THREE WHEELER INDUSTRY
ASSIGNMENT SUBMITTED BY,
SARANYA.C.V
ISEMESTER, MBA
ICM, POOJAPPURA
ABSTRACT
Three wheeler industries is a fast growing industry nowadays. The industry contributes in our economy. The employment facilities in the industry also increase. Industrial environment in the industry also changes than the earlier days. The profit in the industry increases and marketing practices also changes. As the industry grows it the future of the industry also grows. Thus the three wheeler industry growth is upwards
INTRODUCTION
Over the years, the world has been witnessing fantabulous development in the sector of automobile industry. With their advanced engineering techniques, the major auto giants like Mercedes, Ford Motors, General Motors, Audi, BMW, Hyundai, Mitsubishi etc have come up with some of the most sophisticated vehicles that a human mind could have hardly imagined just a few years ago. The global automobile manufacturers have found huge potential markets in a number of developing countries. It is not only the cars,consumer vehicles and two wheelers that are sold in these various countries in large numbers, but the three wheeler market is also quite big in these nations.You will get to see innumerable three wheelers running on the roads of various Southeast Asian countries like India, Thailand, Sri Lanka, Pakistan,
Philippines, Nepal, and Bangladesh etc.
There are a number of reasons that have resulted into the proliferation of the three wheelers in umpteen countries. Three wheelers are quite economical in terms of manufacturing and maintenance. They have also earned huge popularity due to their easy maneuvering capabilities through the narrow lanes that are prevalent in most of the developing countries.It is not that three wheelers are used only in the developing nations.
Three Wheeler Companies
You will also get to see various brands of three wheeler in different parts of US, UK and some of the European nations. Reliant and Morgan Motor Company are the two major three wheeler manufacturers in UK. One of the US based three wheeler manufacturers; ZAP has even come up with eco-friendly three wheelers that operate with battery. Bajaj Auto, Piaggio is the leading players in the three wheeler industry in most of the Southeast Asian nations. The vehicles have also given rise to the three wheeler accessory industry in many countries. It is believed that numerous people have got employed in various countries due to these three wheelers
Basic condition of the industry
The surging growth of the three wheeler industry in India has been influencing several new entrants to start manufacturing newer version of automobiles. In the last fiscal, the three wheeler industry in the country has seen a remarkable 18% growth against the previous year. A total of 5, 56,000 units of the automobiles were produced in India in the last financial year. Three wheeler manufacturers, like Bajaj Auto, Piaggio and Mahindra & Mahindra are expecting to have severe competition to rope in vast number of potential consumers in India.
The annual sale of these various companies has also increased due to the three wheeler loans offered by banks and financial institutions along with finace schemes offered by three wheeler companies like Bajaj Auto There are some criteria based upon which the auto loans for three wheeler are sanctioned. The individuals seeking loans should have annual gross income of about INR 50,000 or more. Three wheeler loans are also provided to proprietor based firms, partnership firms and even to the limited companies. Loans are provided for both new vehicles or for used three wheelers that are up to 3 year old.
By availing a three wheeler loan, consumers have been able to get away with the hurdle of huge amount of one time monetary investment. If you are taking the auto loan, then in most of the cases you may have to give small down payment. However in some of the cases the customers need not make any down payments at all. Repayment is done mainly through equated monthly installments (EMIs). Most of the public sector undertaking (PSU) banks in India charge interest of about 12% per annum. Usually, the loan amount of INR 1, 00,000 is provided by most of the loan providers for a three wheeler. The interest rates may be higher in the private banks and private financial institutions. Depending upon the respective terms and conditions, the regulations may vary from one consumer to another as determined by the loan provider in case of a three wheeler loan.
Contribution to the economy
The opening up of the Indian economy for foreign direct investment by the major automobile companies in the world has resulted into the introduction of various models of car, two wheeler, three wheeler and other forms of vehicles. In the last few years India has successfully emerged as one of the major markets for automobiles. The country leads in terms of three wheeler manufacturing in the world. Some of the pioneering three wheeler companies like Bajaj Auto, Mahindra & Mahindra and Piaggio Vehicles have made a detailed foray into the
growing Indian automobile market.
