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Prepared by :
Group - 8
Priyank Patel - Roll no. 29 Jayesh Vasava - Roll no. 38 Naishadh Joshi - Roll no. 12
ANL 10 %
M&M 26 %
Agreement between HAL & Nissan was terminated & New venture agreement between M&M with Nissan was entered (Nov 7, 1988)
About Industry
As per the report, of the projected light vehicle sales of 11.9 million units in India by 2020 The Indian small and light commercial vehicle (SCV and LCV) segment is expected to log a compounded annual growth rate (CAGR) of 18 percent over the next five years to reach around 830,000 units by 2016, said consultancy firm Frost and Sullivan.
Financial Years FY 08 FY 09
FY 10
FY 11 FY 12e
277,777
353,620 413,735
20.00%
17.50%
-20.00%
About company
About company
July 1983
Allwyn Nissan Limited = Hyderabad Allwyn Limited + Nissan Motor Company Limited
November 7, 1988 Mahindra Nissan Allwyn Ltd. = Mahindra & Mahindra Ltd. + Nissan Motor Company Ltd.
In July, 1983, the automobile division entered into a tie-up with Nissan and the division was named as Hyderabad Allwyn Nissan Ltd. Allwyn along with HMT & Titan Industries dominated the Indian watch market with almost 10% of the market share. The refrigerators division was privatized in 1994 and handed over to Voltas.
The Allwyn refrigerators model was eventually phased out by Electrolux in 2002.
NISSAN MOTOR CO., LTD. is a Japan-based company primarily engaged in the manufacture and sell of automobiles As of March 31, 2012, the Company has 199 subsidiaries and 25 associated companies. In India, Nissan Motors is in its nascent stages. It is presently operating through a network of dealers located in Delhi, Mumbai, Bangalore, Secunderabad, and Chennai.
The company was founded in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed.
In the mid-1980s, Nissan tied up with an Andhra Pradesh Government undertaking and set up a light commercial vehicle (LCV) plant at Zaheerabad, about 70 km from Hyderabad. The manufacture of new generation light commercial vehicles The estimated project cost around Rs. 52 Cr., to be implemented in 2 phases
The first phase was implemented at a cost of Rs. 24.10 crore. The commercial production of LCVs commenced in April 1985. The licensed capacity had been increased from 10,000 units to 50,000 units. The installed capacity was 5,000 per year. The companys vehicles were marked under the brand name CABSTAR
Company Name HAL NMCL FIs & general public
No. of shares
5,999,948 2,500,000 8,200,052
Positive factors
The financial institutions were actively considering the companys request for rephrasing of loans and exemption on commitment charges. The A.P. Government granted a sales tax subsidy in 1987 The A.P Government asked all state PSU to purchase LCV from ANL only.
Negative factors
2,289 LCVs manufactured - Only 1,882 were sold Sudden and sharp rise in the value of the Japanese currency. Increase in excise and customs duties in the union budget Hike in vehicle price. April-June quarter of 1986 ANL received a setback in sales
Demand recession in the LCV market All help proved insufficient - the company was forced to curtail its production to 697 vehicles in 1986-87
Competitive Rivalry
For goods transportation vendors had no options License Raj manufacturing unit had license to manufacture up to certain limit Monopoly in the market
Railways :
For LCVs - Road network is more efficient than Railway network in India. LCVs are used for door to door services
Competitive Rivalry
All leading automobile players are competing New product launches from different rivals low cost labor, local availability of steel, aluminum and natural rubber as well as strong ancillary industry in addition to the 100 per cent FDI allowed in the sector has attracted many foreign players Intense Competition New technology
Competition is Intense
HIGH HIGH
Technological, Economic
MEDIUM
Trade policies of gov.
LOW
Substitute products - railway
MEDIUM
LOW
Distribution network
Vehicle financing
Political environment
International trade policies
Market Environment
Indigenous LCV manufactures Telco, Bajaj Tempo New generation LCV manufactures DCM Toyota, SwarajMazda, Eicher-Mitsubishi In 1986, there was a recession in the Light Commercial Vehicle market .
ANL fared the worst among the four new-generation LCV manufacturers.
Technological environment
Around 1986, enough technology was available to produce fuel efficient and cheaper LCVs. ANL was among the top four New generation LCV manufactures Nissan was the sixth largest automaker in the world latest technology - Better quality product are manufactured
Economic Environment
Andra Pradesh Government was facing severe financial crisis.
Several other State Owned Enterprise were also running in losses Sudden and sharp rise in the value of the Japanese currency Yen in Rupee terms. Till 1991 License Raj after 1991 LPG
Regulatory Environment
A reduction in excise duty from 20% to 10% on fuel efficient LCVs The conversion of interest due into fresh loans on soft terms by financial institutions could not offset the rise in input costs. The financial institutions were actively considering the companys request for rephrasing of loans and exemption on commitment charges. Reduction in excise duty up to 50% The A.P. Government granted a sales tax subsidy in 1987 The A.P Government asked all state PSU to purchase LCV from ANL only.
Political Environment
Stable environment
Not much affect
Socio-Cultural Environment
Before 1990 Car or any other automobile is counted as a Luxury not as necessity ,while after 1990 they were slowly shifted in necessity. Earlier because of less strictness in following the rules companies, enterprises and people can manage with less number of vehicles.
International Environment
Sudden and sharp rise in Value of Yen New generation LCV manufactures DCM Toyota, SwarajMazda, Eicher-Mitsubishi Japanise Automobile companies were coming in India with Joint Ventures. Because of LPG - Indian market is open now
Nature of Impact
In 1986, there was a recession in the Light Commercial Vehicle market . ANL was among the top four New generation LCV manufactures
Not favorable as state government was facing financial crisis
Regulatory
Political Sociocultural International
STRENGTHS
Nissan - reputed brand in international market Government company Full support from government No major player available in the market at that time Financial support from government ANL was among the top four New generation LCV manufactures
WEAKNESS
Low market share in LCV segment ANL fared the worst among the four new-generation LCV manufacturers. Manufacturing unit of the company did not perform well
OPPORTUNITIES
New policies LPG End of License Raj Open market Top most population in the country No other substitutes for transportation Developing infrastructure - roads and highways Growing market Vendors & small business need these type of transportation vehicles.
Threats
Intense competition Because of LPG - Indian market is open now Technology changes Environment norms getting stricter strong R & D required Foreign companies entered into the market
No. of shares
5,999,948 2,500,000 8,200,052
Product :
Launched improved version of its vehicles CABSTAR 576 LCVs of a 3 - tone payload capacity Launched water tender, refuse capacitor, A.C. minibus, police softtop vans, etc.
Price :
Prices were at least 20% higher than competitors It could not reduce price as it would have meant severe pressure on profitability Thus, the company had an expensive product in the lower end of the market
Place :
With the takeover by Mahindra, the distribution network of the company geared up M&M had a great deal of clout abroad, which may helped the company in exports
Promotion :
Company used to provide high discount. Favorable company and product image. After takeover by M&M. It get benefit of M&M promotional activities.
Capability Factor
Nature of Impact
Financial Capability
Marketing Capability
Operational Capability
The company has been placing a lot of importance on its operational capability, it endeavors to effectively utilize its equipment
This factors effectiveness moderate Moderate The companys top management is extremely forward looking, it has time and again rescued the company
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