Description
This describess about Industry trends of international automobile market, PEST Analysis of automobile Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Ashok Leyland, it's Finance performance, SWOT analysis of Ashok Leyland and Various Strategies employed.
Introduction
Automobile Manufacturing Industry International Market
History of the automobile begins as early as 1769, with the creation of steam-powered automobiles capable of human transport in 1806.
The first cars powered by internal combustion engines running on fuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern gasoline or petrol-fueled internal combustion engine The first practical automobile with a petrol engine was built by Karl Benz in 1885 in Mannheim, Germany. Benz was granted a patent for his automobile on 29 January 1886, and began the first production of automobiles in 1888, after Bertha Benz, his wife, had proved with the first long-distance trip in August 1888 (104 km (65 mi) from Mannheim to Pforzheim and back) that the horseless coach was absolutely suitable for daily use. Since 2008 a Bertha Benz Memorial Route commemorates this event. Soon after, in 1889, Gottlieb Daimler and Wilhelm Maybach in Stuttgart designed a vehicle from scratch to be an automobile, rather than a horse-drawn carriage fitted with an engine. They also are usually credited as inventors of the first motorcycle, the Daimler Reitwagen, in 1885, but Italy's Enrico Bernardi, of the University of Padua, in 1882, patented a 0.024 horsepower (17.9 W) 122 cc(7.4 cu in) one-cylinder petrol motor, fitting it into his son's tricycle, making it at least a candidate for the first automobile, and first motorcycle. Bernardi enlarged the tricycle in 1892 to carry two adults.
Commercial vehicle sales are spurred on by economic growth going in hand with the rising demand for the transport of goods. Of course, this is common knowledge – but just perfectly describes the ups and downs in the truck industry over the last couple of years. In 2006 rapid increase of commercial vehicles sales in the world’s emerging economies was expected. But what has been shown until today, especially in China and India, surpassed all prospects: In terms of units sold Chinese manufacturers are taking the global lead in certain segments – and this by almost only offering their trucks in their home market. This impressively shows the enormous strength and significance of the emerging markets for the future of the global truck industry. Of course there are still considerable differences between the Triad (North America excl. Mexico, Western Europe and Japan) and emerging truck market spheres in terms of customer requirements, the importance of total cost of ownership and added value services. But knowing that the developments in recent years by far exceeded the most optimistic expectations – how can anyone foresee the potentials and importance of issues arising in five or ten years’ time? The markets will converge – not today, but early enough to start thinking about which winning strategies could guide the way to a profitable and sustainable global truck business model for tomorrow. Due to the rapid economic recovery, in 2010 most commercial vehicle markets revived from the sales decrease they suffered in 2008 and 2009. Nevertheless, commercial vehicle sales still remain below their pre-crisis volume in most markets. Although, the enormous sales reductions have resulted in some painful lessons, extensive cost saving programs allows a majority of manufacturers to achieve respectable profits. However, particularly OEMs from the established markets continue to face a number of challenges to maintain or grow their market position in their home markets. These include increasingly stringent regulations, rising gas prices and largely saturated markets. On the other hand, economic growth in emerging markets continues to offer great potential, with the associated rise in consumer demand predicted to have a positive medium and long-term impact. Industry experts also expect that the legal framework and commodity prices will continue to play a minor role for the time being. The balance of power in the global commercial vehicle market has changed decisively over the past five years. In 2006, Western Europe accounted for about 10 percent of all commercial vehicle sales worldwide. In 2010, the figure had fallen to around 7 percent. The fall was even greater in North America, where the share of worldwide commercial vehicle registrations fell from about 50 percent in 2006 to around 32 percent in 2010. Market share losses of the saturated markets contrast with strong market share gains in the emerging markets. In particular, China sharply increased its global market share in 2009 by about 10 percent to 28 percent, replacing the US as the largest commercial vehicle market, due largely to governmental support initiatives. By 2010, Chinese global market share had already grown to 30 percent. India enjoyed similar although less spectacular growth. Asia is now by far the largest region for commercial vehicle sales, accounting for nearly one in two commercial vehicles sold worldwide.
