INTERNSHIP AT TATA MOTORS

A report submitted in partial fullfilment of the requirements for the award

of the degree of

MASTER OF BUSINESS
ADMINISTARATION
OF
MAHATMA GANDHI UNIVERSITY, KOTTAYAM, KERALA

Submitted by
Linda Jacob

190031000987

Under the Guidance of

Dr. Jyothi Vijayan
( Faculty Guide)

JULY 2020
DC School of Management and Technology
Pullikannam, Vagamon, Idukki,685503

TEL: -04869-248322,248323

1|Page
 DECLARATION

I hereby declare that the project report entitled “Internship at Sun Pharmaceuticals
Company.” submitted by me for the award of the degree of Master of Business
Administration of the Mahatma Gandhi University, Kottayam, Kerala is my own work.
The report has not been submitted for the award of any other degree or diploma of
this University or any other University .

Linda Jacob

Name and signature of the candidate

Place: VAGAMON

Date:30th July 2020

RollNo:190031000987

2|Page
 D C 2cpooI oL n$n$ZGmGn$
$nq LGcpnoIoZ 入
One School Avenue
Pullikkanam PO, Vagamon,
Idukki - 685 503, Kerala, India
Phone:( 91-4869) 202110
Fax: (91-481) 2564758
Web: www. dcschool. net
E- mail: info@ dcschool. net

Date

30/07/2020

CERTIFICATE

This is to certify that the project report entitled “Internship at TATA Motors", is a bonafide record

of the work done by LINDA ACHU JACOB ,Reg. No.190031000987 under my guidance, in partial

fulfillment of the requirement for the award of Degree of Master of Business Administration of

Mahatma Gandhi University, Kottayam, Kerala and to endorse that this work has not been submitted

by her for the award of any other degree, diploma or title of recognition earlier.

Dr. Jyothi Vijayan(Faculty Guide)

This report has been accepted and forwarded to the University for evaluation based on the
recommendation of the Faculty Guide.

Principal

External Examiner 1 External Examiner 2

Signature Signature

Name Name

Date Date

Admissions Office: DC Kizhakemuri Edam, Good Shepherd Street, Kottayam 686 001. Kerala, IndiaPhone: 0481-2563226,
2301614, Mob: 9745607093/9846869231 e-mail: [email protected] Portal: www.dcsmat.ac.in,
Web:www.dcschool.net

3|Page
 ACKNOWLEDGEMENT

Primarily I would like to thank God to be able to complete this project with success.
Then I would like to thank my project guide Prof. Bala Subramanian, whose
valuable guidance has helped me patch this project and make it fool proof success.
His suggestions and instructions have served as the major contributor towards
the completion of the project.

Then I would like to thank my parents and friends who have helped me with
their valuable suggestions and guidance have been helpful in various phases of
the completion of the project.

Last but not the least I would like to thank my friends who have helped me a lot.

Linda Jacob

4|Page
SL.NO CONTENT PAGE NO.

CHAPTER 1- ORGANIZATION PROFILE

1.1 Brief History of the Company
1 . 2 Business Process of the Organization
1 . 3 Customers of the Company
1 .4 Competitors of the Company
1. 1 . 5 Strategies- Business, Pricing, Management
1.6 CSR Activities
1.7 Export/Import
1 . 8 Collaborations and Expansion Plans
3 - 22
1.9 SWOT Analysis of the Company

CHAPTER 2- AN OVERVIEW OF THE INDUSTRY

2.1Brief History of the Industry
2 . 2 Business Process of the Industry
2 .3 Market Demand and Supply
2.4 Level and type of Competition
2. 2 . 5 Pricing Strategies in the Industry
2 . 6 Prospects and Challenges in the Industry
2.7 Key Drivers of the 23 - 50
Industry 2.8Stalwarts in the
Industry

CHAPTER 3- INDUSTRY ANALYSIS

3.1 Application of Porter’s Five Force Model 51 - 59
3. 3 .2 PEST Analysis

CHAPTER 4- DISCUSSIONS
4.1 Objective Assessment
4. 4.2 Specific Learning Outcome 60 - -65

66
CHAPTER 5- FINDINGS
5.
67
6. CONCLUSION

7. BIBLIOGRAPHY
68

2
 Mercedes Benz is a subsidiary of the German manufacturer Daimler AG. The story of
Mercedes Benz starts with the invention of the first petrol motor car engine by Karl
Benz in the year 1886. The other personalities involved with the evolution of Mercedes
Benz are Gottlieb Wilhelm Daimler and Wilhelm Maybach. These were the founders of
Mercedes Benz cars and pioneer manufacturers of the first cars in the world. Their
world’s first car
which was awarded a patent as a motor car for the first time in the world. The
important features of this earliest car were that it had a 4 stroke, 0.75 HP, petrol engine.
It had space for 2 passengers and wire spooked wheels.
The patent application was made on January 29, 1886. The application was titled
“vehicle powered by a gas engine”and patent No.37435 was awarded to Mr. Karl
Benz for his the three-wheeled Benz Patent Motor Car, model no. 1.
Mercedes-Benz has been operating in India for over 60 years. They started in India
in 1954 in partnership with the Tatas for making commercial vehicles under the
trade name Tata-Benz. In 1994 Mercedes Benz signed an agreement with the
Tatas to

3
produce luxury cars in India and in next year 1995, the first Mercedes Benz car made
in India, the Mercedes Benz model E220 were sold in India. These first Indian made
Mercedes Benz cars were assembled from completely knocked down (CKD) kits
imported from Germany. In 2000 Mercedes bought out the shares of Tatas in their
joint venture, and Mercedes Benz's operations in India became 100% Owned by
Mercedes under their Indian Company Mercedes-Benz India Pvt.Ltd. Mercedes Benz
now has two factories in India, one in Chakan, Pune for car production and another
factory in Oragadam, Chennai for commercial vehicles.

Procurement

Along with assembly, procurement is the other core business process at MBUSI.
MBUSI strives to optimize the material requirement planning (MRP) process. MRP is
the process by which MBUSI determines the amount and type of parts and
components needed for a specified number of vehicles and their related
configurations. Depending on the particular vehicle configuration (i.e, left hand or
right hand drive, etc) ,there could be nearly 15000 variations involved in building an M-
Class. For an order of 5000 vehicles with about 2500 basic parts , MBUSI’s customized
software identifies and organizes the requirements in approximately 90 seconds.
Walker believes that MBUSI has one of the fastest MRP turnarounds in the world.
MBUSI uses a vehicle order and the requisite bill of material to establish the parts
requirements of each vehicle. Based on packaging and inventory quantities , it releases
parts requirements to the supplier, along with the shipping/receipt authorization and
date and arrival time. The failure of the supplier to meet this requirement could result
in a plant shutdown. This just-in-time and in sequence procurement process results in
a number of efficiencies and enhances material tracking capability.

Information Management

IBM’s global services division helped design and currently oversees MBUSI’s enterprise-

4
wide information technology systems to support the plant’s business processes. IBM
claims that no other major automotive manufacturer constructed a plant with new
business processes and personal as quickly. The initial development phase of
MBUSI’s IT system began in 1994. In January 1995, a twelve year technology alliance
(until 2006) was formed and IBM assumed day to day operational support of the
plants IT systems. Through consultation with MBUSI, IBM helped to define the business
processes and necessary interfaces to the supply chain for efficient and effective
design, development, manufacture, marketing and distribution of the M-Class. IBM
then installed an enterprise requirements planning (ERP) package from BAAN
triton and integrated the BAAN system with it’s zone manager program, which
allows companies operating in a foreign trade zone to maintain financial, inventory
control, and other data about products. IBM completed implementation in
March 1997.

Human Resources

MBUSI’s Vice President of operations notes that“people are the spine that runs
through our company … this is a people business, and people build cars”. He
adds,”nothing is more important than teaching our team members high standards,
and it is important for us to reinforce that early on …We are trying to build quality in
each and every step of the process”. The training process for new team members
begins in the MBUSI visitors centre. Through an interactive, hands-on experience
and classroom instruction, team members undergo a four step training process
including basic and assembly line skills. MBUSI often uses employees who
demonstrate a high level of competency to help, train new team members.
Initially, over 150 MBUSI team members trained at Daimler-Benz plans in Germany
working side by side their German counter parts on the assembly line. This hands-on
training provided practical experience and exposure to Mercedes corporate culture,
which the team members brought back to the new plant in bands. After returning to
the Alabama, the team members helped train their colleagues as part of a train-the-
trainer approach. This philosophy ensures that when a team member learns
something, he/she passes it on to other team members, building a pool of knowledge
and skills from which
5
the entire organization can draw. MBUSI also assign German trainers to the Bance
plant who served as instructors. In many cases, the german instructors and their
families became a part of the local employees families while oversees for
assignments of up to 2 years.

Quality Management

Given that a primary business objective of MBUSI and DCAG is achieving“Mercedes-

Benz”quality, Walker believes that quality management is an important resource
management process. Before selling it’s first vehicle, MBUSI assemble 75 vehicles,
subjected them to rigorous quality testing, and made adjustments throughout the
plant until management works satisfied. MBUSI follows industry standardization
requirements. The company requires all of it’s suppliers to be certified according to
ISO 9000 and QS 9000, which are international quality standards for suppliers.
Furthermore, MBUSI is ISO 9002 certified, which is an international quality standard for
manufacturers.

Luxury today means personalization and exclusivity. It is what makes the customers
feel special. Today, customers are well travelled, highly knowledgeable and
demanding, in addition to engineering and technology, they are looking for quality,
customization and craftsmanship. That’s why Mercedes Benz cars, Mercedes-AMG
models as well as the dream car portfolio has found enormous attraction and
appreciation from our customers. Mercedes Benz‘designo’platform offers
individualization options- exclusive paint finishes, high quality interior appointments,
trims etc.‘designo’appointments enhance the unmatched dimensions that a
patron can create for their Mercedes-Benz. In terms of products, the experience of a
Mercedes-Maybach with the quietest rear cabin in the world, Mercedes-Benz E-
Class with the comfort of reclining rear seats is luxury.
6
We have the ability to interpret luxury across different customer profiles- encouraging
customers to indulge in unique experiences. For instance,“AMG Private Lounge’is
exclusively for Mercedes-AMG owners. It is an online community for drivers who revel in
the performance, efficiency, precision, craftsmanship, luxury and safety. With‘AMG
Driving Academy’customers get a chance to become a member of the world’s fastest
family. It provides an opportunity to the customers to be a part of a community of
people in which one can explore their personal performance passions and share
experiences with like-minded people. The idea behind AMG Emotion Tour is to allow
customers to experience the spirit of AMG and become an insider. Customers are
introduced to the secrets of our engine manufacturing and‘One Man-One Engine’
philosophy. The Mercedes Benz Centre of Excellence allows customization of
own“own” Mercedes Benz/AMG with the iconfigurator- where one can get a virtual
look and feel of large variety of exterior paints, upholstery and alloy wheels. The
Mercedez Trophy is an exclusive international invitation tournament series for
Mercedez Benz customers and potential customers who are golf enthusiasts.

We maintain our traditions yet are at the forefront of technology, evoke desire and this
has made us the top notch luxury brand in India and will help us maintain our
leadership position in the country.
India is demographically a young country and that is reflecting in our company profile.
The Average age of the Mercedes Benz customer in India is one of the youngest in the
world- 37 years. And for our performance brand AMG, it is even lower at 30 years. Given
this, our products as well the range we offer in the country reflect this younger
customer’s needs and aspirations. On the other hand, there are other cars in our line-
up, like the GLS SUV, S-Class. Mavbach Mercedes and the long wheelbase E-Class that
cater to audience who seek safety, comfort and pleasure.

Today customers prefer excellent service and approachability. Customer service can
no longer be separated from sales. Mercedes-Benz has the densest network reach
with 93 outlets in 45 cities. In addition to service outlets, we recently launched‘Service
on
7
Wheels’which is a manifestation of our‘Go to Customer’strategy with the aim to
get closer to the customers with remote dealership presence.

The toughest challenge faced by us in luxury industry is on how to keep our brand
exclusive yet be approachable to the correct target audience. We must approach this
not only from a current buyer angle but also from 3-4 years down the line, for the
prospective buyer. What becomes critical is to retain the brand salience along with
the key guiding principles yet be aggressive when it comes to retail acquisitions. The
solutions we have used, and that has worked for us, are on ground activations and
giving real time brand experience to prospects.

