the automotive industry designs

8/3/2019 The Automotive Industry Designs

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The automotive industry designs, develops, manufactures, markets, and sells motorvehicles, and is one of the world's most important economic sectors by revenue.

The term automotive industry usually does not include industries dedicated toautomobiles after delivery to the customer, such as repair shops and motor fuel filling

stations.

Around the world, there were about 806 million cars and light trucks on the road in 2007,consuming over 260 billion gallons of gasoline and diesel fuel yearly. In the opinion ofsome, urban transport systems based around the car have proved unsustainable,consuming excessive energy, affecting the health of populations, and delivering adeclining level of service despite increasing investments. Many of these negative impactsfall disproportionately on those social groups who are also least likely to own and drivecars. The sustainable transport movement focuses on solutions to these problems.The Detroit branch of Boston Consulting Group predicts that, by 2014, one-third of worlddemand will be in the four BRIC markets (Brazil, Russia, India and China). Other

potentially powerful automotive markets are Iran and Indonesia.

History

The first practical automobile with a petrol engine wasbuilt by Karl Benz in 1885 in Mannheim, Germany. Benzwas granted a patent for his automobile on 29 January

1886, and began the first production of automobiles in1888, after Bertha Benz, his wife, had proved with the firstlong-distance trip in August 1888 (from Mannheim toPforzheim and back) that the horseless coach wasabsolutely suitable for daily use. Since 2008 a Bertha BenzMemorial Route commemorates this event.

Soon after, Gottlieb Daimler and Wilhelm May Bach inStuttgart in 1889 designed a vehicle from scratch to be anautomobile, rather than a horse-drawn carriage fitted withan engine. They also are usually credited as inventors of the


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first motorcycle, the Daimler Reitwagen, in 1885, butItaly's Enrico Bernard, of the University of Padua, in 1882,patented a 0.024 horsepower (17.9 W) 122 cc (7.4 cu in)

one-cylinder petrol motor, fitting it into his son's tricycle,making it at least a candidate for the first automobile, andfirst motorcycle Bernardi enlarged the tricycle in 1892 tocarry two adults.

TheTop 5 Most Valuable Automobile Brands

1. BMW (Munich, Germany) $21,81billion2. Toyota (Toyota City, Japan) $21,76billion3. Honda (Tokyo, Japan) $14,30billion4. Mercedes (Stuttgart, Germany) $13,73 billion5.Porsche (Stuttgart, Germany) $12,02billion

Automotive industry in India

The Automotive industry in India is one of the largest in the world and one of the fastestgrowing globally. India manufactures over 17.5 million vehicles (including 2 wheeledand 4 wheeled) and exports about 2.33 million every year.[1] It is the world's secondlargest manufacturer ofmotorcycles, with annual sales exceeding 8.5 million in 2009.[2]India's passenger car and commercial vehicle manufacturing industry is the seventh

largest in the world, with an annual production of more than 3.7 million units in 2010.[3]According to recent reports, India is set to overtake Brazil to become the sixth largestpassenger vehicle producer in the world, growing 16-18 per cent to sell around threemillion units in the course of 2011-12.[4] In 2009, India emerged as Asia's fourth largestexporter ofpassenger cars, behind Japan, South Korea, and Thailand.[5]

As of 2010, India is home to 40 million passenger vehicles and more than 3.7 millionautomotive vehicles were produced in India in 2010 (an increase of 33.9%), making the


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country the second fastest growing automobile market in the world.[6][7] According to theSociety of Indian Automobile Manufacturers, annual car sales are projected to increaseup to 5 million vehicles by 2015 and more than 9 million by 2020.[8] By 2050, thecountry is expected to top the world in car volumes with approximately 611 millionvehicles on the nation's roads.[9]

A chunk of India's car manufacturing industry is based in and around Chennai, alsoknown as the "Detroitof India"[10] with the India operations ofFord, Hyundai, RenaultandNissan headquartered in the city and BMW having an assembly plant on theoutskirts. Chennai accounts for 60 per cent of the country's automotive exports.[11]Gurgaon and Manesarin Haryana are hubs where all of the Maruti Suzuki cars in Indiaare manufactured.

