INTRODUCTION

The Indian Automotive Industry Comprising of the automotive and the auto
component sectors has recorded considerable growth following the de-licensing
and opening up of the sector to FDI in 1993. The unbundling of this industry from
restrictive environment has, on the one hand, helped in restructuring, absorbing
new technologies align itself to the global development and realize its potential
with significant increase in industry‘s contribution to overall industrial growth in
the country. The investment in the industry of nearly Rs. 50,000 crores in 2004-05
is slated to go up Rs.85, 000 crores by 2007-08.

MODERN GLOBAL AUTOMOBILE INDUSTRY - OVERVIEW

Today, the modern global automotive industry encompasses the principal

manufactures, General Motors, Ford, Toyota, Honda, Volkswagen and Daimler
Chrysler; all of which operate in a global competitive marketplace. It is suggested
that the globalization of the automotive industry has greatly accelerated during the
last half of the 1990’s due to the construction of important overseas facilities and
establishment of mergers between giant multinational automakers.

Industry specialists indicate that the origins in the expansion of foreign

commerce in the automobile industry data back to the technology transfer of Ford
Motor Company’s mass-production model from the U.S to Western Europe and
Japan following both World Wars I and II. The advancements in industrialization
led to significant increases in the growth and production of Japanese and German
markets, in particular. The second important trend in industrial globalization was
the export of fuel, efficient cars from Japan to the U.S as a result of the oil
embargo from 1973 to 1974.

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 Increasing global trade has enabled the growth in world commercial
distribution system, which has also expanded global competition amongst the
automobile manufactures. Japanese automakers in particular, have instituted
innovative production methods by modifying the U.S manufacturing model, as
well as adapting and utilizing technology to enhance production and increase
product competition.

There are a number of trends that can be identified by examining the global
automotive market which can be divided into the following factors.

Global Market Dynamics – The world’s largest automobile manufactures

continue to invest into production facilities in emerging markets in order to reduce
production costs. These emerging markets include Latin America, China, Malaysia
and other markets in Southeast Asia.

Establishment of Global Alliances – U.S automakers “The Big Three”

(GM, Ford, Chrysler) have merged with and in some case established commercial
strategic partnerships with other European and Japanese automobile manufacturers.
Some merges such as the Chrysler Daimler-Benz merger was initiated by the
European automaker in a strategy to strengthen its position in the U.S market.
Overall, there has been a trend by the world automakers to expand in overseas
markets.

Industry Consolidation - Increasing global competition amongst the global

manufactures and positioning within foreign markets has divided the world’s
automakers into three tiers, the first tier being GM, Ford, Toyota, Honda and
Volkswagen and the two remaining tier manufacturers attempting to consolidate or
merge with other lower tier automakers to compete with the first tier companies.

One Tier Company Mergers – Volkswagen-Lamborgini, BMW-Rolls Royce.

Two Tier Company Mergers – Chrysler-Mercedes-Benz, Renault-Nissan-Fiat.
Three Tier Company Mergers – Mazda-Mitsubishi-Kia-Volvo.

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INDIAN AUTOMOBILE INDUSTRY

Over a period of more than two decades the Indian Automobile industry has
been driving its own growth through phases. The Entry of Suzuki Corporation in
Indian passenger car manufacturing is often pointed as the first sign of India
turning to a market economy. Since then the automobile sector witnessed rapid
growth year after year.

With comparatively higher rate of economic growth rate index against that
of great global powers. India has become a hub of domestic and exports business.
The automobile sector has been contributing its share to the shining economic
performance of India in the recent years.

With the Indian middle class earning higher per capital income more people
are ready to own private vehicles including cars and two-wheelers. Product
movements and manned services have boosted in the sales of medium and sized
commercial vehicles for passenger and goods transport. Side by side with fresh
vehicle sales growth, the automotive components sector has witnessed big growth.
The domestic auto components consumption has crossed rupees 9000 crores and an
export of one half size of this figure.

OVERVIEW OF AUTOMOBILE INDUSTRY

The Indian automobile industry is going through a technological change

where each 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.

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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.

GROWTH IN THE SECTOR

At present the industry is enjoying a growth rate 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 vehicle – car, utility vehicle and
multi-utility vehicle in the year 2005 reached the market 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 the customers.

Apart from domestic production the industry is consistently focusing on the

automobile exports. The auto component segment is contributing 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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TOP TEN PLAYERS IN INDIAN AUTOMOBILE SECTOR

The domestic players as well as the foreign players dominate the Indian
automobile sector. The key players contributing to the growth of the sector are
discussed below.

➢ Maruti Udyog Limited

➢ Hero Motors Limited
➢ Tata Group
➢ Bajaj Auto Limited
➢ Mahindra Group
➢ Ashok Leyland
➢ Yamaha Motor India
➢ Hyundai Motors India Limited
➢ Toyota Kirloskar Motor Private Limited
➢ Honda Siel Cars India Limited

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 OBJECTIVES OF THE STUDY

The objectives of the study are:

1. To familiarize with procedural routines followed in a manufacturing

sector
2. Getting practical experience regarding the organizational function
3. To learn about the policies and functions of the organization
4. To understand the culture in the organization and its effect on
employees
5. To get industrial exposure and experience
6. To understand the methods in all functional areas

METHODOLOGY

This study was undertaken by undergoing a training program at Ashok

Leyland for about a fortnight. The information was collected by interacting and
interviewing with the concerned personnel of various functional departments.

The methodology used for the study is through direct observation and live
discussion with the managers and the staff members. Secondary data is collected
through Annual Reports, Business Journal and Existing Records, Survey and also
from the website of the company.

SCOPE OF THE STUDY

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 The study is mainly based on the details collected from each department.
The study provides a better understanding at functional level of each department
i.e. Purchase, Material, Production, Marketing, Finance and Human Resource
Management. Each and every activity of the company has been studied very
carefully with the data available. Apart from that I gained knowledge of the
functioning of different departments and their inter relationship with each other.
This study helped me familiarize with the manufacturing and assembling of
commercial vehicles.