PEST Analysis of Automobile Industry

Introduction
The Indian automotive market is one of the most competitive markets with low costs. India is the second fastest growing automobile market in the world after China The large population growth of more than ! million a year and the rising living standards. Imported cars are very e"pensive to ac#uire in India$ due to many import licenses and tariffs that lead to higher prices on imported cars.

 Indian automobile industry is faced with declining sales in the current fiscal due to high interest rates$ rising fuel costs and commodity prices. The slowing demand has lowered industry growth to %.&'( in the first nine months of the current fiscal. The auto sector is one of the most important sectors in manufacturing$ forming. Sector accounts for around )( of India*s +,P. -y !.)$ the government is targeting an annual turnover of /S0.%&bn$ representing .!( of +,P. The government needs to e"pedite economic growth to increase demand and improve disposable incomes. It has to control inflation and bring in more financial discipline in its policies.

Political 1actors
!! auto policy 2ational Automotive Testing and 3 4, Infrastructure Pro5ect 62AT3IP7 Automotive plan 6 !!)8.)7 lays down .! year road map for automotive industry covering all aspects of growth ranging from emissions$ safety 4 globali9ation in terms of technical standards$ enhancing competitiveness$ skill development$ 34, etc. 1,I is .!!( Controversy over labor laws : .;8day strike at <anesar facility for recognition of a new union at the plant. A &!8day long strike since <arch .) $ !.. by a section of workers at the +eneral <otor=s >alol plant demanding higher wages.
Source : http:??pib.nic.in?newsite?erelease.asp"@relidAB.%%) sources : http:??dhi.nic.in?autopolicy.asp" http:??business.gov.in?IndustryCservices?automobileCindustry.p

Economic 1actors
Economic Pressures on the Industry are causing automobile companies to reorgani9e traditional sales process. +ovt. has granted concessions$ such as reduced interest rates for e"port financing. <ore than B!( of the CD purchase is on Credit. 1inance Availability to CD -uyers has grown in scope during the last few years. Several Indian 1irms have partnered with global players. Ehile some have formed FDs with e#uity participation$ others have entered into a technological tie up.

Economic 1actors
Establishment of India as a <anufacturing >ub for mini$ compact cars$ GE<s and for Auto Components. Eeighted Ta" ,eduction of up to .&!( for in8house 3esearch and ,evelopment Activities. The Indian Economy has grown at H.&( on an Average.

Social factors
Changed lifestyle increases automobile purchase Average family is 4 which makes four wheeler purchase favorable . Growth in urbanization ,4th largest economy by ppp index. pward migration of household income levels

!"# of cars are financed in $ndia.

 $ndian customers are highly discerning , educated and well informed. %hey are price sensitive and put a lot of emphasis on value for money. &reference for small and compact cars. %hey are socially acceptable even among the well off . &reference for fuel efficient cars with low running costs. Cars priced below market. '( )*+++ accounts for nearly !+ # of the

Source : society of Indian automobile %wo wheelers account for ,,# of the market share. manufacturers

Technological 1actors
Technological solutions helps in integrating the supply chain $ hence reduce losses and increases profitability. <ore and more emphasis is being laid on 34, activities carried out by companies in India. Eeighted ta" deduction of up to .&!( for in8house research and 34, activities. The +overnment of India is promoting 2AT3IP to support the growth of the auto industry in India. Customi9ed solutions 6designer cars$etc7 can be provided with the proliferation of technology.
3efrence:reviews.cnet.com?car8 tech? en.wikipedia.org?wiki?Automobile

Technological
Eith the entry of global companies into the Indian market$advanced technologies$ both in product and production process have developed. 1ew global companies have setup 34, centers in India. <a5or global players like Audi$ -<E$ >yundai etc have set up their manufacturing units in India.

Eith the development or evolution of alternate fuels$ hybrid cars also have made entry into the market. Internet has also given a huge boost to companies as they can promote $ collect and analy9e customer feedback.

3efrence:en.wikipedia.org?wiki?>ybrid? www.cisco.edu?s?B )?start.asp"@

Thankyou