Description
comprehensive details of Indian automobile industry covering the entire analysis using competitor analysis, BCG, SWOT and other tools of analysis
ASSIGNMENT OF STRATEGIC MANAGEMENT
Subject: Industry Analysis of Automobile Industry.
Submitted by Utpal Das (Roll No.-15) Hemanta Baruah (30) Basanta Jyoti Deka (21) Dept.- MBE
What Is Industry Analysis
Industry analysis is a market strategy tool used by businesses to determine if they want to enter a product or service market. Company management must carefully analyze several aspects of the industry to determine if they can make a profit selling goods and services in the market. Analyzing economic factors, supply and demand, competitors, future conditions and government regulations will help management decide whether to enter an industry or invest money elsewhere.
1. Economic Factors
o
Economic factors of industry analysis include raw materials, expected profit
margins and the interference of substitute goods. The cost of raw materials is an important factor in industry analysis because over-priced goods will not sell in an established market. Profit margins are closely linked to materials costs because offering discounts or sales prices will shrink company profits and lessen cash inflows for future production activity. Substitute goods allow consumers to purchase a cheaper good that performs relatively like the original item.
Supply and Demand
o
A supply and demand analysis helps management understand if enough consumers are willing to purchase more goods in an industry. If demand is high and supply is low, a company may be willing to enter the market and offer goods near the market price to gain a competitive advantage in the industry. A trend of declining demand indicates an industry that is oversold, and any new competitors
will likely lose money because consumers are not interested in current goods or services.
Competitors
o
The number of competitors is an important factor for proper industry analysis. If few competitors exist in a market, they may be charging consumers higher prices because of limited availability of products or services. As new competitors enter the market, existing companies can lower prices to maintain their current market share; newer competitors may not be able to match these price cuts if their products costs are too high. As industries contract, inefficient producers are forced out.
Future Conditions
o
While no company managers can predict the future of an industry, they can try to determine where the industry is in the business cycle. If the industry is in an emerging market stage, companies can enter an industry and expect to earn a profit from rising consumer demand. If the industry is in a plateau stage, then only the most efficient producers with the lowest costs can continue to earn profits. At the end of a business cycle, demand is declining and producers leave the industry for more profitable markets.
Government Regulations
o
Some industries have heavier regulations or taxes than others, which must be considered by companies looking to enter new markets. Taxes and other government fees add to the cost of doing business, which eats into
profits earned by companies. Properly understanding the amount of government regulation in an industry helps management to determine if expected profit margins will earn a high enough return to cover these costs.
INDUSTRY OVERVIEW (AUTOMOBILE) Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 11 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories : Cars, two-wheelers and heavy vehicles.
ROLE OF AUTOMOBILE IN INDIAN 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.
Role of Automobile Industry in India GDP-Sales Trends : >In the year 2012(April), the total passenger car sold were 168,351 >In the year 2012, the total passenger vehicle sold were 227,034 >In the same year, the total three wheeler sold were 31,986 >The total two wheeler sold were 1,157,108 in the same year. >And lastly total commercial vehicle sold were 56,903 in the similar year.
Role of Automobile Industry in India GDP-Growth : >In the year 2011-2012, the growth rate of passenger cars is 3.40% >In the year 2011-2012, the growth rate of passenger vehicle is 9.3% >In the year 2011-2012, the growth rate of two wheeler is 10.94%. >In the same period, the growth rate of three wheeler is negative i.e. is 5.35% >In the similar period, the growth rate of commercial vehicle is 4.37% -
OBJECTIVES OF INDUSTRIES ANALYSIS:
? Detailed analysis of Automobile industry which is gearing towards international standards. ? Analyze the impact of qualitative factors on industry’s and company’s prospect. ? Analyze the current selling scenario of Indian Automobile industry.
Current Scenario of Automobile Industry in Economy
With the latest available data Indian Automobile Industry is expected to grow at 9%-10% in near future, Two wheeler segment sales grew up by 12.8% with the modest 2.6% growth rate, under this segment the market leader Hero Honda registered growth of 12% in its domestic sales where as Bajaj Auto disappointed as sales plunging by 23%, on the other hand car sales has been grew up by a healthy 22.7% in last February and Commercial Vehicles reported slower sales. It is assumed that in coming festive season to meet demand, car makers going to produce 70000units/month more over the average 1.3lac/month with help of 5000 new hands.
India Automobile Industry at global level >India ranks 1st in the global two-wheeler market. >India is the 4th biggest commercial vehicle market in the world. >India ranks 11th in the international passenger car market. >India ranks 5th pertaining to the number of bus and truck sold in the world. >India is the second largest tractor manufacturer in the world.
