NAME: ROLL NO:

GAUTAM TAHLANI 168

SEMESTER: V COURSE: MENTOR: TOPIC: DATE:

BACHELOR OF BUSINESS ADMINISTRATION

PROF. MOHAMMED FEROZ THE AUTOMOBILE INDUSTRY 20-12-2012

Term Paper submitted in Partial fulfillment of The requirements of the Graduate Degree in BACHELOR OF BUSINESS ADMINISTRATION (HONOURS) J.D.BIRLA INSTITUTE At the JADAVPUR UNIVERSITY At KOLKATA

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ACKNOWLEDGEMENT
I would like to express my gratitude to all those who gave me their support to complete my dissertation. I express my feelings and gratitude and sincere thanks to the director of our college, Dr. Asit Datta. I am deeply indebted to my mentor/supervisor, Mr. MOHAMMED FEROZ for his unending support, direction and guidance throughout the course of research of material for the project as well as for the final compilation. I would also like to express my heartfelt thanks to the coordinators and staff of the Learning Resource Centre of our college, who assisted me to avail the relevant books and allowed me to carry out the necessary research for my project work. The various websites from which information was acquired have proved to be very helpful and valuable sources of information in my project. I would further like to acknowledge my parents and friends for their indispensable support to make this project a success.

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INDEX

Sl No. Contents

Pg. No.

1. 2.

Introduction Literature Review 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 Overview. History. Latest Developments. Growth of Automobile Industry. Characteristics of Indian Automobile Market. Exports. S.W.O.T. Analysis. PESTLE Analysis. Segments of Automobile Industry. Economy Factors Influencing Growth of This Industry. Industry Profile.

7-8

10-11 11 11-12 12-13 13-14 16 15-17 17-19 19-22 22 22-25 25-26 27-31 32-33 34-41

3. 4. 5.

Research Methodology. Hypothesis. Data Analysis.

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6.

Result. 6.1 6.2 Findings. Recommendations. 41-42 42-43 44-45 46-47 48-78 79

7. 8. 9. 10.

Conclusion. Limitations. Annexure. Bibliography.

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1. INTRODUCTION
Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which attracted significant India-specific investment by multinational automobile manufacturers. According to New York Times, India's strong engineering base and expertise in the manufacturing of lowcost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. We are all well aware of the fact that, for decades the Indian automobile industry was way behind some of the most influential economies in the world like USA and Japan. Coming to the automotive trends, today, the Indian automobile industry is one of the most vibrant, modern and upbeat automobile markets in the world. It is also the second largest two-wheeler market in the global map. The Indian automotive industry has flourished like never before in the recent years. The automobile industry in India is the Ninth largest in the world. This extra-ordinary growth that the Indian automotive industry has witnessed is a result of a two major factors namely, the improvement in the living standards of the middle class, and an increase in their disposable incomes. Moreover, the liberalization steps, such as, relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies, initiated by the Government of India, have played an equally important role in bringing the Indian Automotive industry to great heights. It is estimated that the sale of passenger cars have tripled compared to their sale in the last five years. It's also to be noted that the demand for luxurious models, SUVs, and mini-cars for family owners, have shot up, largely due to increase in the consumer's buying capacity. The increased demand for Indian automobiles has resulted in a large number of multinational auto companies, especially from Japan, U. S. A., and Europe, entering the Indian market and working in collaboration with the Indian firms. Also, the institutionalization of automobile finance has further paved the way to sustain a long-term high growth for the industry.

OVERVIEW OF THE AUTO SEGMENT

Indians have emerged as avid car enthusiasts sporting their prized possessions as status symbols and speed machines. Foreign car companies have discovered the Indian consumer as well as the R & D potential in the Indian technical fraternity and are setting up manufacturing plants right and left across 5 |Page

the country at lower costs. The Indian automobile industry is currently experiencing an unprecedented boom in demand for all types of vehicles. This boom has been triggered primarily by two factors: (1) increase in disposable incomes and standards of living of middle class Indian families estimated to be as many as four million in number; and (2) The Indian government's liberalization measures such as relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and banking liberalization that has fueled financingdriven purchases. Industry observers predict that passenger vehicle sales will triple in five years to about one million, and as the market grows and customer's purchasing abilities rise, there will be greater demand for higher-end models which currently constitute only a tiny fraction of the market. These trends have encouraged many multinational automakers from Japan, U. S. A., and Europe to enter the Indian market mainly through joint ventures with Indian firms. India is increasingly becoming a global automotive hub both for the vehicles and component industry. India is fast integrating itself into the world economy and open to international automotive companies, who are increasingly investing in India.

2. LITERATURE REVIEW
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2.1 Overview
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people. The supply chain of this industry in India is very similar to the supply chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and go through the automakers and climbs up until the third tier suppliers. However the products, as channeled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition is the sector is high and increasing and the life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged. Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring competition, the barriers to enter the Indian Automotive sector are
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high and these barriers are study. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. As noted by NMCC (2006), competitiveness of manufacturing sector is a very broad multidimensional concept that embraces numerous aspects such as price, quality, productivity, efficiency and macro-economic environment. The OECD definition of competitiveness, which is most widely quoted, also considers employment and however, many OEMs also provide or upgrade technologies of auto-component manufacturers to build up supply chain sustainability, while being exposed to international competition, as features pertaining to competitiveness. There are numerous studies on auto industry in India, published by industry associations, consultancy organizations, research bodies and peer-reviewed journals. In this section, various studies on the Indian auto industry are reviewed, under different heads pertaining to competitiveness, namely, global comparisons, policy environment and evolution of the Indian auto industry, productivity, aspects related to supply-chain and industrial structure and technology and other aspects. The competitive advantage of the automobile companies are maintained through their different strategic management and marketing management processes. Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments. The soaring growth of the automobile companies is how they create the basis of competition. The basis of competition relates to how an organization will produce its product offerings, together with the basis as to how it will act within a market structure, and relative to its competitors, like - A differentiation approach, in which a multitude of market segments are served on a mass scale. An example will include the array of products produced by Unilever, or Procter and Gamble, as both forge many of the world's noted consumer brands serving a variety of market segments, or a cost-based approach, which often concerns economy pricing. Marketing Management on the other hand packages and clearly communicates the best strategic thinking to meet the decision-making needs of knowledgeable executives managing real-world businesses. If the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make their own key strategic decisions and develop a marketing strategy designed to maximize the revenues and profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth, market share, longterm profitability, or other goals. Marketing management often makes use of various organizational control systems, such as sales forecasts, sales force and reseller incentive programs, sales force management systems, and customer relationship management tools (CRM). Recently, some software vendors have begun using the term "marketing operations management" or "marketing resource management" to describe systems that facilitate an integrated approach for controlling marketing resources. In some cases, these efforts may be
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linked to various supply chain management systems, such as enterprise resource planning (ERP), material requirements planning (MRP), efficient consumer response (ECR), and inventory management systems. For the auto industry, it was easier to choose which brands to benchmark. The largest auto brands together have significantly greater market share than all the other auto manufacturers. We chose the corporate brand rather than the product brand as automobile company reputations are built on the corporate brands first and foremost. With product brands in a state of flux, given all the issues affecting the auto industry, we also saw this as a more useful approach to take.

2.2 History
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys. The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys. The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers Such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations.

2.3 Latest developments

After recent slowdown in industry globally, industry is back on progress path with a bright looking future ahead. Indian automobile industry is ready to rule export market. According to KPMG, Indian auto manufacturers are likely to soon join the bandwagon of established international automobile giants, such as Toyota, Hyundai, Volkswagen and Honda, as they are well positioned to significantly increase their market share in the coming five years (till 2014). Indian automakers are likely to see good response for their products in the international market due to low cost advantage. The Indian automobile industry is going through a technological
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change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years. The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. Consistent growth and dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the World. Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales.

2.4 GROWTH OF THE AUTOMOBILE INDUSTRY

India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11 %.The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, Indias increasing per capita disposable income which is expected to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of the industry. Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler market. Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of
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car they buy. The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilizing manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India. Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favorable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.

2.5 Characteristics of the Indian automobile market

1. The Tax and Duty structure: 60% of the final showroom price comprises of various
forms of duties and taxes. There is excise duty, import duties on components, Central Sales tax, state sales tax, Octroi, Road tax. All this heavily affects the pricing strategies of the automobile companies.

2. Differential taxation: The sales tax structure is not standardized across the country. At
present it varies between 4% and 12% from state to state. This leads to a substantial difference in prices across different states. This has caused many a problem to dealers in states having higher rates of sales tax because customers who are in the know of things do not hesitate to buy vehicles from neighboring states, which have lower sales tax. Moreover, there are tax benefits in buying from Union territories also. The sales tax structure has just recently been standardized at 12%. This has resulted in price increase in some states, which had lower rates.

3. Reasons for buying: For many Indian buyers the reason for buying a car is not for
transportation, utility or anything else. The primary motive is to use it as a tax saving device!!! Businesses in India get depreciation benefits on their assets. So purchasing of a car is done in order to save on taxation by claiming depreciation on the vehicles value. This leads to another characteristic of the market, which is the March, and September end buying rush. The tax system allows for 40% depreciation on the asset value if an asset is purchased before the 31st of March and 20% depreciation benefit if it is purchased before the 30th of September in a financial year. Nearing the end of these months demand spurts drastically and there is a mad rush to get delivery
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of the vehicles and get them registered before the month end. Dealers who have ready stock, and thus can give immediate delivery are in an advantageous position in these times. Even the Road Tax Office makes a quick buck by backdating registrations for those who could not procure their vehicles before the deadline.

