Passenger car

Passenger Cars : 

1 Passenger Cars

Profile of the Automotive Industry : 

2 Profile of the Automotive Industry Size of around USD 34 billion in 2006 The industry has grown at a CAGR of 14% p.a over the last 5 years, with total sales of vehicles reaching around 9 million vehicles in 2005-06 The Indian auto industry has the potential to emerge as one of the largest in the world. Presently, India is 2nd largest two wheeler market in the world 4th largest commercial vehicle market in the world 11th largest passenger car in the world and is expected to be the 7th largest market by 2016 The industry has emerged as a key contributor to the Indian economy

Players in the Auto industry : 

3 Players in the Auto industry GM Toyota Ford Hyundai Maruti Suzuki Honda Skoda Volvo Mercedes Tata Motors Mahindra & Mahindra Bajaj Auto TVS Motors Hero Honda Bajaj Tempo Ashok Leyland The auto industry is highly competitive with a number of global and domestic auto companies present in the country.

Current Scenario : 

4 Current Scenario 5th largest commercial vehicle manufacturer in the world 4th largest car market in Asia - crossed the 1 million mark Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%) India became the fastest growing car market in the world in 2004, growth rate of 20% India is the second-biggest market for small cars after Japan

Automobile Production Trends : 

5 Automobile Production Trends

Automobile Exports Trends : 

6 Automobile Domestic Sales Trends Automobile Exports Trends

Key Players in the Indian Auto Industry - Passenger Cars : 

7 Key Players in the Indian Auto Industry - Passenger Cars The largest player in the Indian industry. Plans to launch new and exciting products in the Indian markets, including the ‘1 – lacs’ car MUL is the largest passenger car manufacturer in India The third largest passenger car manufacturer in India and one of the largest exporters of vehicles. Has established India as one of its manufacturing bases in the world. Is planning to invest heavily to boost exports from India. Has vision of capturing 10% share of the Indian passenger car market by 2010 One of the leading players in the Indian premium cars segment One of the leading players in the Indian premium cars segment

Key Players in the Indian Auto Industry - Passenger Cars : 

8 Key Players in the Indian Auto Industry - Passenger Cars One of the leading players in the Indian premium cars segment. Plans to enter the small car segment by relaunching the Matiz One of the largest domestic players in the UV / MUV segment Tata Motors manages the marketing and distribution of the Fiat branded cars through selected Tata outlets throughout India E, C and S Class passenger cars are assembled in India, other models are imported as completely built units (CBUs) and retailed in India. One of the original three car manufacturers in India, founded in 1942, it was a leader in car sales until the 1980s, when the industry was opened up from protection HM has a joint venture with Mitsubishi, producing versions of the Lancer & Pajero.

Passenger Vehicle Clusters in India : 

9 Passenger Vehicle Clusters in India Mumbai-Pune-Nasik Aurangabad Pithampur Rajkot-Halol Chennai-Bangalore-Hosur Hyderabad Jamshedpur Kolkata Delhi-Gurgaon-Noida-Ghaziabad Hindustan Motors Honda SIEL Maruti Suzuki Tata Motors North/Central Daimler Chrysler FIAT GM M & M Skoda Tata Motors West Ford Hindustan Motors Hyundai Mahindra & Mahindra Toyota Kirloskar Volvo South Tata Motors Hindustan Motors East

Segmentation (based on car prices) : 

10 Segmentation (based on car prices)

Regulations - Auto Policy : 

11 Regulations - Auto Policy In 2002, the Central Government formulated an auto policy that aimed at promoting an integrated, phased, enduring and self-sustained growth of the Indian automotive industry. The Auto Policy allows automatic approval for foreign equity investment upto 100% in the automotive sector and does not lay down any minimum investment criteria. The auto policy lays emphasis on R & D activities carried out by companies in India. Weighted tax deduction of upto 150% for in-house research and R & D activities. Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms. The auto policy confirms the government’s intention on harmonizing the regulatory standards with the rest of the world.

Automotive Regulations : 

12 Automotive Regulations Indian automotive regulations are closely aligned to the ECE regulations. The table below shows the level of alignment of the Indian regulations with the ECE regulations. The key regulations that are likely to impact the auto industry in the future are: Crash-related regulations Introduction of Bharat Stage IV norms Source: IMaCS Analysis

Future Regulations : 

13 Future Regulations Regulation Road Map Targets Industry challenges to development Better vehicles: more safer and environmental friendly Approach Harmonization with ECE standards Homologation and certification testing agencies and centres Crash requirements aligned with EU Mandatory airbags Emission standards: Bharat Stage IV in Metros and Bharat Stage III in rest of the country 2009 Presently, Bharat Stage III ( Equivalent to Euro III) is mandated in Metro and other large cities and Bharat Stage II ( Equivalent to Euro II) is mandated for rest of the country Bharat Stage IV ( equivalent to Euro IV) is expected to be introduced in the large Metros around 2009 and Bharat Stage III in the rest of the country

Demand Drivers : 

14 Demand Drivers The growth in domestic demand is driven by a number of factors including: Overall economic growth Rising income levels Low cost of finance and easy availability of finance Increased consumer awareness Closer linkages with global auto trend leading to introduction of contemporary models Government’s specific policy initiatives such as lower excise duties on smaller cars Increased job demands Growth of satellite towns Onset of consumerism and travelling culture Completion of Golden Quadrilateral project

