A

Global Country Study Report

On
AUTOMOBILE INDUSRTY IN CAMBODIA
&
Business Opportunities for Gujarat and Himachal Pradesh

Submitted to

Institute Code: 735

N.R. Institute of Business Management Ahmedabad
In partial Fulfillment of the Requirement of the award for

the degree of

Master of Business Administration (MBA)

Under the Guidance of

Prof. Isha Dave

No. Name of Student

Enrolment No.

1.

Tushal Hareja

147350592043

2.

Ashik Khokhar

147350592065

3.

Vishal Mehta

147350592085

4.

Paresh Rathod

147350592131

5.

Vinay Shah

147350592151

6.

Mihir Tanna

147350592160

Offered By
Gujarat Technological University
Ahmedabad
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2|Page

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PLAGIARISM REPORT

4|Page

TABLE OF CONTENT
SR.NO.

PARTICULARS

PAGE
NO.
06

1.

Introduction to Cambodia

2.

Introduction to Himachal Pradesh

24

3.

Introduction to Gujarat

32

4.

Justification for selection of automobile industry

45

5.

Steepled analysis between Cambodia & Gujarat

47

6.

Swot analysis of Cambodia

68

7.

Swot analysis of Gujarat

74

8.

Swot analysis of Himachal Pradesh

77

9.

Bilateral trade opportunity between Cambodia & Gujarat

81

5|Page

CHAPTER- 1
About the Country
Cambodia

6|Page

INTRODUCTION OF CAMBODIA
History of Cambodia
The history of Cambodia, a century in mainland South-east Asia, can be found back to at least
the 5th millennium BC. Detailed records of a political framework on territory, what is now
modern day Cambodia first part in Chinese annals in reference to Funan, a policy that
encompassed the southern part of the Indochinese peninsula during the 1st to 6th centuries.
Centred at the last Mekong, Funan is noted as the first regional Hindu culture, which suggests
protracted socio-economic interplay with maritime trading partners of the Indosphere in the west.
By the 6th century a convenances, titled Chenla or Zhenla in Chinese katha, has firmly placed
Funan, as it controlled bigger, more undulating spots of Indochina and maintained more than a
single centre of power.
The Khmer kingdom was established by the early 9th century. Sources refer here to a mythical
initiation and consecration ceremony to claim political legality by founder Jayavarman II at
Mount Kulen (Mount Mahendra) in 802 C.E. A succession of powerful sovereigns, continuing
the Hindu devaraja culture tradition, reigned over the classical era of Khmer civilization until the
11th century. A new dynasty of hick origin introduced Buddhism as royal religious
discontinuities and decentralization result. The royal chronology ends in the 14th century. Great
achievements in administration, agriculture, architecture, hydrology, logistics planning and the
arts are testimony to a creative and progressive civilization - in its complication a cornerstone of
Southeast Asian cultural legacy.
A transitional time around 100 years followed, that initiated the Dark Ages or the Middle Period
of Cambodian history in the mid fifteenth century. Although Hindu culture had been all but
replaced, the monument sites at the old metropolis remained an important spiritual center. Yet
since the mid 15th century the core population steadily moved to the east and stable at the juction
of the Mekong and Tonle Sap rivers at Chaktomuk, Longvek and Oudong.
Maritime trade was the basis for a very large handed 16th century. But, as a result foreigners Muslim Malays and Cham, Christian European feat and missionaries - increasingly disturb and
influence government affairs. Vague fortunes, a robust economy on the one hand & a disturbed
culture and compromised royalty on the other are continuing features of the Longneck era.
7|Page

By the 15th century, the Khmers' styffy neighbours, the Mon people in the west and the Cham
people in the east had successively been pushed aside or replaced by the resilient Siamese/Thai
and Vietnamese. These powers had perceived, self understanding and increasingly followed the
imperative of controlling the lower Mekong basin as the key to control all Indochina. A weak
Khmer empire only encouraged the strategists in Ayutthaya (later Bangkok) and Hu?. Attacks on
and conquests of Khmer royal residences left sovereigns without a fiesta

and legit power base.

Interference in succession and marriage policies added to the decay of royal status. Oudong was
established in 1601 as the last royal place of the Middle Period.
The 19th century arrival of technologically better and ambitious European colonial powers with
policies of hard control put an end to regional riots and as Thailand, although humiliated and on
the retreat, escaped colonization as a buffer state, Vietnam was to be the centre point of French
colonial ambition. Cambodia, although largely neglected, had entered the Indochinese Union
territory as a perceived entity and was capable to carry and reclaim its identity and integrity into
modernity.
After 80 years of pukka hibernation, the brief episode of Japanese occupation during World War
II, that match with the investiture of king Sihanouk was the opening act for the unalterable
process towards re-emancipation and modern Cambodian history. The empire of Cambodia
(195370), independent since 1953, struggled to remain coastal in a world by polarisation of the
nuclear powers USA and Soviet Union. As the Indochinese war sharpens, Cambodia becomes
increasingly involved, the Khmer country is one of the results in 1970, another is civil war. 1975,
derelict and in the hands of the Khmer Rouge, Cambodia suffer its darkest hour - Democratic
Kampuchea and its long result of Vietnamese trade, the People's Republic of Kampuchea and the
UN rulers towards Modern Cambodia since 1993.

8|Page

 Name
The official name of the country is the empire of Cambodia and in Khmer as (Preah
Reacheanachak Kampuchea), often shortened to Kampuchea. Kampuchea derives from the
Sanskrit word Kambuja or "Golden Land" or "Land of Peace and Prosperity", as described by the
Khmer Buddhist friar Chuon Nath in his Khmer Dictionary.
Cambodians refer to as, meaning "Khmer's Land" or more as Prateh Kampuchea, "Country of
Kampuchea".

Kampuchea

is

generally

known

as

"Cambodia"

in

british

and

"Cambodge"&"Kamboj" in French. Kampuchea is mostly known to Easterners and Cambodia is

more widely known to Westerners. The word Khmer can indicate the country, its people or its
language.
Geographic Location
Cambodia has a land area of 181,035 square Km in the south-western part of the Indochina
peninsula, about 20% of which is used for agriculture. It lies fully within the tropics with its
southern most points narrowly more than 10 above the Equator. The country capital city is
Phnom Penh.

9|Page

International borders are shared with a Thailand & the Lao Peoples Democratic Republic on the
West and the North, & the social Republic of Vietnam on the East & Southeast. The country is
bounded on the Southeast by the Gulf of Thailand. In comparison with neighbours, Cambodia is
a geographical contact country administratively composed of 20 territory, three of which have
relatively short nautical boundaries, 2 municipalities, 172 districts, and 1,547 communes. The
country has a coastline of 435 km and vast mangrove stands, some of which are relatively
undisturbed.
Language of Cambodia
The Cambodian language is Khmer, which is hereditary itself - and advanced in education with
application of Indic languages Pali and Sanskrit from India. Also, the Khmer language is
influenced by spoken and written Thai. Some technical languages are borrowed from French.
However, English is generally communicated in hotels and business compounds at present days.
English and French are popular 2nd languages and Chineses is the third.
National Anthem
The anthem was particularly adopted in 1941 and reconfirmed in 1947, around the time of
independence from France. In 1970, the empire was abolished, thereby replacing the carol as
well. After the communist victory in 1975, former royalist symbols, including Nokoreach,
were redentegrate for a short while until replaced with their own national symbols. During exile,
the 2nd verse of Nokoreach was declared to be the anthem of Cambodia; after the royalist forces
defeated the Vietnamese stooge regime in 1993, putting an end to their long civil war, the
royalist anthem (all verses) was also restored to Cambodia. The status of the anthem is derived
from the name of an ancient Khmer kingdom.

"Nokor Reach" is the national anthem of the Kingdom of Cambodia. It was based on a
Cambodian folk tune and written by Chuon Nath; the anthem was originally adopted in 1941 and
reconfirmed in 1947, around the time of independence from France. In 1970, the monarchy was
abolished, thereby replacing the anthem as well. After the communist victory in 1975, former
royalist symbols, including "Nokor Reach", were reinstated for a short while. The Khmer Rouge
then replaced it with Dap Prampi Mesa Chokchey ("Glorious Seventeenth of April"). After the
10 | P a g e

royalist party FUNCINPEC defeated the former communists (Cambodian People's Party) in the
1993 elections, the royalist anthem was restored.

National Flag

The Cambodia flag is a curve of red and blue with an image of Angkor Vat placed at the centre
of it. The flag was originally adopted in 1993. It was officially adopted on October 29, 1948 and
remained until Oct 1970.
In 1993, with the re-establishment of the Cambodian kingdom the Cambodian flag once again
restructured.
Angkor Vat, a Hindu temple, an integral and efficient part of the rich heritage of Cambodia
proudly adorns the century flag. The blue colour symbolizes the nation's royalty. The red
represents the nation and the white represents the religion. The emblem of the temple represents
the structure of the unity.

11 | P a g e

 Government
Originally a multiparty democracy, in reality "the country remains a one-party state dominated
by the Cambodian People's Party and PM Hun Sen, a recast Khmer Rouge in power since 1985.
The open doors to new investment during his reign have yielded the most use to a coterie of
cronies of his and his wife, Bun Rany." Cambodia's government has been explain by Human
Rights Watch's Southeast Asian Director, David Roberts, as a "vaguely communist free-market
state with a relatively authoritarian coalition over a superficial democracy."
Prime Minister Hun Sen has vowed to kingdom when he is 74. He is a former Khmer Rouge
member who defected. His government is regularly accused of ignoring human rights and
suppressing political disagree . The 2013 election results were disputed by Hun Sen's opposition,
leading to demonstrations in the capital. Manifestation were injured and killed in Phnom Penh
where a reported 20,000 protesters gathered, with some clashing with riot police. From a meek
farming background, Hun Sen was 33 when he took power in 1985, and is now in the
organization of other long ruling dictators such as Zimbabwe's Robert Mugabe and Kazakhstan's
Nursultan Nazarbayev'.
National politics in Cambodia took place within the framework of the nation's constitution of
1993. The government is a constitutional empire operated as a parliamentary representative
democracy. The PM of Cambodia, an office held by Hun Sen since 1985, is the chief of
government, while the King of Cambodia is the head of state. The prime minister is appointed by
the king, on the advice and with the sanction of the National Assembly. The prime minister and
the ministerial appointees practice executive power.
Legislative powers are shared by the executive and the bicameral Parliament of Cambodia,
which include a lower house, the National Assembly and an upper house, the parliament.
Members of the 123-seat Assembly are elected through a system of relative representation and
serve for a maximum term of five years. The governing body has 61 seats, two of which are
selected by the king and two others by the National Assembly, and the rest elected by the
converse councillors from 24 provinces of Cambodia. Senators serve six-year terms.
On 14 October 2004, King Norodom Sihamoni was elected by a special nine-member throne
council, part of a selection procedure that was quickly put in place after the resignation of King
12 | P a g e

Norodom Sihanouk a week prior. Sihamoni's election was legitimate by Prime Minister Hun Sen
and National Assembly Speaker Prince Norodom Ranariddh, both members of the throne
council. He was enthroned in Phnom Penh on 29 Oct 2004.
Political culture
The Cambodian People's Party is the main ruling party in Cambodia. The CPP controls the lower
and higher chambers of parliament, with 68 seats in the National legislative body and 46 seats in
the council. The opposition Cambodia nationalized Rescue Party (CNRP) is the 2nd largest party
in Cambodia with 55 seats in the National Assembly but has yet to participate in any council
elections. The Sam Rainsy Party has 11 seats in the governing body.
Hun Sen and his government have seen much debate. Hun Sen was a previous Khmer Rouge
chief who was formerly installed by the Vietnamese & after the Vietnamese left the country,
maintains his strong man place by violence and domination when deemed necessary. In 1997,
fear the increasing power of his co-Prime Minister, Prince Norodom Ranariddh, Hun launched a
coup, using the army to wash out Ranariddh and his followers. Ranariddh was ousted and fled to
Paris while other opponents of Hun Sen were detained, tortured and some suddenly executed.
In addition to political domination, the Cambodian government has been accused of fraud in the
sale of huge areas of land to foreign investors ensuing in the eviction of thousands of villagers as
well as taking bribes in exchange for grants to utilize Cambodia's oil wealth and mineral
resources. Cambodia is constantly listed as one of the most fraudulent governments in the world.
Reprieve global currently recognizes one prisoner of sense of right and wrong in the country: 29year-old land rights protester Yorm Bopha.
Journalists covering a protest over dubious election results in Phnom Penh on 22 September
2013 say they were intentionally attacked by police and men in plain clothes, with slingshots and
stun guns. The attack against the President of the abroad Press Club of Cambodia, Rick
Valenzuela, was captured on video. The violence came among political tensions as the
opposition boycotted the opening of Parliament due to concerns about electoral scam. Seven
reporters continued minor injuries while at least two Cambodian protesters were hit by slingshot
projectiles and hospitalized.

