Porter's Five Forces Analysis - Indian Automobile

Industry
15 January, 2010 - 15:18 |  admin

A Porter's Five Forces Analysis explores five principal industry factors to determine the
attractive of a given industry in a given market. In this P5F exercise, we look at the
automobile industry in India. This is independent of any manufacturer. As such, it applies to
every Indian car manufacturer.

In any P5F analysis, one must examine the following:

1. The threat of new entrants

2. The bargaining power of buyers/customers
3. The threat of substitute products
4. The amount of bargaining power suppliers have
5. The amount of rivalry among competitors

1. The threat of new entrants

In most markets, the capital and expertise needed to setup an auto or parts manufacturing
facility, would be a great enough barrier to entry to prevent many new entrants from setting
up.

However, given India's incredible growth forecasts, infrastructure progress (especially new
and better roads), and ever-expanding financing options to rural residents, the market is
attractive. As such, we expect the threat of new entrants to be high.

Result: Unfavorable

2. The bargaining power of buyers/customers

Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers
selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). Of course
there are also a plethora of incredibly cheap choices, like the famous Tata Nano.

Result: Unfavorable

3. The threat of substitute products

India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very
real and obvious threats to auto manufacturers.

Result: Unfavorable

4. The amount of bargaining power suppliers have

It is likely that the suppliers to the manufacturers have considerable bargaining power. They
are not held ransom by one single manufacturer as they can market their products to any of
the others in India.

Result: Unfavorable

5. The amount of rivalry among competitors

High. The industry is not yet in its shake-out phase and is still struggling to find the up-and-
coming stars and possibly topple the leaders.

Result: Unfavorable

India's auto industry is much like China's, as far as Porter's Five Forces is concerned. Like
China's, the P5F analysis ignores the massive future prospects which could indeed render this
analysis irrelevant.

To see a P5F analysis of the auto industry in China, click here.

For a P5F analysis of the auto industry in the US, click here.

Re: Report On Automobile Industry In INdia - August 12th, 2007

Automotive Industries of India and Pakistan

This report offers a realistic assessment of prospects for the automotive industries of India
and Pakistan to 2010, charting the passenger car, commercial vehicle and components
sectors.

The report analyses of great depth the state of the passenger car and commercial vehicle
industries, and profiles the region's vehicle manufacturers, detailing the recent joint ventures
and analysing the key strategic issues facing each company.

The report also gives a unique insight into the structure and prospects of the poorly
documented components industry, including :

* Analysis of general trading conditions and future prospects.

* The tariffs on each major category of component.
* Examination of manufacturing quality and technology transfer.
* Unique listing of the top 300 components manufacturers.

The automotive industries of Indian and Pakistan also provides an overview of the effect of
the political environment on the automotive industry, looking at the attitudes of foreign
investment and the practical constraints on industry policy. Potential political dangers are
clearly sign posted.

This level of information is only possible because the report is based on exhaustive research
conducted in India and Pakistan. Information such as the listing of India's 300 largest
components manufacturers, details of joint-venture agreements, forecasts to 2010, and much
more, cannot be found elsewhere.

This month’s briefing looks at India’s automotive industry, it gives a political and economic overview,
light vehicle market, and the manufacturing and components industry. The manufacturing sector has
registered a steady growth in the past few years. Exports of manufactured goods from India
surpassed US$22bn in 2005, up from US$6bn in 2000, and the Indian automotive supplier industry’s
sales are expected to grow by around 14% in 2006 and 15 to 16% in 2007. Growth would be driven
by strong demand for automobiles in the country, and high growth in exports of components. India
is fast becoming a global outsourcing and strong skills base, and with the emergence of Indian
suppliers into the global market, the Indian manufacturing industry is gearing up for expansion.
Bajaj may ride Ghosn dream

Nissan Renault boss Carlos Ghosn may partner with Bajaj Auto (BAL) for their small car project.

Renault already has a partnership with Mahindra & Mahindra for selling the Logan in India. The two
partners, along Nissan, are also putting up a greenfield plant in Chennai which will be used by all
three. Renault is also putting up a powertrain plant in India as a 100% subsidiary. M& M plans to
focus on the SUV market.

For Bajaj Auto it makes business sense to diversify. It can foray into the small car segment and
leverage the dealership, distribution and service networks already in place for its two wheeler
market.

Source: Economic Times

Not a smooth ride for automobile

A study was jointly conducted by the Automotive Analysis Division at the University of Michigan
Transportation Research Institute (UMTRIAAD) and IBM's Institute for Business Value (IBV), to
highlight the rapid growth & challenges of the Indian automotive industry.

The report titled ‘Inside India - Indians view their automotive future’ is based on analysis of
extensive research and interviews conducted with the Indian automotive executives and experts
from the government, industry and academia.

The report clearly highlights the need for the government to focus on infrastructure and services to
support the automotive industry to meet global standards. If India is to become a global automotive
production and sales hub, the focus areas are:

* A better transportation infrastructure;

* Improved product quality;
* More skilled workers;
* Changes in labor and tax regulations;
* An increase in the scale of exports of automotive companies.
* Intellectual property protection
* Improve transportation infrastructure – hghways, ports and country's infrastructure, air quality,
and oil supply are possible inhibitors to the growth of the domestic automotive market.
* Quality, scale and resources for support services for export - managing global supply chain
logistics, resources to support potential global warranty claims.
* High quality research and development.

Source: CIOL

Car sales looking up at home, but limp abroad

The Indian passenger car industry saw a revival of sorts after a gap of four months, with sales rising
fastest in June. New models (Maruti SX4, Mahindra Renault Logan and GM Spark) attracted new
buyers. Sales in June helped car companies post a cumulative 13% growth at 275,147 units in the
April-June quarter.

Overseas markets witnessed negative growth. The April-June quarter saw car sales exports down 8%.

Source: Economic Times

Mahindra-Renault to increase Logan capacity

Mahindra-Renault, a 51:49 partnership between Mahindra & Mahindra and Renault, will gradually
increase the production capacity of Logan.

As of now, the company manufactures 90 units per day at its Nashik plant.

Logan sales were 2,786 units in May and 2,386 units in June.

Source: PTI via Economic Times

Bajaj Auto plans biking merchandise

Bajaj Auto is planning to foray into biking merchandise - hi-quality branded accessories such as,
riding jackets, gloves and helmets.

Bajaj has taken the lesson from the global players. Harley-Davidson, Kawasaki, Yamaha, Ducati and
Suzuki have their own range of biking accessories.

