According to the data from an online retailer, there has been an increase in the sale of used sports cars during the period of March to May. That was when the Covid-19 lockdown had implemented globally. Let’s look at the further details on the reasons for the increase in the sales of sports cars during 2020.
The rise of the sale of sports cars instead of a steep decline in the sale was not surprising said the CEO of CarShop Nigel Hurley. He also said that the increase in the sales is due to the restrictions laid down on the people during the period because of the lockdown.
He also added on saying that he was not surprised to see an increase in the sale of sports cars across England and Wales because he feels that sports cars were a source of relief for people during the distressing time of coronavirus lockdown. People were looking for something fun, positive and exciting to help themselves to get distracted from the situation of lockdown and the Covid-19 cases.
Holidays were stopped, vacations were canceled, weddings were postponed and family gatherings were cut down, and amid all these why wouldn’t one treat themselves, Asked the CEO of CarShop Nigel Hurley.
There was an unusuality in the data around the sales of sports cars in the West Midlands, North West and the East of England because the residents of these regions are largely from the rural areas. According to speculations the people in the rural regions might practically already own a vehicle.
They would have seized the opportunity of the lockdown to buy something which would provide them a bigger enjoyment factor. The sports cars would be something they could use to drive along their beautiful countryside and the surrounding areas.
This could be a replacement for the people instead of the stopped vacations and postponed weddings to create a sense of fun and enjoyment.
The sale of used sports cars had skyrocketed to an increase of 82% from March to May. In the West of Midlands, the sales of used sports cars increased up to 200% according to the data provided by CarShop.
The North West of England saw an increase in the sales by 185% and the East of England saw an increase in the sales by 159% respectively. This increase in sales was during the time where driving was banned except for any essential reasons when the Lockdown was announced.
The company has told that they had also seen an increase in their website for the sale of SUV segment of cars. They said that it was less surprising because there is an ongoing love in the western world for the SUV car segment.
SUV sales had an increase in their sales by 17% but this is not so dramatic compared to a large number of sales by Sports cars.
Value of Cars
The value of cars bought during the time of pandemic has increased which is quite notable as the pandemic and the nationwide lockdown had affected the economic situation globally. It had led to unemployment and depression worldwide.
The average amount a consumer paid in the UK last year that is 2019 was around 10,000 Euros from which it increased to 11,219 Euros during June and August in 2019 according to the data received by CarShop.
Global luxury car market size from 2010 to 2020
Popular Used Sports car
According to the research, the most popular used sports car was the Mercedes Benz SLK. It is a compact roadster and the production of this car was started in 1996 and later it was rebranded to SLC. The car was later discontinued because of the increase in the competition from other players.
27% of the Mercedes Benz SLK’s sold were the ones which were released in the year 2015 and 23% of the SLK’s sold were released during the year 2014. It is said that more than 95% of these cars had automatic transmissions.
In the Indian automobile market, Italian Automobile Lamborghini has reported that it had seen an increase of sales up to 60% in the year 2019. The company had told that they were going to concentrate on the super luxury segment market in India.
Some of the few reasons for the growth of the company in India was because of the spread of the demand towards Tier I and Tier II cities and a lot of entrepreneurs emerging in the country.
The company has also said that they were seeing an increase in the women buyers in India and added that more than 5% of the buyers were women in India.
FAQ
Which is the best used car website?
According to Investopedia, AutoTrader is the best overall website for used car sales.
What is the #1 selling car in the world?
Toyota Corolla is one of the best selling car in the world.
What is the fastest car in the whole world?
Bugatti Chiron Super Sport is the fastest car in the world with a top speed of 304.7mph.
Conclusion
These are some of the reasons for the increase in sports car sales during 2020. It is said that most of the cars sold were second hand sports cars.
A used car dealership business in India means that selling used cars to customers who are looking to own a vehicle but their savings money does not allow them to buy from ex-showroom price and earn profits. The COVID-19 (Coronavirus Disease) pandemic has placed the automotive industry at great disruption. Starting a user car dealership business in India will be profitable, where cars have to be brought from their owners at a lower price than you will sell later. IBISWorld reports the used car dealership industry has had a net decline over the past five years, due to coronavirus, at an average annual rate of -1.6%. In the upcoming years, this industry’s 129,553 businesses are forecast to see $ 99.1 billion in collective revenue. Nowadays people need more cars due to their daily transportation. The globally used car market size was valued at USD 1,332.2 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027.
As there is the rise in the cost of new cars in the market also the increasing rate of interest on car loans has resulted in a shift in consumer preferences from purchasing brand new cars to buying used cars. In this article, we will discuss in brief how you will begin this car dealership business.
Used Car Market Size, by Vehicle Type
Key Segments of Used Car Dealership Industry
The inability of customers to buy new cars became one of the reasons for the growing sales of used car volume.
These dealership networks helped market participants to brand and make used car options.
The added quality and reliability of used cars changed the consumer attitude and increased the sales of the used passenger cars.
Investing in used car management has become one of the market’s requirements characterized by slimming margin, relentless competition, and demanding consumers.
High disposable income
Rising demand for luxury cars
The shorter period of car ownership
Increasing preference of the owner of a two-wheeler to upgrade to a compact car
External Factors Affect the Used Car Dealership Industry
Several factors affect the performance of the used car dealership industry:
Per capita disposable income – When customers have more money to spend, they become more willing to spend on expensive discretionary items, such as used cars.
Price of new cars – Buying a used car is a more affordable alternative to purchasing a new car.
Aggressive age of vehicle fleet – As the average age of vehicle fleets increases, it represents greater demand for vehicles.
World price of crude oil – High gasoline prices tend to decrease new and used vehicle sales.
Used Car Dealership Business Plan
A business plan is a blueprint that is necessary for running any business successfully. When you have a well-defined business plan the scope for trial and error in the actual business scenario. The primary objective of a used car dealership business is 100% customer satisfaction. After that, the business will aim to achieve and exceed the average profit margin within the first two years of business. The main mission must be to provide a hassle-free car buying experience with the main focus on customer satisfaction. After you select your location where you intend to start your business then you have to do work with the facts, indices, and other figures in the industry.
The dealership also provides job satisfaction to its employees by rewarding their efforts with bonuses and incentives. One important thing is to fulfill the buyer’s need for safe and quality transportation by providing them used cars that match or exceed their expectations.
After doing all the necessary objectives you need to bring together a proactive team of professionals who have some experience in the field. The network of suppliers that can help in buying and selling cars of optimum quality at attractive prices.
The start-up costs of a used car dealership will be financed through short-term loans, owners’ investment, and long term loans. The costs depend upon the following factors:
Stationary and office supplies
Accounting consultation fees
Office or plot rent
Legal fees for a business establishment such as ownership and no sell agreement
Office or plot rent
Marketing or advertisement fees
Web presence and online advertising expenses
Equipment such as desks, computers, telephone, fax/copier, and office furniture
Licensing
Surety bond
Global used car market share, by sales channel 2019(%)
Economic Analysis of Used Car Dealership
This new wave of digital retailing represents more than technology alone because it focuses on the importance of the customer experience in the used-car buying process.
Highlights of used car dealership business:
Complete end to end purchasing capabilities( 59% of buyers)
Extensive vehicle data and photos along with effective search tools ( 64% of buyers)
Your business goal will decide the legal entity, you must choose for your used car dealership business. When you are starting with a moderate amount of capital, you can choose to be the sole proprietor of your entity.
