With over 1.3 Billion people, India is the second most populated country in the world and when there are so many people, almost everything is larger than life here. So naturally, it is not a surprise that India is the fifth largest automobile market in the world in terms of sales. Brands like Maruti Suzuki, Hyundai, Tata Motors are already a hit in this country and are making heads turns of their customers with their amazing automobiles.
While some brands experience immense success in the country, some of them got exposed to failure as well. In this industry, some automakers failed to make a place in the fifth-largest automobile market in the world. This article will talk about all those automakers that failed to set their foot in India and the reason behind it. So without any further ado, let’s get started.
“Car designers are just going to have to come up with an automobile that outlasts the payments.”
Why Automakers are Struggling to Succeed in India?
Two brands that can set their name on the top automakers’ list with their powerful performance in the country are Honda and Hyundai. It wouldn’t be wrong to say that they are ruling the Indian market.
On the other hand, there are some of the automakers who are struggling in our country to lay their foundation. Some of the reasons for this are listed down below:
Increasing fuel price is said to be one reason.
It is also revealed that some concessional GST rate was not allowed by the Government.
One of the reasons is also the higher road taxes.
India is a price-sensitive market and people mostly focus on small cars here, for their needs. A company has to be very precise about this.
Planning of the products by the automakers was poor and naturally, they were not able to adapt to the market.
Another reason is some of the companies are not able to judge the growth of India’s automobile market.
India is a country where a single company dominates more than a quarter of its sales. Maruti Suzuki and Hyundai are the top two companies that dominate the automobile industry. There are some global known brands who failed to set their foot in India and we are here to discuss them.
Harley Davidson
Harley Davidson
The legendary American Cruiser bike was not able to set up its brand in the Indian market. It is said that in 10 years, Harley Davidson was able to sell a little more than 27,000 units in the country. While its competitor Royal Enfield sells double the number of bikes every month. Some of the reason for this is down below:
Not the Right Market
India is a country that is considered one of the biggest two-wheeler markets in the world, but it is not a market for big bikes. In India, over 90% of two-wheelers are small motorcycles and scooters as they are easy to maintain as well.
Expensive Offerings
Another vital reason has to be the price; the most affordable bike from this brand costs somewhat 4.7 Lakh. That kind of pricing is extremely high for the people living in a country like India.
Tough Competitors
Royal Enfield proved to be a better companion for the Indian customers over Harley Davidson, in terms of price, lighter in weight, and easier to maintain.
High Repair Cost
India’s roads are somehow filled with potholes and Harley Davidson bikes are quite expensive to repair if it is damaged by potholes.
General Motors
Chevrolet by General Motors
This American multinational automotive manufacturing company is considered as one of the best and biggest manufacturers in the country but unfortunately, it was not able to establish its power in India. When General Motors first came to India, it was able to sell quite a decent number of cars but with time, the average popularity started declining. So, General Motors 2017 decided to close its operation in India. Some of the reasons that it failed in India are:
Failed Business Strategy
The management of a company is one of the most important factors for its survival. As per reports, decisions regarding the company took a lot of time which resulted in not being able to reach a proper strategy for the business at a time.
Weak Dealership Networks
The dealership networks of General Motors were quite weak. The customers’ main issue was with the dealerships as they were not that confident regarding the products of GM.
Bad Resale Value
GM launched over 20 different models in 20 years and also withdrew 10 of them. Naturally, the change of the model lineup affected the resale value badly, and the customer service was also not up to the mark.
Fierce Competitors
General Motors’ technology was not that modern. Reports said that there are cars that barely pass the emission tests. Other brands focused on updating the technology of their car and were quite fierce competitors for GM.
Failed to Attract the Right Audience
GM never introduced top models that are famous in other countries in India. Naturally, it was not able to attract the attention of people in India.
Ford
Ford
Probably one of the biggest shocks the Indian automobile market got when Ford decided to stop making cars in India. The products were well made and were affordable to buy as well. Still, it failed to crack the Indian market, and the reasons are down below:
Sudden Rise in the Price Factor
The sudden rise in the price factor of Ford is one of the reasons, the company lost its place in the Indian market, the maintenance cost started rising of the new models. This high ownership cost became a problem for the customers; which also resulted in decreased sales.
Not Concentrated on the Right Models
Ford didn’t concentrate on SUV when it started getting momentum. Thus it misses out on a great opportunity to use the model to encourage the brand in the Indian market.
Wrong Investment Decisions
The cost structure is another problem, Ford invested where it was not needed, for example, they invested in world-class factories. It was not able to meet the expectations of its potential customers.
Lack of Proper Marketing
Ford slugged in making its brand big in India, while other brands like Hyundai worked 24/7. This is one of the reasons, plus the aggression that was needed for marketing, was missing in Ford’s startegy.