4. Comparatively less evolution to the medium and premium segment: In the mid
1990s most of the new foreign players who came into the market, came in with mid-sized cars because they felt that the Indian market, like other developing markets, would evolve from the small cars to the mid-sized segment. This, however, has not happened and even today the strongest segment, both, in terms of volumes and growth is the small car segment. Growth in the mid-sized and premium segments has been sluggish and slow. These still remain small volume segments. This has led to manufacturers rethinking their strategies towards small sized cars.

5. Role of rumors and word of mouth: Buyers in India are a closely-knit group. The social
system in India is also tilted towards joint families. Word of mouth and peer opinion play a very significant part in deciding which make of car to buy. Rumors about price discounts, mileage or quality problems in cars spread like wild fire and have seriously affect sales.

6. The Prices sensitive market: The buyer in India is very price sensitive. Demographics
show that 20% of the Indian population is under poverty line and 60% consists of middle class. The segments are very price sensitive and always go for the economic options. That is why we see that most of the Indian automobile companies market their cars on price and have many upgraded versions in the A and B segment.

7. Most number of Players: The Indian automobile industry has the more number of players
than any other country in the world. Whereas, in the other countries, there are normally six to seven players at a time.

8. Foreign Companies: Most of the Indian automobile companies are either wholly owned
subsidiaries of any foreign company or a joint venture between an Indian Company and a foreign Company.

9. High Growth rate: Indian automobile market is growing faster than the world automobile
market. The world automobile market is growing at 2% per annum, whereas the Indian automobile market is growing at five to six percent per annum.

10. Domination of Compact cars: In other countries it is the mid-size segment that is
dominating the market, whereas the compact size passenger cars dominate the Indian passenger car market.
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2.6 Exports
India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014.

2.7 SWOT ANALYSIS

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classifieds strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points:

Strengths
Large domestic market Sustainable labour cost advantage Competitive auto component vendor base. Government incentives for manufacturing plants. Strong engineering skills in design etc

Weakness
Low labour productivity. High interest costs and high overheads make the production uncompetitive. Various forms of taxes push up the cost of production. Low investment in Research and Development. Infrastructure bottleneck.
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Opportunities
Commercial vehicles: SC ban on overloading. Heavy thrust on mining and construction activity. Increase in the income level. Cut in excise duties.

Rising rural demand.

Threats
Rising input costs. Rising interest rates. Cut throat competition The automobile industry in India has posted a rather good performance in the past few months and one of the sectors that is benefiting from the downstream good effects is the auto ancillary sector that supplies inputs to build automobiles. So hunky dory are things for the sector is that things like interest rate hikes and raw material hikes would be temporary glitches for the sector. The growth in auto sales volumes has resulted in a significant improvement in capacity utilization and operating cash flow for the auto suppliers, said Pragya Bansal, an analyst with Fitch Ratings. The Ratings agency feels that Indias auto suppliers will in 2011 have stable and may in face have better prospects on the back of improved profitability and better demand. The auto ancillary industry gets demand from OE (Original Equipment) manufacturers and the replacement market, said Avinash Gupta, Vice President Research Equity, and Bonanza Portfolio. OE demand is dependent on the number of new cars sold and the replacement market is dependent on the age of vehicles and number of vehicles. Whilst demand from the replacement market is expected to be good demand from OE manufacturers may face a bit of pressure. The OEM market growth numbers would moderate a bit because of base effect, said Gupta.
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But overall, regardless of the rate of growth in the auto sector growth per se will be there. Rising industrial production, credit, and consumer confidence will all lead to a demand for autos and consequently for auto ancillaries. And yes the global markets, which had taken a beating in the wake of the 2008 crash are expected to bounce back at least as far as automotives go. The growth will be boosted by exports as global automotive demand picks up in 2011, said Bansal. The demand in the developed world is going to pick up, and in that case the demand from overseas would also come back to the industry, said Gupta. There are various new facets that will be coming into the industry in 2011. According to inputs from Fitch Ratings the growth momentum that started in 2010 will continue in 2011. Original equipment manufacturers would resort to aggressive marketing to get market share. The replacement market will also contribute substantially to growth. In 2010 a combination of capacity constraints as also strong demand from OEMs mean that this demand segment will also be a focus for growth for the auto ancillary segment in 2011. There are however some hurdles that the industry will have to face and of these imports are one. The international trade policy that India has entered into/is negotiating with many of its trading partners could make the domestic auto sector highly competitive over the medium term. These trade agreements aim to reduce trade barriers and promote free trade across partner countries, said Bansal. Interest rates for vehicles have been on the rise and are currently hovering in the 15 to 17 per cent bracket. But even this will have a minor impact on the industry. The interest rates have a significant impact in case of commercial vehicles and tractors. The effect in the personal vehicles segment is relatively smaller. The ancillary industry would be impacted accordingly, said Gupta. The budget that is expected to be presented at the end of February may be something that will affect the industry. An increase in excise duties would hit the industry. The most major factor would be any weakening in the demand for automobiles that would affect demand for automotive ancillary products. But at this point of time market observers are positive on the sector. Fitch Ratings expects the ratings of Indian auto suppliers to largely remain stable with a positive bias emerging, due to improved profitability and better demand prospects, said Fitch Ratings Bansal. This is a dynamic sector of Indian economy. India is aspiring to become global hub for small cars. Indian component manufacturers are also looking for buyers overseas. In case the economy in the developed world picks up then the demand for auto and auto components could pick up. The sectors offer good investment opportunity to the long term investors, said Bonanzas Gupta.[ Monday, January 31, 2011By Manik K. Malakar, afternoon]

2.8 PESTLE ANALYSIS

Political
In 2002, the Indian government formulated an auto policy that
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aimed at promoting integrated, phased, enduring and self-sustained growth of the Indian automotive industry Allows automatic approval for foreign equity investment up to 100% in the automotive sector and does not lay down any minimum investment criteria. Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms Confirms the governments intention on harmonizing the regulatory standards with the rest of the world. Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Allowing automatic approval for foreign equity investment up to 100% with minimum investment criteria. Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheelers. Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. Assist development of vehicle propelled by alternate energy source. Lying emphasis on R&D activities carried out by companies in India by giving a weighted tax deduction of up to 150% for in house research and R&D activities. Plan to have a terminal life policy for CVs along with incentives for replacement for such vehicles. Promoting multi-model transportation and the implementation of mass rapid transport system.

Economic
The level of inflation Employment level per capita is right. Economic pressures on the industry are causing automobile companies to reorganize the traditional sales process. Weighted tax deduction of up to 150% for in-house research and R & D activities. Govt. has granted concessions, such as reduced interest rates for export financing. The Indian economy has grown at 8.5% per annum. The manufacturing sector has grown at 8-10 % per annum in the last few years. More than 90% of the CV purchase is on credit. Finance availability to CV buyers has grown in scope during the last few years. The increased enforcement of overloading restrictions has also contributed to an increase in the no. of CVs plying on Indian roads. Several Indian firms have partnered with global players. While some have formed joint ventures with equity participation, other also has entered in to technology tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.

Social
Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile sector have a large customer base to serve. The average family size is 4, which makes it favorable to buy a four wheeler. Growth in urbanization, 4th largest economy by ppp index. Upward migration of household income levels. 85% of cars are financed in India. Car priced below USD 12000 accounts for nearly 80% of the market. Vehicles priced between USD
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700012000 form the largest segment in the passenger car market. Indian customers are highly discerning, educated and well informed. They are price sensitive and put a lot of emphasis on value for money. Preference for small and compact cars. They are socially acceptable even amongst the well off. Preference for fuel efficient cars with low running costs.

Technological
More and more emphasis is being laid on R & D activities carried out by companies in India. Weighted tax deduction of up to 150% for in-house research and R & D activities. The Government of India is promoting National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth of the auto industry in India Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. Customized solutions (designer cars, etc) can be provided with the proliferation of technology Internet makes it easy to collect and analyze customer feedback With the entry of global companies into the Indian market, advanced technologies, both in product and production process has developed. With the development or evolution of alternate fuels, hybrid cars have made entry into the market. Few global companies have setup R &D centers in India. Major global players like audits, BMW, Hyundai etc have setup their manufacturing units in India.

Legal
Legal provision relating to environmental population by automobiles. Legal provisions relating to safety measures. Confirms the governments intention on harmonizing the regulatory standards with the rest of the world Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheelers. Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry.