Already in today’s market, a considerable proportion of trucks are sold by manufacturers from emerging markets, such as Dongfeng Motor, FAW and CNHTC (all China) and Tata Motors (India). These companies sell most of their vehicles in their respective home markets. Nevertheless, even Daimler Trucks, for years the biggest seller in the heavy duty vehicle segment, was outperformed in 2010 for the first time by the Chinese Dongfeng Group. This underlines the dynamics of the emerging markets and their potential to determine the success of commercial vehicle manufacturers with global aspirations
International key players in heavy commercial vehicle in 2010
WORLDWIDE DONGFENG DAIMLER TRUCKS FAW CNHTC TATA MOTORS VOLVO GLOBAL TRUCKS TORCH BAIC MAN (VW) ASHOK LEYLAND PACCAR TOYOTA NAVISTAR ISUZU FORD ANHUI JIANGHUAI IVECO (FIAT) SCANIA (VW) Units Sold (in thousands) 300.1 280.7 274.3 199.9 194.9 125.8 113.2 109.4 103.8 80.0 79.1 77.4 76.6 71.5 64.8 62.8 51.9 48.6 Market Share (in percent) 10.3% 9.7% 9.5% 6.9% 6.7% 4.3% 3.9% 3.8% 3.6% 2.8% 2.7% 2.7% 2.6% 2.5% 2.2% 2.2% 1.8% 1.7%
Indian Market
The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD $35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion. The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. The projected size in 2016 of the Indian automotive industry varies between $122 billion and $159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India's GDP by 2016, which is more than double the current contribution. The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years. The exports in automotive sector have grown on an average compound annual growth rate of 30% per year for the last seven years. The export earnings from this sector are over USD 6 billion. Even with this rapid growth, the Indian automotive industry's contribution in global terms is very low. This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2.3 million in the year 2008, yet India's share is about 3.28% of world production of 70.53 million passenger and commercial vehicles India’s automotive exports constitute only about 0.3% of the global automotive trade. India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. India has a well developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. India enjoys natural advantage and is among the lowest cost producers of steel in the world.
PEST ANALYSIS OF THE INDUSTRY GLOBAL AND LOCAL.
Political:
? ? ? ? ? ? Almost all of the regulations are increasing concerns for the environment and the concern for safer automobiles. For the safety for passengers there was a law passed National Traffic and Motor Vehicle Safety Act. For the environment a law was passed Vehicle Air Pollution and Control Act. In 2002, the Indian government formulated an auto policy that aimed at promoting, integrated, phased, enduring and self-sustained growth of the Indian automotive industry. Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Promoting multi-model transportation and the implementation of mass rapid transport system.
Economic:
? ? ? ? ? The Indian economy has grown at 8.5% per annum. The manufacturing sector has grown at 8-10 % per annum in the last few years. Several Indian firms have partnered with global players. While some have formed joint ventures with equity participation, other also has entered into technology tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.
Social:
? ? ? Today's society judges people on the type of car you drive. Another aspect of the socio cultural is the environmental concerns for the need of fuelefficient vehicles. Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile sector have a large customer base to serve.
?
Preference for fuel efficient cars with low running costs.
Technical:
? ? ? ? ? ? Because of new legislation, they had no choice but to come up with the technology to make the fuel-efficient cars. Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. Customized solutions (designer cars, etc) can be provided with the proliferation of technology Internet makes it easy to collect and analyse customer feedback With the entry of global companies into the Indian market, advancedtechnologies, both in product and production process have developed. Major global players like audi, BMW, Hyundai etc have setup their manufacturing units in India.
SWOT ANALYSIS OF THE INDUSTRY GLOBAL AND LOCAL.
