficulties transporting food items to mar2et ecause

of its poor roads and infrastructure and high fiscal deficit.

INDIA FORIEN DIRECT IN&ESTMENT

)oreign 5irect Investment in India decreased to 3089 @5 (illion in )eruary of 

$01+ from "87 @5 (illion in anuary of $01+. )oreign 5irect Investment in

India averaged 10+3.+$ @5 (illion from 199+ until $01+, reaching an all time

high of +70 @5 (illion in )eruary of $008 and a record low of %0 @5

(illion in )eruary of $01". )oreign 5irect Investment in India is reported y the

eserve >an2 of India.

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INDUSTRY PERFORMANCE IN ()12()1*

PRODUCTION

the cumulative production data for

DEOMSTIC SALES

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EXPORT

India is a very favorale mar2et for small cars e it production, sales or eport.

ince the Indian automoile industry is the largest manufacturer of small cars

companies li2e #yundai and Bissan (otors eport aout $,"0,000 and $,+0,000

annually. India emerged as !sias fourth largest eporter of automoiles, ehind

apan, outh :orea and Thailand. The Indian automoile eports registered a

$$.30 percent growth in the year $009. The growth trend was as followsC Two

Dheelers% 3$.31 percent, -ommercial Eehicle % 19.10 percent and &assenger -ars

grew y 19.10< .

S5OT ANALYSIS

STRENTHS

• 5omestic (ar2et is large

• 'overnment provides monetary assistance for manufacturing units

• educed Faor cost

5EAKNESS

• Infrastructural setac2s

• Fow productivity

• Too many taes levied y government increase the cost of production

• Fow investments in esearch and 5evelopment

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OPPOURTUNITIES

• eduction in 6cise duty

• ural demand is rising

• Income level is at a constant increase

THREATS

• Increasing rates of interest

• Too much competition

• ising cost of raw materials

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AUTO INDUSTRY

INTRODUCTION

The Indian auto industry is one of the largest in the world with an annual production of $1."8 million vehicles in ) $013%1".

The automoile industry accounts for $$ per cent of the countrys manufacturing

gross domestic product ;'5&=.

!n epanding middle class, a young population, and an increasing interest of the

companies in eploring the rural mar2ets have made the two wheelers segment

;with 80 per cent mar2et share= the leader of the Indian automoile mar2et. The

overall passenger vehicle segment has 1" per cent mar2et share.

India is also a sustantial auto eporter, with solid eport growth epectations for 

the near future. Earious initiatives y the 'overnment of India and the ma/or 

automoile players in the Indian mar2et is epected to ma2e India a leader in the

Two Dheeler and )our Dheeler mar2et in the world y $0$0.

KEY STATISTICS

ales of commercial vehicles in India grew +.3 per cent to +$,"81 units in

anuary $01+ from a year ago, according to ociety of Indian !utomoile

(anufacturers ;I!(=.

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ales of cars also grew for a third month in a row to 19,300 units in

anuary $01+, up 3.1" per cent from the year%ago period. -ar mar2et leader (aruti u?u2i India witnessed 8. per cent higher sales at

approimately 118,++1 units in )eruary $01+, out of which 107,89$ were

sold in domestic mar2et and 10,+9 units were eported. #yundai (otor India Ftd ;#(IF= reported a $." per cent growth in total

sales at "7,1$ units in )eruary, compared with ",+0+ units in the same

month last year. In the two%wheeler segment, #ero (oto-orp witnessed sales of "8",79

units in )eruary $01+. TE (otor -o posted 1+ per cent higher sales at $0",++ units against

177,$ units. >a/a/ !uto sold a total of $"3,000 two and three%wheelers segment.

MA%OR DE&LOPMENT AND IN&ESTMENTS

(ercedes%>en? India plans to increase its investment to s 8+0 crore ;@A 1+8.88

million= y $01". Eol2swagen 'roup aims to increase output y 10%1+ per cent on

a L100 million ;@A 1$.3+ million= investment at its production facilities in

!urangaad and -ha2an in (aharashtra. Bissan plans to introduce ten new

 passenger vehicles y the end of (arch $01. E6 -ommercial Eehicles ;E6-E=,

the /oint venture ;E= etween Eolvo and 6icher, is readying a whole new

range of truc2s with new platforms, engines and cains. Toyota :irlos2ar plans to

increase capacity at its two plants in >idadi, :arnata2a, from 310,000 units to

"00,000 units a year. -apacity at the first plant would rise from 90,000 units to