13 | P a g e

 Foreign relations
The foreign associations of Cambodia are handled by the Ministry of Foreign Affairs under H.E.
Hor Namhong. Cambodia is a member of the UN, the World Bank, and the global Monetary
Fund. It is a member of the Asian Development Bank, ASEAN, and tied the WTO in 2004. In
2005 Cambodia attended the opening East Asia Summit in Malaysia.
Cambodia has established diplomatic associations with numerous countries; the government
reports twenty embassies in the country include many of its Asian neighbours and those of
important players during the Paris peace consultation, including the US, Australia, Canada,
China, the European Union (EU), Japan, and Russia. As a result of its international relations,
various charitable organizations have assisted with social, economic, and civil infrastructure
needs.
While the violent ruptures of the 1970s and 1980s have passed, several border disputes between
Cambodia and its neighbors persist. There are disagreements over some offshore islands and
sections of the boundary with Vietnam and undefined maritime boundaries and border areas with
Thailand. Cambodian and Thai troops have clashed over land immediately adjacent to the Preah
Vihear temple, leading to deterioration in relations.
Economy of Cambodia
The' economy of Cambodia' at present follows an open market system (market economy) and has
seen rapid economic progress in the last decade. Cambodia had a GDP of $13 billion in 2012.
Per capita income, although rapidly increasing, is low compared with most neighboring
countries. Cambodia's two largest industries are textiles and tourism, while agricultural activities
remain the main source of income for many Cambodians living in rural areas. The service sector
is heavily concentrated on trading activities and catering-related services. Recently, Cambodia
has reported that oil and natural gas reserves have been found off-shore.
In 1995, the government transformed the country's economic system from a planned economy to
its present market-driven system. Following those changes, growth was estimated at a value of
7% while inflation dropped from 26% in 1994 to only 6% in 1995. Imports increased due to the
influx of foreign aid, and exports, particularly from the country's garment industry, also
increased.
14 | P a g e

After four years of improving economic performance, Cambodia's economy slowed in 1997-98
due to the regional economic crisis, civil unrest, and political infighting. Foreign investments
declined during this period. Also, in 1998 the main harvest was hit by drought. But in 1999, the
first full year of relative peace in 30 years, progress was made on economic reforms and growth
resumed at 4%.
Currently, Cambodia's foreign policy focuses on establishing friendly borders with its neighbors
(such as Thailand and Vietnam), as well as integrating itself into regional (ASEAN) and global
(WTO) trading systems. Some of the obstacles faced by this emerging economy are the need for
a better education system and the lack of a skilled workforce; particularly in the poverty-ridden
countryside, which struggles with inadequate basic infrastructure. Nonetheless, Cambodia
continues to attract investors because of its low wages, plentiful labor, proximity to Asian raw
materials, and favorable tax treatment.
In 2012 Credit Bureau Cambodia was established with direct regulatory oversight by the
National Bank of Cambodia. The Credit Bureau further increases the transparency and stability
within the Cambodian Banking Sector as all banks and microfinance companies are now
required by law to report accurate facts and figures relating to loan performance in the country.
One of the largest challenges facing Cambodia is still the fact that the older population often
lacks education, particularly in the countryside, which suffers from a lack of basic infrastructure.
Fear of renewed political instability and corruption within the government discourage foreign
investment and delay foreign aid, although there has been significant aid from bilateral and
multilateral donors. Donors pledged $504 million to the country in 2004, while the Asian
Development Bank alone has provided $850 million in loans, grants, and technical assistance.
Bribes are often demanded from companies operating in Cambodia when obtaining licences and
permits, such as construction-related permits.
Cambodia ranked among the worst places in the world for organised labour in the 2015
International Trade Union Confederation (ITUC) Global Rights Index, landing in the category of
countries with no guarantee of rights

15 | P a g e

 Demographics
As of 2013, Cambodia has an estimated population of 15,205,539 people. Cambodia's birth rate
is 25.4 per 1,000. Its population growth rate is 1.7%.
50% of the Cambodian population is younger than 22 years old. At a 1.04 female to male ratio,
Cambodia has the most female-biased sex ratio in the Greater Mekong Subregion.Amongst the
Cambodian population aged over 65, the female to male ratio is 1.6:1.
The total fertility rate in Cambodia was 3.0 children per woman in 2010.The fertility rate was 4.0
children in 2000. Women in urban areas have 2.2 children on average, compared with 3.3
children per woman in rural areas. Fertility is highest in Mondol Kiri and Rattanak Kiri
Provinces, where women have an average of 4.5 children, and lowest in Phnom Penh where
women have an average of 2.0 children.
Religion
Buddhism is the official religion of Cambodia, practiced by more than 95 percent of the
population with an estimated 4,392 monastery temples throughout the country. Cambodian
Buddhism is deeply pervaded by Hinduism, Tantrism, and native animism. Key concepts in
Cambodian Buddhism include bonn (Pali punna, merit), reincarnation, and kamm (Pali kamma,
karma), which means the moral result accruing from action in Pali but a concept closer to
"misfortune" in Khmer.
Key concepts deriving from animism include the close interrelationship between spirits and the
community, the efficacy of apotropaic and luck-attracting actions and charms, and the possibility
of manipulating one's life through contact with spiritual entities such as the "baromey" spirits.
Hinduism has left little trace beyond the magical practices of Tantricism and a host of Hindu
gods now assimilated into the spirit world (for example, the important neak ta spirit called Yeay
Mao is the modern avatar of the Hindu goddess Kali).
Mahayana Buddhism is the religion of the majority of Chinese and Vietnamese in Cambodia.
Elements of other religious practices, such as the veneration of folk heroes and ancestors,
Confucianism, and Taoism mix with Chinese Buddhism are also practiced.

16 | P a g e

Islam is followed by about 2% of the population and comes in three varieties, two practiced by
the Cham people and a third by the descendants of Malays resident in the country for
generations. Cambodia's Muslim population is reported to be 80% ethnic Cham

Education
The Ministry of Education, Youth and Sports is responsible for establishing national policies and
guidelines for education in Cambodia. The Cambodian education system is heavily
decentralised, with three levels of government, central, provincial and district responsible for
its management. The constitution of Cambodia promulgates free compulsory education for nine
years, guaranteeing the universal right to basic quality education.
The 2008 Cambodian census estimated that 77.6% of the population was literate (85.1% of men
and 70.9% of women). Male youth age (1524 years) have a literacy rate of 89% compared to
86% for females.
The education system in Cambodia continues to face many challenges, but during the past years
there have been significant improvements, especially in terms of primary net enrollment gains,
the introduction of program basedbudgeting, and the development of a policy framework which
helps disadvantaged children to gain access to education. The country has also significantly
invested in vocational education, especially in rural areas, in order to tackle poverty and
unemployment. Two of Cambodia's most acclaimed universities are based in Phnom Penh.

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Traditionally, education in Cambodia was offered by the wats (Buddhist temples), thus providing
education exclusively for the male population. During the Khmer Rouge regime, education
suffered significant setbacks.
With respects to academic performance among Cambodian primary school children, research
showed that parental attitudes and beliefs played a significant role. Specifically, the study found
that poorer academic achievement among children were associated with parents holding stronger
fatalistic beliefs (i.e., human strength cannot change destiny). The study further found that
"length of residence" of parents in the community in which they stay predicted better academic
achievement among their children.

18 | P a g e

Trade, growth and poverty in Cambodia

Cambodia has established a remarkable track record of economic growth over the past 10 years.
Between 1997 and 2007, the economy grew at close to 10% per annum during the entire period.
Vigorous economic growth has also translated into important reductions in poverty, with per
capita income more than doubling, from $285 to $593, and the poverty rate declining from 4550% in 1993/94 to 30% in 2007 (World Bank, 2009). However, inequality has increased over
this period, undermining future potential for growth.
Cambodias sustained economic expansion has been driven in large part by rapid export growth.
Foreign sales have increased by more than 20% per year since 1998, and exports in goods and
services accounted for 65% of gross domestic product (GDP) in 2007 (World Bank, 2008a).
Cambodias textile and garment industry has been the cornerstone of this export performance, for
16% of GDP in 2007 and 2.4 points of GDP growth between 1998 and 2007. Despite
Cambodias poor overall governance, publicprivate collaboration in the sector has created an
enabling environment conducive to growth (World Bank, 2009).
For over 10 years, foreign sales in the industry grew at approximately 28% per year, from only
around $26 million in 1995 to almost $2.8 billion in 2007 (ILO, 2008). More than half the
280,000 skilled and unskilled jobs in the industry in 2006 were created over the five preceding
years, making the industry by far the largest source of job growth during this period (Polaski,
2006). Moreover, between 85% and 90% of these jobs have gone to women workers, which
implies an important positive impact on womens empowerment in Cambodia. Finally, about
90% of workers send home an average of 50% of their wages to support their families in their
villages of origin, thus helping to boost the standard of living in rural areas (MoC/ADB, 2004).
This expansion in the garment sector has been complemented by growth in the tourism sector.
The hotel and restaurant industry represents 4% of GDP and contributed 0.5 points of GDP
growth from 1998-2007. Despite the important increases in these industries, Cambodian
households remain heavily dependent on agriculture. 59% of households depend on agriculture
as their primary source of income.
Approximately 250,000 young Cambodians are entering the labour market per year (often with
decreasing access to land resources), so the generation of adequate employment opportunities is
19 | P a g e

of particular importance. To generate employment opportunities, broadening Cambodias export

base and diversifying the economy as a whole are key. Cambodias heavy dependence on the
garment sector is an important vulnerability, one which has become painfully exposed during the
current economic downturn. In January 2009, garment exports contracted to less than 30% of
their value in 2008, and more than 20,000 workers are reported to have lost their jobs in the
garment sector since the beginning of 2009. Simultaneously, the tourism sector has seen foreign
arrivals drop by % compared with 2008. As a result, International Monetary Fund (IMF)
estimates of current growth prospects are negative (Chun Sophal and Hor Hab, 2009).