The Automobile market in India is a huge one, one needs to concentrate on various structures to make their brand a successful one in the country. The automakers that failed in this country are a big lesson for those automakers that wanted to make the 5th largest automobile market a hub for their brand.
FAQs
Which Indian car companies are closing?
Ford, General Motors, Fiat, and Harley had exited the Indian automotive market.
Which car company stopped making cars in India?
Ford India closed its operation in 2021 due to huge mounting losses.
The automobile business is one of the world’s fastest expanding and evergreen industries, particularly in India, where it plays a significant role in the country’s economic growth. Customers who are enthusiastic about cars and bikes will gain most from the industry’s perception of various automobiles culture of the industry. Droom is an online marketplace in India where you can buy and sell new and used cars. Sandeep Aggarwal established Droom in 2014. Droom provides a large variety of automobile categories and also other all connected services such as warranty, insurance, finance.
A variety of elements influence a customer’s decision-making process when acquiring a vehicle, including price, performance, mileage, and vehicle ratings and reviews. Customers look for easy online platforms for buying and selling automobiles as the use of the internet and technology for activities such as shopping grows.
Droom is a renowned autosite that provides an online platform for the vehicle industry. This is a digital automobile platform that employs technology to facilitate end-to-end vehicle sales and purchases from the vendor to the buyer. Droom’s broad and thorough platform allows users to buy or sell a variety of vehicles, from bicycles to aeroplanes. Droom is the largest online automobile platform in India for buying both used and new vehicles, and is also the fourth largest E-commerce site, with an 80% market share of India’s online automobile transactions.
Droom’s business began in Delhi as an online marketplace for old vehicles, but after three months, it expanded to include two-wheelers as well. The brand spread its services across 100 cities within a year. After another six months, the company began offering services such as roadside assistance, warranty, and insurance. They also expanded their services to include seaways, planes, bicycles, and other vehicles.
Business Model of Droom
Droom’s Business Model
Droom’s tenacious business model was important in its growth and success. Let me first define what the term “business model” means before examining Droom’s business plan.
A business model is a form in which an organization is built, that supports the practicability of a product or a company and portrays how an organization operates and goes forward to achieve its aim. As a result, a business model encompasses all of an organization’s operations and regulations.
Droom’s business model is divided into four categories: business to consumer, customer to customer, customer to the business, and business to business. The business to consumer model accounts for the majority of its revenue (approx. 88%), with the customer to business and customer to customer models contributing 10%, and the business to business model accounts for the remaining 2%.
Value Proposition of Droom
A value proposition is a value that a firm claims to deliver to its consumers, and customers prefer to buy their products or services based on that value. Droom’s proposition of value is unique, consisting of pricing, trust, and transparency. It provides buyers with a low cost and large selection, while sellers have access to a large number of online shoppers, a full range of e-commerce services, and so on, allowing them to manage their online store at Droom.
Droom has become the first car gateway worldwide to house the entire ecosystem of the automotive, with additional elements such as price, finance, history, tools, and marketplace.
Droom provides its customers with a variety of ecosystem products and services which are mostly technology driven by combining, data science and artificial intelligence such as using the “ECO App” for getting vehicles’ inspection reports. It also offers purchasers a full circle trust score to verify that the sellers with whom they are engaging can be trusted.
Droom launched a pricing system for automobiles called Orange book value (OBV). It is the first company to introduce this feature in India. This assists dealers and consumers in determining the fair market price of automobiles. This is data-driven and unbiased. Consumers can also use this tool to see if a vehicle is available on the market. It also has Droom discovery, Droom assists, and Droom credit to help buyers and sellers.
Division of Customers in Droom
Droom’s target market is online consumers and internet users. In a larger sense, the company’s customer sector is classified into four categories: Buyers, Sellers, Dealers, Enterprises.
Droom has created four marketplace types to ensure harmonious and smooth buying and selling operations. It offers a variety of purchasing choices to meet the needs of each buyer, which creates a major trust factor.
Droom strives to be incredibly transparent. It allows sellers to upload an unlimited no. of listings and promote to a large audience on the internet, and it allows sellers to sell both used and new vehicles.
Droom offers dealers self-service accounts, such as StoreManager. Dealers can use this to run and manage their internet company from anywhere at any time.
Droom’s customers also include businesses involved in the automobile industry, it provides vertical enterprise solutions. It also offers a variety of effective advertising options.
Important Resources of Droom
Droom uses technologies such as AI, Machine Learning, Data Science, and Big Data in its core services such as customer assistance and the development of various tools such as OBV, and so on. These are the key resources of Droom. Labs of Droom are dedicated to using world-class technology apps to provide excellent user experience and user satisfaction.
The company has a customer-centred approach and its trained and talented team of officials reach out to buyers and sellers helping the organization reach a certain level of growth.
