Indian Automobile Industry

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Analysis of Automobile Industry

Industry Definition

An Automobile, a wheeled passenger land vehicle which is self-propelled, i.e., has its own engine and which, by its discovery, put the horses to rest and changed the way of living for the mankind.

The automobiles (with examples) are classified as follows:

1. 2-Wheelers

These are of 5 types:

1. Motorcycles: Bajaj Pulsar, Honda Unicorn, Honda Shine

2. Scooters: Honda Activa, Kinetic Zoom, Bajaj Chetak 4S

3. Scooterettes: Bajaj Spirit, TVS Scooty Pep, Bajaj Sunny Zip

4. Step thru’s: Bajaj M80, Hero Puch, Kinetic K4 100

5. Mopeds: Kinetic Luna Super, Kinetic Luna TFR

2. 3-Wheelers

These are of 2 types based on purpose:

1.

2.

1. Carriage or Goods transport: Bajaj GC 1000, Piaggio Ape 50, M&M Alfa

2. Passenger transport: Bajaj RE 2S, M&M Champion

3. Passenger Vehicles

These are further classified as:

1.

2.

3.

1. Passenger Cars:

These include passenger cars which are divided into following 6 categories depending upon length:

1. Mini – Car length upto 3400 mm – Maruti 800 and REVA

2. Compact – Length between 3401 and 4000 mm – Maruti Alto, Tata Indica, Hyundai Santro

3. Midsize – Length between 4001 and 4500 mm – Maruti Esteem, Tata Indigo, Hyundai Accent

4. Executive – Length between 4501 and 4700 mm – Toyota Corolla, Honda Civic

5. Premium – Length between 4701 and 5000 mm – Honda Accord, Hyundai Sonata

6. Luxury – Length above 5000 mm – Mercedes S-class

2. Utility Vehicles: Tata Sumo and Safari, Toyota Qualis

3. Multi Utility Vehicles: Maruti Omni and Versa

4. Commercial Vehicles

These are divided into 2 categories according to the loads they can carry:

4.

1. Light Commercial Vehicles – Gross vehicle weight limit is 7.5 tonnes – Cargo, Tempo, Mini Buses, and Mini Trucks etc. Major players are Tata Motors Ltd., Swaraj Mazda Ltd., Mahindra and Mahindra Ltd.

2. Medium & Heavy Commercial Vehicles – Gross vehicle weight limit is above 7.5 tonnes – Cargo, Trucks, Buses, Trailers. Tata Motors Ltd. and Ashok Leyland Ltd are major players.

Scope of Study and Methodology

We begin with an overview of the automobile industry followed by a competitive analysis of the “Passenger Cars” part of the industry on the following criteria:

• Product

• Brand

• Pricing

• Distribution

• Marketing Communication

In each of these contexts, we try to compare the strategies used by players in different segments: from entry level A segment, to most-competitive B-segment to niche SUVs. We cite examples from cars that have been really successful in any parameter as well as the debacles.

Finally, we segment the consumer based on our primary research and discuss their distinctive characteristics. On the basis of our study, we infer the critical factors for success in market and derive insights out of the study.

To carry out the above study, we carried out:

Secondary research: We scoured the internet including industry data from SIAM and IBEF. We referred to old newspaper and magazine articles as required. This was primarily our basis for competitive analysis.

Primary Research: To understand the consumer mindset, we carried out a survey. This survey was conducted online as well as in 14-sector market, Gurgaon. The survey had 94 respondents as below:

[pic]

We supplemented the survey with interviews Customer Relations Manager at Orion Hyundai and Apra-Motors Maruti showroom.

Overview of Indian Passenger Vehicles Industry

Indian economy has grown at an average rate of above 8% in the last 5 years and services followed by industrial production have made excellent contributions to this growth. Auto industry has contributed to the GDP to the tune of 5%.

The Passenger Vehicles (PV) market grew 14% YoY to 1.76 million units as against 1.54 million...
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