Source: Economic Times

Car to jostle for space with super bikes

Cars for Rs 1 lakh and high-speed super bikes for Rs 8-15 lakh, such is the paradox of India’s
automobile market.

Estimating a good market of high network individuals, all Japanese bike makers are launching their
mean machines in the Indian market. Yamaha, Suzuki and Honda are lining up their top bikes for the
Indian market by 2007 end and 2008.

Over a period of more than two decades the Indian Automobile industry has been driving its own
growth through phases. The entry of Suzuki Corporation in Indian passenger car manufacturing is
often pointed as the first sign of India turning to a market economy. Since then the automobile
sector witnessed rapid growth year after year. By late-90's the industry reached self reliance in
engine and component manufacturing from the status of large scale importer.

With comparatively higher rate of economic growth rate index against that of great global powers,
India has become a hub of domestic and exports business.
The automobile sector has been contributing its share to the shining economic performance of India
in the recent years. With the Indian middle class earning higher per capita income, more people are
ready to own private vehicles including cars and two-wheelers. Product movements and manned
services have boosted in the sales of medium and sized commercial vehicles for passenger and
goods transport.

Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big
growth. The domestic auto components consumption has crossed rupees 9000 crores and an export
of one half size of this figure.

The market shares of the segments of the automobile industry

The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual
growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the
growth is expected to double in the next 10 years

Consistent growth and dedication have made the Indian automobile industry the second- largest
tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle
manufacturer in the world. The Indian automobile market is among the largest in Asia.

The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors, Bajaj
Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating the vehicle
industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda India Private Ltd.,
Honda Siel Cars India Ltd. have also entered the market and have catered to the customers’ needs to
a large extent.

Not only the Indian companies but also the international car manufacturing companies are focusing
on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the
automobile companies are coming up with financial schemes such as easy EMI repayment systems
to boost sales.

There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological
advancements. Besides, there are many new projects coming up in the automobile industry leading
to the growth of the sector.

The Government of India has liberalized the foreign exchange and equity regulations and has also
reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly
established its presence in the domestic markets, the Indian automobile sector is now penetrating
the international arena. Vehicle exports from India are at their highest levels. The leaders of the
Indian automobile sector, such as Tata Motors, Maruti and Mahindra and Mahindra are leading the
exports to Europe, Middle East and African and Asian markets.

The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive of
making India the most popular manufacturing hub for automobiles and its components in Asia. The
plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the domestic as
well as international arena.

Scope of Indian Automobile Sector

The Indian automobile industry is going through a phase of rapid change and high growth. With new
projects coming up on a regular basis, the industry is undergoing technological change. The major
players are expanding their plants and focusing on mass customization, mass production, etc.
INVESTMENT IN AUTO SECTOR
Nearly every automobile company is investing at a higher rate than ever before to achieve a high
growth trajectory. The overall investment in the sector has been increasing quite rapidly. It is
expected that by the end of 2010 Indian automobile sector will be investing a huge amount as Rs.
30,000 crores.

For example, Maruti Udyog has plans of investing Rs. 6,500 crores; the Tata Motors is coming up
with more investment of Rs. 2,000 crores in its compact car project. Not only the Indian companies
but also foreign players like Hyundai are coming up with the investment of more than Rs. 3,800
crores in India.
GROWTH IN THE SECTOR
At present the industry is enjoying a growth rate of 14-17% per annum, with domestic sales growth
at 12.8%. The growth rate is predicted to double by 2015.

As it is seen, the total sales of passenger vehicles - cars, utility vehicles and multi-utility vehicles – in
the year 2005 reached the mark of 1.06 million. The current growth rate indicates that by 2012 India
will overtake Germany and Japan in sales volumes.

Financing schemes have become an important factor in the growth of automobile sales. More and
more financial schemes are coming up with easy installment plans to lure the customers.

Apart from domestic production, the industry is consistently focusing on the automobile exports.
The auto component segment is contributing a lot in the export arena. The liberalized policies of the
government are now making the companies go for more and more exports.

The automobile exports are increasing year by year. According to the Society of Indian Automobile
Manufactures (SIAM) automobile exports in the last five years are as follows:

Export trend over the last five years

NEW LAUNCHES
The Indian automobile sector is experiencing changes in every arena. Changes in the looks of the
vehicles are taking place; the vehicles are being made more user-friendly. Each and every firm is
competing to give the customers more customized vehicles with respect to speed, mileage, and
maintenance. At present there are many new models entering the Indian market. To name a few,
Suzuki Heat 125 and Suzuki Zeus 125X are the two bikes in the motorcycle segment; Kinetic Blaze
and Honda DIO in the scooter segment; Maruti’s Zen Estillo in the car segment, so on and so forth.

EMPLOYMENT IN THE SECTOR

Investment is leading to the employment growth in the sector. With the emergence of new projects
and introduction of technological advancements, the focus is more on the skilled and experienced
human resource. The companies are looking for skilled and hard working people who can give their
best to the organization.

The engineers in the automotive or electrical or mechanical field are in demand. Some of the firms
going for automation, i.e. planning for CAD (Computer Aided Designs) systems, are also recruiting
people with IT specializations.

Top ten players in the Indian automobile sector

The domestic players as well as the foreign players dominate the Indian automobile sector. The key
players contributing to the growth of the sector are discussed below.
The key players in Indian automobile industry are:

1) Maruti Udyog Limited

2) Hero Motors Limited
3) Tata Group
4) Bajaj Auto Limited
5) Mahindra Group
6) Ashok Leyland
7) Yamaha Motor India
8) Hyundai Motors India Limited
9) Toyota Kirloskar Motor Private Limited
10) Honda Siel Cars India Limited