Projected growth rate of Automobile Industry :
>Passenger vehicle sales in the country will grow at a CAGR of 12 per cent to touch
3.75 million units by 2014.
>The domestic two-wheeler sales will grow at a CAGR of 8.8% by 2014 at 11.3
million units. >To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.
INDUSTRY ANALYSIS (AUTOMOBILE)
The current trends of the global automobile industry reveal that in the developed countries the automobile industries are stagnating as a result of drooping markets, whereas the automobile industry in the developing nations, have been consistently registering higher growth rates every passing year for their domestic flourishing domestic automobile markets. In 2011, the estimated growth rate of India auto industry is going to be 14% to 17% per annum. The Indian automobile sector is far from being saturated, leaving ample opportunity for volume growth.
Domestic market share in 2010-2011
Passenger vehicles Commercial vehicles Three wheelers Two wheelers 16.25 4.36 3.39 76.00
Segment wise of market share in 2010-2011
16.25, 16% 4.36, 4% 3.39, 4% Two wheelers, 76, 76% Passenger vehicles Commercial vehicles Three wheelers Two wheelers
Total Domestic sales (April 2012)
Types Passenger cars Two wheelers Three wheelers 2011 162,813 1,043,010 33,793 2012 168,351 1,157,108 31,986 227,034 56,257 % Change 3.40% 10.94% -5.35% 9.3% 4.37%
Total passenger vehicles207,724 Commercial vehicles 53,903
The passenger car sales in India witnessed slowest growth during April in 10 years at 3.4% as customer sentiment remained low due to post budget price hiked and high interest rate, affecting the entry level segment more. According to the figure released by the Society of Indian Automobile Manufacturers, domestic passenger car sales stood at 1,68,351 units in April 2012 compared to 1,62,813 units in the same month last year.
Export & Production(April 2012)
2011 Export Production 262,172 1,627,039 2012 265,553 1,721,627 % Chnange 1.29% 5.81%
Industrial Analysis of any industry can be done based on the following headings: 1. Five force model. 2. BCG matrix. 3. Industry Life Cycle. 4. SWOT Analysis
1)Five Forces Model
Michael Porter identifies five forces that influence an industry. These forces are:
Degree of rivalry: Despite the high concentration ratio seen in the
automotive sector, rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market. The industry rivalry is extremely high with any being product being matched in a few months by the competitors. This instinct of the industry is primarily driven by technical capabilities acquired over years of gestation under the technical collaboration with international players.
Threat of substitute: The threat of substitutes to the automotive industry
is fairly mild. Numerous other forms of transportation are available, but none offer the utility, convenience, independence and value offered by automobiles. The switching cost associated with using a different mode of transportation, may be high in terms of personal time, convenience and utility.
Barriers to entry: The barriers to enter automotive industry are
substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. Although the barriers to new companies are substantial, establishing companies are entering the new markets through strategic partnerships or through buying out or merging with other companies. However, a domestic company, with local knowledge and expertise, has the potential to compete its home market against the global firms who are not well established there.
Supplier’s power: In the relationship between the industry and its
suppliers, the power axis is tipped in industry’s favor. The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.
Buyer’s power: In the relationship between the automotive industry and
its ultimate consumers, the power axis is tipped in the consumers’ favor. This is due to the fairly standardized nature and the low switching costs associated with selecting from among competing brands.
2.Company BCG matrix:
HIGH M A R K E T G R
Stars
X1 X2
Question marks
X4
O W T H LOW
Cash Cows
Dogs
X3
X5
HIGH Relative market share
LOW
The BCG growth matrix has a lot common with the Industry life cycle. As industry or company moves through its life cycle, it is categorized into one of four types for the purpose of funding decision.
Question marks: Question marks are new company with potential for success, but they need a lot of cash for development. If such a company is to gain enough market share to become a market leader and thus a star, money must be taken from more mature company and spend on a question marks.
Stars: Stars are market leaders typically at the peak of their industry life cycle and are usually able to generate enough cash to maintain their high share of the market. When their market growth rate slows, stars become cash cows. Cash Cows: Cash cow typically brings in far money than is needed to maintain their market share. In this declining stage of their life cycle, these companies are milked for cash that will be invested in new question marks. Dogs: Dogs have low market share and do not have the potential to bring in much cash. Question marks unable to obtain a dominant market share by the time the industry growth rate inevitably slows become dogs.