Client Relations with Droom
Droom focuses on establishing trustworthy and strong client relationships and strives to provide excellent customer support and management, that is its assistant tool: Droom Assist. This tool helps buyers and sellers with guidance and consultation services. It also helps in transactions of its customers by making them easy and transparent. Droom improves its relationships with consumers by providing security to their funds with the use of easily refundable tokens.
Major Activities of Droom
Droom encourages its services and features through marketing and promotional activities on several social media platforms such as Facebook, Linkedin, etc. It also undertakes researches at its AI labs to develop improvements that would enhance customer satisfaction.
How does Droom Make Money?
Droom mainly has four sources to earn revenue that are, Service fees, Premium tools, Subscription, and Advertisements.
The service fee is the main source of revenue, and this is charged on every successful transaction on the platform. This varies according to the vehicle type.
The subscription plan is offered to various big auto dealers, and the company provides them with online products and services.
Its premium tools include OBV, Droom credit, etc. Droom also earns a lump of money from advertisements as it advertises different auto brands on its platform. This also helps in doubling traffic on the platform.
Competitors of Droom
Droom faces major competition from companies such as Car24, CarDekho, OLX, and Quickr. Droom has several advantages over its competitors such as, it follows all the models of business and it is very efficient for buyers and sellers to get on the platform and use its services and provides an end-to-end service.
Conclusion
Recapitulating, Droom operates on a Business model, a plan that is well-integrated with technological advancements and a progressive model. It gives details to distinctive marketing activities. In the future, when automotive sales are expected to skyrocket, Droom will be facing tough competition, even though it has a big advantage overall.
FAQs
What does Droom Company do?
Droom is India’s first automobile e-commerce platform that allows you to buy and sell automobiles online.
How does Droom make Money?
Droom mainly has four sources to earn money that are, Service fees, Premium tools, Subscription, and Advertisements.
The scenario of public transport in India was not this better always. The middle class had no other option than to wait endlessly for boarding crowded buses. This is the time when mopeds were introduced to the Indian market, and mopeds soon won the hearts of the Indian middle class. Talking about mopeds, one name that we can never fail to mention is TVS. TVS launched India’s first two-seater 50cc moped in 1980, which soon became a part of many Indian households. TVS is still upholding its legacy and is still considered a trusted name in the two-wheeler segment. Here is more on the journey of TVS.
Indian multinational automobile manufacturer, TVS Motor Company (TVS) is located in Chennai, India. TVS is named after its founder Thirukkurungudi Vengaram Sundaram Iyengar. Motorcycles, scooters, mopeds, and 3-wheelers, as well as associated replacement parts and accessories, are the primary products of the firm. With exports to over 60 countries, TVS Motor Company is also India’s fourth-biggest two-wheeler manufacturer after Hero Moto Corp, Honda two-wheelers, and Bajaj Motors. In terms of export, TVS Motor is India’s second-largest exporter of two-wheelers.
Automotive vehicles and Parts, Automotive Accessories, and TVS Financial Services & Others are the major operating divisions of TVS motors. The Automotive vehicles and components segment is where the majority of the company’s income is generated. TVS Motor Company is the largest firm of TVS Group both in terms of size and turnover.
TVS Motor – Industry
In India, the automotive sector is one of the most rapidly developing sectors. India isn’t known for being a simple market, but perseverance always pays off. India produced 26.36 million cars in Fiscal Year 2020.
Passenger cars and 2-wheelers accounted for 80.8 percent and 12.9 percent of the Indian automobile market share, respectively, with over 20.1 million vehicles sold in FY20. Small and midsized automobiles are the most popular passenger vehicles.
In all, India exported 4.77 million cars in FY20, representing a 6.94 percent CAGR from FY16 to FY20. Two-wheelers accounted for 73.9 percent of all vehicles shipped, with passenger vehicles accounting for 14.2percent, 3-wheelers accounting for 10.5%, and commercial vehicles accounting for 1.3 percent.
T. V. Sundaram Iyengar established T. V. Sundram Iyengar & Sons (TVS), a transportation firm with a huge fleet of trucks and buses, in 1911.
T.V. Sundaram Iyengar
Thirukkurungudi Vengaram Sundram Iyengar was an Indian businessman and pioneer in the car industry. T. V. Sundram Iyengar & Sons, a bus firm he started in 1911, eventually moved into automotive manufacture and became the parent company of the TVS Group, India’s largest commercial empire.
TVS Motor – Startup Story
T.V. Sundaram Iyengar is the founder of TVS Group. He began his career as a lawyer and later went on to work in the Railways and in a bank. Sundaram Iyengar however was more inclined towards entrepreneurship, and in 1911 he left his job to form TV Sundaram Iyengar and Sons, a Bus Service provider in Madurai. Till TV Sundaram Iyengar’s death in 1955, the company operated buses and lorries by the name of Southern Roadways Limited. TVS Motor, the flagship company of TVS Group was launched by TV Sundaram Iyengar’s Son T.S. Doraiswamy in 1978.