Automobiles
Overview
India’s automobile sector consists of the passenger cars and utility vehicles, commercial vehicle, two
wheelers and tractors segment. The total market size of the auto sector in India is approximately Rs
540 billion and has been growing at around 8 percent per annum for the last few years. Since the
last four to five years, the two wheelers segment has driven the overall volume growth on account
of the spurt in the sales of motorcycles. However, lately the passenger cars and commercial vehicles
segment has also seen a good growth due to high discounts, lower financing rates and a pickup in
industrial activity respectively.
The automobile industry is fairly concentrated, as in most of the segments two to three players have
cornered a major chunk of the total sales. For instance, in passenger cars segment, MUL, Tata
Motors and Hyundai Motors control around 85 percent of the total annual sales. Similarly, in the two
wheelers segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute around
80 percent of the total sales and in the commercial vehicles segment, the market leader Telco
controls around 56 percent of the total annual sales. The autocomponents industry on the other
hand is highly fragmented, though there are dominant players in some of the critical segments.
Investment climate
Given the high growth expectations and a liberal government policy, the investment potential in the
India auto sector is huge. CRIS INFAC is forecasting a 12-15% annual growth in the passenger car
sales, 6-8% in commercial vehicles and around 10% in two wheelers. Several passenger car makers
have already achieved near full capacity utilisation and are expanding. Almost all the major
automobile manufacturers such as GM, Ford, DaimlerChrysler, Honda, Toyota, Hyundai, and Fiat
(with the exception of Volkswagen, which is planning to set up manufacturing shortly) already have
made significant investments in India. In the next 2-3 years, the passenger vehicle industry is
expected to see investments of more than Rs 30 billion. Similarly, two wheeler industry is expected
to attract investment amounting to Rs 10 billion.
There has also been a surge in exports of cars, utility vehicles and two wheelers. The expected
growth in domestic sales and exports of vehicles also offers significant opportunity for investors to
invest in the auto ancillary industry. Already several international suppliers such as Delphi, Visteon,
TRW, Johnson Controls, Denso and Dana, have set up manufacturing facilities and are expanding
rapidly to serve not only the domestic market but also to supply to their global customers. Another
attractive area of investment for vehicle and parts makers is research and design, to take advantage
of India’s low cost advantage.
However, investment in commercial vehicle manufacturing looks relatively unattractive, given the
current size and structure of the Indian market.

Recently, government has liberalised the investment norms for the auto sector. Local content
requirements and export obligations have been scrapped, and minimum investment requirements
also have been diluted. Import duties on vehicles and parts have been gradually coming down and
are expected to decline further in the next two years. Several state governments also offer attractive
incentives, such as sales tax relaxations and concessional land, to potential investors. However,
manufacture of certain components continues to be reserved for the small-scale sector. This
reservation is also expected to lifted gradually over the medium term.
Outlook
The expected rise in income levels, wide choice of models and easy availability of finance at low
interest rates will drive growth in passenger cars segment, which is likely to be over 12 percent per
annum for the next four to five years. Two wheelers growth is likely to marginally slow down, but
still grow at an average annual growth rate of around 10 percent.
The commercial vehicles segment is likely to grow at a trend rate of 6-8 percent driven mainly by the
increase in industrial and economic activity on account of the expected growth in the economy,
though annual growth rates may fluctuate widely with the cyclical ups and downs of the economy.
Tractor industry growth is likely to turnaround and post a growth in volumes in 2004-05. However, it
will post a moderate growth of around 4-5 percent annual growth rate over the medium term.

Indian Automotive Industry: Opportunities and Challenges Posed By Recent Developments

Executive Summary: The Indian automobile industry is currently experiencing an unprecedented