List of Industry in cambodia

Cement Industry
Media
Telecommunication
Tourism ( Widely Known)
Conglomerate
Consumer Goods
Financial
Industrial Manufacturers
Oil and Gas
Utilities

20 | P a g e

 Contribution Towards GDP

Cambodian economy maintained high growth of more than 10% p.a. for four consecutive years
between 2004 and 2007. While GDP growth dropped to 0.1% in 2009, having suffered from
world economic recession started in the latter half of 2008, GDP growth rate in 2013 recovered
up to 6.0%.According to the MEFs forecast, the growth rates are estimated to persist between
6.0% and 6.5% in 2014 and 2015GDP amount has been steadily grown with 43,057 billion Riels
in 20012 and 47,048 billion Riels in 2013 and is projected to be 52,141 billion Riel in 2014
(approximately USD 12.9 billion) and 57, 363 billion Riel in 2015(approximately USD 14.2
billion).Per capita GDP has also steadily increased since 1998 when the Riel greatly depreciated
against the dollar. Per capita GDP in 2010 reached USD 830, an increase of approximately 70%
from 487 US dollars in 2009. It is projected to reach USD 904 in 2014 and USD 984 in 2015
respectively, according to the MEFs forecast.

Overview of Automobile industry in Cambodia

Angkor Heavy motor co. ltd.

Toyota co. ltd.

Premium auto BMW Cambodia

Cambodias total GDP is

16.77 billion USD.
Cambodia represents
0.03% in worlds GDP.

Star auto (Mercedes) co. ltd.

Land rover service center

21 | P a g e

Table II-1-1 GDP Growth Rate by Economic Activity, 2008-2014

Industry

2008 2009 2010 2011 2012 2013 2014e

Agriculture, Fisheries & Forestry

15.7

5.5

5.7

5.4

3.6

Crops

27.6

5.3

8.2

6.6

5.8

5.7

3.7

Livestock & Poultry

5.6

8.2

3.7

3.8

5.6

3.9

Fisheries

5.6

3.8

0.8

6.5

0.4

3.8

Forestry & Logging

5.1

1.1

0.9

1.1

0.2

1.1

Industry

12.7

18.3

8.4

-9.5

13.6

8.5

Manufacturing

9.7

17.4

8.9

3.1

-15.5

29.6

Textile, Apparel & Footwear

9.2

20.4

10

2.2

-9

18.5

10.4

Construction

22.1

20

6.7

5.8

-25.5

6.4

Services

13.1

10.1

10.1

2.3

3.3

6.3

Trade

8.5

7.1

9.5

9.4

4.2

7.5

Hotel & Restaurant

22.3

13.7

10.2

9.8

1.8

11.2

10.7

Transport & Communication

14.5

2.1

7.2

7.1

3.9

6.8

Real Estate & Business

7.8

10.9

10.7

-2.5

-15.8

5.1

Other Services

18.3

17.2

12.1

12

2.9

4.2

4.6

Taxes on Products

6.1

7.6

45.7

9.1

6.1

0.1

4.1

GDP

13.3

10.8

10.2

6.7

0.1

22 | P a g e

 Export Import Statistic

Export Statistic
Top 10 Export

Top 10 Export

Partners

Partners

United States

United States

$2,032,783,642

Hong Kong

Hong Kong

$1,682,658,567

Singapore
United Kingdom

Singapore

$684,668,761

United Kingdom

$528,030,062

Germany

$469,721,535

Japan

Canada

$417,036,525

China

Japan

$199,167,533

Belgium

China

$182,895,514

Spain

Belgium

$163,347,610

Spain

$149,861,809

Germany

Canada

Importer Data
Top Importers
China

Import Volume
$2,162,204,603

Vietnam

$937,012,554

China

Thailand

$902,257,532

Vietnam

Hong Kong

$495,419,829

Korea, South

$404,436,946

Singapore

$258,429,954

Singapore

Japan

$222,987,165

Japan

Indonesia

$215,672,606

Indonesia

Malaysia

$175,416,043

Malaysia

United States

$151,882,814

Thailand
Hong Kong
Korea, South

United States

23 | P a g e

CHAPTER- 2
Introduction to Himachal
Pradesh

24 | P a g e

Overview of Himachal Pradesh

Facts on Himachal Pradesh
Date of Formation

Jan 25, 1971

Area

55,673 sq km

Density

123/Km2

Population (2011)

6,864,602

Males Population (2011)

3,481,873

Females Population (2011)

3,382,729

No. of District

12

Capital

Shimla

Rivers

Ravi, Beas, Chenab, Sutlej, Yumana

Forests & National Park

Pin Velley NP, Greater Himalaya NP, Renuka WS, Chail WS, KalatopeKhajjiar WS,
Simbalbara WS

Languages

Hindi, English, Punjabi, Kinnauri, Pahari, Kangri and Dogri

Neighbours State

Jammu and Kashmir, Punjab, Haryana, Uttar Pradesh, Uttrakhand

State Animal

Snow Leopard

State Bird

Western Tragopan

State Tree

Deodar

State Flower

Pink Rhododendron

Net State Domestic Product

65535

(2011)
Literacy Rate (2011)

68.74%

Females per 1000 males

974

25 | P a g e

Assembly constituency

68

Parliamentary constituency

Religion
Hinduism is the main religion in Himachal Pradesh, which ranks first in India in terms of the
proportion of Hindus present within it. More than 95% of the total population belongs to the
Hindu faith, the distribution of which is evenly spread throughout the state. Himachal Pradesh
thushas the one of the highest proportion of Hindu population in India (95.17%).
Other religions that form a small percentage are Buddhism and Sikhism. The Lahaulis of Lahaul
and Spiti region are mainly Buddhists. Sikhs mostly live in towns and cities and constitute 1.16%
of the state population. For example they form 10% of the population in Una District adjoining
the state of Punjab and 17% in Shimla, the state capital. The Buddhists constitute 1.15% are
mainly natives and tribals from Lahaul and Spiti, where they form majority of 60%
and Kinnaur where

they

form

40%,

however

the

bulk

are

refugees

from Tibet. The Muslimsconstitute slightly 2.18% of the population of Himachal Pradesh.
Muslims are mainly present in the Chamba and Solan districts, whilst the minority Buddhist
population primarily resides in the Lahul&Sapiti and Kinnour districts. The tiny Catholic
minority has its own Roman Catholic Diocese of Simla and Chandigarh, which has
its cathedral see in Simla and a co-cathedral in Chandigarh.

Natural resources
Soil and Minerals
The State of Himachal Pradesh has varieties of soil found in it. They are Brown, Brown-Grey
and Sedimentary soils. Presence of these types of soils are helpful in agriculture and are mostly
found in the places Shimla, Kangra, Kullu, Hamirpur, Solan and Una. These states are huge
producers of crops.

26 | P a g e

Himachal Pradesh has rich source of minerals like Mica, Uranium, Iron Ore, Limestone, Lead,
Slate, and Gypsum which has helped in setting up industries in different districts of the state.

Forest
A large part of Himachal Pradesh State is covered with forest. The state has forest area
categorized into 6 important types. The total area covered by forest is about 21,325 Sq Km. the
forest types of this state are- Mountain Temperate Region, Mountain sub-tropical region, SubAlpine Region, Moist Tropical Region, Alpine-Scrub Region and Dry Tropical Region. Southern
parts of Himachal Pradesh fall under sub-tropical/sub-tropical moist forest areas. The important
trees found in this region are Shisam and Sal trees.

Lakes
Himachal Pradesh is blessed with numerous lakes ranging from big to small ones. 1% of the
entire area of this state has lakes. Some of these lakes are natural ones and have been created
centuries ago. These lakes get water from springs that are created by melting of mountain snow
and through underground.

Some of the famous lakes of Himachal Prades are MaharanaPratapSagar Lake Kangra,
GobindSagar Lake Bilaspur, Khajjiar Lake Chamba, Manimahesh Lake Chamba, Prashar Lake
Mandi, Chandra Tal Lake Kunzum Pass, Suraj Tal Lake, Dashir Lake Manali, Nako Lake
Kinnaur, Rewalsar Lake Mandi, Lama Dal Lake Chamba.

Rivers
Himachal Pradesh has many small rivers flowing through the state but there are five major rivers
passing through the state. The famous rivers are Sutlej River, Beas River, Ravi River, Chenab
River, Yamuna River etc.

27 | P a g e

Passes
Himachal Pradesh is blessed with numerous lakes ranging from big to small ones. 1% of the
entire area of this state has lakes. Some of these lakes are natural ones and have been created
centuries ago. These lakes get water from springs that are created by melting of mountain snow
and through underground.
Some of the famous lakes of Himachal Prades are MaharanaPratapSagar Lake Kangra,
GobindSagar Lake Bilaspur, Khajjiar Lake Chamba, Manimahesh Lake Chamba, Prashar Lake
Mandi, Chandra Tal Lake Kunzum Pass, Suraj Tal Lake, Dashir Lake Manali, Nako Lake
Kinnaur, Rewalsar Lake Mandi, Lama Dal Lake Chamba.

Transportation
Most of the part of Himachal Pradesh being mountainous, development of proper transport
facilities was difficult. However, the government has made notable progress in connecting the
roads to the state and today Himachal Pradesh is known to have the highest density of roads
among all major hill stations of the country. There are 8 national highways that connect the state
with the rest of the country. Inside the state, all the tourist spots are connected through roads for
the benefits of travellers. Within the city, people prefer private vehicles and buses to
communicate from one part to the other. Two railway stations connect the state with the other
part of the country, the Kalka Shimla railways and the Pathankot-Jogindernagar railways. Few
more tracks have been proposed by the government for better connectivity. With three airports in
the state - Shimla airport near the capital, the Gaggal airport near the Kangra District, and the
Bhuntar airport just near to the Kullu District - Himachal Pradesh can be reached through
airways as well. However, due to improper weather conditions, most of these flights either get
delayed or cancelled in most of the days, causing much inconvenience to the passengers.

28 | P a g e

 Major Industries
Agriculture
Agriculture is the main occupation of the people of Himachal Pradesh and has an important place
in the economy of the state. It provides direct employment to 69 per cent of the total workers of
the state. About 21 per cent of the total GSDP comes from agriculture and its allied sectors.
Rice, Wheat and Maize are important cereal crops of the State. Groundnut, soybean and
sunflower in kharif and rapeseed/mustard and toria are important oilseed crops in the rabi season.
Urd, bean, moong, rajmash in kharif season and gram in rabi are the important pulse crops of the
state. Agro-climatically, the state can be divided into four zones viz., (i) Sub Tropical, submountain and low hills, (ii) Sub Temperate, Sub Humid mid hills, (iii) Wet Temperate high hills,
(iv) Dry Temperate high hills and cold deserts.
The agro-climatic conditions are congenial for the production of cash crops like off-season
vegetables, potato and ginger. The State Government is laying emphasis on production of offseason vegetables, potato, ginger, pulses and oilseeds besides increasing production of cereal
crops, through timely and adequate supply of inputs, demonstration and effective dissemination
of improved farm technology, replacement of old variety seeds, promoting integrated pest
management, bringing more area under efficient use of water resources and implementation of
wasteland development projects. There are four distinct seasons with respect to rainfall. Almost
half of the rainfall is received during the Monsoon season and remaining is distributed among
other seasons.

Agro based industries

Himachal Pradesh is predominately an agricultural state. The natural endowments like soil, land,
water etc. are being harnessed in such a way that the cherished goals of ecological sustainability
and economic upliftment of farming community are achieved. About 18-20 per cent area is
irrigated and rest is rain fed. Huge investment potential exists in the following fields:

29 | P a g e

Tea Plantation: Management of tea factories and tea gardens.

Food Processing: Maize is an important crop where surplus is available for processing. Under
the state Industrial Policy, number of incentives are available to the investors in food processing
industry. Processing industries of ginger, potato and vegetables in valley areas have great
investment scope.

Seed Production: The temperate climate of the state is quite suitable for production of disease
free seed. The Government is encouraging private sector participation for exploitation of vast
seed production potential.

