Table of Contents
Indian Automobile Industry
PESTEL Analysis of the Indian Automobile Industry
Bajaj Auto LTD: Company Overview
SWOT Analysis of Bajaj Auto Ltd.
Bajaj Auto Limited: Strengths
Strong market share
Robust brand recognition
Bajaj Auto Limited: Weaknesses
Vehicle recalls impacting the company's reputation
Labour dispute affecting production
Bajaj Auto Limited: Opportunities
Growing two wheeler market in India
Launch of new vehicles expands the company's product portfolio
Bajaj Auto Limited: Threats
Intense competition in the two wheeler market
Increasing interest rates
Extensive environmental regulations
Competitor Analysis: Bajaj Auto vs. Hero Motocorp:
Bajaj Auto Ltd. Strategy to gain competitive Advantage:
1 Indian Automobile Industry
The automobile industry in India is one of the largest in the world and one of the fastest growing globally. India’s passenger car and commercial vehicle manufacturing industry is sixth largest in the world. It is the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020. Automobile industry in India has huge potentials thanks to the growth of the middle class along with their overall economic growth. This is the reason of attraction for international brands who are trying hard to find new market for their products due to stagnated growth of auto sector in Europe, US and Japan. 1.1 PESTEL Analysis of the Indian Automobile Industry
At present 100% foreign direct investment is permissible under automatic route in this sector including passenger car segment. The import of technology/technological upgradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is also allowed under automatic route in this sector. Automatic approval for foreign equity investment up to 100% of manufacture of automobiles and components is permitted. The automobile industry is delicensed.
Import of components is freely allowed.
In order to enforce compliance and energy conservation act, the government has recently given its nod to fuel mileage standards and labelling for new cars. SIAM is working on a voluntary recall policy that is in favour of auto manufacturers. On a similar note, government is in the process of constituting a national automotive board which would become a formal setup to look into the issue of recall of vehicles and hence improve manufacturing standards. No special tax on diesel cars.
General excise duty for automobiles has been hiked by 2% from 10% to 12% which will increase prices of small cars, two wheelers, etc. 1.1.2 Economical:
Inflation always has a negative impact on the industry. The industry comes to a standstill when there is an inflation in the market. The sales decrease because of the rise in prices of the vehicles. The prices of the vehicles have to be increased to meet the increase in price of the raw materials required for manufacturing. Higher interest rates have a negative impact on the industry. Higher interest rates means that it costs more for consumers to borrow money for auto loans. Therefore the demand decreases and hence the sales decrease. Inflation and high interest rates also dampens the economic growth. Therefore to obtain high economic growth and to increase the sales the inflation should be controlled and the interest rates should be kept low.
People across all age groups buy personal vehicles.
Rising per capita income, rising working population and middle class urbanization have all contributed to the growth of this industry. People are more...
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