In 1980, India’s first two-seater moped, the TVS 50, rolled out of the factory in Hosur, Tamil Nadu. Sundaram Clayton Ltd and Suzuki Motor Corporation formed a joint venture in 1987 as a consequence of a technological partnership with the Japanese car giant Suzuki Ltd. Motorcycles were first produced commercially in 1989.
Sundaram Clayton was incorporated in 1962 as a joint venture between Clayton Dewandre Holdings and T.V. Sundaram Iyengar & Sons Ltd. It produced brakes, exhausts, compressors, and other automobile components. Sundaram Clayton is also the holding company of TVS Motor.
TVS Group has since then ventured into many businesses and forged tied with many organizations. Axel India Limited, a joint venture between Sundaram Finance and Dana Holding Corporation, USA produces Axel Housings. Brakes India Limited was formed in 1962 as a joint venture between TV Sundram Iyengar and Sons Ltd., and Lucas Industries Ltd.UK. for manufacturing braking equipment. TVS is also into the manufacturing of Motor parts and accessories, Electronic Ignition Systems, bus bodies, rubber products, and even textile.
TVS Motor- Mission and Vision
TVS Motor’s vision statement says, “We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfillment and prosperity for employees, dealers, and suppliers.”
TVS Motor – Logo, Slogan, and Tagline
TVS is the abbreviation for Thirukkurungudi Vengaram Sundaram(TVS Group Founder). The company’s professionalism and power are symbolized by the lettering’s blue hue in the company logo. A red-hued jumping horse serves as the TVS logo. The horse’s silhouette is heading right, into the future, and represents the brand’s growth and velocity.
The following is the analysis of the TVS competitive force model:
Supplier Power – Although TVS has long been a popular provider for low-income clients in the two-wheeler industry, we will examine the suppliers’ influence in this case. The TVS supplier market is very fragmented, and the possibility of backward integration is also strong, limiting the suppliers’ strength. TVS works with a number of local vendors to procure spares and components for its cars. The arrival of numerous new small-scale manufacturers has also aided big vehicle manufacturers such as TVS in obtaining highly competitive prices for their spares and parts. This plainly demonstrates the supplier’s poor power.
Buyer Power: Buyers’ power is greater in the two-wheeler sector due to the wide range of products and brands offered. Today’s buyers are choosy and particular about what they want for their money. They are seeking a brand that offers better prices and technology, which has eroded consumer loyalty for any company today and is TVS’s greatest danger.
The threat of Replacements: When compared to other factors, the threat of substitutes is rather modest, since the market appears to be growing and maturing every day. However, when we looked farther down the road, we could see danger from rapidly rising gasoline prices, which may force buyers to convert to more fuel-efficient diesel vehicles. Growing environmental concerns have also resulted in the introduction of bicycles and battery-powered two-wheelers, which might pose a challenge to TVS in the future.
TVS Motor – Employees
T. V. Sundaram Iyengar – Founder
Manu Saxena – VP Business Planning
K Gopaladesikan – CFO
Rajesh Narasimhan – CEO
Lakshmi Venu – Joint Managing Director & Non-executive director
TG Dhandapani – Chief Information Officer
TVS Motor- Challenges Faced
As of July 2020, Due to a shortage of trained labor, TVS Motor Company – one of the top manufacturers of motorcycles and scooters – was experiencing delays in the delivery of replacement parts and overall manufacturing operations.
Following the lifting of the lockdown in May, most manufacturers are attempting to ramp up output in order to meet demand. However, factors such as a spike in Covid-19 cases and a lack of personnel have hampered automakers’ capacity to boost car manufacturing.
According to the Society of Automobile Manufacturers, due to the negative impact of the Covid-19-induced economic downturn, car sales across all categories might drop by more than 25% in FY 21. This followed a decrease of 18 percent in domestic sales in FY 20.
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TVS Motor – Subsidiaries
TVS Motor Subsidiaries include –
Norton Motorcycle Company
TVS Housing Limited
TVS Motor(Singapore) Pte. Ltd.
TVS Motor Services Limited
Intellicar Telematics Private Limited
PT. TVS Motor Company Indonesia
Sundaram Auto Components Ltd.
TVS Motor Co. (Europe) B.V.
TVS Motor – Growth
On Monday, TVS Motor Company reported that it sold 278,855 automobiles in July 2021, an increase of 10% over the same month the previous year. In the month of July 2020, the indigenous automaker sold 252,744 vehicles.
Not only has the brand seen an increase in domestic sales, but it has also seen an increase in international sales. In July 2021, it claimed to have shipped 103,133 automobiles, increasing 65 percent from the same month the previous year. In July 2020, it exported 62,389 vehicles. With 87,559 units delivered in July 2021, TVS saw a 62 percent increase in exports in the two-wheeler sector alone. It exported 54,141 two-wheelers to foreign markets in July of the previous year.