Some of the legal documents you will need to run a used car dealership business are :
Business and liability insurance
Certificate of incorporation
Tax Payer’s ID
Fire certificate
Used Car Dealership License
Business Plan
Non-disclosure Agreement
Employee’s Handbook(optional)
Facility permit/ license
Franchise or Trademark License
Insurance Policy
Choosing Location for Used Car Dealership
A car dealership requires a parking lot where you can park the cars and display them, as well as an indoor office space where all the administration is done. Before you search for a location you will consider the following points:
Demographics
Number of existing used car dealerships in the location
Accessibility
Local laws of the region or state
Security, safety, parking space
The purchasing power of the people residing there
Awareness of Used Car Dealership Business
None of the business is running without promotion and the same goes with the used car dealership business. Uniform promotion efforts are important to get noticed. The way you show yourself people perceive you in that way. Nowadays social media has emerged as the greatest platform for brand promotion and is very effective.
Some ways of brand promotion are as follows:
Sponsor community programs that are relevant to you
Give advertisements in newspaper, magazines, radio, and TV stations
Place hoardings in a target location that will get your business noticed
Distribute pamphlets
Some introductory letters in your location introducing people to know about your business
Take reviews from your initial customers and promote them because this way you will make trust
Looking for Distribution Network for Used Car Dealership Business
Being a member of a good network of used car dealers, you will be able to establish ready links with people who are looking to sell used cars. The Internet is a fantastic platform for advertisement and you must put your best foot forward in gaining leverage from it.
Key Companies & Market Share Insights
The impact of GST on Used Car Dealership Business
GST or Goods and Services Tax is usually charged on the transaction value of goods. Indian Automobile industry mostly benefited after the implementation of the new tax regime. As per the Goods and Services (GST) Act, a registered dealer buying from an unregistered dealer will be entitled to pay tax under RCM, which simply means the registered dealer would subtract all taxes from the payment made to be the provider.
If you are dealing in the market for a used car and are sifting through used car dealerships, you must have observed that the tax increased to 28 % from 5 % after the implementation of the Goods and Services Tax Regime. Previously, the used car dealers had to pay only 5 % tax value-added tax on the vehicles which are resold. Dealers generally keep their margin in the range of 10% to 20 %. It depends on the several factors of cars such as car type, age, and demand.
GST Impact on Selling a Used Car
If you are thinking to sell a used car, try searching for an organized car dealer nearby you who is offering second-hand vehicles at lower prices as compared to what you would expect for it. Generally, the dealers try to eliminate the tax burden either through the buyer and seller side or both.
Conclusion
The organized sectors and semi-organized sectors which cover approximately 21% of the market account are going to be benefited from the reforms and expected to grow by 36% and 12 % respectively against 17% unorganized sectors. Like dining, shopping, and entertainment, the car buying experience that people prefer is changing. The future of car dealerships is changing. The global used car market is expected to grow at a compound annual growth rate of 5.5% from 2020 to 2027 to reach USD 2,150.6 billion by 2027. The Asia Pacific dominated the used car market with a share of 35.6% in 2019, in terms of shipment. This is attributable to emerging economies, including India, which is dominated by unorganized players.
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Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile manufacturer headquartered in New Delhi. It is a subsidiary of the Japanese automotive manufacturer Suzuki Motor Corporation.
Maruti Suzuki has 3,598 sales outlets across 1,861 cities in India. The Brand Trust Report published by Trust Research Advisory, a brand analytics company, has ranked Maruti Suzuki in the thirty-seventh position in 2013 and ninth position in 2019 among the most trusted brands of India.
Maruti Suzuki India Limited is a holding company. The Company is engaged in the manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles). The other activities of the Company comprise facilitation of pre-owned car sales, fleet management and car financing.
Its geographical segments include the domestic segment, which includes sales to customers located in India, and the overseas segment, which includes sales to customers located outside India. The Company’s product portfolio includes Alto 800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy, Ciaz, etc.
Its service offerings include Maruti Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School. It has approximately five plants, located in Palam Gurgaon Road, Gurgaon, Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with an installed capacity of over 1.5 million vehicles per year.
Maruti Suzuki – Logo and its Meaning
The present variant of Suzuki logo is designed in red and blue colours. The red colour (the letter S of Suzuki) represents passion, integrity and tradition, while the blue(the letter M of Maruti) stands for excellence and grandeur.
Maruti Suzuki’s Company Logo
Maruti Suzuki – Recent News
Maruti Suzuki sees ‘much better’ 2021 as economy rebounds: Chairman
Maruti Suzuki sales increase 1.7% to 1,53,223 units in November
Maruti Suzuki – Founder and History
Maruti Udyog Limited was founded by the government of India on 24 February 1981, only to merge with the Japanese automobile company Suzuki in October 1982. The first manufacturing factory of Maruti was established in Gurugram, Haryana, in the same year.
The company was formed as a government company with Suzuki as a minor partner to make a people’s car for middle class India. Over the years the company’s product range has widened ownership has changed hands and the customer has evolved.
On October 2, 1982 the company signed the licence and joint venture agreement with Suzuki Motor Corporation Japan. In the year 1983 the company started their productions and launched Maruti 800. In the year 1984 they introduced Maruti Omni and during the next year they launched Maruti Gypsy in the market. In the year 1987 the company forayed into the foreign market by exporting first lot of 500 cars to Hungary.
In the year 1990 the company launched India’s first three-box car Sedan. In the year 1992 Suzuki Motor Corporation Japan increased their stake in the company to 50%. In the year 1993 they introduced the Maruti Zen and in the next year they launched Maruti Esteem in the market.In the year 1995 the company commenced their second plant. In the year 1997 they started Maruti Service Master as a model workshop in India to look after sales services.
In the year 1999 the third plant with new press paint and assembly shops became operational. In the year 2000 the company launched Maruti Alto in the market. In the year 2002 Suzuki Motor Corporation increased their stake in the company to 54.2%.
Maruti Suzuki’s mission statement says, “To be The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholder’s Wealth; A pride of India.”
Maruti Suzuki – Joint Ventures
Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media until Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues.
The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and to 50% in 1992, and further to 56.21% as of 2013. In 1982, both the venture partners entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director would have a tenure of five years.
Maruti Suzuki – Business Model
Maruti Suzuki’s product range extends from entry level small cars like Alto 800, Alto K10 to the luxury sedan Ciaz. Other activities include facilitation of pre-owned car sales fleet management, car financing. Its Business Segments are divided into : Operating Income from sales of cars and Interests from Investments.
Maruti Suzuki offers 17 models of cars
Company focuses on catering to the needs of almost all the segments from the middle class to high class through wide range of products
Maruti Suzuki – Revenue and Growth
Maruti Suzuki: growth highlights are:
It has a presence in 34 cities as of March 2024
The company has 16,500 employees as per LinkedIn as of March 2024
It has served over 27 million happy customers in India as of March, 2024
It acquires news stakes in AI startup Amlgo Labs as per a news report from March 23, 2024
The company has manufactured close to 2 million cars a year in FY 2022-23
Financials
Auto major Maruti Suzuki reported 2.05 per cent year-on-year growth in consolidated profit at Rs 1,419.6 crore for the September quarter of FY21 (Q2FY21) while revenue rose 10.34 per cent to Rs 18,755.6 crore. In comparison, the company had posted revenue of Rs 16,997.9 crore and profit of Rs 1,391 crore in the corresponding quarter of last year.