boom in demand for all types of vehicles. This boom has been triggered primarily by two factors:
(1) increase in disposable incomes and standards of living of middle class Indian families estimated
to be as many as four million in number; and (2) the Indian government's liberalization measures
such as relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports,
and banking liberalization that has fueled financing-driven purchases. Industry observers predict
that passenger vehicle sales will triple in five years to about one million, and as the market grows
and customer's purchasing abilities rise, there will be greater demand for higher-end models which
currently constitute only a tiny fraction of the market. These trends have encouraged many
multinational
automakers from Japan, U. S. A., and Europe to enter the Indian market mainly through
joint ventures with Indian firms. This paper presents an introduction to the key players in the
Indian automotive industry, a summary of the recent developments, and an analysis of the
opportunities and challenges facing the various players (Indian and multi-national assemblers and
component makers) in the areas of product development, production, and distribution.
1.1 Introduction to The Indian Automotive Industry
For forty years since India's independence from the British in 1947, the Indian car market was
dominated by two localized versions of ancient European designs -- the Morris Oxford, known as
the Ambassador, and a old Fiat. This lack of product activity in the Indian market was mainly due
to the Indian government's complex regulatory system that effectively banned foreign-owned
operations. Within this system (referred to informally as the "license raj"), any Indian firm that
wanted to import technology or products needed a license/permit from the government. The
difficulty of getting these licenses stifled automobile and component imports, creating a low
volume high cost car industry that was inefficient, unprofitable, and technologically obsolete. The
two dominant products Ambassador and Fiat, although customized to the poor road conditions in
India, were based on a stale design concept (with outdated features), and were also fuel inefficient.
In the early 1980's, the Indian government made limited attempts at reforming the automotive
industry, and entered into a joint venture with Suzuki of Japan. The joint-venture, called Maruti
Udyog Limited, launched a small but fuel efficient model (called "Maruti 100"). Priced at about
$5,500, the product became an instant hit. The joint venture now produces three small-car models,
a van, and a utility vehicle at a rate of more than 250,000 a year. Despite being a late entrant,
Maruti's vehicles are estimated to account for as much as 70 per cent of India's car population.
In 1991, a newly elected Indian government took over and faced with a balance-of-payments crisis
initiated a series of economic liberalization measures designed to open the Indian economy to
foreign investment and trade. These new measures effectively dismantled the license raj which had
made it difficult for Indian firms to import machinery and know-how, and had disallowed equity
ownerships by foreign firms. In 1993, the government followed up its liberalization measures with
significant reductions in the import duty on automobile components. These measures have spurred
the growth of the Indian economy in general, and the automotive industry in particular. Since
1993, the automotive industry has been experiencing growth rates of above 25%. Data for the
1995-96 financial year is yet to be released by all the firms, but estimates indicate that passenger
vehicle sales may reach or exceed 350,000 for the first time. (Passenger vehicles include cars and
vans but not jeeps.) Table 1 presents the production data of passenger vehicles for the top four
Indian assemblers. Foreign vehicle sales have been insignificant until the 1994-95 years.
Company Main Products 1992/93
Market Share
1994/95
Market Share
Maruti Udyog Limited
(MUL)
Maruti 100, Esteem,
Omni (Minivan)
74.8% 73%
Premier Automobiles
Limited (PAL)
Premier Padmini
NE118 (Higher end)
9.4% 11%
Hindustan Motors (HM) Ambassador
Contessa (Higher end)
13.4% 10.7%
Tata Engg. & Locomotive
Company Ltd. (TELCO)
Tata Sierra
Tata Estate
2.4% 4.9%
Total Passenger Vehicles 163,300 280,000 (est.)
Table 1: Estimated Production of Passenger Vehicles By the Top Firms in the Indian
Automotive Industry; Source: Association of Indian Automobile Manufacturers (AIAM),
Automotive Components Manufacturers Association of India (ACMA) and other press reports1.
1.2 A Brief Introduction to the Top Four Indian Automotive Assemblers
As seen in Table 1, Maruti Udyog Limited (MUL) is the number one Indian automotive assembler
commanding more than a 70% share of the Indian passenger vehicle market. (It also sells a few
thousand jeeps, called Gypsy, which are not included in the passenger vehicle data of Table 1.)
Most recent data released by MUL show that it produced a total of 277,000 vehicles in 1995/96
resulting in a turnover of approximately $2 billion (Rs. 6673 crore, Source: Financial Express,
March 30, 1996). It is also a reasonably profitable venture with after tax profits of about $122
million (a 65 % increase over the previous year). MUL's relatively large production volumes offer
scale economies in production and distribution, that pose formidable barriers to entry. It has also
established a solid supplier-base located around India (most of its assembly is concentrated in
Northern India near New Delhi). Its products enjoy good reputation – in fact, Indian automotive
industry observers credit Maruti for the rapid improvement in quality and supplier capability in
this industry. (Until last year, new Maruti's have to be booked several months in advance!) MUL's
product line is concentrated in the economy car segment, although it has been moving up recently
to cater to the premium market segments by introducing the higher-end Esteem.
1Much of the data presented in this paper has been extracted from the annual reports published by
ACMA,
and from articles in the business press and trade journals.
Page 3
Occupying the second position in 1994/95 is Bombay-based Premier Automobiles Ltd. (PAL),
which edged out Calcutta-based Hindustan Motors Ltd. (HM) from the second place. In fact, PAL
produced the Fiat, and HM produces the Ambassador – both products that dominated the Indian
automotive industry for decades. The advent of Maruti has resulted in the decline of both these
firms. PAL's main products are the Premier Padmini (in the compact car segment) and the NE118
(in the mid-size car segment). Recently, PAL has rejuvenated itself by entering into joint ventures
with Peugeot (for the Peugeot 309), and with Fiat (for the Fiat Uno). Its close competitor HM
continues to produce Ambassadors in small volumes targeted at the economy/compact car segment.
HM also offers a higher end product called Contessa Classic, and has entered into joint venture
agreements with General Motors (GM) to produce the Opel Astra, and with Mitsubishi to make
the Lancer targeted at the higher-end market.
Despite occupying the fourth position and producing passenger vehicles only in small volumes,
Tata Engg. & Locomotive Company Ltd. (TELCO) is noteworthy, not only because it is a part of
the powerful Tata industrial family, but also because it is one of the few firms with indigenous
product development capabilities, and has been a dominant player in the commercial vehicles
segment. (The author, in fact, worked with TELCO for a brief period in the late 80's in their light
commercial vehicles product development group.) TELCO holds about 70% of the heavy
commercial vehicles market, and (after entering the market late) has also managed to fend off
Japanese competition by gaining about 50% of the light commercial vehicles segment with its
inhouse
product development. It entered the passenger vehicles market only in 1991-92, and has
quickly established itself in the higher end of this segment with its Estate and Sierra models. The
firm has entered into a joint venture with Mercedes Benz to assemble the E220's, and is also said to
be planning an entry into the small/economy car segment challenging Maruti's stronghold.
1.3 A Brief Introduction to the Indian Component Suppliers
Component suppliers are the backbone of an emerging automotive industry. By all accounts, the
Indian component industry, based mostly in the southern city of Madras, is tiny. The auto
component manufacturers association of India (ACMA) estimates that $2.1 billion worth of car
parts were produced in the financial year 1995, out of which exports amounted to $228 million. To
put this in perspective, the entire Indian industry's revenue is roughly one-tenth that of GM's
component unit, Delphi automotive systems2. But, the component market has been growing
rapidly at about 25% a year, and is expected to quadruple in size by the year 2000. This growth
has not only been due to the growing demand for passenger vehicles, but also due to the increasing
trend by multi-national OEM's to resort to global sourcing to improve competitiveness.
Leading automotive assemblers and component makers are increasingly turning to India for
components. One of the now widely-cited examples of this trend is the Indian component firm,
Sundaram Fasteners Limited (SFL), which the author has been studying for the last year. SFL
became GM's largest supplier of radiator caps, and exports about 300,000 caps from its factories in
Madras to GM plants around the world. In 1992, when GM was planning to close one of its
plants in UK., SFL took advantage of the liberalized economic environment in India, bought the
machinery from GM, and relocated them to its plant in Madras. The company has continued to
2It is also noteworthy that Delphi is in the process of setting up its own units in India to make
steering systems,
chassis, and electrical systems recognizing the needs of the fast-expanding Indian automobile
market.
Page 4
invest heavily in quality and productivity improvements, and a tour around SFL's suburban
Madras Factory shows a world-class plant with minimal inventory and rework. The company's
workers, trained in statistical tools and control charts, keep processes under statistical control due
to which radiator cap rejection rate is less than 1% of annual production. The company also has a
very skilled managerial and engineering workforce, which has helped it develop in-house product
development capabilities. Using these resources and skills, the firm is now seeking to expand its
supply to other manufacturers in Europe, US, and Asia, and also diversify into other components.
SFL exemplifies the Indian auto components industry, which although small and fragmented has
the competitive advantages of a skilled workforce and low labor costs. It is estimated that
components can be produced about 30% cheaper in India than in the west. (The top Indian
assembler, Maruti, is able to price its cars at about $5,500 because it sources 90% of its
components from Indian suppliers.) Rapid growth and tie-ups with foreign firms will help Indian
auto components suppliers further invest in capacity and automation and acquisition of the latest
know-how, thereby closing the productivity gap with other world-class component makers.
Exhibit 1 shows a few other notable Indian component suppliers and their exports to OEM's.
2. Recent Developments and Issues Facing the Indian Automotive Industry
In the past two years, more than a dozen multi-national firms have announced plans to enter the
Indian market. Most of them have formed joint ventures with Indian firms, while there are
exceptions such as Hyundai which plan to form fully-owned units. Exhibit 2 displays most of
these firms and their products planned for the Indian market3. Despite the large growth potential
of the Indian market (analysts expect the growth to triple in the next five years), no one expects the
industry to sustain the fragmentation caused by more than a dozen suppliers. Many of these new
firms will not enjoy the scale economies and relationships with suppliers that Maruti does, so they
have decided not to challenge Maruti at its price of $5,500 in the smaller car segment. Most are
planning to produce between 20,000 and 50,000 higher-end vehicles. The stiffest competition is
building up in the mid-sized car range (1,300 cc and above), where several of these multi-national
and Indian companies are planning to go head-to-head. Although these newly announced vehicles
at $12,000 or above remain expensive by Indian standards and planned capacity exceeds projected
demand, new entrants are betting on the rising incomes of middle-class families. Notably,
Daewoo's new product Cielo, priced at about $15,000 in a joint venture with the Indian firm DCM,
drew 76,000 advance bookings last year – reflecting the pent-up demand in the market.
Amongst the many issues facing the Indian automotive industry, the biggest by far is the poor road
infrastructure. India's road network, comprising of a modest national highway system (that is only
2% or less of the total roadway length) is woefully inadequate and dilapidated, and can barely keep
pace with the auto industry's rapid growth. Most roads are single-lane roads built in the 1950's
and 60's, and are crowded with two-wheelers, bullock carts, and even pedestrian humans and cows.
Traffic laws are not well enforced leading to one of the highest per-capita accident rates in the
world. It is to be expected that the introduction of bigger and more powerful vehicles will only
worsen the situation. Upgrading the existing highway system is itself expected to cost $30 billion
or more, and resource and land constraints prevent the building of new highways. The Indian
3Conspicuous by its absence from this list of new entrants is Toyota, which initially had an
arrangement with the
Hinduja group that was called off in March, 1996. Toyota is said to be adopting a wait-and-see
attitude.
Page 5
government's approach to solving this problem is to privatize the road infrastructure, by having
private firms build and operate tollways. However, it is unclear if this alone will be able to solve
this infrastructure problem of enormous proportions, which can severely bottleneck future growth.
The significant (about 50%) tariffs imposed on import products and components combined with
the vagaries of currency exchange rates make localization an important imperative for foreign
companies entering the Indian market. Firms are already making a major effort to localize rapidly;
The Daewoo-DCM venture is expected to raise its local content to 90% by the decade's end.
GM's Astra will start with 40% labor content, and go up to 75% within three years. One challenge
to localization is a shortage of component suppliers with size and sophistication.
Another major uncertainty facing the Indian market is the government's policies toward foreign
investments and joint ventures. As Amsden and Kang [95] note4, governments play a key role in
shaping the growth of the auto industry in emerging economies (as compared with developed
countries). Although many observers say the economic reforms initiated by the ruling Congress
party are not reversible, the difficulties experienced by Enron Corp. in its investments in the
power sector under the hands of the opposition Bharatiya Janata Party (BJP) do not bode well for
other foreign investors. With elections in mid-1996 expected to return a coalition group to power,
it will be hard for the new government to push the reform measures with the same vigor and pace
as the previous government did. It is even unclear if the group in power will be so positively
inclined to foreign investments and trade as the current government.
3. Discussion of the Strengths and Weaknesses of the Various Players
To analyze the strengths and weaknesses of the various players in the Indian automotive industry,
it is useful to classify them into the following four categories: (1) Indian Assemblers, (2) Multinational
Assemblers (3) Indian Component Makers, and (4) Multi-national Component Makers.
Table 2 presents the strengths and weaknesses of each of these groups.
The Indian assemblers, typified by Maruti, have built a formidable distribution and after-sales
network. They also have an established supplier base, which gives them cost and delivery time
advantages, especially in light of import tariffs and currency exchange rate fluctuations/
devaluations. Their biggest weakness, with the exception of TELCO, is the lack of product design
capability. In the coming years, they should focus on acquiring product design and lean production
know-how (as the Korean firms did in the eighties and early nineties [Amsden and Kang 95]).
They could acquire know-how with help from their joint-venture partners, and also with
investments in research and development which at present are at extremely low levels.
Multi-national assemblers could really benefit from their lean production capabilities in India,
where production runs are expected to be small due to the large number of players entering the
Indian market. They could also set themselves apart by incorporating safety and comfort features
not currently included in Indian-assembled products. These include seat restraints, airbags, and
anti-lock brakes, and comfort features such as power windows, and central locks. U. S. assemblers
have a reputation of safety, which they could leverage to their advantage. Close cooperation with
4Amsden, A. H., and J. Kang, "Learning to Be Lean in An Emerging Economy: The Case of South
Korea", IMVP
Sponsors Meeting, Toronto, 1995.
Page 6
the joint-venture partners can overcome the lack of experience with the Indian market, but the small
size of the component supplier base will pose a challenge to their need to localize rapidly.
Group Strengths Weaknesses
Indian Assemblers • Established distribution and
after-sales networks, and
supplier base.
• Understanding of the Indian
market and ability to liaison
with the government
• Lack of product development
capabilities (except TELCO)
• Brand image (especially HM
and PAL).
Multi-national Assemblers • Lean production capability
• Ability to design products
with differentiating features
• Deep pockets, brand image.
• Lack of experience with the
Indian market, industry, and
government.
• Small component supplier
base and high import tariffs.
Indian Component Suppliers • Low cost, skilled workforce
• Learning From exports
• Small Size, Fragmentation
• Lack of know-how in certain
areas.
Multi-national Component
Suppliers
• Size, Deep pockets
• Experience and Know-how in
technology.
• Import tariffs, currency
exchange rate fluctuations.
• Inexperience with Indian
workforce.

