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Marketing Reasearch_Automobile_ Group 5

Apr 14, 2018

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    MARKETING RESERCH

    PROJECT ON

    AUTOMOBILE

    Prof.: Mr.C.Bhattacharjee

    GROUP MEMBERS:

    SANDIP BHAPKAR: 6DEEPAK NIKUMBH: 67

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    Contents

    1) Introduction 03

    2) PESTL Analysis for Automobile Industry 10

    3) SWOT Analysis ... 12

    4) The Five Forces of the Porter Model.. 13

    5) Challenges .. 15

    6) Case Study: BMW .. 17

    a) Porter Model for BMW .... 18

    b) SWOT Analysis for BMW .. 21

    7) SWOT Suzuki, SKODA, Hyundai, Nissan . 22

    7) Conclusion 25

    6) Bibliography 26

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    Overview- Automobile industry

    The automotive industry in India is one of the larger markets in the world and hadpreviously been one of the fastest growing globally, but is now seeing flat or negativegrowth rates. India's passenger car and commercial vehicle manufacturing industry isthe sixth largest in the world, with an annual production of more than 3.9 million units in2011. According to recent reports, India overtook Brazil and became the sixth largestpassenger vehicle producer in the world (beating such old and new auto makers as

    Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), grew 16 to18 per cent to sell around three million units in the course of 2011-12. In 2009, Indiaemerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea,and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter ofpassenger cars.

    As of 2010, India is home to 40 million passenger vehicles. More than 3.7 millionautomotive vehicles were produced in India in 2010 (an increase of 33.9%), making thecountry the second (after China) fastest growing automobile market in the world in thatyear. According to the Society of Indian Automobile Manufacturers, annual vehicle salesare projected to increase to 4 million by 2015, no longer 5 million as previously projected.

    Some of the major global and indian brands are as below:

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    http://en.wikipedia.org/wiki/Automotive_industryhttp://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_productionhttp://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_productionhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_productionhttp://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_productionhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Automotive_industry
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    The majority of India's car manufacturing industry is based around three clusters in thesouth, west and north. The southern cluster consisting of Chennai is the biggest with 35%of the revenue share. The western hub near Mumbai and Pune contributes to 33% of themarket and the northern cluster around the National Capital Region contributes 32%.Chennai, with the India operations of ford, Hyndai, Renault,Mitsubishi, Nissan, BMW, Hindustan Motors,Daimler, Caparo, and PSA Peugeot Citronisabout to begin their operations by 2014. Chennai accounts for 60% of the country'sautomotive exports.

    Gurgaon and Manesar in Haryana form the northern cluster where the country's largest carmanufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is thewestern cluster with companies like General Motors, Volkswagen,Skoda,Mahindra andMahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat and Force Motorshaving assembly plants in the area. Nashik has a major base of Mahindra & Mahindra witha UV assembly unit and an Engine assemblyunit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster.Another emerging cluster is in the state of Gujarat with manufacturing facility ofGeneralMotors in Halol and further planned for Tata Nano attheir plant inSanand. Ford, MarutiSuzuki and Peugeot-Citroen plants are also set to come up in GujaratKolkata with Hindustan Motors, Noida with Honda andBangalorewith Toyota are some of

    the other automotive manufacturing regions around the country.

