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8/9/2019 Automobile Industry Strategies
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AUTOMOBILE INDUSTRY
STRATEGIES
PRESENTED TO:
MR. P.P.SINGH(FACULTY, P.C.T.E.)
PRESENTED BY:HIMANSHU SOOD
RAJAT GUPTA
SONU NATH
SUMIT THAPAR
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RESTRUCTURING
@
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PROBLEMS WITH NISSAN
No shared vision or common long term plan
Lack of a clear profit orientation;
Insufficient focus on customers and too much focus on
chasing competitors Culture that embodied the Japanese style of management
Lack of a sense of urgency
Absence of good product development and marketing,
with little control over finances Lack of cross-functional, cross-border, and intra-
hierarchical lines of work in the company
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IMPLEMENTING THE NRP One of the objectives of the NRP was to reduce the
purchasing costs by 20% by 2002.
Supply better products and services , raise new expectations
from customers, employees, and other stakeholders. In order to reduce purchasing costs, the NRP stated that it
would focus on:
y Centralizing purchasing activity
y
Including services in global purchasing strategyy Decreasing the number of suppliers
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NEW MANAGEMENT
Clear about the objectives that he wanted the company
to achieve
Flexible on giving his teams great freedom in choosing
the best courses of action
Several cross-functional teams with people from
different functional areas, to spearhead the turnaround
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PROFITABLE AT LAST
Targets achieved before time
After the implementation of the NRP, Nissan saw its marketshare slowly increasing with the launch of new products.
Increasing its capacity in the U.S and Restoring its oncedebt-ridden balance sheet.
Achieved a minimum consolidated operating margin of 4.5
percent
Consolidated net automotive debt reduced to less than 700billion yen by the end of FY 2002
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NO
PRIORITY
FOR
ELECTRIS VEHICALS
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New Fiat-Chrysler strategy is based on important
points:y Group consolidation with review of the entire value
chain, to increase efficiency in operations and
administration
y Increase of production volumes of the key technologies
y Exchange and further development of key technologies
y Global market presence and growth of the brands value
and consumers' perception.
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Fiat-Chrysler will limit investments in electric vehicles in2011
Strategy based on integration with Fiat, which includesexchange of key technologies and market developmenttarget
Chrysler had already dedicated resources to thedevelopment of electric vehicles
It gives clear indications of a solid strategy based onpriorities and risks/benefits analysis
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The electric vehicles will be introduced by almost all the
major makers in the next years
The market of electric vehicles is still very uncertain, both
for the necessary technological developments and for the
unclear acceptance from the consumers
Being a new market, new standards, also safety-related
will be defined, and this will require more investments inresearch and development
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The strategy of Fiat-Chrysler, focuses on creating a
solid group that owns important technologies, which
will continue to be used well beyond 2020
There will be risks associated to late research and
development of alternative vehicles; however, theserisks can be managed with the view of future
acquisitions or joint ventures, which will always be
possible supposed that the company can offer financial
solidity and innovative technologies.
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TATA
ACQUISITION
OF
JAGUAR & LAND ROVER
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Ford bought Jaguar for 1.6bn in 1989
Ford have invested about $10bn in Jaguar since it
bought
Ford bought the Land Rover from BMW for 1.7bn in
2000.
JLR - HISTOR
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PRICE OF THE
LUXURY BRANDS Analyst believe anything between $2.5bn to $3bn for jaguar
and Land Rover
Meryll Lynch analysts suggest that Jaguar and Land Rover
may fetch about $1.5bn (735m)
If you look at the financial position, [Jaguar and Land
Rover] are worth some $1bn to $1.5bn, Mr Dorris ananalyst said. Add a control premium, and the final sales
price could come in at about $2.5bn.
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WHAT MAY HAMPERTATAS?
Union leaders of both Jaguar and Land Rover have already
raised concerns about their job security because of the sale
Jaguars sales were down nearly 32 percent for 2006 in theUnited States, the companys largest market
Jaguar lost more than $715 million in 2006 and was expected
to lose $550 million in 2007
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ZERO EMISSION PROGRAM
IN
MADRID
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The Renault-Nissan Alliance is continuing to develop
the plan to promote its future electric vehicles, throughthe signing of an agreement with the Madrid city
council
The agreement has been inked by Alberto Ruiz-Gallardon, City Councilor, Olivier Paturet, Nissan
Europe Zero Emission Business Unit General Manager
and Jean Pierre Laurent, Managing Director and
President of Renault Espaa S.A.
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Both sides will develop a team that will use Renaults
Madrid headquarters as a test point for recharging
systems, make efforts to turn Madrid into one of the
first cities to offer a Renault car sharing EV
mobility system, promote electric mobility, develop acar parts charging infrastructure (through a third party
company), involve local institutions in the process,
present the program to fleet owners and analyze
potential incentives.
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This development will be part of the more than 50agreements signed by the Renault-Nissan
Alliance worldwide in an effort to become the zero
emissions mobility leader.
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COST
REDUCTION
STRATEGY
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Tata Motors was dependent on Ford for a bulk of
supplies of components after it was sold in early 2008
Tata Motors, which was recently sanctioned an
expensive European Investment Bank loan of 340
million at Libor plus 6 per cent, is working towards
making the two brands as cost competitive as possible
in the long run.
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Tata Motors has put in place an aggressive cost reduction
strategy for its luxury brands Jaguar Land Rover (JLR),which it acquired from Ford in 2008, involving a substantial
increase in sourcing vehicle parts from low-cost countries
As part of the plan, a third of JLRs component
requirements will be sourced from countries such as India,
China and eastern Europe within the next 12 months
The company plans to introduce some of its long-term
suppliers to a team of executives from JLR visiting India insearch of partners.
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The low cost of skilled labour and cheaper raw material
costs give these countries a 30 to 40 per cent cost advantageon component prices, which is key to JLRs new drive to
reduce manufacturing costs
Apart from the component sourcing plan, Tata Motors is
also working on reducing costs on every front such as in
areas like pension restructuring, employment costs for new
recruits, a plant closure and improved focus on IT
infrastructure\
The company has already reduced the employee headcount
to 14,000 from 16,000 since the takeover
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BAJAJ AUTO LTD.:
OVERTAKEN IN THE
INDIAN SCOOTERMARKET
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INTRODUCTION TO BAL
o Founded in 1926 by Jamnalal Bajaj
o In 1945, Kamalnayan Bajaj, Jamnalal's son, set up Bachraj
Trading Corporation Ltd. (BTCL) to import and sell two- and
three- wheelers
o Business continued till 1959.
o In 1959, the company secured a license to manufacture two- and
three-wheelers.
o In 1960, BTCL was renamed Bajaj Auto Ltd
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o Entered into a technical collaboration with Piaggio for the
manufacture of scooters
o started manufacturing Vespa brand scooters at its plant near
Pune,