Strengths:
? ? ? ? ? Industry relatively stable. Highly efficient over the last century, with the ability to maximize both the productivity of the workers and machines to maximize profits. Large domestic market. Government incentives for manufacturing units. Strong engineering required.
Weakness:
? ? ? ? ? Severe downturn in the economy can have a crippling effect on it. Heavy competition and little room for growth and become unattractive to new entrants. Cost of production increases due to various taxes levied. Low labor productivity. Infrastructure creates hazards.
Opportunities:
? ? ? ? Technology and bio-technology can be introduced at a larger scale. Increase in GDP Rising rural demand With SC ban on overloading it’s a big opportunity for commercial vehicle manufacturing.
Threats:
? ? ? ? ? New emerging markets are a threat to the already established companies. Rising interest rates. Unreliable economy. Inflation. Competition locally and globally.
COMPETITOR ANALYSIS
COMPANY ANALYSIS : INTRODUCTION ASHOK LEYLAND
The company is an exclusively heavy vehicle manufacturing company situated in Chennai and was initiated in the year 1948. It is one of India's biggest producers of heavy vehicles such as such as trucks, buses, military vehicles and also the second biggest commercial vehicle firm in India heavy vehicle division with a market share of around 27%. Ashok Leyland is also renowned for producing auto spare parts and engines for marine and industrial submission. It transacts around 55,000 heavy vehicles and 8,000 engines every year. Ashok Leyland registered a net profit of ` 190 crores in the FY 2009. Ashok Leyland makes ? Buses ? Trucks ? Defense vehicles, and ? Engines As of 20-March-2007, the company has signed MOU with Harayan Government to setup Driver Training Institute at Kaithal. The company already has 2 institues as below: NDTC, near Salem in Tamil Nadu Burari Driver Training Institute – joint venture with Delhi Government. Against the backdrop of the sharp slump in demand for commercial vehicles, during 2008-09, Ashok Leyland registered sales of 47,118 medium and heavy commercial vehicles (M&HCV), 37.5% less than in the previous year. This includes 16,049 M&HCV buses and 31,069 M&HCV trucks respectively, 8.7% and 46.3% less than in the previous year. The company lost 1.8% market share in the Indian medium and heavy commercial vehicle market during the financial year 2008-09, mainly due to loss of sales in the truck segment. This was because the Eastern Region, where the Company's presence had been historically weak, was relatively stable, whilst the market declined sharply in other regions.
? ?
While total industry volume of the medium and heavy duty buses declined by about 8.7%, the Company's market share grew marginally and Ashok Leyland retained its number one position in this segment. The Company sold 6,812 vehicles in the overseas markets during 2008-09. This represents a decrease of approximately 6.5% over the previous year. Total industry volume related to overseas markets to which the Company exports (such as Sri Lanka, the Middle East) witnessed a reduction of about 25% over the previous year. To combat the impact of decline in CV sales, the Company focused on noncyclical businesses in the portfolio. The Company produced in all 54,049 vehicles during the year. To contain costs and conserve cash, the Company worked only about 50% of the working days in all its manufacturing units during the second half of the year. Heavy vehicles manufactured by Ashok Leyland The major Heavy vehicles manufactured by Ashok Leyland are:
? ? ? ? ? ? ? ? ? ?
Cargo 1512, Cargo 1614, Hippo Tipper, Hippo Haulage, Coal Carrier, Taurus Tipper, Titan Double Decker, Cruiser Luxury Coach, Viking/ Cheetah and Viking Super (CNG) With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus segment. The company claims to carry over 60 million passengers a day, more people than the entire Indian rail network. In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck range starting from 7.5 tons to 49 tons. The joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons).
General Information.