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    http://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/National_Capital_Regionhttp://en.wikipedia.org/wiki/National_Capital_Regionhttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Mitsubishihttp://en.wikipedia.org/wiki/Nissan_Motor_India_Private_Limitedhttp://en.wikipedia.org/wiki/BMW_Indiahttp://en.wikipedia.org/wiki/Hindustan_Motorshttp://en.wikipedia.org/wiki/Daimler_AGhttp://en.wikipedia.org/wiki/Daimler_AGhttp://en.wikipedia.org/wiki/Caparohttp://en.wikipedia.org/wiki/PSA_Peugeot_Citro%C3%ABnhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Manesarhttp://en.wikipedia.org/wiki/Haryanahttp://en.wikipedia.org/wiki/Maruti_Suzukihttp://en.wikipedia.org/wiki/Chakan,_Maharashtrahttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/Volkswagen_Indiahttp://en.wikipedia.org/wiki/Skoda_Auto_India_Private_Limitedhttp://en.wikipedia.org/wiki/Skoda_Auto_India_Private_Limitedhttp://en.wikipedia.org/wiki/Mahindra_and_Mahindrahttp://en.wikipedia.org/wiki/Mahindra_and_Mahindrahttp://en.wikipedia.org/wiki/Mahindra_and_Mahindrahttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Mercedes-Benz_Indiahttp://en.wikipedia.org/wiki/Land_Roverhttp://en.wikipedia.org/wiki/Jaguarhttp://en.wikipedia.org/wiki/Fiat_Automobiles_India_Limitedhttp://en.wikipedia.org/wiki/Force_Motorshttp://en.wikipedia.org/wiki/Nashikhttp://en.wikipedia.org/wiki/Aurangabad,_Maharashtrahttp://en.wikipedia.org/wiki/Audi_Indiahttp://en.wikipedia.org/wiki/Skoda_Auto_India_Private_Limitedhttp://en.wikipedia.org/wiki/Volkswagen_Indiahttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/Halolhttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Sanand_Plant_(Tata_Motors)http://en.wikipedia.org/wiki/Sanandhttp://en.wikipedia.org/wiki/Peugeot-Citroenhttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Hindustan_Motorshttp://en.wikipedia.org/wiki/Noidahttp://en.wikipedia.org/wiki/Honda_Siel_Cars_Indiahttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Toyota_Kirloskar_Motor_Private_Limitedhttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/National_Capital_Regionhttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Mitsubishihttp://en.wikipedia.org/wiki/Nissan_Motor_India_Private_Limitedhttp://en.wikipedia.org/wiki/BMW_Indiahttp://en.wikipedia.org/wiki/Hindustan_Motorshttp://en.wikipedia.org/wiki/Daimler_AGhttp://en.wikipedia.org/wiki/Caparohttp://en.wikipedia.org/wiki/PSA_Peugeot_Citro%C3%ABnhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Manesarhttp://en.wikipedia.org/wiki/Haryanahttp://en.wikipedia.org/wiki/Maruti_Suzukihttp://en.wikipedia.org/wiki/Chakan,_Maharashtrahttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/Volkswagen_Indiahttp://en.wikipedia.org/wiki/Skoda_Auto_India_Private_Limitedhttp://en.wikipedia.org/wiki/Mahindra_and_Mahindrahttp://en.wikipedia.org/wiki/Mahindra_and_Mahindrahttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Mercedes-Benz_Indiahttp://en.wikipedia.org/wiki/Land_Roverhttp://en.wikipedia.org/wiki/Jaguarhttp://en.wikipedia.org/wiki/Fiat_Automobiles_India_Limitedhttp://en.wikipedia.org/wiki/Force_Motorshttp://en.wikipedia.org/wiki/Nashikhttp://en.wikipedia.org/wiki/Aurangabad,_Maharashtrahttp://en.wikipedia.org/wiki/Audi_Indiahttp://en.wikipedia.org/wiki/Skoda_Auto_India_Private_Limitedhttp://en.wikipedia.org/wiki/Volkswagen_Indiahttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/General_Motors_India_Private_Limitedhttp://en.wikipedia.org/wiki/Halolhttp://en.wikipedia.org/wiki/Tata_Nanohttp://en.wikipedia.org/wiki/Sanand_Plant_(Tata_Motors)http://en.wikipedia.org/wiki/Sanandhttp://en.wikipedia.org/wiki/Peugeot-Citroenhttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Hindustan_Motorshttp://en.wikipedia.org/wiki/Noidahttp://en.wikipedia.org/wiki/Honda_Siel_Cars_Indiahttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Toyota_Kirloskar_Motor_Private_Limited
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    Indian Automotive Industry growth decades started in the 1970s. Between 1970 and 1984cars were considered a luxury product; manufacturing was licensed, expansion wasrestricted; there were Quantitative Restriction (QR) on imports and tariff structuredesigned to restrict the market but starting in 2000, several landmark policy changes likeQR and 100% FDI through automotive route were introduced. In 2003, Core group onAutomotive R&D (C.A.R) was set up to identify priority areas for automotive R&D in IndiaIndian Auto Industry is 2nd in Two Wheelers, 3rd in Small Cars and 5th in CommercialVehicles among the top 10 in World.