Maruti Suzuki India on 13 May 2020, said its board took a slew of decisions, including acquisition of Delhi-based JJ Impex, and supply of Vitara Brezza to Toyota Kirloskar Motor (TKM). The car major on said its board has approved acquiring 39.13% equity stake held by Sumitomo Corporation, Japan and 10% held by Sumitomo Corporation India in JJ Impex (Delhi), a company engaged in automobile service and repair business.
The cost of acquisition or the price at which the shares are to be acquired is fixed at Rs 21.73 crore, the company said.
After the acquisition, the company shall become the wholly-owned subsidiary of MSIL. MSIL shall have the right to nominate/ appoint all the directors on the board of the company. The nominee Directors of Sumitomo Group shall resign from the board of the company, Maruti Suzuki India (MSIL) said. The acquisition does not require any government approvals, it added.
Suzuki Motors Corporation had to recall certain models of vehicles such as the Grand Vitara and XL 7 which were manufactured in the year 2005. A problem was detected in the adjuster pulley for the drive belt which has the outer portion made up of plastic and operates the power steering pump and air conditioner compressor. Repeated heat stress caused the outer body made up of plastic to weaken and pieces of the pulley broke off.
The company found out that the broken pieces of pulley can get caught between the pulley and the drive belt which can cause the drive belt to come off resulting in increased effort to steer the vehicle by the driver which in turn increased the risk of a crash or accidents. The company made a plan to resolve the issues in the vehicles with this problem and the dealers of Suzuki Motor Corporation replaced the power steering pump belt tension adjuster free of charge for the customers whose vehicles had the same defect.
Suzukis subsidiary Maruti Suzuki India Limited faced a great challenge to keep its lead in the small market segment of automobiles in India. The company was facing severe production issues which resulted in a long gestation period for some top-selling brands such as Maruti Suzuki Swift, Maruti Suzuki Swift Desire and a few other models. These production issues could have lead to loss in the market share of Maruti Suzuki in India however the company dealt with the situation by working with their vendors to increase the supply of the materials and the company was able to deal with the backlogs of its normal sales on many models.
Difficult days, but we will emerge stronger—This was the message India’s biggest car company gave out on Wednesday as it came out with its annual integrated report for the 2020 financial year and took stock of the toll that the pandemic was inflicting on its bottom line.
“The COVID-19 epidemic has given your company as well as its vendors and dealers an opportunity to review all systems of working and become more efficient and competitive. Thus, while we are going through difficult days, I believe we will emerge stronger and fitter in the future,” Maruti Suzuki chairman R.C.Bhargava said, addressing stakeholders.
The market leader had posted losses for the first time in about two decades, as the April-June 2020 quarter showed nearly Rs 250 crore loss. Net sales had declined to less than Rs 4,000 crore, compared to nearly Rs 19,000 crore from the period in the previous year.
In an alliance with Toyota, Maruti Suzuki will be targeting the Hyundai Creta space with a midsized SUV in 2022, and this vehicle will be based on the current Brezza architecture. A C-segment MPV in 2023 is also planned, and both vehicles are likely to be produced at Toyota’s factory in Bidadi.
Unlike the re-badged Baleno, Ciaz and Ertiga, which will be shared by Maruti and Toyota in India till 2022, the SUV and MPV under development are likely to have distinct characteristics or differentiation to ensure that both companies gain from India’s growing preference for utility vehicles.
“With over a dozen SUVs planned by its rivals, Maruti Suzuki knows it has to have competitive offerings to retain its 50% overall share. The exit from diesel makes compact UVs a challenge, but a 1.5-litre diesel engine is not yet ruled out,” said one of four executives aware of Maruti’s plans. “Plus, Maruti will be relying on the localised hybrid solutions from Toyota to spruce up its future portfolio.”
The utility vehicle segment is expected to overtake the humble hatchback segment in India, as an increasing number of buyers prefer the tall and high-seating SUVs and MPVs that cost as low as Rs 5 lakh and as high as Rs 1 crore. According to vehicle forecasting firm IHS Markit, utility vehicle sales will close 2019 at 38%, a tad behind the hatchback segment, before overtaking the latter in 2020. The share of entry-car or mini-car segment, once Maruti’s mainstay, today accounts for just 10% of the overall market as against 25% share it enjoyed 5-7 years ago.
Apart from bringing in the petrol versions of Vitara Brezza and S-Cross, Maruti created an entrylevel SUV with S-presso. Maruti expects a significant number of its Swift, Dzire, Ciaz, and Ertiga buyers to eventually upgrade to a bigger SUV and MPV.
Maruti Suzuki – FAQs
Who is the owner of Maruti Suzuki?
The company is a subsidiary of Suzuki Motor Corporation of Japan.
Which country company is Maruti Suzuki?
Maruti Suzuki India Limited (MSIL), formerly known as Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India’s largest passenger car company, accounting for over 50 per cent of the domestic car market.
Where is the head office of Maruti Suzuki?
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile manufacturer headquartered in New Delhi.
Who is the CEO of Maruti Suzuki?
Kenichi Ayukawa is the current CEO of Maruti Suzuki.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by the organization it is based on.
Honda Motor Company, Ltd. is a Japanese public multinational conglomerate corporation primarily known as a manufacturer of automobiles, motorcycles, and power equipment. Honda Motor Co., Ltd. operates under the basic principles of “Respect for the Individual” and “The Three Joys” commonly expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating.
Honda has been the world’s largest motorcycle manufacturer since 1959, reaching a production of 400 million by the end of 2019, as well as the world’s largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda became the second-largest Japanese automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the world in 2015.
Honda Motor Co., Ltd. engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses.
The Automobile segment manufactures and sells automobiles and related accessories. The Motorcycle segment handles all-terrain vehicles, motorcycle business, and related parts. The Financial Services segment provides financial and insurance services. The Power Product and Other Businesses segment offers power products and relevant parts. The company was founded by Soichiro Honda on September 24, 1948 and is headquartered in Tokyo, Japan.
Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, and other products.
Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which began production in 2012. Honda has three joint-ventures in China: Honda China, Dongfeng Honda, and Guangqi Honda.
Honda – Logo and its Meaning
The stylized design of the capital H had a certain influence on the print. It is distinguished by the absence of decorative details and minimalistic design bordering on austerity. At the same time, chromium coating of the innovated logo’s font makes it quite prestigious and valuable. The line width helps it stand out clearly on the background.
Honda’s Company Logo
Honda – Founder and History
The engineer Honda Soichiro founded the Honda Technical Research Institute near Hamamatsu in 1946 to develop small, efficient internal-combustion engines.
Founder of Honda
It was incorporated as Honda Motor Company in 1948 and began producing motorcycles in 1949. The Honda C-100, a small-engine motorcycle, was introduced in 1953 and by 1959 was the largest-selling motorcycle in the world. In 1959 the company also established a U.S. subsidiary, the American Honda Motor Company, which began producing motorcycles in the United States in 1979 and automobiles in 1982.
While still Honda is a world leader in producing motorcycles, the bulk of the company’s annual sales comes from automobiles, which the company began manufacturing long ago. Among its lightweight, fuel-efficient passenger cars have been the popular Civic and Accord models. The company’s other major product areas include farm machinery and small engines. Honda is a major Japanese exporter to the United States and to other parts of the world. It also has assembly plants in a number of other countries and is engaged in joint ventures and technology-licensing agreements with several foreign companies.
Honda – Mission
Honda’s mission statement says, “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”
Automotive (~71%) – Honda derives a majority of its revenue from the sales of its automotive units around the world. Per Bloomberg intelligence, 75% of the vehicles Honda sells in the US market are manufactured in the country itself. Additionally, the company does not expect a significant revenue impact from recently imposed tariffs in the US as it manufactures a notable quantity of its US volumes in the domestic market itself. We expect automotive sales of 5.35 million worldwide, translating into $104.7 billion in revenues from this division.
