236 PUBLICATIONS ISSN-2319-1058 JOURNAL OF INNOVATIONS IN ENGINEERING AND TECHNOLOGY AUTOMOBILE INDUSTRY VISION - 2025 B. L. Dhabhai, Research Scholar, Suresh Gyan Vihar University, Jaipur – Email : [email protected]– Membership No :- F 1066850 & – Dr. J.L. Sehgal, Chairman, IE(I), RSC, Jaipur – Membership No : F 100519-3 ABSTRACT Urban population is expected to increase from the present 28% to around 45% by 2025. Rural population is also becoming progressive and there is a huge market for automobiles in India. Automotive industry in India is one of the largest and one of the fastest growing industries in the world. There are 22 commercial vehicle manufacturers which are engaged in the production of automobiles in India. Indian automobile market has become highly competitive today. Auto manufacturing companies need to adopt value engineering methodologies and take policy initiatives in real earnest to secure a competitive edge in the market, reduce manufacturing costs & improve the quality of products. Value Engineering methodologies can serve as an important tool to improve quality and reliability of products at reduced costs and achieve the target costing objectives of the firm. After the entry of M/s Suzuki Corporation in India, automobile manufacturing industry has witnessed rapid growth since early 1980’s and by the late-1990's the industry reached self reliance in engine and component manufacturing from the status of a large scale importer of components and vehicles. Over a period of more than two decades the Indian Automobile industry has experienced rapid growth driven by the
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236
PUBLICATIONS
ISSN-2319-1058 JOURNAL OF INNOVATIONS IN ENGINEERING
AND TECHNOLOGY
AUTOMOBILE INDUSTRY VISION - 2025
B. L. Dhabhai, Research Scholar, Suresh Gyan Vihar University, Jaipur – Email : [email protected]
– Membership No :- F 1066850
&
– Dr. J.L. Sehgal, Chairman, IE(I), RSC, Jaipur
– Membership No : F 100519-3
ABSTRACT
Urban population is expected to increase from the present 28% to around 45%
by 2025. Rural population is also becoming progressive and there is a huge market for
automobiles in India. Automotive industry in India is one of the largest and one of the
fastest growing industries in the world. There are 22 commercial vehicle
manufacturers which are engaged in the production of automobiles in India. Indian
automobile market has become highly competitive today. Auto manufacturing
companies need to adopt value engineering methodologies and take policy initiatives
in real earnest to secure a competitive edge in the market, reduce manufacturing costs
& improve the quality of products. Value Engineering methodologies can serve as an
important tool to improve quality and reliability of products at reduced costs and
achieve the target costing objectives of the firm.
After the entry of M/s Suzuki Corporation in India, automobile manufacturing
industry has witnessed rapid growth since early 1980’s and by the late-1990's the
industry reached self reliance in engine and component manufacturing from the status
of a large scale importer of components and vehicles. Over a period of more than two
decades the Indian Automobile industry has experienced rapid growth driven by the
237
entry of foreign players and indigenous manufacturers with foreign collaboration.
With comparatively higher rate of economic growth in comparison with the global
powers, India has become a hub of domestic and exports business. In the recent years,
the automobile sector has been contributing around 12% share to the GDP growth in
India.
INTRODUCTION
Indian Automobile industry is bearing the brunt of economic slowdown,
today. India has a very low penetration of car ownership ,but the scenario will change
in 5-10 years and the automobile market is expected to become worlds third largest
market by 2020. The car production is expected to increase from 2.5 million cars
today, it would double to around 5 million. The society of Indian Automobile
Manufacturers (SIAM) has scaled down the growth prospects for the industry for
2012. The important factors, that drove the automobile industry a decade ago have
changed. The Interest rates were around - 7.5% as compared to around 12%,today
Petrol prices are much higher now as compared to the world markets .In India,
customers purchase cars only, when their sentiment is positive. During the last
quarter, the economy grew at 4.9% only. In this scenario consumers have become
more conservative. Lower end SUV in the Multi - Utility vehicle segment is selling
due to reasons of people movement .The remaining industry growth is almost flat,but
the market is still on the positive size. Industry plans for three to four years period.
