1

A

Project Report

On

Indian Automobile Industry

And

Indian Electronic Industry

Submitted By

Name Roll No.

Miss Meraj Bagwan 02

Miss Supriya Keskar 27

Miss Trupti Khomane 28

Miss Jyoti Shinde 44

Class : MBA I, VIIT, Baramati

Under The Guidance Of

Dr. Rupendra Gaikwad

Subject : Industrial Analysis – Desk Research (215)

2

Indian Automobile Industry

Chapter 1 : Industry Analysis – the Basics

Indian Automobile Industry

History of the Industry

The first car ran on India's roads in 1897. Until the 1930s, cars were imported

directly, but in very small numbers.

An embryonic automotive industry emerged in India in the 1940s. Hindustan was launched in 1942, longtime competitor Premier in 1944. They built GM and Fiat

products respectively Mahindra & Mahindra was established by two brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles. Following the

independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the

automobile industry. In 1953 an import substitution programme was launched, and the import of fully built-up cars began to be impeded.

The Hindustan Ambassador dominated India's automotive market from the 1960s

until the mid-80s. However, the growth was relatively slow in the 1950s and 1960s due to

nationalisation and the license raj which hampered the Indian private sector. Total restrictions for import of vehicles were set and 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 item. In the 1970s price controls were

finally lifted, inserting a competitive element into the automobile market.By the 1980s, the automobile market was still dominated by Hindustan and Premier, who

sold superannuated products in fairly limited numbers.During the eighties, a few competitors began to arrive on the scene.

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Indian market before independence was seen as a market for imported vehicles while assembling of cars manufactured by General Motors and other brands was

the order of the day. Indian automobile industry mainly focused on servicing, dealership, financing and maintenance of vehicles. Later only after a decade from

independence manufacturing started. India's Transportation requirements were met by Indian Railways playing an important role till the 1950's. Since independence

the Indian automobile industry faced several challenges and road blocks like manufacturing capability was restricted by the rule of license and could not be

increased but still it lead to growth and success it has achieved today.

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Nature Of theIndustry

The automotive industry in India is one of the larger markets in the world. It had

previously been one of the fastest growing globally, but is currently experiencing flat or negative growth rates. India's passenger car and commercial vehicle

manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011. According to recent reports, India overtook

Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy,

Canada, Mexico, Russia, Spain, France, Brazil), grew 16 to 18 percent to sell around three million units in the course of 2011 and 2012.In 2009, India emerged

as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of

passenger cars.

As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%),

making the country the second (after China) fastest growing automobile market in the world in that year.According to the Society of Indian Automobile

Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected.

The majority of India's car manufacturing industry is based around three clusters in

the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune

contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%.Chennai, with the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo,

and PSA Peugeot Citroën is about to begin their operations by 2014. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in

Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the

western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars,

Fiat and Force Motors having assembly plants in the area. Nashik has a major base of Mahindra and Mahindra with a SUV assembly unit and an Engine assembly

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unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing

facility of General Motors in Halol and further planned for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up

in Gujarat.[13] Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the

country.

In 2011, there were 3,695 factories producing automotive parts in all of India.The average firm made US$6 million in annual revenue with profits close to US$400

thousand.

Size of the Industry 2.6 Million Units

Geographical

distribution

Jamshedpur, Pune, Lucknow, Gurgoan,

Delhi, Mumbai, Bangalore, etc

Output per annum Rs 2,000 crore per annum

Percentage in world

market 6-8%

Market

Capitalization 5% of the share

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Market capitalization

Employment opportunities

India today is well known as a potential emerging automobile market and jobs in the automobile industry are rising. Several foreign investments are pouring into Indian automobile industry. It

has become a major three-wheeler market and two-wheeler manufacturer in the world. India is also the second largest manufacturer of tractors. Candidates with bachelor's degree in

mechanical, electrical or automobile engineering are eligible to get good job opportunities in

automobile companies.

For the candidates with diploma courses and ITI courses there are many opportunities in this industry. Automobile companies even require IT specializations. While technical education is

offered by plenty of engineering and polytechnic colleges in India,. the eligible candidates are selected by the companies. The considerable wide scope of Automobile sector, it is not that surprising that more and more candidates are dreaming to develop a career in Automobile

Industry. With foreign automobile companies like Volkswagen, Audi, Renault etc coming in and targeting India as a base for manufacturing cars, the scope for a career in Automobile Industry is

rising rapidly.

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Indian Automobile Industry a glance in 2011 - 2012

In March 2012 as compared to March 2011, production grew at a single digit

rate of 6.83%.

In 2011-12, the industry produced 20,366,432 vehicles of which share of

two wheelers, passenger vehicles, three wheelers and commercial vehicles

were 76%, 15%, 4% and 4% respectively.

The growth rate for overall domestic sales for 2011-12 was 12.24 percent

amounting to 17,376,624 vehicles. Passenger Cars grew by 2.19%, Utility

Vehicles grew by 16.47% and Vans by 10.01% during this period.

For the first time in history car sales crossed two million in a financial year.

If we compare sales figures of March 2012 to March 2011, the growth for

two wheelers was 8.27%.

During April to March 2012, the industry exported 2,910,055 automobiles

registering a growth of 25.44%.

In March 2012 compared to March 2011, overall automobile exports

registered a growth of 17.81%

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Players in the Industry

Maruti Udyog Ltd. General Motors India

Ford India Ltd. Eicher Motors

Bajaj Auto Daewoo Motors India

Hero Motors Hindustan Motors

Hyundai Motor India Ltd. Royal Enfield Motors

Telco TVS Motors

Swaraj Mazda Ltd Maruti Suzuki Tata Motors

Mahindra & Mahindra Toyota

Honda Volkswagen , Nissan erc.

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Nature of Competition From an economist’s perspective in the

industry

Following types of competition ins exists in Indian Automobile Industry :

Perfect Competition

Monopolistic Competition

Oligopoly

Monopolistic Competition :

Current Trends in the current Monopolistic Automobile Market :

Considering huge market potential, production of passenger cars is projected to grow at CAGR of 11% between 2010-11 and 2013-2014.

Oligopoly Competition :

Transformation from Oligopoly to Monopolistic Market :

Causes Of Transformation :

Sanjay Gandhiowned Maruti Technical Services Limited , which was liquidatd . After his death , Indira Gandhi Government collaborated with Suzuki Motors , a

Japanese firm , for collaboration- formation of Maruti Udyog Limited and renamed after later Maruti Suzuki in 2007.

New Industrial Policy in july 1991 by Congress Government led by Mr. Narsinha

Rao. It unshackled Indian industrial economy from unnecessary bureaucratic model. It introduced liberalization poliies – Abolishment of License Raj.

April 1993 – Government removed motor cars from list of industries reserved for

compulsory licensing.

Effects Of Transformation :

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New firm including foreign players entered with modern engineering , efficient processes and modern shop-floor layouts.

Indian automobile industry grew at 19.31% per annum in post 1991 era compared to 8.56% during 1985-91

Delicencing of sector attracted many major Global OEMs (G.M., Ford, Honda,

Hyundai etc.) to start assembly in India.

Impact of Oligopoly structure :

Impact on Automobile Industry –

a) Growth very slow because of low demand and low economic status of the

country b) Government restrictions provided no motivation or incentive foe firms to

technological upgradation.

c) Supply was low and there weren’t many competitors.

Impact on Cosumers –

Cosumers did not have many choices; the demand was fairly low as cars were

still a luxury and availability of same models.

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Top 3 Players in the industry with market share :

Maruti Suzuki India Limited ( 37% Market Share)

Hyundai Motors India Limited (14.4% Market Share) Tata Motors(13.1% Market Share)

Bottom 3 players in the industry with market share :

Honda (2.9% Market Share)

Volkswagen (2.4% Market Share) Nissan ( 1.5% Market Share)

Classification of Players :

Leaders :

Maruti Suzuki Hyundai Motors India Limited

Tata Motors

Followers :

Mahindra and Mahindra

General Motors India Private Limited Ford India

Challengers :

Honda

Volkswagen Nissan

Nichers :

Maruti Suzuki India Limited

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Profile of Top 3 Companies

Maruti Suzuki India Limited

Type Public

Traded as

BSE: 532500

NSE: MARUTI BSE SENSEX Constituent

Industry Automotive

Predecessor(s) Maruti Udyog Limited

Founded 1981

Headquarters New Delhi, India[1]

Key people

RC Bhargava[2] (Chairman)

Kenichi Ayukawa[3] (CEO &

MD)

Products Automobiles

Revenue 369.34 billion

(US$5.9 billion) (2012)[4]

Net income

16.81 billion

(US$270 million) (2012)[4]

Employees 6,903 (2011)[5]

Parent Suzuki[6]

Website www.marutisuzuki.com

Maruti Suzuki India Limited (/marut̪i suzuki/), commonly referred to as Maruti

and formerly known as Maruti Udyog Limited, is an automobile manufacturer in India.[7] It is a subsidiary of Japanese automobile and motorcycle manufacturer

Suzuki.[6] As of November 2012, it had a market share of 37% of the Indian passenger car market.[8] Maruti Suzuki manufactures and sells a complete range of

cars from the entry level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen

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and sedans DZire, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara.[9]

The company's headquarters are on Nelson Mandela Road, New Delhi.[1] In February 2012, the company sold its ten millionth vehicle in India. [10]

History

Originally, 18.28% of the company was owned by the Indian government, and

54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of May 2007, the government of India

sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.[11]

Maruti Udyog Limited (MUL) was established in February 1981, though the

actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only

competitors - the Hindustan Ambassador and Premier Padmini - were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other

countries, depending upon export orders. Models similar to those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by

Pak Suzuki Motors in Pakistan.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually.[citation needed] Its manufacturing facilities are located at two

facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzuki’s Gurgaon facility has an installed capacity of 900,000 units per annum. The

Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual

capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually.

About 35% of [8] all cars sold in India are made by Maruti. The company is 54.2%

owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the

Bombay Stock Exchange and National Stock Exchange of India.[citation needed]

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During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the

first car was rolled out on 14 December 1983.

The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global leader

in mini and compact cars for three decades. Suzuki’s strategy is to utilise light-weight, compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly 75,000 people are employed directly by Maruti Suzuki and its

partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.[12] Maruti Suzuki will be

introducing new 800 cc model by Diwali in 2012.The model is supposed to be fuel efficient, and therefore more expensive.[13] With increasing market competition in

the small car segment, a new model along with the upcoming WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its market

share amid the ever increasing competition[14]

Products and services :

1. 800 (1983) (still distributed to some cities like Guwahati) Competes with

Tata Nano, Maruti Alto and Maruti Omni 2. Omni (launched 1984) Competes with Tata Nano, Tata Venture, Maruti 800

and Maruti Eeco 3. Gypsy King (launched 1985) India's first indegenious vehicle and first

compact SAV, competes with Mahindra Thar CRDe, Tata Sumo 4x4 and Force Gurkha

4. WagonR (launched 1999) Competes with Nissan Micra Active, Maruti A-star and Hyundai i10

5. Swift (launched 2005) Created a Maruti 800 rivalling benchmark, competes with Tata Vista, Hyundai i20, Skoda Fabia, Volkswagen Polo and Toyota Etios Liva

6. SX4 (launched 2007) Soon to be replaced by the upcoming sedan codenamed YL1, competes with Ford Fiesta, Hyundai Verna, Honda City,

Skoda Rapid, Volkswagen Vento, Renault Scala and Nissan Sunny 7. Swift DZire (launched 2008) Competes with Mahindra Verito, Toyota

Etios, Ford Classic, Mahindra Verito Vibe, Honda Amaze, Chevrolet Sail, Skoda Fabia and Tata Manza

8. A-star (launched 2008) Competes with Chevrolet Beat, Nissan Micra Active, Ford Figo and Maruti Wagon-R Stingray

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9. Ritz (launched 2009) Competes with Maruti Swift, Tata Vista, Hyundai Grand i10, Honda Brio, Nissan Micra, Renault Pulse and Toyota Etios Liva

10. Eeco (launched 2010) Stripped down Versa with a lowered roof, in competition with Tata Venture, Tata Winger Platinum, and in-house Omni

11. Alto K10 (launched 2010), competes in the economy class with the Tata Indica, Hindustan Motors Ambassador and Chevrolet Spark

12. Maruti Ertiga (launched 2012), seven seater MPV R3 designed and developed in India, in competition with Toyota Innova, Mahindra Xylo,

Nissan Evalia, Ashok Leyland Stile and Tata Sumo Grande.[50] In early 2012, Suzuki Ertiga will be exported first to Indonesia in Completely Knock

Down car.[51] 13. Maruti XA Alpha based compact SUV to compete with the Ford EcoSport,

Mahindra Xylo Quanto, Nissan Terrano & Renault Duster will be launched in the year 2014

14. Maruti Alto 800, launched in 2012, Competes with Tata Nano 15. Maruti Stingray, launched in 2013, Competes with Maruti A-star,

Chevrolet Beat and Chevrolet Sail

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Differenciation Strategies of Maruti Suzuki :

Maruti-Suzuki use differentiated marketing to attract all segments. Others, such as

Hyundai, and Microsoft appeal to two or more segments, but not all segments.

Differenciation strategies of Maruti Suzuki takes different forms :

Brand Name : Maruti Suzuki

Technology : The highly fuel efficient, technologically advanced K series engines

have been very well appreciated by our customers for their performance.

Service : best service and highest number of service centers.

Dealers network : Highest

Quality : value for money

Performance, mileage best match with Indian road conditions, less maintenance

cost, resale price.

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Marketing Mix of Maruti Suzuki :

Product :

There are number of products of Maruti in the market. Some of the models are

given below :

Maruti-800, Zen, Esteem, Omni, Alto, Gypsy,Wagnor, Grand vitara , Ertiga etc.

These products are divided on the basis of product, quality, variety, design,

features etc.

Price :

The price of maruti car is between Rs.187000 to Rs.1500000.Maruti 800 is the

lowest price car of this company. Alto, Wagnar, Omni are also the low price car of

the company.Zen, Esteem are the mid price car of the company.But Grand Vitara

is the high price model of the company.The price of the car are decided according

to its product variety, quality, design etc. Their pricing strategy is to provide an

option to every customer looking for upgradation in his car.

Place :

Maruti Suzuki has their dealers in different regions of the country like ; Pune,

Mumbai, Delhi etc.

2628 number of workshops that provide customers with maintenance support in

1220 cities.

Maruti had built a strong network of 600 outlets spread over 393 towns and cities.

Vendors of Maruti Suzuki :

Maruti Suzuki has 200 vendors.

1) Bimetal Bearings Ltd. , Coimbatore –

They manufactures engine bearings, bushes and thrust washers.

2) Amalgamation Valeo Clutch Ltd. , Mumbai –

Leading manufacturer of cluch assemblies in India for new generation

vehicles.

3) I.P.Repco Ltd. , Chennai –

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Member of Amalgamations group , manufacturing Fiywheel Ring Gears for

engine range of vehicles.

4) Lumax Industries Ltd. –

Biggest manufacturers of Automotive Lights in India.

5) Pricol Ltd., Coimbatore –

Automotive instruments and speed meter cables in India.

6) Fennar India Ltd., Chennai –

Largest manufacturer of Belts and oil seals in India.

Geographical spread Of plants of Maruti Suzuki :

Gurgaon , Manesar, New Delhi, Gujarat etc.

Promotion :

Maruti Suzuki uses following promotional tools:

Advertising –

Television Ads

Print Ads

Radio Ads

Slogan : “Ghar Aa Gaya Hindustan”

Information advertising, alternative advertising options.

BTL- Sponsorships

TV shows- India’s Got Tallent

Place advertising- Bill Boards

Sales Promotion-

Product warranties

Premiums (gifts)

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Trade shows etc.

Maruti and Customer Relationship Management :

Maruti has created a landmark in CRM by launching a website for the customers in

the year 1998.

Maruti is investing a lot of money and efforts in building customer loyalty

programmes.

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Hyundai Motors India Limited

Drive your way

Type Subsidiary

Industry Automotive

Founded 6 May 1996

Headquarters Sriperumbudur, Kanchipuram district, Tamil Nadu, India

Key people Mr. Bo Shin Seo (MD)

Products Automobiles

Parent Hyundai Motor Company

Website www.hyundai.co.in

Hyundai Motor India Limited is a wholly owned subsidiary of the Hyundai Motor Company in India. It is the 2Hyundai Motor India Limited is currently the

second largest auto exporter from India.[69] It is making India the global manufacturing base for small cars.

Hyundai sells several models in India, the most popular being the Santro Xing, i10,

Hyundai EON and the i20. On 3 September 2013, Hyundai launched its much-awaited car, Grand i10 in petrol and diesel variants. Other models include the Getz,

Accent, Elantra, second generation Verna, Santa Fe and the Sonata Transform. Hyundai has two manufacturing plants in India located at Sriperumbudur in the

Indian state of Tamil Nadu. Both plants have a combined annual capacity of 600,000 units. In the year 2007, Hyundai opened its R&D facility in Hyderabad,

employing now nearly 450 engineers from different parts of the country. Hyundai Motor India Engineering (HMIE) gives technical & engineering support in vehicle development and CAD & CAE support to Hyundai's main R&D centre in

Namyang, Korea.

In 2010, Hyundai started its design activities at Hyderabad R&D Centre with Styling, Digital Design & Skin CAD Teams.

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Hyundai Motor India Limited was formed in 6 May 1996 by the Hyundai Motor Company of South Korea. When Hyundai Motor Company entered the Indian

Automobile Market in 1996 the Hyundai brand was almost unknown throughout India. During the entry of Hyundai in 1996, there were only five major automobile

manufacturers in India, i.e. Maruti, Hindustan, Premier, Tata and Mahindra. Daewoo had entered the Indian automobile market with Cielo just three years back

while Ford, Opel and Honda had entered less than a year back.

For more than a decade till Hyundai arrived, Maruti Suzuki had a near monopoly over the passenger cars segment because TELCO and M&M were solely utility

and commercial vehicle manufacturers, while Hindustan and Premier both built outdated and uncompetitive products.

History

HMIL's first car, the Hyundai Santro was launched in 23 September 1998 and was a runaway success. Within a few months of its inception HMIL became the second

largest automobile manufacturer and the largest automobile exporter in India. Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC), South Korea and is the largest passenger car exporter and

the second largest car manufacturer in India. HMIL presently markets 6 models of passenger cars across segments. The A2 segment includes the Santro, i10,eon and

the i20, the A3 segment includes the Accent and the fluidic Verna and the fluidic elantra, the A5 segment includes the Sonata Transform and the SUV segment

includes the Santa Fe.

HMIL’s manufacturing plant near Chennai claims to have the most advanced production, quality and testing capabilities in the country.[citation needed] To cater to

rising demand, HMIL commissioned its second plant in February 2008, which produces an additional 300,000 units per annum, raising HMIL’s total production

capacity to 600,000 units per annum.

HMC has set up a research and development facility(Hyundai Motor India Engineering - HMIE) in the cyber city of Hyderabad.