Environmental
Physical infrastructure such as roads and bridges affect the use of automobiles. If there is good availability of roads or the roads are smooth then it will affect the use of automobiles. Physical conditions like environmental situation affect the use of automobiles. If the environment is pleasant then it will lead to more use of vehicles. Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. With the development or evolution of alternate fuels, hybrid cars have made entry into the market. Few global companies have setup R &D centers in India. Major global
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players like Audi, BMW, and Hyundai etc have setup their manufacturing units in India

2.9 Segments of the Automobile Industry

Heavy commercial vehicles: In India the commercial vehicles are graded according to their Gross Vehicle Weight (GVW). It is as under: LCV: Intermediate commercial vehicle with GVW of 8 to 10 ton MCV: Medium commercial vehicles with GVW of 10 to 15 ton. HCV: GVW of 16 ton and above. But the gradation apart, the segment is more recognizes by its utility such as the vehicles which carry passenger are called buses and those specializing in carrying loads as trucks. Since 80% of commercial vehicles are purchased on credit, the availability of credit is a major factor influencing demand. The credit squeeze affects the demand negatively. The other important factors influencing demand of CV are depreciation norms, diesel prices and changes in the Motor Vehicle Act. Light commercial vehicles: Like the Heavy vehicles segment, the LCV, which are also essentially freight carriers are equally important. Small freight loads over small distance are transported through these vehicles. In India in rural areas, these vehicles also ferry passengers over short distances. This segment is much more populated and competitive than the HCV. The liberalization of government policy with respect to foreign, technical and financial collaboration lead to a sudden spurt in technical collaboration in LCV segment. The LCV segment is populated with six players with Telco being the traditional market leader by a wide margin. Passenger car segment: The first motorcar on the streets of India was seen in 1898. Mumbai had its first taxicabs in the early 1900. Then for the next fifty years, cars were imported to satisfy domestic demand. The Indian car industry can be classified, based on the price of the car into four segments. The demand for passenger cars can be segmented on the basis of the user segment as those bought by taxi operators, government/non government institutions, individual buyers etc. A major portion of the demand in India accrues mainly from personal vehicle owner. The demand for cars is dependent on a number of factors. The key variables are per capita
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income, introduction of new models, availability & cost of car financing schemes, price of cars, incidence of duties and taxes depreciation norms, fuel cost and its subsidization, public transport facilities etc. The first four factors have positive relationship with the demand whereas others have an inverse relationship with demand for cars.

Two Wheelers Segment: The two-wheeler segment like the passenger is very heterogeneous and could be split on basis of usage, load capacity, stroke engine, utility and appeal. In India it is generally subsegmented into Motorbikes, Scooters and Mopeds. The promotional and marketing outgo would rise steadily for the two-wheelers producers; the emphasis would now be on aesthetics, design, and product positioning and market segmentation. As a result, the consumer would be the ultimate beneficiary with the choice of more models with superior features. Special Utility Vehicles: This segment is also a very important segment but finds very less mention among the analysts in spite of its direct bearing on the economy. The probable reason for this trend is that the vehicle seems mundane and lacks the glamour of the luxury cars. The segment comprises of Tractors, Earth Moving Equipments and Material Handling. The transformation of the Indian market for passenger cars is remarkable. A few years ago you had a choice between three cars. Now the Indian car market has around thirty cars for the consumers. From a stage where the consumer had to wait for months to get a car, the market has turned in favor of the buyer. With new models and recession in the economy, manufacturers are doing everything to attract the consumers. In comparison with the kind of cars available in developed countries, Indias passenger cars may appear primitive even today, when a much wider choice is available than in earlier years. Earlier, the choice was between three cars. The Ambassador from Hindustan Motors was phased out from the European market before 1960. This car is still used by all the government agencies and you still find that most taxis are of this make. For the urban employed class it was Premier Padmini, a Fiat version of the same vintage. Then came Maruti a 798 cc from Maruti Suzuki, which became the most popular car in the country. The opening up of the economy and liberalization attracted investments form different parts of the globe. The result was wide range of cars in the Indian market. The joint venture between Government of India and Suzuki Motors of Japans produced Maruti 800 (798 cc), Omni E (796 cc), Maruti Zen (993 cc), Maruti 1000 (970 cc) and Maruti Esteem (1298 cc). Hindustan Motors offer Ambassador ISZ (1817 cc), Contessa GLX (1817 cc). Other than the older models like Premier Padmini (1366 cc) and Premier 118 NE, the market now has new cars, including Fiat Uno (999 cc (1171 cc), Daewoo Cielo (1498 cc), Peugeot 309 (1360 cc), Opel Astra (1597 cc), Ford Escort (1299 cc), Honda City (1343 cc), and Mercedes E220 (2199 cc).
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Until the 1980s the automobile industry in this country had charted an uneventful course. The scenario showed a limited number of manufacturers, low levels of production and the use of anachronistic technology. Hindustan Motors, for example, have continued with the use of the old reliable Ambassador, making only cosmetic changes in the 1957-designed body. Premier Auto did the same with the Fiat body that was newly introduced in 1964. For a long time, owning a personal four-wheeler was considered a luxury in India, and a limited road network with poor road surface did not help matters much. Production showed only a very gradual upward curve from the 1950s until the early 1980s before Maruti came into the scene. Though the consumers are happy about the variety of cars available, the manufacturers are worried. The drop in the demand and the inventory pile-up in most of the production units are hitting the bottom line. Though all players claim that they are not in the market for short-term gains, they admit that the present condition is far from attractive. With sales remaining stagnant or going down, car manufacturers have started going all out to win the customers. For the first time, car manufacturers in India offered heavy discounts. Easy finance offers, free accessories and attractive warranty offers are the other soaps offered now.

2.10 Economy
Around the world, there were about 806 million cars and light trucks on the road in 2007, consuming over 260 billion US gallons (980,000,000 m3) of gasoline and diesel fuel yearly. The automobile is a primary mode of transportation for many developed economies. The Detroit branch of Boston Consulting Group predicts that, by 2014, one-third of world demand will be in the four BRIC markets (Brazil, Russia, India and China). Other potentially powerful automotive markets are Iran and Indonesia.[8] Emerging auto markets already buy more cars than established markets. According to a J.D. Power study, emerging markets accounted for 51 percent of the global light-vehicle sales in 2010. The study expects this trend to accelerate.

2.11 FACTORS INFLUENCING GROWTH OF THIS INDUSTRY

The factors playing a key role in the Indian automobile industry trends are as follows:

Competition:
With the coming of the multinationals, an immense pressure has grown on the Indian companies. As a result, a lot of joint ventures have taken place, some others have invested
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heavily on R&D to build their own empires and the rest have perished.

Customer:
Armed with higher buying power and an ever increasing expectation from products and services, the customer is undoubtedly the king and has propelled a fierce competition among the major players in the market.

Growth in the road infrastructure increases demand for vehicles:

Indian highways and roads have improved a lot in quality and connectivity in the last 20 years. Projects like the Golden Quadrilateral aim to make even remote areas accessible by road. Some of the National Highways are of international standards. This has made road transport a viable, cost effective and speedy option both for goods and passenger traffic.

Urbanization changes the face of Indian auto industry:

Joint families in towns and villages have given away to migration of the younger generation to cities in search of better opportunities. The new-age educated migrants and nuclear families (many with double income couples) have a higher purchasing power. Presently, the rate of spread of urbanization is 30% which is likely to increase by 40% in 2030 (UN). Urbanization has promoted infrastructural development and it is estimated to spread at a rate of $500 billion in the next 5-6 years.

Rising working class and middle class contribute to increased demand of automotives:
Post 1980s, a surging economy has created millions of new jobs in the private sector. This has lead to a lot of prosperity in the working class and the middle income households. They are able to provide for food, clothing and education and also are able to think of owning luxuries like vehicles. According to the Planning Commission report, between the year 2003 and 2009, 130 million people would have been added to the working population. According to a finding from McKinsey, the middle income group will grow from 50 million to 550 million by 2025.

Exhaustive range of options in price and models of automotives:

Indian consumer in 70s and 80s had to choose between and Premier Padmini or an Ambassador. Now there are at least 123 different models of cars from 30 odd manufacturers available. The price of the compact cars like Tatas Nano has made the world sit up and take note of the truly unbeatable price points.
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Attractive Finance Schemes for purchase of automotives:

Most nationalized and foreign banks have very tempting finance options and low interest rates for purchase of cars and two wheelers. There are specialized companies that finance the commercial vehicles. All this has made the dream of owning a vehicle an easy reality.

Pollution and Safety Norms:

Cars as well as two-wheelers have met the most stringent international norms of pollution. Euro II vehicles have become the norm of the day all over India. Unfortunately, in the Indian context, safety in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of adequate safety features in the vehicles such as airbag and crumple zone needs immediate attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory.

Government:
Unlike in the past, the Indian Government has gone through a total role reversal by becoming the enabler rather than the controller. In the recent past it has started providing better infrastructure, favorable atmosphere to attract investments and implementing growth oriented economic policies.

2.11.1 CONTRIBUTION TO THE ECONOMY

India is one of the fastest growing automobiles market in India. The automotive industry is one of the highest revenue-earning industries in India and contributes 4.4% to Indias GDP and 17.0% to the indirect tax collection. It is one of the largest sources of employment due to its deep backward linkages (in metals such as steel, copper plastics, paint, glass, electronics, capital equipment, warehousing and logistics) and forward linkages (including dealership retails, credit and financing, logistics, advertising, repair and maintenance, petroleum products, gas stations, insurance, service parts, etc). It provides direct and indirect employment to more than 13 million people. In recent years, the automobile industry has seen an upsurge in its exports to other countries. Today, the Indian automobile industry is the worlds largest motorcycle manufacturer, the second largest two-wheeler and tractor manufacturer, the fifth largest commercial vehicle manufacturer and the fourth largest car maker in Asia. Apart from serving the domestic market, the Indian auto sector has also become a sourcing hub for the global auto giants. In short, the Indian automotive industry is set for exponential growth in the future. The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a
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market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition is the sector is high and increasing and the life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged.