Location of the headquarters Corporate Office No.1 Sardar Patel Road, Guindy, Chennai - 600 032. Phone : 044-22206000 Fax : 044-22206001 They have offices at various places in north, south, east, west and central region of India. They also have offices at different countries like Czech Republic, UAE, Deutsch Land, Sri Lanka and Michigan. Year of founding 1948, founded by Raghunandan Saran, Ashok Motors was set up in collaboration with Austin Motor Company, England and incorporated on September 7th for the assembly of Austin cars. 1967, ‘Titan’- the first Indian-made double decker. 1993, Ashok Leyland became the first Indian auto company to receive ISO 9002 certification. 1997, manufactured Stallion for the Indian Army. 2007, joint venture forged with Nissan Motor Company, Japan
Ashok Leyland Limited
Type
Public
Traded as
BSE: 500477 NSE: ASHOKLEY
Industry
Automotive
Founded
1948
Headquarters
Chennai, Tamil Nadu, India
Products
Automobiles Engines
Revenue
12,711 crore (US$2.54 billion)(2011)
Net income
674 crore (US$134.46 million)(2011)
Employees
15,812 (2011)
Parent
Hinduja Group
Subsidiaries
Ennore foundries Limited Automotive Coaches and Components Limited Gulf-Ashley Motors Limited Ashley Holdings Limited Ashley Investments Limited Ashley Design and Engineering Services (ADES) Avia Ashok Leyland Ashok Leyland Defence Systems (ALDS) Ashok Leyland Project Services Limited Lanka Ashok Leyland[1]
Website
www.ashokleyland.com
Top management Board of director: Dheeraj G Hinduja, chairman R Seshasayee, Executive Vice Chairman Anil Harish D J Balaji Rao A K das
Jean Brunol (from 20.10.2010 ) Jorma Antero Halonen (from 19.05.2011) Sanjay K Asher (from 21.12.2010) F sahami Shardul S Shroff Dr V Sumantran Vinod K dasari, Managing director Chief Financial Officer K sridharan Executive Director And Company Secretary A R chandrasekharan Executive Directors Anup Bhat A K Jain Jayendra parikh R R G Menon P G Nilsson Nitin Seth Rajive Saharia Shekhar Arora Auditors M s Krishnaswami & Rajan Deloitte Haskins & Sells Cost Auditors Geeyes & Co. Bankers Bank of America Bank of Baroda Canara Bank Central Bank of India Citibank N.A. Credit Agricole Corporate and Investment Bank HDFC Bank Limited ICICI Bank Limited IDBI Bank Limited Punjab National Bank Standard Chartered Bank State Bank of India State Bank of Patiala Hongkong and Shanghai Banking Corporation Limited
SWOT ANALYSIS
SWOT ANALYSIS
Strengths: High market share ISO certification hence quality products Good training systems in place Nice organizational structure Good skilled employees Loyal Customers Strong presence in south India
? ? ? ? ? ? ?
Weakness: ? Low margin and high price ? Not properly organized to handle grievances and complaints ? Less active than competition ? Lack of innovation
? ? ? ?
Opportunities: Provider to Indian army Give more credit to dealers Need a nice marketing push Promotional programmes started Threats: ? High competition ? Easy replacement from competition ? Indian market is complicated ? Competitor Tata’s presence is strong all over India.
TATA vs ASHOK LYELAND Share price TATA: 212.80 + 7.95 A-L : 21.30 -0.05 Market Share : Light commercial vehicles: TATA – APPROX 58% A-L : 0.5 % Medium commercial vehicles: TATA : APPROX 62% A-L : 27% Heavy commercial vehicles: TATA : 56% A-L : 28%
MARKETING STRATEGIES: Tata motors ? High product and brand centric advertisement ? Good push strategy via pricing ? All India dealer support plus maintenance ? Superior marketing of brand name Ashok Leyland ? Competition centric advertisement ? Gives more preference to dealer support activities ? Supports direct marketing and sales activities
In terms of partnership Tata Acquired Jaguar which is a slow moving business but hopefully in the near future it will reap profits for the company. Whereas Ashok Leyland has launched its first LCV product Dost with its JV partner Nissan.
doc_323880367.docx
This describess about Industry trends of international automobile market, PEST Analysis of automobile Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Ashok Leyland, it's Finance performance, SWOT analysis of Ashok Leyland and Various Strategies employed.