Motorcycle (~14%) – Honda derives $18.4 billion in revenues from the sales of its motorcycle units. This segment includes motorcycles, all-terrain vehicles (ATVs) and Personal watercraft (PWC). We expect higher sales volume of its motorcycle business to drive its top-line growth in 2019. The increased volume sales are expected in its key markets of Asia, including Indonesia, India, and Vietnam. Honda’s Activa and X-blade models continue to be the bestsellers in these markets in 1Q’19.
Financial Services (~13%) – Honda provides a variety of financial services – retail lending, leasing to customers and wholesale financing to its customers and dealers through its finance subsidiaries. Within the financial services segment, North America contributes about 90% of the segment’s revenue. We expect the segment to generate $19 billion in revenue in 2019.
Power and Other business (~2%) – HMC manufactures and markets a complete range of power equipment products for commercial, rental, and residential applications. Its comprehensive product line, which includes tillers, portable generators, outboard engines, water pumps, lawn mowers, snow throwers, general purpose engines, electric four-wheel scooters, is powered exclusively by advanced 4-stroke engines. These products are sold by the company in its markets, mainly in Japan, and are also sold to Original Equipment Manufacturers (OEM).
Honda – Revenue and Growth
Year
Amount
Percentage Change from last year
2020
$137.365B
-3.94%
2019
$142.998B
+3.43%
2018
$138.25B
+6.19%
Honda – Investments
Honda Motor has made 12 investments. Their most recent investment was on Jul 18, 2020, when Contemporary Amperex Technology raised CN¥19.7B.
Date
Organization Name
Round
Amount
Jul 18, 2020
Contemporary Amperex Technology
Post IPO Equity
CN¥19.7B
Jun 28, 2019
MONET Technologies
Corporate Round
¥499.9M
May 14, 2019
Moixa Technology
Corporate Round
£8.6M
May 7, 2019
Cruise
Corporate Round
$1.2B
Mar 28, 2019
MONET Technologies
Corporate Round
¥498M
Mar 5, 2019
ubitricity
Series C
€20M
Oct 3, 2018
Cruise
Corporate Round
$750M
Nov 6, 2017
Mcity
Venture Round
$11M
Sep 19, 2016
Grab
Series F
$750M
Jun 8, 2010
Virent Energy Systems
Series C
$46.4M
Honda – Acquisition
Honda Motor has just one acquisition. Honda acquired ubitricity on Feb 27, 2019.
Honda – Competitors
Major names among Honda’s competitors include – Ford, General Motors, Toyota, Suzuki, Volkswagen, Hyundai, Nissan, FCA (Fiat Chrysler Automobiles), BMW andMercedes.
The automobile crisis of 2008-2010 was the part of financial downturn, which affected automobile makers and suppliers around the world. The industry was weakened by the substantial increase in the prices of fuel linked to energy crisis of 2003-08 which discouraged purchases of automobiles with low fuel economy. In the year 2008 there were fewer fuel efficient models to offer to the consumers, the bigger automobiles including General Motors, Toyota, Ford, Chrysler, Nissan and Honda Motors experienced sliding sales.
Honda has used PEST and SWOT analysis to work harder to achieve the goal to make their sales go high, and have worked on the weakness in the market as well. Honda has studied their PEST analysis and the factors that are affecting their company, being the leading automobile industry has to know its strengths and weakness, when dealing with their customer. All they needed was to know their needs, wants and demands.
Honda is going bullish on its expansion plans. Honda currently holds the number two position in terms of domestic sales, behind Hero MotoCorp, and plans to become number one by December 2020. To achieve this, the company is expanding both, manufacturing and sales. Last year, the company added a fourth assembly line at their Narsapura manufacturing facility in Bengaluru. This move adds 6 lakh units to Honda’s current capacity of 64 lakh bikes and scooters per year. For sales, Honda has set a target of adding 500 retail outlets this year, to its existing 5,200 dealerships. Of these, Honda has already added 250 outlets from April to August and will be adding 50 more this month. Honda is specifically concentrating on rural areas with 70 per cent of the new outlets coming up this year to be situated there.
Honda has been recording strong sales with currently a 30 per cent overall domestic market share for two-wheelers. It is currently the market leader in scooter sales with a 69 per cent market share. While their scooter sales have been strong, Honda wishes to focus more on motorcycle sales now.
Honda is further accelerating its electrification plans for Europe by moving forward its goal for all of its European mainstream models to feature electrified powertrains by 2022. The bold new target announced during an ‘Electric Vision’ event in Amsterdam, is three years ahead of the previously announced 2025 goal, demonstrating the confidence Honda has in its electric and hybrid powertrain technology. This acceleration will see 6 electrified models launched over the next 36 months.
India became the fourth largest auto market in 2019 displacing Germany with about 3.99 million units sold in the passenger and commercial vehicles categories. Automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94% during FY16-FY20. There are several initiatives by the Government of India and major automobile companies in the Indian market is expected to make India a leader in the two-wheeler and four-wheeler market in the world. There are many automobile startups in India. Indian automobile industry mainly focused on servicing, dealership, financing, and maintenance of vehicles. The Indian automobile industry includes two-wheelers, trucks, cars, buses, and three-wheelers which play a crucial role in the growth of the Indian economy. India has emerged as Asia’s fourth-largest exporter of automobiles, behind Japan, South Korea, and Thailand.
India is expected to be the world’s third-largest automotive market in terms of volume by 2026.
The EV industry will create five crore direct and indirect jobs by 2030.
In April-March 2020, overall automobile exports registered a growth of 2.95%.
Passenger vehicle exports marginally increased by 0.17% and two-wheeler exports registered a growth of 7.30% in April-March 2020 over the same period last year.
The sector attracted $24.5 billion FDI during April 2000 – June 2020; accounting for 5.1% of the total FDI inflows.
Automobile Production and Sales Trends
Tata Motors Ltd
Tata Motors Limited, a USD 35 billion organization, is a leading global automobile manufacturer. The company produces passenger cars, including popular models such as Jaguar, Land Rover, Safari, and Sumo, and commercial vehicles, such as buses, trucks, tractor-trailers, light commercial vehicles, and defense and construction equipment. Tata Motors sells its vehicles through an extensive dealer network in India and export vehicles to countries in Africa, Asia, Europe, the Middle East ad South America. In India, Tata Motors is a market leader in commercial vehicles and among the top passenger vehicle manufacturers with 9 million vehicles. Tata Motors strives to pioneer new products that increase the imagination of GenNext customers. The product range includes high-performing engine oils, gear oils and rear axle oil for commercial vehicles range manufactured by Tata Motors for both the on-road and off-road applications segment.
Revenue
INR 3.02 lakh Crores
Market Cap
Rs 199,130 Crores
Market Share
Passenger Vehicles (6.3%)
Commercial Vehicle (45.1%)
Promoter Holdings
38.37 %
Maruti Suzuki India Ltd
Maruti Suzuki India Ltd (formerly Maruti Udyog Ltd) is India’s largest passenger car company, accounting for over 50 percent of the domestic car market. The company is engaged in the business of manufacturing, purchase, and sale of motor vehicles and spare parts (automobiles). The company was formed as a government company, with Suzuki as a minor partner to make a people’s car for middle-class India. The company’s product range has widened, ownership has changed hands and the customer has evolved. According to Automotive Intelligence, Suzuki is the eleventh largest vehicle manufacturing company in the world and fourth in Japan in terms of worldwide sales. Maruti’s profit increase to a 98% rise in its economic second-quarter net profits and they are planning to invest $32.3 million.