As HMC’s global export hub for compact cars, HMIL is the first automotive

company in India to achieve the export of 10 lakh cars in just over a decade. HMIL currently exports cars to more than 120 countries across EU, Africa, Middle East,

Latin America, Asia and Australia. It has been the number one exporter of passenger cars of the country for the sixth year in a row.[citation needed]

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To support its growth and expansion plans, HMIL currently has a 307 strong dealer network and 627 strong service points across India, which will see further

expansion in 2010.[citation needed] In July 2012, Arvind Saxena, the Director of Marketing and Sales stepped down from the position after serving the company for

7 long years.[1]

Products :

1. Hyundai Accent Executive (Launched 2011)

2. Hyundai Santro Xing (Launched 2003) 3. Hyundai Uber Cool i20 (Launched 2008)

4. Hyundai Next Gen i10 (Launched 2010) 5. Hyundai Grand i10 (Launched 2013) 6. Hyundai Fluidic Verna (Launched 2011)

7. Hyundai EON (Launched 2011) 8. Hyundai Neo Fluidic Elantra (Launched 2012)

Imported

1. Hyundai Terracan (2003–2007) 2. Hyundai Elantra (2004–2010)

3. Hyundai Tucson (2005–2010) 4. Hyundai Sonata Transform (2010–2011) 5. Hyundai Santa Fe (Launched 2010)

6. Hyundai Sonata (Launched 2010)

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Marketing Strategy of Hyundai

Objectives

First year Objectives: We are aiming for 5% market share of the Indian market

through unit sale volume of 100000.

Second year Objectives: We are aiming for 10% market share of the Indian market.

An important objective will be to establish a well-regarded brand name linked to a

meaningful positioning. We will have to invest heavily in marketing to create a memorable and distinctive brand image projecting innovation, quality and value.

We also must measure awareness and response so we can adjust our marketing efforts if necessary.

Target Markets

Hyundai Pa’s marketing strategy is differentiated marketing. Our primary

consumer target is middle to upper income professionals who need true value for their money and comfortable ride in city conditions. Our secondary consumer

target is college students who need style and speed.

Our primary business target is mid sized to large sized corporates that want to help their managers and employees by providing them a car for ease of transport. Our

secondary business target is entrepreneurs and small business owners who want to provide discounts to managers buying a new car.

Each of the four marketing strategies conveys Hyundai Pa’s differentiation to the

target marketing segments identified above.

Positioning

Using product differentiation we are positioning the Hyundai Pa as the most

versatile, convenient, value added car model for above target market used. The marketing strategy will be focused on promoting the car as economic car for the

next generation.

Example : Positioning of Hyudai Santro

Positioning strategies of Hyudai Santro –

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The oldest positioning of the santro was that of a ‘family car” this positioning strategy was changed in around 2012 and Santro was repositioned as to that of a

small car for young people.The target age group for the car had now shifted from 30-35 years to 25-30 years.

The repositioning followed the face –lifts the car has been getting from time to time in the form of engine upgradation, new power steering, automatic transmission etc. to keep the excitement around it alive in the highly competitive

small car market.The repositioning also comes ahead of the possible launch of new design Santro the super B-segment car ‘Getz’, sometime in 2013.

The Santro was given a fresh new positioning – from ‘complete family car to a ‘sunshine car’. The company thought that instead of promoting thr Santro as a family car, it should be promoted as a car that can change the life of a young

person since many of the buyers were young buyers.

Strategies

Product

Hyundai pa is fully loaded and will be sold with 3 year warranty. We will also

introduce a diesel/CNG/LPG version of Hyundai Pa in the near future. Also the high end model will have an option of GPS system.

Price

Hyundai Pa’s base model will be introduced at ex-showroom price of 3 lakhs. This

price reflects a strategy of

1) attracting desirable channel partners

2) Taking market share from Maruti.

Distribution

STOCKIST

DEALERS

SUB DEALERS

BOOKING AGENT

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Marketing Mix

Product

The all-new “Hyundai Pa” is fully loaded with a range of exciting new features. It's

a perfect complement to your evolved tastes and lifestyle. And the best way to take your driving pleasure to a brand-new high. European Styling. Japanese

Engineering. Dream-Like Handling.

The new Hyundai Pa is a generation different from Getz and Santro design. Styled with a clear sense of muscularity, its one-and-a-half box, aggressive form makes

for a look of stability, a sense that it is packed with energy and ready to deliver a dynamic drive.

Price

Hyundai is expected to take Maruti heads on with the pricing of their upcoming

Hyundai Pa car. After launching cars for the masses since so many years, India’s second largest automobile manufacturer is now targeting the premium segment

with their latest model from the Hyundai’s stable. The analysts predict the pricing of this premium hunchback to start from Rs. 3 lakh.

This price range would practically rip apart Maruti’s offering in Zen Estilo, which

is priced at a higher tag of Rs. 3.5 lakh. Both the companies are known for their value based offerings and Hyundai with their extensive service network and brand

reputation for making reliable cars should get the customer’s nod over their competition.

The official pricing however is still not out. However, the company is said to be

studying the prospects of launching the base model at the 3 - lakh price tag.

Place

Sales and service network

As of March 2011, HMIL has 451 dealerships and more than 647 Hyundai

Authorised Service Centers in 340 cities across India. HMIL also operates its own dealerships known as Hyundai Motor Plazas in large metros across India. HMIL

has the second largest sales and service network in India after Maruti Suzuki.[citation

needed]

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Promotion

Road Shows

The company plans to stage road shows, to display vehicles in the pavilions during

various college festivals and exhibition. This car will appeal to youngsters more.

Television advertisements

Advertisements to promote and market our product will be shown on leading

television channels. Major music and sports channels will promote and they will reach out to the youth will be promoted through Star, Zee, Sony and Doordarshan

etc as it has more viewers.

Radio

Radio is the medium with the widest coverage. Studies have recently shown high levels of exposure to radio broadcasting both within urban and rural areas, whether

or not listeners actually own a set. Many people listen to other people's radios or hear them in public places. So radio announcements will be made and

advertisements will be announced on the radio about the product features and price, qualities, etc.

Print Ads

Daily advertisements in leading newspapers and magazines will be used to

promote the product. Leaflets at the initial stage will be distributed at railway stations, malls, college areas and various other locations.

Workshops and Seminars

Workshops and seminars will be held in colleges and big corporate to make people aware about the companies past performance and product features, its affordability and usage, vast distribution network. Road shows will be conducted where free

trials of the car would be given.

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Segmentation , Targeting and Positioning Of Hyundai :

Closer to the Customer:

Hyudai offers free fuel vouchers with every purchase of Santro and i10.Hyundai

plans to launch Santro in rural India. (Ghar Ghar Ki Pehachaan)

HMIL recently hosted a Golf event called ‘Hyundai Motor Invitation Golf

Tournament’ in Mumbai.

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Hyundai Motor India Limited – SWOT Analysis

Strengths:

• HMIL has managed to gain customers loyalty and trust by serving them with superior technology.

• The Korean car manufacturer has almost become like an Indian brand due to its long time presence in the Indian market

• HMIL has the second largest market share in overall passenger car segment next to Maruti Suzuki

• Hyundai Motor India limited is the largest car exporter from Asian Market which showed a 10% growth compared to last FY

• The domestic sales has witnessed an average growth rate of 19.1% • HMIL has proved itself by manufacturing cars which suits Indian road conditions

and it has superior quality compared to its competitor MUL in its respective segments.

• HMIL involves itself in lot of CSR activities by donating funds and vehicles to the government

Weaknesses

• HMIL is not the first mover in the Indian market, hence it is difficult to capture

the rural market • Maruti is more reputed and trusted brand in Indian automobile industry among

customers • Hyundai has lesser network of service stations on highways

• In SUV segment both Tucson and its next model Santa Fe dint make a major impact

• Since HMIL concentrates on both domestic and International sales there are higher risks of exchange rate fluctuations

• Hyundai products are not cost effective as it doesn’t compromise its quality

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Opportunities

• Hyundai may act as threat to Maruti Alto’s market territory • The labour issues in Maruti Suzuki has affected production and inturn the overall

sales and brand name has been affected. Hyundai can use this opportunity to boost up sales and expand the market

• SIAM – Society of Indian automobile Manufacturers, have indicated there is potential market in abroad for the cars exported by HMIL

• There is more scope of HMIL to enter into small car segment as its has dedicated

R&D plant in Hyderabad, India. Hyundai is one of the very few companies that has widest R&D network across the world located in Korea, Europe, India, US, Japan

• Hyundai has very good opportunity in entering into commercial vehicles and Recreational vehicles as they are already doing well outside India. Currently HMIL

has its focus only on Passenger car segment Threats

• Though MSIL seems to be a direct competitor for Hyundai, there are other major

players like Tata, Mahindra imposing a strong threat for Hyundai Motors India to expand its product category

• Foreign Direct Investments flowing in Indian automobile space are not good signs for already existing Giants like MUL and Hyundai.

• The increase in petrol prices have paralysed the sales of overall petrol vehicles • People doesn’t prefer to make new investments as there are more job cuts due to

global economic crisis • Almost all major automobile players have started invading India to open up their

market and their manufacturing plant in India.”Chennai” is referred to as the Detroit of Asia! • Hyundai faced a slight decline in market share due to tough competition from

Ford’s Figo and Volkswagen- Polo • Many manufacturers have started to concentrate on small car segment as an

alternative to Nano. These will slowdown the expected sales of Eon. • Maruti new 800 diesel may increase the threats to HMIL

32

Tata Motors

Type Public

Traded as

BSE: 500570 (BSE SENSEX

Constituent) NSE: TATAMOTORS

NYSE: TTM

Industry Automotive

Founded 1945

Founder(s) J. R. D. Tata

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people

Ratan Tata (Chairman

Emeritus) Cyrus Pallonji Mistry

(Chairman) Karl Slym (died 26 January 2014, Managing Director)

Ravi Kant (Vice Chairman)

Products

Automobiles

Commercial vehicles Coaches

Buses Construction equipment

Military vehicles Automotive parts

Services

Automotive design, engineering and outsourcing services

Vehicle leasing Vehicle service

Revenue US$ 34.7 billion (FY 2012-

13)[4]

Operating US$ 3.06 billion (2012)[4]

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income

Profit US$ 2.28 billion (2012)

Total assets US$ 28.05 billion (2012)

Total equity US$ 6.44 billion (2012)

Employees 59,759 (2012)[4]

Parent Tata Group

Divisions Tata Motors Cars

Subsidiaries

Jaguar Land Rover

Tata Daewoo Tata Hispano

Website www.tatamotors.com

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is an Indian multinational automotive manufacturing

company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses,

construction equipment and military vehicles. It is the world's sixteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume.[5]

Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom. It has research and development

centres in Pune, Jamshedpur, Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. Tata Motors' principal subsidiaries include the

British premium car maker Jaguar Land Rover (the maker of Jaguar, Land Rover and Range Rover cars) and the South Korean commercial vehicle manufactuer

Tata Daewoo. Tata Motors has a bus manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo), a construction equipment manufacturing joint venture with

Hitachi (Tata Hitachi Construction Machinery) and a joint venture with Fiat which manufactures automotive components and Fiat and Tata branded vehicles.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its

first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the

launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile. [6] In 1998 Tata

launched the first fully indigenous Indian passenger car, the Indica, and in 2008

34

launched the Tata Nano, the world's cheapest car. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and

purchased Jaguar Land Rover from Ford in 2008.

Tata entered the commercial vehicle sector in 1954 after forming a joint venture

with Daimler-Benz of Germany. After years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. Tata subsequently launched the

Tata Estate (1992; a station wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle), the Tata Sumo (1994; LCV) and the Tata Safari

(1998; India's first sports utility vehicle).

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although initially criticised by auto-analysts, its excellent fuel economy, powerful

engine and an aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. A newer version of the car, named

Indica V2, was a major improvement over the previous version and quickly became a mass-favourite. Tata Motors also successfully exported large quantities

of the car to South Africa. The success of Indica played a key role in the growth of Tata Motors.[7]

In 2004 Tata Motors acquired Daewoo's South Korea-based truck manufacturing

unit, Daewoo Commercial Vehicles Company, later renamed Tata Daewoo.[8]

On 27 September 2004, Tata Motors rang the opening bell at the New York Stock Exchange (NYSE) to mark the listing of Tata Motors.[9]

In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach manufacturer Hispano Carrocera.[10] Tata Motors continued its market area expansion through the introduction of new products such as buses (Starbus &

Globus, jointly developed with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with subsidiary Tata Daewoo).

In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus, to manufacture fully built buses and coaches.[11]

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover,

manufacturer of the Jaguar, Land Rover and Daimler luxury car brands, from Ford Motor Company.[12][13][14][15]

35

In May 2009 Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo;[16] the range went in sale in South Korea, South Africa, the SAARC

countries and the Middle-East at the end of 2009.[16]

Tata acquired full ownership of Hispano Carrocera in 2009.[17]

In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering

company Trilix for €1.85 million. The acquisition formed part of the company's plan to enhance its styling and design capabilities.[18]

In 2012, Tata Motors announced it would invest around 6 billion in the

development of Futuristic Infantry Combat Vehicles in collaboration with DRDO.[19]

In 2013, Tata Motors announced it will sell in India, the first vehicle in the world

to run on compressed air (engines designed by the French company MDI) and dubbed "Mini CAT".

Tata Technologies

Tata Technologies Limited (TTL) is an 86.91% owned subsidiary of Tata Motors

which provides design, engineering and business process outsourcing services to the automotive industry. It is headquartered in Pune (Hinjewadi) and also has

operations in Detroit, London and Thailand. TTL's clients include Ford, General Motors, Honda and Toyota.

The British engineering and design services company Incat International, which

specialises in engineering and design services and product lifecycle management in the automotive, aerospace and engineering sectors, is a wholly owned subsidiary of

TTL. It was acquired by TTL in August 2005 for 4 billion.

European Technical Centre

The Tata Motors European Technical Centre (TMETC) is an automotive design, engineering and research company based at the campus of the University of

Warwick in the United Kingdom. It was established in 2005 and is a wholly owned subsidiary of Tata Motors. It was the joint developer of the World Truck. [34]

36

Marketing Mix of TATA MOTORS

Tata motors is a leading automobile brand. It is most widely known for its

commercial vehicles such as buses and trucks. However, TATA motors has also started an excellent expansion in passenger cars and it is rapidly gaining market

share. The Marketing mix of Tata Motors talks about the 4P of the brand which has helped the brand rise in the automobile empire.

1. Product: Tata has a very wide range of products it has passenger cars, utility

vehicles, Trucks, Commercial passenger Carriers And Defence Vehicles

Passenger cars

UtilityVehicles Trucks Commercial Passenger Carriers

Indica vista Safari Dicor Tata Novas

Buses

Indigo XL Sumo Grande TL 4×4 Winger

Nano Sumo Magic

Fiat cars Xenon XT

2. Price: The prices of Tata motors are generally affordable acceptable by the general public at large. Tata always have something for the lower class people with

Nano being their trump card. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors.

Discount can be made from Company’s profit or from dealer’s profit at certain range.

3. Place: Tata Motors has an extensive dealer network covering Indian and

International markets. Wherever you are, there is a Tata Motors Sales and Service dealership close to you. The channel of distribution, physical location, and

dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to

end user. This is not only in India itself but also to the world-wide dealership.

4. Promotion: Tata motors promote their products via Advetising and after sales services

5. People: Tata Motors owe our success to the highly motivated and talented staff.

Our recruitment division picks the crème-de-la-crème from premier universities, management and engineering institutes in India. they put them through rigorous

37

training programmes to hone their entrepreneurial skills and impart comprehensive product knowledge.

6. Processes: Tata motors follow Balanced Scorecard Collaborative, Inc for achieving excellence in overall Company performance.

7. Physical Evidence: The management of the company has managed to keep their

hopes alive even in this recession and hopes that the worse is behind Tata Motors recently launched the most awaited car of the year, Tata Nano and the company

has already received 203,000 booking that are fully paid and 70 percent of the applicants are ready to wait till the end of 2010 for the car to be manufactured.

Positioning Strategies Of Tata Motors :

Example : Tata Indica

It has positioned Indica as ‘more car per car’. The new car offers more space, more

style,more power and more options. Emphasizing the delivery of world class

quality. They have tried to redefine the small car market as It has been understood

in India.

38

Bottom 3 Companies

Honda Cars India Limited

Type Subsidiary

Industry Automotive

Founded December 1995

Headquarters Greater Noida, Uttar Pradesh

Number of

locations

Greater Noida, Uttar Pradesh

Bhiwadi, Rajasthan

Key people Mr. Hironori Kanayama, President and CEO

Products Automobiles

Parent Honda

Website hondacarindia.com

Honda Cars India Ltd. (HCIL) is a subsidiary of the Honda of Japan for the production, marketing and export of passenger cars in India. Formerly known as

Honda Siel Cars India Ltd, it began operations in December 1995 as a joint venture between Honda Motor Company and Usha International of Siddharth Shriram Group. In August, 2012, Honda bought out Usha International's entire 3.16 percent

stake for 1.8 billion in the joint venture. The company officially changed its name to Honda Cars India Ltd. (HCIL) and became a 100% subsidiary of Honda.

It operates production facilities at Greater Noida in Uttar Pradesh and at Bhiwadi in Rajasthan. The company's total investment in its production facilities in India as of 2010 was over 16.2 billion.

39

Facilities

HCIL's first manufacturing unit at Greater Noida commenced operations in 1997.

Setup at an initial investment of over 4.5 billion, the plant is spread over 150 acres (0.61 km2). The initial capacity of the plant was 30,000 cars per annum,

which was thereafter increased to 50,000 cars on a two-shift basis. The capacity has further been enhanced to 100,000 units annually as of 2008. This expansion led

to an increase in the covered area in the plant from 107,000 m² to over 130,000 m².

The company invested 7.8 billion in Bhiwadi for its second production plant with an annual production capacity of 50,000 units.[2] It operates under the ISO 9001

standard for quality management and ISO 14001 for environment management.

Honda setup its Third plant in India at Tapukara in Alwar District of Rajasthan, spread over 450 acres with an investment of ₹3526 crores.[3]

HCIL produces the following vehicles in India for local and export markets:

Honda City (Launched 1998) Honda Accord (Launched 2001, Production discontinued in 2013)

Honda Civic (Launched 2006, Production discontinued in 2012) Honda Jazz (Launched 2009, Production temporarily discontinued in early 2013 in

anticipation of all-new model) Honda Brio (Launched 2011)

Honda CR-V (Imported since 2003; 2013 model locally assembled) Honda Amaze (launched April 2013)

Sales

HCIL has 152 dealerships across 98 cities in 20 states and 3 Union Territories of

India.[4]

It sold 55,884 units during the period April '09 - February '10 as against 45,052

units during the same period a year ago, recording an increase of over 24%. Honda jazz is known as Honda fit in other countries.

40

Marketing Mix Honda Motors

Honda motors has a strong marketing mix because of its dynamic use of the product marketing mix concept. Below we discuss the marketing mix of Honda

motors.

PRODUCT :

Available Car Models

Honda Jazz Honda City 2008 Honda Civic

Honda Accord 2008 Honda Civic Hybrid Honda CR-V

Features:

Looks and Design:

The looks of the Honda cars is stunning or in other words we can say that it is an outstanding design among its competitors.

Interiors:

Interiors are brilliantly designed, Multidimensional dash, Steering wheel with audio controls, I pod connective music system, comfortable Seat, safety features

like Airbags etc

Engine, Gearbox and Performance: I-VTEC engine, Smoothest engine widely spaced gear ratios, Paddle shift, Ride

and Handling, Independent suspension on the front, Wheel base ,ABS, Dual air bags and EBD are standard feature of this car.