Introduction
Automobile Manufacturing Industry International Market
History of the automobile begins as early as 1769, with the creation of steam-powered automobiles capable of human transport in 1806.
The first cars powered by internal combustion engines running on fuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern gasoline or petrol-fueled internal combustion engine The first practical automobile with a petrol engine was built by Karl Benz in 1885 in Mannheim, Germany. Benz was granted a patent for his automobile on 29 January 1886, and began the first production of automobiles in 1888, after Bertha Benz, his wife, had proved with the first long-distance trip in August 1888 (104 km (65 mi) from Mannheim to Pforzheim and back) that the horseless coach was absolutely suitable for daily use. Since 2008 a Bertha Benz Memorial Route commemorates this event. Soon after, in 1889, Gottlieb Daimler and Wilhelm Maybach in Stuttgart designed a vehicle from scratch to be an automobile, rather than a horse-drawn carriage fitted with an engine. They also are usually credited as inventors of the first motorcycle, the Daimler Reitwagen, in 1885, but Italy's Enrico Bernardi, of the University of Padua, in 1882, patented a 0.024 horsepower (17.9 W) 122 cc(7.4 cu in) one-cylinder petrol motor, fitting it into his son's tricycle, making it at least a candidate for the first automobile, and first motorcycle. Bernardi enlarged the tricycle in 1892 to carry two adults.
Commercial vehicle sales are spurred on by economic growth going in hand with the rising demand for the transport of goods. Of course, this is common knowledge – but just perfectly describes the ups and downs in the truck industry over the last couple of years. In 2006 rapid increase of commercial vehicles sales in the world’s emerging economies was expected. But what has been shown until today, especially in China and India, surpassed all prospects: In terms of units sold Chinese manufacturers are taking the global lead in certain segments – and this by almost only offering their trucks in their home market. This impressively shows the enormous strength and significance of the emerging markets for the future of the global truck industry. Of course there are still considerable differences between the Triad (North America excl. Mexico, Western Europe and Japan) and emerging truck market spheres in terms of customer requirements, the importance of total cost of ownership and added value services. But knowing that the developments in recent years by far exceeded the most optimistic expectations – how can anyone foresee the potentials and importance of issues arising in five or ten years’ time? The markets will converge – not today, but early enough to start thinking about which winning strategies could guide the way to a profitable and sustainable global truck business model for tomorrow. Due to the rapid economic recovery, in 2010 most commercial vehicle markets revived from the sales decrease they suffered in 2008 and 2009. Nevertheless, commercial vehicle sales still remain below their pre-crisis volume in most markets. Although, the enormous sales reductions have resulted in some painful lessons, extensive cost saving programs allows a majority of manufacturers to achieve respectable profits. However, particularly OEMs from the established markets continue to face a number of challenges to maintain or grow their market position in their home markets. These include increasingly stringent regulations, rising gas prices and largely saturated markets. On the other hand, economic growth in emerging markets continues to offer great potential, with the associated rise in consumer demand predicted to have a positive medium and long-term impact. Industry experts also expect that the legal framework and commodity prices will continue to play a minor role for the time being. The balance of power in the global commercial vehicle market has changed decisively over the past five years. In 2006, Western Europe accounted for about 10 percent of all commercial vehicle sales worldwide. In 2010, the figure had fallen to around 7 percent. The fall was even greater in North America, where the share of worldwide commercial vehicle registrations fell from about 50 percent in 2006 to around 32 percent in 2010. Market share losses of the saturated markets contrast with strong market share gains in the emerging markets. In particular, China sharply increased its global market share in 2009 by about 10 percent to 28 percent, replacing the US as the largest commercial vehicle market, due largely to governmental support initiatives. By 2010, Chinese global market share had already grown to 30 percent. India enjoyed similar although less spectacular growth. Asia is now by far the largest region for commercial vehicle sales, accounting for nearly one in two commercial vehicles sold worldwide.