Biotechnology
Himachal has the potential to develop various types of industries using raw material base of
fruits, vegetables, high value cash crops and other naturally growing herbal plants. These
industries can be in the following: bio-pharmaceuticals, phyto- chemicals, bio-prospecting,
fermentation, post-harvest processing, bio-processing, pharmaceuticals, biochemical, genetically
engineered micro-organisms, enzyme production, environment protection and animal husbandry
etc.

Himachal has tremendous potential in horticultural sector. The state needs immediate
replacement of old orchard with high yielding disease free fresh planting stock. Biotechnology
can play important role by use of micro propagated plants. With this the industries for cider,
vinegar, wine and juice can come up to international standard. The horticulture sector also needs
a facelift using hi-tech biotechnological interventions at nursery, orchard, post-harvest,
processing, packaging and marketing stages. The Horticulture Technology Mission launched in
the State will prove to be a major milestone in strengthening the developmental activities through
technological inputs.
In agriculture sector there is need for diversification of farming for economic rehabilitation and
self-sufficiency. High yielding improved crop verities and transgenic especially stress tolerant
(cold, rain fed conditions), biofertilzers, bio pesticides etc. are other areas where Biotechnology
can play major role.
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Tourism
Tourism has been recognized as one of the most important/significant sectors of the economy in
Himachal Pradesh and has been recognized as a major engine of growth for future. The state has
a natural advantage for the development of tourism as an industry. It is endowed with
geographical and cultural diversity, clean, peaceful and beautiful environment owing to its
forests, lakes, mountains, rivers and rivulets, sacred shrines, historic monuments and the friendly
and hospitable people.
Tourism industry has been given very high priority and the government has developed
appropriate infrastructure for its development, which includes provision of public utility services,
roads, communication network, airports, transport facilities, water supply, civic amenities, etc.

Contribution of Himachal Pradesh in GDP of India

According to 2013-2014, Himachal Pradesh has contributed net worth 82,585crores INRin GDP
of India

Overview of automobile industry in Himachal Pradesh

TVS motors

International cars & Motors Ltd.

TAFE Tractors

Automobile
industry
is
contributing about 7% in total
GDP of India.
Indias total GDP is 2066.90
billion USD
It represents 3.33% in worlds
GDP.

31 | P a g e

CHAPTER- 3
Introduction to Gujarat &
Overview of Automobile
Industry in INDIA

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DETAILS OF SELECTED INDUSTRY WITH REFERENCE TO

GUJARAT
History
Historically, the state of Gujarat has been one of the main centres of the Indus Valley
Civilization. It contains major ancient metropolitan cities from the Indus Valley such as Lothal,
Dholavira, and Gola Dhoro. The ancient city of Lothal was where India's first port was
established. Also, Dholavira, the ancient city, is one of the largest and most prominent
archaeological sites in India, belonging to the Indus Valley Civilization. The most recent
discovery was Gola Dhoro. Altogether, about 50 Indus Valley settlement ruins have been
discovered in Gujarat. The ancient history of Gujarat was enriched by their commercial
activities. There is a clear historical evidence of trade and commerce ties with Egypt, Bahrain
and Sumer in the Persian Gulf during the time period of 1000 to 750 BC. There was a succession
of Hindu and Buddhist states such as the Mauryan Dynasty, Western Satraps, Satavahana
dynasty, Gupta Empire, Chalukya dynasty, Rashtrakuta Empire, Pala Empire and GurjaraPratihara Empire, as well as local dynasties such as the Maitrakas and then the Solankis.

The early history of Gujarat reflects the imperial grandeur of Chandragupta Maurya who
conquered a number of earlier states in what is now Gujarat. Pushyagupta, a Vaishya, was
appointed governor of Saurashtra by the Mauryan regime. He ruled Giringer (modern day
Junagadh) (322 BC to 294 BC) and built a dam on the Sudarshan lake. Emperor Ashoka, the
grandson of Chandragupta Maurya, not only ordered engraving of his edicts on the rock at
Junagadh, but asked Governor Tusherpha to cut canals from the lake where an earlier Mauryan
governor had built a dam. Between the decline of Mauryan power and Saurashtra coming under
the sway of the Samprati Mauryas of Ujjain, there was a Greek incursion into Gujarat led by
Demetrius. In the first half of the first century A.D. there is the story of a merchant of King
Gondaphares landing in Gujarat with Apostle Thomas. The incident of the cup-bearer killed by a
LION might indicate that the port city described is in Gujarat.

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Geographical Location:
Gujarat borders Pakistan's Sindh province to the northwest, is bounded by the Arabian Sea to the
southwest, the state of Rajasthan to the northeast, Madhya Pradesh to the east, and by
Maharashtra, Union territories of Diu, Daman, Dadra and Nagar Haveli to the south. Historically,
the north was known as Anarta, the Kathiawar peninsula, "Saurastra", and the south as "Lata".
Gujarat was also known as Pratichya and Varuna. The Arabian Sea makes up the state's western
coast. The capital, Gandhinagar is a planned city. Gujarat has an area of 75,686 sq mi (196,030
km2) with the longest coast line (24% of Indian sea coast) 1,600 kilometres (990 mi), dotted with
41 ports: one major, 11 intermediate and 29 minor.
The Sabarmati is the largest river in Gujarat followed by the Tapi, although the Narmada covers
the longest distance in its passage through the state. The Sardar Sarovar Project is built on the
Narmada River, one of the major rivers of peninsular India with a length of around 1,312
kilometres (815 mi). It is one of only three rivers in peninsular India that run from east to west
the others being the Tapi River and the Mahi River. A riverfront project has been built on the
Sabarmati River.

Demographics:
The population of Gujarat State was 60,383,628 according to the 2011 census data. The
population density is 308 km2 (797.6/sq mi), lower than other Indian states. As per the census
of 2011, the state has a sex ratio of 918 girls for every 1000 boys, one of the lowest (ranked 24)
amongst the 29 states in India.
While Gujarati speakers constitute a majority of Gujarat's population, there exists a cosmopolitan
atmosphere especially in the metropolitan areas of Ahmedabad and Surat. Marwaris and Biharis
compose large minorities of economic migrants while smaller communities to be found are
Nepalese, Portuguese, South Koreans, Tamils, Odias, Telugus, Assamese, Bengali, AngloIndians, Armenians, Greeks, Jews, Tibetans, Maharashtrians, Konkanis, Malayalees, Punjabis,
and Parsis. The South Korean community traditionally worked in the local tanning industry and
ran restaurants. Sindhi presence is traditionally important here following the loss of their
province post-Partition.

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Religion:
Gujarat consists of people following Hinduism, Islam, Judaism, Jainism, Buddhism, Christianity
and Zoroastrianism, making it a religiously diverse state. Hinduism is major religion of the state,
as 88.6% population of the state is Hindu. A major part of the Hindu population follow
Vaishnavism. Muslims are the biggest minority in the state accounting for 9.7% of the
population. Gujarat has the third-largest population of Jains in India, following Maharashtra and
Rajasthan.

Language:
Gujarati is an Indo-Aryan language evolved from Sanskrit and local Prakrits, and is part of the
greater Indo-European language family. It is native to the Indian state of Gujarat, and is its main
language, as well as of the adjacent union territories of Daman and Diu and Dadra and Nagar
Haveli.
About 59 million people speak Gujarati, making it the 26th most-spoken native language in the
world. Along with Romani, Kutchi and Sindhi, it is amongst the most western of Indo-Aryan
languages.
The majority of the population in the state can speak Gujarati and Hindi, whilst people from the
Kutch region of Gujarat also speak in the Kutchi mother tongue, and to a great extent appreciate
Sindhi as well. Memoni is the mother tongue of Kathiawar and Sindhi Memons, most of them
who are exclusively Muslims.
Almost 88% of the Gujarati Muslims speak Gujarati as their mother tongue, whilst the other 12%
speak Urdu. A sizeable proportion of Gujarati Muslims are bilingual in both languages as Islamic
academic institutions (Darul Uloom) place a high prestige on learning Urdu and Arabic,
memorising the Quran and ahadith, and emphasising the oral and literary importance of
mastering these rich languages as a compulsory rite of religion. Other native languages spoken in
low proportions are Bhili and Gamit, which are spoken exclusively among the tribals.

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Government:
Gujarat is governed by a Legislative Assembly of 182 members. Members of the Legislative
Assembly are elected on the basis of adult suffrage from one of 182 constituencies, of which 13
are reserved for scheduled castes and 27 for scheduled tribes. The term of office for a member of
the Legislative Assembly is five years. The Legislative Assembly elects a speaker who presides
over the meetings of the legislature. A governor is appointed by the President of India, and is to
address the state legislature after every general election and the commencement of each year's
first session of the Legislative Assembly. The leader of the majority party or coalition in the
legislature (Chief Minister) or his or her designee acts as the Leader of the Legislative Assembly.
The administration of the state is led by the Chief Minister. The current Chief Minister of the
state is Anandiben Patel, who recently took office after Narendra Modi was elected as Prime
Minister of India.

Economy:
Gujarat has some of the largest business corporations in India. It is one of the major industrial
hubs of India. During the British Raj, Gujarati businesses served to play a major role to enrich
the economy of Karachi and Mumbai. Major agricultural produce of the state includes cotton,
groundnuts (peanuts), dates, sugar cane, milk and milk products. Industrial products include
cement and petrol. According to a 2009 report on economic freedom by the Cato Institute,
Gujarat is the second freest state in India (the first one being Tamil Nadu). Reliance Industries
operates the oil refinery at Jamnagar, which are the worlds largest grass-roots refineries. The
world's largest shipbreaking yard is in Gujarat near Bhavnagar at Alang. Indias only Liquid
Chemical Port Terminal at Dahej, developed by Gujarat Chemical Port Terminal Co Ltd. Gujarat
has two of the three liquefied natural gas (LNG) terminals in the country (Dahej and Hazira).
Two more LNG terminals are proposed, at Pipavav and Mundra.

Education:
The Gujarat Secondary and Higher Secondary Education Board (GSHSEB) are in charge of the
schools run by the Government of Gujarat. However, most of the private schools in Gujarat are
affiliated to the Central Board of Secondary Education (CBSE) and Council for the Indian

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School Certificate Examinations (CISCE) board. Gujarat has 13 state universities and four
agricultural universities. The premier management institute Indian Institute of Management in
Ahmedabad ranks the best in India and among the best management Universities in the world.
The top-notch institutes for Engineering and Research include IIT Gandhinagar Dhirubhai
Ambani Institute of Information and Communication Technology (DA-IICT) also in
Gandhinagar, Sardar Vallabhbhai National Institute of Technology (SVNIT) in Surat, Pandit
Deendayal Petroleum University (PDPU) in Gandhinagar, Nirma University in Ahmedabad and
Charotar University of Science and Technology (CHARUSAT) in Changa (a village in anand
district). Mudra Institute of Communications Ahmedabad (MICA) is one of the most famous
institutes for mass communication and is well-renowned across India.
In addition, Institute of Rural Management Anand (IRMA) is one of the leading sectoral
institutions in rural management. IRMA is a unique institution in the sense that it provides
professional education to train managers for rural management. It is the only one of its kind in all
Asia.The National Institute of Design (NID) in Ahmedabad and Gandhinagar is internationally
acclaimed as one of the foremost multi-disciplinary institutions in the field of design education
and research. Centre for Environmental Planning & Technology University, popularly known as
(CEPT) is one of the best planning and architectural school not in India, but across the world;
providing various technical and professional courses.

