Click here to load reader

Automobile Industry Strategies

  • View
    221

  • Download
    0

Embed Size (px)

Text of Automobile Industry Strategies

  • 8/9/2019 Automobile Industry Strategies

    1/50

    AUTOMOBILE INDUSTRY

    STRATEGIES

    PRESENTED TO:

    MR. P.P.SINGH(FACULTY, P.C.T.E.)

    PRESENTED BY:HIMANSHU SOOD

    RAJAT GUPTA

    SONU NATH

    SUMIT THAPAR

  • 8/9/2019 Automobile Industry Strategies

    2/50

    RESTRUCTURING

    @

  • 8/9/2019 Automobile Industry Strategies

    3/50

    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

  • 8/9/2019 Automobile Industry Strategies

    4/50

    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

  • 8/9/2019 Automobile Industry Strategies

    5/50

    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

  • 8/9/2019 Automobile Industry Strategies

    6/50

  • 8/9/2019 Automobile Industry Strategies

    7/50

    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

  • 8/9/2019 Automobile Industry Strategies

    8/50

    NO

    PRIORITY

    FOR

    ELECTRIS VEHICALS

  • 8/9/2019 Automobile Industry Strategies

    9/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    10/50

    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

  • 8/9/2019 Automobile Industry Strategies

    11/50

    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

  • 8/9/2019 Automobile Industry Strategies

    12/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    13/50

    TATA

    ACQUISITION

    OF

    JAGUAR & LAND ROVER

  • 8/9/2019 Automobile Industry Strategies

    14/50

    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

  • 8/9/2019 Automobile Industry Strategies

    15/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    16/50

    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

  • 8/9/2019 Automobile Industry Strategies

    17/50

    ZERO EMISSION PROGRAM

    IN

    MADRID

  • 8/9/2019 Automobile Industry Strategies

    18/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    19/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    20/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    21/50

    COST

    REDUCTION

    STRATEGY

  • 8/9/2019 Automobile Industry Strategies

    22/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    23/50

    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.

  • 8/9/2019 Automobile Industry Strategies

    24/50

    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

  • 8/9/2019 Automobile Industry Strategies

    25/50

    BAJAJ AUTO LTD.:

    OVERTAKEN IN THE

    INDIAN SCOOTERMARKET

  • 8/9/2019 Automobile Industry Strategies

    26/50

    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

  • 8/9/2019 Automobile Industry Strategies

    27/50

    o Entered into a technical collaboration with Piaggio for the

    manufacture of scooters

    o started manufacturing Vespa brand scooters at its plant near

    Pune,