Академический Документы
Профессиональный Документы
Культура Документы
Project in Micro-Economics
Introduction
Automotive industry, globally, as well in India, is one of the key sectors of the economy. Due to its deep forward and backward linkages with several major segments of the economy, the industry has a strong multiplier effect of industrial growth. The rise in efficiency and productivity helps directly and indirectly to accelerate the efficiency of other sectors through factor movements of goods and people in the economy. Therefore the industry is recognized as one of the drivers of economic growth as it contributes significantly to the overall GDP of the nation. It has been identified as a sector with a high potential to increase exports and employment. It also helps in attaining two critical goals of the common minimum program that of increasing manufacturing output and of providing employment. Although indirectly but it also facilitates the third objective of increasing agricultural productivity through farm mechanization and the needs of agro-produce transportation The Indian automotive industry has flourished after economic liberalization in 1990s like never before. This extra-ordinary growth of the industry is mainly due to higher disposable incomes of the middle class and resultant increase in their living standards. This is well supported by the economic conditions particularly in the financial sector, which has played a big role in boosting the demand and sustaining a long-term growth in the industry. With a high cost of developing production facilities, limited accessibility to new technology, and increasing competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five year
Toyota kirloskar motors privates limited Honda Siel cars India limited
Advertising may or may not result in improved consumer benefits and efficiency When advertising results in increased sales and in turn increased production, it may lead to economy of scale. But advertising itself involves some cost. Advertising improves efficiency only when savings from economy of scale exceeds the cost of advertising. Advertising has no direct relationship with benefits to customers.If increased sales turnover, because of advertising or any other reason, is accompanied by reduced prices, customers will benefit.
As a consequence, advertising can result in either an increase or a decrease in the price of the product compared to what it would be if there were no advertising in the industry. As a consequence, advertising can result in either an increase or a decrease in the price of the product compared to what it would be if there were no advertising in the industry. Advertising increases costs. However, advertising can also increase revenues. So advertising may cause profits to either increase or decrease relative to what they would be if there were no advertising in the industry.
Advertisement, pricing and market share of firms in the automobile industry. How far advertisement is market creating for firms.
Advertisement is creating the markets as well as building the brand value for the companies. Advertisement often eats into other companys market share, but it is helping to create markets as well.it has mainly cumulative effect, and we can say that as companies sales are growing in auto sector in India on YOY basis, this is enough evidence that it has helped to create markets. Not all markets are created by advertisement alone, but yes it is also playing role in generating revenue from increased sales of consumers plan to purchase a vehicle this year. To fuel these higher sales, manufacturers and dealers are putting money into new ad campaigns. Some research shops report that dealers are being particularly aggressive about the resources theyre putting into online advertising this year.
Agency has the tools and the talent to create a thriving Automotive Industry business. Advertising Agency use television, radio, print advertising and the Internet to create brand image consumers can connect with. Advertising Agency uses the latest in advertising trends and utilizes modern marketing tools to spread the news about the products and services.
Advertisement - Ideology
Generally advertising is one way of promoting a product or services. Advertising can be seen in the television, it can be heard in the radio, it can be in streamer hanged in every corner of the geographical locations in the business area, it can be in the form of flyers or catalogues and even compact disk or flash drives in just in a click of a computer and some companies they also place their advertisement in the newspaper. Every time we open our television we can always see different advertisements from different companies with different strategies on how to present those advertisements that can attract the attention of the prospective customer and to retain those loyal customers. Through advertisement it motivates the urge of every customer to purchase products or to use services. Therefore the effect of advertising is to create wants. When people see something advertised, even they dont really need the product just for curiosity sake they try to purchase the product or use the service if there is something what we call value proposition of the products being advertised. People wanted to test the product whether what is being seen as advertised is true or not. If it is proven that the product or service really contain the value proposition then customers will come back to you and buy again those products or services that has been tried and tested. Value proposition is the way to test and use the product or service whether it has an effect of using it or not, say for example the whitening soap if it is mention in the advertisement that after seven days of using the soap your skin become fairer and whiter then it must have an effect after seven days of using it to prove that it has really a value proposition. When value proposition of a product or service has been proven then you can tell everyone or the whole world that the product or services can be relied upon or can be trusted, and you must be proud if you are the owner of that product or service because wherever you are you will be looking by your loyal customer as well as the prospective customer because those who have tried and tested your product or services will be the one to advertise through their word of mouth it becomes multiplier effect. This time you do not need to advertise intensively. Advertising has created false standards as well as improved standards. We have been made self-conscious. When we are self-conscious, we are uncomfortable. To relieve our discomfort we buy. This kind of buying is true of everything from deodorants to the constantly changing styles in dress, cell phones, automobiles and the like. The idea or concept that the highly advertised product is better than any other often makes us careless in our purchases. We buy brand name when unadvertised brands may give us more for our money. We must learn to be careful with advertising with as much care as we buy product or service. For all concerns especially the consumers anything that we wanted to purchase, we must be careful whether to accept or believe in the advertisement especially it be needed significantly or not. We have to learn to see more than the colorful pictures and the advertisers alluring slogans. Advertising is helpful as long as we use it intelligently.