PRICE :

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Ex Showroom Mumbai

Honda Jazz Jazz basic

Rs. 743000Jazz ModeRs. 773786

Jazz Active

Rs. 778871

Honda City 2008 Honda

City 1.5 EMTRs. 825100Honda

City 1.5 SMTRs. 879000

Honda City 1.5 SAT

Rs. 954900

Honda Civic Honda Civic

1.8 E MTRs. 1102300Honda Civic 1.8 S MTRs. 1274300

Honda Civic 1.8 V MT

Rs. 1307900

Honda Civic 1.8 V AT

Rs. 1389400

Honda Accord 2008

Honda Accord Elegance ATRs. 1833700Honda

Accord 2.4 (Base Model)Rs. 1833700

Honda Accord Inspire MT

Rs. 1833700

Honda Accord Elegance

MT

Rs. 1912400

Honda Accord Inspire AT

Rs. 1912400

Honda Accord V 6 3.5

Rs. 2532300

Honda Accord V 6 3.5 Inspire

Rs. 2532300

Honda Civic Hybrid Rs.

22,23,401

Honda CR-V Honda CR-V

2.0 2WD(MT)Rs. 2203000Honda

CR-V 2.4 CR-V(M/T)Rs. 2357200

Honda CR-V 2.4 CR-V(A/T)

Rs. 2430600

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PLACE : The Honda City, its first offering introduced in 1997, revolutionized the Indian

passenger car market and has ever since been recognized as an engineering marvel in the Indian automobile industry. The company has a capacity of manufacturing

100,000 cars.

Sales and Distribution Network: Strong sales and distribution network : 94 facilities and in 57 cities and 51

Exclusive Dealership. HSCI dealerships are based on the “3S Facility” (Sales, Service, Spares) format, offering complete range of services to its customers.

Having established itself as a leading brand in the metros, the company is now focusing on increasing its presence in tier-II towns and cities and plans to increase

its dealership network to more than 100 by the end of 2008-09 fiscal year. The company is targeting 100 dealer outlets across India by 2009, as per their

expansion strategy which is based on the ’1 dealer per 1000 cars’ formula

PROMOTION :

Honda is a brand known for its quality and innovation. Honda was never into an aggressive promotional activities but the company always tried to maintain the

quality and created a brand image by providing better customer service. Honda car like Honda city is the largest seller in the segment and ranked fourth position in

passenger car segment.

Considering the advertisement, Honda has been very careful and precise in their advertisements. Honda always projected their image as most reliable brand,

advanced technology, eco friendly cars. Even considering the television commercials, Honda promoted their hybrid car that runs without gasoline and

emits water as the bye product rather than advertising the specific brands existing in the market. The ad was more concentrated to the company’s technological

advancements and eco friendly image which differentiated Honda from the competitors

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Volkswagen India

Type Subsidiary

Industry Automotive

Founded 2007

Key

people

Mr. Mahesh Kodumudi, President

and Managing Director

Products Automobiles

Parent Volkswagen Group Sales India

Website www.volkswagen.co.in

Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private Limited that assembles, manufactures and distributes Volkswagen vehicles in India. It was established in 2007.

Manufacturing facilities

Volkswagen India Private Limited operates a manufacturing plant in Chakan, Maharashtra which is capable of producing 110,000 vehicles per annum. The plant is also shared by Škoda Auto India Private Limited for assembling the Škoda Fabia

& Rapid.

Manufactured locally

Volkswagen Passat (2007–present)

44

Volkswagen Jetta (2008–present) Volkswagen Polo (2010–2013)

Volkswagen Vento (2010–present)

Sales performance

In the year 2010, VIPL recorded sales of 32,627 vehicles against 3,039 vehicles

sold during the year 2009 and registered a sales growth of over 1,000%.[2]

Fan club

A group of Volkswagen car enthusiasts started a fan club for Volkswagen vehicle owners and fans and created Volkswagen Fans Club Community Website on 24th

March, 2012. Registered members discuss about their Volkswagen vehicles and share their knowledge. They help each other in solving issues and guide those

people who are seeking to purchase new Volkswagen vehicle.

45

Marketing Mix of Volkswagen

Product :

15 different models under 3 brands. Plant at Chakan, near Pune.

More assembly plans in India – competitive advantage. Awards last year.

Price :

Targeted mainly for the luxury segment in the Indian market. Plan to capture bigger market through the VW Polo.

Place : Significant presence – number of dealerships and outlets across major cities.

Promotion :

Launched Integrated Marketing campaign in November, 2009. Collaboration with DDB Mudra.

Evoke consumer awareness of VW as a brand. Innovative promotional campaigns – OOH, print ads,TVCs.

Print media – Communicating benefits. Television Commercials – Brand building.

AD CAMPAIGNS Highlights the technical qualities it ensures. “… tested by our engineers. So you don’t need to.”

Highlights Volkswagen as a composite brand. Cars for different stages of life and career.

46

47

Nissan Motors India Private Limited

Type Subsidiary

Industry Automotive

Founded 2005

Headquarters Chennai, Tamil Nadu[1][2]

Area served India

Key people Mr. Kenichiro YOMURA ,

CEO and MD

Products Automobiles

Parent

Renault Nissan Automotive

India Private Limited

Website www.nissan.in

Nissan Motor India Private Limited is the Indian subsidiary of Nissan Motor Company of Japan.[3]

History

Nissan Motor India Private Limited (NMIPL) started its operations in India in 2005, with the launch of the Nissan X-Trail (T30), which was imported as a

CBU.[3]

Manufacturing facilities

NMIPL's manufacturing plant in Chennai can manufacture 200,000 vehicles per

annum. The Chennai Plant has an additional 200,000 vehicles per annum capacity exclusively for French car maker Renault's Indian arm Renault India Private

Limited. The plant's combined capacity is 400,000 vehicles per annum.

48

The plant in Oragadam with an investment of 45 billion (US$720 million) covers an area of 650 acres (2.6 km2).[4] It will manufacture the Nissan Micra for the

Indian and European market, besides various other models for the Indian market.[5]

Manufactured locally

1. Nissan Micra (launched 2010)

2. Nissan Sunny (launched 2011) 3. Nissan Evalia (launched 2012)

4. Nissan Terrano(launched 10/09/2013)

Imported

1. Nissan X-Trail (Launched 2005) 2. Nissan Teana (Launched 2007)

3. Nissan 370Z (Launched 2010)

Sales and service network

NMIPL has appointed Hover Automotive India for the Sales, Service, Parts,

Marketing & Dealer Development functions for Nissan vehicles in India. Nissan currently has 40 dealerships across 39 cities in 17 states and 1 Union Territory of India.[6]

49

50

51

Geographical spread of Indian Automobile Industry

52

Demand and Supply balance in the Industry

The automobile industry crisis of 2008–2010 makes us wonder what are the

factorswhich lead to such a crisis. Let us discuss in detail the various demand and supplyfactors which affect the automobile sector. Demand Factors

1 . F i n a n c i n g O p t i o n s Auto industry observers cite car loans as the biggest driving factor for the

expansionof the Compact Car segment. At present, almost 85 per cent of all new car sales are backed by auto finance, compared to 65 per cent five years

ago.Interest rates on car loans have come down drastically in the past four or five years,which helps prospective buyers take the plunge. The growth of the CC-

segment in the past few years can be mainly credited to factors such as rise in income levels leadingto increased affordability and simultaneous reduction in

interest rates leading to lower EMIs. The drop in interest rates usually helps very few people to probably shift fromthe base model to a deluxe model. A larger shift

happens if people are willing to takelong-term loans, like five years instead of the earlier three-year loans.2.

Advertising And Marketing Due to the advertising techniques adopted by all the manufacturers in the CC-

Segment the sales have risen drastically. It is all due to because the companies now adays are using even aggressive selling techniques for which they are even coping

withthe Film celebrities and Cricket stars, like Maruti has contracted Irfan Pathan as the brand ambassador of Zen and for Santro Hyundai has contracted for Shah

Rukh Khan.And the companies are even trying to approach to the customer as to there demand for a vehicle at special interest loans, etc. They are using data

according to the customersreturn and earning capacity for attracting the customers for there vehicles.

3 . P r i c e O f T h e C a r One of the major factors that affect the demand of any commodity in the market is the price of the commodity. As the law of demand also states that with an increase

in price the demand of the commodity decreases and vice versa.Since, in the compact car segment market even there are very less competitors there isstiff price

competition. Like the price of Zen in 2001 was Rs. 3.93 lacs whichincreased to Rs. 4.01 lacs in 2005, but still the sale of the Maruti brand keeps onincreasing it was

due to the company’s reputation with the customers. 4 . I n c o me O f C o n s u me r / Bu y e r

The income of the consumer or buyer of the car is a very important factor of demand.In recent time we have seen that due to increase in the Income of the

53

general public,there has been a shift from the Lower CC-segment cars to the Upper CC-segmentcars

Due to the recent increase in the number of multinationals in India, the income levelof the employees have risen drastically and has made CC-segment cars an

entry levelcar for a lot of people. The average age of a CC-segment car owner has also droppedfrom 35 years to 31 years in India.

5 . Inc re a s e In Affo rda bility The demand for passenger cars is driven mainly by greater affordability, which in

turnincreases the aspiration level of the customers. Today with high amount of disposableincome in the hand of Indian youth, who forms major portion of the

population, PVmarket has larger addressable market. 6 . D e mo g r a p h i c D r i v e r s

Cars being aspirational products, purchase decisions are influenced by the overalleconomic environment. Increase in per capita income increases the

consumptiontendency of the customer. Growth in per capita income and rising aspirations andchanging lifestyle is leading to increased preference for carsover two-wheelers, which is also having a positive rub off on car demand.

7 .Ava ila bility Of Ea s y F ina nc ing Optio ns A majority of PV purchases are financed through financial institutions. Over the

past4-5 years car industry has been benefited through significant increase in affordabilitydue to the decrease in EMIs. Car finance rates dropped from 17% in

2000-01 to 11%in 2005-06. However it has increased and averaged at 13.75% in 2006-07. The currenthardening of interest rates is expected to affect demand

byreducing affordability.8. New Offerings

Car sales increase when a new model hits the market. Due to escalation incompetition in Indian car market, frequency of new model launches has

increased. Inthe past one year only the Indian car market has seen many launches namely SX4,Swift Diesel, Zen Estilo, Spark, Logan, etc.

9 . E x p o r t s The share of exports from domestic production is currently at 12-13%, which is

muchlower than current export hubs. Currently, India’s share of global passenger carsexport volume stands at less than 1%. But India is fast emerging as a

manufacturinghub for leading global car makers, and several manufacturers have already firmed up plans for setting up manufacturing bases in India, which will

also be used for exports.3

Supply Factors

1 .Pre s e nce Ac ro s s S e g me nts

54

Manufacturers with presence across various product segments can ensure higher volume and better capacity utilization by using the common manufacturing

capacity.Typically a customer upgrades from one segment to higher segment and the presenceacross various segments ensures that the company retains its existing

customers. 2 . E f f i c i e n t O p e r a t i o n s

Competition in PV segment is very intense and this requires the existing players toinitiate steps to reduce their cost of production. Effective and successful

operationmethods like platform commonality, reduction in vendor base and workforcerationalization can help a company immensely.

3.Wide Dealer Network And Availability Of Finance A wide dealer network helps the company serve customers over wide

geographicalarea. For e.g. Maruti has used its available wide service network as point of differenceover competitors. The companies are tying up with the financial

institutions havingrural presence to provide additional financing options to customers in such areas. 4 .Ac c e s s To La te s t Te c hno lo g ies

Indian PV segment is highly competitive with as many a 14 players operating in it andmore than 80 models on the offering. But still any new model launch meets

withincrease in sales volume for the company. Moreover in a time when a substantial portion of Indian customer is looking to upgrade in higher segment,

companies withlatest technologies and latest models will catch more attentions 5 . P r i c e O f T h e C a r

Price of the car is one of the major factors that affect the supply as well as the demandof a car. If the price of the car is high in the market, the manufacturer or the

supplier will want to supply more units in the market so he can earn more profits.In the automotive industry where the market type is oligopoly, if one company

dropsits price for the car, there is a huge impact on the sales of the other cars as well as thesame car. In the market the price of one car is inter-related to the price of the other cars in the same segment.

6 . F a c t o r s O f P r o d u c t i o n There are some factors of production which influence the supply of a car likeCost

of Raw MaterialLabour CostMachineryInput CostThese factors influence the supply of a car largely. If the cost of the raw material(Steel, Spare Parts, Rubber)

7.Government Policies And Taxes If there is a change in the government policies regarding the increase in the road

taxcharged or the tax which is to be paid per unit sold, the supply of a car will fluctuatewith the nature of the change.

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Professional Trade Bodies of The Automobile Industry

SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS

Society of Indian Automobile Manufacturers (SIAM) is the apex Industry

body representing 38 leading vehicle and vehicular engine manufacturers in

India. SIAM is an important channel for the communication for the

Automobile Industry with the Government, National and International

organizations. The Society works very much closely with all the concerned stake

holders and actively participates in formulation of rules, regulations and policies

related to the Automobile Industry. SIAM provides a window for the Indian

Automobile industry and aims to enhance exchanges and communication, expand

economics, trade and technical cooperation between the Automotive Industry and

its international counterparts. With its regular and continuous interaction with the

international bodies and organizations it aims to facilitate upgradation of technical capabilities of the Indian Industry to match the best practiceworldwide.

SIAM also interacts with worldwide experts to assess the global trends and developments shaping the Automotive Industry. It has been actively pursuing

the issues like Frontier Technologies viz. Telematics: Promotion of Alternative Fuels which includes Hydrogen Energy for automotive use through cell

vehicles and Harmonisation of Safety and Emission Standards, etc.

Dissemination of information is the integral part of SIAM'S activities, which it

does through various publications, reports, seminars and conferences. SIAM

organizes the biennial Auto Expo series of trade fairs in co-operation with

Confederation of Indian Industry (CII) and Automotive Component

Manufacturers Association of India (ACMA). SIAM has been striving to keep

pace with the socio-economic and technological changes shaping the Automobile

Industry and endeavour to be a catalyst in the development of a stronger

Automobile Industry in India.

Activities of SIAM

Inspection of vehicles:

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SAFE,the Society for Automotive Fitness and Environment an initiative of SIAM

focusses on creating awareness among vehicles users about their responsibility

for cleaner air and safer roads, by proper maintenance of vehicles. SIAM &

SAFE organise campaigns and emission clinics to check vehicles for pollution and issue of pollution under control certificate for compliant vehicles.

Emission Testing:

In pursuance of its commitment to reducing pollution SIAM-SAFE have

developed a Computerised PUC System. The first Computerised PUC Centre for

Petrol vehicles was launched in Kolkata.The Computerised PUC Centers are

modeled on international systems.This system minimizes human intervention and

deficiencies prevalent in the current system in the process of recording and

issuing PUC certificates, thereby establishing credibility and acceptance to the

certificate issues. SAIM-SAFE have set up computerised emission check centres in cities across the country.

Traning for Drivers:

The number of accidents in the country is caused due to high stress and low self

esteem among the drivers in particular. Hence there is a need to touch on the

psychological aspects which will enable all drivers to view themselves with

greater pride and involvement in their personal and professional life.SIAM

introduced a new training concept for development of soft skill of drivers of

commercial vehicles. This training focuses on psychological aspects of the

drivers in order to improve their performance and handle stress arising due to

long working hours. Training is also provided on vehicle maintenance and traffic

regulations by partnering vehicle manufacturers and traffic police. SAFE, along

with several partners organises workshops on soft skill development for commercial vehicle drivers in various cities across the country.

Educational Programmes:

SIAM has undertaken several initiatives for Road Safety education of students,

drivers and the public at large.

57

Online Presence of Players in the Automobile Industry

Maruti Suzuki names Digitas as its digital agency

Ignitee Digital was handling the digital duties of the brand since 2011.

Auto major Maruti Suzuki India has awarded its digital duties to Digitas India.

afaqs! has learnt this from multiple sources. The brand will be handled by the agency's Delhi office.

Ignitee Digital, which was handling the digital duties of the brand since 2011,

stands to be the agency which has lost the account. Ignitee's duties for Maruti included building the website, organising campaigns, ORM (online reputation

management) and search optimisation, among others.

Most of the duties to be handled by Digitas will be on the media planning and buying side, along with SEM (search engine marketing) and SEO (search engine

optimisation). afaqs! also learns that the agency will be responsible to grow the brand on the social media platforms.

On the digital front, Maruti Suzuki has worked with several agencies in the past,

including Interface Business Solutions (social media marketing for Ritz, Swift Dzire and SX4), social media agency Media Redefined (Alto K10) and integrated

marketing communication agency Markigence Communications (A-star and Estilo).

Ongoing List of Social Media Examples in the Auto and Car Industry

Chevy Tahoe “Create you ad” – 2006 Perhaps one of the earliest examples (and boldest) was the advertisement where

anyone could create their own Chevy ads. Many anti-SUV/Auto ads appeared, and some suggest it was a failed campaign. I believe it was a success for the very

reasons it was criticized, at least GM took a bold move to embrace what everyone was talking about, aside from the residual buzz from the campaign itself.

Honda/Acura

Has launched several campaigns such as this ‘create your own profile‘ for your social network, featuring Honda Pilot. Other examples inlcude Acura TSX

Facebook page, and a Honda YouTube channel that features a variety of innovation lead videos.

58

GM launches a Community program -2008 From Neville and Shel of the For Immediate Release program (podcast) “GMnext

is more or less a year-long online initiative around the 100th anniversary of the company. Here’s a bit of an overview in the event it’s close to what you’re looking

for. Shel did a few podcasts when they launched.” Aside from this community initiative, GM continues to push the envelope and has created a ‘social media

newsroom‘.

Chrysler Listens with Insight Community -08 Forming an online community is one thing, but using it to listen to customers, then

making changes is another. Chrysler has launched a Customer Advisory Board that allows customers to be involved in a two way dialog to make suggestions. This one

was powered by Passenger, see list of other insight vendors. GM’s many blogs

This Chrysler auto focused blog is rich with media, appears to be frequently updated, by void of many comments. Of course many of you know the GM Fast

Lane blog, which has been around since 2005, authored by employees such as Bob Lutz, and the GMNext blogs.

Ford’s Social Media Press Release

I’ve never really understood the value of the social media press release, as I’d rather see corporations/employees joining the conversation, as the level of trust

will be higher. In any case, Ford has developed a social media press release for it’s cars, the layout and visualization of the cars looks fantastic.

Toyota: Master of Africa -2008

I applaud this community site that talks about 4X4 best practices and sharing, as it discusses not only the sponsored brands’ discussion of their products, but other

companies. Great way to really join the authentic conversations that the market will already have, and attempt to build trust.

BMW 1 Series Graffiti Facebook campaign -2008

This is perhaps one of the best case studies of brands getting social media right, like the Dell Regeneration campaign (both by Federated Media) BMW reaches to

existing Grafiti users to draw what they think the BMW 1 means to them “What drives you?”. The result is astounding, thousands of beautiful pieces of art created,

and spread across Facebook.Nissan Finland launches Social Map Mashup This interactive map let’s members upload their destinations and images and let’s them share with others.