Table 2 Strengths and Weaknesses of the Different Groups in the Indian Auto Industry
As mentioned earlier, the Indian component industry is small and fragmented, but is growing and
learning fast due to exports. It is also estimated to hold a 20-40% cost advantage over multinational
component suppliers who are much larger and are themselves opening up units in India to
take advantage of the lower-cost, skilled workforce. The Indian component industry needs to
invest in capacity and research and development to stay abreast of competition, when the wage gap
closes over time. It is likely that some of the multi-national assemblers or component makers might
buy some of the small but niche component makers with a reputation for quality.
4. Conclusions
The Indian automotive industry, although growing rapidly, is in a state of flux. The production
capacities planned by the new joint ventures currently exceed most projections, and unless import
Page 7
tariffs come down quickly and the economy grows remarkably, a shake-out may be expected from
the current 20 firms to about half a dozen major firms turning out finished products by the end of
the decade. However, if multi-national firms decide to use India as a production base from which
vehicles are exported to the rest of the world, more than half a dozen firms may be able to remain
profitable in India. Suzuki has already begun to use its Maruti joint-venture production to export a
few thousand cars to the Middle East and Europe. However, the production capacities of other
emerging economies such as Korea and China are also predicted to grow significantly in the coming
years, so exports may also face a highly competitive market situation.
In this paper, we have presented a brief introduction to the Indian assemblers and component
suppliers. We noted that Indian assemblers have a tight hold over the small-car market due to their
low cost supplier base and the tariffs levied on import components. Maruti with its production
volumes of over 250,000 enjoys scale economies in production, distribution, and service that are
hard to challenge. As Amsden and Kang [95] (cited before) and Womack et al.5 note, production
volumes do confer several advantages to a firm. However, new entrants can set themselves apart
by offering new safety and comfort features that are not currently offered in the Indian market.
They can also leverage their low production run (lean) capabilities to stay profitable despite the
low production volumes. Further, they can combine their reputation with the Indian industry's
lower production costs to produce cars and export them to the global markets. Many multinationals
are already said to be planning such an approach.
For Indian component makers and assemblers, product development capability is key, in order to
rejuvenate their product lines, enhance their reputation, and export their products to the markets in
developed countries. The author is currently pursuing a study of product development and
production systems in the Indian component industry. Since the plants located in India are very
far from the developed markets of the USA, Europe, and Japan, component suppliers incur
significant transportation and inventory carrying costs in exporting products to global markets.
Their situation is worsened by the poor Indian infrastructure, which leads to frequent power
interruptions and long delays in supply. These companies are adopting innovative techniques to
cope with these uncertainties, which will be a topic of another paper.
The Indian automotive industry, as a whole, is also severely bottlenecked by the woefully
inadequate road infrastructure. Privatization of the road infrastructure, even if started immediately,
can take years to solve this problem. India also experiences an extraordinarily high number of
traffic fatalities, and faces severe pollution problems. As of April 1, 1996, the ministry of surface
transport has set emission norms (that are modest by international standards), which local
automakers say are hard to meet. Multi-national firms can bring their experience and know-how to
bear in these areas, and enhance their reputation as well as attract customers who are
safetyconscious
and environmentally aware. This will also result in the gradual reduction of the autorelated
facilities and pollution (due to the diffusion of these practices), thereby contributing to the
further growth of the Indian automotive industry.
India