With India emerging as one of the fastest growing market for Auto sector, an analysis of their advertisement expenditure and net sales turnover suggests companies in these sectors witnessed robust growth in their sales turnover despite falling advertisement expenditure, according to an ASSOCHAM Study. The elasticity of advertisement to net sales for the auto sector was found to be -1.32 as against 0.80 per cent for the FMCG sector as analyzed by the ASSOCHAM Eco Pulse (AEP) Study. A negative figure for the advertising elasticity auto industry implies, despite spending less on their advertisement and promotion campaigns, companies in this sector were able to increase their sales volume significantly. According to the ASSOCHAM Eco Pulse (AEP) Study titled Cost-Benefit Analysis of Advertisement Campaigns, the ad spend, proportionate to sales, by fast rising auto (two wheelers) sectors has grown the most among a host of sectors. With services becoming driver of the Indian economy, advertising which spreads awareness to consumers has made an important contribution to the growth in some of the dynamic sectors like telecommunications, auto and FMCG said ASSOCHAM President, Sajjan Jindal. The amount spent on the marketing expenses in proportion to the sales has undergone a substantial decline in 2008-09. As the advertising outlays of the sectors like auto and telecom swell down due to the low pace in the economic conditions to overcome the manufacturing cost of the products and services. As per the analyses of the income and expenditure for the auto sector, it has been observed that the top auto companies in the two wheeler segment have decreased their advertising expenses by 5.87 per cent in 2008-09 as compared to the corresponding period of 2007-08, whereas the sector grew by 2.5 per cent in terms of net sales.
The analysis of three major auto companies in the two wheeler segment revealed that Hero Honda spent 12.54 per cent more on the advertising and sales promotion activities in 2010-11 as compared to 2009-10 while its net sales increased by 19.23 per cent during the period. Whereas Bajaj Auto Ltd. and TVS motors cut their advertising expenditure by 32.94 per cent and 12.02 per cent respectively in 2010-11. However, according to their net sales figures, TVS motors registered a growth rate of 14.02 per cent whereas Bajaj Auto Ltd. witnessed a decline of 6.60 per cent during 2010-11 over the corresponding period of 2009-10 Starting from the era when there was too slim of a variety of cars available in Indian market, Indian automobile industry has come up a long way to have a diverse array of cars these days. There are a number of top automobile companies running their operations in India, which again have a range of models in different segments of cars. However, while looking for top 10 automobile companies in India, one name that would always lead the list is Maruti Suzuki India. Maruti Suzuki has consistently been the dominant leader in the Indian automobile industry. However, there are also other big names like Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hindustan Motors etc. During its early days, the most of the Indian car auto manufacturers banked upon foreign technologies. But the scenario has changed over the years and currently, the Indian auto manufacturers are using their own technology. Due to the growing pace of Indian automobile market, a number of car manufacturers including the global leaders have locked their horns in the Indian auto market. After the recent setback due to the global recession, the Indian automobile market has again started to grow up. Though the auto sales except commercial vehicles started creeping up since the beginning of this financial year, it's only the month of September 2009 when the market saw buoyant sales. It fuelled optimism in the industry. The retail trade also started soaring up. The auto sales saw a 9.6% rise in the month of September with a sale of 1,092,262 units. The passenger vehicle sales also grew by 20.32%. The two wheeler market was also augmented by 7.67% during the same period with a total sale of 838,150 units. The same trade is applicable for the three-wheeler market, which saw a growth of 13.51% (with sale of 41,137 units) during the same period. Market Share of Firms in automobile industry 2011 ET Company 500 Rank 7 21 19 41 46 67 Tata Motors Ltd. Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd. Hero MotoCorp Ltd. Bajaj Auto Ltd. Ashok Leyland Ltd. Turnover 123222.91 37026.37 38140.69 19669.29 17008.05 11133.04 PAT MCRP CR Assets 52209.48 36926.19 14762.9 4447.22 5154.96 6621.16
9273.62 56499.77 3079.73 49945.17 2382.37 31475.63 1927.9 631.3 40398.63 6653.15 3454.89 46885.69
Sundaram Clayton Ltd. TVS Motor Company Ltd. Eicher Motors Ltd. Force Motors Ltd.
Therefore, the short-term investor reaction may be adjusted over time until it stabilizes in the long run, as the new-products performance becomes so predictable that it loses its ability to further adjust stock prices. A similar argument can be developed with respect to promotion effects on valuation. Given promotions positive revenue effects on manufacturers, we may expect some positive investor reaction behavior in the short run. On the other hand, since promotion effects on sales are typically short-lived, it is not clear a priori if this positive investor reaction will persist, dissipate or turn around. Finally, we recognize that dynamic feedback loops may exist among marketing variables, among performance variables and between marketing and performance variables. Marketing actions such as new- product introductions and promotional incentives are often related over time. Successful new-product introductions can increase a brands price premium and make promotions redundant. In contrast, a prolonged absence of successful new-product introduction may force a company to use promotional incentives in order to move product. Similarly, revenue performance may act as an intermediate variable between marketing actions and firm value. For example, successful new products lead to higher revenues and profits that, in turn, can be used to further launch new products. Likewise, lackluster revenue performance may prompt some companies to engage in aggressive rebate tactics in an effort to boost sales.