Automobile Companies, normally plans for their investments on a long term basis.
Although, lower sales are upsetting the industry. Yet the growth prospects are
expected to improve in the long run .Companies are creating higher value products
for the customers with attractive features and financing facilities,today and are
exploring different segments and products in smaller cars and SUV’s. Most of these
products sales are growing on the back of diesel offerings.
Urban population is expected to increase from the present 28% to around 45%
by 2025. Rural population is also becoming progressive and there is a huge market for
automobiles in India. Automotive industry in India is one of the largest and one of the
fastest growing industries in the world. There are 22 commercial vehicle
manufacturers which are engaged in the production of automobiles in India. Indian
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automobile market has become highly competitive today. Auto manufacturing
companies need to adopt value engineering methodologies and take policy initiatives
in real earnest to secure a competitive edge in the market, reduce manufacturing costs
& improve the quality of products. Value Engineering methodologies can serve as an
important tool to improve quality and reliability of products at reduced costs and
achieve the target costing objectives of the firm.
Population in all big cities is increasing year on year . Delhi population stands
today at more than 18 million . The number of vehicles plying on Delhi roads is
increasing continuously . Majority of street roads are lined up with vehicles parked on
both sides of the road, with the result that movement of vehicles is restricted even on
wide roads. The majority of population does not own cars or any motorized vehicle .
Pedestrians will find it increasingly difficult to survive on the road. National
automobile policy should address the problems of vehicle parking spaces and rights of
pedestrians across the country.
India’s passenger car and commercial vehicle manufacturing industry is the
seventh largest in the world. India has become a manufacturing hub for Auto mobile
industry . Industry needs to train more Automobile engineering graduates , PG’s and
Doctorates to promote R&D activities , future growth and production of innovative
world class, fuel efficient products for the vision 2025.Appropriate strategy,
manpower planning , skill development and employability of Indian engineers and
technicians must be improved to match the future requirements of manpower.
BACKGROUND
In the 21st Century, we will be dealing with new concepts like “self branding”
an insight into the new manufacturing environment and social networking and lean
manufacturing for survival in 2025 Rapid economic expansion is fuelling the
demand for skilled manpower in the face of low levels of workers employability.
NSDC, and state & central Government initiatives hold crucial importance in the
development of skilled manpower. Capacity building initiatives in the Manufacturing
Industry for the vision 2025 must be started today. Every project throws some
challenges, but a challenge always leads to opportunities ,which should be used
pragmatically.
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Managing Director and Chief Executive Officer of National Skill
Development Corporation (NSDC) Shri Dilip Chenoy stated on 09 Nov 2012, that
the corporation is scaling up its network to include a large number of manufacturing
companies for imparting training in skill development and achievement of the target
of 150 million workers by 2022. State governments and other central Govt.
Ministries are responsible for skill training of 350 million workers by 2022. If
necessary NSDC will intervene to provide proper carrier avenues for the workers . It
is essential that industry employs only those candidates , who are certified by the
Sector Skills Councils(SSC). NSDC hopes to trained 2.57 lakh workers during 2012
.Rajasthan State Skill and Livelihood Development Corporation (RSLDC) has set a
target of training 1 million youths over the next three years. If all the currents
projects stay in place, 7.40 Cores skilled youths will be trained at a project cost of Rs
1.68 cores. NSDC is providing funds for skill development initiatives at 6 % interest
only with ten year repayment cycle. RSLDC has trannied more than 85000 youths
with 300 training partners in 34 sector and 192 courses .CII is also taking action to
align skilling initiatives with the industry to improve employability of the candidates.
In rajasthan , CII has adopted ITI’s through PPP with the collaboration of SSC’s and
Skills Gurukuls. China has successfully managed to increase its labor productivity
during the past few years with proper focus on skill development .