Mahindra & Mahindra Limited (M&ML) founded in 1945 at Ludhiana, is an Indian multinational automobile manufacturing company. They are market leaders with the vision to drive the industry trends in the direction of technological creativity, social duty, and constant enhancement of customer contentment. The Company’s automobile products include light, medium, and heavy commercial vehicles, jeep-type vehicles, and passenger cars. The company launches a new visual identity reflecting modernity and dynamism.
Revenue
Rs. 1.06 lakh Crores
Market Cap
Rs 70,725 Crores
Market Share
Passenger Vehicles( 7.4 %)
CV(25.3%)
Tractor (40.2%)
UV (25%)
LCV(44.5%)
Promoter Holdings
18.90 %
Hero MotoCorp Ltd
Hero MotoCorp Limited is the world’s largest manufacturer of two-wheelers. The company has four manufacturing facilities namely Dharuhera and Gurgaon in Haryana, Haridwar in Uttarakhand and Neemrana in Rajasthan. The joint venture between India’s Hero Group and Honda Motor Company Japan has not only created the world’s single largest two-wheeler company but also one of the most successful joint ventures worldwide. As per the terms of the Agreement, Honda had agreed to transfer its entire shareholding of 26% in the company to the Indian Promoter Group.
Revenue
Rs. 29,614 Crores
Market Cap
Rs 57,180 Crores
Market Share
36.0%
Promoter Holdings
34.63 %
Bajaj Auto Ltd
Bajaj Auto Ltd is one of the leading two & three-wheeler manufacturers in India. The company is well known for its R&D, product development, process engineering, and low-cost manufacturing skills. The company has two subsidiaries name Bajaj Auto International Holdings BV and PT Bajaj Indonesia. The holding company operated in the auto, wind-energy, insurance, and others. The company is the flagship firm of Bajaj Group, which also makes home appliances, lighting, and steel, as well as provides finance, insurance, and travel services.
Revenue
Rs. 29,919 Crores
Market Cap
Rs 84,763 Crores
Market Share
18.7%
Promoter Holdings
53.52 %
Ashok Leyland Ltd
The company was set up in collaboration with Austin Motor Company England for the assembly of Austin cars. Ashok Leyland, the flagship of the Hinduja group, is the 2nd largest manufacturer of commercial vehiclesin India, the 3rd largest manufacturer of buses in the world, and the 10th largest manufacturers of trucks. Ashok Leyland has recently been ranked as the 34th best brand in India. Ashok Leyland has been a major presence in India’s commercial vehicle industry with a tradition of technological leadership, achieved through tie-ups with international technology leaders.
People, Planet, and Profit for all stakeholders especially customers are at the core of Ashok Leyland which resonates with Philosophy of ‘AAPKI JEET, HAMARI JEET’.
TVS Motor Company Ltd is located in Chennai, Tamil Nadu, India, and is part of the Motorcycle Manufacturing Industry. It is one of the leading two-wheelers and three-wheeler exporters from India distributing to over 60 countries. TVS brand provides highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products. The motorcycle marks TVS Motor Company’s entry into the super-premium segment both in domestic and international markets.
Revenue
Rs. 150 Crores
Market Cap
Rs 20,178Crores
Promoter Holdings
57.40 %
Market Share (FY 2017-18)
Eicher Motors Ltd
Eicher Motors Limited is an India-based company, which operates in the automotive segment. The Company owns Royal Enfield, which offers middleweight motorcycles. Eicher Motors Limited is a 50-50 joint venture with Sweden’s AB Volvo and VE Commercial Vehicles Limited (VECV) designs manufactures and markets reliable fuel-efficient trucks and buses is one of India’s leading manufacturers. In October 2017 Royal Enfield forayed into Vietnam the fourth biggest motorcycle market in the world and opened its first store in Ho Chi Minh City.
Force Motors Ltd is a fully, vertically integrated automobile company, with expertise in the design, development, and manufacture of the full spectrum of automotive components, aggregates, and vehicles. The Company is engaged in manufacturing light commercial vehicles and utility vehicles, and engines. Force Motors started production of the Hanseat three-wheelers in collaboration with Vidal & Sohn Tempo Werke, Germany, and went on to establish a strong presence in the light commercial vehicles (LCV) field with the Matador.
Turnover
Rs. 3,487 Crores
Market Cap
Rs 1,155 Crores
ROE
7.67 %
Sales Growth (3Yrs)
6.48 %
SML ISUZU Ltd
SML Isuzu Ltd. (SMLI) is a trusted and reliable commercial vehicle manufacturer since 1985. It has over 33 Years of experience in producing Light & Medium commercial vehicles to meet Indian customer needs. SMIL is the first company to manufacture and supply state of the artfully built Buses, Ambulances, and customized vehicles. It is the last in the list of top Automobile Companies in India.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Volkswagen.
Volkswagen Group is a German automobile manufacturer whose main brand is Volkswagen. With headquarters in Wolfsburg, Germany, it is the world’s biggest luxury vehicle manufacturer.
Volkswagen creates, produces, and distributes passenger and commercial cars, motorbikes, engines, and turbomachinery, as well as financial, leasing, and fleet management services. It overtook Toyota as the world’s largest carmaker in 2016, and held that position for the next three years, selling 10.97 million vehicles.
Volkswagen is a premium automobile manufacturer and retailer located in Germany. Volkswagen is derived from the German word Volk, which means “people,” and so Volkswagen means “people’s automobile” or “people’s car.” It is divided into four sections:
Passenger Automobiles – includes vehicle and engine research, manufacturing and marketing of passenger cars, as well as the related authentic parts industry.
Commercial vehicles include light commercial vehicles, trucks, and buses, as well as the genuine parts sector and related services.
Large-bore diesel engines, turbo compressors, industrial turbines, and chemical reactor systems, as well as gear units, propulsion components, and testing equipment, are all part of Power Engineering.
Dealer and customer finance, leasing, banking and insurance operations, fleet management, and mobility services are all part of Financial Services.
Among the company’s brands are Volkswagen, Audi, SEAT, SKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania, and MAN.
Volkswagen – Founder and History
The German government, led by Adolf Hitler of the National Socialist (Nazi) Party at the time, forms the Gesellschaft Zur Vorbereitung des Deutschen Volkswagens mbH, a new state-owned automobile business, on May 28, 1937. It was renamed Volkswagenwerk, or “The People’s Car Company,” later that year.
Volkswagen was based in Wolfsburg, Germany, and was originally owned by the German Labour Front, a Nazi group. Aside from his ambitious plan to create a network of autobahns and limited-access motorways across Germany, Hitler’s favorite project was the creation and mass manufacturing of a low-cost, high-speed car that could be purchased for less than 1,000 Reich marks (about $140 at the time).
Hitler enlisted the help of Austrian automotive expert Ferdinand Porsche to develop this “people’s vehicle.” “This automobile has been developed for the wide masses,” the Fuhrer said during a Nazi rally in 1938. Its objective is to satisfy their mobility needs while also making them happy.” However, shortly after the KdF (Kraft-Durch-Freude)-Wagen (“Strength-Through-Joy”) was presented at the Berlin Motor Show in 1939, World War II broke out, and Volkswagen halted production. With the plant in ruins after the war, the Allies chose to concentrate their efforts on rebuilding the German automobile industry on Volkswagen.