59

Chapter 2 : Promoters And Management Ethos

Promoters, Chairman, Board Of Directors And Management

Personnel of Maruti Suzuki

Name Since Current Position

R. Bhargava

2007 Non-Executive Chairman of the Board

Kenichi Ayukawa

2013 Chief Executive Officer, Managing Director, Director

Toshiaki Hasuike

2013 Joint Managing Director, Whole-Time Director

Sudam Maitra

2012 Senior Managing Executive Officer - Supply Chain

S. Siddiqui

2012

Senior Managing Executive Officer - Administration (HR, IT, Finance & COSL)

M. Singh

2012 Senior Managing Executive Officer - Production

Kazuhiko Ayabe

2012

Managing Executive Officer - Supply Chain, Whole-time Director

Mayank Pareek

Managing Executive Officer - Marketing & Sales

Masayuki Kamiya

2013 Director - Production, Whole-time Director

T. Hashimoto

2012 Executive Officer - Marketing & Sales

M. Kamiya

Executive Officer - Production

C. Raman

Executive Officer - Engineering

Y. Suzuki

Executive Officer - Quality Assurance (QA)

A. Tomer

Executive Officer - Quality Assurance (QA)

S. Ravi Aiyar

2013 Executive Director - Legal, Company Secretary

Toshihiro Suzuki

2013 Director

Kinji Saito

2012 Non-Executive Director

Osamu Suzuki

2002 Non-Executive Director

Davinder Brar

2006 Non-Executive Independent Director

60

Biography :

Mr. Ravindra Chandra Bhargava, M.Sc. (Maths), M.A. (Dev. Economics)

serves as the President and Chief Executive Officer at RCB Consulting Private Ltd.

Mr. Bhargava served as the Managing Director of Maruti Suzuki India Ltd. since

1985 and the Chairman and Managing Director since 1990. He joined the Indian

Administrative Service (I.A.S.) in 1956 and stood 1st in the batch and was allotted

to the U.P. cadre. From 1981 to 1997, he served with Maruti Suzuki India Ltd.

initially on deputation from the I.A.S. as Director of Marketing. He served as an

Agricultural Production Commissioner and Secretary to the Government of the

State of Jammu and Kashmir for the Departments of Agriculture, Horticulture,

Animal Husbandry, Forests, Co-operation from 1968 to 1973. He served as a

Special Assistant to the Union Minister of Energy, Government of India from 1973

to 1974. From 1974 to 1978, he served as the Joint Secretary to the Government of

India, Ministry of Energy and the Cabinet Secretariat. He served Bharat Heavy

Electricals Limited as the Director of Commercial. He has been the Chairman of

the Board of Maruti Suzuki India Ltd. since December 19, 2007 and Fem Care

Pharma Ltd. since June 25, 2009. He serves as Chairman of the Board of Directors

at Roulunds Codan (India) Ltd. and Roulunds Braking (India) Limited. He served

as the Chairman and a Director of Omax Autos Ltd. until January 2008. Mr.

Bhargava serves as a Member of Advisory Board of Aditya Birla Private Equity

Fund. He has been an Independent Director at UltraTech Cement Limited since

July 6, 2004. He has been a Non-executive Independent Director at Dabur India

Ltd., since January 27, 2005 and Polaris Financial Technology Limited since

March 1999. He has been Independent Director of UltraTech Cement Ltd. since

July 6, 2004. He has been a Director of Polaris since March, 1999. He has been a

Non-Executive Director of Polaris Software Lab Ltd. since March 1999. He has

been an Independent Director of Idea Cellular Ltd, since October 20, 2008. He

serves as a Non Executive Director of Maruti Suzuki India Ltd. He has been an

Independent Director of Infrastructure Leasing & Financial Services Limited since

August 1990. He serves as a Director in Optimus Outsourcing Company Limited, a

subsidiary of Polaris Software Lab Ltd. Mr. Bhargava serves as a Director of

Optimus Global Services Limited, IL&FS Limited, Grasim Industries Ltd.,

Machino Bassel (India) Limited, IL&FS Securities Services Ltd. and Thomson

Press (India) Limited. He has been a Director of Samruddhi Cement Ltd. since

61

May 18, 2010. Mr. Bhargava serves as a Member of Board of Governors of Indian

Institute of Management Calcutta. He served as a Director of Lord Krishna Bank,

Ltd. He served as a Director of Shree Digvijay Cement Company Ltd. from

September 12, 2006 to March 25, 2008. Mr. Bhargava has a Master of Sciences

degree in Mathematics from Allahabad University, India and a Master of Arts in

Developmental Economics from Williams College, Williams town, MA, USA.

Mr. Kenichi Ayukawa has been Managing Director and Chief Executive Officer

at Maruti Suzuki India Limited since April 1, 2013. Mr. Ayukawa serves as a

Senior Managing Officer of Suzuki Motor Corp. and served as its a Managing

Officer. He has been a Director of Maruti Suzuki India Limited since July 21, 2008

and has been an Additional Director at Asahi India Glass Ltd. since May 21, 2013.

Mr. Ayukawa has been a Director of Subros since July 29, 2013. He served as a

Non-Executive Director at Pak Suzuki Motor Co. Ltd. He is a graduate from Osaka

University.

62

Corporate Social Responsibility of Maruti Suzuki :

Maruti Suzuki was the first company to promote safe driving and training in

the country.

Maruti Suzuki envisions road safety in its flagship Corporate Social

Responsibility arena.

The company collaborated with the Delhi government in 2000 to set up the

Institute of Driving and Traffic Research (IDTR) at Loni in North East

Delhi.

In the technical education/skill development area, MSIL has adopted 10

state-run ITIs (one each at Kerala, Tamil Nadu, Maharashtra, two at Goa,

and four at Haryana.) with intent to transform them into the Centers of

Excellence. The company plans to increase the total number of ITIs to 50 by

2015.

63

Promoters, Chairman, Board Of Directors And Management Personnel of

Hyundai Motors India Limited

Key Executives for Hyundai Motor India Limited

Name Title

Bo Shin Seo

Chief Executive Officer and

Managing Director

R. Sethuraman

Senior Vice President of Finance &

Corporate Affairs and Director

Anish Agarwal Head of Lucknow Zone

Nalin Kapoor

Group Head of Marketing and Senior

General Manager

Head of West Zone

T. Sarangarajan

No Relationships

Head of

Production Division

and Vice President

Anurag Singh

No Relationships

Head of North Zone

Pankaj Tiwari

No Relationships

Head of

Central Zone

M. Whoo

No

Relationships

Head of R&d and

Engineering Operations

-

64

Mr. R. Sethuraman promoted as Director Mr. Rakesh Srivastava promoted as Sr. Vice President

Mr. R Sethuraman as Director Finance and Member of Board and Mr. Rakesh Srivastava as Sr. Vice President, Sales and Marketing. Prior to this elevation,

Mr. R. Sethuraman was Senior Vice President, Finance and Member of the Board of Directors of HMIL, while Mr. Rakesh Srivastava was Vice President, National Sales and Marketing.

.

Mr Bo Shin Seo took over as the company's Managing Director, from Mr H. W. Park, who is returning to Korea as the Chief Financial Officer of Kia

Motors. Mr Park goes back to his home country after a stint in India.

Prior to his elevation as Managing Director, Mr Seo was Executive Director – Production, a position he held for two years.

“Mr Seo is an engineer by training, in his distinguished career he has been

Hyundai's Production Head at its Alabama plant in the US,” says a press release from Hyundai India.

Chung Ju-yung a South Korean entrepreneur, businessman and the founder of

all Hyundai Groups of South Korea.

Born

Chung Ju-yung

November 25, 1915 Tongchon, Kangwŏn, [Korea]

(now Tongchon, North Korea)

Died

March 21, 2001 (aged 85)

Songpa District, Seoul, South Korea

Nationality South Korean

Occupation Businessman

Known for Founder and honorary chairman

of Hyundai.

65

Corporate Social Responsibility Of Hyundai Motors India Limited :

Hyundai Motor India Foundation ( HMIF) , the Corporate Social Responsibility arm of Hyundai Motor India Limited, further reiterated its’ commitment to Tamil

Nadu by launching fresh initiatives. HMIF launched two new programs” Project Go Green” and “Adoption of Model Villages”. These two programs are the latest

addition to other ongoing projects such as community development, road safety, education and healthcare.

On the occasion, HMIF also welcomed the 7th batch of 120 Korean Happy Move

volunteers, who will be working on upgrading living and sanitation conditions of villages and schools in the various districts of Tamil Nadu.

As a part of HMIF’s ongoing support to education projects, the Foundation

undertook the following activities.

Donation of 450 sets of benches to government schools across the state Donation of 200 tables and chairs to teachers of 50 schools

Undertaking responsibility of sinking of Ten (10) bore wells at middle schools

Handing out of certificates to the first graduating batch of 50 nursing students who benefitted from the vocation training scheme of the company

Hyundai Motor Indian Foundation has invested over Rupees Twenty Crore in

various CSR projects since its inception in April 2006.

About the Projects:

Project “Go Green”

Project “Go Green” is an income generating tree planting project with a difference.

Undertaken along with TIST, the project envisages distributing one lakh saplings to farmers in a phased manner. The farmer will plant the sapling on his land

holdings and be paid by HMIF for its upkeep and maintenance. The proceeds from sale of the produce will add to his income. Saplings like , teak, jackfruit, mango etc

will be given out. HMIL along with TIST will regularly monitor the progress.

Adoption of Model Village

This scheme focuses on sanitation and income generation. Five needy villages and three of their hamlets in the Kancheepuram district have been identified under this

66

scheme. The villagers will be provided with individual toilets and given lessons in hygiene. Schools will be provided with safe drinking water. Women’s self help

groups will be provided support and guidance to make their projects commercially viable and ensure income for the members.

Happy Move

The happy move volunteers comprise of a contingent of 120 students and 20 doctors all sponsored by Hyundai Motor Corporation, Korea. So far 54 villages

and 62 schools have benefited through this initiative under their health, sanitation and nutrition program. These students have tiled floors of the schools, built new

toilets , increased the level of hygiene standards in the school community kitchens, renovated and repaired the schools where required.

They have also conducted medical camps for adults and educated the villagers

about hygiene issues.

About Hyundai Motor India Foundation

Hyundai Motor India Foundation was formed on April 10, 2006. Born out of the need to provide structured support to community development, HMIF aims to

uplift the larger section of the society through a Five Point program Viz:

Education Road safety

Community Development Healthcare

Arts and Culture

All projects of HMIF are extremely popular with the public and well appreciated by the government. HMIF if funded directly through Hyundai Motor India Limited

(HMIL) through a contribution of Rs 100 for every car sold. For further information,

67

Promoters, Chairman, Board Of Directors And

Management Personnel of Tata Motors :

Jehangir Ratanji Dadabhoy Tata (29 July 1904 – 29 November 1993) was a

French-born Indian aviator and business tycoon. He was the former Chairman of Tata Sons. He became India's first licensed pilot in 1929. In 1983, he was awarded

the French Legion of Honour and, in 1992, India's highest civilian award, the Bharat Ratna.[1]

Born 29 July 1904 Paris, France

Died 29 November 1993 (aged 89) Geneva, Switzerland

Nationality Indian

Ethnicity Parsi

Occupation Former Chairman of Tata Group

Known for

Founder of TCS Founder of Tata Motors

Founder of Titan Industries Founder of Tata Tea

Founder of Voltas Founder of Air India

Religion Zoroastrianism

Spouse(s) Thelma Vicaji Tata

Children None

Parents R.D. and Suzanne Tata nee Brière

Mr. Karl Slym served as the Managing Director at Tata Motors Limited from

September 13, 2012 to January 26, 2014. Mr. Slym joined Tata Motors in

68

September 2012. Mr. Slym served as the Managing Director and President of

General Motors India Pvt. Ltd. (known as GM India) at General Motors Company

from October 1, 2007 to January 1, 2012. He served as an Executive Vice

President of SAIC GM Wuling Automobile Co., Ltd. since January 1, 2012. He

served as President of Cami Automotive Inc. since September 2002. He served as

President and Managing Director for Indian Subsidiary of Motors Liquidation

Company (formerly General Motors Corporation) from October 1, 2007 to July

2009. Mr. Slym served as Vice President of Quality at General Motors, Asia

Pacific and GM Daewoo since January 1, 2006. He joined General Motors in 1995

and served as an Assistant Plant Manager at the Oshawa car assembly plant in

1999. He served as plant manager of GM of Canada's Oshawa car plants 1 and 2 in

Ontario, Canada. He served as a Director of General Motors India Pvt. Ltd. until

January 1, 2012. He served as Director of CAMI Automotive, General Motors'

Canadian joint venture with Suzuki Motor Manufacturing Corporation, since

September 2002. He then moved on to general assembly manager at the same

facility before becoming director of manufacturing for the new Opel Polska plant

development in Gliwice, Poland, in 1997. He worked for Toyota U.K. in

Derbyshire, rising to General Assembly Manager, before joining GM. Mr. Slym

served as a Director of Tata Motors Limited until January 26, 2014. He was

awarded a Sloan Fellowship from GM and in 2002 earned a master of science

degree in business administration from Stanford University. He graduated in 1984

from his post-secondary education in production engineering at England's Derby

University. Mr. Slym passed away on January 26, 2014.

Ratan

Tata

28 December 1937 (age 76)

Surat, India

69

Born

Residence Colaba, Mumbai, India[1]

Nationality Indian

Ethnicity Parsi

Alma mater Cornell University

Occupation Former Chairman of Tata

Group

Religion Zoroastrianism

Awards Padma Vibhushan (2008)

KBE (2009)

Signature

Ratan Tata, KBE (Born Ratan Naval Tata on 28 December 1937) is an Indian businessman of the Tata Group, a Mumbai-based conglomerate. He was the

chairman of the group from 1991-2012. He stepped down as the chairman on 28 December 2012 and now holds the position of Chairman Emeritus of the group which is an honorary and advisory position. He will continue as the chairman of

the groups charitable trusts.[2]

Early life

Ratan Tata is the adoptive great-grandson of Tata group founder Jamsetji

Nusserwanji Tata.

Tata began his schooling in Mumbai at the Campion School and the Bishop Cotton School in Shimla, and finished his secondary education at the Cathedral and John

Connon School.[4] He completed his B.S. in architecture with structural engineering from Cornell University in 1962, and the Advanced Management

70

Program from Harvard Business School in 1975.[5] Tata is a member of the Alpha Sigma Phi fraternity.

Career

Tata began his career in the Tata group in 1962; he initially worked on the shop floor of Tata Steel, shovelling limestone and handling the blast furnace.[6]

In 1991, J. R. D. Tata stepped down as Tata Industries chairman, naming Ratan as

his successor.

In 1991, Tata was appointed as the chairman of the Tata group. Under his stewardship, Tata Tea acquired Tetley, Tata motors acquired Jaguar Land Rover

and Tata Steel acquired Corus, which have turned Tata from a largely India-centric company into a global business, with 65% revenues coming from abroad. He also

pushed the development of the Tata Indica and the Tata Nano Ratan Tata retired from all executive responsibility in the Tata group on December 28, 2012 which is

also his 75th birthday and he is succeeded by Cyrus Mistry, the 44-year-old son of Pallonji Mistry and managing director of Shapoorji Pallonji Group.[7][8]

He is chairman emeritus of Tata Sons, Tata Motors, Tata Steel and a few other

group companies. He is also the chairman of the main two Tata trusts Sir Dorabji Tata and Allied Trusts and Sir Ratan Tata Trust which together hold 66% of shares

in the group holding company Tata Sons.

Ratan Tata has served in various capacities in organisations in India and abroad. He is a member of the Prime Minister's Council on Trade and Industry. Tata is on

the board of governors of the East-West Center, the advisory board of R&D's Center for Asia Pacific Policy, the jury panel of Pritzker Architecture Prize -

considered to be one of the world's premier architecture prizes [9] and serves on the program board of the Bill & Melinda Gates Foundation's India AIDS initiative.[10]

71

Cyrus Pallonji Mistry (born 4 July 1968) is an Irish businessman who became chairman of Tata Group, an Indian business conglomerate, on 28 December

2012.[2][3] He is the sixth chairman of the group and the second not to be named Tata, after Nowroji Saklatwala.[4] The Economist has described him as "the most

important industrialist" in both India and Britain.[5]

He is the youngest son of Indian construction magnate Pallonji Mistry.[6]

Cyrus Mistry

Born 4 July 1968 (age 45)

Nationality Irish[1]

Alma mater Imperial College London

London Business School

Occupation Chairman of Tata Group

Spouse(s) Rohiqa Mistry

Children 2

Parents Pallonji Mistry

Patsy Perin Dubash

Early life and education

Mistry studied at the Cathedral & John Connon School in Mumbai.[7] He graduated from the Imperial College, London with a BEng in civil engineering and holds a

Master of Science in management from the London Business School. He is a fellow of the Institution of Civil Engineers.[8][9]

Career

Mistry has been managing director of Shapoorji Pallonji & Company, which is part

of the Shapoorji Pallonji Group. He joined the board of Tata Sons on 1 September 2006, a year after his father retired from it.[1] He served as a Director of Tata Elxsi

72

Limited, from 24 September 1990 to 26 October 2009 and was a Director of Tata Power Co. Ltd until 18 September 2006.[citation needed]

In 2012, Mistry was appointed as the chairman of Tata Sons. In addition, he is also chairman of all major Tata companies including Tata Industries, Tata Steel, Tata

Motors, Tata Consultancy Services, Tata Power, Tata Teleservices, Indian Hotels, Tata Global Beverages and Tata Chemicals.[citation needed

73

Corporate Social Responsibility Of Tata Motors :

Education

Education initiatives implemented include scholarships, infrastructure and facility improvement to allow greater access to quality education, implementing

extra-curricular activities for overall development of students and teacher training programs.

A joint team of journalists and employees of Tata Motors Thailand donated items

such as sun-filter shades to help block sunshine on the school playgrounds, life-vests for children in the Baan Phukhem school, Amphur Kaengkrachan and

Phetchburi. Since most of them travel to school via boat, towels, blankets, rice, slippers and various other essentials in addition to a financial donation for the

construction of the sun-filter shades.

Monetary donations of KRW 35 million were made by Tata Daewoo for delivery of coal briquette, scholarships for school-going children in South Korea. Training

program for teachers in Jeonbuk, South Korea, and an alliance with Gunsan Yongkwang Girls' Middle School was formed under the 'Company School Alliance

Program.'

Employability and Skill Advancement To promote skill-based employment for youth Tata Motors collaborates with 112

Industrial Training Institutes (ITI) across 19 states under the Institute Management Committee (IMC) Model. At the plant level, training is provided to women

through Self Help Groups to empower them. The empowerment paves the way for economic self-reliance. Tata Motors Grihini Social Welfare Society, which

employs more than 1000 women, achieved a significant milestone by crossing a turnover of 13 crores. To align community initiatives with core business

processes, we initiated a 'Driver Training Programme' with a target of training 3.4 million youth over a period of ten years.