September 2012 experienced the steepest fall in vehicle sales growth at 9.43%
during the last four years. The festive session has failed to boost customer sentiment
of car and two-wheeler buyers. Domestic car sales in September, 2012 declined by
5.36%, while the motorcycle sales declined by 18.85%. Total sales of vehicles across
all categories registered a dip of 9.45% to 14.18 lakh units in September, 2012 against
15-65 lakh units in September, 2011. In December, 2008 vehicle sales had declined
by 18.25% , whereas the sharpest decrease in two wheelers sales figures was 23% in
December, 2008.
India is a mature auto market . Lot of factors affect sales volumes and market
development . During economic down slide, there is huge pressure on the company
profit margins. Commercial vehicle (CV) sales are projected to double in 5 years and
rise from 0.8to 1.6 million units in 2017. TATA Motors Ltd (TML) and Ashok
Leyland are major producers of commercial vehicles. The German Auto giant
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Mercedes Benz is set to introduce three heavy duty global standard trucks with the
caption Bharat Benz under its 100% owned subsidiary Daimler India commercial
vehicles pvt. Ltd (DICV) . Indian commercial vehicles segment will become highly
competitive in the coming decades 2012-22. Competition among the truck
manufactures will ultimately benefit the customers and fleet owners. Bharat Benz
plans to launch 17 product in the range of 7 to 49 Ton trucks. DICV, Chennai plant
has been setup with an investment of 40,000 Crores , employing 2000 personnel with
a capacity to produce 36000 units per annum with 85-90% local content. The
company will also provide financing facilities to the customers through banks. Bharat
Benz trucks are expected to change the market dynamics by the end of 2013.
Indigenous CV manufacturers are also getting ready to meet the competition .Bharat
Benz is planning to provide strong after sales services through 28 dealers at 103
locations in India.
Recent years have witnessed major automobile manufacturers incurring huge
expenditure to recall vehicles for repairs and /or replacements of defective
components /parts. Recall of 7.4 million vehicles worldwide on 10th October, 2012 by
the Japanese biggest automaker Toyota Motor Corporation has dented the reputation
of the corporation, besides causing its economic loss. However, the process of
repairing the driver side power window switches would involve only putting heat-
resistant grease on the switches or exchanging them to mitigate the cause of fire.
Either due to intense international competition or the desire to quickly realize the
R&D expenditure incurred by the company over a number of years to develop a new
vehicle or a refresh version of an old vehicle , manufacturers are launching their new
products without due care and after full life cycle – span trials / testing of the
assemblies /components /parts fitted on the vehicle. It has been reported in September,
2012 that the Italian sports car maker Lamborghini is recalling 1500 Gallardo Coupe
and Spider auto models from years 2004 to 2006, because the power steering fluid
could leak and catch fire. Lamborghini documents sent to US safety regulators state
that pipes can corrode near the power steering pump. In rare cases, fluid can leak onto
the hot engine and cause a fire. As a result , the brand image of important
manufacturers like Toyota (Japan),Lamborghini (Italy), and NANO (India) etc. is
getting dented and customers confidence is being shaken .Indian Customers psyche is
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extremely sensitive and the customers do not venture again to try or buy any other
improved model from the same company.
ECONOMIC SLOWDOWN
Global economy is passing through critical times today. This time the
economic slow down is widespread and has affected the advanced economies &
developing countries including China, India and other countries across the globe. All
countries are likely to post lower growth rates during 2012,than that what was forecast
earlier. Austerity measures being adopted by the developed economies are leading to
social unrest and unemployment. Consumer sentiment continues to be down and the
Auto industry growth in 2013 is likely to remain slow. Rising inflation rates, interest
rates and fuel prices are adversely impacting the auto industry. Even the biggest
automakers across the globe are experiencing series of setbacks in the current times.
Auto industry economy is experiencing a slowdown shock, since January, 2012.
Passenger car industry as a whole has witnessed a drop of 15% in recent months, but
India has a mature and developing auto industry market. Every stake holder in the
auto industry is banking on improvement in the buyer segment by the end of 2012.