As far as I can say the hierarchy system across Diamler AG (for those who don’t know,
it’s the parent company of Mercedes-Benz and a number of other subsidiaries like
Fuso, Setra, Freightliner, Bharat Benz), it’s uniform throughout the organization.
The Hierarchy here in Daimler India Commercial Vehicles Limited is divided in to
(White-Collars) plus the Blue Collar Associates starting with,
– of the concerned subsidiary (In case of Mercedes Benz Cars India-
Mr. Roland Folger, DICV- Mr. Erich Nesselhauf).
– of Various sub-functions (operations, SCM, R&D).
– , directly reporting to the VPs of concerned departments.
– who lead various teams within the sub-functions (for
example, the operations sub function is further divided in to production planning and
scheduling (PPS), Manufacturing Engineering (ME), Assembly Production) who report
to the various L3’s.
– who report to their respective L4s and who act as interim L4’s
in absence of the departmental L4’s.
– (DET’s) who handle the BCA’s and
report to the L5’s andL6’s.

8
The top 10 competitors in Mercedes-Benz Competitive set are:-
BMW
Audi

Honda
Volkswagen
Toyota
Ford
General Motors
FCA
Nissan

Volvo

Our strategy

We firmly believe that individual mobility will be a basic human need in the coming
decade as well, and that the market for sustainable automobiles in the luxury segment
will continue to grow. Demand for goods transport services remains a key pillar of the
economy and our prosperity, and this demand can be expected to increase even
further around the globe for years to come. The markets for financial services and the
demand for fleet management services and digital mobility solutions are also likely to
develop positively in the future. We are committed to the principles of sustainability
and in particular of climate protection, and are therefore setting our course for
CO2-neutral mobility.

MOVE - Reinvent the invention

As the inventor of the automobile, it is in our nature to repeatedly reinvent mobility. Our
aspiration is to offer sustainable solutions for mobility and the transport of goods in
the
9
future. We want to inspire emotionally and convince rationally. We aim to bring
sustainability and luxury into harmony. Our innovative and highly efficient commercial
vehicles are designed to make our customers in the haulage and transportation
sectors successful.

We are working systematically to achieve our“Ambition 2039”goal of CO2-neutral

mobility. To do so, we are also utilizing the potential offered by automated driving
and digital services.

PERFORM - We create sustainable value

We aim to create value that is sustainable. Our business is grounded in what we do

best — delighting our customers with fascinating vehicles. Here, the attainment of our
profitability targets and the maintenance of a solid cash flow remain top priorities for
the short and medium term. Together with our partners, we seek to develop new
technologies and share the costs of development activities. We want to continue to
grow profitably and expand our leading position in all the sectors in which we operate
worldwide.

TRANSFORM - Reinvent ourselves

Our transformation is a long-term process of adapting the implementation of our

structures and processes in cooperation with our employees. We have a workforce that
is agile and willing to learn, and this facilitates the development of the skills needed to
face new requirements. Our corporate culture creates the foundation for the
outstanding innovative capability displayed by our employees. We put diversity into
practice, and integrity is our inner compass. The principle of integrity guides our
actions and our relationships with our business partners.

With our sustainable business strategy, we are shaping the transformation of the
automotive industry from a position of leadership in a sustainable, customer-
focused and innovative manner to safeguard our economic success.

10
• Knows theTarget Market Inside Out
For the new SUV all-electric vehicle, Mercedes-Benz is targeting a young audience with
a campaign to promote its first electric SUV, the EQC that features Grammy award-
winning singer The Weekend. The singer gets a creative director credit on spot
featuring his track‘Blinding Lights’The Canadian artist appears in an ad for the model
that’s sound tracked to his new single Blinding Lights and also gets a creative
director credit.

• Goes Big In Promoting

Highly inspired by the Netflix hit,“Stranger Things”, Mercedes-Benz goes cool to
advertise its parking feature. This fascinating ad says it all, a retrospective aspect of
the classic American neighborhood and a group of kids with bicycles. Mercedes-Benz
presents the feature called‘Remote Parking Pilot‘ which means the car parks itself
automatically with the help of Mercedes Me access.

• Combines data with style

Mercedes-Benz was unveiled the Digital Light technology that aims to improve
safety and communication with other drivers and pedestrians by projecting signals
onto the road.

Announced at the 2018 Geneva Motor Show. Digital Light is a new HD-quality
headlamp. As it has been shared by Mercedes-Benz. the new HD headlamp features
chips that work with over one million micro mirrors, i.e. more than two million in
total per vehicle. The brand thanks to integrated cameras and sensors, the headlights
can show directional and warning icons by detecting other road users and
evaluating the data using powerful computers. For example, drivers can easily see
pedestrians at night and headlights can show a pedestrian road with the help of
Digital Light. They can also be assisted with the symbols such as Low-grip surface,
construction-site, rear-end collision, lane-keeping, blind-spot and speed symbol.

11
•
Imagine a car that behaves you well like your precious Smartphone does! To
promote its new Mercedes A-Class, Mercedes-Benz’campaign was named,“Just like
you”.

Created by Antoni Berlin, the new campaign,“Just like You”, focuses on what makes
the new car unique, mentioning its ability to reach people who are living in the digital
era and to understand their preferences, their needs and characteristics.

SUSTAINABILITY: BETTER TODAY BETTER TOMORROW

At Mercedes- Benz India, we continuously try to emphasis on the local issues where
communities are benefited and sustained. Engaging local people in every project is a
key aspect for its successful implementation. We enable local people to actively
participate in the project activities, wherein their inputs are valued the most. Our key
motive is to improve the quality of education, provide infrastructural facilities,
provide healthier lives to the marginalized people and facilitate the local community
with clean and safe drinking water systems.

As an environmentally sensitive organization, our foremost concern is to give

something back to the nature that we constantly thrive upon. Natural resources
are endlessly under pressure due to human interventions and damages they
cause. Preserving these resources is very important, and therefore we are
predominantly working to protect these resources in various possible ways.

We seek to implement such facilities which will focus on creating an impact on the
society as well as on the people, which will reduce the gap between all
stakeholders.

Education, Skill Development & Awareness

According to UN Sustainable Development Goals, obtaining quality education is the

foundation to improve people’s lives and ensure sustainable development. At
Mercedes- Benz India, we are focusing on providing quality education to the
underprivileged
12
students from nearby communities.

Health and Sanitation

Unsafe and unhygienic birth practices, unclean water, poor nutrition and degraded
and unsanitary environments are challenges to the public health systems. The
majority of rural population are smallholders, laborers etc. with limited access to
available natural resources. The basic nature of rural health problem is attributed to
lack of health literature and health consciousness amongst the people. This has
led to the unavoidable health issues, especially amongst the women from
rural areas.

Rural Development & Welfare

Rural development is one of the most important factors for the growth of Indian
economy. This development has witnessed several changes over the years in its
emphasis, approaches, strategies and programmes. People’s participation has
a significant role to play in rural development and economic growth.

Environment:

India is the fastest growing country and far behind most other countries when it comes
to conserving the environment and the ecology. The number of environmental concerns
have aggravated over the years. The major reasons being the increased pollution,
deforestation, loss of biodiversity, and various natural calamities that leads to severe
climate changes. The projects undertaken through Mercedes-Benz India’s CSR have
created a positive impact on the lives of the local communities and nearby
surroundings, by combating negative effect of the increased carbon content in the
atmosphere, thus reducing the effect of Global Warming.

Disaster Relief

Mercedes-Benz India through its CSR is also supporting the people affected by the
unprecedented natural calamities. The Chennai floods that occurred in 2015, led
to

13
major death tolls and destruction of the properties. To support the flood affected
people, MB India contributed towards Chief Minister’s Relief Fund. The landslide that
occurred in Malin, Ambegaon taluka of Pune district, caused severe damage to the area
and led to loss of around 151 lives. To support the displaced people of Malin, MB India
constructed few houses for the landslide hit families. The heavy rainfall in Kerala
(2018), resulted in death tolls which led to displacement of 60,000 people from the
area. To support these people MB India contributed towards the Chief Minister’s
Relief Fund.

Mercedes-Benz to export made-in-India GLC to the US

Mercedes will utilize capacity at its Chakan plant to meet high demand for the SUV in
the North American market. The trade stand-off between the United States and China
has resulted in the emergence of an unlikely beneficiary - Mercedes-Benz India. You
see, US President Donald Trump's administration has levied high tariffs on products
imported from China, and to get around the taxation issue, Mercedes-Benz is now
shipping its midsize SUV, the GLC, to the US, from India. In reply to an Auto car India
query, Mercedes-Benz India confirmed the news. "The Mercedes-Benz plant in
Pune/India supplies small quantities of GLC to the US. This serves as a backup
solution in case of high demands," read a company statement. Utilizing its plant in
Chakan, Pune (which has an annual production capacity of 20,000 units), Mercedes-
Benz India is now exporting the GLC to meet high demand in the North American
market – where the GLC is its highest-selling model. Currently, Mercedes' facility in
Bremen, Germany supplies the GLC to the US, and Mercedes has no plans to
produce the SUV at its plant in Alabama, US. This makes Mercedes-Benz the
first luxury car manufacturer in India to be shipping locally-produced models to the US,
and is a move that will elevate India’s position on the world stage. Mercedes-
Benz is expected to debut a face lifted version of the GLC sometime next year.

Mercedes-Benz is gearing-up to give the GLC a facelift, with a test mule of the
upcoming SUV having been spotted in Germany. The Mercedes-Benz GLC was
globally

14
launched in 2015 and the SUV arrived on Indian shores in June 2016. Since it’s a mid-
life facelift, we expect minor changes on the styling front with restyled LED headlight
and bumper along with a slightly different grill. The overall styling and profile will be
similar to the current GLC. The German brand will also update the interiors of the
SUV. The 2019 Mercedes-Benz GLC’s interior will be inspired by the one seen on
the face-lifted C- Class. So expect a dual touch-pad interface for the infotainment on
the steering wheel, a 12.3-inch digital dashboard and a sleeker, high-resolution
infotainment screen. There are no details regarding the power train. However, it has
been reported that the Mercedes-Benz GLC facelift could be powered by the
new 2.0-litre diesel engine, which made its debut on the new C-class with a power
rating of 194hp and 400Nm of torque. The Mercedes-Benz GLC is currently on sale in
India with both petrol and diesel powerplants. The face-lifted GLC is expected to
make its global debut next year and it’s highly likely to be launched in our market by
mid or late 2019. The Mercedes-Benz GLC goes up against the Volvo XC60, BMW X3
and the recently launched Audi Q5.

The Top Indian Importers of Mercedes Benz are:

1. Daimlerchrysler India Private Limit

2. Aggarwal Autospares International
3. Trans Car India Pvt Ltd
4. Embassy Of The Republic
5. Adayar Gate Hotel Ltd

1. Daimlerchrysler India Private Limit

Import data (based on bill of entry) of Daimlerchrysler India Private Limit

Daimlerchrysler India Private Limit imports Mercedes Benz and its variants namely
motor vehicle components and parts for Mercedes Benz passenger cars for model E
240 Gummed Labelle, motor vehicle components and parts for Mercedes Benz
passenger cars for model C 200K diesel engine, motor vehicle components and
parts for Mercedes Benz passenger cars for model C 200K Assy Speed S, motor
vehicle

15
components and parts for Mercedes Benz passenger cars for model E 200K Plastic
Hoses and motor vehicle components and parts for Mercedes Benz passenger cars
for model no.:240 Gummed Labelle.

The company imports Mercedes Benz mainly from Germany. The consignments are
generally shipped by exporting companies from Not Available Ports. Import of
Mercedes Benz shipments has taken place under HS Code 39199010, 84099990,
90291090, 39174000 and the import consignment was cleared at Indian ports of
Jnpt. This data is reported by customs department of the ports mentioned above
from the Bills of entry filed at these ports.

2. Aggarwal Autospares International

Import data (based on bill of entry) of Aggarwal Autospares International having

its headquarters in 40, Prithvi Raj New Delhi ,.

Aggarwal Autospares International imports Mercedes Benz and its variants namely
Mercedes Benz M-Class (Automotive Glasses), Mercedes Benz M-Class
(Automotive Glasses), Mercedes Benz (Automotive Glasses) and Mercedes Benz
M-Class (Automotive Glasses) .

The company imports Mercedes Benz mainly from China. The consignments are
generally shipped by exporting companies from Shatian Ports. Import of Mercedes
Benz shipments has taken place under HS Code 70072190, 70071900 and the import
consignment was cleared at Indian ports of Delhi Tkd Itd. This data is reported by
customs department of the ports mentioned above from the Bills of entry filed at
these ports.