Automotive Industry

Compiled by:

SBH India

New Delhi, April 2008

The Indian automotive industry is represented by two industry associations – Society of Indian Auto-

mobile Manufacturers (SIAM) which represents the OEMs and the Automotive Components
Manufac-

turers’ Association (ACMA) which represents the components industry. Both associations actively

engage with industry, government and other stakeholders to promote the interests of the sector and

improve competitiveness.

The automotive sector comprises of Original Equipment Manufacturers (OEMs) and auto component

manufacturers. The industry encompasses commercial vehicles, multi-utility vehicles, passenger

cars,

two wheelers, three wheelers and auto components. Global as well as local forces have affected the

Indian auto industry, leading to a rapid transformation over the last decade or so. After the end of li-
censing era in early 1990s, the industry has witnessed rapid growth in volumes and capacity and sev-

eral new ventures have come up in the last 10 years.

The industry (OEMs and suppliers together) contributed nearly 5 per cent to the country’s GDP in

2006. The automotive sector also offers significant employment opportunities. It employs approxi-

mately 13 million people directly and indirectly. The industry’s capabilities in design, engineering and

manufacturing have been recognised the world over and most automotive majors are looking to in-

creasingly source auto components from India.

Cost and quality remain the underlying issues of India’s auto industry internationalisation. Indian
mak-

ers are being challenged on several counts. Costs, especially labour costs are rising for Indian manu-

facturers, while the cost reductions that should come with infrastructure improvements are painfully

slow in materialising. The quality imperative means that Indian makers have to seek new
technological

resources through alliances and acquisitions, challenging the capital and management resources of

companies that are often small and family owned.

Infrastructure development projects which are underway in India combined with favourable govern-

ment policies will also drive automotive growth in the next few years. Easy availability of finance and

moderate cost of financing facilitated by double income families will drive sales in the next few
years.

India is also emerging as an outsourcing hub for global majors. Companies like GM, Ford, Toyota and

Hyundai are implementing their expansion plans in the current year. While Ford and Toyota continue

to leverage India as a source of components, Hyundai and Suzuki have identified India as a global

source for specific small car models.

At the same time, Indian players are likely to increasingly venture overseas, both for organic growth
as

well as acquisitions. India is emerging as one of the most attractive automotive markets in the world,

and is poised to become a key sourcing base for auto components.

1. Automotive Components Industry

According to the Auto Component Manufacturers Association (ACMA), the apex body of component

makers in India, global sourcing of components from the country will double from US$ 2.95 billion in

2006-07 to US$ 5.9 billion in 2009-10, and is slated to hit US$ 20 billion by 2015-16.

Riding this success, and capitalising on the spiralling demand of domestic auto companies, the Indian

automobile components industry has emerged as one of India's fastest growing manufacturing sec-

tors, and a globally competitive one.

Industry – Snapshot

Year

Turnover (US$ bio)

Export (US$ bio)

Investments (US$ bio)

2002-03

5.4

0.8

2.7
2003-04

6.7

3.1

2004-05

8.7

1.4

3.8

2005-06

12

2.1

4.4

2006-07

15

2.9

5.4

2007-08

18

3.6

7.2

2009-10*

18.7

5.9

10.1

2015-16*

40

20
20.9

CAGR**:

CAGR:

CAGR:

2002-06: 29%

2002-06: 38%

2002-06: 19%

2006-1015: 13%

2006-1015: 24.4%

2006-2015: 16%

Source: ACMA

* Estimates

** CAGR – Compounded Annual Growth Rate

The global auto component industry is expected to touch US$ 1.9 trillion by 2015, of which around
40

per cent (US$ 700 billion) is potentially expected to be sourced from low cost countries (LCC) like

India. ACMA-McKinsey Vision 2015 document estimates the potential for the Indian auto component

industry to be US$ 40 billion by 2015. Of this, 50 per cent is expected to come from exports.