Despite the slowdown in auto industry there is a continuous increase in
demand of automobiles from global customers. Meeting the customer demand is of
high importance and reduction of lead time plays a vital role for continuing and
improving the business. The long lead times and high work in process inventory are
eating into the vitals of the industry and are reducing the profit margins. We are living
in an increasingly globalised world, where growth is slowing down in large markets
including US, UK and Europe. Uncertainty has increased in this challenging
environment, which has affected the customer’s confidence. Companies should
change their focus from growth to increasing efficiency, maintaining stability,
employment and risk prevention. Index of Industrial Production (IIP) has reduced
between 0.7 – 2.4% during the period ending September 2012. Therefore,
manufacturing companies should start focusing on increasing efficiency instead of
growth in the slow growth market.
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LATEST DEVELOPMENTS
Increasing global competition and complexity in the automotive sector has led
companies to find ways to maximize value of their products, processes, projects, or
services within a total system. Value Engineering has evolved into a strategic and an
innovative tool that has the potential to search alternative materials, technologies and
processes through evaluation of creative ideas. The maximized value is approached
from a customer viewpoint and the related function is expected to operate at the least
cost without affecting its quality and reliability. The literature on Value Engineering
covers all the issues involved, but it is essential to consider all the related aspects too,
that focus on maximizing values from the customers’ point of view in a
comprehensive manner.
Both indigenous and foreign auto manufacturers are producing automobiles to
meet the domestic and export markets across the globe.
Raises in inflation rate and prices of petrol/diesel are continuously creating a negative
sentiment among the customers . However, economic recovery in Europe and U.S is
likely to help India and other countries. Foreign brand auto manufacturers have
established their subsidiaries and manufacturing plants in India to cater both domestic
and export markets .Export strategies of foreign companies provide an important
hedge for the company.
A lot of future vehicle launches will be in the small car segment and diesel
versions of popular models. 70% of all cars sold in India are being financed by the
banks. Maximum number of cars sold today are in the small car segment and this mix
is not likely to change in the coming decades. Indian Govt. policies should remain
stable and transparent, so that Auto manufacturers are able to plan their long term
production levels. Keeping in view the above uncertain conditions, major German
Auto gaiant VOLKS WAGON Co has postponed its expansion plans till 2015.The
president and MD of Ford Motor Co.(India Branch) ,believes that transparent and
stable Govt. polices and positive consumer sentiment will go a long way in boosting
the auto industry market .If the Govt. suddenly decides to increase taxes on diesel
fuel ,it would create major problems for auto manufacturers through confusing
signals.
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TATA MOTORS LTD.
Tata Motors Ltd. Karl Slym new MD and Shri Ranjit Yadav President
Passenger Vehicle Business (PVB) have taken over their duties in October, 2012 and
they are planning to put the passenger vehicle business on fast track. They have made
plans to introduce dynamic product planning in TML to boost the Nano sales. In
recent months, TML had lost its market share to Mahindra & Mahindra Motors. ACE
model of TML, which was introduced in India, a few years ago is having good sales
volume in the market. Jaguar Land Rover sales are also on the rise. But, both Nano
and Indica are facing challenges, today. Nano was introduced three years ago, but it
has not achieved volume sales, as yet. Brand image of Nano car had been impacted
adversely, since its launch in 2009, due to various incidents of fire and other unsafe
incidents. Customers do not want to be associated now with a cheap or unsafe car and
have moved on to buy the premium hatchbacks. There was no reason to fail for the
Nano, as a low-cost People’s car. Nano is being branded today as the Rs. One lakh
car. Sanand plant was designed to manufacture around 30,000 Nano vehicles per
month in three shifts , but at present Nano sales are not averaging even 10,000 units
per month. Valuable time was lost in re-locating the manufacturing facility from
Singur (W.B) to Sanand (Gujrat), which had affected the marketing plan, in which
real customers for the Nano were expected to come from smaller cities and towns.
Auto industry experts believe that, if TML had not faced problems at the West Bengal
Singur facility it might have just clicked, since a loyal base of customers was waiting
to buy the Nano. There is no doubt that TML has a huge advantage in its cost-
competitive manufacturing base, which can be leveraged to quickly roll out new
models of cars . This is the main reason, why FIAT Co. is not changing its alliance
with TML. Mr. Karl slym new MD, should focus on introducing new products
sandwiched between the price tags of Nano and Indica by employing Fiat’s 1.3 lt.
multijet diesel engine which is ideally suited to achieve high volume sales.