Industry Life Cycle
The industrial life cycle is a term used for classifying industry vitality over time. Industry life cycle classification generally groups industries into one of four stages: pioneer, growth, maturity and decline. In the pioneer phase, the product has not been widely accepted or adopted. Business strategies are developing, and there is high risk of failure. However, successful companies can grow at extraordinary rates. The Indian automobile sector has passed this stage quite successfully. In the growth phase, the product market has been established and there is at least some historical guide to ground demand estimates. The industry is growing rapidly, often at an accelerating rate of sales and earnings growth. Indian Automotive Industry is booming with a growth rate of around 10.1% annually. The cumulative growth of the Passenger car segment during April 2011 – April 2012 is 3.40%. Passenger vehicles grew by 9.30%, Commercial Vehicles by 4.3%, two wheelers by 10.94% and three wheeler has the negative growth rate of -5.35% in the month of April 2012 compared to last
year. While Medium & Heavy Commercial Vehicles declined by 1.66 percent, Light Commercial Vehicles recorded a growth of 12.29 percent. The growth rate of the automobile industry in India is greater than the GDP growth rate of the economy, so the automobile sector can be very well be said to be in the growth phase.
As the product matures, growth slows as penetration reaches practical limits. Companies began to focus on market share rather than growth. Industry demand tends to follow the overall economy, but the scope of growth of the automobile sector is very much possible in India due to the increasing income of the middle class and their income as well as standard of living. from the above statistical data, we can conclude that Indian automobile industry is in growth stage of product life cycle because the new automobile
company is coming to India, the production increases, export increases, selling increases and share of the market of this industry also increases .i.e. an optimistic environment prevails in the market.
SWOT ANALYSIS: A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points:
Strengths: >Large domestic market. >Sustainable labor cost advantage. >Competitive auto component vendor base. >Government incentives for manufacturing plants. >Strong engineering skills in design etc. Weaknesses: >Low labor productivity. >High interest costs and high overheads make the production uncompetitive. >Various forms of taxes push up the cost of production. >Low investment in Research and Development. >Infrastructure bottleneck.
Opportunities: >Commercial vehicles: SC ban on overloading. >Heavy thrust on mining and construction activity. >Increase in the income level.
>Cut in excise duties. >Rising rural demand. Threats: >Rising input costs. >Rising interest rates. >Cut throat competition
doc_772806690.docx
comprehensive details of Indian automobile industry covering the entire analysis using competitor analysis, BCG, SWOT and other tools of analysis
ASSIGNMENT OF STRATEGIC MANAGEMENT
Subject: Industry Analysis of Automobile Industry.
Submitted by Utpal Das (Roll No.-15) Hemanta Baruah (30) Basanta Jyoti Deka (21) Dept.- MBE
What Is Industry Analysis
Industry analysis is a market strategy tool used by businesses to determine if they want to enter a product or service market. Company management must carefully analyze several aspects of the industry to determine if they can make a profit selling goods and services in the market. Analyzing economic factors, supply and demand, competitors, future conditions and government regulations will help management decide whether to enter an industry or invest money elsewhere.
1. Economic Factors
o
Economic factors of industry analysis include raw materials, expected profit
margins and the interference of substitute goods. The cost of raw materials is an important factor in industry analysis because over-priced goods will not sell in an established market. Profit margins are closely linked to materials costs because offering discounts or sales prices will shrink company profits and lessen cash inflows for future production activity. Substitute goods allow consumers to purchase a cheaper good that performs relatively like the original item.
Supply and Demand
o
A supply and demand analysis helps management understand if enough consumers are willing to purchase more goods in an industry. If demand is high and supply is low, a company may be willing to enter the market and offer goods near the market price to gain a competitive advantage in the industry. A trend of declining demand indicates an industry that is oversold, and any new competitors
will likely lose money because consumers are not interested in current goods or services.
Competitors
o
The number of competitors is an important factor for proper industry analysis. If few competitors exist in a market, they may be charging consumers higher prices because of limited availability of products or services. As new competitors enter the market, existing companies can lower prices to maintain their current market share; newer competitors may not be able to match these price cuts if their products costs are too high. As industries contract, inefficient producers are forced out.
Future Conditions
o
While no company managers can predict the future of an industry, they can try to determine where the industry is in the business cycle. If the industry is in an emerging market stage, companies can enter an industry and expect to earn a profit from rising consumer demand. If the industry is in a plateau stage, then only the most efficient producers with the lowest costs can continue to earn profits. At the end of a business cycle, demand is declining and producers leave the industry for more profitable markets.