Of the US$ 2.1 billion worth of component exports by the Indian auto component industry in 2005-
06,

around 57 per cent were bought by global majors in Europe and North America.

Continent-wise Share of export of auto components 2005-06 (%)

Europe

32.4

Middle East

7.8

North America

25.1
South America

2.5

Asia

20

Oceania

1.3

Africa

10.8

Other

0.02

Source: ACMA

India's component industry has the capability to manufacture the entire range of auto-components,

such as engine parts, drives, transmission parts, suspension and braking parts, electrical parts and

body and chassis parts, with engine parts making up nearly a third of all exports.

Engine Parts

31%

Electrical Parts

9%

Drive Transmission and Steering Parts

19%

Suspension and Braking Parts

12%

Equipment

10%

Body and Chassis

12%

Others
7%

Source: ACMA

The composition of exports in terms of the proportion of original equipment manufacturer (OEM)
and

aftermarket has undergone a sweeping change since the past decade. The ratio of OEM to aftermar-

ket has changed from 35:65 in the 1990s to 75:25 in 2006. In a bid to lower freight charges and facili-

tate faster delivery, automotive components manufacturers are located largely around their OEM
cus-

tomers. This is particularly so since most of them are directly supplying to the OEM producer.

While exports have been booming, there has been a sharp rise in imports of auto components as
well,

especially in the last few years. From an import of US$ 2.48 billion in 2005-06, they are estimated to

go up to US$ 4.93 billion in 2007-08. This is a healthy trend, indicative of rising domestic demand.

Over 20 OEMs have set up their International Purchase Offices (IPOs) in India to source the compo-

nents from this region. This number is expected to double by the year 2010. The OEMs in India in-

clude firms like General Motors, Ford Motor Company, Cummins International, Bosch, Volkswagen,

BMW, MAN (trucks) and JCB (earthmoving equipment) amongst others.

India enjoys a cost advantage with regard to castings and forgings. The manufacturing costs in India

are 25 to 30 percent lower than its western counterparts. India's competitive advantage does not
come

from costs alone, but from its full service supply capability. Besides, the quality consciousness of the

industry matches global standards now. This is corroborated by the fact that eleven Indian
companies

in the automotive sector have received the coveted Deming Prize, which is the largest number
outside

Japan.

Auto component sector is highly fragmented

The Indian automotive component industry is highly fragmented. There are nearly 6’400 players in
the
sector, of which only about 6 per cent are organised and the remaining 94 per cent are small-scale,

unorganised players. In terms of value added, however, the organised players account for nearly 77

per cent of the output in the sector. The sector manufactures components across all key vehicle sys-

tems.

Unorganised Sector: The unorganised sector accounts for a sizeable chunk of the total production

of components in the country. Most of these manufacturers use primitive technologies and buy

second-hand machinery, sometimes at near-scrap value. This sector serves mainly the replace-

ment market.

The Counterfeit Components Market: The Indian automotive components market has long been

affected by the presence of a large spurious-parts market. Further, counterfeiting is largely preva-

lent in those segments (or models) that offer sufficient volume. Manufacturers have been using

bar coding techniques to partly offset the problems created by the spurious market.

Investments related news

Chrysler is setting up a local sourcing unit in Chennai and is expected to start sourcing for its

global plant by next year.

Palfinger AG, the Austrian hydraulic lifting, loading and handling systems manufacturer, has joined

hands with Western Auto LLC, Dubai, the vehicle dealership arm of ETA Star group, have in-

vested US$ 1.7 million to set base in India.

IFCI Venture Capital Funds Ltd is launching a private equity fund in association with German con-

sultancy UBF-B worth US$ 144.67 million focussed entirely on domestic automotive components

industry.

The world’s third largest auto components maker, Magna International Inc., plans to bring two

more group companies to India in the next 12 months and is considering the Gurgaon, Chennai

and Pune regions for these manufacturing facilities.

Auto parts maker Robert Bosch of Germany will invest US$ 201.4 million in its Indian subsidiaries

over the next two years.

Ashok Leyland and Nissan Motor have invested US$ 500 million in three joint ventures to manu-

facture light commercial vehicles (LCVs), LCV engines and power train components.

Not only global investors, Indian component companies are also pumping in huge sums into expand-

ing operations:

Bharat Forge invested US$ 135 million in its Pune plant for increasing domestic capacity to

240’000 tons.

Amtek Auto is expanding capacity of its castings unit to 70,000 tonnes per annum (tpa) from

30’000 tpa.

Sona Koyo plans to have capacity of three million pieces of manual steering gears, 500’000 units

of hydraulic power steering and 250’000 units of electronic power steering (EPS), apart from dou-

bling the capacity of steering columns from one million parts.

Rico Auto is investing US$ 23 million to expand capacity.

Opportunities for large scale auto component manufacturing in India is driven by the fact that India
is

being seen as a global compact car hub, as a centre for skill based manufacturing and engineering

and increasingly companies in US/Europe are seeking partnerships in low cost countries like India.

Besides the burgeoning demand from global auto majors, there is also the domestic car industry,

which is growing at a sparkling rate of over 20 per cent, driven by a rising consumer base and afford-

able loans.

2. Automobiles Industry

The Indian automotive industry has witnessed an unprecedented boom in recent years, owing to the

improvement in living standards of the middle class, and a significant increase in their disposable in-

comes. The industry is expected to touch the 10 million mark, to which the commercial vehicle seg-

ment will be a major contributor. Industry experts peg the Indian Automobile sales growth at a com-

pounded annual growth rate (CAGR) of 9.5 per cent by 2010.

India has made a mark in the global automobile industry; the salient aspects below make for India

featuring on every leading automobile player's roadmap.

India is the second largest two-wheeler market in the world

Fourth largest commercial vehicle market in the world

Eleventh largest passenger car market in the world

Fifth-largest bus and truck market in the world (by volume)

Envisaged to be the seventh largest automobile market by 2016, and world's third largest by

2030 (behind only China and the US)

The industry structure spans all segments and is concentrated in regional clusters

Automobile manufacturing units are located all over India. These are, however, concentrated in
some

pockets such as Chennai and Bangalore in the south, Pune in the west, the National Capital Region

(NCR, which includes New Delhi and its suburban districts) in the north, Jamshedpur and Kolkata in

the east and Pithampur in the central region. Following global trends, the Indian automotive sector

also has most auto suppliers located close to the manufacturing locations of OEMs, forming regional

automotive clusters. Broadly, the three main clusters are centred around Chennai, Pune and the
NCR.