    India is a global hub of automobile industry having:

    15 Manufacturers of passenger cars and multi-utility Vehicles

    9 Manufacturers of commercial vehicles

    16 Manufacturers of 2/3 wheelers

    14 Manufacturers tractors

    5 Manufacturers of engines

    The evolution of the automotive component industry predictably followed the evolution ofthe auto industry itself. With the startup of local production of cars, trucks, and two-wheelers in the 1950s, many of the associated component manufacturers (mainly fromEurope) started operations in India. Over a period of time, many of the majormanufacturers had established plants for manufacture or assembly of parts. Theseincluded companies like Bosch (fuel injection systems and spark plugs) and Mahle (pistons)from Germany; Lucas (auto electricals), Girling (brakes), and Lockheed (clutches) from theUnited Kingdom; and Champion (spark plugs), Armstrong (shock absorbers), and UnionCarbide-Exide (batteries) from the United States.

    From the Indian perspective, these units were primarily intended to aid importsubstitution. In the process, there was gradual transfer of technology from the parentcompany [5]. The domestic two-wheeler industry has grown steadily at a CAGR of 8.5 percent from 4.2 million in 2001 to 7.43 millionin 2009. The motorcycle segment continues todominate the market. Entry-level bikes (engine power below 125cc and price in the rangeof US$ 8501,000) account for around 80 per cent of sales. The cost of ownership andeconomics of operations are key purchase criteria. The premium-bike segment (enginepower above150cc and price in the range of US$ 1,2002,000) is growing at a faster pacethan entry-level vehicles; this is an indication of the increasing affluence of customers.Recent trends indicate that 100cc bikes are being preferred over 125cc bikes by themarket [7]. Fig. 1 shows the Segment Wise Market Share.

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    Various types of vehicles are available like Cars, Jeeps, Buses, Trucks, LCVs, Tractors and

    2-Wheelers which are produced by India.

    Table 1 shows the Vehicle Production by Type in India.

    Source: ACMA

    Rising GDP per capita (US $) is shown in fig.

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    Main segments in the Indian automotive industry

    Passenger vehicles:

    Cars and buses

    Commercial vehicles:

    Light commercial vehicles Goods carrier

    Multi UtilityVehicles, Sports Utility and mini vans

    Heavy commercial vehicles Trucks, Tempo,

    Tractor and Tipper/Dumper

    Three wheelers:

    Rickshaws, Trolleys, Delivery Vans and Tipper

    Two wheelers:

    Scooters, Motorcycles and Mopeds

    Aside from these four segments there is also a growing segment within the electrical cararea in India. Electrical cars are both economical, efficient and environment friendly.

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    Indian Automotive Development

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    Key Indian companies in the automotive industry

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    Key International companies in Indian automotive industry

    Major automotive industry in India

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    Observers will see a continuing progression in the ruinous steps which have forced theindustry into a socio-politico-economic corner. Whether this is related to flat demand orto the industry's creation of an ever-wider range of vehicles that many buyers seem tocare little about, there is a problem. The industry is likewise linked closely to the policiesof governments, the earnings of banks. Little wonder then that so many emergingcountries are keen to develop an auto sector or that there is such a political pressure toprotect it in the developed countries. The world's vehicle industry is currently dominatedby little more than a handful of firms, each wielding colossal financial, emotional andpolitical power. The industry's approach to dealing with political institutions has notalways been brilliant. It tends to be good on technical issues, although it has not alwaysfully presented the longer-term options, in order to make the choices and theirimplications clear.