Volkswagen – Logo and its meaning
The Volkswagen logo is made up of the company’s initials, with the “V” positioned above the “W,” and both letters interacting beautifully.
The Volkswagen Logo
The blue color of the Volkswagen emblem stands for quality, reliability, and class, while the white hue stands for nobility, purity, and charm.
Volkswagen – Mission
There is no formal mission statement for Volkswagen. Volkswagen’s objective, according to a spokesman, is to “provide beautiful, safe, and ecologically sound vehicles that can compete in an increasingly competitive market and establish world standards in their respective classes.” The corporate aim encapsulates all the organization undertakes to achieve its vision. Its focus is on maintaining a level of quality that outperforms all other rivals in every way.
Volkswagen – Business Model
Innovation-driven VW introduces new models on a regular basis. It adjusts to fit local needs and focuses on the unique characteristics of each country (esp. in growth markets). VW seeks to decrease costs through efficient manufacturing methods and economies of scale while stressing the requirement for quality. “Offer beautiful, safe, and ecologically sound cars that can compete in an increasingly competitive market and establish world standards,” says the organization.
VW secures control and exploits its scale by a degree of centralization, but its worldwide presence allows it to accommodate for local specifics: R&D (including worldwide trend reconnaissance and technology scouting) is headquartered in Germany, with subsidiary research hubs in the United States, Japan, and China. Similarly, Group procurement buys manufacturing supplies, services, and Capex in bulk to maximize negotiating power, but it does so from 39 sites in 23 countries.
VW develops sustainable, long-term relationships with a range of suppliers and requires a high level of quality and dedication to ensure steady and efficient flows of high-quality and innovative sourced components.
The Group’s multi-brand approach encourages internal competition, encourages switchers to try new brands, and appeals to a wide range of individuals. Because of its strict hierarchical brand design with sub-brands, internal cannibalism of sales is reduced. Passenger (VW), premium (Audi), luxury (Porsche), and commercial business holding firms are the four product categories in the corporation. The brands are translated into the corporate hierarchy and are used to arrange the business in order to represent customer preferences within the company.
Economic volatility and greater competitiveness, as well as the costs of the current diesel crisis and new, time-consuming exhaust testing in the European Union, are among the issues.
According to chief financial officer Frank Witter, the cost of executing the Worldwide Harmonized Light-Duty Test Procedure (WLTP) testing surpassed €1 billion (S$1.6 billion). Production increased by 13.5 percent in the second quarter, more than twice the growth rate of deliveries, as the automaker prepared for the regulation change. Volkswagen warned earlier this year that inventories might pile up ahead of the WLTP’s implementation on September 1st.
VW is grappling with political issues as well as internal transformation in the aftermath of the three-year-old diesel scandal, which continues to haunt the industrial juggernaut.
The business incurred penalties of €1.64 billion, mostly due to a punishment imposed by German authorities, bringing the total losses to almost €27.4 billion. Mr. Rupert Stadler, the now-suspended chief of Audi’s premium division, was arrested by Munich prosecutors in June and is still detained.
As per a spokesperson, a subsequent partnership with Ford in light commercial vehicles would allow the companies to pool development resources for electrification, lowering one-time costs in areas such as battery-powered and self-driving cars, both of which are gaining pace at the same time.
“We cannot rest on our laurels because great challenges lie ahead of us in the coming quarters,” Mr Diess (chairman of the board of management of Volkswagen Group) said. “Growing protectionism also poses major challenges for the globally integrated automotive industry.”
Volkswagen – Future Plans
Between 2020 and 2024, planned investments and development expenses in future sectors such as hybridization, electric transportation, and digitization will reach over EUR 60 billion.
In Planning Round 68, the share of anticipated spend on future themes grew to over 40%, up from around 30% in the previous Planning Round.
The Volkswagen Group continues to make significant investments in its future. Planning Round 68 resulted in the creation of the investment plan for 2020 to 2024. The Group plans to invest over EUR 60 billion in hybridization, electric mobility, and digitization over the next five years. This amounted to around 40% of the company’s property, plant, and equipment investments, as well as all research and development costs, throughout the planning period. It’s a ten-percentage-point rise over the previous Planning Round for the Group. The Group expects to invest about EUR 33 billion in electric vehicles alone.
“We are resolutely pressing ahead with the transformation of the Volkswagen Group and focusing our investments on the future of mobility. This is part of our systematic and consequent implementation of the Group’s strategy,” said Hans Dieter Pötsch, Chairman of the Supervisory Board of the Volkswagen Group.
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Toyota Motor Corporationis a Japanese multinational manufacturer headquartered in Toyota, Aichi, Japan. In 2017, Toyota’s corporate structure consisted of 364,445 employees worldwide and, as of December 2019, was the tenth-largest company in the world by revenue.
Toyota is the largest automobile manufacturer in Japan, and the second-largest in the world behind Volkswagen, based on 2018 unit sales. Toyota was the world’s first automobile manufacturer to produce more than 10 million vehicles per year, which it has done since 2012, when it also reported the production of its 200 millionth vehicle.
Toyota Motor Corporation (Toyota), incorporated on August 27, 1937, conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company’s segments include Automotive, Financial Services and others. Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s markets for its automobiles are Japan, North America, Europe and Asia.
Toyota produces automobiles, and related parts and components through approximately 50 overseas manufacturing companies in over 30 countries and regions besides Japan. Toyota’s manufacturing facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey, Thailand, China, Taiwan, India, Indonesia, South Africa, Australia, Argentina and Brazil.
The Company’s Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota’s financial services also provide retail instalment credit and leasing through the purchase of instalment and lease contracts originated by Toyota dealers. Toyota’s subsidiary, Toyota operates financial services companies in approximately 40 countries and regions, which support its automotive operations across the globe. Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
The other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information.
Toyota Motor – Logo and its meaning
The overlapping of the two perpendicular ovals inside the outer oval symbolize “T” for Toyota, as well as a steering wheel, representing the vehicle itself. The outer oval symbolizes the world embracing Toyota.
In 1933 Toyoda Kiichiro founded what later became the Toyota Motor Corporation as a division of the Toyoda Automatic Loom Works, Ltd. (later Toyota Industries Corporation, now a subsidiary), a Japanese manufacturer founded by his father, Toyoda Sakichi.
Its first production car, the Model AA sedan, was released in 1936. The following year the division was incorporated as the Toyota Motor Company, Ltd., headed by Kiichiro. (The company’s name was changed to Toyota, which has a more pleasing sound in Japanese.) Toyota subsequently established several related companies, including Toyoda Machine Works, Ltd. (1941), and Toyota Auto Body, Ltd. (1945).
Toyota Motor – Mission
Toyota’s corporate mission is “to make ever-better cars, to build a future where everyone has the freedom to move.” This mission statement is a combination of the company’s official statements regarding the mission of its business: “to build a future where everyone has the freedom to move” and “to make ever-better cars.” Toyota’s corporate mission statement has the following key elements that reflect the enterprise and the purpose and goals of its business:
Make ever-better cars
Build an inclusive future
Freedom to move for everyone
Toyota Motor – Business Model
Toyota’s operation has been analysed based on those 4Vs below :
Volume of Processes : Toyota manufactures numerous vehicles (8,736.5 thousand units in 2012, Toyota Production figures) and for such high output, there’s greater degree of repeatability in the process. The high volume of output has allowed Toyota in systematization of activities and Toyota believes in developing deep expertise in specialities among its workforce as an essential requirement to its product-development system. Such high volume process output helps Toyota gain economies of scale and thus reduces the unit cost of its production.
