Digital Marketing

Topics: Automotive industry, Automobile, General Motors Pages: 80 (26630 words) Published: April 5, 2011
Digital Marketing as an emerging trend in the Indian market: Automobile sector

Team Members:

Subhasis C
Raman M
Rahul R
Girish R
Meghna B

Guided by

Prof. Parag Amin

Prof. Sunil Deshpande

Current Scenario: Automobile Sector

Touted to be the 11th largest market in the passenger car segment, the Indian automotive industry is expected to grab the 7th place in global rankings by 2016. With an annual production of 9.7 million units, the industry is ranked as the 10th largest auto industry in the world and is expected to account for 10.6% of India’s GDP by 2016. Clocking 12 million units’ sales in 2009, India leads the production of two wheelers. However, its passenger car segment is also catching up. In May 2010, passenger car segment recorded sales of 1,90,575 units.

The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the growth is expected to double in the next 10 years. With rise in disposable incomes, easier financing options and favourable policies being charted out by Indian government, buying a car has become easier and consequently the demand for passenger vehicles is high.

An Overview of the Indian Automobile Industry

Starting its journey from the day when the first car rolled on the streets of Mumbai in 1898, the Indian automobile industry has demonstrated a phenomenal growth to this day. Today, the Indian automobile industry presents a galaxy of varieties and models meeting all possible expectations and globally established industry standards. Some of the leading names echoing in the Indian automobile industry include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in addition to a number of others.

During the early stages of its development, Indian automobile industry heavily depended on foreign technologies. However, over the years, the manufacturers in India have started using their own technology evolved in the native soil. The thriving market place in the country has attracted a number of automobile manufacturers including some of the reputed global leaders to set their foot in the soil looking forward to enhance their profile and prospects to new heights. Following a temporary setback on account of the global economic recession, the Indian automobile market has once again picked up a remarkable momentum witnessing a buoyant sale for the first time in its history in the month of September 2009.

The automobile sector of India is the seventh largest in the world. In a year, the country manufactures about 2.6 million cars making up an identifiable chunk in the world’s annual production of about 73 million cars in a year. The country is the largest manufacturer of motorcycles and the fifth largest producer of commercial vehicles. Industry experts have visualized an unbelievably huge increase in these figures over the immediate future. The figures published by the Asia Economic Institute indicate that the Indian automobile sector is set to emerge as the global leader by 2012. In the year 2009, India rose to be the fourth largest exporter of automobiles following Japan, South Korea and Thailand. Experts state that in the year 2050, India will top the car volumes of all the nations of the world with about 611 million cars running on its roads.

At present, about 75 percent of India’s automobile industry is made up by small cars, with the figure ranking the nation on top of any other country on the globe. Over the next two or three years, the country is expecting the arrival of more than a dozen new brands making compact car models.

Recently, the automotive giants of India including General Motors (GM), Volkswagen, Honda, and Hyundai, have declared significant expansion plans. On account of its huge market potential, a very low base of car ownership in the country estimated at about 25...

References: The Cost of Distress: Survival, Truncation Risk and Valuation-
Aswath Damodaran
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