Jaguar Land Rover with Birmingham Metropolitan College forged a

partnership to deliver Interactive Learning Programmes for schools and colleges at the Jaguar Land Rover Education Business Partnership Centres in

Solihull and Castle Bromwich, Birmingham. The Centres will be the hubs for showcasing engineering careers to pupils from across the region so they consider engineering when they start to think about their career options. Further, a

partnership with the Institution of Mechanical Engineers (IMechE) builds on a long

74

standing relationship with IMechE and reflects the need for the UK to maintain its engineering pedigree.

Pursuing the objectives of fostering close relations with the local community and of providing relevant industrial experience to the engineering students, Tata

Motors South Africa forged an alliance with the Engineering Faculty at the University of Pretoria. The Company has provided on-the-job industrial training on various functions like production, quality, purchase, logistics etc., to students from

the University of Pretoria.

Environmental conservation

Tata Motors' focus on environmental management helps preserve the long-term health of people and ecosystems and build strong relationships with local communities. Various initiatives have been undertaken within the broad frame of

Environment and Climate Change to address the conservation of natural resources and energy, minimize waste generation, enhance recovery and recycling of

material and develop eco-friendly process and systems. We have been continuously working towards reducing our various environmental footprints,

which is evidenced by our decrease in specific consumption levels. We recycle close to 69% of wood packaging, eliminating the use of fresh wood. A 200 litre

engine oil barrel can now be used to test 170 engines instead of 85 engines. At Jamshedpur and Lucknow, the wet garbage from our canteens is converted to

usable organic manure to sustain greenery in the plants. We achieved annualized energy savings of 230,959 GJ through conservation initiatives across our

operations. Similarly, in last three years, we have reduced Green House Gas emissions by 22,581.62 tonnes of CO2 while total energy consumed per vehicle produced has also decreased.

Healthcare Tata Motors actively promotes healthcare both at the national and plant levels. A

partnership with Smile Train empowers surgeons to provide free corrective surgery for children with cleft lip and palette deformities. Further, AIDS awareness campaigns were conducted for truck drivers. Preventive and curative healthcare

facilities are provided through small Mobile Health Clinics, awareness camps, hospitals and clinics. Besides, rural health workers are trained to act as foot doctors

to cure minor ailments in their allocated areas.

Tata Motors Thailand also extended vehicular support to raise funds for helping the Tsunami and Earthquake victims of Japan.

75

Reducing Pollution

Tata Motors has been at the forefront of the Indian automobile industry's anti-

pollution efforts by introducing cleaner engines. It is the first Indian Company to introduce vehicles with Euro norms well ahead of the mandated dates. Tata Motors'

joint venture with Cummins Engine Company, USA, in 1992, was a pioneering effort to introduce emission control technology for India. Over the years, Tata Motors has also made investments in setting up of an advanced emission-testing

laboratory.

Restoring Ecological Balance

Tata Motors has set up effluent treatment facilities in its plants, to avoid release of

polluted water into the ecosystem. In Pune, the treated water is conserved in lakes attracting various species of birds from around the world thus turning the space

into a green belt.

Tree plantation programmes involving villagers and Tata Motors employees, have turned acres of barren village green. Tata Motors has planted as many as 80,000

trees in the works and the township and more than 2.4 million trees have been planted in Jamshedpur region. Over half a million trees have been planted in the

Pune region. Tata Motors has directed all its suppliers to package their products in alternate material instead of wood.

76

Promoters, Chairman, Board Of Directors And Management

Personnel of Honda Cars India Limited

Honda : Name Age Since Current Position

Fumihiko Ike 61 2013 Chairman of the Board, Representative Director

Takanobu Ito 59 2013 President, Executive President, Representative Director

Tetsuo Iwamura 62 2013

Executive Vice President, Chief Director of North America Region, Chief Director of Four-

wheeled Business, Risk Management Officer, President of Subsidiaries, Representative

Director

Sho Minekawa 58 2013

Senior Managing Executive Officer, Chief

Director of Japan Sales, Chief Director of Safety Drive Popularization

Takashi Yamamoto 60 2013

Senior Managing Executive Officer, Senior

Director of Four-wheeled Production in Main Four-wheeled Business Unit, Director

Yoshiharu Yamamoto 60 2013 Senior Managing Executive Officer, Chief Director of IT, President of Subsidiary, Director

Hidenobu Iwata

2012

Senior Managing Executive Officer, President of Subsidiary

Masahiro Yoshida 56 2013 Managing Executive Officer, Chief Director of Administration, Compliance Officer, Director

Koichi Fukuo

2010 Managing Executive Officer

Ko Katayama

Managing Executive Officer, Senior Director of

SCM of Automobiles Production Supervision Unit and Main Automobiles Business Unit

Hiroshi Kobayashi 58

Managing Executive Officer, Chief Director of

Asia and Oceania, President of Subsidiaries

Yoshiyuki Matsumoto

Managing Executive Officer, President of

Subsidiary

Manabu Nishimae

Managing Executive Officer, Chief Director of

Europe & CIS & Middle Eastern and Africa, President of Subsidiary

77

Corporate Social Responsibility Of Honda Cars India

Limited :

Honda Foundation announces Young Engineers and Scientists Award for the

4th Consecutive Year

The YES awards were instituted in 2008 to encourage and support young Indian engineers and scientists

Honda Motor India Pvt. Limited (HMI) on Feb 26, 2012 announced the winners of

fourth Young Engineers and Scientists’ (YES) awards in India and presented awards to fourteen students from India’s premier institutes for science &

technology – Indian Institute of Technology.

The YES Award initiative of Honda Foundation has been facilitated by Honda Motor India Pvt. Ltd., to foster young students who have excelled in the area of

science and technology and continue to aspire for higher academic achievement in the area of Eco-Technology. Through this initiative, Honda Foundation will grant financial aid to the winning students and also give them an opportunity to pursue

trainings or higher professional education, in Japan.

A cash scholarship of US $3000, was presented to fourteen students selected from

seven IITs – Delhi, Bombay, Roorkee, Madras, Kharagpur, Kanpur & Guwahati on the basis of their Cumulative Grade Point Average (CGPA), technical papers, essays and finally their performance in the one-on-one interviews. All the YES

Award recipients may claim $ 7,000/- for 2 months Summer Training in Japan or ‘Yes Award Plus’ scholarship of US$10,000 if they are admitted to, and join

postgraduate (master or doctoral) study in the designated Japanese universities, within three years of having received the YES Award.

Hello Woods Symposium

We have held a variety of programs with the theme of "Healthy Forests and Healthy Kids" at Hello Woods, which includes a restored satoyama village forest

on an expansive, 42-hectare site. The Hello Woods Symposium was launched in 2010 to commemorate the 10th anniversary of the founding of Hello Woods. Guests representing a variety of perspectives, including officials from government

agencies and local governments as well as researchers and representatives of NPOs, are invited to exchange views on forests, children, and related topics.

78

Promoters, Chairman, Board Of Directors And

Management Personnel of Volkswagan India

Key Executives for Volkswagen India Pvt Ltd.

Name Title

Mahesh Kodumudi

Managing Director, President, Head of

Production – Pune & Maharashtra Plants

and Chief Representative

Hans-Jaochim Rothenpieler

Managing Director for Engineering - VW

Saschen

Wolf-Stefan Specht

Head of Volkswagen Passenger Cars Sales

of India

Maria Stenstrom

Managing Director of Operations of

Volkswagen Group Canada and Brand

Director of Volkswagen Canada

Maik Stephan

Managing Director of Volkswagen Group

Sales

K. K. Swamy

Managing Director and Vice President

Frank Tuch

Head of Group Quality Assurance -VW

Group

79

Corporate Social Responsibility Of Volkswagan India :

Volkswagen India initiates CSR in drought declared Gulani village at Khed in

Pune

Volkswagen India Private Limited has undertaken the initiative of recharging the water resource at Gulani village in Khed taluka.

The water channel in the village will be deepened and widened so as to increase

the water capacity by over 13 times and it will be used for domestic and agriculture purposes. Government of Maharashtra has declared 18 villages in Khed taluka as

draught affected and has approached industries and corporates to come ahead and join hands in strengthening the water resources in these villages. Volkswagen

India, has taken up this project at Gulani village situated approximately 30 kilometers from Volkswagen Pune Plant in Chakan.

Volkswagen India, prior to this initiative, has undertaken several other social

responsibilities in the past such as building an additional block at Zilla Parishad school in Nighoje, H1N1 (Swine Flu) vaccination to over 1,500 school children in the neighbouring villages of Nighoje, Mhalunge and Kharabwadi, and also is

supporting Inter-Mission Industrial Development Community College for a period of three years. This institute educates the underprivileged youth and women in

Chakan. Earlier, Volkswagen India had donated an ambulance to Red Cross in Nighoje and a bus to the Inter Mission Care and Rehabilitation Society in Paud.

With its headquarters in Pune, Maharashtra, the Volkswagen Group is represented

by five brands in India: Audi, Lamborghini, Porsche, ŠKODA, and Volkswagen. The Volkswagen Group has been present in India for the last 12 years and began

its India journey with the entry of the ŠKODA brand in 2001, Audi brand and Volkswagen brand in 2007, Porsche brand and Lamborghini brand in 2012. Each

brand has its own character and operates as an independent entity in the market.

2) Community education pimpri chinchwad by Volkswagen.

80

Promoters, Chairman, Board Of Directors And

Management Personnel of Nissan Motors India Private

Limited :

Mr Kenichiro Yomura , president of Nissan's India operations.

Insiders at nissan motor co ltd (7201)

Name (Connections)

Title

Carlos Ghosn

Chairman, Chief Executive

Officer, President,

Chairman of Renault, Chief

Executive Officer of

Renault and President of

Renault

--

Toshiyuki Shiga

Vice Chairman, Chief

Operating Officer and

Chairman of Global

Environment Management

Committee

--

Hidetoshi Imazu

Executive Vice President

of Manufacturing & Scm

and Director

Mitsuhiko Yamashita

Executive Vice President

of Research and

Development and Director

Hiroto Saikawa

Chief Competitive Officer,

Executive Vice President

and Representative

Director

Greg Kelly

Senior Vice President and

Representative Director

Jose Munoz

Executive Vice-President

81

Name (Connections)

Title

and Chairman of The North

America Business

Jose Valls

Senior Vice-President and

Chairman of The Latin

America Unit

Scott Becker

Vice Chairman of North

America Operations and

Vice President of Legal

Affairs -North America

Other Board Members on Board

Name (Connections)

Primary Company

William Krueger

Jatco Ltd.

Katsumi Nakamura

Nissan Motor Co. Ltd.

Toshiyuki Nakamura

Nissan Motor Co. Ltd.

Masahiko Aoki

Nissan Motor Co. Ltd.

Jean-Baptiste Duzan

AB Volvo

Mikio Nakura

Nissan Motor Co. Ltd.

Shigetoshi Ando

Nissan Motor Co. Ltd.

Tony Laydon

Nissan Motor Co. Ltd.

82

Corporate Social Responsibility Of Nissan Motors India

Private Limited :

Nissan to become the world’s No1 seller of zero-emission vehicles by 2016

CEO Carlos Ghosn speaks with the Global Media Center on

announcement of the Nissan Green Program 2016.

Nissan Motor Comapny announced our new six-year environmental action plan,

Nissan Green Program (NGP2016) on Oct. 24, 2011, Yokohama in Japan, where company has headquartered. Rising population and developing economies mainly

in emerging markets arouse concerns about energy, resource supply, price hike, and environmental impact rise.

NGP2016 focuses on reducing environmental impact of corporate activities and

pursuing harmony between resource consumption and ecology by promoting and widening the application of green technologies that were developed in NGP2010,

previous environmental action plan, and contributing to recycling-based society.

Nissan CEO Carlos Ghosn speaks with the Global Media Center about the company’s new mid-term environmental plan, promoting zero-emission vehicles

and corporate social responsibility (CSR).

.

83

Chapter 3 : External Environment

PESTL Analysis of Automobile Sector• Political

• In 2002, the Indian government formulated an auto policy that aimed at promoting integrated, phased, enduring and self-sustained growth of theIndian 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

• Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheeler.

• Lying emphasis on R&D activities carried out by companies in India.

• Promoting multi-model transportation and the implementation of mass rapid transport system.

• Economic

• Economic pressures on the industry are causing automobile companies to reorganize the traditional sales process.

• 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.

• Several Indian firms have partnered with global players.

• While some have formed joint ventures with equity participation, other also has entered intot echnology tie-ups.

• Establishment of India as a manufacturing hub, for mini, compact cars and for auto components.

84

• 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.

• 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 7000-12000 form the largest segment in the passenger car market.

• Indian customers are 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 evenamongst the well off.

• Prefrence for fuel efficient cars with low running costs.

• Technological

• More and more emphasis is being laid on R & D activities carried out bycompanies in India.

• tax deduction of up to 150% for in-house research and R & D activities.

• The Government of India is promoting National Automotive Testing andR&D Infrastructure

• Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability.

• 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.

85

Environmental Issues

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.

The category for Indian Automobile Industry is "Red" which represents the highly polluting

industries Several Automobile exhaust pollutants are as follows:

Hydrocarbon

Nitrogen Oxides

Carbon Monoxide

Carbon Dioxide

• Legal

• Legal provision relating to environmental population by automobiles.

• Legal provisions relating to safety measures.

• 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.

86

Automobile Industry Regulations in India

The automotive regulations in India are governed by the Ministry of Road Transport and Highways (MoRT&H) which is the nodal ministry for regulation of

the automotive sector in India.[1][2]

In India the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic, construction & maintenance of motor vehicles etc are

governed by the Motor Vehicles Act, 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR).

The CMVR - Technical Standing Committee (CMVR-TSC) advises MoRT&H on

various technical aspects related to CMVR. This Committee has representatives from various organisations namely; Ministry of Heavy Industries & Public

Enterprises (MoHI&PE), MoRT&H, Bureau of Indian Standards (BIS), Testing Agencies such as Automotive Research Association of India (ARAI), Vehicle

Research and Development Establishment (VRDE), Central Institute of Road Transport (CIRT), industry representatives from Society of Indian Automobile

Manufacturers (SIAM), Automotive Component Manufacturers Association (ACMA) and Tractor Manufacturers Association (TMA) and representatives from

State Transport Departments.

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards Committee (AISC) having members from various stakeholders in

drafting the technical standards related to Safety. The major functions of the committee are as follows:

Preparation of new standards for automotive items related to safety.

To review and recommend amendments to the existing standards Recommend adoption of such standards to CMVR Technical Standing

Committee Recommend commissioning of testing facilities at appropriate stages Recommend the necessary funding of such facilities to the CMVR Technical

Standing Committee Advise CMVR Technical Standing Committee on any other issues referred

to it

AISC submits the draft safety standards in the form of recommendations to CMVR-TSC for final approval. The CMVR – TSC looks into the

87

recommendations of AISC and either approves or sends the recommendations to AISC for amendments. After approval CMVR-TSC submits its final proposal to

MoRT&H. MoRT&H then takes the final decision for incorporation of the recommendations in CMVR.

The Automotive Industry Standards are published by the Automotive Research Association of India on behalf of the Automotive Industry Standards Committee.

Under Rule 126 of the CMVR, various test agencies are established to test and

certify the vehicles based on the safety standards and emission norms prescribed by the Ministry. Every manufacturer of motor vehicle has to submit a prototype of

the vehicle to be manufactured to any of the test agencies mentioned hereafter. After testing the vehicle for compliance of all standards and norms, the test agency shall grant a certificate to the manufacturer. The test agencies are – Automotive

Research Association of India, Pune (ARAI), Vehicle Research & Development Establishment, Ahmednagar, Central Farm Machinery Testing and Training

Institute, Budhni, Indian Institute of Petroleum, Dehradun, Central Institute of Road Transport, Pune and International Centre for Automotive Technology,

Manesar.

Facing the challenges of new age

The Indian automotive industry has been facing new challenges due to the rapid

changes taking place during the last decade..

To realise the growth predictions, it is important to overcome various challenges the industry is facing currently. Two of the foremost challenges are the spiralling

cost of fuel and the paucity of highly skilled manpower.

Rising oil price

International price of crude oil has crossed US$ 120 per barrel and is rising at an alarming rate. The forecast of market experts that the crude oil price will plateau

around US$ 100 per barrel has been proved wrong. The skyrocketting crude oil price rise will affect the economic growth of most of the nations of the world

including India. The prospects of India and China of becoming economic superpower will be seriously affected. Also, the rise in oil prices will impact the

growth of global automotive industry. Unless the use of alternative fuels increases, it is very unlikely that the situation will change for the better. This necessarily

means that more and more investments should be directed towards R&D,

88

establishing mechanisms to translate R&D results into products and their efficient manufacturing. This will also require radical redesigning of engines.

Human resources

The second major challenge is the creation of highly skilled human resource required for the auto industry. Auto industry, like many other industries is facing

severe shortage of skilled technical as well as managerial manpower. This challenge becomes all the more daunting because faults lie at a more fundamental

level of training infrastructure and the social perception.

In India, engineering colleges and technology institutions impart engineering education. Many of these institutions used to provide training in automotive

engineering through well-established Internal Combustion Engineering (ICE) and Mechanical Engineering departments. However, the new wave of IT, electronics

and communication technology has forced these institutions to close down ICE departments and also reduce the umber of Mechanical Engineering departments.

The well-known ICE department of the Indian Institute of Science that produced high quality research and trained manpower is a sad example of these

developments. It is true that more than 50 per cent of the total components of the current automobiles are electronic and that the importance of communication technology is also increasing. However, the advances and training in these areas

cannot be at the cost of the fundamental aspects of auto engineering including thermodynamics. Therefore, we need to redesign our automotive engineering

courses and brand them properly to attract good students. This will help in not only increasing the number of auto engineers, which is crucial to the growth of the auto

industry, but also getting the human resources to carry out research in the auto sector and achieve breakthroughs necessary for designing the next-generation

vehicles.

There is also an urgent need to improve the quality of skilled and semi skilled manpower working in the auto industry. To do this the existing vocational

educational institutions have to be upgraded and more number of such institutes should be started. Today, most of our vocational educational institutes have poorly

trained, unmotivated and uninspiring teaching faculty, and outdated equipment, machines, syllabus and governance system. National Knowledge Commission, in

its recent report has given several recommendations to improve vocational training in this country. The Central Government has accepted all the recommendations.

89

Two major recommendations are rebranding the vocational education by updating the syllabus and public-private partnership (PPP) in the establishment and

governance of vocational educational institutes. Accordingly, the finance minister has allotted an initial amount of Rs. 1,000 crores in this year's budget to establish a

corporation of Rs. 15,000 crore outlay through PPP model. It is hoped that this corporation will help immensely in revolutionising and making the vocational

education more relevant to the contemporary needs.

The third area that needs to be addressed immediately is the shortage of human resources in auto design. The government as well as the professionals have realised

that creative people in India need to be given training by which they can come into the mainstream and design contemporary products in general and autos in

particular. National Institute of Design at Ahmedabad is playing a seminal role in producing good designers. However, the output of the institute is very small.

Therefore, in the first of its kind National Policy of Design, the Government has suggested to establish four such institutes, immediately.

Regulatory Bodies of the industry :

The automotive regulations in India are governed by the Ministry of

Shipping, Road Transport & Highways (MoSRT&H) .

The principal instrument governing the automotive sector in India is the

Motor Vehicles Act, 1988 (MVA) along with the Central Motor Vehicles

Rules 1989 (CMVR).