3. Trans Car India Pvt Ltd

Import data (based on bill of entry) of Trans Car India Pvt Ltd

Trans Car India Pvt Ltd imports Mercedes Benz and its variants namely Mercedes Benz

16
C-Class elegance trim package, Mercedes Benz C Class door Handle Sin obsidian
black colour, Bi Hinon headlamps for Mercedes Benz C Class vehicles and Mercedes
Benz C Class door handles in Albasto white colour.

The company imports Mercedes Benz mainly from United Arab Emirates. The
consignments are generally shipped by exporting companies from Not Available
Ports. Import of Mercedes Benz shipments has taken place under HS Code 87089900,
85122010 and the import consignment was cleared at Indian ports of Madras Air.
This data is reported by customs department of the ports mentioned above from the
Bills of entry filed at these ports.

4. Embassy of the Republic

Import data (based on bill of entry) of Embassy Of The Republic.

Embassy Of The Republic Of imports Mercedes Benz and its variants namely
Mercedes Benz C200K Sedan Model 2004 VIN WDC203042 2R 147457 ENG 271940
30 342660 and Mercedes Benz 119VITO Combi Model 2004 VIN
WDF63970523069462 ENG
11295131836512.

The company imports Mercedes Benz mainly from Germany. The consignments are
generally shipped by exporting companies from Hamburg Ports. Import of Mercedes
Benz shipments has taken place under HS Code 87032391, 87029012 and the import
consignment was cleared at Indian ports of Delhi Tkd Icd. This data is reported by
customs department of the ports mentioned above from the Bills of entry filed at
these ports.

5. Adayar Gate Hotel Ltd

Import data (based on bill of entry) of Adayar Gate Hotel Ltd

Adayar Gate Hotel Ltd imports Mercedes Benz and its variants namely Mercedes
Benz type E220 CDI with accessories and Mercedes Benz type E220CDI with
accessories.

17
The company imports Mercedes Benz mainly from Germany. The consignments are
generally shipped by exporting companies from Not Available Ports. Import of
Mercedes Benz shipments has taken place under HS Code 87031090 and the import
consignment was cleared at Indian ports of Madras Sea. This data is reported by
customs department of the ports mentioned above from the Bills of entry filed at
these ports.

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1. Deepening of Strategic Partnership

Daimler and BAIC further expand Mercedes-Benz production capacities in China •

signing ceremony in the context of the Chinese state visit in Berlin • Agreement on
capacity expansion for approximately €1 billion • Dieter Zetsche:“Meanwhile we are
deeply rooted in China. The agreement we have signed today shows once again that we
are making steady progress in China together with our longstanding partner BAIC.”•
Hubertus Troska:“The steady expansion of local production and the continuous
deepening of the cooperation with our Chinese partners are key elements of our China
strategy.”Berlin – In the presence of Germany’s Chancellor Dr. Angela Merkel and the
Chinese State President Xi Jinping, Daimler AG and its Chinese partner Beijing
Automotive Industry Corporation (BAIC Group) today signed an agreement on the
further expansion of the production capacities of their joint venture Beijing Benz
Automotive Co., Ltd. (BBAC). The official ceremony was attended by Hubertus Troska,
Member of the Board of Management of Daimler AG responsible for China; and Xu
Heyi, Chairman of the BAIC Group and its car division BAIC Motor.

2. The strategic cooperation between Daimler and the Renault-Nissan

19
This alliance forms agreement with Ford to accelerate commercialization of fuel cell
electric vehicle technology • Daimler AG, Ford Motor Company and Nissan Motor Co.,
Ltd. have signed a unique three-way agreement for the joint development of common
fuel cell system to speed up availability of zero-emission technology and significantly
reduce investment costs • Collaboration expected to lead to launch of world’s first
affordable, mass-market fuel cell electric vehicles as early as 2017 • Unique
collaboration across three continents and three companies will help define global
specifications and component standards • Sends clear signal to suppliers, policymakers
and the industry to encourage the further development of hydrogen infrastructure
worldwide Stuttgart, Germany - Daimler AG, Ford Motor Company and Nissan Motor
Co., Ltd. have signed a unique three-way agreement to accelerate the
commercialization of fuel cell electric vehicle (FCEV) technology. The goal of the
collaboration is to jointly develop a common fuel cell electric vehicle system while
reducing investment costs associated with the engineering of the technology. Each
company will invest equally towards the project. The strategy to maximize design
commonality, leverage volume and derive efficiencies through Daimler Investor
Relations, will help to launch the world’s first affordable, mass-market FCEVs as
early as 2017.

3. Establishment of‘Daimler Trucks and Buses China Ltd’

This strengthens Daimler’s commercial vehicle business in China • Legally independent

entity for trucks and buses in China • Even stronger focus on specific needs of
commercial vehicle market • Exploring new business opportunities for Daimler Buses •
Hubertus Troska:“We continue the structural realignment of our business in China with
‘Daimler Trucks and Buses China.’”Stuttgart/Beijing – Daimler AG further enhances
its clout on the important Chinese market. With the foundation of‘Daimler Trucks and
Buses China Ltd.’(DTBC), the company establishes a legally independent entity for its
truck and bus business in China. The entity has already obtained its business license
from the Chinese authorities. In his function as President and CEO of DTBC, Robert
Veit, hitherto Executive Vice President Daimler Trucks China, will directly report to
Hubertus Troska, responsible for China on the Daimler Board of Management. The
structural
20
 independence will enable DTBC to increase its focus on the specific needs of
customers of commercial vehicles. At the same time, integrating the bus business will
create room for exploring new business opportunities. Investor Relations Release April
25, 2013 Daimler Investor Relations, www.daimler.com/investor“We continue the
structural realignment of our business in China page 2 with our newly established
entity ‘Daimler Trucks and Buses’”, says Hubertus Troska.“The new commercial
vehicle entity is another milestone for Daimler in China and
highlights our long-term commitment to the world’s largest vehicle market, which
promises to offer enormous potential in the future as well.

Expansion Plans
Daimler stays in the fast lane: Best-ever figures for unit sales, revenue and
earnings in 2016 – dividend of €3.25 proposed – ongoing positive outlook
Record unit sales with around 3 million vehicles sold for the first time
(+5%) Group revenue up by 3% to €153.3 billion (2015: 149.5 billion)
Group EBIT of €12.9 billion at prior-year level (2015: €13.2 billion)
Slight increase in Group EBIT adjusted for special items to €14.2 billion (2015:
€13.8 billion)
Net profit at highest level with €8.8 billion (2015: €8.7 billion)
Attractive dividend of €3.25 per share proposed (2015: €3.25)
Outlook for 2017: slight growth in unit sales, revenue and EBIT
Stuttgart,
Germany - Daimler AG (ticker symbol DAI) grew profitably once again in 2016
and achieved best-ever figures for unit sales, revenue and net profit. In the year
2017, due to the very attractive and competitive product range in all divisions,
Daimler expects to profit from slight growth in global demand for motor
vehicles and from its strengthened market position, and to further increase
its unit sales in total. Accordingly, further growth in revenue and EBIT is also
anticipated.

21
Mercedes Benz Strengths
Below are the Strengths in the SWOT Analysis of Mercedes Benz:
1. Mercedes Benz has a strong brand value and global leader in premium cars
2. Mercedes is a financially strong company and hence invests huge money
in manufacturing & brand building
3. Leader in innovation i.e. 1st to introduce diesel engines, fuel injection and anti
locking brakes
4. More than $12bn allocated for R&D
5. Strong presence in motor sport under McLaren Mercedes
6. Manufactured and assembled in over 20 countries across the world
7. Mercedes holds patents on the majority of safety features
8. The company has a significant presence in sports & motorsports
through sponsorships & participation respectively
9. Mercedes is a pioneer in advertising and marketing & createsbrand
awareness through TVCs, print media, OOH and online ads
10. The company is a leader in innovation and is responsible for internal
combustion engine, air bags etc

Mercedes Benz Weaknesses

Here are the weaknesses in the Mercedes Benz SWOT Analysis:
1. Intense competition means limited market share growth for Mercedes
2. Being a global car brand, even minute issues are blown out of proportion,
which affect the brand adversely

Mercedes Benz Opportunities

Following are the Opportunities in Mercedes Benz SWOT Analysis:
1. Mercedes can focus on developing hybrid cars and fuel efficient cars for the future
2. Tapping emerging markets across the world and building a global brand
3. Fast growing luxury automobile market & increased income can be an opportunity for
22
Mercedes Benz
4. The brand's strong presence can be leveraged to acquire more customers

Mercedes Benz Threats

The threats in the SWOT Analysis of Mercedes Benz are as mentioned:

1. Government policies for the automobile sector across the world can cause
business losses for Mercedes
2. Ever increasing fuel prices
3. Intense competition from global automobile brands.

The Indian automobile market is one of the largest in the world, both in terms of sales
volume and production. Talking about historical roots of the car market in India, the
first time that a vehicle came on road was in 1897. Till 1930, India did not have any
manufacturing facility and cars were imported directly from other countries. The
landmark decade in the manufacturing process was that of 1940s, in which Indian
companies like Hindustan Motors and Premier started to manufacture cars of other
firms. During the same decade, Mahindra & Mahindra also started to produce utility
vehicles.

Soon after independence 1947, Government of India tried to create an automotive

component manufacturing industry in order to supplement the automobile fraternity.
From 1960 to 1980s, the Indian market was dominated by Hindustan Motors, which
gathered a large amount of share due to its Ambassador model. However, during
1950s

23
till 1960s, the overall industry moved at a slow pace due to trade restrictions set on
imports. Soon after this repressive phase, demand surged but to a smaller extent,
which was mainly seen in the tractor and commercial vehicles segment.

It was in 1980s that the two firms, Hindustan Motors and Premier, were challenged by a
new entrant, Maruti Udyog Limited. Soon after liberalization period, car makers that
were previously not allowed to invest in Indian market due to stringent policies arrived
in the country. Post liberalization, the alliance between Maruti and Suzuki was the first
joint venture between an Indian company and foreign one. Slowly and steadily, the
economic reforms brought in the led to the entry of major foreign companies like
Hyundai and Honda, which expanded their bases to the country. From 2000 to 2010,
almost every major car company expanded its presence to India by establishing
manufacturing facilities across different parts of the country.

As the manufacturing process during early 2000 decade gained traction, exports of
cars was quite slow in that period. Maruti Suzuki was among the first car brands that
started shipping vehicles to major European markets. During the same decade, the
Government of India introduced mandatory emission norms in order to reduce
pollution arising out from vehicles. The updated guidelines were known as 'Bharat
Stage' came into effect in major cities as these standards were based on stringent
European norms. At present, Bharat Stage IV is implemented in 13 cities that include
Delhi (NCR), Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad, Pune,
Surat, Kanpur, Lucknow, Sholapur, and Agra while the rest of the nation is still under
Bharat Stage III.

Over the years, the car market in India has evolved by leaps and bounds as almost all
major companies are present in the country. India has now become a hub for auto
makers to set up their plants for manufacturing vehicles intended for domestic and
international markets. The three prominent regions in which the majority of Indian car
industry is concentrated lies in south, west and north. In the southern region, Chennai
is the hub for manufacturing vehicles while Mumbai and Pune belt comes in second
place. For the north, the NCR holds a fair share as far as concentration of production
facilities
24
is concerned.

To list a few commendable feats of the Indian car industry, it emerged as the fourth
largest exporter of passenger cars behind Japan, South Korea, and Thailand in
2009. While in 2010, India emulated its previous year's performance to become the
third largest exporter of cars in Asia. The biggest reward came for the Indian car
market in 2011 as it became the sixth largest country in the world in terms of
production.

Autonomous Driving

The goal moving forward is to make the technology more readily available in less
expensive ways. Consultancy firm Accenture anticipates that over the next eight
years, assisted-driving techniques will be so effective in lowering insurance costs and
reducing accidents, that it will save consumers roughly one trillion dollars and, most
importantly, save close to one million lives.

Connected Supply Chain and Improved Manufacturing

As discussed, digitizing the connected supply chain ecosystem drives costs down,
more effectively engages the consumer, and collects and uses data to serve customers
better. The industry is moving away from national and regional production, and toward
a more decentralized approach for both manufacturing and the supply chain.