Overview of the automobile industry in Gujarat

Tata motors
General Motors
Ford motors
Asia motor works

Automobile industry is
contributing about 7% in
total GDP of India.
Indias total GDP is 2066.90
billion USD.
It represents
worlds GDP.

3.33%

in

37 | P a g e

Overview of Automobile Industry in India

The automotive industry in India is one of the largest automotive markets in the world. It was
previously one of the fastest growing markets globally, but it is currently experiencing flat or
negative growth rates. In 2009, India emerged as Asia's fourth largest exporter of passenger cars,
behind Japan, South Korea, and Thailand, overtaking Thailand to become third in 2010. As of
2010, India was home to 40 million passenger vehicles. More than 3.7 million automotive
vehicles were produced in India in 2010 (an increase of 33.9%), making India the second fastest
growing automobile market in the world (after China). India's passenger car and commercial
vehicle manufacturing industry recently overtook Brazil to become the sixth largest in the world,
with an annual production of more than 3.9 million units in 2011. From 2011 to 2012, the
industry grew 16-18%, selling around three million units. According to the Society of Indian
Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015,
not 5 million as previously projected.
Introduction
The Indian auto industry is one of the largest in the world with an annual production of 23.37
million vehicles in FY 2014-15, following a growth of 8.68 per cent over the last year.
The automobile industry accounts for 7.1 per cent of the country's gross domestic product
(GDP). The Two Wheelers segment with 81 per cent market share is the leader of the Indian
Automobile market owing to a growing middle class and a young population. Moreover, the
growing interest of the companies in exploring the rural markets further aided the growth of the
sector. The overall Passenger Vehicle segment has 13 per cent market share.
India is also a prominent auto exporter and has strong export growth expectations for the near
future. In FY 2014-15, automobile exports grew by 15 per cent over the last year. In addition,
several initiatives by the Government of India and the major automobile players in the Indian
market are expected to make India a leader in the Two Wheeler and Four Wheeler market in the
world by 2020.

38 | P a g e

Contribution to GDP:
The Role of Automobile Industry in India GDP has been phenomenon. The Automobile Industry
is one of the fastest growing sectors in India. The increase in the demand for cars, and other
vehicles, powered by the increase in the income is the primary growth driver of the automobile
industry in India. The introduction of tailor made finance schemes, easy repayment schemes has
also helped the growth of the automobile sector.
To emerge as the destination of choice in the world for design and manufacturing of

automobiles and auto components with output reaching a level of US $ 145 billion, accounting
for more than 10 per cent of the GDP and providing additional employment to 25 million people
by 2016. This is the vision of the Automotive Mission Plan 2006 - 2016 drafted by the Ministry
of Heavy Industries and Public Enterprises department of the Government of India.
This gives you an idea to the magnitude of a single industry being able to contribute as much as
10 per cent of the gross domestic product for a country like India. As of 2013, the Indian
automobile industry had contributed to almost 7 per cent of the countrys GDP. During the time
it provided 22 per cent of Indias manufacturing GDP and provided around 18 per cent of excise
duties to the state exchequer. The Indian automobile industry has also significantly increased the
39 | P a g e

presence of the nation in international markets with a year-on-year increase in exports of

approximately 18 per cent.
With a significant number of car makers already present in India and more of them looking to
enter the market in the future, the potential of the Indian automobile industry is immense in
terms of both revenue generation and employment. While the industry has gone through a
slowdown off late, what car makers are now looking forward to are reduction in duties and taxes
along with the incorporation of a centralized Goods and Service tax norm that will not only
streamline tax norms to make life easier for companies but also boost the industry as a whole.

MAJOR PLAYERS IN AUTOMOBILE INDUSTRY IN INDIA:

Maruti Suzuki (37% Market Share): Maruti Suzuki India Limited (MSIL, formerly Maruti
Udyog Limited) is a subsidiary of Suzuki Motor Corporation of Japan. Maruti Suzuki is a
leading manufacturer of passenger vehicles in India. Lovingly referred to as the peoples car
maker; over the past three decades Maruti Suzuki has changed the way people in India commute
and travel.
Hyundai Motors India Limited (14.4% Market Share): Hyundai Motor India Limited
(HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC). HMIL is the largest
passenger car exporter and the second largest car manufacturer in India. It currently markets
eight passenger car models across segments in the A2 segment it has the Eon, Santro, i10 and
the i20, in the A3 segment the Accent and the Verna, in the A5 segment Sonata and in the SUV
segment the Santa Fe.
Tata Motors (13.1% Market Share): Tata Motors Limited is Indias largest automobile
company, with consolidated revenues of INR 1, 65,654 crores (USD 32.5 billion) in 2011-12. It
is the leader in commercial vehicles in each segment, and among the top three in passenger
vehicles with winning products in the compact, midsize car and utility vehicle segments. It is the
worlds fourth largest truck and bus manufacturer.

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Mahindra & Mahindra (11.4% Market Share): In 1947, Mahindra & Mahindra
introduced India to the utility vehicle. More than 65 years later, it is still Indias premier
utility vehicle (UV) company. In addition to making ground-breaking UVs like the Scorpio and
Bolero, Mahindra offers cars, pickups, and commercial vehicles that are rugged, reliable,
environmentally friendly, and fuel-efficient.
Toyota (6.4% Market Share): Since its inception in India in 1997, Toyota Kirloskar Motor has
witnessed a steady growth in the Indian automotive market and is today more than ready to seize
the enormous opportunity India offers. Toyotas newly built second plant is a testimony to this
commitment and also, the start of a new era for Toyota in India.
General Motors (3.3% Market Share): General Motors India Private Limited is a 50:50
partnership between General Motors and SAIC that is engaged in the automobile business in
India. It is the 6th largest automobile manufacturing company in India. General Motors India
started its journey in 1996 and has completed 16 years of operation in India.
Ford (3.2% Market Share): Established in 1995, Ford India is a wholly owned subsidiary of
Ford Motor Company, a global automotive industry leader. Ford India manufactures and
distributes automobiles and engines made at its modern integrated manufacturing facilities at
Maraimalai Nagar, near Chennai. The companys models include the Endeavour, Fiesta and the
Figo.
Honda (2.9% Market Share): Honda Cars India Ltd., (HCIL) is a leading manufacturer of
premium cars in India. The company was established in 1995 with a commitment to provide
Hondas latest passenger car models and technologies, to the Indian customers. The company is a
subsidiary of Honda Motor Co. Ltd., Japan.
Volkswagen (2.4% Market Share): With its headquarters in Pune, Maharashtra (India), the
Volkswagen Group is represented by three brands in India: Volkswagen, Audi and Skoda. The
Volkswagen Group is completing 10 years of its India journey which began with the entry of the
Skoda brand in 2001, Audi brand and Volkswagen brand in 2007. Each brand has its own
character

and

operates

as

an

independent

entity

in

the

market.

Nissan (1.5% Market Share): Nissan Motor India Private Ltd. (NMIPL), a 100% subsidiary of
41 | P a g e

Nissan Motor Co., Ltd., was incorporated in 2005 with a vision of Enriching Peoples Lives
through latest Nissan Technology and products. In India, Nissan offers innovative and exciting
products across hatchback, sports, and SUV and sedan segments. Nissan has successful
introduced two locally-produced models in India in less than two years Micra & Sunny.

LOCAL TAXES & DUTIES ON AUTOMOBILE SECTOR:

Most demands raised by auto players were not addressed in the current budget. That said,
reduced corporate tax (from 30% to 25%) and the government's focus on infrastructure will
indirectly help the auto industry.
Lower excise duty benefit was the primary demand that all the automakers were asking, which in
the new budget has not been addressed. This means that cars and two-wheelers will not get
cheaper. The previous UPA government had cut excise duty on cars, SUVs and two-wheelers in
its interim budget in February 2014 to help the industry tide over a demand slump.
Excise duty was reduced to 24 per cent from 30 per cent in the case of SUVs, 20 per cent for
mid-sized car from 24 per cent and 24 per cent for large cars from 27 per cent. In June, the new
government led by Narendra Modi extended the excise duty concession by six months to
December 31. But in January, it was rolled back and the excise duty slab came to the old
structure once again.

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SPECIAL BENEFITS PROVIDED BY THE STATE OF

GOVERNMENT:
We have announced a policy of mega and innovative projects under which incentives are offered
to select sectors. Accordingly, the automobile sector comes under this and is eligible for
incentives under the scheme of Mega Projects. Industries are required to fulfil the condition of
investing in fixed assets exceeding Rs 1,000 Crores and providing jobs to 2,000 people. The
eligible industries get benefits of sales tax incentives for 10 years.
The plants of General Motors India and Tata Motors are in operation at Halol and Sanand
respectively. Understanding the potential to attract more investment in this region, the Gujarat
Industrial Development Corporation (GIDC) has undertaken expansion activities of the Halol
Estate and set up an estate at Sanand.

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1. Raw Material Availability:

Raw material should be easily available near to a selected location, as it will reduce the cost of
transporting raw materials. Mundra Port would allow them to import steel and other raw
materials at very low cost even from overseas. Transporting the same over land would cost thrice
as much2)
2. Nearness to Markets:
It will reduce the cost of transporting the finished goods to the market but also decrease the
chances of finished product being damaged or spoiled in the way. Moreover a plant being near to
the market can catch a big share of the market and can also provide quick service to the
customers. Setting up the Nano plant in Gujarat is advantageous for the group because nearly 50
% of the car parts are produced in Rajkot, and the extensive coastline of the state could be
beneficial for imports and exports. And proximity of mudra port will allow them to export cars to
the markets easily.

3. Transportation Cost and Facilities:

A lot of many are spent both in transporting raw materials and finished goods, therefore it should
also be kept in mind that the transportation cost should be fairly minimum and also be available
easily. The strategic location of Sanand, some 30 km from Ahmedabad and its proximity to the
Ahmedabad-Rajkot highway made the new site attractive
In some state local government provide various facilities (i.e. Provide loans, feed money in
business, machinery, relaxation in tax policy, excise duties, etc.) to attract industrialists. It is also
important to have knowledge about government regulations and if are available should be made
use of the facilities. Gujarat government has provided land at low rate.

4. Income Tax Incentives:

10 year corporate tax holiday on export profit

100% for initial 5 years and 50%
Indirect Tax Incentives
Zero customs duty
Zero excise duty
44 | P a g e

CHAPTER- 4
Justification for the selected
industry

45 | P a g e

JUSTIFICATION FOR SELECTING THE INDUSTRY/SECTOR:

We have selected this industry because there is lots of opportunity in Cambodia for automobile
Sector in Cambodia. There are total 2000 car demand annually in Cambodia and which is
increasing day by day. If we talk about Gujarat than Gujarat is slowly becoming the automobile
hub In India because there are many companies in Gujarat who are producing their cars in
Gujarat; Like Ford, TATA, General Motors, CEAT Tyres and Maruti Suzuki is coming in 2016.
So there is lot of opportunity for bilateral trade opportunity with Cambodia with focused to
Automobile sector because there is lot of scope in Cambodia for automobile industry and most of
the companies in Cambodia are exporting to Cambodia but they have not yet started
manufacturing in Cambodia and now the political stability will help in manufacturing cars in
Cambodia.