Automotive Research Association of India (ARAI)

Vehicle Research & Development Establishment, Ahmednagar

Central Farm Machinery Testing and Training Institute, Budni.

Indian Institute of Petroleum, Dehradun

Central Institute of Road Transport, Pune.

International centre for Automotive Technology, Manesar.

Ministry of Heavy Industries & Public Enterprises (MoHI&PE)

90

Vehicle Research and Development Establishment (VRDE)

Central Institute of Road Transport (CIRT)

Society of Indian Automobile Manufacturers (SIAM)

Automotive Component Manufacturers Association (ACMA)

Tractor Manufacturers Association (TMA)

Central Motor Vehicles Rules-Technical Standing Committee (CMVR-TSC)

Auto Policy In India :

1. POLICY OBJECTIVES

This policy aims to promote integrated, phased, enduring and self-sustained growth of the Indian automotive industry. The objectives are to:-

(i) Exalt the sector as a lever of industrial growth and employment and to achieve a high degree of value addition in the country;

(ii) Promote a globally competitive automotive industry and emerge as a global source for auto components; (iii) Establish an international hub for manufacturing small, affordable passenger

cars and a key center for manufacturing Tractors and Two-wheelers in the world; (iv) Ensure a balanced transition to open trade at a minimal risk to the Indian

economy and local industry; (v) Conduce incessant modernization of the industry and facilitate indigenous

design, research and development; (vi) Steer India's software industry into automotive technology;

(vii) Assist development of vehicles propelled by alternate energy sources; (viii) Development of domestic safety and environmental standards at par with

international standards.

Policies :

FOREIGN DIRECT INVESTMENT

7Automatic approval for foreign equity investment upto 100% of manufacture of automobiles and component is permitted.

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IMPORT TARIFF

The Government will review the automotive tariff structure periodically to encourage demand, promote the growth of the industry and prevent India from

becoming a dumping ground for international rejects. In respect of items with bound rates viz. Buses, Trucks, Tractors, CBUs and Auto components,

Government will give adequate accommodation to indigenous industry to attain global standards. In consonance with Auto Policy objectives, in respect of unbound

items i.e., Motor Cars, MUVs, Motorcycles, Mopeds, Scooters and Auto Rickshaws, the import tariff shall be so designed as to give maximum fillip to

manufacturing in the country without extending undue protection to domestic industry.. Used vehicles imported into the country would have to meet CMVR,

environmental requirements as per Public Notice issued by DGFT laying down specific standards and other criteria for such imports.

EXCISE DUTY

India can build export capability and become an Asian hub for export of small cars.

The growth of this segment needs to be spurred. Multi Utility Vehicles are an important mode of economical mass transport in rural India due to poor road

infrastructure and lack of good State transport system. They are the first vehicle purchased by a number of farmers, traders, small businessmen in rural and semi-

urban markets. The Government will endeavour to provide fiscal incentives to this sector. Commercial Vehicles Presently excise duty on commercial vehicles sold by

a manufacturer whether as a chassis or with a complete body is 16%. However, no duty is levied on the body that is built by an independent body builder on chassis bought from a manufacturer. This dispensation inveigles production of the

complete trucks and buses by the chassis manufacturer and is detrimental to safety standards. The duty imposed on the construction of bodies by an independent body

builder, small or organised sector, shall be equal to that of bodies built by a chassis manufacturer. The Government will encourage fabrication of bus body on bus

chassis designed for better passenger comfort instead of truck chassis as is the current practice. The Government will promote the use of multi-axle vehicles for

carriage of goods as they cause reduced environmental pollution and lesser wear and tear on road surface in comparison to the existing 2-axle trucks.

In the Interiem Budget 2014 of India, Exise duty for automobile sector will reduce from 12% to 8%.So that prices of automobiles will reduced.

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IMPROVING ROAD INFRASTRUCTURE

Traffic on roads is growing at a rate of 7 to 10% per annum while the vehicle

population growth for the past few years is of the order of 12% per annum. Poor road infrastructure and traffic congestion can be a bottleneck in the growth of

vehicle industry. A balanced and coordinated approach will be undertaken for proper maintenance, upgradation and development of roads by encouraging private sector participation besides public investment and incorporating latest technologies

and management practices to take care of increase in vehicular traffic. For the convenience of traveling public the Government shall also promote multi-modal

transportation and the implementation of mass rapid transport systems.

INCENTIVE FOR RESEARCH AND DEVELOPMENT

The Government shall promote Research & Development in automotive industry

by strengthening the efforts of industry in this direction by providing suitable fiscal and financial incentives. The current policy allows Weighted Tax Deduction under

I.T. Act, 1961 for sponsored research and in-house R&D expenditure. This will be improved further for research and development activities of vehicle and component manufacturers from the current level of 125%. 11.3 In addition, Vehicle

manufacturers will also be considered for a rebate on the applicable excise duty for every 1% of the gross turnover of the company expended during the year on

Research and Development carried either in-house under a distinct dedicated entity, faculty or division within the company assessed as competent and qualified

for the purpose or in any other R&D institution in the country. Allocations to automotive cess fund created for R&D of automotive industry shall be increased

and the scope of activities covered under it enlarged.

BUILDING BYE LAWS FOR RESIDENTIAL, COMMERCIAL AND OTHER USES

With the growth of vehicles, smooth traffic movement has come under severe

strain. The problem has been aggravated because of inadequate provision of parking facilities generally. Starting with metropolitan and important towns, the

Government will pursue with State Governments and Local bodies amendments to bye laws for upward revision of the parking norms for new residential buildings,

construction of common parking for existing residential areas besides parking upgradation in all commercial areas. Multi-storied parking shall also be

encouraged.

ENVIRONMENTAL ASPECTS

93

The automotive and oil industry have to heave together to constantly fulfill environment imperatives. The Government will continue to promote the use of low

emission fuel auto technology. The Government after considering the recommendations of the Expert Committee on Auto Fuel Policy headed by Dr.

R.A. Mashelkar, have approved a road map for implementation for the auto fuel quality consistent with the required levels of vehicular emissions norms and

environmental quality. The Government will formulate a comprehensive auto fuel policy covering the other related aspects and ensure availability of appropriate auto

fuel/fuel mixes at minimum social costs across the country. Suitable institutional mechanism will be put in place for certification, monitoring and enforcement of

different technologies/fuel mixes . In the short run, the Government will encourage the use of short chain hydrocarbons along with other auto fuels of the quality

necessary to meet the vehicular emissions norms. There is prime need to support the development and introduction of vehicles propelled by energy sources other

than hydrocarbons by promoting appropriate automotive technology. Hybrid vehicles and vehicles operating with batteries and fuel cells are alternatives to the conventional automobile, which in their early beginnings, lie intreasured.. In order

to facilitate faster upgradation of environmental quality, the Govt. will consider having a terminal life policy for commercial vehicles alongwith incentives for

replacement for such vehicles.

SAFETY

14.1 Government will duly amend the Central Motor Vehicles Rules, Bureau of

Indian Standards (BIS) and other relevant provisions and introduce safety regulations that conform to global standards. 14.2 Testing and certification facilities need to be revised and strengthened in accordance with safety standards

of global order. Government, in partnership with industry, will tend to this requirement.

94

Pollution handling and environmental issues faced by the industry.

If it is believed that smoking is harmful then there is a need to take a break from

the personal automobile as the favorite set of wheels could be harming the environment and even the health more. As rest of the world is catching up with the

concept of personal cars in the country, where days back having a car for the entire family will soon become a thing of the past as each bread winner of the family

wants his or her personal set of wheels. Hence it is would not be surprising that the

pollution levels in several metros of the country like Delhi, Mumbai, Kolkata and Bangalore are on the increase. In the cars the pollution comes from the process of

the evaporation of the fuel and from the by-products of the combustion process.

Cars use Petrol and Diesel which are a mixture of Hydrocarbons and compounds usually contain Hydrogen and carbon items. In simple terms the Oxygen in the air

converts all the Hydrogen in the fuel to water and Carbon in the fuel would be converted to Carbon Dioxide. Nitrogen is supposed to remain unaffected in this

whole process. However things are not that good as they look and engines are not that perfect either. Several types of harmful gases are emitted in the whole process

of combustion which leaves the air polluted.

The government is taking and has taken steps to introduce catalytic converters in the country a few years back to reduce air pollution. In addition to this petrol with

lead has been phased out from several parts of the country to cut down on lead particles in the exhaust.

In addition to this several cars and two wheeler companies are striving hard

themselves to provide pollution free environment. Companies like Tata Motors and Mahindra are fine tuning their Diesel engines for optimum performance and

reduced emission. In the two-wheelers category the companies like Hero Honda is providing pollution free vehicles.

95

Liberalisation

Eventually multinational automakers, such as, though not limited to, Suzuki and

Toyota of Japan and Hyundai of South Korea, were allowed to invest in the Indian market ultimately leading to the establishment of an automotive industry in India.

Maruti Suzuki was the first, and the most successful of these new entries, and in part the result of government policies to promote the automotive industry beginning in the 1980s. As India began to liberalise their automobile market in

1991, a number of foreign firms also initiated joint ventures with existing Indian companies. The variety of options available to the consumer began to multiply in

the nineties, whereas before there had usually only been one option in each price class. By 2000, there were 12 large automotive companies in the Indian market,

most of them offshoots of global companies.

The Premier Padmini was the Ambassador's only true competitor. Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets

and neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe (Hungary). After some growth in the mid-nineties, exports once

again began to drop as the outmoded platforms handed down to Indian manufacturers by multinationals were not competitive. This was not to last, and

today India manufactures low-priced cars for markets across the globe. As of 18 March 2013 global brands such as Proton Holdings, PSA Group, Kia, Mazda,

Chrysler, Dodge and Geely Holding Group are shelving plans for India due to the global economic crisis.

96

Chapter 4: Financials

Maruti Suzuki India Limited

97

Key Financial Ratios of Maruti Suzuki India

Mar '13 Mar '12 Mar '11 Mar '10 '09

Investment Valuation Ratios

Face Value 5.00 5.00 5.00 5.00

Dividend Per Share 8.00 7.50 7.50 6.00

Operating Profit Per Share (Rs) 140.02 86.98 125.94 129.38

Net Operating Profit Per Share (Rs) 1,442.93 1,231.77 1,267.47 1,014.77

Free Reserves Per Share (Rs) -- -- -- 403.82

Bonus in Equity Capital -- -- -- --

Profitability Ratios

Operating Profit Margin(%) 9.70 7.06 9.93 12.74

Profit Before Interest And Tax Margin(%) 5.33 3.77 7.07 9.73

Gross Profit Margin(%) 5.43 3.86 7.16 9.93

Cash Profit Margin(%) 9.57 7.61 8.89 10.78

Adjusted Cash Margin(%) 9.57 7.61 8.89 10.78

Net Profit Margin(%) 5.38 4.49 6.16 8.34

Adjusted Net Profit Margin(%) 5.38 4.49 6.16 8.34

Return On Capital Employed(%) 15.92 13.53 22.32 27.89

Return On Net Worth(%) 12.87 10.76 16.50 21.10

Adjusted Return on Net Worth(%) 12.87 10.76 16.50 20.29

Return on Assets Excluding Revaluations 615.03 525.68 479.99 409.65

Return on Assets Including Revaluations 615.03 525.68 479.99 409.65

Return on Long Term Funds(%) 16.63 14.49 22.37 28.80

Liquidity And Solvency Ratios

Current Ratio 1.04 1.13 1.57 0.91

Quick Ratio 0.90 1.03 1.26 0.68

Debt Equity Ratio 0.07 0.07 0.01 0.07

Long Term Debt Equity Ratio 0.03 -- 0.01 0.04

Debt Coverage Ratios

Interest Cover 16.76 39.88 125.35 105.39

Total Debt to Owners Fund 0.07 0.07 0.01 0.07

Financial Charges Coverage Ratio 26.56 60.50 165.89 130.02

Financial Charges Coverage Ratio Post Tax 23.41 51.25 133.08 100.18

Management Efficiency Ratios

Inventory Turnover Ratio 23.68 19.81 25.88 30.47

Debtors Turnover Ratio 36.92 40.39 44.81 33.92

Investments Turnover Ratio 23.68 19.81 25.88 30.47

Fixed Assets Turnover Ratio 2.25 2.46 3.14 2.82

Total Assets Turnover Ratio 2.21 2.22 2.62 2.32

Asset Turnover Ratio 2.41 2.35 2.74 2.58

Average Raw Material Holding -- -- -- 10.66

Average Finished Goods Held -- -- -- 5.35

Number of Days In Working Capital 1.02 19.31 24.53 0.83

98

Financial Statements for maruti suzuki india ltd (MSIL) Year over year, Maruti Suzuki India Limited has been able to grow revenues from 352.0B INR to 432.2B

INR. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of

goods sold, SGA expenses and income tax expenses. All of these improvements led to a bottom line

growth from 16.8B INR to 24.7B INR.

Currency in

Millions of Indian Rupees

Mar 31

2010

Restated

INR

Mar 31

2011

Restated

INR

Mar 31

2012

Restated

INR

Mar 31

2013

INR

Revenues 295,915.0 363,330.0 351,972.0 432,159.0

Other Revenues -- 3,559.0 3,959.0 5,477.0

TOTAL REVENUES 295,915.0 366,889.0 355,931.0 437,636.0

Cost of Goods Sold 241,123.0 311,231.0 308,382.0 365,491.0

GROSS PROFIT 54,792.0 55,658.0 47,549.0 72,145.0

Selling General & Admin Expenses, Total 15,820.0 17,170.0 19,006.0 23,326.0

Depreciation & Amortization, Total 8,414.0 10,313.0 11,625.0 18,897.0

Other Operating Expenses -1,001.0 1,408.0 233.0 3,158.0

OTHER OPERATING EXPENSES, TOTAL 23,233.0 28,891.0 30,864.0 45,381.0

OPERATING INCOME 31,559.0 26,767.0 16,685.0 26,764.0

Interest Expense -374.0 -288.0 -611.0 -1,967.0

Interest and Investment Income 3,756.0 3,856.0 3,598.0 2,652.0

NET INTEREST EXPENSE 3,382.0 3,568.0 2,987.0 685.0

Income (Loss) on Equity Investments 797.0 753.0 474.0 219.0

Currency Exchange Gains (Loss) -135.0 135.0 -1,810.0 -1,519.0

Other Non-Operating Income (Expenses) 696.0 362.0 1,173.0 869.0

EBT, EXCLUDING UNUSUAL ITEMS 36,299.0 31,585.0 19,509.0 27,018.0

Gain (Loss) on Sale of Investments 1,264.0 597.0 2,575.0 4,234.0

Gain (Loss) on Sale of Assets -97.0 -79.0 -157.0 -332.0

99

EBT, INCLUDING UNUSUAL ITEMS 37,466.0 32,103.0 21,927.0 30,920.0

Income Tax Expense 11,219.0 8,279.0 5,115.0 6,215.0

Minority Interest in Earnings -- -- -- -13.0

Earnings from Continuing Operations 26,247.0 23,824.0 16,812.0 24,705.0

NET INCOME 26,247.0 23,824.0 16,812.0 24,692.0

NET INCOME TO COMMON INCLUDING

EXTRA ITEMS 26,247.0 23,824.0 16,812.0 24,692.0

NET INCOME TO COMMON EXCLUDING

EXTRA ITEMS 26,247.0 23,824.0 16,812.0 24,692.0

100

Hyundai Motors India Limited

Hyundai reports Rs 12,600 crore revenue from India in H1, 2012

Korean auto major Hyundai Motor Co today reported 3 per cent increase in

revenue from Indian operations at 2,612 billion Korean Won (over Rs 12,600 crore) during the first half of 2012 amid declining sales of its main models, except

for entry-level small car Eon.

According to its half yearly business results report, the the company's Indian arm -- Hyundai Motor India Ltd (HMIL) had a revenue of 2,533 billion Korean Won

(over Rs 12,300 crore) in the first half of 2011.

In terms of volumes, HMIL posted 7.2 per cent increase in sales during the first half of 2012 to 3,25,000 units as against 3,03,000 units in the same period last

year.

The gain in the volume was mainly on account of the entry level hatchback, Eon which clocked 62,000 units during the period. HMIL had launched Eon in October

last year.

During the period under review, sales of the company's best selling model i10

declined by 11.26 per cent to 1,26,000 units in the first six months of the year as compared to 1,42,000 in the year-ago period, the report said.

Sales of premium hatchback i20 also declined by 16.41 per cent to 56,000 units in

the first six months of the year as compared to 67,000 units in the same period last year.

HMIL's combined sales of other models, including Santro, Accent and Verna, also

dropped by 13.82 per cent to 81,000 units during the period under review as against 94,000 units the corresponding period in 2011, it added.

.