2.12 INDUSTRY PROFILE

After recent slowdown in industry globally, industry is back on progress path with a bright looking future ahead. Indian automobile industry is ready to rule export market. According to KPMG, Indian auto manufacturers are likely to soon join the bandwagon of established international automobile giants, such as Toyota, Hyundai, Volkswagen and Honda, as they are well positioned to significantly increase their market share in the coming five years (till 2014). Indian automakers are likely to see good response for their products in the international market due to low cost advantage. The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years. As per Society of Indian Automobile Manufacturers (SIAM) the market share of each segment of the industry is as follows:

The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. Consistent growth and dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the world. Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the
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automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements. Besides, there are many new projects coming up in the automobile industry leading to the growth of the sector. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Indian automobile sector is now penetrating the international arena. Vehicle exports from India are at their highest levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti and Mahindra and Mahindra are leading the exports to Europe, Middle East and African and Asian markets. The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive of making India the most popular manufacturing hub for automobiles and its components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the domestic as well as international arena.

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3. RESEARCH METHODOLOGY
ACCORDING TO N.G. DAS (STATISTICAL INTRODUCTION TO RESEARCH METHODOLOGY METHODS)

Research is common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of investigation. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Like every subject this topic of the handloom sector has also been thoroughly researched and the relevant information has been rightly used.

DATA:
Data is a collection of facts, such as values or measurements. It can be numbers, words, measurements, observations or even just descriptions of things. The term data refers to qualitative or quantitative attributes of a variable or set of variables. Data (plural of "datum") are typically the results of measurements and can be the basis of graphs, images, or observations of a set of variables. Data are often viewed as the lowest level of abstraction from which information and then knowledge are derived. Raw data refers to a collection of numbers, characters, images or other outputs from devices that collect information to convert physical quantities into symbols that are unprocessed.

Quantitative Data:
The term qualitative data is used to describe a type of information that can be counted or expressed numerically. This type of data is often collected in experiments, manipulated and statistically analyzed. Quantitative data can be represented visually in graphs, histograms, tables and charts.

Qualitative Data:
Quantitative data are those which focus on numbers and frequencies rather than on meaning and experience. Quantitative data (e.g. experiments, questionnaires and psychometric tests) provide information which is easy to analyze statistically and fairly reliable. Quantitative data are associated with the scientific and experimental approach and are criticized for not providing an in depth description. Qualitative data are concerned with describing meaning, rather than with drawing statistical inferences. What qualitative data (e.g. case studies and interviews) lose on reliability they
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gain in terms of validity. They provide a more in depth and rich description.

There are two methods of collecting data. They are: Primary Data
It is a term for data collected on source which has not been subjected to processing or any other manipulation. It is the Data that has been compiled for a specific purpose, and has not been collated or merged with others. Primary data is always collected from first-hand experience.

Secondary Data
Secondary data is data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research. Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data, provides larger and higher-quality databases than would be unfeasible for any individual researcher to collect on their own. In addition to that, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments.

CORRELATION
The word correlation is used to denote the degree of association between variables. If two variables x and y are so related that variations in the magnitude of one variable tend to be accompanied by variations in the magnitude of other variables, they are said to be correlated. If y tends to increase as x increases, the variables are said to be positively related. If y tends to decrease as x increases the variables are negatively correlated. If the values of y are not affected by changes in the value of x, the variables are said to be uncorrelated.

Properties of correlation coefficient

The correlation coefficient r is independent of the choice of both origin and scale of observations the correlation coefficient r is a pure number and is independent of the units of measurement. The correlation coefficient r lies between 1& +1.

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Formulae,

REGRESSION ANALYSIS:
Regression analysis is a statistical tool for the investigation of relationships between variables. Usually, the investigator seeks to ascertain the causal effect of one variable upon anotherthe effect of a price increase upon demand, for example, or the effect of changes in the money supply upon the inflation rate. To explore such issues, the investigator assembles data on the underlying variables of interest and employs regression to estimate the quantitative effect of the causal variables upon the variable that they influence. The investigator also typically assesses the statistical significance of the estimated relationships, that is, the degree of confidence that the true relationship is close to the estimated relationship.

METHOD:
The method of least squares assumes that the best-fit curve of a given type is the curve that has the minimal sum of the deviations squared (least square error) from a given set of data. Suppose that the data points are , , ..., variable and is the dependent variable. The fitting curve where is the independent has the deviation (error) .

from each data point, i.e., , , ..., According to the method of least squares, the best fitting curve has the property that:

In regression analysis the researcher specifies an empirical model. For example, a very common model is the straight line model which is used to test if there is a linear relationship between dependent and independent variable. If a linear relationship is found to exist, the variables are said to be correlated. However, correlation does not prove causation, as both variables may be correlated with other, hidden, variables, or the dependent variable may "reverse" because the independent variables, or the variables may be otherwise spuriously
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correlated.

2:

R-Square (R^2) is the proportion of variation in the dependent variable (Y) that can be explained 2 by the predictors (X variables) in the regression model. The value r is a fraction between 0.0 and 2 1.0, and has no units. The r value of 0.0 means that knowing X does not help you predict Y. 2 When r equals 1.0, all points lie exactly on a straight line with no scatter. Knowing X lets you predict Y perfectly.

Adjusted R :
Adjusted R-Square is computed using the formula 1-((1-R^2)*(N-1)/(N-k-1)).

When the number of observations (N) is small and the number of predictors (k) is large, there will be a much greater difference between R-Square and adjusted R-Square (because the ratio of (N-1)/(N-k-1) will be much less than 1). By contrast, when the number of observations is very large compared to the number of predictors, the value of R-Square and adjusted R-Square will be much closer because the ratio of (N-1)/(N-k-1) will approach 1.

Degrees of Freedom:
In statistics, the number of degrees of freedom is the number of values in the final calculation of a statistic that are free to vary. Estimates of statistical parameters can be based upon different amounts of information or data. The number of independent pieces of information that go into the estimate of a parameter is called the degrees of freedom (df). In general, the degrees of freedom of an estimate is equal to the number of independent scores that go into the estimate minus the number of parameters estimated as intermediate steps in the estimation of the parameter itself (which, in sample variance, is one, since the sample mean is the only intermediate step).

P-VALUE:
P value is associated with a test statistic. It is "the probability, if the test statistic really were distributed as it would be under the null hypothesis, of observing a test statistic [as extreme as, or more extreme than] the one actually observed."The smaller the P value, the more strongly the
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test rejects the null hypothesis, that is, the hypothesis being tested.A p-value of .05 or less rejects the null hypothesis "at the 5% level" that is, the statistical assumptions used imply that only 5% of the time would the supposed statistical process produce a finding this extreme if the null hypothesis were true.

WHAT IS HYPOTHESIS?
Hypothesis testing is a common practice in science that involves conducting tests and experiments to see if a proposed explanation for an observed phenomenon works in practice. A hypothesis is a tentative explanation for some kind of observed phenomenon, and is an important part of the scientific method. The scientific method is a set of steps that is commonly employed by those in scientific fields to give scientific explanations for various phenomena.

Null hypothesis:
A type of hypothesis used in statistics that proposes that no statistical significance exists in a set of given observations. The null hypothesis attempts to show that no variation exists between variables, or that a single variable is no different than zero. It is presumed to be true until statistical evidence nullifies it for an alternative hypothesis.

Alternative hypothesis:
Alternative hypothesis is the "hypothesis that the restriction or set of restrictions to be tested does NOT hold." Often denoted H1. Synonym for 'maintained hypothesis. In hypothesis testing, the null hypothesis and an alternative hypothesis are put forward. If the data are sufficiently strong to reject the null hypothesis, then the null hypothesis is rejected in favor of an alternative hypothesis. For instance, if the null hypothesis were that 1= 2 then the alternative hypothesis (for a two-tailed test)would be 1 2.

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4. HYPOTHESIS
PRODUCTION VALUE OF H.C.V.
H0 : = 0 (No influence of production of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India) H1 : <> 0 (influence of production of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India)
1 1

EXPORT VALUE OF H.C.V.

H0 : = 0 (No influence of exports of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India) H1 : <> 0 (influence of exports of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India)
1 1

DOMESTIC CONSUMPTION OF H.C.V.

H0 : = 0 (No influence of Domestic Consumption of L.C.V. on Sales Value in India) H1 : <> 0 (Influence of Domestic Consumption of Light Commercial vehicles on Sales Value of Light Commercial vehicles in India)
1 1

IMPORT VALUE OF M.H.C.V.

H0 : = 0 (No influence of imports of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India) H1 : <> 0 (influence of imports of medium and heavy commercial vehicles on sales of medium and heavy commercial vehicles in India)
1 1

DOMESTIC CONSUMPTION OF M.H.C.V.

H0 : = 0 (No influence of Domestic Consumption of M.H.C.V. on Sales Value of in India) H1 : <> 0 (Influence of Domestic Consumption of M.H.C.V. on Sales Value in India)
1 1

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MARKET SIZE OF M.H.C.V.

H0 : = 0 (No influence of Market Size of M.H.C.V. on Sales Value in India) H1 : <> 0 (Influence of Market Size of M.H.C.V. on Sales Value of in India)
1 1

PETROLEUM PRICES ON SALES OF M.H.C.V.