100,000 units, at a cost of s 70 crore ;@A 13.08 million= and the second plants

capacity is eing increased from 1$0,000 units to $10,000 units, with an

investment of s 830 crore ;@A 1++.1" million= due to increase in demand for its

models especially the 6tios and )ortuner. 5- 5esigns !vanti planning its first

sports car to e designed and manufactured in India. The cars prototype has een

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showcased at the 11th !uto 6po and has een priced at s $.+ million ;@A

",7$8=. >a/a/ !uto Ftd has entered into an agreement with :awasa2i #eavy

Industries, under which >a/a/ motorcycles will e assemled and sold in Indonesia

through :awasa2is distriution networ2 as co%randed products.

4O&ERNMENT INITATI&ES

The 'overnment of India encourages foreign investment in the automoile sector 

and allows 100 per cent )5I under the automatic route. To oost manufacturing,

the government had lowered ecise duty on small cars, motorcycles, scooters and

commercial vehicles to eight per cent from 1$ per cent, on sports utility vehicles to

$" per cent from 30 per cent, on mid%segment cars to $0 per cent from $" per cent

and on large%segment cars to $" per cent from $7 per cent.

ome of the ma/or initiatives ta2en y the 'overnment of India areC

• The governmentOs decision to resolve E!T disputes has resulted in the top

Indian auto ma2ers namely, Eol2swagen, >a/a/ !uto, (ahindra * (ahindra

and Tata (otors announcing an investment of around s 11,+00 crore ;@A

1.8 illion= in (aharashtra.

• The !utomoile (ission &lan for the period $00Q$01, designed y the

government is aimed at accelerating and sustaining growth in this sector.

!lso, the well%estalished egulatory )ramewor2 under the (inistry of 

hipping, oad Transport and #ighways, plays a part in providing a oost to

this sector.

• The 'overnment of India%appointed I!( and !utomotive -omponents

(anufacturers !ssociation ;!-(!= are responsile in wor2ing for the

development of the Indian automoile industry.

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• The government plans to come out with policies to introduce clean fuels

such as iodiesel, ioethanol and electricity for pulic transport vehicles and

school uses in ig cities to tac2le air pollution.

• The Fo2 aha passed the (otor Eehicles !mendment >ill, $01", pavingthe way for regulari?ation of e%ric2shaws.

• The government has set up Bational !utomotive Testing and *5

Infrastructure &ro/ect ;B!TI&= at a total cost of @A 388.+ million to

enale the industry to e on par with gloal standards.

TOP PLAYER IN AUTOMOBILE INDUSTRY

Hind3stan Motors

#industan (otors is another top automoile company in India. It was once

countrys largest car manufacturer efore (aruti @dyog overpowered it. Its popular 

model !massador has een etensively used as government limousine as well as

tai ca in India.

Tata Motors

Tata (otors is the largest automoile company of !sia headGuartered in (umai,

India. !nnual &ro/ected revenue for $010%11 is @A $7.$9 illion. It also occupies

the numer one position in commercial car segment. Tata (otors en/oys 31.$< of 

mar2et share in the multi%utility vehicles, which in luury car segment, it has ."<

mar2et share. (ost of the Tata (otors vehicles are sold predominantly in India

and over " million vehicles have een produced domestically within India.

Mar3ti S33:i India Limited ?MSIL@

(aruti u?u2i India is an undisputed leader in the Indian automoile industry.

tarted its /ourney in )eruary 1981 as (aurti @dyog Fimited, the company

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created history in the Indian automoile mar2et with its hugely popular four%

wheeler model (aruti 800. The company ecame the first Indian automoile

company to manufacture one million vehicles in 199". The company ecame

(aruti u?u2i India Fimited on eptemer 17, $007.

Ma=indra ' Ma=indra Limited ?M'M@

(ahindra *(ahindra Fimited is another auto%giant in India. ! part of the

(ahindra 'roup, (*( is the largest @E ma2er in the country. In eptemer 

$009, (*( registered a domestic sale of record $,9$1 units, comparing to

$$,7$9 units in eptemer $008 ;with an increase of 18."<=. Mn the other hand, it

sold 1+,$9 units of @E in the same period comparing to 10,"1 units in

eptemer $008 ;with a whooping growth of "3.7<=.