The Indian economy has been influenced by impressive industrial resurgence and automobile industry is definitely one of them. The automotive industry has played a commendable role in the rapid industrial and economic growth of the country. Due to the economic liberalization a number of global automobile manufacturers have found India as one of the premier business destinations. With an annual growth of about 18 %, prospects of the Indian automotive industry are very bright. The three wheelers have successfully helped to overcome the dearth of jobs in the country. Numerous people could be seen driving auto-rickshaws on the roads of cities like Delhi, Mumbai, Kolkata, Hyderabad, Bangalore and many more. Due to their simple construction and limited amount of investment the three wheelers as a mode of conveyance and commercial mechanism has gained popularity. What's more, their maintenance is also quite simple. Bajaj Auto has dominated the three wheeler market in the country for years. Several other companies like Piaggio Vehicles and Mahindra & Mahindra have made a late foray into this field. An overview of the current automobile market indicates that the tremendous demand of three wheelers in India and abroad has also allured several other automobile manufacturers like Honda India and TVS Motor to start producing the three wheelers.
Employment facilities
With the passage of time, India is slowly emerging as a global automotive manufacturing major and as its war horse, it is betting heavily on the compact car segment. Though the automotive manufacturing industry of India is still at its nascent stage, and many of the global players individually produce more vehicles than all the auto manufacturing companies of India taken together, it remains to be seen how far India goes with its manufacturing skills and huge manpower in the future.
Presently, India ranks third after Japan and Brazil in terms of production capacity of compact cars. This is the only segment in the automobile industry where it has the potential to manufacture at par with global standards and capacities. Also, thanks to easy availability of cheap labor and raw materials, the prices of these cars could be significantly kept lower than their Japanese or Brazilian counterparts. This will definitely result in increased sales over the coming years and provide the opportunity to tap a huge overseas market of first time buyers.
To achieve this, we have to set up more world class facilities like the ones we are having in Gurgaon, Chennai and Pune and also have to improve our transport network for quick delivery. With direct plant-to-ship transport infrastructure this problem could be successfully overcome in the coming years. The fact that global companies are increasingly looking forward to India as a destination for cost effective and quality products is evident from Nissan's strategic partnership with Maruti to source its compact cars and do business in Europe. But before being recognized as an automobile hub the world over, India needs to prove its mettle on the testing grounds and zoom ahead in style. While high volume reduces unit cost drastically, it also gives the required impetus to productivity and improves the product quality to a great extent. Though India is putting in constant efforts to carve a niche for itself in the global automotive manufacturing industry, it lacks the quality, range and scale to achieve its targets.
Major players in three wheeler industry
We are all well aware of the fact that, for decades the Indian automobile industry was way behind some of the most influential economies in the world like USA and Japan. The Indian automobile industry, though in its nascent stage, is expected to set the ball rolling in the Indian Economy as well. Coming to the automotive trends, today, the Indian automobile industry is one of the most vibrant, modern and upbeat automobile. in the world. It is also the second largest two-wheeler market in the global map. With the emergence of the financially sound middle class,
The factors playing a key role in the Indian automobile industry trends are as follows:
• Government: Unlike in the past, the Indian Government has gone through a total role reversal by becoming the enabler rather than the controller. In the recent past it has started providing better infrastructure, conducive atmosphere to attract investments and implementing growth oriented economic policies.
• Competition: With the coming of the multinationals, an immense pressure has grown on the Indian companies. As a result, a lot of joint ventures have taken place, some others have invested heavily on R&D to build their own empires and the rest have perished.
• Customer: Armed with higher buying power and an ever increasing expectation from products and services, the customer is undoubtedly the king and has prOpelled a fierce competition among the major players in the market.
• Pollution and Safety Norms: cars as well as two-wheelers have met the most stringent international norms of pollution. Euro II vehicles have become the norm of the day all over India. Unfortunately, in the Indian context, safety in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of adequate safety features in the vehicles such as airbag and crumple zone needs immediate attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory.
Industrial structure
The Indian automobile industry is the tenth largest in the world with an annual production of approximately 2 million units. Indian auto industry, promises to become the major automotive industry in the upcoming years and the industry experts are hopeful that it will touch 10 million units mark. Indian automobile industry is involved in design, development, manufacture, marketing, and sale of motor vehicles. There are a number of global automotive giants that are upbeat about the expansion plans and collaboration with domestic companies to produce automobiles in India.