H0 : = 0 (No influence of petroleum prices of M.H.C.V. on Sales Value in India) H1 : <> 0 (Influence of petroleum prices of M.H.C.V. on Sales Value of in India)
1 1

PCY ON SALES OF M.H.C.V.

H0 : = 0 (No influence of Market Size of M.H.C.V. on Sales Value in India) H1 : <> 0 (Influence of Market Size of M.H.C.V. on Sales Value of in India)
1 1

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5. Data Analysis
Table-1
Shows the yearly sales value data of Light commercial vehicles in India and depicts the rise in the sales value of Light Commercial vehicles in India from 2448.4 crores to 18772.1 crores through the years 2001 to 2011. It shows a constant growth in the sales value of Light Commercial vehicles in India.

Table-2
Shows the yearly exports value data of Light commercial vehicles in India and depicts the rise in the exports value of Light commercial vehicles in India from 227.6 crores to 828.2 crores through the years 2001 to 2011.

Table-3
Shows the yearly imports value data of Light commercial vehicles in India and through the years 2003 to 2011.

Table-4
Shows the yearly domestic consumption data of Light commercial vehicles in India and depicts the rise in the domestic consumption of Light commercial vehicles in India from 2220.8 crores to 17944.4 crores through the years 2001 to 2011. It shows a constant growth in the domestic consumption of Light commercial vehicles in India.

Table-5
Shows the yearly Market Size data of Light commercial vehicles in India and depicts the rise in the Market Size of Light commercial vehicles in India from 2448.4crores to 18772.6 crores through the years 2001 to 2011. It shows a constant growth in the market size of Light commercial vehicles in India.

Table-6
Shows the yearly sales value data of Medium and Heavy commercial vehicles in India and depicts the rise in the sales value of Medium and Heavy commercial vehicles in India from 5596.5 crores to 38719.9 crores through the years 2001 to 2011. It shows a constant growth in the sales value of Medium and Heavy Commercial vehicles in India.

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Table-7
Shows the yearly exports value data of Medium and Heavy commercial vehicles in India and depicts the rise in the exports value of Medium and Heavy commercial vehicles in India from 382.8 crores to 1838.5 crores through the years 2001 to 2011.

Table-8
Shows the yearly imports value data of Medium and Heavy commercial vehicles in India and the import value of Medium and Heavy commercial vehicles in India from 38.1 crores to 315.5 crores through the years 2001 to 2011.

Table-9
Shows the yearly domestic consumption data of Medium and Heavy commercial vehicles in India and depicts the rise in the domestic consumption of Medium and Heavy commercial vehicles in India from 5251.8 crores to 37196.9 crores through the years 2001 to 2011. It shows a constant growth in the domestic consumption of Medium and Heavy commercial vehicles in India. Table-10 Shows the yearly Market Size data of Medium and Heavy commercial vehicles in India and depicts the rise in the Market Size of Medium and Heavy commercial vehicles in India from 5634.6crores to 39035.3 crores through the years 2001 to 2011. It shows a constant growth in the market size of Medium and Heavy commercial vehicles in India.

Table-11
Shows the yearly Sales(in Rs. crores) and Exports Value(in Rs. crores) data of Light Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.775172 which shows there is a medium correlation between the Sales of Light Commercial vehicles in India and the Exports Value of Light Commercial vehicles in India.

Table-12
Shows the yearly Sales(in Rs. crores) and Imports Value(in Rs. crores) data of Light Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.306847 which shows there is a weak correlation between the Sales of Light Commercial vehicles in India and the Imports Value of Light Commercial vehicles in India.

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Table-13
Shows the yearly Sales(in Rs. crores) and Domestic Consumption (in Rs. crores) data of Light Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.999590308 which shows there is a very high and very strong correlation between the Sales of Light Commercial vehicles in India and the Domestic Consumption Value of Light Commercial vehicles in India.

Table-14
Shows the yearly Sales(in Rs. crores) and Market Size(in Rs. crores) data of Light Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.999999952 which shows there is a very high and very strong correlation between the Sales of Light Commercial vehicles in India and the Domestic Consumption Value of Light Commercial vehicles in India.

Table-15
Shows the yearly Sales(in Rs. crores) and Exports Value(in Rs. crores) data of Medium and Heavy Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.864926 which shows there is a strong correlation between the Sales of Medium and Heavy Commercial vehicles in India and the Exports Value of Medium and Heavy Commercial vehicles in India.

Table-16
Shows the yearly Sales(in Rs. crores) and Imports Value(in Rs. crores) data of Medium and Heavy Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.630585 which shows there is a medium correlation between the Sales of Medium and Heavy Commercial vehicles in India and the Imports Value of Medium and Heavy Commercial vehicles in India.

Table-17
Shows the yearly Sales(in Rs. crores) and Domestic Consumption(in Rs. crores) data of Medium and Heavy Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.999702 which shows there is a very strong correlation between the Sales of Medium and Heavy Commercial vehicles in India and the Domestic Consumption of Medium and Heavy Commercial vehicles in India.

Table-18
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Shows the yearly Sales(in Rs. crores) and Market Size Value(in Rs. crores) data of Medium and Heavy Commercial vehicles in India along with their correlation coefficient. The correlation coefficient is 0.999949 which shows there is a very strong correlation between the Sales of Medium and Heavy Commercial vehicles in India and the Market Size Value of Medium and Heavy Commercial vehicles in India.

Table-19
The regression equation to show the influence of Exports value of Light Commercial vehicles on Sales Value of Light Commercial vehicles in India is given by: Y= + X Y= 1225.358628+17.75729855 X Here y is the dependent variable which is Sales, and x is the independent variable which is Exports Value. The R value is given by 0.600891316 The R value is given by 0.600891316 means that the dependency of Sales Value on Export value is of 60.08%. This means that 60.08% of the variation is explained and 39.92% remains unexplained. The computed P-value at 95% confidence level is 0.005067084 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Exports value of Light Commercial vehicles on Sales of Light Commercial vehicles in India.
2 2

Table-20
The regression equation to show the influence of Imports value of Light Commercial vehicles on Sales Value of Light Commercial vehicles in India is given by: Y= + X Y= 7532.878799+832.7018337 X Here y is the dependent variable which is Sales, and x is the independent variable which is Imports Value. The R value is given by 0.094155241 The R value is given by 0.094155241 means that the dependency of Sales Value on Imports value is of 09.41%. This means that 09.41% of the variation is explained and 90.59%
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2 2

remains unexplained. The computed P-value at 95% confidence level is 0.421888634 which is more than 0.05. This is the confidence with which the null hypothesis is accepted and the alternate hypothesis is rejected. This regression equation shows that there is influence of Imports value of Light Commercial vehicles on Sales of Light Commercial vehicles in India.

Table-21
The regression equation to show the influence of Domestic Consumption of Light Commercial vehicles on Sales Value of Light Commercial vehicles in India is given by: Y= + X Y= 117.0122287+1.034000252 X Here y is the dependent variable which is Sales, and x is the independent variable which is Domestic Consumption. The R value is given by 0.999180785 The R value is given by 0.999180785 means that the dependency of Sales Value on Domestic Consumption is of 99.91%. This means that 99.91% of the variation is explained and 0.09% remains unexplained. The computed P-value at 95% confidence level is 3.33593E-15 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Domestic Consumption of Light Commercial vehicles on Sales of Light Commercial vehicles in India.
2 2

Table-22
The regression equation to show the influence of Market Size of Light Commercial vehicles on Sales Value of Light Commercial vehicles in India is given by: Y= + X Y= 0.199548945+0.999831835X Here y is the dependent variable which is Sales, and x is the independent variable which is Market Size. The R value is given by 0.999999905 The R value is given by 0.999999905 means that the dependency of Sales Value on Market Size is of 99.99%. This means that 99.99% of the variation is explained and 0.01% remains
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2 2

unexplained. The computed P-value at 95% confidence level is 6.50609E-33 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Market Size of Light Commercial vehicles on Sales of Light Commercial vehicles in India.

Table-23
The regression equation to show the influence of Exports value of Medium and Heavy Commercial vehicles on Sales Value of Medium and Heavy Commercial vehicles in India is given by: Y= + X Y= 2846.500004+16.27336343X Here y is the dependent variable which is Sales, and x is the independent variable which is Exports Value. The R value is given by 0.748096224 The R value is given by 0.748096224 means that the dependency of Sales Value on Export value is of 74.80%. This means that 74.80% of the variation is explained and 25.20% remains unexplained. The computed P-value at 95% confidence level is 0.000587238 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Exports value of Medium and Heavy Commercial vehicles on Sales of Medium and Heavy Commercial vehicles in India.
2 2

Table-24
The regression equation to show the influence of Imports value of Medium and Heavy Commercial vehicles on Sales Value of Medium and Heavy Commercial vehicles in India is given by: Y= + X Y= 10440.11344+48.28399893X Here y is the dependent variable which is Sales, and x is the independent variable which is Imports Value. The R value is given by 0.397637058
2

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The R value is given by 0.397637058 means that the dependency of Sales Value on Imports value is of 39.76%. This means that 39.76% of the variation is explained and 60.24% remains unexplained. The computed P-value at 95% confidence level is 0.037521304 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Imports value of Medium and Heavy Commercial vehicles on Sales of Medium and Heavy Commercial vehicles in India.

