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AUTOMOTIVES

The Automobile Industry in India is one of the largest and is the fastest growing industry, world-wide. There has been a dramatic development and change in Automobile industry, particularly for the last couple of years. These companies are now concentrating more on customer needs and price factors; there has been a sharp rise.

Over the past few years, the Motor Vehicle Manufacturing industry has become more volatile. This has been the result of fluctuations in metal prices and fuel prices, as well as changes in legislation and assistance packages. Demographically and economically, India’s automotive industry is well-positioned for growth, servicing both domestic demand and, increasingly, export opportunities. India’s increasing per capita disposable income and growth in exports is playing a major role in the rise and the competitiveness of the industry. The increase in the spending power has been a forefront of the economic development. The level of volatility is medium. According to the current sources, economic liberalization – allowing unrestricted Foreign Direct Investment (FDI) and removing foreign currency neutralization and export obligations – has been also been one of the key to India’s automotive volatility.

Domestically, some mergers, consolidation or alliances might be expected in future, driven by the need of better technology, manufacturing facilities, service and Distribution Formats.

  • Barriers to Entry in this industry are high.
  • The relatively high competition between established domestic companies and foreign companies.
  • The automobile manufacturing sector is characterized by a high cyclical growth patterns, high fixed cost and break-even point levels, and an excessive number of participants.
  • Some of the barriers that need to be overcome by a new entrant include: the cost of developing high volume production facilities, in order to benefit from economies of scale; and the ability to gain access to technology of major operators, as the present incumbents include some of the largest multinationals, that have considerable claims to new technology.
  • The relative large size of domestic market, together with high competition, has already seen significant rationalization of this industry.

Advisory

Setting up a business in India though attractive, is complex and requires substantial knowledge of local market trends and regulations. We the team of professionals helps to evaluate the right entry mode—organic route, Joint ventures, acquisitions etc. and put forward a comprehensive roadmap to execute the strategy effectively.

  • We help define strategies which help companies maximize the benefits from the growth wave both from a short term as well as long term point of view.
  • We help define strategies around market developments, consumer behaviour, product specification, value-chain partnerships, new distribution formats, and service offerings to achieve the goals to compete more effectively.