46 | P a g e

CHAPTER- 5
STEEPLED Analysis of
Cambodia & Gujarat

47 | P a g e

STEEPLED OF GUJARAT:
Social Analysis of Gujarat
Life style:
Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile
sector is having a more numbers of customers.
Social life:
Social life of the people of Gujarat also impacts on buying behaviour of automobile. Customer of
Gujarat is price sensitive means they bargain for every product they want to buy.The greater a
person's age, the greater the level of respect that must be granted to them.
People of Gujarat are accepting small & compact cars because of traffic. Growth in urbanization
is there in Gujarat.
Preference for fuel efficient car with low running cost.Gujarat customers are price sensitive and
put a lot on emphasis on value of money.
Education:
Gujarat customers are highly aware, well-educated and informed. They are price sensitive and
put a lot of emphasis on value of money.
Labour and Social Mobility:
Here in this sector the work of labour is very important because each equipment of the cars
should be fixed in a proper way.
Technical (Gujarat):
R & D activities:
Companies in Gujarat is mainly focusing on R & D activities The Government is promoting
National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth
of the auto industry.
48 | P a g e

Internet:
Technology is helping in the solution to integrate supply chain and because of that it reduces
losses and increases the profit. The connectivity to the world through internet is very good in
Gujarat because 4G is in Gujarat launched by Airtel.
Companies:
Major global players like Ford; General motors etc. have setup their manufacturing units in
Gujarat. Global companies entered into the market with full of technology in production as well
as in product also. Tata and parent company are no. 1 in technology field.
Employing 1,400 scientists and engineers, Tata Motors Research and Development team is
ahead. Automobile industry is becoming crucial for manufacturer to stay on top with rising of
new problems such as pollution problems. Internet connectivity is very strong in Gujarat so
technology usage is very easy for companies of auto mobile industry in Gujarat.
Alternate Fuels:
Because of alternate fuels are available in the market, hybrid cars are now entering into the
market.

Economic factors (Gujarat)

Economic growth
The current economic growth of Gujarat in terms of GDP is about 8.5% which is good sign for
any industry especially automobile and also industry friendly environment of Gujarat is suitable
for automobile industry.
Government spending
The government of Gujarat develop public private partnership model which support to develop
industries and infrastructure facility which is suitable to develop automobile industry at Gujarat.

49 | P a g e

Under this public private partnership model government spending is 50% and till now out of
total investment government spend 125.03 billion dollar (percentage value 12.91).
Employment and unemployment
Availability of all level employees is high due to environment and literacy level in a state.
Population of Gujarat is most of working population between the age group of 18-60 which is
suitable for any industry. Automobile industry at Gujarat consider under mega projects which
have to provide employment to minimum 2000 people and due to this unemployment rate at
Gujarat is 1%. Also government of Gujarat develop more than 150 skill development centre
which provides skill labour to automobile industry.
Interest rates and monetary policy
In Gujarat interest rates and monetary policy is liberal to provide a platform to develop more
industry. The small and medium sectors at Gujarat get 7% interest subsidiary for five years while
large scale industry get benefit of 2% interest subsidiary for five years from the day of
commencement which if positive sign for automobile industry.
Taxation
Taxation policy for automobile industry at Gujarat is very liberal and industry friendly. If the
automobile industry fulfill the requirement of mega projects regarding investment and providing
employment than its get benefit of sales tax incentives for 10 year also with 100% tax benefit in
export in corporate tax and zero custom and excise duty which makes Gujarat as a lucrative state
for automobile industry.
Inflation and exchange rates
Inflation rate at Gujarat is about to 7.5% which is slightly worried factor for automobile industry.
Due to change in exchange rates and inflation rate, every time change in price of fuel and other
raw materials destruct the calculation of demand and growth for automobile industry.

50 | P a g e

Environmental factor (Gujarat)

Natural resources:
Gujarat has very wide range of natural resources are available in terms of raw materials and
minerals etc. with human resource. Gujarat has its own resources to generate power and
electricity and water and land facilities are vast available which is most suitable to automobile
industry.
Infrastructure
Infrastructure wise Gujarat is more developed than any other state. Gujarat industrial
development corporation (GIDC) develop special economic zone (SEZ) in Gujarat at halol and
sanand especially for automobile industry which is fully developed with power, infrastructure,
water and human resource which motivates any industrial start up. The Gujarat government
planning to spend 116,993 crore rs.to develop various facilities like port, power, roads, industrial
park, township, urban transportation and water supply & sanitation which makes Gujarat as a
lucrative for automobile industry.
Political (Gujarat):
Government support:
Gujarat govt. has changed role to facilitator with focus on providing best infrastructure, growth
oriented economy and correct environment to attract investments. This has made giant auto
manufacturers enter into Gujarat. The steps that government has taken in relaxation of foreign
exchange, equity regulations have played important role in bringing Gujarat automobile industry
at very good level. Gujarat is the only state to emerge as investor friendly state in India. Establish an
international hub for manufacturing small, affordable passenger cars as well as tractor and two
wheelers. Indian government auto policy aimed at promoting an integrated, phased and
conductive growth of the Indian automobile industry.
Summit:
The vibrant summit has opened up the doors for automobile industries for Gujarat. With low
cost, good amount of water supply, low risk & safety. The support of proactive government is
51 | P a g e

key factor for rapid automobile sector growth. The Gujarat government has taken several policies
measures and incentives to attract large amount of investors.
Political stability:
Political stability is most important for any sector to grow in a particular region which is there in
Gujarat for the last 15 years. The plants of General Motors India and Tata motors are in
operation at Halol and sanand. The Gujarat Industrial Development Corporation (GIDC) has
undertaken the expansion activities of the Halol Estate at Sanand. Both estates are having full
facilities with road, power, water and gas facilities.
Infrastructure:
When Tata Motors decided to set up its plant in Gujarat, they were concerned for the skilled
labour. The government of Gujarat has announced a policy of skill development under which
industries will have courses and they will be allowed to utilise ITI buildings to conduct skill
programmes.
State government departments through the platform of the Vibrant Gujarat Summit organised the
interval of two years. We invite Indian states as partner states at Vibrant Gujarat Summits
wherein they are provided a platform to give presentations. The key highlight is the incentives
the state offers. The important factor to attract investors is to be ready infrastructural facilities.
The state government is committed to providing investors with a comfort level.

Legal (Gujarat):

Ministry of shipping & transport:

In Gujarat, regulations regarding automobile industry are governed by ministry of shipping, road
transport & highways. Motor vehicles act, 1988 is the main act which monitors the emission
norms in Gujarat.

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Government regulations:

Gujarat safety standards are hand on hand with international standards. The legal frame work for
automobile sector is so easy and friendly that because of low cost, low land cost and by
providing end no. of facilities, Gujarat is an automobile hub, because tata nano plant at sanand &
ceat tyres plant at Halol are the examples for it.

Auto policy of government of Gujarat is aiming to promote an integrated and conductive growth
of the automobile industry of Gujarat. Government of Gujarat wants to make Gujarat as
international hub for manufacturing small, affordable passenger cars, as well as tractor and two
wheelers.

Ethical (Gujarat):
People of Gujarat:
Bribery is there in Gujarat in all Sectors so which is not good for the industry. People of Gujarat
prefer to buy new cars but they give extra money as a bribe to get immediate delivery. Because
of vibrant Gujarat summit, reputation of Gujarat government is very friendly.

Demographics (Gujarat):
Name:
Gujarat was earlier known as Saurastra and it was a part of state Mumbai which include
Maharashtra and Gujarat both. On 1st may, 1960 Mumbai was divided in two parts and State of
Gujarat was made.
Geographical Location:
Gujarat borders Pakistan's Sindh province to the northwest, is bounded by the Arabian Sea to the
southwest, the state of Rajasthan to the northeast, Madhya Pradesh to the east, and by
Maharashtra, Union territories of Diu, Daman, Dadra and Nagar Haveli to the south. Historically,
53 | P a g e

the north was known as Anarta, the Kathiawar peninsula, "Saurastra", and the south as "Lata".
The Arabian Sea makes up the state's western coast. The capital, Gandhinagar is a planned city.
Gujarat has an area of 75,686 sq mi (196,030 km2) with the longest coast line (24% of Indian sea
coast) 1,600 kilometres (990 mi), dotted with 41 ports: one major, 11 intermediate and 29 minor.

Language:
Gujarati is an Indo-Aryan language evolved from Sanskrit and local Prakrits, and is part of the
greater Indo-European language family. It is native to the Indian state of Gujarat, and is its main
language, as well as of the adjacent union territories of Daman and Diu and Dadra and Nagar
Haveli. About 59 million people speak Gujarati, making it the 26th most-spoken native language
in the world. Along with Romani, Kutchi and Sindhi, it is amongst the most western of IndoAryan languages. The majority of the population in the state can speak Gujarati and Hindi, whilst
people from the Kutch region of Gujarat also speak in the Kutchi mother tongue, and to a great
extent appreciate Sindhi as well. Memoni is the mother tongue of Kathiawar and Sindhi
Memons, most of them who are exclusively Muslims. Almost 88% of the Gujarati Muslims
speak Gujarati as their mother tongue, whilst the other 12% speak Urdu.

Population:
The population of Gujarat State was 60,383,628 according to the 2011 census data. The
population density is 308 km2 (797.6/sq. mi), lower than other Indian states. As per the census

54 | P a g e

of 2011, the state has a sex ratio of 918 girls for every 1000 boys, one of the lowest (ranked 24)
amongst the 29 states in India.

STEEPLED OF CAMBODIA
Social Analysis of Cambodia
Life Style changes:
Family is still the most important social reference unit as young people have really good
relationship with their parents.
Social life:
Family is the most important for young people. Cambodians people are known for their kindness,
patience and talent as well as having a wealthy culture and tradition. The greater a person's age,
the greater the level of respect that must be granted to them.
Labour and social mobility:
As the automobile sector is growing in the Cambodia country so highly skilled workers are
required.
Education:
Lifestyle of the people gets changed as with the new industry coming to the country there is
increased in employment of the country.
Technical (Cambodia):
R & D activities:
Country is importing the new cars, no any company is having there manufacturing plant in
Cambodia, Government is not promoting that R & D activities. Cambodia is one of the fastest
55 | P a g e

growing countries; technology is already benefitting the nation. One out of every six businesses
launched were part of the information and communications technology (ICT) industry. Today,
the number of mobile subscriptions in Cambodia exceeds the population.
Internet:
Today, the number of mobile subscriptions in Cambodia exceeds the population. Internet usage
increased by almost 60 percent, jumping from 1.7 million users to 27 lacs users. Increment in use
of mobile and Internet users in Cambodia means there is limitless potential for business growth
and employment opportunities in the technology sector.
New Companies:
New companies are entering into the Cambodian automobile market and they are bringing new
technologies. New industry comes up with new technology for their company to lead in market.
Alternate fuels:
Increasing use of other fuels like CNG and LPG fuel has made the entry of new kinds of vehicle
in the market. Electric cars are introduced in the automobile industry in Cambodia.

Economic factor (Cambodia)

Basically economy of Cambodia is mainly based on the other, which means that economy of
Cambodia is a dependent economy. Main economic activities are based on foreign institutional
investment and foreign market.
Economic growth
According to World Bank Cambodias economic growth rate will expected to be 6.9% which
shows a positive sign about the development of any industry. While the sector wise GDP are
agriculture 34.8%, industry 24.5%, and service 40.7% which is also a positive side for any
automobile industry.
Government spending:
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In Cambodia government spending is 50% with the support of other organisation like IMF,
World Bank, Asian development bank for any industrys growth and development in open
development programme, which is suitable for automobile industry at Cambodia.
Employment & unemployment:
Cambodias population is raised by 1.5% every year which increase the labour force in the
country. On the other hand the condition of Cambodia is such that it is fail to generate productive
employment. So, it is opportunity for any automobile manufacturing company to get labour at
cheaper rate but at the same time labours are uneducated and unskilled which is unsuitable for
any industry.
Inflation and exchange rate
Cambodias macroeconomic policy is helpful to reduce inflation because of its conservative
fiscal policy. Exchange rates are free in Cambodia and there is no restriction on current and
capital account. So, the economy of Cambodia is liberalised and it is suitable factor for
automobile industry.
Interest rates & monetary policy
As stated earlier that the economy of Cambodia is liberalised, the national bank of Cambodia
does not have any direct control over interest rates. Banks are free to charge interest rates and
lending to any organisation and industry. The monetary authority use foreign exchange
intervention to maintain the liquidity and exchange rates.
Taxation
The import excise tax on new car at Cambodia is 45% which hinder the new players at there and
restrict the growth of industry as grey and black markets emerge due to this.

