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    Medium & Heavy Commercial Vehicles' Industry: An Overview: Group Members

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    krunalpshah
    This document provides an overview of the medium and heavy commercial vehicles industry in India. It discusses the major players in the industry including Tata Motors and Ashok Leyland, which hold a majority market share. The industry has experienced significant growth in recent years, driven by factors such as economic growth, infrastructure development projects, and government policies supporting the industry. However, the industry faces some challenges as well, including rising input costs and competition from rail transport. Overall, the future outlook for the industry remains positive with expectations of continued growth.

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    Medium & Heavy Commercial Vehicles' Industry: An Overview: Group Members

    Uploaded by

    krunalpshah
    56 views10 pages
    This document provides an overview of the medium and heavy commercial vehicles industry in India. It discusses the major players in the industry including Tata Motors and Ashok Leyland, which hold a majority market share. The industry has experienced significant growth in recent years, driven by factors such as economic growth, infrastructure development projects, and government policies supporting the industry. However, the industry faces some challenges as well, including rising input costs and competition from rail transport. Overall, the future outlook for the industry remains positive with expectations of continued growth.

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    HCV-L&f

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    This document provides an overview of the medium and heavy commercial vehicles industry in India. It discusses the major players in the industry including Tata Motors and Ashok Leyland, which hold a majority market share. The industry has experienced significant growth in recent years, driven by factors such as economic growth, infrastructure development projects, and government policies supporting the industry. However, the industry faces some challenges as well, including rising input costs and competition from rail transport. Overall, the future outlook for the industry remains positive with expectations of continued growth.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    56 views10 pages

    Medium & Heavy Commercial Vehicles' Industry: An Overview: Group Members

    Uploaded by

    krunalpshah
    This document provides an overview of the medium and heavy commercial vehicles industry in India. It discusses the major players in the industry including Tata Motors and Ashok Leyland, which hold a majority market share. The industry has experienced significant growth in recent years, driven by factors such as economic growth, infrastructure development projects, and government policies supporting the industry. However, the industry faces some challenges as well, including rising input costs and competition from rail transport. Overall, the future outlook for the industry remains positive with expectations of continued growth.

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    Attribution Non-Commercial (BY-NC)
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    of 10

    MEDIUM & HEAVY COMMERCIAL VEHICLES INDUSTRY: AN OVERVIEW

    GROUP NUMBER: 7
    GROUP MEMBERS:
    1. PRANSHU GUPTA 2. DEEPTI KANAL 3. MANISH KESHARI 4. AZAM ALI KHAN 5. RICHA KHETAWAT 6. MEENU MAHESHWARI 7. MILIND RAWAT (119) (122) (123) (124) (125) (130) (143) DATED: 12TH SEPTEMBER 2007

    CONTENTS

    1. 2. 3. 4. 5. 6. 7. 8. 9.

    Abstract....3 Introduction ... 4 Classification of Commercial Vehicles..... 4 Size of Industry.......... 5 Market Share of Various Players .....6 Growth Enablers ....7 Key Problem Area.. ...8 Road Ahead.....9 Conclusion...9

    10. References.....10

    ABSTRACT

    With the economy growing at an astounding rate of more than 9% a year, the transportation industry is growing at a similar pace. With easing of various norms & regulations for foreign investors to invest money in India, technological improvements have been phenomenal. India is the fourth largest Commercial Vehicle market of the world. The major players being Tata Motors & Ashok Leyland holding a total market share of approx. 91 %. With lots of Improvements & developments in the Infrastructural projects, the demand for Heavy commercial vehicles has seen a spurt .Though; the industry is facing a severe competition from Railways which is a cheaper mode of transport comparatively.

    INTRODUCTION

    The Indian CV industry is the fourth largest in the world with major players being Tata 3

    Motors, Ashok Leyland, Mahindra and Mahindra , Eicher and Swaraj Mazda. It grew by 33% in FY07 compared to FY06 (Source:INDIA INFOLINE)

    MAJOR CLASSIFICATIONS OF COMMERCIAL VEHICLES IN INDIA


    COMMERCIAL VEHICLES (BASED ON GVW)

    MEDIUM & HEAVY COMMERCIAL VEHICLES > 11 tonnes GVW

    LIGHT COMMERCIAL VEHICLES 2 10 tonnes GVW

    SMALL COMMERCIAL VEHICLES 1-2 tonnes

    COMMERCIAL VEHICLES BASED ON TYPES OF VEHICLES

    GOODS

    PASSENGER S

    RIGID TRUCKS

    TRACTOR TRAILERS

    TIPPERS

    PICK UPS

    APPLICATION BASED
    TRANSIT MIXER BULKERS FUEL TANKERS

    BUSES

    SIZE OF AUTOMOBILE INDUSTRY IN INDIA(2006-07)

    The domestic automobile market in India saw a 13.5% growth in the fiscal 2006-07 on a year on year basis over 2005-06. The total domestic sales for the year stood at 1,01,09,037. The sales for the commercial vehicles stood at 4,67,882 units.

    MAJOR PLAYERS IN THE FIELD OF HCV: Tata Motors


    Established in 1945, is the leader in the Commercial Vehicles segment and no. 2 in the passenger car market. It is the world's fifth-largest M&HCV manufacturer. Tata Motorss product range covers passenger cars, multi-utility vehicles as well as LCV, M&HCV for goods and passenger transport.

    Ashok Leyland
    Established in 1948, Ashok Motors was set up in Madras for the assembly of Austin Cars. In 1955 with equity participation by British Leyland, the Company's name changed to Ashok Leyland. Since then it has been a major player in India's commercial vehicle industry.