101

Tata Motors India Limited

Balance Sheet of Tata

Motors ------------------- in Rs. Cr. -------------------

Mar '13 Mar '12 Mar '11 Mar '10 '09

12 mths 12 mths 12 mths 12 mths ths

Sources Of Funds

Total Share Capital 638.07 634.75 637.71 570.60

Equity Share Capital 638.07 634.75 637.71 570.60

Share Application Money 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00

Reserves 18,496.77 18,991.26 19,375.59 14,208.55

Revaluation Reserves 0.00 0.00 0.00 24.63

Networth 19,134.84 19,626.01 20,013.30 14,803.78

Secured Loans 5,877.72 6,915.77 7,708.52 7,742.60

Unsecured Loans 8,390.97 4,095.86 6,929.67 8,883.31

Total Debt 14,268.69 11,011.63 14,638.19 16,625.91

Total Liabilities 33,403.53 30,637.64 34,651.49 31,429.69

Mar '13 Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths 12 mths ths

Application Of Funds

Gross Block 25,190.73 23,676.46 21,002.78 18,416.81

Less: Accum. Depreciation 9,734.99 8,656.94 7,585.71 7,212.92

Net Block 15,455.74 15,019.52 13,417.07 11,203.89

Capital Work in Progress 4,752.80 4,036.67 3,799.03 5,232.15

Investments 19,934.39 20,493.55 22,624.21 22,336.90

Inventories 4,455.03 4,588.23 3,891.39 2,935.59

Sundry Debtors 1,818.04 2,708.32 2,602.88 2,391.92

Cash and Bank Balance 462.86 1,840.96 2,428.92 612.16

Total Current Assets 6,735.93 9,137.51 8,923.19 5,939.67

Loans and Advances 5,305.91 5,832.03 5,426.95 5,248.71

Fixed Deposits 0.00 0.00 0.00 1,141.10

Total CA, Loans & Advances 12,041.84 14,969.54 14,350.14 12,329.48

Deffered Credit 0.00 0.00 0.00 0.00

Current Liabilities 16,580.47 20,280.82 16,271.85 16,909.30

Provisions 2,200.77 3,600.82 3,267.11 2,763.43

Total CL & Provisions 18,781.24 23,881.64 19,538.96 19,672.73

Net Current Assets -6,739.40 -8,912.10 -5,188.82 -7,343.25

Miscellaneous Expenses 0.00 0.00 0.00 0.00

Total Assets 33,403.53 30,637.64 34,651.49 31,429.69

Contingent Liabilities 14,981.11 15,413.62 19,084.08 3,708.33

Book Value (Rs) 59.98 61.84 315.36 259.03

102

Key Financial Ratios of Tata

Motors

Mar

'13 Mar '12 Mar '11 Mar '10 '09

Investment Valuation Ratios

Face Value 2.00 2.00 10.00 10.00

Dividend Per Share 2.00 4.00 20.00 15.00

Operating Profit Per Share (Rs) 5.39 13.16 73.51 70.68

Net Operating Profit Per Share (Rs) 140.33 171.12 742.00 619.98

Free Reserves Per Share (Rs) -- -- -- 229.67

Bonus in Equity Capital 17.44 17.53 17.45 19.50

Profitability Ratios

Operating Profit Margin(%) 3.83 7.69 9.90 11.40

Profit Before Interest And Tax Margin(%) -0.21 4.68 6.95 8.38

Gross Profit Margin(%) -0.22 4.73 7.01 8.47

Cash Profit Margin(%) 5.43 6.25 6.98 7.26

Adjusted Cash Margin(%) 5.43 6.25 6.98 7.26

Net Profit Margin(%) 0.64 2.26 3.81 6.26

Adjusted Net Profit Margin(%) 0.64 2.26 3.81 6.26

Return On Capital Employed(%) 5.95 10.26 10.75 10.37

Return On Net Worth(%) 1.57 6.32 9.05 15.15

Adjusted Return on Net Worth(%) 3.80 9.31 9.78 9.61

Return on Assets Excluding Revaluations 59.98 61.84 315.36 259.03

Return on Assets Including Revaluations 59.98 61.84 315.36 259.46

Return on Long Term Funds(%) 7.31 11.38 12.55 12.26

Liquidity And Solvency Ratios

Current Ratio 0.42 0.50 0.52 0.44

Quick Ratio 0.40 0.43 0.54 0.44

Debt Equity Ratio 0.75 0.56 0.73 1.12

Long Term Debt Equity Ratio 0.42 0.41 0.48 0.80

Debt Coverage Ratios

Interest Cover 1.43 2.58 2.69 2.61

Total Debt to Owners Fund 0.75 0.56 0.73 1.12

Financial Charges Coverage Ratio 2.74 3.90 3.68 3.56

Financial Charges Coverage Ratio Post Tax 2.53 3.34 3.29 3.74

Management Efficiency Ratios

Inventory Turnover Ratio 10.05 11.84 12.10 13.50

Debtors Turnover Ratio 19.78 20.45 18.86 17.92

Investments Turnover Ratio 10.05 11.84 12.10 13.50

Fixed Assets Turnover Ratio 2.03 2.66 2.55 1.95

Total Assets Turnover Ratio 1.48 1.98 1.46 1.14

Asset Turnover Ratio 1.40 1.66 1.43 1.24

Earnings Per Share 0.95 3.91 28.55 39.26

103

Honda Cars India Limited

Revenue ¥9.877 trillion$ 104

Billion USD (2013)

Operating

income

¥544.8 billion (2013)

Net income ¥367.1 billion (2013)

Total assets ¥11.780 trillion (2012)

Total equity ¥4.402 trillion (2012)

Honda's Net Sales and Other Operating Revenue by Geographical Regions in 2007[

Geographic Region Total revenue (in millions of ¥)

Japan 1,681,190

North America 5,980,876

Europe 1,236,757

Asia 1,283,154

Others 905,163

104

Volkswagan India

Production output 5,771,789 units (2012)

Revenue €103.942 billion (2012)

Profit €21.7 billion (2012)

Sales performance

In the year 2010, VIPL recorded sales of 32,627 vehicles against 3,039 vehicles

sold during the year 2009 and registered a sales growth of over 1,000%.

Nissan Motors India Limited

Sales performance

In the year 2007, NMIPL recorded sales of 533 vehicles. Nissan Motor India has

sold more than 13,000 units of its flagship model Micra since sales began in July 2010.

Production

output

4,889,379 units

(2012)[4]

Revenue ¥9.63 trillion (2012)[5]

Operating income ¥523.5 billion (2012)[5]

Profit ¥342.4 billion (2012)[5]

Total assets ¥12.8 trillion (2012)[5]

Total equity ¥4.51 trillion (2012)[6]

105

CHAPTER 5: Recent Developments

Indian auto industry, is currently growing at the pace of around 18 % per annum, has become a

hot destination for global auto manufacturers like Volvo, General Motors and Ford. The Indian Automobile industry has adopted global standards which are manifested in the increasing exports

of this sector. After a temporary decline in the years 1998- 99 and 1999-00, exports increased with robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two

and- a-half times the export figure for 2001-02.

The Annual growth of the industry was 16.0 per cent in April-December, 2004; the growth rate

in 2003-04 was 15.1 per cent. The compound annual growth rate (CAGR) of Indian Automobile Industry is of 22 per cent between 1992 and 1997. While the investments exceeding to Rs.

50,000 crore, the turnover of the industry was Rs. 59,518 crore in 2002-03. It even estimated to have exceeded Rs.1, 00,000 crore (USD

The development story of the Indian automobile industry cannot be complete without mentioning

the Pioneer Mr. J.R.D Tata's role in setting up the Tata group with high standard Engineering Research Centre (ERC) in 1965 to facilitate technological advancement.. 60% of the Indian

commercial vehicle market is dominated by Tata Motors.

Today India is being recognized as a potential emerging auto market.

The industry adds up foreign players to their investments. 80% of the segment size is contributed by two-wheelers & motorcycles.

Indian passenger vehicle market is dominated by cars (79%) unlike the USA. India is the largest three-wheeler & two-wheeler market in the world. It is second largest

tractor manufacturer in the world, fifth largest commercial vehicle manufacturer in the

world. India crossed the 1 million mark as the fourth largest car market in Asia recently.

The industry is expected to grow to US$ 40 billion by 2015 from the current level of US$ 7 billion in 2008. By the year 2016 the industry is expected to contribute 10% of the nation's GDP.

Very recently history has been created in the world of Automobile Industry by Ratan Tata, Chairman (Tata Motors) by launching the world's cheapest car NANO. The price of

the car was around one lakh which gained instant recognition in the automobile industry across the globe. It heralded the coming to age of the Indian Automobile Industry.

India is the second Largest Producer of Motorcycles in the world (5.2 Mln) after China .

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Exports in the 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.

In 2008, South Korean multinational Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its

India plant by 2011.[83] Similarly, US automobile company, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011.

In September 2009, Ford Motors announced its plans to set up a plant in India with an annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the Indian market and for export.

In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after Japan (1.77m), Korea (1.12m) and Thailand (0.26m) by allowing foreign

carmakers 100% ownership of factories in India, which China does not allow.

Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually from India. Apart from Maruti Exports' shipments to Suzuki's other

markets, Maruti Suzuki also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small cars from its new Indian assembly line.

Tata Motors exports its passenger vehicles to Asian and African markets, and is in preparation to launch electric vehicles in Europe in 2010. The firm is also planning to launch an electric version of its low-cost car the Tata Nano in Europe and in the

U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in the U.S. market. Bajaj Auto is designing a low-cost car for Renault

Nissan Automotive India, which will market the product worldwide. Renault Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in

another small car project.

Following are the top 20 export countries of Indian Automobiule Industry :

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Rank

Country

2007-2008 (in USD

Millions)

2008-2009 (in USD

Millions)

Percentage

Growth

1 United States of America

593.64 525.24 -11.52

2 Italy 332.35 359.68 8.22

3 Sri Lanka 249.14 216.11 -13.26

4 South Africa 224.93 188.57 -15.79

5 United Kingdom 165.57 246.32 48.77

6 United Arab Emirates

164.44 192.74 17.21

7 Algeria 147.34 265.63 80.28

8 Bangladesh 137.26 164.86 20.11

9 Egypt 134.43 143.54 5.99

10 Germany 133.52 409.63 206.8

11 Colombia 118.88 120.71 1.54

12 Nepal 111.33 98.13 -11.86

13 Mexico 93.80 94.10 0.32

14 Turkey 83.53 73.82 -11.63

15 Spain 81.01 56.96 -29.69

16 France 76.77 134.21 74.83

17 Nigeria 66.01 148.74 125.03

18 Greece 65.75 127.63 94.1

19 Netherland 65.19 163.66 151.05

20 Ghana 59.91 38.30 -36.07

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Mergers And Acquisitions in the Automobile Industry

Mergers and acquisitions has been regular phenomenon in an automobile industry and is

considered as one of most important business strategies in today's corporate world and play a

vital role across all business sectors in general and automotive sector in particular. While

mergers lead to amalgamation of two or more enterprises which in turn leads to formation a big

single entity, acquisitions refers to takeover or buyout of one company by another.

In 2008 Indian Auto maker Tata Motors acquired two iconic British car brands from its US based

owner Ford Motor Company. JLR was managed and owned by American auto giant Ford Motor

Company. Ford acquired Jaguar in 1989 and Land rover in 2002. Both brands were kept as part

of Ford Motor's luxury car segment called Premier Automotive Group. Since acquiring Jaguar,

Ford has invested huge sums in terms of technology and other resources in order to consolidate

its position in European and American market but this venture has never been profitable. Also

Land rover which ford acquired from BMW in 2002 failed to generate appreciable profits. Ford

decided to sell both brands together due to their close association. There were various bidders up

for this deal which included rival Indian vehicle maker Mahindra Group and private finance

group One Equity but deal was finalised with Tata Motors for US $ 2.3 billion on a cash free

debt free basis and was much hyped across the media.

Mergers and Acquisitions in the industry :

Ford acquired Jaguar in 1989 and Land rover in 2002.

In 2008 Indian Auto maker Tata Motors acquired two iconic British car brands from its

US based owner Ford Motor Company i.e. Jagur and Landrover.

The board of Maruti Suzuki, India's largest carmaker, has proposed to merge Suzuki

Powertrain India Ltd (SPIL).

Maruti Suzuki was a joint venture between the Indian government, and Suzuki of Japan.

As of May 10 2007, Govt. of India sold its complete share to Indian financial institutions.

With this, Govt. of India no longer has stake in Maruti Udyog.

Renault and Nissan Company

Hero and Honda

Toyota and Kirloskar Motor

Tata Motors and Daewoo Commercial Vehicle Company

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Technological Development in the industry :

Indian automotive industry urgently needs technologies to produce fuel efficient,

environmental friendly, lighter, safer, and cost competitive engines and vehicles. Therefore, some of the areas where there is a need for nationally focused efforts in

technology development are: advanced materials, advanced manufacturing techniques, newer and innovative technologies for utilization of alternative fuels,

emission abatement, fuel economy improvement, safety enhancement, engine management systems, embedded vehicle control system.

In this phase of TDM, there are 33 projects ( 2 from IITD, 2 from IITM, 11from

IITKG, 4 from IISc ,8 from IITR,6 from IITK ) in automotive technology areas that aim at providing technological solutions in a wide spectrum of subjects

ranging from development of advanced materials, hydrogen fueled bus, fuel efficient two wheeler engine, electric vehicle to intelligent vehicles.

Leading Automotive OEMs and Component industries like Ashok Leyland, Tata

Auto Components Ltd., Harita Industries, TVS Motors, Motorola, Tata Steel, Tata Motors have committed participation in these projects.

National Needs

Indian automotive industry contributes significantly to the overall GDP of the

nation and also provides significant business and employment opportunities. It is an engine of growth for the Indian economy. It is one of the key industries whose

well being is very important in our vision of improving the living standard of our population.

With the liberalization of economy, the decades old monopolistic environment of

the Indian automotive industry where only a handful of vehicle models were available with a long waiting list, gradually gave way to a highly competitive,

complex and rapidly changing market which was not limited to domestic market alone. Today the number of vehicle models available are more than hundred and

not a month goes without offerings of newer and more advanced model. Today the market is customer driven with performance, cost, fuel economy and reliability

being the key drivers.

. The market has slowly become a technology driven market where MNCs are using "technology forcing" as a route to keep their market share. Thus the need for

Indian automotive industry to develop/ acquire a range of new technologies in a very short time has never been so acute .

110

Ironically for the Indian automotive industry, the cost of technology development has increased manifold and increasing product cost has put a squeeze on profit

margins affecting their ability to outsource expensive technologies.

Some of the issues we face are unique to India (such that 70% of our vehicle

population consists of two wheelers and 7 out of the 10 dirtiest cities are in India) and innovative technologies relevant to its need are needed. Three wheelers are unique to our market and no technologies are available from advanced countries to

optimize such veh. Indian automotive industry urgently needs technologies to produce fuel efficient, environmental friendly, lighter, safer and cost competitive

engines, and vehicles.

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Labour Unrest in Indian Automobile Industry

< Latent Importance of Empl.. Women Safety in Indi.. >

Automobile Industry

“Honda Motorcycles staff, police clash, over 100 hurt”

Economic Times 26th July 2005

“Sacked workers beat CEO to death in Noida; 50 Hurt, 10 Execs in ICU As 200-Strong Mob Runs Riot”

Economic Times, 23rd September 2008

“Labour unrest slams brakes on auto hub”

Economic Times, 21st October, 2009

“Workers kill VP of Coimbatore firm”

Economic Times, 23rd September, 2009

“India’s strike, riots become fatal for auto parts outsourcing”

Economic Times, 16th November 2009

“Strikes cost over 500 crore in 2011”

Times of India, 22nd May, 2012

“1 killed in labour strife at Maruti plant; 90 Injured As Workers Attack Executives, Set Fire To Company Office At Manesar”

Times of India 19th July, 2012

“Strike at Hyundai enters sixth day”

Economic Times, 5th November, 2012

The above exhibits give a general idea about the alarming situation that prevails in Indian automobile industry with respect to labor disputes.. It was in 2005 that the

112

agitating workers of Honda Motorcycle and Scooter India were brutally attacked by police. This labor unrest was followed by labor unrest at several other

manufacturing plants, including Sunbeam, Micro-Tech, Rico Daruhera, Rico Auto, FCC Rico, Hema Engineering, HMSI, Hi Lux, AG Industries, Hero Honda, Sona

Steering, Bajaj and Denso Haryana

As is evident from the newspaper exhibits, deaths have occurred even before on account of labor disputes, but it did not catch media attention as much as the recent

case of Mr.Awanish Kumar a General Manager of the Maruti plant in Manesar.

Why Disputes?

The major cause of unrest or protest has risen from the fact that the companies

does not allow the formation of labor unions. As can be seen in the case of Rico Auto incident which happened in October 2009, it all started when the company

expelled 17 people on grounds of discipline, who are believed to be victimized for helping form trade unions in the company. The labor strike lead to violent protests

and confrontations between employees and finally ended up in the death of an employee. Even the Maruti Gurgaon plant issue also had similar problems of trade unions where company was against formation of trade unions.

Another major cause is the low wage issue. India has one of the most rigid laws for employment. But it is not still strong enough to meet the requirements of the present day economy. there are strict regulations regarding the wages, rights and

other facilities which are applicable to permanent employees. To avoid giving them, companies prefer to employ more contract laborers. Wage inequality has

been the major cause of labor unrest in Maruti plant in Manesar. The contract laborers who were almost 40% of the total labor force were given almost half of

the salary of the permanent workers when the work performed by them were similar to the permanent workers. Contract Labor Act 1970 prohibits employment

of contract labor in any work similar to that of permanent employees. But the workers were not able to raise the issue because of the absence of a strong union

for contract laborers.

Another cause of many industrial disputes is the unfair and ill treatment of workers by the employees. It happens not only in case of wages, but also in the nature of

work and facilities provided. In Manesar plant, the work was so hectic that they hardly got time to go to toilet In between. They were given too short breaks. The

pressure on them was so high. They were penalized heavily for late comings and absenteeism. The facilities provided to the workers was also inadequate as per the

113

laws. They worked harder every day to increase the productivity of the plant, but they were not paid as per the work.

The other cause is the changing economic environment. This problem aggravates especially when the company makes huge profit and the workers feel the same

does not penetrate till the lower level. They feel that they work hard (made to do double the work) to gain such profits, but they does not benefit from the profit they earned for the company.

Another cause can be the mismanagement and failure to understand the culture of the location by the top level management. Maruti puts forward the example again.

The Manesar plant issue proves that the entire machinery was a failure to anticipate such an unrest. The new MD who was a Japanese was no way able to establish a rapport with the Indian machinery. The middle level management also failed to

communicate between the high level management and the laborers. So the entire machinery was in dire straits within the company. Strikes had been so frequent

within the company, still they were not able to anticipate such an extreme incident. The incident also made clear the absence of a strong Industrial Relations team in

the organization..

Impact

The highest impact of any labor issue falls first on the affected company. The prdocution gets affected and the sales come down which in turn affects profits.

Manesar plant issue became severe to such an extent that the company had to think of locking out the plant. The incident also hit the component manufacturers who

depended solely on Maruti. The local economy of the region also gets adversely affected due to such incident.

Another major impact is on the investment climate and economy of the country.

Such incidents when increasingly reported sullies the image of the country. These incidents would be seen as alarming signs by many potential investors who

consider India as a place for investment. These incidents would affect the investments at a time when India is becoming a manufacturing base for many of

the foreign automobile manufacturers.

While it was the suppliers who bear the impact in case of Maruti incident, it was the manufacturer who got the impact in case of Rico Auto strike. A strike at a

factory in India affected the global value chain and it impacts India in the long term perspective. The Rico strike that extended 45 days led to closure of factories

of Ford and GM abroad since the supply to these factories was affected. Such

114

incidents raise questions about the credibility of India as a location for industries and many companies would look for alternate locations like China and Thailand.

The Manesar plant incident has led to serious thoughts not only in the manufacturing industry, but also in the academic field. Industrial Relations has

gained popularity after the incident. It has long been a neglected field. The top B-schools are revamping their curriculum to give emphasis to this subject which was forgotten for a long time especially after the economic reforms of 1991.

Companies also pushed the management institutions to include industrial relations and rebalance the human resource courses so that those skills are not neglected.

How to tackle ?

The major concern still stays with employment of contract labor. Maruti after the Manesar incident told that it will revisit its contract labor policy. Employment of

Contract labor should be minimized. At present, the contract laborers face lot of discrimination and they are still unorganized. They do not have unions to represent

them. There is a lack of security and social welfare for them. They do not enjoy rights or facilities at par with permanent employees though they do the same kind of job. Such discrimination should be stopped. It is this discrimination, exploitation

and deprivation that leads to labor unrest and riots.

The laws and legal framework regarding the contract labor should be clear and straight forward. They should feel empowered. The laborers should be educated

and made aware of the industrial scenario of the country and how important their contribution is to the progress of the industry and nation. The increasing

aspirations of the present working class should be understood by the management. The HR department should be more proactive in dealing with the laborers.

Promotion of trust between the manager and the managed is necessary. More discretionary power should be given to employees. The management should have

dialogues with the workers.. The industrial set up should be improved in such a way with the inclusion of employees such that they get incentives for increased

productivity. Capacity development should be given importance not only in the high level and middle level management, but also in the shop floor level. Such

actions would surely make the employees more empowered and self-valued.

The role of labor unions in the industrial scenario of our country cannot be negated. It is the approach towards the trade unions that determines how well they

are managed. Companies which always restrict and control the formation of trade unions have always suffered at their hands. Companies should allow formation of

115

trade unions on democratic grounds. Toyota is an excellent example for their approach to employees. They are considered as a company which do not build only

cars, but people too. If the company pursues proper employee engagement, employee development and transparent conversations with the employees, they

would not seek the help of an external agency for help like a labor union. So it is required that every company has a 360o feedback system so that even the lightest

issue is addressed before it gets serious.