Table-25
The regression equation to show the influence of Domestic Consumption of Medium and Heavy Commercial vehicles on Sales Value of Medium and Heavy Commercial vehicles in India is given by: Y= + X Y= 109.5482334+1.038602155X Here y is the dependent variable which is Sales, and x is the independent variable which is Domestic Consumption. The R value is given by 0.9994049 The R value is given by 0.9994049 means that the dependency of Sales Value on Domestic Consumption is of 99.94%. This means that 99.94% of the variation is explained and 0.06% remains unexplained. The computed P-value at 95% confidence level is 7.91662E-16 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Domestic Consumption of Medium and Heavy Commercial vehicles on Sales of Medium and Heavy Commercial vehicles in India.
2 2

Table-26
The regression equation to show the influence of Market Size of Medium and Heavy Commercial vehicles on Sales Value of Medium and Heavy Commercial vehicles in India is given by: Y= + X Y= 6.408653889+0.991738818X

Here y is the dependent variable which is Sales, and x is the independent variable which is Market Size.
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The R value is given by 0.999898944 The R value is given by 0.999898944 means that the dependency of Sales Value on Market Size is of 99.98%. This means that 99.98% of the variation is explained and 0.02% remains unexplained. The computed P-value at 95% confidence level is 2.71226E-19 which is less than 0.05. This is the confidence with which the null hypothesis is rejected and the alternate hypothesis is accepted. This regression equation shows that there is influence of Market Size of Medium and Heavy Commercial vehicles on Sales of Medium and Heavy Commercial vehicles in India.
2

Table-27
Shows the yearly data of Petroleum pricies in India and depicts the rise in the Petroleum prices in India through the years 2000 to 2010. It shows a constant growth in the petroleum prices in India.

Table-28
Shows the yearly data of per capita Income in India and depicts the rise in the Per capita income in India through the years 2000 to 2010. It shows a constant growth in the per capita income in India.

Table-29
The regression equation to show the influence of Petroleum Prices on Sales Value of Medium and Heavy Commercial vehicles in India is given by: Y= + X Y= 14763.66+ 0.971X Here y is the dependent variable which is Sales, and x is the independent variable which is Petroleum Prices. The R value is given by 0.0236511967679632 The R value is given by 0.0236511967679632 means that the dependency of Sales Value on Petroleum prices is of 2.37%. This means that 2.367% of the variation is explained and 0.06% remains unexplained. The computed P-value at 95% confidence level is 0.651651968116609 which is more than 0.05. This is the confidence with which the null hypothesis is accepted and the alternate hypothesis is rejected. This regression equation shows that there is no influence of Petroleum Prices on Sales of Medium and Heavy Commercial vehicles in India.
2 2

6. RESULTS
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6.1 FINDINGS This dissertation aims to find out the regression analysis and correlation of sales, production, consumption, export, and import and market size. This study has tried to identify various factors that cause fluctuations in the automobile industry. The different findings which have been established in this research paper have been summed up as following: India is the 4 largest car maker in India, along with being the largest 2-wheeler and tractor manufacturer in the world. In the heavy commercial vehicles segment, Tata Motors is the most important player in India. With a range of HCVs from Tata LPT 1613, Tata Se 1613, Tata LPT 2213, Tata LPT 2516 TC, Tata Sk 1613 , the company has many options and variants for the customers. Tata Motors has a technical tieup with Volvo, one of the globally acclaimed commercial automobile manufacturers from Russia and has launched Volvo FH12-420 and Volvo FH12-340 in the country. Overall auto sales continued its uptrend, growing 24.33 per cent over August last year -- the highest for the current financial year. According to the data, 1,008,702 units were sold last month. In July, vehicle sales grew 20.76 per cent. The sales growth in the M&HCV segment does not surprise us. Sustained GDP growth over the last few months, timely payment of vehicle EMIs by large truckers making them eligible for new vehicle financing, elements of the government's stimulus package like the 50 per cent depreciation rates on new truck purchases this year and the low base effect of last year have all contributed to positive sales in this segment last month- said S Ramnath, vice- president (research) of IDFC Sales of buses dipped by 7 per cent, following a trend of the past few months. Industry executives said the government's procurement of around 15,000 buses under an urban renewal scheme has not been sufficient to revive this segment. The overall commercial vehicle market grew 18.48 per cent over August last year, driven mainly by a 30 per cent growth in light commercial vehicles. 6.2 RECOMMENDATIONS India has high potential for attracting Research and Development. It allows a weighted tax deduction of up to 200% for in-house R&D activities in the country. The Indian Automobile Industry must aim to build its basic infrastructure in order to attract foreign investments as India has a very high potential of being the R&D hub of the world. 0.4 million engineers graduate in India every year and the cost of engineering talent in India is 45 percent lower than in the USA.
th

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Infrastructure development can make India a manufacturing hub for companies exporting to other Asian countries due to its proximity to the Asian markets. The Indian automobile industry must use Indias cost advantage in order to produce vehicles which are more cost effective than any other country in the world. India has a large labour force with a high availability of unskilled and semi skilled labour. In order to spur further growth, the automobile industry needs to be brought under the purview of existing incentive structure (which exists for other sectors of the economy or which are available in some of the competing countries). Continued investment in infrastructure is essential. Infrastructure should keep pace with growth in trade in the automotive industry. In order to match up with global competition, the automobile industry should endeavor to explore new markets. Competition in this industry is high and is increasing. Automotive industry is a volume driven industry and certain critical mass is a pre-requisite for attracting the much needed investment in research and development and new product design and development. Research and development investment is needed for innovations which is the lifeline for achieving and retaining competitiveness in the industry. In order to further improve the automobiles in the Indian domestic market, the industry should be provided with world class facilities of automotive testing and certification and to ensure a healthy competition among manufacturers at a level playing field. Continued investment in infrastructure is essential. Infrastructure should keep pace with growth in trade in the automotive industry. To bring down the cost of power and fuel, which accounts for 6% of the manufacturing costs in the auto sector, captive power generation should be encouraged to enable the industry to access reliable, quality and cost-effective power.

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7.CONCLUSION
The face of the Indian automobile market has changed tremendously since the turn of the millennium and will change even further since Nano. De-licensing in 1991 has put the Indian automobile industry on a new growth track, attracting foreign auto giants to set up their production facilities in the country to take advantage of various benefits it offers. The industry has progressively witnessed the formation of global alliances seeking the benefits of scale, market access and technology which is strengthening the evolution of the Industry in our country. IT plays an important role in reducing the cost of developing a vehicle, and India is emerging as a research and development (R&D) hub for the auto industry. Amid the economic crisis, the Indian auto industry managed to stay positive. Even as global auto majors went into reverse gear in 2009, the Indian industry largely bucked the trend, launching new models for the domestic market and registering significant growth in exports. With the Nano, Tata has challenge the global auto industry and created an absolutely new segment with this car. Low cost, design innovation and economies of scale are now becoming the hallmark of the Indian automobile industry. Investment is leading to the employment growth in the sector. With the emergence of new projects and introduction of technological advancements, the focus is more on the skilled and experienced human resource. The companies are looking for skilled and hard working people who can give their best to the organization. The engineers in the automotive or electrical or mechanical field are in demand. Some of the firms going for automation, i.e. planning for CAD (Computer Aided Designs) systems, are also recruiting people with IT specializations. The Indian automotive industry has flourished like never before in the recent years. This extraordinary growth that the Indian automotive industry has witnessed is a result of a two major factors namely, the improvement in the living standards of the middle class, and an increase in their disposable incomes. Moreover, the liberalization steps, such as, relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies, initiated by the Government of India, have played an equally important role in bringing the Indian Automotive industry to great heights. It is estimated that the sale of passenger cars have tripled compared to their sale in the last five years. Thus, the sale of cars has reached a figure of 1 million users and is expected to increase further. Its also to be noted that the demand for luxurious models, SUVs, and mini-cars for family owners, have shot up, largely due to increase in the consumers buying capacity. The increased demand for Indian automobiles has resulted in a large number of multinational auto companies, especially from Japan, U. S. A., and Europe, entering the Indian
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market and working in collaboration with the Indian firms. Also, the institutionalization of automobile finance has further paved the way to sustain a long-term high growth for the industry. The basic objective of this market research report "Indian Automobile Industry--Recent Trends" is to estimate the demand for automobiles from 2005 till 2012. The increasing role of auto finance is also scrutinized by proving a series of surveys conducted across the country covering all categories of private and commercial vehicles finance. The report also examines the region-wise demand and growth trends for the selected vehicles, and how they influenced Indias GDP growth. The Indian automobile industry is predicted to grow at a compounded rate annually and become the largest manufacturer of automobiles in the world by 2050 and gain a very high position in the world market by 2016 according to the data provided by the Reserve Bank of India(RBI). Indias vast and available pool of low cost skilled and educated manpower, proven productdevelopment capabilities, and geographic advantage due to its proximity to emerging markets present significant growth opportunities in the country.

8.LIMITATIONS
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Only secondary data has been used for the purpose of research. Lack of availability of data on certain significant factors like government allocation of funds etc limited the scope of research. Only limited number of variables has been used in the research. Time constraints facilitated only limited area of study. Lack of knowledge of advanced statistical tools did not facilitate more thorough research and analysis.
Data on various aspects of production of vehicles in India such as cost of labour, cost of setting up a factory, cost of machinery, data pertaining to availability of raw materials are unavailable so it had to be excluded from the research.

