small car big profit

8/8/2019 Small Car Big Profit

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INTRODUCTION TO AUTOMOBILEINTRODUCTION TO AUTOMOBILE

SECTOR SECTOR

y The automotive sector is one of the keysegments of the economy having extensiveforward and backward linkages with other keysegments of the economy.

y It contributes about 4 per cent in India's GrossDomestic Product (GDP) and 5 per cent inIndia's industrial production.

y This sector has generated about 4.5 lakh of direct employment and about one crore of indirect employment.



y India holds huge potential in the automobile

sector including the automobile componentsector owing to its technological, cost and

manpower advantage.

y India has a well developed, globally competitive

Auto Ancillary Industry and established

automobile testing and R&D centers.

y India enjoys natural advantage and is among the

lowest cost producers of steel in the world.



Small Car Segment in IndiaSmall Car Segment in India

y The fast growing auto market of India may soon become

the small car hub of the world. India is likely to soon

dethrone Japan from its no. 1 position.

y India became the world's second biggest market of small

cars by leaving behind Brazil in 2009.

y Japan had produced 3.4 million compact cars between

January and December in 2009 , compared to India's1.48 million units in the same period. India's top car

makers have collectively sold 720 , 000 units of compact

cars during the first six months of this year. It is a growth

of 32% compared to the same period last year.



Why Small Car?Why Small Car?

y

A large pie of the automobile market belongs to the small cars. Some of themajor factors influencing the hike in the sales of small autos are as follows:

y Price: The price of the new small cars is much less than the price of the new

luxury cars. This difference in price makes it more salable and affordable.

When the price of the new small car is less the loan requirement is also less.

The car loan if small can be paid back faster.

y Fuel consumption: One of the major concerns of the car buyers is the

consumption of fuel. The price of the fuel is rising. When the car buyers

seek the new car quotes they look for the fuel consumption in the technical

specifications. If the average is not good it can prove to be an elephant for the owner.

y Maintenance: The maintenance of the auto is very easy and comparatively

cheaper than that required for luxury cars.

y



y Spare parts: The spare parts of small cars are easily available and cheap too.

y Insurance: At time and especially the luxury cars, the insurance can prove to

be too costly. If you buy the car you can be assured of low cost auto insurance because the price of the small is comparatively quite less.

y Handling: The center of gravity in case of small vehicles is lower in

comparison to other cars. This makes the car easy to handle and maneuver

sharp turns without flipping. This reduces the chances of accidents too.

y Eco-friendly: The traffic rules especially those pertaining to emission and

pollution are becoming stricter day after day. The emission of the new small

cars is usually within the limits specified by the traffic department.

y

Comparison: The manufacturers have understood the market trend and havestarted manufacturing small cars in bulk. The buyer can request for the online

car quotes, compare the response and conclude about the cheapest new cars.

y Size: The size of the small car is small enough to be driven easily in crowded

places. The parking space required by that is also comparatively very less



Market OverviewMarket Overview-- Key Players in Small Car Key Players in Small Car

SegmentSegment

Maruti, 50.37

Hyundai, 19.17

Tata Motors,

17.19

Honda, 5.33

Others, 5.73



MarutiMaruti SuzukiSuzuki

y India's largest car maker Maruti Suzuki has registered

28% sales growth in November this year. The company

has sold 112 , 554 units in the month compared to sales

of 87 , 807 units in the same period last year.

y The company has exported 10 , 051 units in the month

also. The company has also crossed sales of 1 lakh units

in the second consecutive month.

y Maruti has reported sales increase of 32.2 percent in its

A2 segment , comprising Alto , Wagon-R , Zen , Swift ,

Ritz and A-Star at 74 , 063 units.



Tata Motor GroupTata Motor Group

y Tata Motors Group , including Jaguar Land Rover , has

posted sales growth of 6% in November 2010.

y Nano sales have not been very impressive. It was

reported that the company has reported one per cent

increase in its sales at 54,622 units sold during

November compared to 54,108 units sold in the year-ago

y It was reported that the company's latest offering Nano's

sales during the month stood at 509 units, which was

down by 85 per cent over November last year.y Indica range reported sales of 5,716 units, down by 37

per cent from November 2009.



Hyundai Motor IndiaHyundai Motor India

y Hyundai Motor India has posted domestic sales

growth of 12% in November 2010. The

company has sold 31 , 540 units in the domestic

market in the month compared to 28 , 162 unitssold in November 2009.

y A2 segment (Santro, i10, i20) 40,347 units;



General Motor IndiaGeneral Motor India

y General Motors (GM) India has recorded sales

growth of 17.67% in November 2010. The

company has sold 8 , 376 units of its products in

the month. It had sold 7 , 118 units in the samemonth last year.

y The company has sold 2 , 786 units of Spark ,

617 units of Cruze and and 2 , 547 units of newsmall car Beat in November 2010



y Nissan Motors plans to export 250,000 vehicles manufactured in

its India plant by 2011.

y General Motors announced its plans to export about 50,000 cars

manufactured in India by 2011. By 2010, India is expected to

witness over Rs 30,000 crore of investment.y Maruti Udyog has set up the second car with an investment of Rs

6,500 crore.

y Hyundai will bring in more than Rs 3,800 crore to India.

y

Tata Motors

will be

inve

sting R

s2,000

crore

inits small

car proje

ct.

y General Motors will be investing Rs 100 crore and Ford about Rs

350 crore.

y Ashok Leyland and Tata Motors have each announced over Rs 1,000

crore of investment.

Future prospect of Small car segmentFuture prospect of Small car segment



WeaknessWeakness

y Indian is lacking in proper infrastructure.

y This is slowing the pace of growth of autoindustry

y Companies are not improving after sale services



OpportunitiesOpportunities

y The automotive ecosystem is in the midst of significant change,

with increasing challenges in consumer demands, technologydevelopment, and globalization.

y While demand for incumbent technologies will remain strong,alternative power trains could capture more than 20 percent of theglobal market by 2020, depending upon boundary conditions such

as fuel taxation and emissions regulation set by governments aswell as oil price development.

y storage is in the heart of the next generation of efforts for fueleconomy.

y More realistic scenario will emerge for technologies usingHydrogen as automotive fuel.

y Intelligent use of NCES (Non conventional energy sources) for powering Public Transport.



ThreatsThreats

y Global Crisis

y

Companies not focusing on R & D are under greatrisk

y High competition from foreign players

y Lack of technology for Indian companies



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small car big profit

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