Product Launches by top 3 passenger car market share leaders Maruti Suziki 1. Versa (20012010) 2. Grand Vitara XL7 (2003 2007) 3. Swift (Launched 2005) 4. Estilo (Launched 2007) 5. SX4 (Launched 2007) 6. Grand Vitara (Launched 2007) 7. Swift DZire (Launched 2008) 8. A-star (Launched 2008) 9. Ritz (Launched 2009) 10. Eeco (Launched 2010) 11. Alto K10 (Launched 2010) 12. Kizashi (Launched 2011) 13. Maruti Ertiga(Launched 2012) 14. Maruti XA Alpha launched in the year 2014 Tata Motor Cars 1. Tata Sumo 2. Tata Sumo Grande 3. Tata Safari 4. Tata Indica 5. Tata Vista 6. Tata Indigo 7. Tata Manza 8. Tata Winger 9. Tata Magic 10. Tata Nano 11. Tata Xenon XT 12. Tata Aria 13. Tata Venture 14. Tata Iris 15. Tata Indigo Marina 16. Tata Sierra 17. Tata Estate
Hyundais product launches :1. Hyundai Accent Executive (Launched 2011) 2. Hyundai Santro Xing (Launched 2003) 3. Hyundai Uber Cool i20 (Launched 2008) 4. Hyundai Next Gen i10 (Launched 2010) 5. Hyundai Fluidic Verna (Launched 2011) 6. Hyundai EON (Launched 2011) 7. Hyundai Terracan (20032007) 8. Hyundai Elantra (20042007) 9. Hyundai Tucson (20052010) 10. Hyundai Sonata Transform (20102011) 11. Hyundai Santa Fe (Launched 2010) 12. Hyundai Sonata (Launched 2012) 13. Hyundai Santro (19982001) 14. Hyundai Accent GTX (1999 2002) 15. Hyundai Atos Prime (2003 2008) 16. Hyundai Getz (20042007) 17. Hyundai Accent GLS (2004 2005) 18. Hyundai Amica (20052008) 19. Hyundai Sonata Embera (20052009) 20. Hyundai Accent GLE (2006 2011) 21. Hyundai Verna (20062010) 22. Hyundai Getz Prime (2007 2010) 23. Hyundai i10 (2007-2010) 24. Hyundai Verna Transform (2010-2011) 25. Hyundai New Look Santro (20012003) 26. Hyundai Sonata Gold (2001 2005) 27. Hyundai Accent Viva (2002 2004) 28. Hyundai Accent CRDi (2002
Source: Indian Planning Commission, World Bank, IRF, SIAM, Industry, ICRAs estimates
Players Performance:
1)
Vehicles 16.45%. 9/4/12 Automobile Industry India Tata Motors Limited is Indias largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer with over 24,000 employees. Since first rolled out in 1954, Tata Motors as has produced and sold over 4 million vehicles in India. Tata Motors is the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two British brands which was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint by franchises and joint ventures assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa. With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, a development which signifies a first for the global automobile industry. Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at USD 2,200 or 100,000 (excluding VAT and transportation cost). The Tata Nano has been subsequently launched as planned, in India in March 2009.
2)
Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti-800 and Alto, to stylish hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. Since inception in 1983, Maruti Suzuki India has produced and sold over 7.5 million vehicles in India and exported over 500,000 units to Europe and other countries. The companys revenue for the fiscal 2008-2009 stood over USD 4 billion and Profits After Tax at over USD 243 million.
3)
India Limited is a wholly owned subsidiary of worlds fifth largest automobile company, Hyundai Motor Company, South Korea, and is the largest passenger car exporter. Hyundai Motor presently markets 49 variants of passenger cars across segments. These includes the Santro in the B segment, the i10, the premium hatchback i20 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Transform in the E segment. Hyundai Motor, continuing its tradition of being the fastest growing passenger car manufacturer, registered total sales of 559,880 vehicles in the year 2009, an increase of 14.4% over 2008. In the domestic market it clocked a growth of 18.1% as compared to 2008 with 289,863 units, while overseas sales grew by 10.7%, with export of 270,017 units. Hyundai Motor currently exports carsto more than 110 countries across European Union, Africa, Middle East, Latin America and Asia. It has been the number one exporter of passenger car of the country for the sixth year in a row. In a little over a decade since Hyundai has been present in India, it has become the leading exporter of passenger cars with a market share of 66% of the total exports of passenger cars from India, making it a significant contributor to the Indian automobile industry. In 2009, in spite of a global slowdown, Hyundai Motor Indias exports grew by 10.7%. In 2010 Hyundai plans to add 10 new markets with Australia being the latest entrant to the list. The first shipment to Australia is of 500 units of the i20 and the total i20 exports to Australia are expected to be in the region of 15,000 per annum.