Government Regulations
o
Some industries have heavier regulations or taxes than others, which must be considered by companies looking to enter new markets. Taxes and other government fees add to the cost of doing business, which eats into
profits earned by companies. Properly understanding the amount of government regulation in an industry helps management to determine if expected profit margins will earn a high enough return to cover these costs.
INDUSTRY OVERVIEW (AUTOMOBILE) Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 11 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories : Cars, two-wheelers and heavy vehicles.
ROLE OF AUTOMOBILE IN INDIAN 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.
Role of Automobile Industry in India GDP-Sales Trends : >In the year 2012(April), the total passenger car sold were 168,351 >In the year 2012, the total passenger vehicle sold were 227,034 >In the same year, the total three wheeler sold were 31,986 >The total two wheeler sold were 1,157,108 in the same year. >And lastly total commercial vehicle sold were 56,903 in the similar year.
Role of Automobile Industry in India GDP-Growth : >In the year 2011-2012, the growth rate of passenger cars is 3.40% >In the year 2011-2012, the growth rate of passenger vehicle is 9.3% >In the year 2011-2012, the growth rate of two wheeler is 10.94%. >In the same period, the growth rate of three wheeler is negative i.e. is 5.35% >In the similar period, the growth rate of commercial vehicle is 4.37% -
OBJECTIVES OF INDUSTRIES ANALYSIS:
? Detailed analysis of Automobile industry which is gearing towards international standards. ? Analyze the impact of qualitative factors on industry’s and company’s prospect. ? Analyze the current selling scenario of Indian Automobile industry.
Current Scenario of Automobile Industry in Economy
With the latest available data Indian Automobile Industry is expected to grow at 9%-10% in near future, Two wheeler segment sales grew up by 12.8% with the modest 2.6% growth rate, under this segment the market leader Hero Honda registered growth of 12% in its domestic sales where as Bajaj Auto disappointed as sales plunging by 23%, on the other hand car sales has been grew up by a healthy 22.7% in last February and Commercial Vehicles reported slower sales. It is assumed that in coming festive season to meet demand, car makers going to produce 70000units/month more over the average 1.3lac/month with help of 5000 new hands.
India Automobile Industry at global level >India ranks 1st in the global two-wheeler market. >India is the 4th biggest commercial vehicle market in the world. >India ranks 11th in the international passenger car market. >India ranks 5th pertaining to the number of bus and truck sold in the world. >India is the second largest tractor manufacturer in the world.
Projected growth rate of Automobile Industry :
>Passenger vehicle sales in the country will grow at a CAGR of 12 per cent to touch
3.75 million units by 2014.
>The domestic two-wheeler sales will grow at a CAGR of 8.8% by 2014 at 11.3
million units. >To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.
INDUSTRY ANALYSIS (AUTOMOBILE)
The current trends of the global automobile industry reveal that in the developed countries the automobile industries are stagnating as a result of drooping markets, whereas the automobile industry in the developing nations, have been consistently registering higher growth rates every passing year for their domestic flourishing domestic automobile markets. In 2011, the estimated growth rate of India auto industry is going to be 14% to 17% per annum. The Indian automobile sector is far from being saturated, leaving ample opportunity for volume growth.
Domestic market share in 2010-2011
Passenger vehicles Commercial vehicles Three wheelers Two wheelers 16.25 4.36 3.39 76.00
Segment wise of market share in 2010-2011
16.25, 16% 4.36, 4% 3.39, 4% Two wheelers, 76, 76% Passenger vehicles Commercial vehicles Three wheelers Two wheelers
Total Domestic sales (April 2012)
Types Passenger cars Two wheelers Three wheelers 2011 162,813 1,043,010 33,793 2012 168,351 1,157,108 31,986 227,034 56,257 % Change 3.40% 10.94% -5.35% 9.3% 4.37%
Total passenger vehicles207,724 Commercial vehicles 53,903
The passenger car sales in India witnessed slowest growth during April in 10 years at 3.4% as customer sentiment remained low due to post budget price hiked and high interest rate, affecting the entry level segment more. According to the figure released by the Society of Indian Automobile Manufacturers, domestic passenger car sales stood at 1,68,351 units in April 2012 compared to 1,62,813 units in the same month last year.
Export & Production(April 2012)
2011 Export Production 262,172 1,627,039 2012 265,553 1,721,627 % Chnange 1.29% 5.81%
Industrial Analysis of any industry can be done based on the following headings: 1. Five force model. 2. BCG matrix. 3. Industry Life Cycle. 4. SWOT Analysis
1)Five Forces Model
Michael Porter identifies five forces that influence an industry. These forces are:
Degree of rivalry: Despite the high concentration ratio seen in the
automotive sector, rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market. The industry rivalry is extremely high with any being product being matched in a few months by the competitors. This instinct of the industry is primarily driven by technical capabilities acquired over years of gestation under the technical collaboration with international players.