Baa A3to

>a/a/ !uto is the second largest two%wheeler manufacturer in India. It is also the

fourth largest two and three%wheeler ma2er in the world. In eptemer $009, >a/a/

!uto sold $"9,79+ units of two%wheelers, comparing to $18,"9" units in eptemer 

$008 ;with a growth rate of 1".3<=. 5uring eptemer $009, it also registered a

growth of 1$."< in the domestic two%wheeler sales and 19.9< in two%wheeler 

eport.

ROLE OF AUTOMOBILE INDUSTRY IN INDIA 4DPFOREI4N

IN&ESTMENTS

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COMPANY DETAILS

T$#e &ulic

Traded as >6C +00+70 ;>6 6B6H -onstituent=

 B6C T!T!(MTM

 B6C TT(

Ind3str$ !utomotive

Fo3nded 19"+

Fo3nder amset/i Tata

Head3arters (umai, (aharashtra, India

Area ser"ed Dorldwide

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Ke$ #eo#7e -yrus &allon/i (istry ;-hairman=

Prod3!ts !utomoiles

Re"en3e @A 38. illion ;) $013%1"=

O#eratin in!ome @A 3.8 illion ;$01"=

Pro<it @A $.$9 illion ;$01"=

Tota7 assets @A 3.0+ illion ;$01"=

Tota7 e3it$ @A 8.91 illion ;$01"=

N3m,er o< em#7o$ees ,+93 ;$01"=

Parent Tata 'roup

Di"isions Tata (otors -ars

S3,sidiaries aguar Fand over 

Tata 5aewoo

Tata #ispano

S7oan (ore 5reams &er -ar 

5e,site www.tatamotors.com

SHAREHOLDIN4 PATTERN OF TATA MOTORS LTD;

#MF56 B!(6 BM. M) #!6 <#!6 #MF5IB'

IB5I!B &M(MTM 939++$0+ 3".33

IBITIT@TIMB!F

IBE6TM 

10118""9" 37.13

MT#6 IBE6TM 1"8++3$1 $$."7

'6B6!F &@>FI- 111710$ .07

TOTAL (+2.+121(( 1))

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MARKET SHARE OF TATA MOTORS

-M(&!B &!6B'6 F-E (*#-E

(!@TI @N@:I "1< % %

#@B5!I 1"< % %

T!T! (MTM 1$< +0< +3<

!#M: F6F!B5 % < $<

(F I@N@ % % 3<

(!#IB5!*(!#IB5 

!

11< % %

)M-6 % $8< %

6I-#6 (,MTM % % 13<

MT#6 $1< 1 +<

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EARNIN4 PER SHARE

6! 6&

$010 +9.91

$011 "9.99

$01$ 8.98

$013 ."

$01" 7."7

$010 $011 $01$ $013 $01"0

10

$0

30

"0

+0

0

70

EPS

6&

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DI&IDEND PER SHARE

6!  5&

$0101+

$011 $0

$01$ "

$013 $

$01" $

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$010 $011 $01$ $013 $01"0

+

10

1+

$0

$+

DPS

5&

PRICE INFORMATION

RATIO ANALYSIS

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$010 $011 $01$ $013 $01"0

0.1

0.$

0.3

0."

0.+

0.

0.7

0.8

CURRENT RATIO

-@6BT !TIM

OUICK RATIO

>3i!: ratioGTota7 >3i!: AssetTota7 C3rrent Lia,i7ities

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>3i!: AssetGTota7 C3rrent Assets ?min3s@ In"entor$

6!

 

K@I-: 

!TIM

$010 0."3

$011 0.+

$01$ 0."3

$013 0."0

$01" 0.3

$010 $011 $01$ $013 $01"

0

0.1

0.$

0.3

0."

0.+

0.

>UICK RATIO

K@I-: !TIM

DEBT E>UITY RATIO8

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6! 56>T 6K@IT

!TIM

$010 1.1$

$011 0.73

$01$ 0.+

$013 0.7"

$01" 0.7+

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$010 $011 $01$ $013 $01"0

0.$

0."

0.

0.8

1

1.$

 DEBT E>UITY RATIO

 56>T 6K@IT !TIM

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IN&ENTORY TURNO&ER RATIO

6! IBE6BTM

T@BME6 

!TIM

$010 13.+0

$011 1$.10

$01$ 11.8"

$013 10.0+

$01" 8.89

$010 $011 $01$ $013 $01"0

$

"

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