    Volvo Motors

    Founded in 1927, Volvo is one of the worlds leading manufacturers of heavy commercial vehicles and diesel engines. Today, Volvo has approximately 81,000 employees and production in 25 countries and operates on more than 185 markets.

    Eicher Motors
    Founded in 1982, a part of Eicher Group. It manufactures and markets trucks, buses, automotive gears, motorcycle and deals with the exports vehicles, aggregate and components.

    Force Motors
    Founded in 1950, Force Motors Limited is an enterprise of the Firodia Group (formerly Bajaj Tempo Limited). Recently rolled out the MAN series of M&HCVs

    Vehicle Factory Jabalpur


    Vehicle Factory, Jabalpur established in 1969 is a dedicated manufacturing unit to meet 'Transport Needs' of the Armed Forces.

    MARKET SHARE OF VARIOUS PLAYERS IN M&HCV SEGMENT:


    The domestic market share of different players in MHCV is shown as under:

    DOMESTIC MARKET SHARE MHCV 2006-07


    OTHERS (VOLVO, SCANIA, MAN, ACTROS) 8% TATA MOTORS 63%

    ASHOK LEYLAND 28%

    EICHER 1%

    GROWTH TREND OF M&HCV IN INDIA

    246857

    Exports of M&HCV form a minimal portion. Mainly two players are into exports of M&HCV. Tata Motors exported 12155 units and Ashok Leyland exported 6358 units in the year 2006-07
    136804 95741 73185
    28 12 7 28 69 2

    172868

    179345

    19 97 0

    24 59 1

    25 63 8

    16 81 4

    PASSENGERS RS GOODS

    '01-02

    '02-03

    '03-04

    '04-05

    '05-06

    '06-07

    [SOURCE: SIAM] Six years of consecutive growth in the MHCV segment of commercial vehicles has been observed in India

    GROWTH ENABLERS OF M&HCV INDUSTRY:


    There are various factors which are contributing to the growth & development of M & HCV Industry in a big way .Some of them are as follows :

    Market Induced Factors


    Robust GDP(9.4%) and IIP (11.3%) growth in 2006-07 Freight generating sectors registered robust growth High demand potential replacements with stricter emission norms in offing Favorable demandsupply scenario with buoyant freight outlook Increasing capacity utilization in road freight industry. Introduction of more economical and fuel -efficient vehicles Improved profitability of fleet operators coupled with shrinking replacement cycle for CVs

    Strong economic activity in the country, leads to increased demand for freight movement by road. Continued strength in freight rates in the last 12 -15 months (up ~5%) and the 12% cut in fuel prices since Nov -06 have adequately compensated for increased cost pressures owing to inflation and rise in interest rates

    Govt. Policy Induced Factors


    Strict implementation of Overloading ban means increased volumes Infrastructure development continued to gain momentum o NHAI project completion : 26% o NHDP Phase V 6,500 Kms included Favorable regulatory environment such as changes in emission norms, (BS-III norms implemented in 11 major industrial cities of India from April 2005) strict restrictions imposed by cities on vehicle age (No MHCV of 8 years or older can ply on Mumbai) Proposed phase-out of CST by 2010 will boost the organized logistics players and in turn the CV manufacture Weighted tax deduction of upto 150% for in-house research and R&D activities. (Auto Policy 2002) Now 100% foreign equity investment is allowed by the government and does not lay down any minimum investment criterion (Auto Policy 2002)

    KEY PROBLEM AREAS


    Market Induced Factors
    Inflationary pressures and likely interest rate hikes Input Costs are expected to continue to pose a key challenge Crude Oil price trends need to be watched closely Competition from airline and railway industry.

    Emergence of stricter international norms like ELV (end-of-life vehicle) will cause obsolescence of established current manufacturing procedures.

    Govt. Policy Induced Factors


    Increase in competitive intensity by the entry of international players like Man and Scania. This will pose a challenge to Indian players like Tata and Ashok Leyland. Certain markets like coal, cement & steel are captive for railways by govt. regulations

    THE ROAD AHEAD


    With technologically advanced global players vying to enter Indian markets for both manufacturing and research, the sector is bound to grow while also making its presence felt in the international arena.

    New Trends in Industry


    Super Heavy Commercial Vehicles 40T GVW and above (Benz Actros, Tata Novus, Tatra, Scania) HYBRID Trucks (Ashok Leyland) GPS Controlled Vehicles & freight Tracking Systems. Percolation of latest technology from car segment to HCV. Shift towards structured & large Fleet Operators.

    CONCLUSION
    The Commercial Vehicle market has in the past shown a cyclic trend, as , it has faced a downturn in 1995-96 and 2000-01, & a similar recession can be expected in the near future. Usually, this is because of excess capacity buildup & a slight correction in demand recently in the first quarter of present fiscal. At the same time the economy is surging ahead at a healthy growth rate and there is a lot of untapped market hitherto a domain of railways which could be tapped into and not to mention the export segment. These factors may help in avoiding the downturn that is possible in short term. Certain factors that might pose a

    problem in short term are increasing interest rates for financing, and need for higher expenditure on R&D to meet the environmental norms and competition. These might be offsetted by the deep penetration achieved by finance firms & booming economy and the tax sops on R&D. The overcapacity issue though can become a major one, but will also enable to meet the export sector All in all it can be said that the short term period is of caution but in the long term, the market is expected to grow well despite the expected revival of Railways.

    REFERENCES
    www.siam.in www.icra.org www.tatamotors.com www.eicherworld.com www.ashokleyland.com www.ibef.org www.cso.org www.unionbudget.nic.in www.north.nic.in www.economictimes.com www.commerce.nic.in www.elvsolutions.org www.automartindia.com www.indiainfonline.com

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