Predictive Maintenance

Next-gen, advanced self-diagnostic systems can now instantly alert drivers to real-time
problems, allowing us to proactively service our vehicles, drastically reducing
mechanical failures and recalls. The trucking industry is also undergoing a similar
movement powered by sensor technologies and Internet of Things (IoT) technology
that allows companies to monitor data proactively to ensure safety, fuel optimization,
and
25
the condition of cargo.

Data Security and Protection

The automotive industry is one of the most data-driven sectors globally,
with‘intelligent’ vehicles collecting data about drivers, destinations, routes, traffic
patterns, etc. The consumer benefits because they are at the center of these
efforts, as companies continue to establish and maintain levels of customer
loyalty.

Transforming is about competitive advantage through clear vision, effective change

management, and well-planned transformation processes. However, business
transformation is not necessarily just about digital technology, but about the fact that
technology, which is digital, allows people to solve their traditional problems. In
practice, this means:
Supporting process transparency and visibility by breaking down silos and
encouraging knowledge sharing, collaboration, and engagement.
Acting as a solid foundation for consistency, standardization, and harmonization of
activities across the whole organization, so everyone moves as one.
Creating agency and streamlining how work gets done by putting the power to
automate tasks into the hands of the people who know it best.
Utilizing data your organization already produces to make effective decisions, directly
and continuously.
In other words, automotive enterprises need to work smarter, not harder, to take
advantage of business transformation and reap the innovative benefits that follow
when the rubber really hits the road.

2019 Automobile Industry Process

Such is the automotive industry’s economic significance that its ripple effects can
dictate slumps and spark growth. 2019 automotive industry processes already
support

26
a vast supply chain, and generate a spectrum of direct and indirect business
services. To take one example from the heavyweight European Automobile
Manufacturers Association; the automotive industry is the largest private investor
in R&D in Europe, with almost €54 billion invested annually.
However, the industry is also synonymous with complex supply chain management,
large, disjointed manufacturing information systems, and inefficient, resource-
demanding business application development cycles. Alarmingly, when the
automotive industry stalls, so too can powerhouse companies, regions, and even
nations. Just think of the recent decline in Detroit.
For example: According to EAMA, 24% of all passenger cars produced worldwide
are made in Europe.
And: 6.1% of the EU workforce— 13.3 million people—are employed in the sector.
However: For the first time in five years, the German economy receded by 0.2% in the
third quarter of 2018, primarily due to the car industry regressing in the production
and export of cars.

The need for process change in the automotive industry

Automotive executives and CIOs are working to minimize risks with business
transformation initiatives. To ensure quality, reliability and economic efficiency, and the
manufacture of vehicles and automotive components— like engines and gearboxes—
and retail sales, the way work is done requires better process-centric, workflow-
powered, and potentially automated initiatives.
Business Transformation and 2019 Automotive Industry Processes

Business transformation is about the speed of business, and the ability of

organizations to deal with new and emerging behaviors. For example, with the arrival of
disruptive Mobility-As-A-Service (MaaS) companies like Uber, Lyft, and car2go,
people no longer see owning a car as their best option, especially in larger cities
around the world.

This is a profound transformation and requires an equally intense and

transformative response from organizations whose business model relies on that
previous reality of widespread and ubiquitous car ownership.
27
Connecting with Technology

Looking at the current automotive landscape, it is easy to see that the focus is
instead on innovation and access through technology. The evolving nature of the
automobile, pushed forward by connected-car services, autonomous vehicle
capabilities, and new environmental regulations have led to a dramatic investment
by major companies and suppliers in transformative business technologies. For
example: According to Gartner’s recent automotive CIO report, 30% of respondents
view cloud services and solutions as an essential investment moving forward.

Business Transformation Platform

The demand for innovative solutions in the automotive industry is, therefore, higher
than ever. However, these innovations require the backing of flexible and efficient
process solution platforms to be successful. In other words, automotive CIOs must
streamline their systems with agile process software to score big in this fast-paced
market.

For example: In the same Gartner report, automotive CIOs believe that analytics
will impact the way their businesses are run more than any other technology.

Automotive Industry Prediction 2019: Enterprise Resource Planning (ERP) systems

will continue to be a key area of investment going forward. ERP systems can
streamline operations for efficiency, reduce costs, and maximize profitability. With
new intelligent ERP transformations, there is a massive opportunity for businesses to
optimize all of their resources and improve business processes.

2019 automotive industry processes in a sales environment

The result of all this innovation is, of course, getting vehicles into the hands of
consumers. But even here, there is scope for improvement, driven by a better
understanding of customer needs and desires. Having the right omni-channel strategy
is a prerequisite to auto retailer success because business is built on high-volume, low-
margin transaction. Industry leaders must raise awareness across online research,
lead- gen activities, and in-showroom sales.

28
But no Omni-channel strategy can succeed without a valid business process
management (BPM) solution. When considered as a way of working, BPM is the
conductor that melds together today’s retail business model, integrating corporate
processes and multifaceted procedures. These can touch both the consumer-
facing user experience and back-end functionality, too.

Simplifying 2019 automotive industry processes

Auto retail today is significantly more complex than in the past. Owners and
managers must now look beyond the sale yard to consider a whole range of issues
and factors with an impact on their inventory, and their customers. From customer
relationship management, sales planning, and accounting, the sale of financing
and protection products, to the logistics of order fulfillment. Retail is now run by
a web of integrated data-driven technology systems.

With this, older technology systems are now forced to quickly adapt to ensure all
other operations in the dealership run efficiently.

How BPM is the invisible driver in 2019 automotive industry processes

The customer never sees BPM; they just experience the benefits during the buying
process. Like all great team players, BPM keeps systems running efficiently,
interdependently, and continuously. Currently, when 2019 automotive industry
processes run as intended in a sales context, the customer experiences BPM
through shopping, the point of sale, order fulfillment, and customer service. BPM
becomes the central intelligence enabling the dealer’s success.

BPM adoption happens in two key steps:

The technology helps to create a model that outlines the right process for each of
the retailer’s moving parts.

Correct processes enable the creation of workflows that pull employees, decisions,
and technology into a seamless, transformed system.

29
Specific to auto retail:

Dealers can incorporate several key initiatives into their organization to help
identify where and how to implement a successful BPM solution.

With such a system in place, dealers can structure and automate it in a way that
helps identify critical metrics and ROI. This includes steps such as benchmarking to
identify key areas within the organization where BPM can offer the most substantial
impact, as well as simplify specific workflows.

BPM and the Automotive Industry 4.0 Revolution

If the vision of Industry 4.0 and new automobile industry standards is to be realized,
enterprise processes and models must become more digitized and agile using
process management systems. A critical element will be the evolution of traditional
supply chains toward a connected, smart, and highly efficient supply chain
ecosystem.

BPM empowers better efficiency, effectiveness, performance, and productivity through

automation, workflows, and synchronization. It can also improve tracking and
scheduling, and optimizes consumption which can increase turnover, quality, and
profits, as well as reduce costs and waste. All things vital to current success and future
triumph.

BPM as a dynamic model that incorporates business and process intelligence, and
tools such as predictive analytics, is very much alive, and very much needed for your
Industry 4.0 future success. Indeed, the vision of connecting Industry 4.0 with process
management systems edges towards the creation of Industry 5.0.

Disruptive … Transformative … 2019 Automotive Industry Processes

As discussed, business transformation is about the speed of business, and the ability
of organizations to deal with new and emerging behaviors.

30
This engagement empowers companies to shift away from lopsided efficiency
goals, which often frustrate customers. Instead, you can move towards all-inclusive
effectiveness goals with Operational Excellence (OpEx) built around the customer,
at the lowest organizational cost possible.

Indian Automotive Industry started its new journey from 1991 with de-licensing of
the sector and subsequent opening up for 100 percent FDI through automatic route.
Since then almost all the global majors have set up their facilities in India taking the
production of vehicle from 2 million in 1991 to 9.7 million in 2006.

The surge in number of people with higher purchasing power along with strong
growth in economy over a past few years has attracted the major auto
manufacturers. The market linked exchange rate and availability of trained
manpower at competitive cost has added to the attraction of Indian market. This
increasing pull of Indian market on one hand and the near stagnant rate of growth in
auto sector in markets. Demand is driven by growing environmental concern and
the Indian government 's proactive measures to implement Euro-II emission
norms.

Substitutes: Goods that can serve as replacements for one another: when the price of
one increases, demand for the other goes up. * When the price of a Honda city goes
up, the demand for its substitute the Hyundai automobile goes up.

Complements/complementary goods: Goods that“go together”, i.e. a decrease in

the price of one results in an increase in demand for the other.

If the price of petrol increases, the demand for automobile and its complementary
good will fall. If the price of Automobiles were to rise dramatically, less people would
chose to buy and use automobiles, switching perhaps to public transport - trains
perhaps!. It follows that under these circumstances the demand for the
complementary good - Petrol - would also decrease. 4. Expectations of future
Price Changes.

31
A growing working population and an expanding middle-class have been the key
demand drivers for automobiles in India. India has the second largest road network in
the world at 4.7 million kilometers. Road development activity has gradually increased
over the years with an improvement in connectivity between cities, towns, and villages
in the country. The Government of India’s policy to set aside substantial investment
layout for infrastructure development in every 5-year plan has included the focus on
the development of country’s roads. This has given a fillip to the demand for cars and
other vehicles.
India is home to the second largest population in the world. The estimated population
is about 1.3 billion people. The GDP per capita has grown from approximately US$
1432 in 2010 to US$ 1500 in 2012 and US$ 1939 in 2017.52 Factors like increasing
disposable incomes in the rural agriculture sector, presence of a large pool of skilled
and semiskilled workers, and a strong educational system will continue to
increase vehicle demand in future.53 It is estimated that by 2020, migration on
account of urbanization will be over 140 million.54 India is projected to add over 68
million households to its already significant middle-class by 2030, which would
drive an increased demand for automobiles. The number of registered motor
vehicles per 1000 population was only 167 in 2015.55 These facts point to a huge
potential of increasing private vehicle ownership penetration in the future.

Factors affecting demand of passenger vehicles made by automobile companies

1) Interest rate

It is one of the factors that affect demand made by consumers. Although drop in
it helps very few people to shift from base to deluxe model, a large shift can be
made only if customers want to take long term loans rather than short term loans
so as to avail interest benefits. There is negative relationship between interest rate
and demand of commodity.

2) Price

It is one of the major factor that affects demand of cars in market. As the law of

32
demand states that with an increase in price demand of commodity decreases
and vice versa.
3) Advertising & marketing

Due to advertising & marketing many companies have been successful in

increasing their sales. In general both have positive relation with sales.

4) Income level of consumers

Income level of consumers is also very important factor. Increase in per capita
income increases the consumption tendency of the customer. Growth in per
capita income and rising aspirations and changing lifestyle is leading to increased
preference for cars.

5) Global crude prices

Global crude prices decides Indian petrol and diesel prices. There is negative
relation between fuel price and demand of cars as reduction in prices of fuel will
increase affordability of cars and ease out its maintenance. 6) New launches-
Car sales increase when a new model hits the market. Due to increased
competition in Indian car market, frequency of new model launches has increased.

Role of Automobile Industry in India GDP

The auto industry contributes 7.5 percent of India's GDP and a whopping 49
percent of manufacturing GDP with a large economic multiplier impact.

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. The
introduction of

33
tailor made finance schemes, easy repayment schemes has also helped the
growth of the automobile sector.