According to the automaker, demand in the export market is still strong, and container availability is increasing compared to the previous few months when shipping was disrupted. In the next months, TVS anticipates a further increase in container availability.
TVS Motor- Competitors
Bajaj Auto, Hero MotoCorp, Yamaha Motor, Suzuki Motor Corporation, Ather Energy, Honda, Royal Enfield, Kymco, Piaggio & C. SpA, and Piaggio & C. SpA are among the top ten competitors of TVS Motor Company.
TVS Motor – Awards and Achievements
Most recent awards and achievements are:-
Bike Awards – 2019 – Two-wheeler manufacturer of the year
Indian Motorcycle Of The Year – 2017
TVS Motor has been awarded Highest in Customer Satisfaction by J.D. Power Asia Pacific Awards for 2018.
TVS Scooty Zest 110 is awarded the Most Appealing Executive Scooter by J.D.Power Asia Pacific Awards for 2016.
TVS Motor Company was named the Two Wheeler Manufacturer of the Year by NDTV Car and Bike Awards 2015.
TVS is India’s Most Trusted Brand in the Two Wheeler Category
TVS Apache RTR180 is the Most Appealing Premium Motorcycle as awarded by J.D.Power Asia Pacific Awards for 2018.
TVS StaR City + is awarded the highest-ranked Economy Motorcycle by J.D.Power Asia Pacific Awards for 2018.
TVS Motor – Future Plans
While TVS Motor Company has already begun manufacturing and selling their new electric scooter, the iQube, in a few locations, the next 24 months are expected to witness exponential development, with a whole new variety of electric vehicles due to reach the market under the new vertical. The vehicles will most likely be two and three-wheelers with power outputs ranging from 5 to 25 kW. However, for the time being, the brand’s electric car division will work alongside its ICE vehicle division.
Speaking on his future plans, Sudarshan Venu who leads the new strategy says “We want to scale up the TVS electric experience pan India, and it is a space where we would like to play a leading role. We’ve quietly worked on EVs for the last one decade. It is a huge focus area for us as we advance. We are embracing this future; we are investing in it and are excited.”
For the time being, though, it’s probable that the company is searching for partnerships to help them expand its charging network and satisfy consumer demands. In addition, the company has built a new EV plant that will be scalable to meet demand and is investigating the possibility of managing crucial backend production of batteries and other vital elements in-house.
TVS Motor – FAQs
Which country is TVS Motor based in?
TVS Motor is an Indian automotive company.
Who founded TVS Motor?
T. V. Sundaram Iyengar established TVS, a transportation firm with a huge fleet of trucks and buses, in 1911. Later
When was TVS Motor founded?
TVS Motor was started in 1978 by T. V. Sundaram Iyengar’s son T.S. Doraiswamy
Which companies do TVS Motor compete with?
Bajaj Auto, Hero MotoCorp, Yamaha Motor, Suzuki Motor Corporation, Ather Energy, Honda, Royal Enfield, Kymco, Piaggio & C. SpA, and Piaggio & C. SpA are among the top ten rivals of TVS Motor.
The Indian automotive industry was left with even fewer brands as Ford Motors departed from the Indian markets on Friday. The motor giant had announced its decision to shut down all local manufacturing facilities on Thursday.
The unpleasant news meant worse for car dealers and the company’s employees as this would affect them in the long run. The manufacturing plants will continue to operate until 2022 for the sole purpose of manufacturing export vehicles. This means their models for the Indian Market such as Figo, Aspire, Freestyle, EcoSport, and Endeavour will no longer be produced.
For those who have kept track of the auto market, this shouldn’t be something too surprising. Ford is the most recent automotive brand to leave the Indian markets as we’ve seen with Harley Davidson, Chevrolet, and Fiat before. Did all these brands leave for the same reasons or did each of them have their own barriers that stopped them? We’ll take a deeper look into what drove Ford Motors to make this difficult decision.
Ford’s been in the Indian market since 1995, although the company had begun its initial days back in 1926, it had come to halt due to severe import restrictions enacted at the time.
Ford had resurfaced as Mahindra Ford India Limited (MFIL) a joint venture with Mahindra & Mahindra Limited. The company was then renamed to Ford India Private Limited. Further down the lane, we got to see some of the most iconic cars released by Ford such as the Ikon and Mondeo Mk3.
There are a few reasons that have contributed to the company’s decision to stop dealing in the Indian market. The decision was bold and calculated to ensure the long-term profitability and sustainability of the company.
Poor Sales Conditions
Consumers have always loved Ford but the Indian auto industry as a whole is going downhill. This is rather something to do with how the market is performing and isn’t specific to the brand.