A contemporary shaped Nano fitted with a diesel engine keeping in tune with
the market trends is likely to achieve volume sales in India. By using their experience
in brand image building and marketing, Mr. Karl Slym and Mr. Ranjit Yadav can
reposition the Nano as a smart car and project its lower price as an important factor in
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its favor. Sales are gradually increasing and satisfied customers experiences over the
years will further enhance the Nano sales.
On a standalone basis, TML is impacted by weak macro-economic outlook
and sluggish industrial demand coupled with diesel price increases. These factors are
affecting medium CV’s and heavy CV’s. The CV market share is 69.7% and
passenger car sales share is 12.3% today. Karl Slym MD of TML opines, that new
cars & features generate sales in India. Therefore, TML plans to maintain a mix of
refresh & new vehicles in CV’s and passenger cars to introduce six cars and 25 CV’s
and products in volume growth segments like utility vehicles. TML has been losing
market share in passenger cars in the last few years and sales volumes are lower than
expected. The commercial vehicles share has reached 59.7% and passenger cars
market share is at 12.3% today. Medium commercial vehicles and heavy commercial
vehicles sales have been reduced.
MAHINDRA AND MAHINDRA
In recent months, Mahindra and Mahindra group has been growing its auto
manufacturing segment and has entered all segments of the automobile industry with
its overseas forays and acquisitions. Farm equipment sector sales were low in Q2 and
is struggling to survive today. Operating margins were lower at 11.4% (12%). The
company performance was boosted with higher sales in vehicles and SUVs by 32%.
M & M has launched its first premium SUV in October 2012. M&M has recently
acquired the South Korean Co.Ssang Motor Co, which is expected to break even in
two years. REXTON manufacture at the plant , RX5,a high end – SUV was launched
on 20 Nov.2012.
FORD MOTOR COMPANY
Ford company had commenced its operations as a marginal player in India, in
1995. It became a serious player with the launch of FIGO model in March, 2010. Ford
company has witnessed slow growth, stiff competition and rapid shift of the market to
diesel vehicles. The company believes models based on global proven platforms and
hatch backs can achieve higher sales volumes and that its strategy is on the right track,
245
despite a slowing economy, where rising inflation rates are continuously creating
worry in the minds of customers.
Ford company is planning to make a mark in the small car segment with high
levels of localization in addition to maintain its domestic and export strategy for
vehicles. Small car is expected to meet the demand of customers who are graduating
from two wheeled vehicle users to four wheeled vehicle owners due to their enhanced
purchasing power
It has established its manufacturing plants in Chennai and Gujrat with a
capacity to manufacture 4.4 lakh vehicles and 7.1 lakh engines p.a. for export and
sales in India. In order to beat its competitors, around 70% local content will be
introduced in the low-cost ECO-Sport SUV car to make it competitive & obtain
economy of scale through exports and sales in India. Ford company has failed to
attract customers for the sale of its global Fiesta Sedan launched in July 2011.
Currently, Ford has adopted a multi-pronged strategy for the years 2012-2014 to
introduce new compact models and achieve high volumes in India.
VOLKSWAGON INDIA (VW)
German automobile major passenger car group is planning to introduce a
specially design small car to fill the gap in its portfolio. Managing director of VW
feels that a low-cost entry level car would be very difficult to support with our brand
expectation of safe, sturdy and good to drive vehicles. Small cars would continue to
remain a dominant part of the Indian market. SUV’s and MUV’s segment is
experiencing much higher rates of growth, which are expected to become dominant
products in the market. Volks Wagon ,Touareg SUV is targeting hardcore enthusiasts
at high prices and its sales volume is low.