Role of Automobile Industry in India GDP-Facts

India has become one of the international players in the automobile market

In the year 2006-07, the Indian Automobile Industry produced 2.06 million four
wheelers and 9 million two and three wheelers

The four wheelers include passenger cars, multi-utility vehicles, sports utility
vehicles, light, medium and heavy commercial vehicles, etc

The three wheelers include mopeds, motor-cycles, scooters, and three

wheelers India ranks 2nd 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

It is expected that the Automobile Industry in India would be the 7th largest
automobile market within the year 2016

Role of Automobile Industry in India GDP-Sales Trends

In the year 2006-07 the number of Passenger Car sold were 10,76,408

In the year 2006-07 the number of Passenger Vehicles sold were

13,79,698 In the year 2006-07 the number of Commercial Vehicles sold

were 4,67,882 In the year 2006-07 the number of Three Wheelers sold

were 4,03,909 In the year 2006-07 the number of Two Wheelers sold

were 78,57,548

34
 In the year 2006-07 the number of automobile sold were 1,01,09,037

Role of Automobile Industry in India GDP-Growth

The growth rate of the Passenger Cars in the year 2007 is 13.50%

The growth rate of the Utility Vehicles in the year 2007 is 10.10%

The growth rate of the Multi Purpose Vehicles in the year 2007 is 24.40%

The growth rate of the Light Commercial Vehicles in the year 2007 is

16.05% The growth rate of the Commercial Vehicles in the year 2007 is

3.43%

The Maruti Udyog Ltd is the largest car manufacturer in the country and the rate
of growth in the year 2007 was 20.7%

The Mahindra & Mahindra Ltd's cumulative sales for the year 2007 was 1,06,094
units and the rate of growth was 35.8%

The Honda Siel Cars India Ltd, the leaders in India pertaining to the
manufacturing of premium cars, registered a growth of 16.1 % during the
year 2007 and sold 41,638 units

The Daimler Chrysler sales for the year 2007 was 1,681 units in India and the
growth rate was more than 22%

The General Motors India, registered a 114% increase in the national sales in the
August of 2007

The Hero Honda sold more than 2 million units in the Jan-Aug period of the year
2007

The export pertaining to the motorbikes was 3,21,321 units in the year 2007

It is estimated that in the year 2007-08 the motorcycle sales would be 7 million,
the car sales would be 1.55 million, and the two-wheelers sales would be
8.3 million
35
 Role of Automobile Industry in India GDP-Foreign Investments

The Indian Automobile industry is at present engaged in mergers and

acquisitions on the international scale

The Indian automobile industry's foreign sector worth US$ 515 million

The Mahindra and Mahindra company will be establishing a utility assembly plant
in collaboration with Bramont, a local company at Manuas, in North Brazil

In Egypt, the Mahindra and Mahindra company has set up assembly plants in
collaboration with the Bavarian Motors

The Tata Motors have entered the passenger car market in Saudi Arabia with the
launch of

Tata Indigo, Tata Indica, and Tata Indigo Marina

The TVS Motor Company has established a two-wheeler manufacturing unit at

Karawang, in Indonesia

The Maruti Udyog Ltd has captured nearly 60% of the small car market in
Indonesia

The Nissan Motor facility in South Africa was acquired by the Tata Motors to
manufacture Tata vehicle for European and South African market

The Jaguar and Land Rover companies owned by the Ford Motor Company was
acquired by the Tata Motors Ltd for estimated price of US$ 1.5 billion

India's annual production has been 29.08 mn vehicles in 2018 as against 25.33 mn in
2017, registering a healthy growth of 14.8%. The industry is expected to reach $135 bn
by 2020 and $300 bn by 2026 at a CAGR of 15%. In April-March 2019, overall
automobile

36
exports grew by 14.50%.

Besides the competition observed amongst global players in the domestic India
market. India as an automotive manufacturing country is also pitting against other
competitors in the international market. In terms of exports of automobile, India is
ranked 29th, while China, the other huge automotive factory ranked 17th. For exports of
auto parts, India was 26th, while China came in 11th. The top country for exports of
automobile and auto parts was Germany.

Although perfect competition cannot be possible as it is idealistic, but near to perfect

competition industries do occur. We shall discuss the automobile industry in Pakistan.
All those companies that provide spares and locally assembled manufactured cars are
a part of the automobile industry of Pakistan, Toyota, Honda, Suzuki, Mitsubishi
Hyundai etc to name few.
As in perfect competition there is no asymmetric information i.e. the prices of the
vehicles, their performance, their specifications and their availability at dealers is
known to all. There is a huge demand for vehicles and so there are a huge amount of
dealers spread throughout Pakistan. As nothing is hidden from the customer it is safe
to assume that there is perfect knowledge in the market. Perfect knowledge is a
key ingredient for perfect competition, reflecting that automobile industry is near-
perfect competition.

Cell phones today are made from cutting edge technologies and the pace of their
development is very fast, research and development costs are high but because as
production techniques are enhanced and technologies become cheaper so a
particular cell phone becomes cheaper and new cell phone models will be highly
priced.

A communication has globalized, boundaries have been removed and with new

37
Information technologies coupled with the web has helped streamline the way
company information is transmitted and perceived, helping in effectively manage and
provide up- to-date support on products and bridge business to business and
business to consumer gaps.

The most basic strategy of business is to provide goods at cut throat prices giving
the competition a run for their money by being the cheapest option in the market.
Thi way they can secure a larger share of demand for their product in the market
and possibly remove and“kill off”other competitors. Hi is usually practiced by
companies which have ability to achieve a very highly efficient economy of scale
operation model or simply with large amounts of capital.

The company aim to provide a product that is different and yet highly competitive in
the market, that is either promoting and placing the product in such a way that appeals
to the consumer (branding) or buy having variety in looks, technology, shape, size
etc. in the same class and product.

The ability of a company to identify and then customize its product for a particular
niche is segmentation strategy. Here a company will provide a product in accordance
to the requirements and needs of a particular area, income class, age, gender, etc.
and then provide them with the product. This“rifle”approach helps companies
achieve the optimum supply and demand production.

International trade is exchange of capital, goods, and services across international

borders or territories. In most countries, it represents a significant share of gross
domestic product (GDP). An import is the purchase of a good or service made
overseas. An export is the sale of a good or service overseas. Industrialization,
advanced transportation, globalization, multinational corporations, and
outsourcing are all having a major impact on the international trade system. Increasing
international trade is crucial to the continuance of globalization. Without
international trade, nations would be limited to the goods and services produced within
their own borders and would all be much poorer. International trade is in principle
not different from domestic trade as the motivation and the behavior of parties
involved in a trade do not change fundamentally
38
regardless of whether trade is across a border or not. The main difference is that
international trade is typically more costly than domestic trade. The reason is that
a border typically imposes additional costs such as tariffs, time costs due to
border delays and costs associated with country differences such as language,
the legal system or culture.

In monopolistic competition, buyers do not know everything, but they have

relatively complete information about alternative prices. They also have
relatively complete information about product differences, brand names, etc.
Each seller also has relatively complete information about production
techniques and the prices charged by their competitors. In the automobile
market, the buyers and sellers also contain relatively information about the
brands names, product differences and prices of the products

In monopolistic competition, firms are relatively free to enter and exit an industry.
There might be a few restrictions, but not to many. These firms are
not“perfectly” mobile as with perfect competition, but they are largely
unrestricted by government rules and regulations, start-up cost, or
other substantial barriers to entry. In the automobile market the mobility of the
resources is easy during the operation but there are certain rules and
regulations, permission needed by the firm in the starting of business

Each firm in a monopolistic competitive market sells a similar, but not absolutely
identical, product. These goods sold by the firms are close substitutes for one
another, just not perfect substitutes. Most important, each good satisfies the
same basic want or need. In the automobile market all the cars are not the same
and they are providing different features or benefits to the users so therefore
automobile market does not provide the perfect substitute but they are offering
a close substitute products.

There are many barriers which can prevent the business to enter into an industry,
they can be economies of scale, product differentiation, investment requirements,

39
switching costs, access to distribution channels, etc. All of these factors can
decrease the competition inside an industry as it prevents other firms from
entering it, however small firms are the ones which are mostly affected by it. But
if these barriers are eased, than new organizations can enter the industry and
therefore increasing the competition in it. So, if any new firm or organization
enters into the industry and for an organization to address these issues they
can easily handle the market activities by differentiating their products or by
lowering their cost of production which would hence lead to decreased prices
of the products, thus making the new firms or organizations to face
difficulty in being able to operate in that particular industry.

These products are products that a customer can choose over an existing
product in that industry. Customers usually do so when the other product is not
available in the market or the prices of that product are too high for them to
afford. Therefore they then look for an alternative product which is then known
as a substitute product. They are usually cheap as well. For example, there are
two products tea and coffee in an industry. We assume that majority of the
people are using tea and its price goes up and the price of the coffee remains
the same, then people would shift to the alternative which would in this case be
the coffee. This act can be said to be an act of choosing a substitute (an
alternative) over their existing product. For an organization to address this issue,
they would have to strengthen the research and development department and
also acquire the modern technological system so that they can produce the
modern products which will not be available in another organization or in that
industry. By strengthening your research and development an
organization can also become more efficient, hence this would help in reducing
the prices of the product and increasing its quality.

An organization or a firm produces the products they produce in order to satisfy

the needs of the customers in the market. Organizations or firms can make
profits by capturing the majority number of customers in the market available
to

40
 them, so it means that the customers can or always play a vital role in the
operating of business as they are the ones who pay for the purchase of these
products. The customers are never willing to pay more for any product unless
or until they are luxury goods, even then the customers would want to pay as
less as possible as that is in their nature. So if the organizations or firms are
producing such products that are costly and beyond the reach of the
customer, than the customer will not purchase the product. So for the form or
organization to address this issue they must produce those products which are
in demand, or which will match with the income level of that area of
customers.

Firm Level Initiatives

At firm level there are few gaps that need immediate focus. Most of the firms do
not have a long-term vision in terms of business development. Since the Indian
firms are currently not at par with the best in class, there is a need for access to
new manufacturing and engineering technology and this can be immediately
achieved through some kind of association with the Best in class firms. The
nature of this association can be licensing, joint venture etc. The Indian firms
have shown poor success rate in managing such relationships and there needs
to be a more constructive approach to wards nurturing such relationships.
Speedy and first time right approach to product development shall be most
critical success factor for Indian firms to exploit the global opportunities.
Product development is the weakest factor and the reason for the
shortcomings is that the customers are not involved during development, poor
capability assessment, and inadequate virtual prototyping capability

As far as manufacturing capability is concerned there has been marked

improvement over few years however firms, which are implementing JIT, Lean
Manufacturing and other Japanese practices, are showing radical
improvement in business results. Supply chain management (SCM) is one area
where suppliers have not been electronically dovetailed with the firms.
There is
41
 immense unutilized skill and capacities available and they need to be
harnessed and utilized in order to reduce capital investments and duplication
of assets. Firms do not carry out utilization of Information technology (IT)
for decision- making process and overall business process effectively.
There is a vast potential for improvement in business efficiency that can
be derived out of appropriate use of information technology. The 204
Cluster of Indian Auto component manufactures constitute of around
eighty percent single part manufacturers and around 20% module
manufacturers. Firms, which are Tire-III supplier, should evolve itself as Tier-II
and eventually as Tier-I suppliers in order to maintain its profitability and
growth.

Pricing Trend Analysis is an exclusive Analysis of Indian Passenger Vehicle. Pricing is

one of the most important criteria for Indian buyers. Each segment is having different
user, dynamics, expectation, Outlook and product position. Our latest report gives an
in- depth analysis of Vehicle pricing, how it curved with product and market
parameters and other key detail. It is expected that the Indian car market will be the
global top market in the next 5 years. Price is an important marketing mix tool for
both creating and capturing customer value. You explored the three main pricing
strategies—customer value-based, cost-based, and competition-based pricing— and
the many internal and external factors that affect a firm’s pricing decisions. In this
chapter, we’ll look at some additional pricing considerations: new-product pricing,
product mix pricing, price adjustments, and initiating and reacting to prices changes.
We close the chapter with a discussion of public policy and pricing.
Effective pricing strategies shall help a company sell its products in a competitive
market to witness a profit. So, what are price strategies? Well, it is a way or literally
an approach to find the competitive price of service or a product in that particular
market. This strategy is one of the other marketing strategies followed in the system
of every management. It is indeed a known fact that a company's ultimate goal is to
maximize their turnover. In order to maximize the profit, one has to choose the right
strategy for price setting.

Business magnate might use different combinations of price strategies to increase

sales, but finding the right strategy is a crucial step in the journey towards
success.
42
Often, the misconceived thought on price setting is, sales volume is directly
proportional to profit. An increase in sales volume is expected to increase a company's
profit. There are different strategies one can depend on in the process of price setting.
A few significant factors are given below.

Penetration & psychological pricing strategies

In order to gain a great market share, many companies embrace the penetration
pricing strategy. The company aims to set up a customer-based price in the market.
This is primarily achieved by providing a free to low price for their products or
services to a limited period of time. This later on, with a revised version comes into
the market as a premium product with a little raise in the price. This strategy is
implied to meet the expectation that consumers will hop on to new brands when
they're priced low. On the other hand, a psychological pricing strategy is a method
that embraces a consumer's emotional response rather than considering their
rational one. Here consumer ignores the quality of a service/ product but sticks on to
the costing price.

