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The automobile industry in India is the ninth largest in the world with an annual production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. India has a well developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. India enjoys natural advantage and is among the lowest cost producers of steel in the world.
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India ranks 1st in the global two-wheeler market India is the 4th biggest commercial vehicle market in the world India ranks 11th in the international passenger car market India ranks 5th pertaining to the number of bus and truck sold in the world India is the second largest tractor manufacturer in the world. annual production of over 2.3 million units. The monthly sales of passenger cars in India exceed 100,000 units.

Passenger vehicle Commercial vehicle Two wheeler Three wheeler

76.23

3.58

4.32

15.86

Passenger Vehicles Three Wheelers

Commercial Vehicles Two Wheelers

AUTO INVESTMENTS & THEIR SPREAD

Society of Indian Automobile Manufacturers (SIAM), automobile sales (including passenger vehicles, commercial vehicles, two-wheelers and three-wheelers) in the overseas markets increased to 1.53 million units in 2008-09 from 1.23 million units in 2007-08. Export of passenger vehicles increased from 218,401 in 2007-08 to 335,739 units in 2008-09.

The industrial life cycle is a term used for classifying industry vitality over time. Industry life cycle classification generally groups industries into one of four stages: Pioneering Growth Maturity Decline

In the growth phase, the product market has been established and there is at least some historical guide to ground demand estimates. The industry is growing rapidly, often at an accelerating rate of sales and earnings growth
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INDUSTRY ANALYSIS

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Degree of Rivalry Despite the high concentration ratio seen in the automotive sector, rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market. The industry rivalry is extremely high with any being product being matched in a few months by the competitors

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Threat of Substitutes The threat of substitutes to the automotive industry is fairly mild. Numerous other forms of transportation are available, but none offer the utility, convenience, independence and value offered by automobiles

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Barriers to entry The barriers to enter automotive industry are substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive

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In the relationship between the industry and its suppliers, the power axis is tipped in industrys favor. The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.

Suppliers power

Buyers Power In the relationship between the automotive industry and its ultimate consumers, the power axis is tipped in the consumers favor. This is due to the fairly standardized nature and the low switching costs associated with selecting from among competing brands.

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A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points:
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Strengths

Automobile industry is an established and an evergreen industry. India is the strongest player in the small car segment of the global automobile market Indian companies are the best cost innovators

The automotive industry has long been known for its development and promulgation of the assembly-line. Some of the greatest developments in the automotive supply chain lie in the development of Just-In-Time (JIT) inventory methods.
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Indian is lacking in proper infrastructure.

This is slowing the pace of growth of auto industry Companies are not improving after sale services

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The automotive ecosystem is in the midst of significant change, with increasing challenges in consumer demands, technology development, and globalization. While demand for incumbent technologies will remain strong, alternative power trains could capture more than 20 percent of the global market by 2020, depending upon boundary conditions such as fuel taxation and emissions regulation set by governments as well as oil price development. storage is in the heart of the next generation of efforts for fuel economy. More realistic scenario will emerge for technologies using Hydrogen as automotive fuel. Intelligent use of NCES (Non conventional energy sources) for powering Public Transport.

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Global Crisis Companies not focusing on R & D are under great risk High competition from foreign players Lack of technology for Indian companies

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Current Share Price Rs.1,546.40 Maruti Suzuki India Limited, Indias car market leader, sold a total of 84,808 vehicles in August 2009, growing 41.6 percent in the month. This includes exports of 14,847 units, the highest ever monthly export in the companys history. The company had sold a total of 59,908 vehicles in August 2008. Maruti Suzukis volume in the domestic A2 segment grew by 39.3 per cent. In the A3 segment the sales volume grew by 44.1 cent during the month as compared to sales in August 2008. During the month the company crossed the milestone of 50,000 cumulative exports in this fiscal. A star is Maruti Suzukis flagship export model. A star, which was introduced internationally in January 2009, has been leading the export numbers since introduction. The major markets for this model in Europe include Germany, UK, France and Netherlands.

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