[12]The Chakan corridor nearPune, Maharashtra is another vehicular

production hub with companies like General Motors, Volkswagen, Skoda, Mahindra andMahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors[13][14] havingassembly plants in the area. Ahmedabad with the Tata Nano plant, Halol again withGeneral Motors, Aurangabad with Audi, Skoda and Volkswagen, Kolkatta with

Hindustan Motors,Noida with Honda and Bangalore with Toyota are some of the otherautomotive manufacturing regions around the country.

Overview

The Indian Automobile Industry is manufacturing over 11 million vehicles and exportingabout 1.5 million every year.[18] The dominant products of the industry are two wheelerswith a market share of over 75% and passenger cars with a market share of about 16%.[18]Commercial vehicles and three wheelers share about 9% of the market between them.

About 91% of the vehicles sold are used by households and only about 9% forcommercial purposes.[18] The industry has attained a turnover of more than USD 35billion and provides direct and indirect employment to over 13 million people.[18]

The supply chain of this industry in India is very similar to the supply chain of theautomotive industry in Europe and America. This may present its own set ofopportunities and threats. The orders of the industry arise from the bottom of the supplychain i. e., from the consumers and goes through the automakers and climbs up until thethird tier suppliers. However the products, as channelled in every traditional automotiveindustry, flow from the top of the supply chain to reach the consumers.

Interestingly, the level of trade exports in this sector in India has been medium andimports have been low. However, this is rapidly changing and both exports and importsare increasing. The demand determinants of the industry are factors like affordability,product innovation, infrastructure and price of fuel. Also, the basis of competition in thesector is high and increasing, and its life cycle stage is growth. With a rapidly growingmiddle class, all the advantages of this sector in India are yet to be leveraged.


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Note that, with a high cost of developing production facilities, limited accessibility tonew technology and soaring competition, the barriers to enter the Indian Automotivesector are high. On the other hand, India has a well-developed tax structure. The power tolevy taxes and duties is distributed among the three tiers of Government. The coststructure of the industry is fairly traditional, but the profitability of motor vehicle

manufacturers has been rising over the past five years. Major players, like Tata Motorsand Maruti Suzuki have material cost of about 80% but are recording profits after tax ofabout 6% to 11%.[18]

The level of technology change in the Motor vehicle Industry has been high but, the rateof change in technology has been medium. Investment in the technology by the producershas been high. System-suppliers of integrated components and sub-systems have becomethe order of the day. However, further investment in new technologies will help theindustry be more competitive. Over the past few years, the industry has been volatile.Currently, Indias increasing per capita disposable income which is expected to rise by106% by 2015[18] and growth in exports is playing a major role in the rise and

competitiveness of the industry.

Tata Motors is leading the commercial vehicle segment with a market share of about64%.[18] Maruti Suzuki is leading the passenger vehicle segment with a market share of46%.[18] Hyundai Motor India and Mahindra and Mahindra are focusing expanding theirfootprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing26%[18] of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself isoccupying about 58% of the three wheeler market.

Consumers are very important of the survival of the Motor Vehicle manufacturingindustry. In 2008-09, customer sentiment dropped, which burned on the augmentation in

demand of cars. Steel is the major input used by manufacturers and the rise in price ofsteel is putting a cost pressure on manufacturers and cost is getting transferred to the endconsumer. The price of oil and petrol affect the driving habits of consumers and the typeof car they buy.

The key to success in the industry is to improve labour productivity, labour flexibility,and capital efficiency. Having quality manpower, infrastructure improvements, and rawmaterial availability also play a major role. Access to latest and most efficient technologyand techniques will bring competitive advantage to the major players. Utilisingmanufacturing plants to optimum level and understanding implications from thegovernment policies are the essentials in the Automotive Industry of India.

Both, Industry and Indian Government are obligated to intervene the Indian Automotiveindustry. The Indian government should facilitate infrastructure creation, createfavourable and predictable business environment, attract investment and promoteresearch and development. The role of Industry will primarily be in designing andmanufacturing products of world-class quality establishing cost competitiveness andimproving productivity in labour and in capital. With a combined effort, the Indian


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the automotive industry designs

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