Scope of Indian Automobile Sector

The Indian automobile industry is going through a phase of rapid change and high growth. With new projects coming up on a regular basis, the industry is undergoing technological change. The major players are expanding their plants and focusing on mass customization, mass production, etc. INVESTMENT IN AUTO SECTOR Nearly every automobile company is investing at a higher rate than ever before to achieve a high growth trajectory. The overall investment in the sector has been increasing quite rapidly. It is expected that by the end of 2010 Indian automobile sector will be investing a huge amount as Rs. 30,000 crores. For example, Maruti Udyog has plans of investing Rs. 6,500 crores; the Tata Motors is coming up with more investment of Rs. 2,000 crores in its compact car project. Not only the Indian companies but also foreign players like Hyundai are coming up with the investment of more than Rs. 3,800 crores in India. GROWTH IN THE SECTOR At present the industry is enjoying a growth rate of 14-17% per annum, with domestic sales growth at 12.8%. The growth rate is predicted to double by 2015. As it is seen, the total sales of passenger vehicles - cars, utility vehicles and multi-utility vehicles - in the year 2005 reached the mark of 1.06 million. The current growth rate indicates that by 2012 India will overtake Germany and Japan in sales volumes. Financing schemes have become an important factor in the growth of automobile sales. More and more financial schemes are coming up with easy installment plans to lure the customers. Apart from domestic production, the industry is consistently focusing on the automobile exports. The auto component segment is contributing a lot in the export arena. The liberalized policies of the government are now making the companies go for more and more exports.
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The automobile exports are increasing year by year. According to the Society of Indian Automobile Manufactures (SIAM) automobile exports in the five years are as follows:

Export trend for five years NEW LAUNCHES The Indian automobile sector is experiencing changes in every arena. Changes in the looks of the vehicles are taking place; the vehicles are being made more user-friendly. Each and every firm is competing to give the customers more customized vehicles with respect to speed, mileage, and maintenance. At present there are many new models entering the Indian market. To name a few, Suzuki Heat 125 and Suzuki Zeus 125X are the two bikes in the motorcycle segment; Kinetic Blaze and Honda DIO in the scooter segment; Maruti's Zen Estillo in the car segment, so on and so forth. EMPLOYMENT IN THE SECTOR Investment is leading to the employment growth in the sector. With the emergence of new projects and introduction of technological advancements, the focus is more on the skilled and experienced human resource. The companies are looking for skilled and hard working people who can give their best to the organization.

9. ANNEXURE
Table-1 SALES OF LIGHT COMMERCIAL VEHICLES
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YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

SALES(in Rs.Crores) 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1

Table-2 EXPORT OF LIGHT COMMERCIAL VEHICLES

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 EXPORTS(in Rs.Crores) 277.6 174.4 71.4 141.2 428.6 569.5 571.4 436.1 381.9 307.1 828.2

Table-3 IMPORT OF LIGHT COMMERCIAL VEHICLES

YEAR
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IMPORTS(in Rs.Crores)

Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

0.3 0.5 1 1.3 2.1 5.3 1.4 4.5 0.4

Table-4 DOMESTIC
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

CONSUMPTION OF LIGHT COMMERCIAL VEHICLES

DOMESTIC CONSUMPTION(in Rs.Crores) 2220.8 1869.6 2991.4 4061.8 5006.7 6507 8760.9 9772.2 9535.2 13487.2 17944.4

Table-5 MARKET SIZE OF LIGHT COMMERCIAL VEHICLES

YEAR Dec,2001
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MARKET SIZE(in Rs.Crores) 2448.4

Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

2004 3062.6 4203 5435.3 7076.5 9332.3 10208.3 9917.1 13794.3 18772.6

Table-6 SALES OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES(in Rs.Crores) 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9

Table-7 EXPORTS OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

YEAR Dec,2001 Dec,2002
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EXPORTS(in Rs.Crores) 382.8 255.9

Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

323.8 494.4 849.1 1040.3 1117.6 1365 1651.9 911.5 1838.5

Table-8 IMPORTS OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 IMPORTS(in Rs.Crores) 38.1 57.6 71.4 108.3 37.5 92 74.4 191.4 400.9 331.4 315.5

Table-9 DOMESTIC
YEAR Dec,2001
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CONSUMPTION OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

DOMESTIC CONSUMPTION(in Rs.Crores) 5251.8

Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

6157.7 7991.4 11335.2 14622.2 16237.1 23700.6 25235.2 17044.2 24532.4 37196.9

Table-10 MARKET SIZE OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

MARKET SIZE(in Rs. Crores) 5634.6 6413.6 8315.2 11829.5 15471.3 17277.4 24818.2 26600.2 18697.1 25443.8 39035.3

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

Table-11 CORRELATION BETWEEN SALES VALUE AND EXPORTS FOR L.CV.

YEAR Dec,2001
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SALES VALUE IN CRORES 2448.4

EXPORTS IN CRORES 277.6

Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 0.775172 Source Authors Calculations Column 2

2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1

174.4 71.4 141.2 428.6 569.5 571.4 436.1 381.9 307.1 828.2

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Table-12 CORRELATION BETWEEN SALES VALUE AND IMPORTS FOR L.CV.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 Column 2 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 IMPORTS IN CRORES 0.3 0.5 1 1.3 2.1 5.3 1.4 4.5 0.4

0.306847

Source - Authors Calculations

Table-13 CORRELATION BETWEEN SALES VALUE AND DOMESTIC CONSUMPTION FOR L.CV.
SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 DOMESTIC CONSUMPTION IN CRORES 2220.8 1869.6 2991.4 4061.8 5006.7 6507 8760.9 9772.2 9535.2 13487.2 17944.4

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1

Column 2

Column1 1 Column2 0.999590308 Source - Authors Calculations

Table-14 CORRELATION BETWEEN SALES VALUE AND MARKET SIZE FOR L.CV.
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column 2 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 MARKET SIZE IN CRORES 2448.4 2004 3062.6 4203 5435.3 7076.5 9332.3 10208.3 9917.1 13794.3 18772.6

Column1 1 Column2 0.9999999 Source - Authors Calculations

Table-15 CORRELATION BETWEEN SALES VALUE AND EXPORTS FOR M.H.C.V.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 Column 2 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9 EXPORTS IN CRORES 382.8 255.9 323.8 494.4 849.1 1040.3 1117.6 1365 1651.9 911.5 1838.5

0.864926

Source - Authors Calculations

Table-16 CORRELATION BETWEEN SALES VALUE AND IMPORTS FOR M.H.C.V.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 Column 2 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9 IMPORTS IN CRORES 38.1 57.6 71.4 108.3 37.5 92 74.4 191.4 400.9 331.4 315.5

0.630585

Source - Authors Calculations

Table-17 CORRELATION BETWEEN SALES VALUE AND DOMESTIC CONSUMPTION FOR M.H.C.V.
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 Column 2 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9 DOMESTIC CONSUMPTION IN CRORES 5251.8 6157.7 7991.4 11335.2 14622.2 16237.1 23700.6 25235.2 17044.2 24532.4 37196.9

0.999702

Source - Authors Calculations

Table-18 CORRELATION BETWEEN SALES VALUE AND MARKET SIZE FOR M.H.C.V.
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 Source - EIS Colu mn 1 Column1 1 Column2 Column 2 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9 MARKET SIZE IN CRORES 5634.6 6413.6 8315.2 11829.5 15471.3 17277.4 24818.2 26600.2 18697.1 25443.8 39035.3

0.999949

Source - Authors Calculations

Table-19 Regression Analysis of Sales value of LIGHT COMMERCIAL VEHICLES and EXPORT of LIGHT COMMERCIAL Vehicles in India SALES VALUE AND EXPORTS FOR L.CV.
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 EXPORTS IN CRORES 277.6 174.4 71.4 141.2 428.6 569.5 571.4 436.1 381.9 307.1 828.2

Source - EIS
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 11 0.775171798 0.600891316 0.556545907 3476.72632

ANOVA df Regression Residual Total 1 9 10 Coefficient Standard Error 2080.30067 4.823955206 SS 163790334.9 108788633.1 272578968 t Stat 0.570328329 0.005067084 MS 163790334.9 12087625.9 P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% F 13.55024851 Significance F 0.005067084

Intercept X Variable 1

1225.358628 17.75729855

0.589029579 3.681066219

-3480.608423 6.844753753

5931.325679 28.66984335

-3480.608423 6.844753753

5931.32567 28.6698433

Table-20 Regression Analysis of Sales value of LIGHT COMMERCIAL VEHICLES and IMPORTS of LIGHT COMMERCIAL Vehicles in India SALES VALUE AND IMPORTS FOR L.CV.
YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 IMPORTS IN CRORES 0.3 0.5 1 1.3 2.1 5.3 1.4 4.5 0.4

Source - EIS
SUMMARYOUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.30684726 0.094155241 -0.035251153 5029.161693 9