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Environmental factors (Cambodia)

Natural resources:
Natural resources are widely available at Cambodia. Only 20% of land was used for the
industrialization and urbanisation while other resources like availability of water and chip labour
are advantageous for automobile industry. The main problem regarding natural resources is
energy. Cambodia doesnt have its own source of energy. They import energy from neighbours
like Vietnam and Thailand. Only 22% of Cambodia use electricity which might hinders the
growth of automobile industry.
Infrastructure:
Infrastructure is more concentrated towards main cities. Development of roads and transportation
in last few years are quite well but due to lack of care affects it very badly. The main advantage
for automobile industry is too exclusive and special economic zone which is 62515 sq. kms, also
marine and coastal zone is wide range which is beneficial for industry.
Climate change and threat from natural causes
Climate change is in terms of heavy fluctuation in rainy season and monsoon. Due to this
temperature of county is not stable and floods and droughts situations was occurred which is not
suitable for some industry.
Global warming
Due to global warming the sea level of Cambodia is rises and which leads to problems like
coastal erosion and it affects the economically important ports and coastal zones and it also be
bring situation like floods and storms which is not ideal situation for automobile industry and
export as well.
Sustainable energy
Though the energy sources for industry is limited in Cambodia the government focuses on
various sustainable energy plans like hydro-electricity, solar energy etc. to reduce the gap, also

58 | P a g e

they develop a plan to use bio mass, forest waste, animal waste as a source of energy for
villagers which helps to develop industry indirectly.

Political of Cambodia:
Political Stability:
Most important factor in automobile industry is political stability in Cambodia. Stability of
politics, safety ensured the of transportation development, infrastructure. Economy of Cambodia
is open to FDI with 100% foreign investment, while some of the sectors are having the
restrictions of local equity participation, this includes These include manufacturing of cigarettes,
movie production, rice milling, publishing and printing, radio and television, manufacturing of
wood and stone carvings, and silk weaving. Thanks to political stability, Cambodians are
investing in more stable and long-term businesses, which is a good thing for countrys economy.
With a stable country and tremendous economic growth, Cambodia is having a healthy number
of ultra- high net worth consumers.
Corruption:
This is one of the most important problems ruining the economy. According to the Index of
Corruption 2014 by Transparency International, Cambodia is ranked at 157 from 176 countries,
in corruption.
Infrastructure:
Infrastructure insufficiency is the big problem ruining the countrys competitiveness and growth.
Addition to political; the Cambodian government has been accused of corruption in the sale of
large area of land to investors which is resulted to exploit countrys oil and mineral resources.
Cambodia is consistently listed as one of the most corrupt governments.
Government support:
Government is not providing any support to the automobile industry as it is imposing taxes on
car imports contribute to a third of the governments tax collections and that government wants
59 | P a g e

more taxes so that they can pay their staff better. The tax scheme for Cambodias car imports
always favours second hand cars.
Automobile Market:
Cambodia is having small auto market with annual new car demands about 2,000 units and used
cars demand up to 20,000 units. Now, the country is hoping that global automakers from
neighbouring Thailand and Vietnam with a young, cheap labour force, especially.
The situation of Cambodian auto sector is grey. Due to high taxes on import, with 45% excise
charged when new car is brought into Cambodia. It is not surprise that people are going towards
a grey market. When the car is imported other than official channel, it will be cheaper. While
authorized dealers are spending millions on it. It is not easy for them to crack the market
monopoly of unofficial import cars in which sale price is almost 50% cheaper. The authorized
dealership is increasing in numbers but they are not sure that they can overtake the grey market
in near future.
Legal (Cambodia):
Ministry of environment:
The responsibility regarding the quantity of flammable substances, air pollutions & noise created
by the vehicles either it is a two, three, four vehicles lies with the ministry of environment with
the collaboration of other ministries. Ministry of environment has the responsibility to frame
guidelines regarding the same. The responsible person for the air pollution has to bear expenses
for the analysis done by the ministry of environment. Ministry of environment has the
responsibility to check the air quality on a regular basis.
Law:
The said law governs any investments carried out in the territory of the Kingdom of Cambodia
by Cambodian and/or foreign investors. Cambodias judicial system does not provide any
commercial courts. Cambodias commercial regulatory environment presents a number of
challenges like corruption, policy uncertainty. Ministry of commerce of Cambodia makes a

60 | P a g e

watch on foreign and domestic business activities; it takes a lead developing commercial
legislation and issues the certificate for the same.

Government regulations:

Cambodian government has made compulsory for the automobile sector to test the ignition of the
car to prevent it from fire. If there is any electrical car in the market than company has to make
sure that there is no any problem in the battery so that it can save people from physical damage.
Combodian government has made compulsory for all the companies that they have to mention all
the facts related to their product in the advertisement. It should match all the safety standard of
the government. For the safety purpose, department of Cambodia has announced that the
imported vehicles should not be more than 2 years old.

Ethical (Cambodia):
People of Cambodia:

People of Cambodia buy cars from grey market, the market in which cars are dealt without
original invoices which is cheaper than the new cars. The Cambodian people have more trust on
second hand car and because of this Cambodia has annual demand of 20000 second hand cars.
Automobile industry has to provide cars with low pollutant. Automobile industry are earning a
good amount of profit so they should have an ethics to give some part of their profit back to the
people of Cambodia in terms of corporate social responsibility. If the customers are having any
problem than it is resolved in timely manner.

Demographics (Cambodia):
Name:
The official name of the country is the empire of Cambodia and in Khmer as (Preah
Reacheanachak Kampuchea), often shortened to Kampuchea. Kampuchea derives from the
Sanskrit word Kambuja or "Golden Land" or "Land of Peace and Prosperity", as described by the
Khmer Buddhist friar Chuon Nath in his Khmer Dictionary.

61 | P a g e

Geographic Location:
Cambodia has a land area of 181,035 square Km in the south-western part of the Indochina
peninsula, about 20% of which is used for agriculture. It lies fully within the tropics with its
southern most points narrowly more than 10 above the Equator. The country capital city is
Phnom Penh.

Language of Cambodia:

The Cambodian language is Khmer, which is hereditary itself - and advanced in education with
application of Indic languages Pali and Sanskrit from India. Also, the Khmer language is
influenced by spoken and written Thai.

Population:
As of 2013, Cambodia has an estimated population of 15,205,539 people. Cambodia's birth rate
is 25.4 per 1,000. Its population growth rate is 1.7%.

COMPARISION BETWEEN CAMBODIA AND GUJARAT:

Social

Cambodia

Gujarat

Life style

Families are more important Due to change in life style,

than luxury for them.

leads to increased purchase

of automobiles.

Social Life

They respect there elder, Social

people

are

known

life

affects

in

for purchasing buyers behaviour

kindness and talent.

Labour and social mobility

Highly skilled labour are Here in this sector the work

required

of labour is very important

because each equipment of
the cars should be fixed in a

62 | P a g e

proper way.

Technical

Cambodia

Gujarat

R&D

Government is not promoting The

those R & D activities.

Government

promoting

is

National

Automotive

Testing

and

R&D Infrastructure Project

(NATRIP) to support the
growth of the auto industry.

Internet

Internet usage increased by The connectivity to the world

almost 60 percent, jumping through internet is very good
from 1.7 million users to 27 in Gujarat because 4G is in
lacs users.

New Companies

Gujarat launched by Airtel.

New companies are entering Major global players like

into

the

Cambodian Ford; General motors etc.

automobile market and they have

are

bringing

technologies.
Alternate fuels

setup

new manufacturing

their
units

in

Gujarat.

Electric cars are introduced Because of alternate fuels are

in the automobile industry in available
Cambodia.

in

the

market,

hybrid cars are now entering

into the market.

Economic factors

Cambodia

Gujarat

Economic growth

According to World Bank The current economic growth

63 | P a g e

Cambodias

economic of Gujarat in terms of GDP is

growth rate will expected to about 8.5%

be 6.9% which shows a
positive

sign

about

the

development of any industry.

Government spending

In

Cambodia

government Under this public private

spending is 50% with the partnership

model

support of other organisation government spending is 50%

like IMF, World Bank, Asian and till now out of total
development bank

investment

government

spend 125.03 billion dollar.

Employment
unemployment

and Condition of Cambodia is Availability

of

all

level

such that it is fail to generate employees is high due to

productive employment.

environment

and

literacy

level in a state.
Interest rates and monetary The economy of Cambodia is In Gujarat interest rates and
liberalised, the national bank monetary policy is liberal to

policy

of Cambodia does not have provide a platform to develop

any

direct

control

over more industry.

interest rates.
The import excise tax on new Taxation

Taxation

car at Cambodia is 45% automobile

which hinder the new players

policy

for

industry

at

Gujarat is very liberal and

industry friendly.

Inflation

and

rates

exchange Cambodias macroeconomic Inflation rate at Gujarat is

policy is helpful to reduce about to 7.5% which is
inflation

Environmental

because

of

its slightly worried factor for

conservative fiscal policy.

automobile industry.

Cambodia

Gujarat

64 | P a g e

Natural resources

Only 20% of land was used Gujarat has its own resources
for the industrialization and to
urbanisation

while

generate

power

and

other electricity and water and land

resources like availability of facilities are vast available

water and chip labour are which is most suitable to
advantageous for automobile automobile industry.
industry.
Infrastructure

Infrastructure

is

more Gujarat

industrial

concentrated towards main development

cities. Development of roads (GIDC)

corporation

develop

special

and transportation in last few economic zone (SEZ) in

years are quite well but due Gujarat at halol and sanand
to lack of care affects it very
badly.

Political

Cambodia

Gujarat

Political Stability

Thanks to political stability, Political stability is most

Cambodians are investing in important for any sector to
more stable and long-term grow in a particular region
businesses&Economy

of which is there in Gujarat for

Cambodia is open to FDI the last 15 years.

with

100%

foreign

investment.
Infrastructure

Infrastructure insufficiency is The government of Gujarat

the big problem ruining the has announced a policy of
countrys
and growth.

competitiveness skill

development

under

which industries will have

courses and they will be
allowed

to

utilise

ITI

buildings to conduct skill

65 | P a g e

programmes.
Government support

Government is not providing Gujarat govt. has changed

any

support

to

the role to facilitator with focus

automobile industry as it is on
imposing

taxes

on

providing

best

car infrastructure,

growth

imports contribute to a third oriented economy and correct

of

the

governments

tax environment

collections.

investments.

Legal

Cambodia

Gujarat

Ministry of environment

Ministry of environment has In

Gujarat,

the responsibility to frame regarding

guidelines

regarding

to

attract

regulations
automobile

the industry are governed by

same.

ministry of shipping, road

transport & highways.

Government regulations

Cambodian government has Auto policy of government

made compulsory for the of Gujarat is aiming to
automobile sector to test the promote an integrated and
ignition of the car to prevent conductive growth of the
it from fire.

automobile

industry

of

Gujarat

Ethical

Cambodia

Gujarat

People of Cambodia

People of Cambodia buy cars People of Gujarat prefer to

from grey market, the market buy new cars but they give
in which cars are dealt extra money as a bribe to get
without

original

invoices immediate delivery.

which is cheaper than the

new cars.