Threat of substitute: The threat of substitutes to the automotive industry
is fairly mild. Numerous other forms of transportation are available, but none offer the utility, convenience, independence and value offered by automobiles. The switching cost associated with using a different mode of transportation, may be high in terms of personal time, convenience and utility.
Barriers to entry: The barriers to enter automotive industry are
substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. Although the barriers to new companies are substantial, establishing companies are entering the new markets through strategic partnerships or through buying out or merging with other companies. However, a domestic company, with local knowledge and expertise, has the potential to compete its home market against the global firms who are not well established there.
Supplier’s power: In the relationship between the industry and its
suppliers, the power axis is tipped in industry’s favor. The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.
Buyer’s power: In the relationship between the automotive industry and
its ultimate consumers, the power axis is tipped in the consumers’ favor. This is due to the fairly standardized nature and the low switching costs associated with selecting from among competing brands.
2.Company BCG matrix:
HIGH M A R K E T G R
Stars
X1 X2
Question marks
X4
O W T H LOW
Cash Cows
Dogs
X3
X5
HIGH Relative market share
LOW
The BCG growth matrix has a lot common with the Industry life cycle. As industry or company moves through its life cycle, it is categorized into one of four types for the purpose of funding decision.
Question marks: Question marks are new company with potential for success, but they need a lot of cash for development. If such a company is to gain enough market share to become a market leader and thus a star, money must be taken from more mature company and spend on a question marks.
Stars: Stars are market leaders typically at the peak of their industry life cycle and are usually able to generate enough cash to maintain their high share of the market. When their market growth rate slows, stars become cash cows. Cash Cows: Cash cow typically brings in far money than is needed to maintain their market share. In this declining stage of their life cycle, these companies are milked for cash that will be invested in new question marks. Dogs: Dogs have low market share and do not have the potential to bring in much cash. Question marks unable to obtain a dominant market share by the time the industry growth rate inevitably slows become dogs.
Industry Life Cycle
The industrial life cycle is a term used for classifying industry vitality over time. Industry life cycle classification generally groups industries into one of four stages: pioneer, growth, maturity and decline. In the pioneer phase, the product has not been widely accepted or adopted. Business strategies are developing, and there is high risk of failure. However, successful companies can grow at extraordinary rates. The Indian automobile sector has passed this stage quite successfully. In the growth phase, the product market has been established and there is at least some historical guide to ground demand estimates. The industry is growing rapidly, often at an accelerating rate of sales and earnings growth. Indian Automotive Industry is booming with a growth rate of around 10.1% annually. The cumulative growth of the Passenger car segment during April 2011 – April 2012 is 3.40%. Passenger vehicles grew by 9.30%, Commercial Vehicles by 4.3%, two wheelers by 10.94% and three wheeler has the negative growth rate of -5.35% in the month of April 2012 compared to last
year. While Medium & Heavy Commercial Vehicles declined by 1.66 percent, Light Commercial Vehicles recorded a growth of 12.29 percent. The growth rate of the automobile industry in India is greater than the GDP growth rate of the economy, so the automobile sector can be very well be said to be in the growth phase.
As the product matures, growth slows as penetration reaches practical limits. Companies began to focus on market share rather than growth. Industry demand tends to follow the overall economy, but the scope of growth of the automobile sector is very much possible in India due to the increasing income of the middle class and their income as well as standard of living. from the above statistical data, we can conclude that Indian automobile industry is in growth stage of product life cycle because the new automobile
company is coming to India, the production increases, export increases, selling increases and share of the market of this industry also increases .i.e. an optimistic environment prevails in the market.
SWOT ANALYSIS: A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points:
Strengths: >Large domestic market. >Sustainable labor cost advantage. >Competitive auto component vendor base. >Government incentives for manufacturing plants. >Strong engineering skills in design etc. Weaknesses: >Low labor productivity. >High interest costs and high overheads make the production uncompetitive. >Various forms of taxes push up the cost of production. >Low investment in Research and Development. >Infrastructure bottleneck.
Opportunities: >Commercial vehicles: SC ban on overloading. >Heavy thrust on mining and construction activity. >Increase in the income level.
>Cut in excise duties. >Rising rural demand. Threats: >Rising input costs. >Rising interest rates. >Cut throat competition
doc_772806690.docx