Volkswagon India has introduced Vento and Polo variant cars in India and has
a market share of just less than 3%. The company sold 6091 vehicles in August, 2011,
but the sales have dropped to 4410 vehicles in August, 2012. Passenger car industry
as a whole has witnessed a drop of 15% in recent months. Volkswagon company
opines that India is a mature and developing car market. The company has planned its
growth as a customer driven organization. A large number of factors affect the sales.
246
It is necesary to keep a continuous watch over the car market. If the car market
continues a declining trend, the industry will experience severe margin pressures. VW
is working hard to gain more than 3% market share and increase its number of
dealers to 150 in 2012.
MERCEDEZ BENZ
The Mercedes Benz had started its luxury car sales, in completely knock down
(CKD) condition in India. Luxury car sales had been zooming at 50% CAGR from
2007 till 2011. Slow down has started since Jan 2012 and in the first 8 months of
2012, luxury car sales have been flat with a modest 8% growth. The company has
sold 250 B-class imported vehicles in 2012, but the market remains unpredictable.
Audi and BMW mini SUV’s sales have increased affecting adversely the company car
sales. It has now introduced B class segment cars in CKD to beat the competitors.
Mercedes-Benz rolled out its first locally manufactured M-class luxury SUV costing
Rs. 45.64 lakhs from its Chaka plant near Pune in October, 2012. In the premium
hatchback segment there are both diesel and petrol variants. The SUV segment is
dominated by diesel vehicles and no petrol SUV is selling fast. Currently diesel
vehicles are available in hatch back and the low and segment sedan cars.
GENERAL MOTORS
US car major General Motors(GM) company has acquaired 43% share from
its equal joint partner Shanghai Automotive Industry Carporation (SAIC) group in
October, 2012. This decision reflects its confidence in the long term potential of
Indian auto industry. GM plans to indtrouce hatchback SAIL and its Sedan Version,
MPV Enjoy by end of 2012.
MARUTI SUZUKI
After the entry of M/s Suzuki Corporation in India, automobile manufacturing
industry has witnessed rapid growth since early 1980’s and by the late-1990's the
industry reached self reliance in engine and component manufacturing from the status
of a large scale importer of components and vehicles. Over a period of more than two
decades the Indian Automobile industry has experienced rapid growth driven by the
entry of foreign players and indigenous manufacturers with foreign collaboration.
247
With comparatively higher rate of economic growth in comparison with the global
powers, India has become a hub of domestic and exports business. In the recent years,
the automobile sector has been contributing around 12% share to the GDP growth in
India.
M/s Maruti Suzuki has introduced new Alto-800 in petrol and CNG versions
in October, 2012. Alto car was first introduced in September, 2000 and more than 2
million units have been sold till date. It is the largest selling car in past 8 years. New
version Alto has 15% higher fuel efficiency giving 22.4 kpl. It is fitted with a higher
compression ration and volumetric efficiency engine. At the selling price of Rs. 2.44
lakh, this low priced car is loaded with high value features.
FORCE MOTORS
Force Motors, Pithampur (M.P.) has introduced “Traveller 26” LCV in
October, 2012. The bus is powered by a 129Ps/295 Nm common rail engine made
under licence from Daimler AG. It uses dual mass fly wheel technology and has
ventilated disc brakes on all wheels. Force Motors is planning to introduce three more
variants in MPV and SUVs in 2013.
HONDA
Honda company has decided to make its diesel debut with the Rs. 7 lakh
“Amaze” sedan in 2013 and a variant of its popular and best seller “City” model. In
the next few years the company will launch diesel variants of its small cars with
smaller engines to cut costs. A new MUV will be introduced in 2014, while a compact
SUV is expected to be launched in 2015. The company’s diesel variants will be fitted
with a new all-aluminum 1500cc engine which will be manufactured in India and
strapped across various models including a 7-seater MUV and an all-new compact
SUV.
Being a late entrant into the fast growing diesel market, Honda has lined up an
aggressive plan to spread its wings fast into the segment. Lack of diesel variants has
already resulted in los of crustal market share. Amaze model will compete with
segment heavy weights like Maruti Suzuki’s Desire and Tata Motor’s Indigo CS. The
248
company has decided to make the diesel engines and transmission in India to control
the costs.