ANOV A Regression Residual Total

df 1 7 8

SS 18402632.81 177047271.3 195449904.1

MS 18402632.81 25292467.33

F 0.72759342

Significance F 0.421888634

Coefficients Intercept X Variable 1 7532.878799 832.7018337

Standard Error 2476.071417 976.2142427

t Stat 3.042270408 0.852990867

P-value

Lower 95% 1677.900281 -1475.678039

Upper 95% 13387.85732 3141.081706

Lower 95.0 1677.900281 -1475.678039

Upper 95.0%

0.0187867 0.421888634

13387.8573

3141.08170

Table-21 Regression Analysis of Sales value of LIGHT COMMERCIAL VEHICLES and DOMESTIC CONSUMPTION of LIGHT COMMERCIAL Vehicles in India

SALES VALUE AND DOMESTIC CONSUMPTION FOR L.CV. YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 DOMESTIC CONSUMPTION IN CRORES 2220.8 1869.6 2991.4 4061.8 5006.7 6507 8760.9 9772.2 9535.2 13487.2 17944.4

Source - EIS
SUMMARY OUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 11 0.999590308 0.999180785 0.999089761 157.5157395

ANOVA df Regression Residual Total 1 9 10 SS 272355667.1 223300.8738 272578968 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept X Variable 1 117.0122287 1.034000252 87.6858124 0.009869074 1.334448818 104.7717629 0.214832998 3.33593E-15 -81.34685948 1.011674856 315.3713169 1.056325648 Lower 95.0% -81.34685948 1.011674856 Upper 95.0% 315.3713169 1.056325648 MS 272355667.1 24811.2082 F 10977.12231 Significance F 3.33593E-15

Table-22

Regression Analysis of Sales value of LIGHT COMMERCIAL VEHICLES and MARKET SIZE of LIGHT COMMERCIAL Vehicles in India

SALES VALUE AND MARKET SIZE FOR L.CV.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES VALUE IN CRORES 2448.4 2004 3062.6 4202.5 5434.3 7075.2 9330.2 10202.9 9915.7 13789.8 18772.1 MARKET SIZE IN CRORES 2448.4 2004 3062.6 4203 5435.3 7076.5 9332.3 10208.3 9917.1 13794.3 18772.6

Source - EIS
SUMMARY OUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 11 0.999999952 0.999999905 0.999999894 1.696578038

ANOVA df Regression Residual Total 1 9 10 SS 272578942.1 25.90539334 272578968 MS 272578942.1 2.878377038 F 94698831.49 Significance F 6.50609E-33

Coefficient Upper95

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower95.

Intercept X Variable 1

--0.199548945 0.999831835

0.954323339 0.000102744

-0.209099932 9731.332462

0.839026376 6.50609E-33

-2.358378317 0.999599413

1.959280427 1.000064257

-2.358378317 1.95928042 0.999599413 1.00006425

Table-23 Regression Analysis of Sales value of MEDIUM AND HEAVY COMMERCIAL VEHICLES and EXPORT of MEDIUM AND HEAVY COMMERCIAL Vehicles in India

SALES VALUE AND EXPORTS FOR M.H.C.V.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9 EXPORTS IN CRORES 382.8 255.9 323.8 494.4 849.1 1040.3 1117.6 1365 1651.9 911.5 1838.5

Source - EIS
SUMMARY OUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.86492556 0.748096224 0.720106915 5362.659799 11

ANOVA df Regression Residual Total 1 9 10 Coefficients Intercept X Variable 1 SS 768644965.7 258823081.1 1027468047 Standard t Stat Error 2846.500004 3344.680238 0.851052956 16.27336343 3.147709732 5.169906001 P-value 0.416807801 0.000587238 Lower 95% -4719.692337 9.152749329 MS 768644965.7 28758120.12 F 26.72792806 Significance F 0.000587238

Upper 95% 10412.69235 23.39397753

Lower 95.0% -4719.692337 9.152749329

Upper 95.0% 10412.69235 23.39397753

Table -24 Regression Analysis of Sales value of MEDIUM AND HEAVY COMMERCIAL VEHICLES and IMPORT of MEDIUM AND HEAVY COMMERCIAL Vehicles in India

SALES VALUE AND IMPORTS M.H.C.V.

YEAR Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

SALES VALUE IN CRORES 5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9

IMPORTS IN CRORES 38.1 57.6 71.4 108.3 37.5 92 74.4 191.4 400.9 331.4 315.5

Source - EIS
SUMMARY OUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.630584695 0.397637058 0.330707842 8292.625074 11

ANOVA df Regression Residual Total 1 9 10 Coefficients Intercept X Variable 1 Coefficients 10440.11344 48.28399893 SS 408559371.3 618908675.6 1027468047 Standard Error Standard Error 3978.571879 19.80923362 t Stat t Stat 2.624085666 2.437449114 P-value P-value 0.027625247 0.037521304 Lower 95% Lower 95% 1439.958585 3.472399297 MS 408559371.3 68767630.62 F 5.941158181 Significance F 0.037521304

Upper 95% 19440.26829 93.09559857

Lower 95.0% 1439.958585 3.472399297

Upper 95.0% 19440.26829 93.09559857

Table-25 Regression Analysis of Sales value of MEDIUM AND HEAVY COMMERCIAL VEHICLES and DOMESTIC CONSUMPTION of MEDIUM AND HEAVY COMMERCIAL Vehicles in India SALES VALUE M.H.C.V.
YEAR

AND

DOMESTIC

CONSUMPTION

FOR

SALES VALUE IN CRORES

DOMESTIC CONSUMPTION IN CRORES

Dec,2001 Dec,2002 Dec,2003 Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

5596.5 6355.9 8243.3 11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9

5251.8 6157.7 7991.4 11335.2 14622.2 16237.1 23700.6 25235.2 17044.2 24532.4 37196.9

Source - EIS
SUMMARY OUTPUT

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.999702406 0.9994049 0.999338778 260.6500578 11

ANOVA df Regression Residual 1 9 SS 1026856601 611446.0736 MS 1026856601 67938.45262 F 15114.51264 Significance F 7.91662E-16

Total

10 Coefficients

1027468047 Standard t Stat Error 109.5482334 165.2668856 0.662856525 1.038602155 0.008447966 122.9410942 P-value 0.524033708 7.91662E-16 Lower 95% -264.3114348 1.019491529

Upper 95% 483.4079016 1.057712782

Lower 95.0% -264.3114348 1.019491529

Upper 95.0% 483.4079016 1.057712782

Intercept X Variable 1

Table-26 Regression Analysis of Sales value of MEDIUM AND HEAVY COMMERCIAL VEHICLES and MARKET SIZE of MEDIUM AND HEAVY COMMERCIAL Vehicles in India SALES VALUE AND MARKET SIZE FOR M.H.C.V.
YEAR Dec,2001 Dec,2002 Dec,2003 SALES VALUE IN CRORES 5596.5 6355.9 8243.3 MARKET SIZE IN CRORES 5634.6 6413.6 8315.2

Dec,2004 Dec,2005 Dec,2006 Dec,2007 Dec,2008 Dec,2009 Dec,2010 Dec,2011

11721.3 15433.8 17185.4 24743.8 26408.8 18296.2 25112.4 38719.9

11829.5 15471.3 17277.4 24818.2 26600.2 18697.1 25443.8 39035.3

Source - EIS
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 11 0.999949471 0.999898944 0.999887715 107.4099407

ANOVA Regression Residual Total df 1 9 10 SS 1027364215 103832.0582 1027468047 MS 1027364215 11536.89536 F 89050.31923 Significance 2.71226E-19

Coefficients Intercept X Variable 1 -6.408653889 0.991738818

Standard Error 68.43302198 0.003323377

t Stat -0.093648559 298.4130011

P-value 0.927440008 2.71226E-19

Lower 95% -161.2149044 0.984220818

Upper 95% 148.3975966 0.999256819

Lower 95.0% -161.2149044 0.984220818

Upper 95.0% 148.3975966 0.999256819

TABLE-27
YEAR Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

Petroleum Price
27.76 28.54 29.23 32.87 36.54 42.98 45.43 42.65 47.78 4354 49.67

TABLE-28

YEAR Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

Per Capita Income 16688 17782 18885 20871 23198 26003 29524 33283 37490 41234 45210

TABLE-29 Regression Analysis of Petroleum prices and SALES of MEDIUM AND HEAVY COMMERCIAL Vehicles in India
SUMMARY OUTPUT Regression Statistics Multiple R 0.153789 R Square 0.023651 Adjusted R Square -0.08483 Standard Error 8560.07 Observations ANOVA df Regression Residual Total 1 9 10 Coefficient s 14763.66 0.971324 SS 15975162 6.59E+08 6.75E+08 Standard Error 2732.037 2.080266 Upper 95% 20943.96 5.677212 3 MS 1597516 2 7327479 7 F 0.218017 Significance F 0.651651968 11

Intercept X Variable 1

t Stat 5.403904 0.466923

P-value 0.000431 0.651652

Lower 95% 8583.367723 -3.734564127

Lower 95.0% 8583.367723 -3.734564127

Upper 95.0% 20943.9597 5.67721225

10. Bibliography

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http://www.surfindia.com/automobile/automobile-industry.html http://business.mapsofindia.com/automobile/ http://www.india-server.com/magazine/indian-automobile-industry-3.html http://ibef.org/download/Automotive_250608.pdf http://www.automobileindia.com/automobile-industry/ http://business.rediff.com/report/2009/sep/09/heavy-commercial-vehicle-saleswitness-upturn.htm http://www.automobileindia.com/commercial-vehicles/heavy-commercialvehicles/manufacturers/ http://www.automobileindustryindia.com/