    Economic.For much of the developed world, and increasingly fro the developing world, the

    automotive industry is a pillar industry, a flag of economic progress. Without an

    automotive industry, it is impossible to develop an efficient steel business, a plasticindustry or a glass sector - other central foundations of economic progress. Theautomotive industry has been a core industry, a unique economic phenomenon, which hasdominated the twentieth century. However, the industry now suffers from a series ofstructural schisms and has become riddled with contradictions and economicdiscontinuities. For the capital markets and the finance sector, it has lost a lot of itssignificance, as a result of ever declining profits and stagnant sales. The proliferation ofproducts means that it has become hopelessly wasteful of economic resources. While allthese and more sound like a very gloomy assessment of such a vast economicphenomenon, the industry is not in the end despondent. A different future is possible forthe industry, a highly desirable one.

    Social.The world's automotive industry affects the society as a whole. It employs millions ofpeople directly, tens of millions indirectly. Its products have transformed society, bringingundreamed-of levels of mobility, changing the ways people live and work. The social valueof the additional mobility that this industry brings involves the value of the people beingable to commute over longer distances easily, among many others. For most of itsexistence the motor industry has been a model of social discipline and control and it is notjust that the auto sector offers a pillar' of something else. There are, on the other hand,particular social issues to address in many developing countries, often those that are theresult of an undertone of religious faith. The automotive industry has the role to play in

    helping develop the mobility of such countries and it can be achieved at an acceptablesocial cost of the country is prepared to learn the necessary lessons from those who havetravelled this route before it, and to make the necessary investments.

    Technological.The automotive industry works on a scale so awesome and has an influence so vast that itis often difficult to see. The level and diversity of technologies that it must deploy areincreasing, which imposes both new investment burdens and new uncertainties and risks.Roughly a million new cars and trucks are built around the world each week - they areeasily the most complex products of their kind to be mass-produced in such volumes. Theindustry uses manufacturing technology that is the cutting edge of science. But still, the

    potential for developing coordination skills, intellectual capabilities and emotionalsensitivities through electronic technologies remain far from fully exploited. There are

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    numerous additional near-term technological opportunities to adapt the automobile tochanging energy availability. The possibilities suggest that automotive technology isunexpectedly robust and provides a powerful defence against energy starvation even if thereal price of oil climbs steadily during the next couple of decades.

    Legal.The automobile industry is subject to numerous technical directives and regulations, aswell as legislation of a more legal nature. The legislation covers areas such as competitionlaw, intellectual property law, consumer protection and taxation, and emissions (airquality and fuels). When the auto parts industry reached full development, acceleratedtechnological efforts were made to create a web of local suppliers that would make itpossible to meet the growing legal requirements for the national integration ofproduction.

    Environmental.

    Other than the vehicles themselves, and the roads and fuel needed to run them; thebusiness is intricately tied to the manufacture of a wide range of components and theextraction of precious raw materials. Indirectly, it brings people road congestion, toomany fatalities and a wave of other environmental troubles. The effect to the automotivecompanies are that they needed to establish R&D centres to take advantage of researchinfrastructure and human capital, so that they can develop vehicle products locally tosatisfy the requirements of the environmental and safety regulations more effectively.

    Indian Automobile Industry SWOT Analysis

    STRENGTH WEAKNESS

    1. Domestic Market is large2. Government provides monetaryassistance for manufacturing3. Reduced Labor cost

    1. Infrastructural setbacks2. Low productivity3. Too many taxes levied by governmentincrease the cost of production

    OPPORTUNITIES THREATS

    1. Reduction in Excise duty2. Rural demand is rising3. Income level is at a constant increase

    1. Increasing rates of interest2. Too much competition3. Rising cost of raw materials

    Porters Five Force Analysis Indian Automobile Industry

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

    In any P5F analysis, one must examine the following:

    1. The threat of new entrants2. The bargaining power of buyers/customers3. The threat of substitute products4. The amount of bargaining power suppliers have5. 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 fromsetting up.

    However, given India's incredible growth forecasts, infrastructure progress (especially newand better roads), and ever-expanding financing options to rural residents, the market isattractive. 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 andLamborghini). Of course there are also a plethora of incredibly cheap choices, like thefamous Tata Nano.

    Result: Unfavorable

    3. The threat of substitute products

    India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These arevery 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 toany 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.