People have a variety of options available in the market and this has reduced the company’s demand in the Indian market over the years. It’s rather clear from the numbers that the company wasn’t getting any better in terms of market share over the years.
Ford has lost more than $2 billion over the last 10 years in India. Although models such as the EcoSport had sufficient sales, it wasn’t enough to be considered profitable for the company. Based on how the company operates in India, it’s worth considering the $0.8 billion spent in 2019 just for operations.
Ford has tried to incorporate global standards for its manufacturing plants and operations alike. These may have been a little too expensive for the country and cost them more money than the potential profits.
The tie-up between Ford Motors and Mahindra has allowed the company to produce new cars faster and with less investments in the past. The joint venture formed in October, 2019 meant Mahindra was owning a 51 percent controlling stake and Ford owning a 49 percent stake.
The marvel of modern technology allowed us to do a joint press conference alongside Bill Ford, Chairman & Jim Hackett, CEO of Ford Motor. Of course, tech couldn't solve the time zone challenge so a big thank you to Bill & Jim for trekking to office in Detroit so early! https://t.co/8kFaMOTrIR
The companies were to cooperate specifically for the co-development of 3 new SUVs and an electric vehicle. But this was not to be, as the partnership was called off in December, 2021. The reasons for this were apparently in the best interests of both companies although there is no official statement.
Ford’s joint venture with Mahindra & Mahindra in October 2019
This also means that the upgraded version of Ford’s EcoSport which was to feature Mahindra’s 1.2-liter direct-injection turbo-petrol engine will not be released later this year. The declining sales meant that Ford was relying on the partnership as well as the new SUVs to keep them afloat. The formal end of the joint venture has left the company in a rather difficult position.
The company was forced to make a choice that would have a deep impact on its future profits. Ford makes more money in other countries like the United States where it’s still able to get sales and keep pushing more expensive cars to consumers.
To those of you who might be wondering if this is the end game for the company, it certainly isn’t. Ford Motors isn’t leaving India, rather it has put a stop to all manufacturing of local vehicles. The manufacturing plants in Chennai (Tamil Nadu) and Sanand (Gujarat) will be shut down in a phased manner. As of right now, these will still be used to manufacture export vehicles and parts.
Ford has always provided great customer support. The company promises to keep providing existing owners with the same care and support regardless of their decision. As mentioned by Anurag Mehrotra, president of Ford India, car owners will still have access to spare parts and services through local dealers and customer support if it’s needed for any reason.
As per the company, service will be provided to Ford owners all across India
As for resales, you might not get as much value as expected. This is the same for any motor brand that isn’t operational in the country anymore. While this is true, cars like the EcoSport are still a good buy if you aren’t too paranoid about the resale value and just want a great car at an affordable price. Service and parts will be provided by Ford as previously mentioned, meaning that getting a Ford car in 2021 can be a satisfying deal if you choose to.
Ford still plans to serve the Indian market in the form of global imports. Popular global models such as the Ford Mustang will be available to consumers in the form of imports. This just goes to show how desperate the company is to stay operational in the country and how the decision was made purely to ensure the sustainable future of the motor manufacturer. Ford had tried reaching out to multiple manufacturers trying to ensure another joint venture but unfortunately, none have worked out for varying reasons.
Ford’s recent move isn’t very pleasant considering the 4,000 employees who just lost their job. Regardless, the company has made its mind and taken a decision that will aid their benefits. Ford plans to bring more international cars to India and we’ll have to wait and see how things turn out.
The Indian automotive industry and car enthusiasts alike are sure to miss the brand. But as things are in motion the best we can do is watch out for some great deals for used cars and hope that Ford Motors stays on Indian grounds in the future.
FAQ
Why is Ford shutting down its manufacturing plants?
Ford is shutting down its operations in India as it has lost more than $2 billion over the last 10 years in India.
Is Ford Leaving India?
No, Ford will shut down its manufacturing plants but Ford owners will still have access to spare parts and services through local dealers.
Will Ford support the existing customers?
Yes, as mentioned by Anurag Mehrotra, president of Ford India, car owners will still have access to spare parts and services through local dealers and customer support if it’s needed for any reason.
The Indian automobile industry is one of the most competitive sectors in the economy. There are approximately 5000 car dealers in India wherein approximately around 11 – 12 cars are being sold every minute. Be it SUV or sedan, as the standard of living is rising in India, people feel like having a car is a necessity.
In the past decade, the popularity of having cars has increased a lot. Due to the advancement in technology, cars have become affordable as well as eco-friendly. With the increasing needs of people in India, the competition in the automobile industry is beyond par. Even when there are many automobile companies in India who sell affordable, luxury all kinds of cars, there is one company that has always been on the top priority of people and that is Maruti Suzuki.