NISSAN COMPANY
Japanese Auto Major Nissan Company has established a manufacturing plant
at orgadam near Chennai . It had sold 33,000 vehicles in 2011 and has planned to sell
66,000 vehicles in 2012 , besides maintaining its export volumes at 100,000 vehicles
per annum. The company has already launched six models (including 3 models
manufactured in India). The company has launched a 7 seater vehicle Evalia in 2012
and it has planned to launch 10 new models including Datsun in 2016.
TVS MOTORS
TVS motors has recorded drop in sales during the second quarter July-
September, 2012. Between April-Septermber, 2012, industry growth had declined to
2%, when compared to 19% in the same period of 2011.
BAJAJ AUTO
The two wheeler major Bajaj Auto sales from April-September 2012 has
experienced a down slide of 4%. Its exports have also declined by 4% during the same
period. Bajaj Auto has 27% share in the two wheeler domestic market and 33%
market share including exports. The company has adopted a strategy to focus on high
end motorcycle segment with its variable cost structure. Customers are value
conscious. Mileage is important, but customers want to have more features. Better
technology offers an opportunity to add features in different segments of vehicles.
FUTURISTIC VEHICLES
Tata Motors is in the forefront of new technology applications. TML has
developed the worlds first air powered car (Zero emission). Tata motors Ltd has
scheduled the Air Car to be launched by the end of 2012.The air car developed by ex-
Formula One engineer Guy N, for Luxembourg-based MDI, uses compressed air to
develop the necessary engine power for running the car. This car is called ‘MiniCAT’
and is expected to cost Rs. 365,757 or $8,177. The ‘MiniCAT’ is simple, light ,urban
car which has a tubular chassis and its body is made of fiberglass, which is glued and
249
not welded. A Microprocessor is used to control all electrical functions of the car. One
tiny radio transmitter sends instructions to the lights, turn signals and every other
electrical device on the car. The temperature of the clean air exhaust is between 0 C to
15C below zero, which makes it suitable for use by the internal air conditioning
system without using gases or any other power sources. There are no keys, just an
access card which can be read by the car from the owners pocket .It costs less than Rs
50 per 100Km, that’s about a tenth of the cost of a car running on gas. Its mileage is
about double that of the most advanced electric car, which is useful for city motorists.
The car has a top speed of 105Km per hour and would have a range of around 300Km
between refuels. Refilling of the car can be done at adapted gas stations with special
air compressor .A fill up will only take two to three minutes and costs approximately
Rs 100 .This car can also be filled at home with its onboard compressor. It will take 3-
4 hours to refill the tank, during sleep hours , because there is no combustion engine.
Oil changing requires 1 liter of vegetable oil every 50,000 Km and due to its
simplicity very little maintenance is required
Tata technologies have unveiled a cheap Electric Car eMO (Tata’s Business
Card) at the Detroit show in January 2012 which is priced at $ 20,000. Mr. Kewin
Fisher heads the groups vehicle development team. It weighs 900 kg and according to
Warren Harris, President, Tata Technologies, this vehicle employs intimate
understanding of frugal engineering principles. The vehicle has a steel frame which
meets the existing crash standards and has a seating capacity for four adults.
Tata Motors Ltd. CNG variant of the Nano is going to hit the roads much
before the diesel variant. The diesel variant is expected a year ahead from now. The
CNG model was displayed at the Indian Auto Show 2012, which has a dual fuel
option of CNG and petrol. At a time, when fuel conservation is becoming imperative
across the world, Tata Motors is aiming to make a car, Tata Megapixel that can
deliver up to 100 kilometers from a litre of fuel by using a unique combination of
technology. The Tata group has announced in July 2012 the development of a four-
seater concept vehicle which is a global range extended electric vehicle (REEV)
meant for city driving. This new innovation from the Tata group is expected to be
commercially launched in around three years from now.