66 | P a g e

Demographics

Cambodia

Gujarat

Name

The official name of the Gujarat was earlier known as

country is the empire of Saurastra and it was a part of
Cambodia and in Khmer as state Mumbai which include
(Preah

Reacheanachak Maharashtra and Gujarat both.

Kampuchea)
Geographical location

Cambodia has a land area of

Gujarat

181,035 square Km in the Sindh

south-western
Indochina

part

of

peninsula,

borders
province

Pakistan's
to

the

the northwest, is bounded by the

about Arabian Sea to the southwest,

20% of which is used for the state of Rajasthan to the

agriculture.

northeast, Madhya Pradesh to

the east, and by Maharashtra,
Union

territories

of

Diu,

Daman, Dadra and Nagar

Haveli to the south.
Language

The Cambodian language is Gujarati, Hindi, Kutchi

Khmer.

Population

As of 2013, Cambodia has an The population of Gujarat

estimated

population

15,205,539 people.

of State

was

60,383,628

according to the 2011 census

data.

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CHAPTER- 6
SWOT analysis of Cambodia

68 | P a g e

SWOT analysis of Cambodia

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieve that objective.

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Strengths
Uniqueness
Uniqueness helps distinguish Cambodia from competitors. Cambodia can charge higher price for
their products, because customers cant get those products elsewhere easily. Unique
Products have a significant impact, so an analyst should put more weight into it. Unique Products
will have a long-term positive impact on the customers, which adds to its value. As automobile
industry is concern the variety in design may give the advantages over the customers.

Strong supply chain

The one of the major advantage to the Cambodia automobile industry is the strong supply chain.
With the help of that manufacturer can easily get the parts and components of the cars and make
the car easily and supply it to the customers easily. So it is one of the advantages to the industry
over the competitors.

Economies of scale
Economies of scale is the cost advantages that Cambodia obtains due to size. The greater the
volume, the greater the advantages. This qualitative factor will lead to a decrease in costs. This
statement will lead to an increase in profits for this entity. Existence of Economies of Scales an
easily defendable qualitative factor, so competitors will have a difficult time overcoming it. So it
is one of the major strength of the Cambodia.
Developing market
Cambodia is a developing market economy that grew at an average rate of over seven percent in
the last decade, driven largely by an expansion in the garment sector, construction, agriculture,
and tourism. In 2014, the economy grew by an estimated seven percent and it is expected to
continue to grow at a similar rate over the next two years. Per capita GDP increased from
US$367 in 2003 to US$1,130 in 2014. As of 2012, the percentage of the population living below
the poverty line was 17.7 percent (poverty line was US$1.20 per person per day), a three percent
decrease from 2011.
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Weaknesses

Weak R&D
Automobile industry needs more research and development to succeed in the market. As far as
Cambodia is concerned then the research and development is not advanced, it is one of the major
weakness of the country. Due to that country cant beat the rival easily. So country faces the
weakness of the research and development department.

Weak Brand
Cambodian brands are considered as weak brand because they are not as popular as another
automobile country. Due to that Cambodia cant charge the same prices for goods and services as
their competitors, because consumers dont value the brand. So it is one of the major weaknesses
to go for global business.

Population of country

The population of Cambodia is around 15,408,270 as on 2014. Due to that the customers of the
country will be very few and the skilled labors are less compare to the other rival country. So it
can be the weakness for the country to compete with the rivals.

Opportunities

New services
New services can help Cambodia to better meet their customers needs. These services can
expand Cambodias business and diversify their customer base. Because in automobiles if the
country can able to satisfy their domestic customers then only it can go for expansion in another
country. And by this way country can easily develop its business.

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New technology
In automobile industry, technology is most important. Because everything starts from there. If
county is weak in the technology then it cant compete with the rivals and kicked out from the
market. To come out with the innovation the company should adopt the advanced technology to
meet their customer needs.

Emerging Markets
Cambodia is an emerging market in the world. So country should understand their customer and
provide accordingly to them. Emerging markets are fast growing regions of the world that
enable Cambodia to quickly expand.

New Markets
New markets allow Cambodia to expand their business and diversify their portfolio of products
and services. Country can target that market and easily expand the business. Because in every
country the automobile sector is at its peak. So company can capture new market for the growth
of the business

Threats

Bad Economy
A bad economy can hurt Cambodias business by decreasing the number of potential customers.
Bad Economy has a significant impact, so an analyst should put more weight into it. Bad
Economy will have a long-term negative impact on this entity, which subtracts from the entity's
value. These statements will have a short-term negative impact on this entity, which subtracts
from its value. This qualitative factor will lead to an increase in costs. This statement will lead to

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a decrease in profits. "Bad Economy is a difficult qualitative factor to overcome, so the

investment will have to spend a lot of time trying to overcome this issue.

Threat of rival country

The biggest threat to the Cambodia is the rivals. Many rivals found the opportunity in the
Cambodia to do the business. Such as Toyota, Maruti Suzuki, Mercedes etc. Due to that the
Cambodian country cant stand high. And country may lose its customers. So the availability of
the rivals can create threats as well.

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CHAPTER- 7
SWOT analysis of Gujarat

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SWOT ANALYSIS OF GUJARAT

Strength
Land Available in plenty
As Gujarat is known for tourism and for manufacturing unit lands are available in plenty it is the
biggest strength for automobile sector for gujarat
Surplus in power capacity
Gujarat has capacity of 278.33 GW so there is so much surplus in power capacity which is very
necessary for automobile sector.
Committed political leadership
Gujarat has already established itself as a prospering state in terms in industrialization and due to
vibrant summit has catapult immense growth for automobile sector.
Enjoys the challenges status
As Gujarat state is in different sector so it enjoys the challenges and in automobile sector
especially for manufacturing unit there are lots of challenges are there.
WEAKNESS
Lack of skilled technical manpower
In Gujarat labors availability is high but technical and skilled labors are not enough sound to fill
requirement of global company
Research and development
Gujarat if far behind in making investment in research and development into particular industry
which makes it less lucrative for global giants

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Complexity in taxation
Complexity in taxation part is the major weakness for automobile industry at Gujarat. Different
taxes like custom duty, excise duty, central sales tax, value added tax, service tax are imposing
on automobile industry.

OPPORTUNITIES
Public private partnership model
Gujarat government has public private partnership model which provide wide range of
opportunity for any automobile industry to grow
Various support activities
Various support activities like the assembly line and manufacturing, manufacturing of auto
components, automotive design centre etc. provide opportunity to do business with ease.
Industrial area
Various industrial areas for automobile industry like in sanand and halol specially for automobile
industry and special economic zone provide opportunity for automobile industry to grow.
Stability of government
Stability of government and actively involvement of government into industrial growth is helpful
in development

THREATS
Competition by other states
A major threat for automobile industry at Gujarat was to competition by other states like
Maharashtra and Tamilnadu. Government of other states provides lucrative offers to automobile
industry which makes Gujarat less important.
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CHAPTER- 8
SWOT analysis of Himachal
Pradesh

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SWOT OF HIMACHAL PRADESH

Strength

Labor force

Strength for automobile industry at Himachal Pradesh is high availability of labor force like 65%
of workers at operation level are available out of total work force in automobile industry.

Business friendly policy

Government of Himachal Pradesh has business friendly policy which is fiscal and other policy
incentive for automobile industry

Infrastructure

Himachal Pradesh provide wide range of infrastructure facilities like industrial area hydropower
projects which provide 24*7 electricity to industry

Stable government

Himachal Pradesh has stable government with ruling of only one political party which provide
stable environment for growth of automobile industry
Weakness

Road infrastructure

Road infrastructure is major weakness for automobile industry as most of the roads are hilly and
only particular types of vehicles are suitable for it.

Long and complex procedure

To set up plant of automobile at Himachal Pradesh requires lots of procedure for registration and
permission from various authorities which makes it complex in nature

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Opportunity

Special economic zone

Government of Himachal Pradesh set up various industrial areas at different location in state and
also spend us $ 1.8 billion to develop special economic zone which provide opportunity for
automobile industry to set up manufacturing plan

Franchise showrooms:

As now a days automobile industry of India is into booming segment. All leading automobile
companies are ready to do business with India. Himachal Pradesh also has vast opportunity now
a day in terms of doing business with franchise showrooms.

Lower competitions:

As mention earlier most of business at Himachal Pradesh is through franchise business, so if you
choose well geographical location for the franchise and according to gets the competitive
advantages because of lower competition.

Auto parts:

Auto parts of the same automobile company have also a good business opportunity for doing the
business simultaneously with it.

Economic growth

Himachal Pradesh is stable in economic growth and looking for 8.5% growth rate in current year
which provide opportunity for growth of automobile industry at there.
Threats

Absenteeism and lack of industrial culture

At Himachal Pradesh very high rate of absenteeism ration in terms of employment and
frequently disturbance of labor union leads to threat for automobile industry.

Less attention of industrial developers

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Most of the industry leaders not provide enough attention towards Himachal Pradesh because of
its adverse geographical condition and high power tariff.

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CHAPTER- 9
Bilateral trade opportunity

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BILATERAL TRADE OPPORTUNITY

Automobile industries of the Gujarat and the automobile industries of the Cambodia has a very
good chance of making the bilateral trade in this sectors from this the state and the country can
establish the foreign relation to be strong and the value of the both the place will increase to
making a bilateral trade in automobile industries.
Following companies are in Gujarat which is having there manufacturing plant.
Tata motors
General Motors
Ford motors
Asia motor works

TATA Motors:
Tata Motors plant for the Tata Nano at Sanand, located in the Ahmedabad district of Gujarat.
The capacity of the plant, to begin with, will be 250,000 cars per year to be achieved in phases,
and with some balancing is expandable up to 350,000 cars per year. Provision for further
capacity expansion has also been incorporated in this location.
Built in a record time of 14 months starting November 2008, the integrated facility comprises
Tata Motors own plant, spread over 725 acres and an adjacent vendor park, and spread over 375
acres, to house key component manufacturers for the Tata Nano.
General Motors:
GMIPL operates vehicle manufacturing plants in Halol, Gujarat and Talegaon Dabhade,
Maharashtra; it maintains headquarters in Halol and Gurgaon and a large technical center in
Bangalore. Its Halol and Talegaon Dabhade manufacturing plants have a combined production
capacity of 225,000 vehicles annually.

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Ford Motors:
The Sanand Facility at a Glance:

Investment of over US $1 billion

Spread over a total of 460 acres comprising Stamping, Vehicle Operations, Engine Plant,
Service Parts Production

Initial production capacity of 240,000 vehicles and 270,000 engines per annum

This plant will launch with approximately 2500 employees

Paint facility at Sanand will use Fords innovative three-wet paint process that allows three coats
of paint to be applied and dried simultaneously. The energy efficient process significantly
reduces wastage, energy consumption and helps in lowering paint shop carbon-dioxide emissions
by up to 25 percent.

The state-of-the-art press shop, for example, will not only ensure that we produce the highest
quality parts, but it will also maintain an exceptionally clean environment for employees with
positive ventilation being deployed

Ford is working to provide safe drinking water to children in kindergartens run by the
government in 70 villages. The company has introduced its Happy Schools program in 10
schools close to the plant, designed to address gaps in academic support, health, nutrition and
infrastructure requirements that restrict schools from imparting holistic education

Asia Motor Works:

The Companys manufacturing facility in Bhuj, Western India is spread over 2 million sq. meters
and produces vehicles for a range of civilian and defence applications. AMW has invested over
Rs20 billion in the plant and has a capacity to produce 50,000 vehicles.

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