Key Success Factors – Market Leaders : 

15 Key Success Factors – Market Leaders Presence across segments - Manufacturers with presence across various segments can ensure higher volumes and better capacity utilization by using common manufacturing facilities. Cost-competitive operations - Higher localization, reduction in the vendor base, use of common components, manufacturing a larger number of models on a single platform have helped bring down prices. Wide dealer network - After sales service and access to original spare parts act as distinct advantages in the marketing of a model. Easy availability of finance - MUL tied up with State Bank of India (SBI) in June 2003 to offer finance to its rural and semi-urban customers through the latter's 13,000 plus strong branch network. Strong support from parent companies: Strong brand Strong financial and technological support Access to latest technology for launching new models, enhanced export capability

Customer Segmentation (by car ownership and use) : 

16 Customer Segmentation (by car ownership and use)

Changing Dynamics of Segmental Demand : 

17 Changing Dynamics of Segmental Demand

Player-wise Market Share : 

18 Player-wise Market Share

Cars: Sales Trend and Market Share(key segments) : 

19 Cars: Sales Trend and Market Share(key segments) A1:Mini A2:Compact A3:Midsize A4 Executive A5:Premium A6:Luxury

Comparison Tests:Differences in Marketing : 

20 Comparison Tests:Differences in Marketing

Hot Hatch Face-OffSuzuki Swift versus Hyundai Getz : 

21 Hot Hatch Face-OffSuzuki Swift versus Hyundai Getz

Background : 

22 Background Suzuki Swift Esteem in India: known overseas as ‘Swift’ earlier Now Suzuki’s “Global Car” – All new car launched at Paris Auto show ’04 Well appreciated in Europe. Hyundai Getz Not a very well-known model Few awards won here and there. For example, Budget car of the year by ‘What Car?’ (UK, 2003)

Marketing: Swift : 

23 Marketing: Swift Buzz in the industry: Maruti’s first new car in two decades! Differentiating factor: Hot shot looks and also awards in India (Car of the Year awards) USP: Killer Price! OTL: TVCs that communicate hardly anything BTL: Separate sections at showrooms Personnel trained specially for “Swift selling”

Marketing: Getz : 

24 Marketing: Getz Initially marketed as feature packed: failed Now being marketed as a big, spacious car USP: Space Price about Rs. 50,000 more than the Swift Not as successful as the Swift so far

C – Segment Cars Competition : 

25 C – Segment Cars Competition

Marketing: City : 

26 Marketing: City Fairly advanced stage of the product lifecycle: Growth/Maturity Undergone a full makeover since its launch: all new city launched 4 years back USP: Honda brand name Advertising Hi tech car: Honda name (esp. VTEC) Rising diesel costs in India relative to petrol (so cost saving due to diesel is unsustainable) Quality (good scores on JD Power surveys): lower maintenance costs overall in comparison

Marketing: Fiesta : 

27 Marketing: Fiesta Newest in the line of “made for India” Ford cars Exists as a hatchback in Europe, suitably modified for India Abhishek Bacchan (movie star in India) was hired as brand ambassador “Go fida” campaign: a car that will bowl you over – this was the message communicated Mileage: 31 kilometers/litre record (published recently in an auto magazine)

Marketing: Verna : 

28 Marketing: Verna Latest car from Hyundai, India. (Originally) Intended as replacement for the Accent – sandwiched on both sides Good features: Diesel economy with high technology (VGT) and power (110 bhp / 24kgm). Market response – time will tell!

D – Segment Cars : 

29 D – Segment Cars

Marketing: Octavia : 

30 Marketing: Octavia Skoda’s first car in India: need to build the Skoda brand first Quality differentiator: “Obsessed with quality, since 1895” – this was the tagline used Built on the golf platform – Skoda is part of the VW group USP: Diesel economy (users have reported 19 km per litre mileage) Replacement of the Octavia (Skoda Laura) falls in the next segment, i.e. competes with Honda Accord

Marketing: Corolla : 

31 Marketing: Corolla Best selling car in the world (over the years) Not as successful as Toyota would like Marketing changed over time Initial: Successful people use Corolla Now: Trying to cash in on its worldwide acceptance Quality niggles (on a Toyota!) in the interior have been a cause for complaint among owners

Marketing: Civic : 

32 Marketing: Civic One of Honda’s best selling brands worldwide: eagerly awaited before its launch in India Currently outsells the Corolla – in markets abroad, too. Brand communication: “Pure Exhilaration” tagline used to communicate sporty nature Scores on the styling front – especially the interior Aggressive salespeople Already the leading seller in the segment

Future Trends : 

33 Future Trends Individual buyers, lease rental-based bulk buyers for high volume growth More importance to fuel efficiency, adaptability with road condition, heavy traffic Not many crave a status symbol  small car is the choice of the hour Government regulations favouring manufacturing of small cars The development of a vibrant used car market will drive the growth of new car and UV sales by Helping owners: Dispose old car; Upgrade to a new car Creating potential customers for new cars: Used car owners upgrade to new models Demand from two-wheeler owners who want to upgrade to used cars All major players to launch diesel variants and models with increasing frequency. However, the following player initiatives will have a significant impact on diesel share: Maruti setting up an initial 100,000 diesel engine capacity by the end of 2006, which it eventually plans to expand to 300,000 units Tata Motors' Rs 100,000 car, targeted for launch by mid-2008