Production

Growth in consumer-spending habits has reshaped the industry which has spurred an enormous cost

advantage in manufacturing, research and development (R&D), skilled labour, software, and design,

encouraging leading automakers to perceive India as a global player in this sector. Marked by consis-

tent growth at a frantic pace, the automobile industry recorded production of a wide variety of
vehicles

- including over 2.06 million four-wheelers (passenger cars, light, medium and heavy commercial
vehi-

cles, multi-utility vehicles such as jeeps), and over 9 million two-and-three wheelers (scooters,
motor-

cycles, mopeds, and three wheelers) - in 2006-07.

Automobile Production Trends

(Number of Vehicles)
Category

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

Passenger Cars

500’301

557’410

782’562

960’487

1’046’133

1’238’032

Utility Vehicles

105’667

114’479

146’325

182’018

196’506

222’111

MPVs

63’751

51’441

60’673

67’371

66’661
84’707

Total Passenger Vehicles

669’719

723’330

989’560

1’209’876

1’309’300

1’544’850

M&HCVs

96’752

120’502

166’123

214’807

219’295

294’266

LCVs

65’756

83’195

108’917

138’896

171’788

225’734

Total Commercial Vehi-

162’508

203’697

275’040

353’703
391’083

520’000

cles

Three Wheelers

212’748

276’719

356’223

374’445

434’423

556’124

Scooters

937’506

848’434

935’279

987’498

1’021’013

943’974

Motorcycles

2’906’323

3’876’175

4’355’168

5’193’894

6’207’690

7’112’225

Mopeds

427’498

351’612
332’294

348’437

379’994

379’987

Electric Two Wheelers

7’982

Total Two Wheelers

4’271’327

’5’076’221

5’622’741

6’529’829

’7608’697

8’444’168

Grand Total

5’316’302

6’279’967

7’243’564

8’467’853

9’743’503

11’065’142

Source: SIAM

Domestic Sales
The Society of Indian Automobile Manufacturers' Association (SIAM) estimates sales figures of 7 mil-

lion motorcycles, 1.55 million cars (including MPVs, SUVs and MUVs) and 8.3 million two-wheelers,

for the 2007-08 fiscal. Consequently, India should be able to contribute about 3 per cent to the total

global automotive industry output by end-2007.

Automobile Production Trends

(Number of Vehicles)
Category
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Passenger Cars
500’301
557’410
782’562
960’487
1’046’133 1’238’032
Utility Vehicles
105’667
114’479
146’325
182’018
196’506
222’111
MPVs
63’751
51’441
60’673
67’371
66’661
84’707
Total Passenger Vehicles 669’719
723’330
989’560
1’209’876 1’309’300 1’544’850
M&HCVs
96’752
120’502
166’123
214’807
219’295
294’266
LCVs
65’756
83’195
108’917
138’896
171’788
225’734
Total Commercial Vehi-
cles
162’508
203’697
275’040
353’703
391’083
520’000
Three Wheelers
212’748
276’719
356’223
374’445
434’423
556’124
Scooters
937’506
848’434
935’279
987’498
1’021’013 943’974
Motorcycles
2’906’323 3’876’175 4’355’168 5’193’894 6’207’690 7’112’225
Mopeds
427’498
351’612
332’294
348’437
379’994
379’987
Electric Two Wheelers
-
-
-
-
-
7’982
Total Two Wheelers
4’271’327 ’5’076’221 5’622’741 6’529’829 ’7608’697 8’444’168
Grand Total
5’316’302 6’279’967 7’243’564 8’467’853 9’743’503 11’065’142
Source: SIAM
Domestic Sales
The Society of Indian Automobile Manufacturers' Association (SIAM) estimates sales figures of 7 mil-
lion motorcycles, 1.55 million cars (including MPVs, SUVs and MUVs) and 8.3 million two-wheelers,
for the 2007-08 fiscal. Consequently, India should be able to contribute about 3 per cent to the total
global automotive industry output by end-2007

. Global Scenario Of Automotive Industry

            4.1  Market Segmentation
            4.2  Competitive Landscape
            4.3 Forecast Value and Volume (2004-2009)
 
5. Indian Automotive Industry
            5.1 Market Overview
            5.2 Industry Background
 
6. Automotive Component Sector
 
7. Performance Of Indian Vehicle Sectors
            7.1 Medium and Heavy Commercial Vehicles
            7.2 Light Commercial Vehicles
            7.3 Passenger Car and Multi Utility Vehicles
            7.4 Two / Three Wheelers
            7.5 Tractors
            7.6 Agricultural Machinery and Earth Moving Equipment
 
8. Porter's Five Forces Model 
            8.1 Supplier Power
            8.2 Industry Rivalry
            8.3 Threat of Substitute
            8.4 Buyer Power
            8.5 Entry Barriers 
 
9. Industry Advantages, Opportunities and Obstacles 
            9.1 Advantages    
            9.2 Opportunities 
            9.3 Obstacles      

10. Overall Assessment of the Industry and Marketers in Indian Automotive Industry

11. Demand Forecast (2003-04 to 2009-10)

            11.1  Investment
            11.2 Future Outlook (2003-04 to 2009-10)
 
12. Market Access Strategies for Foreign Firms
 
13. Automotive Dealer Satisfaction Study, 2004
            13.1  Importance Of Dealer Satisfaction
            13.2  DSS Rankings
            13.3  Dealer Typology
            13.4  Grid Analysis
            13.5  Profitability Measures
            13.6  Regional Information
 
14. Recent Issues and Current Developments
            14.1  Investment In Auto Ancillary Industry
            14.2  New Launches
 
15. Company Profiles
            15.1  Maruti Udyog Limited        
            15.2  Hyundai Motor India Limited (HMIL)
            15.3  Toyota Motors         
            15.4  Tata Motors Limited  
            15.5  Ashok Leyland Limited (All)      
            15.6  Mahindra & Mahindra Limited (M&M)
            15.7  Punjab Tractors Limited (PTL)
            15.8  Hero Honda Motors Limited (HHML)
            15.9  Bajaj Auto Ltd.   
            15.10  TVS Motor Company Limited        
 
16. Company Analysis
            16.1  Auto Ancillary Industry  
                      16.1.1 Bharat Forge Limited  
                      16.1.2  Motor Industries Company (MICO)
                      16.1.3  Amtek Auto  
                      16.1.4  Sundram Fasteners Limited (SFL)