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DIESELISATION
Manufacturers are producing more diesel vehicles today, due to the growing
customer demand, price differential in petrol & diesel prices and the fact that a diesel
vehicle is 20 to 40% more fuel efficient. Currently refineries are getting Rs. 12.50
lesser recovery per liter of diesel. Government has regulated the prices of petrol, but
diesel price is still being regulated. Internationally diesel car are using clean diesel or
low-sulphur fuel, which is emitting lesser pollutants. European consumers are using
super refined diesel. Diesel car in Europe must conform to Euro-V emission
standards. In France 77% of automobiles are operating in diesel fuel, while Spain has
69% , western Europe has 53%, India has 49%, Germany has 44% and Japan has only
2% diesel vehicles.
Car manufacturers in India are capable of introducing more efficient engines,
but Government has to decide a road map and implement the policy of enforcing
tougher emission standards like BSIV-IV/V. Lax enforcement of vehicle fitment
certificate is a major contributor to vehicular pollution. India needs to modernize
commercial vehicles on priority and weed out more than 20 years old vehicles,
Which are using outdated technology.
A recent Central Pollution Control Board study conducted in Delhi has
concluded that vehicles are contributing only 6.6% to particulate matter (PM)
emissions. Road dust created by the construction activity is the biggest contributor of
PM at 52.5% . Industries around Delhi and neighboring states account for as much as
22% of PM, while 19% is due to its geographical location . According to the
information provided in the parliament on 23rd August 2012 sector wise diesel
consumption data shows that generation sets are consuming 5%, Mobile towers 2% ,
Commercial vehicles 16% and other 77% of total diesel consumption . All related
factors must be tackled together to provide safe quality air to Delhi citizens or
elsewhere in India. Since the year 2000, the levels of two key pollutants , namely PM
10and nitrogen oxides have risen sharply by 47% and 57% respectively beyond the
human consumption safety limits, which are posing a serious threat to Delhi
population .
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There is a spurt in the introduction of diesel cars, UV’s and CV’s today. GM,
Honda and other companies have decided to introduce diesel variants of their best
seller vehicle models to meet the market competition. Honda company sales fell by
4% in 2010-2011 and by 8% in 2011-12. Being a late entrant in to the fast growing
diesel market, companies have lined up an aggressive plan to launch vehicles in the
diesel segment. Honda is introducing two new cars in 2013 with entry level Sedan
‘AMAZE” and a diesel variant of its best seller city model.A new all aluminum 150cc
engine is being manufactured in India to be strapped across various models including
a 7- seater MUVin 2014 and new compact SUV in 2015. To keep the prices low
,Honda has decided to keep the length of the car under 4 meters. Honda is decided to
make the diesel engine and transmission at TAPUCARA plant in India to control
cost. New models will also be rolled out later from this plant .Honda is also planning
to manufacture a smaller diesel engine in India for small cars.
EXPORTS
The domestic players as well as the foreign companies are exporting their
products today. Indian automobile manufacturers including Tata Motors, Maruti and
Mahindra and Mahindra are the major exporting companies to Europe, Middle East,
Africa and Asian markets. After having firmly established themselves in the domestic
market the automobile sector is now penetrating the international arena and vehicle
exports are at their highest levels. Top Ten Players in Indian Automobile Sector
include Maruti Suzuki India, Hero Motors Limited, Tata Group, Bajaj Auto Limited,
Mahindra Group, Ashok Leyland, Yamaha Motor India, Hyundai Motors India
Limited, Toyota Kirloskar Motor Private Limited and Honda Siel Cars India Limited.
CONCLUSION
The potential market for low-cost cars is enormous throughout the developing
world. In the current slow growth environment, inventory is piling up in all auto
manufacturing companies. Auto manufacturers, therefore need to address the
problems of customer demands and market preferences more effectively employing
value engineering methodologies to introduce new fuel efficient vehicles, value added
and improved aesthetics models to garner higher market share in the world market.
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Automobile industry including auto-components manufacturing industry is
expected to witness higher rates of growth in the coming decades. From a low-key
supplier of auto components in the domestic market, the industry has emerged as a
significant player in the global automotive supply chain. Preparations for building
manufacturing capacities and capabilities for futuristic vehicles and components