Industrial Report :Industrial Report Name of the Sector : Automobile Name of the Brand : Tata Nano Competitor Brand : Maruti800 Presented by S.Maruthi Dinesh ( MBA-HRM)


Key players of Automobile sector :Key players of Automobile sector Commercial vehicles TATA Motors, Ashok Leyland, Swaraj Mazda, Mahindra & Mahindra ,Force motors, Eicher Motors Passenger vehicle TATA Motors, Maruti Udyog, Honda Motors, Toyata, Ford etc...


FORD :FORD Ford Motor Company (F) was founded in 1903 by automotive and industrial pioneer Henry Ford in Dearborn, Michigan. Being first to implement a moving assembly line for automotive manufacturing Ford was able to more efficiently mass produce their products than their competitors. A key element in Ford’s success is its relationship with the UAW and ability to get concessions from the union. Concessions over healthcare costs, which cost upwards of $2000 per new vehicle sold, and plant consolidations are required for Ford to be leaner, more efficient, and more cost-effective in its business. Ford has announced plans to increase its hybrid vehicle production tenfold to 250,000 per year by 2010.


HONDA :HONDA Honda Motor Co. (HMC) was established by Soichiro Honda in 1946. It originally began producing motorcycles in the mid 20th century and began manufacturing automobiles (the Honda Civic) in 1972. . From 2002 to 2003, Honda increased sales by 95,000 units, and from 2003 to 2004, sales increased by 259,000 units. With this growth in sales Honda has seen a commensurate increase in its revenues. In the future, Honda has stated that they will keep improving the fuel efficiency of all their vehicles. They will continue to expand their production capacity in Asia, due to the expected increases in demand in those regions. Given Honda’s past record on delivering high quality and fuel efficient vehicles, their strong position in the current market, their strategic direction for the next few years, and the rising costs of fuel worldwide, it is evident that Honda will have a strong presence in the automotive market in the future


HYUNDAI :HYUNDAI Hyundai Motor Co. (HMC) was established in Korea in 1967. The company’s first model (Cotina) was released, in cooperation with Ford Motor Company, in 1968. In 1998, Hyundai acquired a 51% stake india, but has since reduced its share to 37%. In August 2005, the production of 25,683 vehicles was delayed due to a strike by the company’s unionized workers. Later that week, Kia’s workers joined the strike causing Kia to delay the production of 21,273 vehicles. The economic effects of these strikes have yet to be reported. If Hyundai can overcome these recent strikes, the company’s future outlook is promising.


MUL :MUL A license and Joint Venture agreement was signed between the government of India and Suzuki Motor Company (SMC) in Oct. 1982 to launch Maruti Udyog Limited (MUL). MUL’s dominant position in the Indian car market and its ability to satisfy its customers have made it the success it is today . MUL has been the leader in the Indian car market fortwo decades. Today, MUL holds about 50% of the total Indian market. For a record sixth year in a row, MUL’s major competitor in this market, Tata motors, Hyundai Motor Company,are aggressively expanding its sales and network across India. MUL has reduced the price of the Maruti 800 three times tto keep thismodel cheaper than those offered by Hyundai. Even with the planed expansion to new Indian markets, MUL’s future success will depend greatly on how well it can compete with its new international competitors.


TOYOTA :TOYOTA Toyota was established as a public company in Japan in 1937. It entered the U.S. market in 1957, but only became successful with the introductions of the Corona in 1965 and the Corolla in 1968. In the last few years, Toyota has been able to ride out the automotive storm, continuing to post impressive results despite the troubles that other companies have seen. Toyota has more than 60 manufacturing facilities in 26 countries. This allows production in geographic proximity to Toyota’s future target markets like Asia and South America. With expansion underway, operations going well, innovative infrastructure and mindset, and well-targeted high quality products, Toyota is excellently positioned for future growth and success.


VOLKSWAGEN :VOLKSWAGEN The Volkswagen Automotive Group was formed in Germany in 1937 based on Ferdinand Porsch’s concept for a “volkswagen,” which literally means a “people’s car. The company is divided into three main groups: the Volkswagen Group, which includes the brands Volkswagen, Škoda, Bentley and Bugatti; the Audi Group, which includes Audi, SEAT, and Lamborghini; and Commercial Vehicles Group. Together, these groups comprised 11.5% of the 2004 global automobile market.


TATA :TATA Established in 1945, Tata Motors’ presence indeed cuts across the length and breadth of India.  Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The company’s dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India.  Tata Motors is also expanding its international footprint, established through exports since 1961. The company’s commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South America. It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal. In January 2008, Tata Motors unveiled its People’s Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at Rs.100,000 (excluding VAT and transportation cost).