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    Result: Unfavorable

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

    Forecasts for Indian Auto Industry

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    1. Passenger vehicle market of India will even cross japan by selling about 5 millionvehicles by 2017-18

    2. Indias passenger vehicle production projections:In 2010: 2.6 Million VehiclesBy 2015: 5.1 Million VehiclesBy 2020: 9.7 Million VehiclesApart from many countries, there are top 12 countries which are the sales destination

    Future Technological Demands

    Now from Today, there are some future technological demands which should be fulfil infuture, those demands are listed below: Fuel Efficiency

    Emission Reduction

    Safety and Durability

    Cost Effectiveness

    Innovative FeaturesSome of the innovative features are Key Less Entry, Electrically controlled mechanisms,enhanced driving control, Composites, Long life Components, Soft feel interiors.

    Various Challenges

    In Indian Automotive Market, there are some challenges by virtue of which automobileindustry faces lot of problems. These challenges should be overcome and the challengesare listed below:

    Growth in input costs

    Fuel price volatility

    Slowdown in demand

    Slowdown in USA

    Production cuts

    Growing competition

    Changing consumer preferences

    Environmental issues

    Low R&D orientation

    Infrastructure contraintsCASESTUDY - BMW

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    Strategic Analysis (PESTEL, Porter and SWOT) of BMW

    Introduction

    When there prevails high level if dubiety due to intricacy or brisk changes, it becomesdifficult to predict the external environmental that might affective the firms strategies.Thus scenario analysis is done to evaluate the likely views to predict the organizationsfuture business environment (Heijiden, 2006). In order to reach this conclusion PESTELanalysis is done to identity the key drivers of change that can be used to predict thescenarios for the future.

    PESTEL stands for political, economical, social, technological, environmental and legal andforms of analysis of the macro-environment of the organization (Thomas, 2007).

    Political factors

    Political factors highlight the probable government laws and regulations, securitymeasures and restrictions that can apply to the industry as a whole. The probable factorsthat affect the automobile industry are:

    1. Laws and regulations had affected the automobile industry since its outburst.These laws generally revolved around the environmental norms that were to befulfilled by any car industry. Thus the car manufacturers had to take care of theenvironmental issues during manufacturing of cars.

    2. Taxes and government foreign policies are critical for the automobile industry. Theforeign policies help to us decide the probability of success in the global market.

    3. Introduction of new schemes in the US and Europe automobile industry whereinregulations led to produce high mileage cars along with increase in automobile sales

    and production (Hill, 2008).

    Economical factors

    Economical factors related to the exchange rates, economic growth globally and thebusiness setting prevailing in the industry. Economic factors for the industry are:

    a) There was excess capacity of cars produced thus giving rise to high amount ofrevenue in marketing and new product designs. Thus there was lot of revenue withheldeven though demand was less than supply. For example the UK auto market had excess

    80% capacity in 2003 which freeze 1.3 billion euro of the automobile industry (autofacts,2004).

    b) Total increase in the GDP globally from 2.0% to 3.1% in the year 2008 (statistics,2008).

    c) Decrease in the exchange rate if euro has hampered the European car makers in abig way (Allen, 2006).

    d) Economic downturn in the US market (Copper, 2008)

    e) Surplus capital and buying power in the developing economies like India and China

    and their personal emergence in the global market place.

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    Social factors

    Social factors include the changes in cultures and demo graphics globally apart fromchange in buying pattern and capacity of the consumer. Social factors having an impact onthe auto industry are:

    Changes in the customer predilection from car being a status symbol to fuelefficiency and low emission cars.

    Changes in buying pattern of the consumers due to recession in mature markets.

    Environmental issues and awareness of the harmful emissions through automobiles

    Technological factors

    Increase in use of technology to gain a clear competitive ad vantage

    Use of new and sophisticated design to overcome the decreased margins inthe industry.

    Modifications or restriction on technology causing environmental pollution

    Environmental factors

    Increasing effect if awareness of global warning, greenhouse effect andburnout among patrons (organization, 2008)

    Shift in consumers tastes and preferences towards use of more eco-friendlycars, hybrid cars, fuel cell cars etc.