Market Share
At present major Indian, European, Korean, Japanese automobile companies are holding significant market shares. In commercial vehicle, Tata Motors dominates over 60% of the Indian commercial vehicle market. Tata Motors is the largest medium and heavy commercial vehicle manufacturer.
Among the two-wheeler segment, including scooters and mopeds- motorcycles have- major share in the market. Hero Honda contributes 50% motorcycles to the market in which Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. In the three wheeler industry in India, Piaggio holds 40% of the market share. Bajaj is the leader by making 68% of the three-wheelers.
Car manufacturers in India dominate the passenger vehicle market by 79%. Maruti Suzuki is the largest car producer in India and has 52% share in passenger cars and is a complete monopoly in multi purpose vehicles. In utility vehicles Mahindra holds 42% share. Hyundai and Tata Motors is the second and third car producer in India.
Three wheelers serve as a major mode of transportation in India. Over the years Indian three wheeler companies have come on their own, in terms of technology, skills and expertise. Three wheeler statistics suggest that companies like Bajaj Auto and Mahindra & Mahindra have substantially grown their revenues by marketing their three wheelers not only in this country but also in various Southeast Asian nations. Three wheelers come with affordable price and also require easy maintenance Three wheelers serve as a major mode of transportation in India. Over the years Indian three wheeler companies have come on their own, in terms of technology, skills and expertise. Three wheeler statistics suggest that companies like Bajaj Auto and Mahindra & Mahindra have substantially grown their revenues by marketing their three wheelers not only in this country but also in various Southeast Asian nations. Three wheelers come with affordable price and also require easy maintenance
Industrial attraction
Andhra Pradesh is one of the more important states of India, politically as well as economically. The state has a huge geographical area encompassing some of the important towns in the region such as Hyderabad, Vishakapatnam, Tirupati and others. The state has seen considerable growth in economic and commercial terms and IT and Biotech too have grown in a big way. Indian and foreign companies have set up their operations in many towns and cities across the state. In addition to, the state has many places of tourist attraction. The hospitality sector, including the travel operators, hotels and restaurants too have grown up well. And all of them depend upon cars to a great extent to fulfill the needs of their clients. General Motors (GM), a US-based MNC with global operations too has enhanced its presence in Andhra Pradesh with the setting up of dealer network and service centers in towns and cities of Andhra Pradesh.
Marketing practices
Maruti Udyog Ltd. (MUL) was basically formed to cater to the problem of insufficient public transport capability of the Government. During the early 80's, India was facing tremendous problems regarding public transport. And there was no possible solution. The Indian markets were yet to be opened so there were very few small car manufacturers in the country. However, the need for an alternative was becoming very necessary, when the Government of India through an Act of Parliament formed Maruti Udyog Ltd. in 1981
Future of the industry
Three wheeler showrooms play an important role in making the consumers aware of the company's products and bringing close to them. They provide a chance to see the three wheeler on own, understand the specifications and features and even test ride the vehicle. Thus the consumer gets an opportunity to identify his needs and if the concerned model of a three wheeler matching them. All the leading three wheeler companies in India namely, Bajaj Auto, Piaggio and Mahindra & Mahindra have their showrooms in the important towns and cities in the country. With cities like New Delhi, the company has got 10 showrooms and Mumbai and Bangalore following suit with 8 showrooms respectively. Kolkata with 4 showrooms and other cities like Ahmedabad, Hyderabad and others too being part of the Bajaj Auto's ambitious marketing network with quite a number of showrooms showcasing all popular models of the Bajaj three wheelers . The company however is different in one sense as against the other players and that is the exclusive showrooms that Bajaj Auto has for its range of three wheelers.
Piaggio has limited operations in India. In spite of being a formidable player in the three wheeler segment, Piaggio has its production and marketing tie-up with Bajaj Auto and does not have exclusive showrooms of its own. M&M, the other leading three wheeler player in India is focusing more on the four wheeler segment and hence does not have exclusive three wheeler showrooms but sells its Champion range of three wheelers through the showrooms primarily for the four wheelers
Analysis of the industry
Thus three wheeler industry is a fast growing industry , It has a economic contribution to the society and industrial environment is different from other industry. Major players contribution is different fro other industry. The three wheeler industry has a good future also
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