Already in today’s market, a considerable proportion of trucks are sold by manufacturers from emerging markets, such as Dongfeng Motor, FAW and CNHTC (all China) and Tata Motors (India). These companies sell most of their vehicles in their respective home markets. Nevertheless, even Daimler Trucks, for years the biggest seller in the heavy duty vehicle segment, was outperformed in 2010 for the first time by the Chinese Dongfeng Group. This underlines the dynamics of the emerging markets and their potential to determine the success of commercial vehicle manufacturers with global aspirations
International key players in heavy commercial vehicle in 2010
WORLDWIDE DONGFENG DAIMLER TRUCKS FAW CNHTC TATA MOTORS VOLVO GLOBAL TRUCKS TORCH BAIC MAN (VW) ASHOK LEYLAND PACCAR TOYOTA NAVISTAR ISUZU FORD ANHUI JIANGHUAI IVECO (FIAT) SCANIA (VW) Units Sold (in thousands) 300.1 280.7 274.3 199.9 194.9 125.8 113.2 109.4 103.8 80.0 79.1 77.4 76.6 71.5 64.8 62.8 51.9 48.6 Market Share (in percent) 10.3% 9.7% 9.5% 6.9% 6.7% 4.3% 3.9% 3.8% 3.6% 2.8% 2.7% 2.7% 2.6% 2.5% 2.2% 2.2% 1.8% 1.7%
Indian Market
The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD $35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion. The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. The projected size in 2016 of the Indian automotive industry varies between $122 billion and $159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India's GDP by 2016, which is more than double the current contribution. The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years. The exports in automotive sector have grown on an average compound annual growth rate of 30% per year for the last seven years. The export earnings from this sector are over USD 6 billion. Even with this rapid growth, the Indian automotive industry's contribution in global terms is very low. This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2.3 million in the year 2008, yet India's share is about 3.28% of world production of 70.53 million passenger and commercial vehicles India’s automotive exports constitute only about 0.3% of the global automotive trade. India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. India has a well developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. India enjoys natural advantage and is among the lowest cost producers of steel in the world.
PEST ANALYSIS OF THE INDUSTRY GLOBAL AND LOCAL.
Political:
? ? ? ? ? ? Almost all of the regulations are increasing concerns for the environment and the concern for safer automobiles. For the safety for passengers there was a law passed National Traffic and Motor Vehicle Safety Act. For the environment a law was passed Vehicle Air Pollution and Control Act. In 2002, the Indian government formulated an auto policy that aimed at promoting, integrated, phased, enduring and self-sustained growth of the Indian automotive industry. Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Promoting multi-model transportation and the implementation of mass rapid transport system.
Economic:
? ? ? ? ? The Indian economy has grown at 8.5% per annum. The manufacturing sector has grown at 8-10 % per annum in the last few years. Several Indian firms have partnered with global players. While some have formed joint ventures with equity participation, other also has entered into technology tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.
Social:
? ? ? Today's society judges people on the type of car you drive. Another aspect of the socio cultural is the environmental concerns for the need of fuelefficient vehicles. Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile sector have a large customer base to serve.
?
Preference for fuel efficient cars with low running costs.
Technical:
? ? ? ? ? ? Because of new legislation, they had no choice but to come up with the technology to make the fuel-efficient cars. Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. Customized solutions (designer cars, etc) can be provided with the proliferation of technology Internet makes it easy to collect and analyse customer feedback With the entry of global companies into the Indian market, advancedtechnologies, both in product and production process have developed. Major global players like audi, BMW, Hyundai etc have setup their manufacturing units in India.
SWOT ANALYSIS OF THE INDUSTRY GLOBAL AND LOCAL.