    Stern application of the EURO norms set up to curb pollution in developingcountries.

    Legal factors

    Restrictions and strict pollution norms set up in European and US markets

    Strict implications of the EURO norms in developing countries e,g, formationof BHARAT norms on the lines of EURO norms in India(CEN, 2006)

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    Porters Five Force Analysis

    Threats of new entrants:

    Threat of new entrant is dependent on the challenges faces during entry into the industryor entry barriers. The threat of new entrants in case of automobile industry is less as largecapital cost is required to set up a manufacturing plant and assembly liner. Also it takestime for new entrants to get a place and the reputation in the minds of the consumers.

    Threats of substitutes:

    BMW has a brand image of being powerful and luxurious. It is positioned in the exclusivecar range where there exist many substitutes for BMW like mercedes, GM and Toyoto. Thusthe threat of substitutes for BMW is high.

    Bargaining power of buyers:

    BMW and its competitors are positioned as in exclusive product range. Here the bargainingpower of buyers is high because the consumers can decide the product according to theprice range and buy the products accordingly. Also with environmental issues hovering

    over the industry the buyers have the last say with sample substitutes available.Bargaining power of suppliers:

    BMW has good supply chain management system and had long relationship with suppliers.The bargaining power of suppliers is high in this industry as the suppliers can dedicate theprice tag for the raw materials. Though long time associations with suppliers can provefruitful, the final word lies more or less with the suppliers.

    Competitive rivalry

    Industry has cut thoat comptetion for its products, with its products targeting the segmentand postioned in a similar way. Competitive rivalry was high in the industry with thedominant US and European markets facing stiff competition from the Asian market.

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    KEY DRIVERS OF CHANGE

    From the PESTEL analysis and the five forces analysis, the key drivers of change are:

    Huge deployment of infrastructure and manpower concentrated on automobileindustry after the dusk of the second world war

    Consumer preferences for product excellence and cost of ownership

    Use of design as a chief asset

    Technological advancements

    Environmental issues

    Increase in the implication an brand management rather than product excellence

    PRODUCT LIFE CYCLE

    The implications of the five forces analysis varies with the industry life cycle. Theelements that underline the industry life cycle are development stage, growth stage,shake-out stage, maturity stage and decline stage. During start up the company is the

    development stage with high differentiation and innovation as its assets followed bygrowth stage where the firm experiences high growth with low bargaining power of buyersand less threat of new entrants. In the shakeout stage the growth is slower and the keyassets for the firm are its managerial and financial activities. In the maturity stage thegrowth is almost stagnant with high entry barriers, high competition but less unit costs andhigher market share. Finally in the decline stage the firm is likely to face extreme rivalrywith the rational and emotional approach key for the firm.

    BMW was in the maturity stage of the industry life cycle. The growth of BMW was stagnantbut its products like the 1, 3, 5, 7 series having huge market share and brand identity inmature as well as developing markets. There were high entry barriers in comparison withBMW. But BMW had considerable market share and reputation for being an engineering

    excellence, an asset of BMW in the maturity stage.

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    CYCLE OF COMPETITION

    Cycle of competition underlines the various drifts between competitors with time. BMW,the German carmaker had a consistent increase in its annual sales and had the technologyat its behest to counter its competitors in the market.

    BMWs competitive advantage lies in its integral processes and its designs. The use ofscientific technology that BMW restores to, can be implemented to gaining highereconomies of scale. In terms of competition BMW has Lexus, Mercedes, Toyoto, GM, Volvogroup etc. as its rivals in the automobile industry. BMW has its product range from a MINIto a Rolls Royce. Thus its product range varies from a luxury segment to a premiumsegment in the auto industry.

    In the cycle of competition any core competencies or competitive advantage is temporaryand in this scenario the closest competitor or BMW is the Toyota group. Toyota group hastechnology, production capacity; profit margins and product range that can give BMW runfor their money. It is also a proved product in immature market territory.

    Thus BMW can strive in the cycle of competition through its core competencies andcompetitive advantage.

