Академический Документы
Профессиональный Документы
Культура Документы
Submitted by Group 5 Aman Raaj Narang 211014 Arun Garg 211033 Hitesh Munjal 211054 Pooja Gupta -211095
Title of the Term End Paper: In depth study on Risks in International Business: The Case of Maruti Udyog Ltd
Scope of Term Paper: To study the Indian automotive export industry in order to identify and study in detail the risks involved. This paper will also include the various risk management practices undertaken to identify, analyse and respond to these risks. For this purpose we will be using the case study of Maruti Udyog Limited.
Objectives: The main purpose of the study is to find out what all Risks are associated with Automobile Exports, and how they are managed. This may include risks from Currency Exchange Rate, Foreign Government Policies, Government Policies and many more. Sub-Objectives: Study the Risk Management Policies at Maruti Identifying & Mapping the various risks involved in the automobile Export Market : With regard to Marutis foreign clients Understanding the Risk Ranking Processes currently in use Evaluating the Risk Management practices currently in use for the identified risks, and make suggestions if any.
Introduction In the last few years, the world automotive industry has changed its locational preferences due to various reasons. India and China are now evolving, as the manufacturing hubs for Global Majors like Ford, Honda, Toyota etc. The changes in design and adaptation of international technologies have enabled the Indian automotive industry to compete globally, and thus are also exposed to global challenges. Indian exports in Automobile sector are at an all time high, with local players like Mahindra & Mahindra offering their products in international markets. Thus we feel it would be an excellent opportunity to study the risks that Indian companies are being exposed to, by dealing with new foreign markets.
Literature Review Risk identified in the Automobile Sector 1. Capital risk management: The Automobile companies manage their capital to maintain an optimal capital structure for maximizing profit of its shareholder and reducing the cost of capital. 2. Financial risk management: The Automobile companies are exposed to various financial risks such as market risk (foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk related to its financial instruments. a) Market risk: The Automobile companies are mainly exposed to financial risks arising from changes in foreign exchange rates and interest rates. Foreign exchange risk management: The Automobile companies are exposed to various foreign exchange risks by making transactions in foreign currencies. Interest rate risk management: The company is exposed to interest rate risk arising from financial instruments with variable interest rates as it has many borrowing with fixed or variable interest rates b) Credit Risk: The Automobile companies are exposed to credit risk when counterparty defaults on its contractual obligation resulting in financial loss to the Automobile companies. c) Liquidity Risk: The Automobile companies manage liquidity risk based on maturity profile of its funding. They analyze and reviews actual cash outflow and its budget to match the maturity of its financial liabilities to that of its financial assets. 3. Political Risk: The automobile companies are exposed to the various risks associated with the government policies & regulations 4. Government Policy Risk: Government policies regarding emission norms, custom duty etc. 5. Tax/Levies Risk: Change in tax structure, import duties etc. 6. Competition Risk: The automobile Industry is highly competitive. 7. Supplier/Contractual Risk: The companies face risk of disruption of production, due to unavailability of supplies
Sources of Data: Primary Data: Data would be collected through Questionnaire / Interviews from the employees at Maruti Udyog Ltd. Secondary: Research Papers & Journals, Internet
Methodology The methodology which will be used for this project is Firstly studying in general about the risks involved and risk management practices undertaken by the Indian Automobile Export Market. Studying in depth about the various risks involved during exports specifically with respect to Maruti with the help of a case study. Analysing and evaluating the risk management practices currently in use by Maruti for the identified risks, and make suggestions if any. Finally conclusion which will include the whole analysis of the case study of Maruti Udyog Limited.
Limitations
Limited resources Limited Timeframe
References:
Annual Report: Maruti Udyog Ltd. Annual Report: Hyundai Ltd ARTNeT Working Paper No. 113, May, Bangkok (2012) : THAILANDS 2011 FLOODING: ITS IMPACT ON DIRECT IMPORTS & GLOBAL SUPPLY CHAIN Anuradha Sivakumar and Runa Sarkar, IIT-K (2009) : Corporate Hedging for Foreign Exchange Risk in India Export Consultancy Unit, Saudi Industrial Development Fund (2006) : EXPORT RISKS & MANAGEMENT