Variety of Processes : Toyota carefully chooses a variety to balance market demands and operational efficiency. The company is present in all the segments of automotive and at least 70 different models of vehicles are sold by Toyota (Automotive, 2014) making the portfolio with a wide range of products and this accounts for a higher variety of processes. High variety of processes enables Toyota to match a wider range of customer demands and be more flexible in the eyes of customers. This, however, accounts for higher unit costs and makes the process relatively complex but Toyota has advanced other productions methods to control such aspects.
Variation of Processes : With predictably constant demand, it’s easier to allocate resources to a level that is capable of meeting the demand Slack et al. (2012). The variation in demand for Toyota’s products is low in the past few years and the company’s production has integrated Just in Time production techniques to fulfil those demands. Low variation enables Toyota to implement stable, routine and predictable operation processes.
Visibility of Processes : Process visibility indicates how much of the processes are exposed to its customers Slack et al. (2012). Toyota has low process visibility, as most of its operation process is ‘factory-like’. Low process visibility means there’s a time lag between production and consumption of Toyota products but it enables the company for high staff utilization and enjoys low unit cost for its products. Few of its processes such as those of sales centre and test drive facilities, however, have some kind of contact with customers allowing limited visibility.
The Toyota Motor Corporation’s net revenue contracted by one percent year-on-year and dipped to just under 30 trillion Japanese yen in the fiscal year ended March 2020. This figure is approximately equal to 278 billion U.S. dollars. Toyota’s revenue for the twelve months ending September 30, 2020 was $241.196B, a 13.59% decline year-over-year.
Year
Annual Revenue
Percentage change
2019
$272.031B
+2.88%
2018
$264.416B
+3.02%
Toyota Motor – Funding and Investors
Toyota Motor Corporation has raised a total of $243.6M in funding over 2 rounds. Their latest funding was raised on Jun 28, 2018 from a Post-IPO Equity round.
Date
Round
Amount
Investor
Jun 28, 2018
Post-IPO Equity
$201.6M
GT Capital Holdings
Apr 14, 1982
Funding Round
$42M
–
Toyota Motor – Investments
Toyota Motor Corporation has made 27 investments. Their most recent investment was on Feb 25, 2020, when Pony.ai raised $462M.
Amount
Organization Name
Round
Amount
Feb 25, 2020
Pony.ai
Series B
$462M
Jan 16, 2020
Joby Aviation
Series C
$590M
Dec 4, 2019
May Mobility
Series B
$50M
Oct 24, 2019
OPTIMIND
Series A
¥1B
Oct 15, 2019
LeapMind
Series C
¥3.5B
Jul 24, 2019
Didi Chuxing
Corporate Round
$600M
Jun 28, 2019
MONET Technologies
Corporate Round
¥499.9M
Apr 19, 2019
Uber Advanced Technologies Group
Corporate Round
$1B
Aug 27, 2018
Uber
Corporate Round
$500M
Aug 21, 2018
Getaround
Series D
$300M
Toyota Motor – Acquisitions
Toyota Motor Corporation has acquired 3 organizations. Their most recent acquisition was Daihatsu on Feb 12, 2016.
Acquiree Name
Date
Amount
About Acquiree
Daihatsu
Feb 12, 2016
–
Daihatsu is the surviving Japanese internal combustion engine manufacturers
Cascade Corporation
Mar 28, 2013
$760M
Manufacturers of materials handling load engagement devices
Hino Ottawa-Gatineau
Oct 28, 2010
–
A Japanese manufacturer of commercial vehicles
Toyota Motor – Competitors
Toyota Motor Corporation’s top competitors include FCA US, Mitsubishi Motors, Opel, Volkswagen, Nissan USA, PSA Group, Hyundai Motor, BMW Group, Ford Motor, General Motors and Daimler.
Toyota Motor – Challenges Faced
Toyota’s sales in its home market are going through a phase of stagnation.
Any weakness in the Japanese yen provides a competitive advantage to Toyota’s overseas business. Therefore, the company’s margins from the overseas business are highly dependent on the currency movement of the Japanese yen against major currencies, including the US dollar and the euro. Continuous strength in the yen against these currencies can significantly affect Toyota’s profitability.
Despite being an Asian automaker, Toyota is unable to stay ahead of GM in the Chinese market.
With increasing environmental awareness across the globe, a delay in Toyota’s ability to deliver mainstream eco-friendly vehicles may restrict its future growth prospects.
The demand for electric and hybrid cars is growing vastly. You might have heard of the self-driving vehicles running on the roads these days. That is a rough example of what modern technology demands from the automakers. Inbuilt software running the automobile is the need of the hour. The automotive industries are now racing for innovations to keep up the repo in the market. The modern era is the time of transformation. And that is what Toyota is battling for.
The manufacturers now understand that electric cars are the future. The company is now designing special electric vehicles in a partnership with Subaru. Toyota now has the dedication to built electric cars. Toyota future plans will help to increase global sales. They are now in a joint venture with the various battery supplying companies.
They not only have to design electric vehicles but also have to match the market needs. Numerous electric car manufacturing vehicles are in this race. The demand for electric cars is increasing all around the globe. The experts working on Toyota future plans will have to put all efforts possible. It is so to increase sales and reach the set target.
The automakers are working on hybrid and plug-in hybrid models as well. According to industry knowledge, the count of electric vehicles will still be less than hybrid cars. Electric vehicles are not the only focus for the company. They also want to increase global sales in hybrid vehicles. The company will design and manufacture electric vehicles as per the market demands. But the game will still be on the hybrid and plug-in hybrid cars.
In the automobile industry across the globe, Elon Musk’s Tesla is the leading brand that manufactures Electric Vehicles and the company plans to revolutionize its cutting-edge innovations. Elon Musk announced earlier officially, that he intends to launch Tesla vehicles in India over the coming years.
After Tesla’s CEO made this announcement official, Maharashtra Tourism and Environment minister, claimed that he held a video conference with Tesla executives and have invited them to their state. India minister claimed that Musk’s firm belief in sustainable and environment-friendly growth has made him active in bringing the electric vehicle maker in the country and established a fanbase in Indian states.
On the contrary, Elon Musk replied on Twitter to a tweet from an Indian profile which wrote, “Next year for sure”. However, Musk did not specify any official date or timeline for the proposed launch yet. It is worth noting that Elon Musk announced the plan to launch the company’s vehicles in the country in the year 2018.
Musk’s company, Tesla has been experimenting with super and advanced technologies to develop more environmental friendly vehicles that help in protecting environment.
In the world’s second most populated country, India, pollution has always been a challenge to overcome over the years. The government’s initiative to bring the EV company in the country will aid in environmental protection and increase in number of jobs. The government also has to look in terms of the demand production of the EV company.
The fact of establishing EV in the country is that their sales are essential, but more important is setting up a manufacturing plant in India. Due to the global pandemic, high and raging unemployment has reigned supreme in the country.
If Tesla established the production setup in the country, it will boost the economy by increasing the citizens’ job opportunities. The Indian government would take a step towards the future of tech in the automobile industry, starting with Tesla.
Elon Musk’s tweet about the Tesla’s launch in India
Challenges for Tesla’s Launch in India
Tesla has been monitoring the Indian market for quite some time now but has been unsuccessful due to some reasons like lack of infrastructure, policies, and the market for electric vehicles.
