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project on Automobile Industry (industry analysis)

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INDUSTRY An industry is the manufacturing of a good or service within a category. Although industry is a broad term for any kind of economic production, in economics and urban planning, industry is a synonym for the secondary sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products. Industry means any systematic activity carried on by co-operation between an employer and his workmen for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not any capital has been invested for the purpose of carrying on such activity; or such activity is carried on with a motive to make any gain or profit. CLASSIFICATION OF INDUSTRIES There are four key industrial economic sectors: the primary sector, the secondary sector, the tertiary sector, the quaternary sector, and the quinary sector. The economy is also broadly separated into public sector and private sector, with industry generally categorized as private. Industries are also any business or manufacturing. Primary sector: These industries are involved in the extraction or production of raw materials such as mining, farming, fishing, forestry, coal mining, oil drilling, gold mining etc. Secondary sector: The secondary sector of the economy includes those economic sectors that create a finished, usable product. These industries are involved in the processing of raw materials such as refining, construction, and manufacturing. This sector generally takes the output of the primary sector and manufactures finished goods for export, or sale to domestic consumers. Tertiary sector: These are the service industries, e.g. Transport, dentists, doctors, and so on. The capital required for a manufacturing business (secondary sector) is usually prohibitively large. Quaternary sector: A relatively new type of knowledge industry focusing on technological research, design and development such as computer programming, and biochemistry. It focuses on the latest technology. Examples of Quaternary Industries are designing new computers/writing computer software, Researching new medicines and medical equipment. Quinary sector: The sector comprises of health, education, culture, research, police, fire service, and other government industries not intended to make a profit. The quinary sector also includes domestic activities such as those performed by stay-at-home parents or homemakers. These activities are not measured by monetary amounts but make a considerable contribution to the economy.

INDUSTRY LIFECYCLE The stages of evolution through which an industry progresses as it moves from conception to stabilization and stagnation represent an industry lifecycle. An industry has a beginning, with technological innovation; a period of rapid growth; maturity and consolidation; and finally decline and possibly death. The stages of industry lifecycle include fragmentation, shake-out, maturity and decline. Developmental Stage: The first stage of the industry life cycle is developmental or formative stage. This is the stage when the new industry develops the business. At this stage, the new industry normally arises when an entrepreneur works out how to bring the new products or services into the market. The growth prospects are usually high. Competition is likely to enhance during the development of this stage as other entrepreneurs become acquainted with the market potential. High risks can be seen in this phase given that there is insecurity as to whether or not consumers will generally acknowledge the product, and which firms will continue to exist. Shake-out or growth stage: Shake-out is the second stage at which a new industry emerges. Consumer recognition extends the market as the leaders develop the product more. The risk in this stage reduces because of increased consumer acceptance and customer loyalty starts to come about. Competitors start to realize business opportunities in the emerging industry. Maturity: Maturity is the third stage in the industry lifecycle. This is by and large the most extended stage in the life cycle and can last for a good number of years. The competition in the industry is rather aggressive because there are many competitors and product substitutes. The growth rate slows down and becomes stable at a level that is sustainable over a long period of time, as a result of competition and shrinking profit margins. Some companies may shift some of the production overseas in order to gain competitive advantage. Decline: Decline is the final stage of the industry lifecycle during which a war of slow destruction between businesses may develop and those with heavy bureaucracies may fail. In addition, the demand in the market may be fully satisfied or suppliers may be running out. Some companies may leave the industry if there is no demand for the products or services they provide, or they may develop new products or services that meet the demand in the market. In such cases, this will create a new industry.


The automobile industry in India is the ninth largest in the world with an annual production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. 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. Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax relief by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the canvas of Indian economy. The face of the Indian automobile market has changed tremendously since the turn of the millennium and will change even further since Nano. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories: Cars, two-wheelers and heavy vehicles. Segment Know-how Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda contributes 50% motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. 40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers. Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multi purpose vehicles. In utility vehicles Mahindra holds 42% share. In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer.

INDIAN AUTOMOBILE HISTORY During the 1920s, cars exhibited design refinements such as balloon tires, pressedsteel wheels, and four-wheel brakes. An embryonic automotive industry emerged in India in the 1940s. Following the independence, in 1953, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies. In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the license raj, a number of Indian and multi-national car companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands The automobile industry has changed the way people live and work. The earliest of modern cars was manufactured in the year 1895. Shortly the first appearance of the car followed in India. As the century turned, three cars were imported in Mumbai (India). The dawn of automobile actually goes back to 4000 years when the first wheel was used for transportation in India. In the beginning of 15th century Portuguese arrived in China and the interaction of the two cultures led to a variety of new technologies, including the creation of a wheel that turned under its own power. By 1600s small steam-powered engine models was developed. The actual horseless carriage was introduced in the year 1893. One of the highest-rated early luxury automobiles was the 1909 Rolls-Royce Silver Ghost that featured a quiet 6cylinder engine, lea

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