Product line & economy pricing strategies

The product line pricing strategy is nothing but, providing service with an option to
upgrade upon choosing higher value packs. Consumers are pushed to compare the
packages and choose a wise plus cost-effective product or service. The other purpose
of the product line strategy is to bring a product or service to the spotlight which had
low visibility or recognition earlier. Whereas, economy pricing strategy embraces no to
the low marketing cost in product or service promotion. It's more like the budget
pricing of a product or service. A great example would be promoting only a certain
range of products or services that shall gain specific and quick attention among
people.

Customer value-based pricing strategy

This is the most effective method that is followed by many successful companies.
Value-based pricing is a nothing but, price setting strategy that exclusively focuses on
consumer perceived value of a service or product. This is entirely based on how
consumers value the product or service and how they find it worth buying. Many
companies that offer unique and high-value products choose this strategy in setting
the price. The value-based pricing embraces customer's abilities to buy a product by
considering the unparalleled experience upon buying a particular service or a product.
Many luxury automakers find customer-value based pricing strategy an effective
method of approach. A value-based strategy will enable manufacturing companies to
extend the life-cycle of existing products and will help to establish a great bond with

43
value-added suppliers.

Pricing analytics

Manufacturers and service providers predict the future well enough to carry out a price
optimization system. They approach the for a detailed
analysis of pricing strategies for automobiles. We evaluate the past performance with
a specific set of market conditions and suggest the state of conditions for the
probability of profit for your product or service in the market. This will help the
automotive industry to gain an insight into pricing strategy. Pricing analytics include
the process of finding the underperformers of a particular industry. It's highly crucial
to analyze why certain product lines become your cause of down economy. We
develop reports exclusively after researching the probabilities and will let you
understand the customer value definition with facts and figures.

Customer satisfaction

When a pricing system includes detailed pricing analytics, it will definitely boost the
customers' satisfaction. The system of achieving maximum profit with minimum
wasted effort shall only be obtained upon consulting the business consultants. ACG
shall help you find not only the best pricing strategy for your company but also identify
the substitute product or service that might better fit in a customers' budget. This will
help your sales team create a budget based service or product that shall come with a
package deal to the customers which in turn allows you to enhance customer's ability
to purchase.

Almost everything in business aims for justification for the value of a specific price.
Customers do not buy a product or service by just seeing the price tag, they
meticulously research before buying it. With much of comparisons, they find the right
choice that will fit in their budget and lifestyle. Our business consulting services
shall help you understand how customers understand the value of a service or
product. We consider a lot of factors, impacts on buying decisions with that of other
parameters before drawing the conclusion.
Example: Mercedes Benz is a premium priced luxury car brand. Being in the luxury
segment, it caters to a niche segment who value quality more than the price and so
the price is always on the higher end. In the overseas market where Mercedes Benz
have a huge product variety available, the prices range from $30,000 to $100000 and
above. In India as it caters only to the luxury car market, the price ranges from INR
25,00,000 to

44
somewhere around INR 80,00,000. Thus, the Mercedes Benz marketing mix pricing
strategy is that of premium pricing, based on its features and competition. Mercedes
is selling a luxury cars from a long time, however it is focusing on customer
satisfaction and maintaining the number one positions in sales in comparison to
other competitors in India. Mercedes has introduced new pricing strategy in Indian
market of having a top end luxury car on rent / lease. In following topics we will study
the marketing mix of Mercedes and various attractive offers provided by
Mercedes.

Since independence, there has been several limitations that the automotive sector has
overcome. Measures such as reduction of tariffs on imports, relaxation of the foreign
exchange and equity regulations, and refining the banking policies played a major
driver in turning around the Indian automobile industry. The Indian automotive industry
is gearing up for major challenges in the coming years. Entrepreneurs in the
automotive manufacturing industry are confronted by many challenges. With
changes in government regulations, altering world economy, relative prices
and market dynamics it becomes difficult to adopt a strategic planning for the
automotive business.
There are five key challenges that form the crux of these indispensable areas
of concern in Indian automotive world:

1. The ever-expanding Chinese market

One of the biggest challenges of automakers outside China is the risk of competing
with China. In the last fifteen years China has been the leading automotive market. The
volume growth has helped the country to overcome other structural and competitive
challenges. The biggest challenge for the planners of the automotive market is to plan
a strategy keeping in mind China’s outlook.

2. The evolution of connected cars

Connected are the biggest transformational changes in the automotive industry, but
it is also one of the biggest unknowns. The concept of connected cars serves as a
communication hub that receives and transmits data from its surroundings.
However, this technology is still in such a nascent stage that it is creating
uncertainties and questions such as who will buy the car, who will deliver these
services, whether the current automakers will be able to navigate through all these
uncertainties keep
45
plaguing the automotive world.

3. Increased competition
of all the myriad issues facing the automotive world, one of the pressing problems is
the sales demand flattening in mature markets like Europe and Japan and
competition rising from other manufacturers. The slowdown is sales is directly
proportional to the increasing competition.

4. Balancing the demands of technology and government

The major global automotive markets have been facing stringent legislations
focusing on controlling carbon dioxide emission and other exhaust gas emissions.
This is done to improve fuel economy. One of the key challenges in the industry is to
make the right power trains and technology choices to cater to changing social
preferences in a changing regulatory environment.

5. Consolidation of platforms
Intensifying competition, state regulators and global consumers are making global
automakers rethink their platform strategy. The trend towards consolidation of
modular architectures or mega platforms is slowly replacing the earlier rationalization
of segments. Hence this is becoming one big challenge for automakers.

Prospects
Consumer demands are changing, transforming the industry with the digitalization
of technology. The automotive industry is offering solutions for greener cars, public
transportation, driving assistance and autonomous driving, smart infrastructure, and
many innovative ways to satisfy the demands of customers
1. Favorable macroeconomic and demographic trends
Currently, the automotive sector contributes more than 7 percent to India’s GDP.4
The Automotive Mission Plan 2016–26 sets an aspiration to increase the contribution
to 12 percent.
A number of economic trends could help in meeting this target. Rapid urbanization
means the country will have over 500 million people living in cities by 2030— 1.5
times

46
the current US population. Rising incomes will also play a role, as roughly 60
million households could enter the consuming class (defined as households with
incomes greater than $8,000 per annum) by 2025. At the same time, more people
will join the workforce. Participation could reach 67 percent in 2020, as more
women and youth enter the job market, raising the demand for mobility.
Some of them would leap straight into four-wheeler segment, and others will graduate
from two- to four-wheelers. Over 44 percent of the consuming-class households will be
in 49 growth clusters—for example, Delhi is expected to have the same GDP per
capita at purchasing power parity as the entire country of Russia in 2025.6 Cities like
Delhi are a sweet spot for car manufacturers to target.
2. Continued government focus on supporting the industry
Through the Automotive Mission Plan, the National Electric Mobility Mission Plan
(NEMMP), and other initiatives, the government seeks to achieve two
objectives—facilitate long-term growth in the industry and reduce emissions and
oil dependence.
In the Automotive Mission Plan 2026, the government and industry set a target to
triple industry revenues, to $300 billion, and expand exports sevenfold, to $80 billion.
To meet these aims, it is estimated that the sector could contribute more than 60
million additional direct and indirect jobs, and the result could be improved
manufacturing competitiveness and reduced emissions.
To tackle emissions, the government seeks to bring local standards up to par with
global standards, enabling India to leapfrog from BS-4 to BS-6 emissions (the Euro 6
equivalent) by 2020 (Exhibit 1). Additionally, India has implemented Corporate
Average Fuel Efficiency norms in which the manufacturers have to improve their fuel
efficiency by 10 percent between 2017 and 2021 and by 30 percent or more from
2022.
3. The potential for global disruptions
The global automotive industry is undergoing a cascade of disruptions that will
reshape it in unexpected ways, and India will be no exception to this. Four key trends
will shift markets and revenue pools, change mobility behavior, and build new
avenues for competition and cooperation.
4. Shared mobility
Penetration of shared mobility in India remains low compared with China and the
United States, but a major shift is under way in densely populated cities where the use
of e- hailing cabs costs less, comparatively, than driving a personal car. Major
stakeholders

47
from the government to automakers to venture-capital funds and cab aggregators
agree that the industry will continue to grow, becoming a significant alternative to
commuting in growing urban areas. For example, two of the major cab aggregators
covered 500 million trips together in 2016; that number is expected to rise with
innovative models like cab-pooling and pay-later options.

5. Connected vehicles
Connectivity is still in the early stages of adoption in India. A minuscule share of
vehicles sold in India come with factory-fitted connectivity features, but the mass
adoption of smart phones, coupled with low data costs, could enable connectivity
features to proliferate. There are several connectivity-linked applications that are
picking up in India. Basic in-car entertainment, navigation, and in-car connectivity (for
example, through Bluetooth) have evolved rapidly over the last decade. More advanced
telemetric features that utilize car sensor data, driving behavior, and vehicle-health
parameters are also evolving, particularly with aftermarket solutions. Several start-ups
are leveraging this data coupled with proprietary hardware and algorithms to build
solutions centered on improving safety and security, tracking vehicle activity or theft,
monitoring and influencing driver behavior, and enabling timely repairs and
maintenance.

There are several factors that are expected to drive the growth in the
automotive industry. These are as follows:

1. Increasing demand for vehicles

This has been a result of, theE growth in income levels and easy availability of
financing options. Greater consumer awareness and closer linkages with the global
auto trends, for example, shorter life cycles of vehicles due to faster replacement
have led companies to introduce contemporary products in the Indian
market. The CAGR at 14.1 per cent achieved by the domestic automotive industry
between 2001-02 and 2006-07, makes India one of the fastest growing markets in the
world.
2. Stable economic policies adopted by successive governments:
TheE Indian Government has ensured continuity in reforms and policies in the country,
which has contributed to the overall economic growth including 208 the growth of the
automotive sector. In addition, the government has taken specific policy initiatives
such as lower excise duties on smaller cars, etc, to boost local demand.
Implementation of VAT, has positioned India as one of the leading low cost
manufacturing sources. India

48
is expected to emerge as the manufacturing hub for small cars. It has already been
recognized, as a low cost source for components, and vehicles are expected to gain
next, from the trend in outsourcing to low cost countries.

3 . Availability of low cost skilled manpower

The cost of qualityE manpower in India is one of the lowest in the world. In terms of
availability, India produces 400,000 engineering graduates each year and it is estimated
that roughly 7 million skilled workers do enter the workforce each year.

4 . High quality standards

The „ Made in India‟ brand is rapidly gettingE associated with quality. Already, nine
Indian component manufacturers have won the Deming Prize, for quality and most of
the leading component manufacturers are QS and ISO certified.

5. Proximity to key markets

Proximity to other growing AsianE economies and emerging markets, gives India a
strong advantage, over other competing nations. Also, freight cost of shipments from
India to Europe is cheaper, as compared to freight costs from other competing
countries like Thailand. A low ownership of 8 vehicles per 1000 persons (ACMA 2008a)
and the presence of strong demand drivers have identified India as an attractive
automobile market.

6. Low car penetration & Rising family income

India has about 120 vehicles (all segments including 19 cars per 1000) on every 1000
people right now, which is expected to rise to almost 300 in next 10 years. Around 60%
of the mobility demand in India is served by public transportation modes like buses and
metros and non- motorized transport modes ( walking and cycling) . India' s per capita
income grew at pace of 8.6 per to Rs. 1,12,835 (1375 Euro) during FY18 from Rs.
1,03,870 (1265 Euro) in FY17. The growing domestic income is to make motor vehicles
more affordable for local consumers.

7. Young population

Indian is one of the youngest country in the world with more than 50% of population is
below the age of 25 years and more than 65% is below the age of 35%. A young
population may lead to higher personal vehicle ownership.

8 . Greater Availability of cheaper and easier finance

All nationalized and scheduled banks offers loans for purchase of new vehicles at very

49
low interest rates. In India nearly 70-75% of the new vehicle purchases are done by
using bank loans. This indicates that Indian auto industry is unique in the way
vehicles are purchased by consumers.

9. Research and Development

There have been many research and development initiatives, both private and
governmental. These are aimed at improving the automobile industry in India. The
government started the Automotive Component Manufacturers Association of
India (ACMA) which is an apex body that deals with 19 | P a g e the automobile
industry in India. This body looks into matters such as upgrading of technology in
the industry, collecting information on industrial events and trends as well as
disseminating this information to relevant stakeholders. The body does this
through research and also promotes trade in both domestic and foreign circles. On
their part, private investors have also set up research and development initiatives
within their companies. For instance the Mahindra and Mahindra research centre
for electric vehicles in order to enhance their services in India.