Brand AnalysisMaruti 800 :Brand AnalysisMaruti 800 Segmentation : Variable Used.   Geographic: rural and urban.   Demographic: family size & income.   Behavioral: benefit & user status.   Target Market: Executive two wheeler segment, second hand car user, auto rickshaw market, middle and lower income group people.   Positioning: Maruti 800 intending to place in the mind of the consumers as a people’s car.


SWOT :SWOT STERNGHTHS: Contemporary technology. Japanese Management practices (that had captured Japan over USA to the status of top Auto manufacturing country in the world)Early mover advantages. Recruitment is done in very tedious mann--er ensuring talent and best professionals, Working culture, after sale services , distribution, diversification, R&D. WEAKNESS: Still depends upon SUZUKI COPORATION, Japan For tech. support, 10% components are manufactured outsideIndia. Though MUL has launched luxury cars as well it’s still considered as poor man’s brand. Diversification is not supported with all India presence of Manufacturing Units. Bureaucracy, Technological disadvantages, Decades of isolation, inertia and subservience to the whims of government bureaucrats have made MUL unaccustomed to international standards or keen competition. OPPURTUNITY: first company to roll out suitably designed cars before 2008 as per Govt.’s Proposal of new ethanol (renewable)mixed fuel. Other companies lacks economy of scale, so market is still open. Importing new technology is controlled by Govt. so there is plenty of untapped market and with increase in Income scale, Demand is rising THREAT: Numbers of new Technology driven players and manufactures are in market. Govt .reducing support and cuttingdown the Gas supply quota.(TOI, New Delhi,11th june,07).


Slide 12:OPPURTUNITY: first company to roll out suitably designed cars before 2008 as per Govt.’s Proposal of new ethanol (renewable) mixed fuel. Other companies lacks economy of scale, so market is still open. Importing new technology is controlled by Govt. so there is plenty of untapped market and with increase in Income scale, Demand is rising. THREAT: Numbers of new Technology driven players and manufactures are in market. Govt .reducing support and cutting down the Gas supply quota.(TOI, New Delhi,11th june,07).


TATA NANO :TATA NANO Segmentation : Variable Used.   Geographic: rural and urban.   Demographic: family size & income.   Behavioral: benefit & user status.   Target Market: Executive two wheeler segment, second hand car user, auto rickshaw market, middle and lower income group people.   Positioning: TATA intending to place in the mind of the consumers as a people’s car.


SWOT Analysis :SWOT Analysis Strengths : – Cheapest Eco-Friendly Fuel Efficiency & Engine Stylish


Slide 16:Opportunities : - Cost Control Parking Space Low Maintenance World Wide Appeal


Slide 17:Threats : – Traffic Congestion Cost may increase in Future Bad impression due to late date in market Security not secure Competitors – HYUNDAI, BAJAJ, GM


Competitive AnalysisNano Vs Maruti 800 :Competitive AnalysisNano Vs Maruti 800 Maruti 800 versus Nano:-   Maruti 800 Nano   Variants  2 3   Price Rs 1.9-2.3 lakh Rs 1.5-2.12 lakh   Sales per month 4000-5000 Units 800 Units   Fuel efficiency 18-20 km/l 20-23 km/l   Maintenance Rs 300-400 Rs 300-400   Engine 800 cc 623 cc


Slide 19:Where could Maruti cash on the opportunity would be the fact that Tata Motors will not be able to give enough numbers in terms of the demand that is expected out of this product. So the production constraints by Tata Motors will actually be in a way helping Maruti. However Maruti may not be in a hurry to immediately go and cut prices of its 800, in fact they feel that any which way the consumers who were looking to buy a Nano and may not get the product on time since there is a huge and long booking period and so they may switch to buying a Maruti 800 instead.


Slide 20:In terms of fuel efficiency, Nano gives around 16-17 kilometers per litre, however the company has claimed it is about 23 kilometers per liter. That would be the ideal conditions perhaps but realistically it is about 16-17 km/. For Maruti, it is proven that it is 18-20 kilometers per litre so clearly there is an edge of Maruti 800 over Nano as far as the fuel efficiency is concerned.   The maintenance cost for Maruti 800 is about Rs 300-400 per month. However for Nano, the numbers are yet not known but it could be around the same if not less and it in fact could even go up higher because the service module for this car is still unknown.


Slide 21:It is 800CC engine for Maruti 800 and Nano one is a smaller engine with 623CC. So overall there is not going to be huge difference as far as the maintenance cost of this car is concerned as compared to Nano.


THANK YOU :THANK YOU