Strengths:
? ? ? ? ? Industry relatively stable. Highly efficient over the last century, with the ability to maximize both the productivity of the workers and machines to maximize profits. Large domestic market. Government incentives for manufacturing units. Strong engineering required.
Weakness:
? ? ? ? ? Severe downturn in the economy can have a crippling effect on it. Heavy competition and little room for growth and become unattractive to new entrants. Cost of production increases due to various taxes levied. Low labor productivity. Infrastructure creates hazards.
Opportunities:
? ? ? ? Technology and bio-technology can be introduced at a larger scale. Increase in GDP Rising rural demand With SC ban on overloading it’s a big opportunity for commercial vehicle manufacturing.
Threats:
? ? ? ? ? New emerging markets are a threat to the already established companies. Rising interest rates. Unreliable economy. Inflation. Competition locally and globally.
COMPETITOR ANALYSIS
COMPANY ANALYSIS : INTRODUCTION ASHOK LEYLAND
The company is an exclusively heavy vehicle manufacturing company situated in Chennai and was initiated in the year 1948. It is one of India's biggest producers of heavy vehicles such as such as trucks, buses, military vehicles and also the second biggest commercial vehicle firm in India heavy vehicle division with a market share of around 27%. Ashok Leyland is also renowned for producing auto spare parts and engines for marine and industrial submission. It transacts around 55,000 heavy vehicles and 8,000 engines every year. Ashok Leyland registered a net profit of ` 190 crores in the FY 2009. Ashok Leyland makes ? Buses ? Trucks ? Defense vehicles, and ? Engines As of 20-March-2007, the company has signed MOU with Harayan Government to setup Driver Training Institute at Kaithal. The company already has 2 institues as below: NDTC, near Salem in Tamil Nadu Burari Driver Training Institute – joint venture with Delhi Government. Against the backdrop of the sharp slump in demand for commercial vehicles, during 2008-09, Ashok Leyland registered sales of 47,118 medium and heavy commercial vehicles (M&HCV), 37.5% less than in the previous year. This includes 16,049 M&HCV buses and 31,069 M&HCV trucks respectively, 8.7% and 46.3% less than in the previous year. The company lost 1.8% market share in the Indian medium and heavy commercial vehicle market during the financial year 2008-09, mainly due to loss of sales in the truck segment. This was because the Eastern Region, where the Company's presence had been historically weak, was relatively stable, whilst the market declined sharply in other regions.
? ?
While total industry volume of the medium and heavy duty buses declined by about 8.7%, the Company's market share grew marginally and Ashok Leyland retained its number one position in this segment. The Company sold 6,812 vehicles in the overseas markets during 2008-09. This represents a decrease of approximately 6.5% over the previous year. Total industry volume related to overseas markets to which the Company exports (such as Sri Lanka, the Middle East) witnessed a reduction of about 25% over the previous year. To combat the impact of decline in CV sales, the Company focused on noncyclical businesses in the portfolio. The Company produced in all 54,049 vehicles during the year. To contain costs and conserve cash, the Company worked only about 50% of the working days in all its manufacturing units during the second half of the year. Heavy vehicles manufactured by Ashok Leyland The major Heavy vehicles manufactured by Ashok Leyland are:
? ? ? ? ? ? ? ? ? ?
Cargo 1512, Cargo 1614, Hippo Tipper, Hippo Haulage, Coal Carrier, Taurus Tipper, Titan Double Decker, Cruiser Luxury Coach, Viking/ Cheetah and Viking Super (CNG) With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus segment. The company claims to carry over 60 million passengers a day, more people than the entire Indian rail network. In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck range starting from 7.5 tons to 49 tons. The joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons).
General Information.