Maruti Suzuki India Ltd has grown to be India’s largest passenger car company, which accounts for over 50% of the domestic car market. Maruti Suzuki is a subsidiary of Suzuki Motor Corporation, Japan, where the Japanese car company boasts of holding around 56.37% of stakes, according to the reports dated September 2020.
The company offers a wide range of cars starting from entry-level cars to stylish hatchbacks and the most modern sedans including DZire, SX4, Grand Vitara, and more. It takes care of the business of the manufacturing, purchase, and sale of motor vehicles and their spare parts (automobiles). Furthermore, it is also engaged in the financing of cars and the facilitation of pre-owned car sales fleet management. The Maruti automobile company has 2 manufacturing plants in Gurgaon and Manesar in Haryana and 1 manufacturing complex in Gujarat. According to the recent announcement of the company in May 2021, the company is capable of manufacturing around 200 cars per day in total.
In this Maruti Suzuki Case Study, you will know all about the History and Success of Maruti Suzuki in India.
Maruti Suzuki was started back on February 24, 1981, to manufacture cars for middle-class Indians. The company was formed as a government company, incorporated as Maruti Udyog Ltd. with Suzuki as its minor partner. Maruti Udyog then signed the license and joint venture agreement with Suzuki Motor Corporation, Japan, on October 2, 1982, which began the start of the long-lasting and successful partnership.
The company started its productions in 1983, which then came to be the choice of every Indian household. The first car it launched was Maruti 800. It was affordable back then and was thus incredibly popular. This model of Maruti is still considered to be a Maruti classic to date. Although the journey of Maruti Suzuki India Ltd. started off in a very different way.
Maruti Suzuki – 1980
In India, till the early 1980s, the government of India controlled the Indian automobile sector, and privatization did not enter yet. There were only two automobile companies – Premier Automobiles Ltd, which had their popular car, Premier Padmini, and Hindustan Motors Ltd, which made the Ambassador cars. Maruti Udyog Ltd. entered this era with Suzuki Motor Corporation as its minor partner.
Premier Padmini
Maruti Suzuki – 1983
Maruti Udyog signed a license and joint venture agreement (JVA) with Suzuki Motor Corporation of Japan in 1982. This is when the very first factory of Maruti Suzuki was established in Gurgaon, Haryana. In the first 2 years when Maruti was set up, the company was engaged in the importing of fully-built cars from Suzuki, which later grew to include only 33% native parts. This was not what the indigenous company had planned.
Though Maruti was ready with the idea of its own manufacturing facility in India, the company couldn’t continue with its plan fearing the small market here in the subcontinent. Besides, our country was in need of producing fuel-efficient vehicles to meet the increasing demands as the local transport was inefficient. This is why the company thought of adjusting the petrol tax and also reduce the excise duty to ramp up their sales.
Maruti Suzuki began its local production in December 1983 and introduced its Suzuki Alto (SS30/SS40), Suzuki Fronte, and Alto-based Maruti 800.
Maruti Suzuki came up with a new and powerful Suzuki Alto (SS80), a 796 cc hatchback, which replaced the former Maruti 800 model in 1986. The company also successfully manufactured its 100,000th vehicle in the same year.
By this time the company was already recognized for its stronghold in the automobile and at the turn of the new year, Maruti Suzuki also began its foreign exports. It started with exporting a lot of 500 cars to Hungary
Market Liberalization and Maruti Suzuki – 1991
1991 was the year of the liberalization of the Indian economy and by then, the company witnessed around 65% of its components being indigenized. It was also in this year that Maruti further increased its stakes in Maruti. Maruti Udyog then became a 50-50 joint venture with the Government of India and a Japanese automotive company as stakeholders.
Maruti Suzuki – 1994
Maruti Suzuki saw the production of its 1 millionth vehicle in 1994 since it started manufacturing automobiles. This year also saw the inauguration of the second plant of Maruti. Furthermore, the automobile manufacturers also started their 24-hour on-road emergency vehicle service.
Maruti Suzuki – 2000-2002
Maruti emerged as the first Indian car company to launch a call center for its internal processes and customer service in the year 2000. The company also saw the release of many more models of its cars in the next 2 years that followed, including the Esteem Diesel, which was launched in 2002. Meanwhile, Suzuki Motor Corporation also increased its stake in Maruti, which now became 54.2%.
Maruti Suzuki – 2003-2004
The company started the year 2003 with the introduction of the Suzuki Grand Vitara XL-7 and upgrading its Zen and Wagon R models. Later in the same year, the company manufactured the 4 millionth Maruti vehicle and also entered started its new partnership with the State Bank of India. Moreover, the company was also listed on BSE and NSE after which it went public with issues that were oversubscribed tenfold.
Maruti 800, which was the best-selling Maruti car till 2004 was overtaken by the incredible popularity of the Alto model after 2 decades in the same year. Maruti Udyog concluded the financial year 2003–04 with a record 472,122 units as its annual sale, which reached an all-time high since the company began operations.