In the year 2019, the government has lowered the custom duty on EV commodities and parts to around 5%. Pre-assembled EV components will attract almost 15% taxation whereas the ones assembled in India will attract 10% taxation.
And at the same time, the Central Board of Indirect Taxes had withdrawn the exemption of customs duty for EV batteries, to boost the company’s products in India, which might help the Indian EV system and the government’s Make in India initiative in the longer run.
However, the plan couldn’t get through and only the base has been set, there hasn’t been any major development in EV and its parts manufacturing in India, especially the ones that will be competent for Tesla’s technology.
Even though several Indian startups are looking to speed up the process, the timeline is still not defined. Addition to these, with the lack of technology, there is also a lack of infrastructure to accommodate EV on Indian roads.
Tesla’s Top Models
Musk had spoken about India’s strict vehicle import policies earlier. India’s increasing duties on vehicles has delayed Tesla’s entry into the Indian market. Additionally, India’s inadequate EV infrastructure and the low per capita income may have also influenced the California-based carmaker’s decision.
Elon Musk‘s tweet in 2019 read, “I am told duties are extremely high in India (up to 100%) even for electric cars. This would make our cars unaffordable.“
As per a report the transactional market size of electric vehicles is expected to be $7.2 Billion in 2026 and 2030 respectively, with 97% of total EV transactions to be in the commercial vehicle segment by 2030.
Developing charging infrastructure is another difficulty that the company will have to cross. Tesla model 3 which is a complete package in a car, has 50 kWh battery pack which can cover around 355 kms. The government of India is targeting the year 2030 by which it plans to go all-electric in terms of new car sales in the country.
There is hope from the Indian government on making charging points throughout the country to push the go green movement. Buyers may also face the problem of not getting the workshops throughout the country as the company would be just setting up in India. As the vehicles are fully electric, no common mechanic can even try to fix it.
If Tesla comes to India they may also face the problem regarding the price of the cars as the price of Tesla cars starts from Rs 35 lakhs. The Tesla cars will be under the luxury section of vehicles, so the customers who will buy will be only the privileged section of India.
Conclusion
The final line must be that if Tesla comes to India, it has to take a greater risk not only in terms of competition but it also has to deal with the purchasing behaviour and nature of Indian people. If the company is aiming to establish their roots in the Indian environment it does need to look through the fact that the number of electric cars sold in India in a year is much less than other countries.
The Indian automobile industry is the world’s fourth-biggest, auto mobile industry after the USA. It is presently the world’s fourth-biggest producer of vehicles and 7th biggest producer of industrial automobiles .The size of the Indian automobile industry includes aspect manufacturing which is anticipated to attain Rs16.16-18.18 trillion ($ 251.4-282.eight billion) through 2026.
Two-wheelers dominate the enterprise and made up 80% of the home car income in FY19.Overall, Domestic car income multiplied at 6.71% CAGR among FY13-18 with 26.27 million automobiles was bought in FY19.Indian car enterprise has obtained Foreign Direct Investment (FDI) worth US$ 23.51 billion among April 2000 and September 2019.
Indian automobile industry growth recorded a boom in home income at 17.55%, accompanied by three-wheelers at 10.27% .The passenger automobile income in India crossed 3.37 million gadgets in FY19 and is similarly anticipated to boom to 10 million gadgets through FY20.Passenger automobile exports are anticipated to touch approximately 6,90,000 gadgets in 2019-20.
Indian Automobile Market by Vehicle type
COVID 19 automobile industry impact
Indian Automotive Industry, unfortunately, is going through a hard time. Due to COVID-19, New Emission norms, Weak client, and monetary sentiments, Coronavirus will extrude the future of the automobile organization and is forecasted to offer a protracted-lasting impact on a massive scale.
The dreary fact is that March and April remained the most tough months of 2020 for the auto sector, for the 40 days lockdown produced nil earnings and zero manufacturing. However, OEMs gave monetary beneficial resource and helped dealers to route out of these tough times.
Indian automobile industry slowdown
Demand for emblem new cars declined sharply in 2019, forcing automakers to reduce manufacturing throughout the year. Sales had been anticipated to revive in the festive season from October 2019 however they did not do so. In fact, there has been an encouraging spike in income in Q3 – inspired through promotional offers, competitive discounts, new version launches, and the growing availability of fashions supplying Bharat Stage-VI (BS-VI) emission standard.
Government Objectives for the Indian automobile industry
Government of India has shortlisted 11 towns for the advent of electrical automobiles (EVs). The Government plans to start with a delivery structure FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme.
The first section of the scheme had been prolonged to March 2019.The Government of India accredited the FAME-II scheme with a financial requirement of Rs10,000 crore which sums up to ($ 1.39 billion) for FY20-22.Under Union Budget 2019-20, the authorities introduced to offer extra profits tax deduction of Rs1.five lakh ($ 2146) on the loans taken to buy EVs.
Under FAME II, Government has sanctioned 5,595 e-buses in 64 towns in 26 states for inter-metropolis and intra-metropolis operations. Under the scheme, 2,636 charging stations in 62 towns throughout 24 States/UTs have been sanctioned.
Indian Passenger Vehicle Market Share
Moderating Economic Growth
The worldwide monetary slowdown has impacted the Indian automobile sector (and Europe and China).India’s GDP increase in Q3 2019 fell to 4.5% from 5% in Q2, and from 7.1% a 12 months ago, on account of decreased customer spending and reduced personal investment. A depressed rural monetary system with the decrease annual rainfall maintains to have a vast effect on two-wheeler demand.
Growing unemployment and a moderating monetary system led humans to delay car buying for decisions. According to the Centre for Monitoring Indian Economy (CMIE), the unemployment charge became into at 8.5% in October 2019, the very best while you recall that August 2016.The International Monetary Fund has reduced its increased forecast for the Indian monetary system from 7% to 6.1% in 2020.
In spite of the plain slow down, MG Motors (an element of SAIC Group), BYD, and different main Chinese OEMs alongside with Changan Automobile and Great Wall Motors have critical funding plans for India and are showcasing their proposed fashions at this year’s Delhi Auto show.
Bucking the trend MG Motors and Korean automaker Kia Motors have had sturdy launches in their latest SUV fashions, receiving great orders months in advance.With the multiplied opposition in passenger vehicles in 2020, Counterpoint estimates those new automakers will nibble away at Maruti Suzuki’s and Tata Motors’ marketplace shares.
Growing Popularity of Shared Mobility
Shared mobility companies keep to dent the name for passenger cars in city areas, with human beings an increasing number of more who prefer shared-mobility offerings for his or her commute.
Based on variety one studies performed withinside the America of America in 2019, Counterpoint Research estimates out of 3 common customers of shared mobility offerings recollect ride-hailing more economical than proudly owning a car.Leading gamers Ola and Uberhave plans to increase offerings similarly into tier-2 and tier-three towns withinside the following couple of years.
Cautious Lending through NBFCs
Non-banking monetary companies (NBFCs) finance maximum automobile purchases and are used mainly in rural India. Dealers depend on NBFCs to fund their wholesale shopping of cars from OEMs. The problems surrounding India’s NBFCs introduced careful lending that has adversely affected car income in 2019 and suggests no signs and symptoms of improvement.
Sellers have approached India’s Finance Industry Development Council, searching for authorities intervention to enhance the monetary health of main NBFCs. Overall for 2020, Counterpoint Research’s car income forecast for India stays careful, with numerous factors – mainly tight credit score conditions, the moderating economic system, and the transition to BS-VI emissions standards – growing uncertainty, boundaries, and delays.
Manav Makhija