Location of the headquarters Corporate Office No.1 Sardar Patel Road, Guindy, Chennai - 600 032. Phone : 044-22206000 Fax : 044-22206001 They have offices at various places in north, south, east, west and central region of India. They also have offices at different countries like Czech Republic, UAE, Deutsch Land, Sri Lanka and Michigan. Year of founding 1948, founded by Raghunandan Saran, Ashok Motors was set up in collaboration with Austin Motor Company, England and incorporated on September 7th for the assembly of Austin cars. 1967, ‘Titan’- the first Indian-made double decker. 1993, Ashok Leyland became the first Indian auto company to receive ISO 9002 certification. 1997, manufactured Stallion for the Indian Army. 2007, joint venture forged with Nissan Motor Company, Japan
Ashok Leyland Limited
Type
Public
Traded as
BSE: 500477 NSE: ASHOKLEY
Industry
Automotive
Founded
1948
Headquarters
Chennai, Tamil Nadu, India
Products
Automobiles Engines
Revenue
12,711 crore (US$2.54 billion)(2011)
Net income
674 crore (US$134.46 million)(2011)
Employees
15,812 (2011)
Parent
Hinduja Group
Subsidiaries
Ennore foundries Limited Automotive Coaches and Components Limited Gulf-Ashley Motors Limited Ashley Holdings Limited Ashley Investments Limited Ashley Design and Engineering Services (ADES) Avia Ashok Leyland Ashok Leyland Defence Systems (ALDS) Ashok Leyland Project Services Limited Lanka Ashok Leyland[1]
Website
www.ashokleyland.com
Top management Board of director: Dheeraj G Hinduja, chairman R Seshasayee, Executive Vice Chairman Anil Harish D J Balaji Rao A K das
Jean Brunol (from 20.10.2010 ) Jorma Antero Halonen (from 19.05.2011) Sanjay K Asher (from 21.12.2010) F sahami Shardul S Shroff Dr V Sumantran Vinod K dasari, Managing director Chief Financial Officer K sridharan Executive Director And Company Secretary A R chandrasekharan Executive Directors Anup Bhat A K Jain Jayendra parikh R R G Menon P G Nilsson Nitin Seth Rajive Saharia Shekhar Arora Auditors M s Krishnaswami & Rajan Deloitte Haskins & Sells Cost Auditors Geeyes & Co. Bankers Bank of America Bank of Baroda Canara Bank Central Bank of India Citibank N.A. Credit Agricole Corporate and Investment Bank HDFC Bank Limited ICICI Bank Limited IDBI Bank Limited Punjab National Bank Standard Chartered Bank State Bank of India State Bank of Patiala Hongkong and Shanghai Banking Corporation Limited
SWOT ANALYSIS
SWOT ANALYSIS
Strengths: High market share ISO certification hence quality products Good training systems in place Nice organizational structure Good skilled employees Loyal Customers Strong presence in south India
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Weakness: ? Low margin and high price ? Not properly organized to handle grievances and complaints ? Less active than competition ? Lack of innovation
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Opportunities: Provider to Indian army Give more credit to dealers Need a nice marketing push Promotional programmes started Threats: ? High competition ? Easy replacement from competition ? Indian market is complicated ? Competitor Tata’s presence is strong all over India.
TATA vs ASHOK LYELAND Share price TATA: 212.80 + 7.95 A-L : 21.30 -0.05 Market Share : Light commercial vehicles: TATA – APPROX 58% A-L : 0.5 % Medium commercial vehicles: TATA : APPROX 62% A-L : 27% Heavy commercial vehicles: TATA : 56% A-L : 28%
MARKETING STRATEGIES: Tata motors ? High product and brand centric advertisement ? Good push strategy via pricing ? All India dealer support plus maintenance ? Superior marketing of brand name Ashok Leyland ? Competition centric advertisement ? Gives more preference to dealer support activities ? Supports direct marketing and sales activities
In terms of partnership Tata Acquired Jaguar which is a slow moving business but hopefully in the near future it will reap profits for the company. Whereas Ashok Leyland has launched its first LCV product Dost with its JV partner Nissan.
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