Maruti Suzuki – 2007
On May 10, 2007, the government of India took an exit from the country’s largest car maker Maruti Udyog Ltd by selling the residual stakes, which amounted to Rs 2,360 crores to a bunch of financial institutions led by the Life Insurance Corporation. In July 2007, Suzuki decided to change the name of its subsidiary to Maruti Suzuki India Limited.
Maruti Suzuki Logo
Maruti Suzuki – 2012 and the Later Years
Maruti Suzuki successfully sold its 10 millionth vehicle in February 2012. The company boasted of having a market share of 45% in July 2014 and then in May 2015, it witnessed the production of the 15 millionth vehicle in India with the launch of the Maruti Suzuki Swift DZire.
Maruti Suzuki was cautious of the environmental factors and understood the need of embracing environmentally friendly automobiles. This is why the company declared that it would phase out the manufacturing of diesel cars by 1 April 2020. Furthermore, by this time the Bharat Stage VI emission standards also came into effect, which announced that the company must significantly invest in its diesel cars to comply with the stringent emission standards.
The company plans to launch its first electric car in the second half of 2021, according to the reports. The car would be named Maruti Suzuki WagonR Electric, which is currently put to test.
Maruti has carved its own league of success throughout the years that it has remained in business. The company now boasts of having 9 subsidiary companies in total, namely:
True Value Solutions Ltd
Maruti Insurance Agency Logistics Ltd
Maruti Insurance Agency Solutions Ltd
Maruti Insurance Distribution Services Ltd
Maruti Insurance Business Agency Ltd
Maruti Insurance Agency Services Ltd
Maruti Insurance Agency Network Ltd
J J Impex (Delhi) Pvt Ltd
Maruti Insurance Broker Ltd
Maruti Suzuki had surely achieved great success. 5 Main things that ushered in the success of the company are – Affordability, Goodwill, Hatchbacks, Low Maintenance & NEXA
Affordability
In the early ’80s cars weren’t something that every Indian man or a middle-class family could afford. It was a luxury resource about which only a few people could dream. There weren’t many car companies since liberalization came late in India.
When Maruti Suzuki entered the Indian market, the most prominent factor which made it the market leader at that time was the price of its cars. They were very successful in launching cars with excellent features at an Indian budget-friendly price which made it ‘people’s car’.
Even to date company’s cars are known to be in a range which any middle-class man today can afford to buy.
Goodwill
Over a decade ago, Maruti Suzuki launched an advertisement video which said ‘Ghar aa Gaya Hindustan’ which became an instant sensation among people of India. Since the initial years, Maruti Suzuki has been successful in creating a notion into the minds of people that they associate home, the nation with their car.
Their commercial still instills that India comes home in a Maruti Suzuki. The company has received great acceptance for the brand and its customers are very loyal to them. All these years, customer satisfaction has proved that Maruti Suzuki’s goodwill and brand loyalty are very strong and enthralling.
Hatchbacks are the most idol cars for Indian roads and they rule the market. They are everywhere present in the market and are the most preferred body type throughout the nation. Maruti Suzuki initiated the concept in India and its most popular hatchback car Alto is one is the most demanded cars in India to date.
Maruti Suzuki Alto
Low maintenance
When comparing the services of different automobile companies in India, Maruti Suzuki’s service charges are lower. The best thing about their services is that they have various stations and centers across the nation where they serve a huge number of cars daily. Today they make most parts in India under the Made in India and hence their spare parts and components are variably low when compared to other automobile companies.
Since Maruti Suzuki’s cars were always looked at as the mid-range cars that serve the middle-class category they wanted to enter the other market too. That is when Maruti Suzuki launched NEXA. In 2015 they started the delivery and operations of its premium range cars. This helped them engage with their high-end customer category.
Maruti Suzuki Nexa
Conclusion
The automobile sector has been growing rapidly over the past decade, even after the Covid-19 pandemic. Maruti Suzuki cars have emerged as budget-friendly and low-cost cars with superior after-sales services that have made it India’s top choice for many car owners.
Maruti Suzuki will play a very important role in making cars assessable and available to many Indians in the future as well. Its aggressive management and promotion strategies will cater to huge demand in the Indian automobile market.
FAQ
What is the net worth of Maruti Suzuki?
As of 2020, the total assets of Maruti Suzuki is ₹63,627 crore (US$8.9 billion).
Who is the chairman of Maruti Suzuki?
Shri Ravindra Chandra Bhargava is the chairman of Maruti Suzuki.
Is Maruti a Govt company?
Maruti was a Govt company, but in 2002, the Indian government gave the charge of the management of Maruti Udyog Ltd. to Suzuki for a consideration of Rs1000 crore.
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.
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.
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.
Lakshya Singh