1. Industry Stalwart, S N Barman moves on from Tata Motors

Mr. S N Barman, the Industry Stalwart, has spent close to quarter of a century in the
Automotive Industry. He is an IIT Graduate. Extremely focused, experienced and result
oriented professional. As he moves on from Tata Motors PVBU, he leaves a great
legacy behind at the organization. He has been instrumental in the turnaround of Tata
Motor PVBU. Under his aegis, products like Nexon, Harrier, Tiago & Tigor were
launched which completely transformed the image and the market performance of
Tata Motors in the Highly competitive Car market. He is passionate for keeping the
customer in the centre for everything that his company does. He is an Ace of Rural &
Institutional Markets, having given long years to Maruti Suzuki before Tata Motors.
Barman da as he is lovingly called by his team, mentees and friends has won the
coveted WAF Award for Best M&S Head thrice in a row, which is a great
achievement and a record in itself. An Award which takes 6 months of Selection
Process with research by IIT Delhi.

2. Auto industry stalwart Rajiv Dube drives to Birlas

Rajiv Dube, who built Tata Motor's $4bn passenger car biz, is moving to Aditya Birla
50
Group.
Rajiv Dube, widely credited with building Tata Motor’s $4-billion passenger car
business from scratch, is moving to the Aditya Birla Group as a director tasked with
devising manufacturing and marketing strategies for the metals-to-telecom
conglomerate.
The 48-year-old resigned from Tata MotorsNSE 1.74 % on May 17 as head of
its passenger car division, ending his 27-year stint, after a series of high-level
new appointments at the carmaker that sparked speculation that the existing
Tat.

Mr. Dube’s role at the Aditya Birla Group would include devising strategies for
developing vendors for the conglomerate’s diversified businesses, especially as,
according to a Birla Group executive, almost half of the revenue comes from
outside India. The Birlas have a presence in a wide range of sectors, including
commodities such as aluminium, copper and cement, and in garments and retail
and in financial services.

51
Evolution of Porter’s Five Forces Model
Five forces is a framework for the industry analysis and business strategy development
developed by Michael E. Porter of Harvard Business School in 1979. Michael Porter is
a professor at Harvard Business School and is a leading authority on competitive
strategy and international competitiveness. Michael Porter was born in Ann Arbor,
Michigan.
Five forces uses concepts developing, Industrial Organization (IO) economics to derive
five forces that determine the competitive intensity and therefore attractiveness of a
market. Attractiveness in this context refers to the industry profitability.
An“unattractive” industry is one where the combination of forces acts to drive down
overall profitability. A very unattractive industry would be one approaching“pure
competition”.

Five Forces Model by Michael Porter

Five Forces model of Michael Porter is a very elaborate concept for evaluating
company’s competitive position. Michael Porter provided a framework that models
an industry and therefore implicitly also businesses as being influenced by five
forces.Michael Porter’s Five Forces model is often used in strategic planning.
Porter’s competitive fiveforces model is probably one of the most commonly used
business strategy tools and has proven its usefulness in numerous situations when
exploring strategic management models . Three of Porter’s five forces refer to
competition from external sources. The remainder are internal threats. It is useful to
use Porter’s five forces in conjunction with SWOT analysis (Strengths,
Weaknesses, Opportunities, and Threats).
A change in any of the forces normally, requires a business unit to re-assess the
marketplace given the overall change in industry information. The overall
industry attractiveness does not imply that every firm in the industry will return
the same profitability. Firms are able to apply their core competencies, business
model or network to achieve a profit above the industry average.

52
Porter’s five forces include:
Three forces from‘horizontal’competition

* Threat of new entrants or barriers to entry

* Threat of substitute products or substitutes
* Threat of established rivals or competitive rivalry

Two forces from‘vertical’competition

* The bargaining power of buyers or buyers

* The bargaining power of suppliers or suppliers

Force 1: Barriers to entry

Barriers to entry measure how easy or difficult it is for new entrants to enter into
the industry. This can involve for example:
Cost advantages (economies of scale, economies of scope)
Access to production inputs and financing,

Government policies and taxation

Production cycle and learning curve
Capital requirements

Access to distribution channels

Patents, branding, and image also fall into this category.

Force 2: Threat of substitutes

Every top decision maker has to ask: How easy can our product or service be

53
substituted? The following needs to be analyzed:
How much does it cost the customer to switch to competing products or
services?

How likely are customers to switch?

What is the price-performance trade-off of substitutes?
If a product can be easily substituted, then it is a threat to the company because
it can compete with price only.

Force 3: Competitive Rivalry

In this, we have to analyze the level of competition between existing players in
the industry.

Is one player very dominant or all equal in strength/size?

Are there exit barriers?

How fast does the industry grow?

Does the industry operate at surplus or shortage?

How is the industry concentrated?

How do customers identify themselves with your brand?

Is the product differentiated?

How well are rivals diversified?

Force 4: Bargaining power of buyers

Now the question is how strong the position of buyers is. For example,can customers
work together to order large volumes to squeeze your profit margins? The following is
a list of other examples:
Buyer volume and concentration

What information buyers have

54
 Competitive price
How loyal are customers to your brand

Price sensitivity
Threat of backward integration

How well differentiated your product is

Availability of substitutes
Having a customer that has the leverage to dictate your prices is not a good
position.

Force 5: Bargaining power of suppliers

This relates to what your suppliers can do in relationship with you.
How strong is the position of sellers?

Are there many or only few potential suppliers?

Is there a monopoly?

Do you take inputs from a single supplier or from a group?

(concentration) How much do you take from each of your suppliers?
Can you easily switch from one supplier to another one? (switching costs)
If you switch to another supplier, will it affect the cost and differentiation of your
product?
Are there other suppliers with the same inputs available? (Substitute inputs)

Need for Porter’s five forces Model

In general, any CEO or a strategic business manager is trying to steer his or her
business in a direction where the business will develop an edge over rival firms.
Michael Porter’s model of Five Force scan be used to better understand the industry
context in which the firm operates. Porter’s Five Forces model is a strategy tool that
is used to

55
analyze attractiveness of an industry structure. Porter’s Five Forces model views
the business from outside. It focuses on assessing competitive position within
industry
.Porter’s Five Forces model in the internal view.

Automobile Industry
The auto manufacturing industry is considered to be highly capital and labor
intensive. The major costs for producing and selling automobiles include:
1. Labor – While machines and robots are playing a greater role in manufacturing
vehicles, there are still substantial labor costs in designing and engineering
automobiles.
2. Advertising Each year automakers spend billions on print and broadcast
advertising, furthermore, they spent large amounts of money on market research to
anticipate consumer trends and preferences.
3. The auto market is thought to be made primarily of automakers, but auto
parts makes up another lucrative sector of the market. The major areas of auto
parts manufacturing are:
4. Original Equipment Manufacturers (OEMs) – The big auto manufacturers do
produce some of their own parts, but they can’t produce every part and component
that goes into a new vehicle. Companies in this industry manufacture everything
from door handles to seats.
5. Replacement Parts Production and Distribution – These are the parts that are
replaced after the purchase of a vehicle. Air filters, oil filers and replacement lights
are examples of products from this area of the sector.
6. Rubber Fabrication – This includes everything from tires, hoses, belts, etc.

In auto industry, a large proportion of revenue comes from selling automobiles. The
parts market is even more lucrative. For example, a new car might cost $18,000 to
buy, but if you bought, from the automaker, all the parts needed to construct that car,
it would cost 300-400% more.
A significant portion of an automaker’s revenue comes from the services it offers
with the new vehicle. Offering lower financial rates than financial institutions, the car
company makes a profit on financing. Extended warranties also factor into the
bottom line.
Greater emphasis on leasing has also helped increase revenues. The advantage of

56
leasing is that it eases consumer fears about resale value, and it makes the car sound
more affordable. From a maker’s perspective, leasing is a great way to hide the true
price of the vehicle through financing costs. Car companies, then, are able to push
more cars through. Unfortunately, profiting on leasing is not as easy as it sounds.
Leasing requires the automakers to accurately judge the value of their vehicles at
the end of the lease, otherwise they may actually lose money.

Indian Automobile Industry

The Indian automobile industry is the tenth largest in the world with an annual
production of approximately 2 million units. Indian auto industry, promises to become
the major automotive industry in the upcoming years and the industry experts are
hopeful that it will touch 10 million units mark. Indian automobile industry is involved
in design, development, manufacture, marketing, and sale of motor vehicles. There are
a number of global automotive giants that are upbeat about the expansion plans and
collaboration with domestic companies to produce automobiles in India.

Porter’s five forces model on Automobile Industry

1. Barriers to Entry
It’s true that the average person can’t come along and start manufacturing
automobiles. The emergence of foreign competitors with the capital, required
technologies and management skills began to undermine the market share of
many automobile companies. Globalization the tendency of world investment
and businesses to move from national and domestic markets to a worldwide
environment, is a huge factor affecting the auto market. More than ever, itis
becoming easier for foreign automakers to enter the Domestic market .Automobiles
depend heavily on consumer trends and tastes. While car companies do sell a large
proportion of vehicles to businesses and car rental companies (fleet sales), consumer
sales is the largest source of revenue. For this reason, taking consumer and business
confidence into account should be a higher priority than considering the regular
factors like earnings growth and debt load .

2. Threat of Substitutes
Rather than looking at the threat of someone buying a different car, there is also need
to also look at the likelihood of people taking the bus, train or air plane to their
destination. The higher the cost of operating a vehicle, the more likely people will seek
alternative
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transportation options. The price of gasoline has a large effect on
consumers’decisions to buy vehicles. Trucks and sport utility vehicles have higher
profit margins, but they also guzzle gas compared to smaller sedans and light
trucks. When determining the availability of substitutes you should also consider
time, money, personal preference and convenience in the auto travel industry. Then
decide if one car maker poses a big threat as a substitute.

3. Competitive Rivalry
Highly competitive industries generally earn low returns because the cost of
competition is high. The auto industry is considered to be an oligopoly (A market
condition in which sellers are so few that the actions of any one of them will materially
affect price) which helps to minimize the effects of price-based competition. The
automakers understand that price-based competition does not necessarily lead to
increases in the size of the marketplace, historically they have tried to avoid price-
based competition, but more recently the competition has intensified – rebates,
preferred financing and long-term warranties have helped to lure in customers, but
they also put pressure on the profit margins for vehicle sales. Every year, car
companies update their cars. This is a part of normal operations, but there can be a
problem when a company decides to significantly change the design of a car. These
changes can cause massive delays and glitches, which result in increased costs and
slower revenue growth. While a new design may pay off significantly in the long run,
it’s always a risky proposition

4. Bargaining Power of Suppliers

The automobile supply business is quite fragmented (there are many firms). Many
suppliers rely on one or two automakers to buy a majority of their products. If an
automaker decided to switch suppliers, it could be devastating to the previous
supplier’s business. As a result, suppliers are extremely susceptible to the demands
and requirements of the automobile manufacturer and hold very little power.
For parts suppliers, the life span of an automobile is very important. The longer a
car stays operational, the greater the need for replacement parts. On the other
hand, new parts are lasting longer, which is great for consumers, but is not such
good news for parts makers. When, for example, most car makers moved from
using rolled steel to stainless steel, the change extended the life of parts by several
years.

5. Bargaining Power of Buyers

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The bargaining power of automakers are unchallenged. Consumers may become
dissatisfied with many of the products being offered by certain automakers and
began looking for alternatives, namely foreign cars. On the other hand, while
consumers are very price sensitive, they don’t have much buying power as they never
purchase huge volumes of cars.

The global automobile industry is a multi billion industry with several large brands
competing for market share. Since its foundation in the 19th century, this sector has
grown to become an important part of the world economy in terms of revenue. Due to
the large size of the auto industry, it’s growth and revenue are impacted by several
forces. The recent financial crisis had hit this sector really hard. However, since the
global recession has passed, the sales of automotives are again back on track. Apart
from the manufacturing of vehicles globally, this sector is also involved in the
marketing and sales of automotives. During the recent years, the Asian markets have
proved highly lucrative for the automotive brands. China has particularly grown to
become the world’s largest market for vehicles. In the 21st century technology and
innovation have become the main basis of differentiation for the vehicle
manufacturers. Apart from it, the focus is on fuel efficiency and environment
friendliness. The pressure on the industry with regards to pollution control and
carbon footprint has gotten high. All the major players are trying to bring more fuel
efficient and low emission vehicles to the markets. The sales of electric vehicles that
are emission free, is also catching up. Presented below is a PESTEL Analysis of the
automotive industry that shows how the political, economic and other factors impact
this industry.