    STRATEGIC DRIFT

    Drift is trying to go towards a direction however fail to do that. This could be good or bad.Strategic drift is when a company fails to work in line with environmental changeshowever incremental development is evidenced but there is a strong influence of thecultural and historical factors.

    BMW and its emphasis on brand development incrementally with the changes in theenvironment when it outsmarted competition. However the path way dependency pavedway for the acquisition of Rover an English brand. This could be due to the companiesneed for huge production and the consideration happened during that time. This would bethe strategic drift. The company beaded with the English brand when it was in the fluxphase of the strategic drift. But when the new CEO was appointed BMW went fortransformation and Rover was sold to Ford. After this BMW started to working in tandemwith the changes in the environment and developed incrementally.

    RESOURCES

    Every organization or a firm need and possess certain resources and competences requiredto endure and thrive globally. In other words every firm has its own strategic capability tosurvive against all odds (Gerry Jonhson, Kewan Scholes, Richard Whittington, 2008).

    The resources consist of-

    Tangible resources underlining the physical chattels like plant, people andfinance of the organization

    Intangible resources underlining non-physical chattels like information, reputationand knowledge (Gerry Johnson, Kevin Scholes, Richard Whittington, 2008)

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    BMW; SWOT Analysis

    STRENGTH WEAKNESS

    1. Technologically Strong2. Globally accepted processes.3. Competent workforce

    1. Infrastructural setbacks2. Low productivity3. Too many taxes levied by governmentincrease the cost of production

    OPPORTUNITIES THREATS

    1. Income level is at a constant increase

    2. Reduction in Excise duty3. Increase in number of upper categorypeople.

    1. Increasing rates of interest

    2. Increasing competition3. Rising cost of raw materials

    MAURIT SUZUKI ; SWOT Analysis

    STRENGTH WEAKNESS

    1. Most popular brand2. Largest car manufacturer in India.3.Wide range of cars for all segments4. Best Mileage in class.5. Easily available service centres & spareparts.

    1. Labour issues2. Not acceptable by high class people.

    OPPORTUNITIES THREATS

    1. Income level is at a constant increase2 Increase in income of Middle & uppermiddle population.

    1. Increasing rates of interest2. Increasing competition mostly fromHyndai & Nissan.3. Duplication of Spare parts result in loss ofprofit margin.

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    SKODA SWOT Analysis

    STRENGTH WEAKNESS

    1. Technologically Strong2. Globally accepted processes.3. High in Safety standards.

    1. Low mileage2. High cost.3. Less number of Service centres

    OPPORTUNITIES THREATS

    1. Growing market.

    2. Educated class prefer safety features incar, which is at a rise.3. Increase in number of upper categorypeople.

    1. Increasing competition

    2. Rising cost of raw materials resulting infurther increase in cost of vehicle.

    HYNDAI SWOT Analysis

    STRENGTH WEAKNESS

    1. Most popular brand after maruti Suzuki.2. 2nd Largest car manufacturer in India.3. Wide range of cars for all segments4. Innovative concepts (eg fluidic series).

    1. Availability of Spare parts is a cause ofconcern for car owners.2. Limited Service stations.

    OPPORTUNITIES THREATS

    1. Income level is at a constant increase2 Increase in income of Middle & uppermiddle population.

    1. Increasing rates of interest2. Increasing competition mostly fromMaruti Suzuki & Nissan.

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    NISSAN SWOT Analysis

    STRENGTH WEAKNESS

    1. Technologically Strong2. Globally accepted processes.

    1. Availability of Spare parts is a cause ofconcern for car owners.2. Limited Service stations.

    OPPORTUNITIES THREATS

    1. Income level is at a constant increase

    2 Increase in income of Middle & uppermiddle population.

    1. Increasing rates of interest

    2. Increasing competition mostly fromMaruti Suzuki & Hyndai.

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    CONCLUSION

    India has the potential to develop into a significant market for automobile manufacturers.Indian automotive industry holds significant scope for expansion, both in the domestic

    market, where the vehicle penetration level is on the lower side as compared to worldaverage, and in the international market, where India could position itself as amanufacturing hub.

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    BIBLOGRAPHY

    SrNo.

    Topic Link Source

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    5Major automotive industryin India

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