1. Political
Political factors play an important role and have a direct impact on the profitability of
the automotive industry. Governments around the world are favoring low emission
vehicles. Moreover, taxes on the luxury vehicles and fuel guzzlers have grown higher.
The markets like EU and UK are providing government subsidy for the low emission
vehicles. Environment friendly vehicles have grown in demand globally. They are also
receiving higher government support for their low environmental impact. As such the
government rules and regulations heavily affect the revenues of the vehicle brands.
Technology that is fuel efficient and low on emission can easily pass government rules.
Moreover, the import rules and taxes vary from country to country. Overall, there are so
many political factors affecting the auto industry. Changing government regimes as
well political regulation of the market can from time to time cause favorable or
unfavorable fluctuations. However, the political factors are generally outside the
control of the
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businesses except for lobbying. Still, their importance can be understood from the fact
that companies have shifted their manufacturing bases to countries where the wage
related regulations are lenient. Companies have to manage their costs and the political
factors can have a significant role in this area. If China has become a favorite of
several brands then the reason is the low labor cost which is because of the lenient
wage regulation. The import and export laws that vary across nations can also
be a headache for automakers in case of the nations where import laws are stiff. Thus,
the government policies to a remarkable extent affect the fortunes of the auto
companies.

2. Economical
Economic forces are also of particular importance in the context of the automotive
industry. This sector was hit hard by the recent economic crisis. When the economic
conditions are not good, the sales of vehicles fall. The demand for luxury or high priced
vehicles is also affected poorly during poor economic conditions. Moreover, the taxes
on the high priced vehicles are high in several markets. If the economic conditions are
good, the sales of vehicles can remain high. The sales are generally higher in the
developed countries. In the developing and under-developed markets, they are
comparatively low. The developed markets see higher sales as the purchasing power
of the customers is higher. In these markets, the sales of the higher priced variants are
also higher. The lower priced variants are generally in demand in the developing and
underdeveloped markets. Thus, the size of the economy and the economic conditions
globally, have a major impact on the profitability of the auto industry in various
markets. There are various angles to analyze the importance of the economic factors
for the industry. The most used angle is the purchasing power of the customers. It
dips during economic downturns. Industries are dependent heavily on the purchasing
power of the customers. If a large number of brands have focused on bringing low
cost cars to the market, it is because they know they can tap into a larger customer
segment this way.

3. Socio-Cultural
The market is influenced deeply by the socio-cultural forces. The automotives industry
is also affected by the changing socio cultural trends and people’s preferences.
Vehicle makers have to adapt to these forces. Every year new models are released
keeping people’s preferences in mind. Moreover, specific styles are preferred in
certain cultures. In some markets while the SUVs might be in higher demand, in the
others the sedans might be preferred. Age distribution in the various populations is
also an important factor that vehicle makers have to keep in mind while targeting
the consumers. They should release vehicles based on the preferences of their
target population. Apart from it from culture to culture, people’s style and
preferences also differ. The result is that
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while a particular model will sell in a market, it might not be as popular in the other.
Social trends also keep changing continuously affecting the popularity of brands and
models. Changing trends may sometimes make the older models obsolete or go out
of fashion.

4. Technological
Technology and innovation have become important determinants of market share in
the automotive industry. The more innovative the company, the higher is its market
share. Given this fact, all the major players make huge investments in research and
development. Brands like Toyota, Hyundai and Ford are investing in low emission and
environment friendly vehicles. Toyota is even planning to release a driverless car in the
coming years. Not just this, the major technological players are trying to enter this
sector of the industry. In the recent years technological innovation has remained a
major basis of differentiation for the automotive makers. It is because the customers’
focus shifted towards fuel efficient and high mileage vehicles. The sales of the low
emission and fuel efficient vehicles are always high. It shows that technology is one of
the most important factors affecting the sales and profitability of the automotive
industry.

Mercedes Benz is the most successful company existing in the market now days

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 with the latest technology in the automobile industry with luxury cars to sports
to family car they have a vast range of cars and motorbikes.
“The process of strategic analysis the process of conducting research on the
business environment within which an organization operates and on the
organization itself, in order to formulate strategy”.“A number of tools are used
in the process of strategic analysis, including PEST, SWOT analysis, and
Michael Porter’s five forces model”.
They understand the technology they have to provide in there automobiles
because the latest technology will be able to attract the people better and
they would be able to reach the market better
The process core capabilities at Mercedes Benz is playing an important role as it
is helping in having new and developing innovative ideas for the company
and playing an important role in product related core competencies.
Better allocation and better utilization of resources, improved quality have a
comparative advantage towards its competitors.

Mercedes Benz understands its market as they are providing according to their
customers wants as they have restriction in providing different kinds
of automobiles which is not required in the particular country.

Mercedes Benz study all the behavior and attitude of the customer confined to
social systems given norms, values, roles, culture, and ethics in order to
develop a better strategy in future.
Mercedes Benz has a good knowledge about the marketing communication and
knows its limits.

Mercedes Benz believes in professional pride, culture and religion understanding

of the people and how people react to these norms as Mercedes Benz is the
leading Automobile industry as it suites towards the Systemic school of
thought in order towards the strategic development.

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Mercedes Benz is one of the leading automobiles industries and in couple of
years they have been facing problems as the industry was weakened by the
rapid increase in the fuel prices as well as to energy crisis.
There were some models released by Mercedes Benz with fuel efficient models
to offer to the consumers, the bigger automobiles including General Motors,
Toyota, Ford, Chrysler, Nissan and Mercedes Benz Motors experienced
sliding sales.
Mercedes Benz has used PEST and SWOT analysis to work harder to achieve the
goal to make their sales go high, and have worked on the weakness in the
market as well.
Mercedes Benz has studied there PEST analysis and the factors that are
affecting their company.

Mercedes Benz being the leading automobile industry has to know its strengths
and weakness, when dealing with their customer.

Whittington’s Evolutional and Systemic schools of thoughts are being applied by

Mercedes Benz to the better development of their strategy and which helps
them to know where they are standing in the market and with the help of the four
loops Mercedes Benz can know its company better way as they will be able to
understand its culture, religion and this will help to make better strategic
decisions for the company.
The Company’s wish is to nurture and promote individuals with the capacity to
think reason and create – and the ability to dream in Mercedes Benz by
respecting individual differences and trusting each other as equal
partners.

Mercedes Benz uses local associates, who are most familiar with the region to
run management in that area.

Mercedes Benz tries to diversify and localize its workforce with multinational
people in order to address market changes promptly and flexibly.

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Mercedes Benz provides training programs tailored for each region based on its
needs and conditions, while offering at the global level shared training
programs to develop global leaders.

At Mercedes Benz, the Human Resources Division and Associate Relations

Division at the corporate headquarters in Tokyo draws up global human
resources strategies from the mid- to long-term perspective in coordination
with operations in each region.
Mercedes Benz also encourages employees to respect each other’s individual
differences and talents while exerting their own abilities to the fullest, based
on Mercedes Benz’s philosophy of Respect for the Individual.
Mercedes Benz Company Ltd sells its products under 5 broad categories, and
each of these serves as separate product lines. All of its products are sold
under the brand name of Mercedes Benz Motor Company Ltd.
Its products are perceived to be of higher quality than that of competitors.
Therefore, customers are willing to pay a higher price for these.

Mercedes Benz Company Ltd sells products that are famous for its traditional
design that is also practical for customers to use.

The current pricing strategy to set the price level that Mercedes Benz Company
Ltd follows is a competitive based pricing strategy.

It currently uses product bundle pricing as well, where products are bundled
together and sold at prices lower than the total of individual items.

It charges a greater price for the products it sells online. This is because delivery
costs have been included in the price of the product.

Mercedes Benz Company Ltd sells its products through two marketing channels.
The first is where it sells directly to its customer through its online website. The
second is where it sells to wholesalers who then sell to different retailers
located

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 all over the country.

Mercedes Benz Company Ltd has its products present on over 500 retailers
throughout the country. It follows an intensive marketing strategy where it
tries to include its products on as many retailers as possible.
In order to run its online operations, Mercedes Benz Company Ltd has partnered
with numerous deliveries service providers in order to provide timely deliveries.

Mercedes Benz Company Ltd has a network of over 500 suppliers that provide it
with the raw materials needed for production.

Mercedes Benz Company Ltd uses multiple media channels to promote its
products. It uses traditional media, which includes an advertisement on
television and radio.
It uses online and social media advertising, which is cheaper and beneficial due
to the increasing usage of the internet.

Mercedes Benz Company Ltd undergoes various sales promotions taking part in
various trade exhibitions and events around the year.

Mercedes Benz Company Ltd undergoes personal selling, with a large sales force
to increase its presence in retail stores.

令 The main objective of my project was to how the company ensured its footing
in the business so deep. Business process, strategies and other managerial
activities of the company was looked into and I was able to partially attain my

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 objectives from this project, because Mercedes Benz’s success stems from its
obsession to make innovative and reliable machines. Mercedes Benz has
looked outward from its home shores well before other manufacturers
considered making or even selling products overseas.
令 Mercedes Benz manufacturing subsidiaries virtually everywhere around the world
operate as autonomous companies, designing and producing vehicles based
on local conditions and consumer behaviour.
令 Combining engineering, design, and manufacturing functions in each of its large
local facilities. By contrast, virtually all industrial companies keep R&D and
other technical and design functions close to home, where they can be
managed by executives who are miles removed from local preferences and
circumstances.
令 Mercedes Benz's factories are purposefully the most labor intensive in the auto
industry, employing robots only in areas that are dangerous or
otherwise obviously less fit for humans than machines.

令 Since Mercedes Benz's founding in 1926 all of the company's CEOs (including
the father of the company, Karl Benz) have been engineers, veterans of Benz's
prized autonomous research and development unit.
令 Mercedes Benz CEOs' strengths lie in product and process innovation, primarily
in designing new vehicle models and features and in conceiving fresh
techniques for building them faster and better.
令 Mercedes Benz has in-house engineering co-located at each major production
facility, serving as an independent operation that is focused solely on local
needs. This helps Mercedes Benz I n seamlessly produce multiple autos on a
single assembly line, one after another, and switch a line over to a newly
designed vehicle within hours.
令 From POTTER’S 5 force model, I understand that the Competitive rivalry or
competition is less in automobile industry. Innovation and technology are root
of Mercedes Benz and the Bargaining power of suppliers and Threat of
substitutes

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or substitution are a Weak force and Threat of new entrants or new entry
is nothing of concern as of now for Mercedes Benz.

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令 It is a well known and prestigious brand in the automotive world.

令 The cars produced by the Mercedes were stylish, elegant and they were held
to an incredible standard of performance, much like today.

令 The Mercedes cars were very well built and designed to be driven on all types
of terrains and at slow or fast speeds.
令 It adopts one of the most safety features and computerised stability control
systems.
令 These cars are engineered almost as well as commercial jet aircraft.

令 Mercedes Benz has always been at the forefront of innovation.

令 Strong R&D Departments – Mercedes Benz has strong research and

development groups. It has an R&D department on every important location it
has been operating its businesses. Additionally, for R&D purpose it
collaborated with other different institutions.
令 It has a strong brand image as the luxury and racing cars.

令 It is the most advanced, luxurious and performance oriented automobiles on the

planet

令 it is the leading automobile manufacturer in the world which has been offering
innovative products to its customers.

令 It has strong production process system & presence in the market. It has been
developing quality cars for decades, never went for aggressive but slow
marketing & promotional strategies, and always promoted its products
precisely.
令 Mercedes Benz has always been working, along with its dealers, for increasing
customers’satisfaction.

令 It is the only one that have the highest resale value among all others.

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Mercedes Benz Plays an important role in drive out the extreme luxuriousness
in the overall automobile industry and they are highly succeeds in it.
Effective strategies adoption makes their industry more success and
gets enlightened in the entire automobile scenario.
It’s Research and development, Innovation and their performance makes
the considerable role.
They are highly talented in every concern; their production, manufacturing,
marketing, distribution, price fixation, customer accessibility, R & D,
promotional strategies, innovation, technology utilization & adaptation,
advertisements and their company website promotions and so on.
Mercedes Benz drive out many vital functions for the current over crossing in
the automobile business market.
Their interaction towards their customers and their communication styles
makes their market dealings more suitable.
I finally conclude that Mercedes Benz India Pvt Ltd gives a greater contribution
to the International Automobile Market Sector economy.

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