It is not only the companies which should revisit their approach to trade unions. Trade unions should have a second thought on why and what they exist for. They

should safeguard the interest of the workers, but at the same time, they have the responsibility to promote the growth of the industry and the country. They should

understand the changed industrial scenario. Trade unions should not become franchisees of politicians.

Another area where thrust has to be given is the handling of the labor issues.

Whatever industries do, disputes will continue to occur. But the success depends on how smoothly the company handles it. Thebility to listen and negotiate with

patience should be there in every management. The way a dispute is handled creates an image of the company in the minds of the workers. It is very important

to create a good image because the image persists even after the conflict is over and the worker returns to work. It is far more important to create an inclusive work

atmosphere for workers returning after strikes.

The last few years have indeed seen a rise in labour unrest, particularly in the auto and auto parts sector. Among the prominent instances are: Mahindra (Nashik),

May 2009 and March 2011; Sunbeam Auto (Gurgaon), May 2009; Bosch Chassis (Pune), July 2009; Honda Motorcycle (Manesar), August 2009; Rico Auto

(Gurgaon), August 2009, including a one-day strike of the entire auto industry in Gurgaon; Pricol (Coimbatore), September 2009; Volvo (Hoskote, Karnataka),

August 2010; MRF Tyres (Chennai), October 2010 and June 2011; General Motors (Halol, Gujarat), March 2011; Maruti Suzuki (Manesar), June-October 2011; Bosch (Bangalore), September 2011; Dunlop (Hooghly), October 2011; Caparo

(Sriperumbudur, Tamil Nadu), December 2011; Dunlop (Ambattur, Tamil Nadu), February 2012; Hyundai (Chennai) April and December 2011-January 2012; and

so on.

This is the desk research on Indian Automobile Industry.

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Indian Electronic Industry

Chapter 1 : Industry Analysis : the Basics

History

Indian Electronics industry dates back to the early

1960's. Electronics was one industry initially restricted to the development and maintenance of

fundamental communication systems including radio-broadcasting, telephonic and telegraphic

communication, and augmentation of defense capabilities. Until 1984, the electronics Industry was

primarily government owned and then in 1980s witnessed a rapid growth of the electronics industry

due to sweeping economic changes, resulting in the liberalization and globalization of the economy.

The economic transformation all over the world was motivated by two compelling factors - the

determination to boost economic growth, and to accelerate the development of export-oriented industries,

like the electronics industry. By 1991 in the country private investments - both foreign and domestic were

encouraged. The easing of foreign investment norms, allowance of 100% foreign equity, reduction in

custom tariffs, and relicensing of several consumer electronic products had attracted remarkable amount

of foreign collaboration and investment.

The domestic Electronic industry also responded favorably to the policies of the government. The

initiatives of the electronics field to private sector enabled entrepreneurs to establish the industries to meet

demand in the market. Improvements in the Indian Electronics industry have not been limited to a

particular segment, but encompass all its sectors. This pace made in the areas of commercial software,

telecommunications, electronics, instrumentation, positioning and networking systems, and defense. The

result therefore has been a significant trade growth that began in the late 1990's. The Indian Electronics

Industry is a text for investors who consider India as a potential investment opportunity.

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Nature of the Electronic Industry

India is the fifth largest economy in the world and has the second largest GDP

among emerging economies. Owing to its large population, the potential consumer demand is almost unlimited and consequently under appropriate

conditions, strong growth performance can be expected. In fact, the

liberalization of the economy in 1991 has led to rapid growth. The electronics

industry, in particular, is emerging as one of the most important industry in the Indian market.

The electronics industry in India dates back to the early 1960s. Electronics was

initially restricted to the development and maintenance of fundamental communication systems including radio-broadcasting, telephonic and

telegraphic communication, and augmentation of defense capabilities. Until

1984, the electronics sector was primarily government owned. The late 1980s witnessed a rapid growth of the electronics industry due to sweeping economic

changes, resulting in the liberalization and globalization of the economy. The

economic transformation was motivated by two compelling factors - the

determination to boost economic growth, and to accelerate the development of export-oriented industries, like the electronics industry.

The electronics industry has recorded very high growth in subsequent years. By

1991, private investments - both foreign and domestic - were encouraged. The easing of foreign investment norms, allowance of 100 percent foreign equity,

reduction in custom tariffs, and delicensing of several consumer electronic

products attracted remarkable amount of foreign collaboration and investment. The domestic industry also responded favorably to the politic policies of the

government. The opening of the electronics field to private sector enabled

entrepreneurs to establish industries to meet hitherto suppressed demand. Improvements in the electronics industry have not been limited to a particular

segment, but encompass all its sectors. Strides have been made in the areas of

commercial electronics, software, telecommunications, instrumentation,

positioning and networking systems, and defense. The result has been a significant trade growth that began in the late 1990s.

Despite commendable achievements in the sphere of electronics, considerable

infrastructural improvements remain a priority. Water, power, telecommunications, and transportation sectors must still be augmented so that

high economic growth can be sustained.

The authors have examined the roles of government, major companies in electronics including the multinationals, research organizations, and

educational institutions in establishing the infrastructure.

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Size of the

Industry Indian electronics industry today stands at US $ 25 billion

Geographical

distribution All the major Metropolitans cities in the India

Output per

annum

It is growing at over 25% CAGR and is expected to be worth

US $ 158 billion by 2015

In 1990 the electronic production included 5 million television sets, 6 million radios, 5 million

tape recorders, 5 million electronic watches, and 140,000 video cassette recorders. The Indian

engineering sector is large and varied and provided around 12 % of India's exports in the mid-

1990s. Two subsectors, electronics and motor vehicles, are the most dynamic in all the sectors.

Despite the global economic slowdown, growth of Indian electronics industry in 2009 was on par

with the previous year at 9.9%, although this was decreased according to the double-digit growth

achieved in 2006 and 2007. In 2010 output grown by 13.6% and in the medium to long-term

India will continue to show strong growth driven by a large, fast growing domestic market,

significant foreign investment and an improving regulatory environment. The global electrical

and electronics industry has various adjunct sectors. Few of them are Electronic Components,

Computer & Telecommunications, Office Equipments, Consumer Electronics as well as

Industrial Electronics.

Market capitalization

The Indian electronics market was at US$11.5 billion in 2004, then the market wgrew worldwide

over the next several years. Indian Electronics Industry is expected to grow at a Compound

Annual Growth Rate (CAGR) of 23% by 2010 to reach US$40 billion. Though its total output

will be far behind China electronics market, worth US$271.97 billion in 2004, India promises a

better market with the bears watching. Low manufacturing costs in skilled labor and raw

materials, availability of engineering skills, and opportunity to meet demand in the populous

Indian market, are driving its electronics market.

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Total contribution to the economy/ sales

Indian electronics industry today stands at US $ 25 billion and is ranked 26th in

the world in terms of sales and 29th in the world in terms of production. It is growing at over 25% CAGR and is expected to be worth US $ 158 billion by

2015. Electronic industry is one of the fastest growing industries in the country and is driven by growth in key sectors such as IT, Consumer Electronics and Telecom.

Employment opportunities

According to a recent report presented by Ernst & Young, the Indian domestic demand for electronics products is expected to reach $125 billion

by 2014 from the current level of $45 billion annually. The primary demand drivers for the Indian Electronic Industry are sectors like telecom, defence,

IT and e-governance, automotive, consumer electronics, and energy. At these demand levels, until India creates its own electronics product industry,

the imports of these products will create the single largest trade deficit item, which would even be larger than petroleum products. On the other hand, if

this particular unique opportunity is utilized, it can create a large industry catering to domestic consumption, which will help achieve self reliance in

strategic sectors like telecom and defence, while leading to large exports.

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INDIAN ELECTRONIC INDUSTRY AT A GLANCE IN 2011 - 2012

Indian electronics hardware production increased from 1,10,720 crore in 2009-10 to

1,21,760 crore in 2010-11,registering a growth of 10 per cent. During the year 2010-11 exports

of electronics hardware registered a growth of 56 per cent in rupee terms over the preceding

year.

In value terms, exports of electronics hardware was 40,400 crore (US$ 8.9 billion) during of

the year 2010-11, up from the 25,900 crore (US$ 5.5 billion) in 2009-10.

Electronics hardware production was around US$ 33 billion in 2011-12. It was projected that

electronics hardware exports will cross US$ 10 billion in 2011-12 as against US$ 8.86 billion

in 2010-11, an expected growth of about 12.8 per cent.

INDIAN ELECTRONIC INDUSTRY AT A GLANCE IN 2012 - 2013

Modernisation plans coupled with a good budget allocation in the defense sector has

fuelled growth in the country's electronics industry and it is projected to cross Rs 10000 crore

during the current year. The Indian electronics industry has shown an upward trend during the

11th Plan, growing from Rs 5400 crore in 2007-2008 to Rs 7948 crore in 2011-12 and is

projected to cross Rs 10000 crore during the current year. It is estimated that the defense

electronics purchases will be about Rs 600,000 crore in the next ten years. This offers an

immense growth opportunity for domestic electronics manufacturers. While the Navy and IAF

are likely to contribute about 15 per cent each, bulk of the demand (about 70 per cent) will

come from the Army.

2012 was an interesting year, with both exciting and worrying events for the Electronics

Industry in India. While on the one hand the global economic climate was volatile and caused

some slowdown in the country's economic growth, on the other the National Policy on

Electronics promised far-reaching consequences for the Indian Electronics industry. The Policy

aims at addressing the huge gap which is estimated at Rs.15.31 lakh crore ($300 billion)

between locally manufactured electronics and the consumer demand for electronics that we

expect to see by 2020.

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Players in the industry

Phil Systems

Keltron Projectors

, Birla 3M

Samrat Video Vision

LG Electronics

Philips

Sony

Sansui

Samsung

BPL

Videocon

Onida

Aiwa

Akai

Thompson

Panasonic

Sony

Canon

Olympus

Fuji film

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Top 3 Players in the industry :

L.G. Electronics India PrivateLimited ( Market Share: 22.7% )

Samsung India Electronics Private Limited (Market Share : 21.0%)

Videocon Industries Limited (Market Share: 13.6%)

Bottom 3 Players in the industry :

Onida Electronics (Market Share: 4.5%)

British Physical Laboratories Group (Market Share: 3.5%)

Akai Consumer Electronics India Limited (Market Share: 3%)

(Market share is of the year 2012)

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Possible Classification of Players into Leaders, Challengers, Followers and

Nichers :

Leaders :

L.G. Electronics India Private Limited

Samsung India Electronics Private Limited

Videocon Industries Limited

Challengers :

Onida Electronics

British Physical Laboratories Group(BPL)

Akai Consumer Electronics India Limited

Followers :

Samsung India Electronics Private Limited

Videocon Industries Limited

Nichers :

L.G. Electronics India Private Limited

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Top 3 Companies

L.G. Electronics India Private Limited

LG Electronics India Pvt. Ltd. manufactures and sells consumer electronics, home

appliances, computer products, and mobile phones in India. The company's consumer electronics include LCD TVs, plasma displays, display panels, color

televisions, home theatre systems, music systems, DVD recorders/players, and MP3 and MP4 players; and home appliances comprise room air conditioners,

commercial air conditioners, refrigerators, refrigerator compressors, washing machines, dishwashers, microwaves, and vacuum cleaners. The company also

offers computer products, such as laptops, notebook and desktop personal computers, LCD monitors, CRT monitors, optical storage devices, and projectors;

and mobile phones, including camera phones, music phones, and color screen GSM handsets. It sells its products through dealers. The company was incorporated

in 1997 and is based in Greater Noida, India. LG Electronics India Pvt. Ltd. operates as a subsidiary of LG Electronics Inc.

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LG Electronics

Parent Company LG Group

Category Consumer Electronics

Sector IT and Technology

Tagline/ Slogan Life’s Good

USP Innovative Technologies and Cutting edge Designs; Health (in Indian Consumer Durables Market)

STP

Segment

Mobile Communications, Home Entertainment, Home Appliances,

Air Conditioning, and Energy Solutions

Target Group

Consumer Durables: Currently mass market, efforts are on to shift to a more premium segment

Mobile Phones: Youth/Generation

Positioning Technology that offers you more and sets you free

SWOT Analysis

Strength

1. Wide range of products to serve all categories and a strong focus on technology and quality

2. Effective localization of product offerings for growth markets

like India, Brazil, China

3. Brand offers sound rational appeal – good product features and good value for money

4. Good after sales service and wide distribution network

5. Subsidiaries enjoy independence in decision making and hence

have flexibility in adapting to the local market

6. Sponsorship of sports and entertainment events enhances visibility

7. It has nearly 100,000 employees and is one of the top mobile

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manufacturers

Weakness

1. Brand lacks influence in the opinionated segment of early

adopters especially in the social media environment

2. Brand has limited market share compared to market leaders

Opportunity

1. Fast growth of home appliances, electronics goods market in

emerging economies

2. Convert improved brand image and awareness in to market share

3. Increase the already Wide product portfolio

Threats

1. Price war with close Korean competitors like Samsung can disrupt growth in price sensitive markets

2. Highly competitive industry dynamics

3. Stagnant urban demand

4. Instances of false green claims can erode brand value and

consumer trust

Competition

Competitors

1. Samsung

2. Sony

3. Panasonic

4. Toshiba

5. Whirlpool

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Samsung India Electronics Private Limited

As a unit of behemoth Samsung Electronics, Samsung India Electronics works to

keep its customers connected through its growing products portfolio. It develops and manufactures a wide variety of consumer electronics devices, including DVD

players, plasma televisions, digital cameras, personal computers, color monitors, LCD panels, printers, and computer peripherals. The New Delhi-based company

also makes and markets semiconductors, such as DRAMs, SRAMs, and flash memory products. Ranging from wireless phones to networking switches, Samsung

India produces communications devices, as well.

samsung Electronics commenced its operations in India in December 1995 and is today a leading provider of Consumer Electronics , IT and Telecom products in the

Indian market. Samsung India is the Regional Headquarters for Samsung’s South West Asia operations, which provides employment to over 8,000 employees with

around 6,000 employees being involved in R&D. In 2010, Samsung India achieved a sales turnover of US$3.5 billion.

Samsung began operations in India through its manufacturing complex located at

Noida (UP), which today houses facilities for Colour Televisions (including 3D, LED and LCD Televisions), Mobile Phones, Refrigerators, Washing Machines and

Split Air Conditioners categories. Samsung commenced operations of its second state–of-the-art manufacturing complex at Sriperumbudur, Tamil Nadu in

November 2007. Today, the Sriperumbudur facility manufactures Colour televisions, Fully Automatic Front Loading Washing Machines, Refrigerators and Split Air Conditioners. Samsung India has two R&D Centres in India – at Delhi

and Bangalore .While the Delhi R&D Centre develops software solutions for hi-end televisions such as Plasma TVs, LCD TVs and Digital Media Products, the

Bangalore R&D Centre works on major projects for Samsung Electronics in the area of telecom, wireless terminals and infrastructure, Networking, SoC (System

on Chip) Digital Printing and other multimedia/digital media as well as application software.

Samsung India is a market leader in product categories like LED TVs, LCD TVs,

Slim TVs and Side by Side Refrigerators. While it is the second largest mobile handset brand in India, it leads in the smart phone segment in India.

Samsung India has won several awards and recognitions for both its corporate

initiatives as well as its product innovations in audio visual, home appliance, IT and telecom product categories.

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Videocon Industries Limited

Videocon Industries Limited is a large diversified Indian company headquartered in Gurgaon, Haryana. The group has 17 manufacturing sites in India and plants in

Mainland China, Poland, Italy and Mexico. It claims to be the third largest picture tube manufacturer in the world. The group is a US$5 billion glob The Videocon

Group emerges as a $2.5 billion global conglomeratecontinuing to set trends in every sphere of its activities from aconference room sized assembly line in 1979 to

having state-of-the-art manufacturing facilities in 17 different locations all over the globe.Today the word ‘VIDEOCON’ is synonymous with millions of Indiansall over the globe. Through its consumer electronics and homeappliances products it has

enriched the lives of millions of Indians.And since being the only true Indian brand amongst the largeplethora of Korean and German brands Videocon has managed

tocarve its own niche in the market be the market leader.

"The Indian Multinational"

Type Public Company

Traded as

BSE: 532129

NSE: VIDEOIND

Industry Conglomerate

Founded 1979

Founder(s) Venugopal Dhoot[1]

Headquarters Gurgaon, India

Key people Venugopal Dhoot (Chairman & managing director)[1]

Products

Consumer Electronics Home Appliances

Components Office Automation

Mobile phones

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Wireless

Internet Petroleum

Satellite television Power

Revenue 181572.7 million

(US$3.0 billion)(2012–13)[2]

Net income

-716.3 million (US$−12 million)(2012–13)[2]

Employees 9,000 (2012)

Subsidiaries

Videocon Telecom Videocon d2h

Videocon Consumer Electronics & Home

Appliances

Website www.videocon.com

videoconworld.com

Corporate profile

The Videocon group's core areas of business are consumer electronics and home appliances. They have recently diversified into areas such as DTH, power, oil

exploration and telecommunication.

Consumer electronics

In India, the group sells consumer products like colour televisions, washing

machines, air conditioners, refrigerators, microwave ovens and many other home appliances, through a multi-brand strategy with the largest sales and service network in India.[5]

Since the entry of Korean Chaebols and their rising popularity in the Indian market, Videocon from a stand-point of market leader has seen a slow decline to

become a no 3 player in India. The company continues to do well in the washing machine and refrigerator segment but has significantly lost ground in the consumer electronics space[6]

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Mobile phones

In November 2009, Videocon launched its new line of mobile phones. [7] Videocon

has, since launched a number of handsets ranging from basic colour FM phones to high-end Android devices. In February 2011, Videocon Mobile Phones launched

the hitherto unknown concept of 'Zero' paise (1 paise is the 100th unit of 1INR) per second with bundled SIM cards of Videocon mobile services for 7 of its handset models.

In June 2013, Videocon Mobiles launched its own flagship smartphone Videocon A55HD in India for Rs. 13,499.[8]

Oil and gas

An important asset for the group is its Ravva oil field with one of the lowest

operating costs in the world producing 50,0000 barrels of oil per day. [9]

DTH

In 2009, Videocon launched its DTH product, called 'd2h'. As a pioneering offer in

the Indian DTH market, Videocon offered LCD & TVs with built-in DTH satellite receiver with sizes 19" to 42".

Telecommunication

Videocon Telecommunications Limited has a licence for mobile service operations

across India. It launched its services on 7 April 2010 in Mumbai.

Major Achievements of Videocon Industries Ltd:

One of the world's largest and most respected CRT glassmanufacturers

Firing the largest furnace of its kind in the world with a tank sizeof 3300 sq ft

One of the few companies in the world to convert sand to TV

One of the largest and most acknowledged CPT manufacturer in the world Manufactured India's first rust-free Washing Machine

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Bottom Companies

Onida Electronics

Mirc Electronics Pvt. Ltd.

Type Public BSE: 500279

Industry Consumer electronics

Founded 1981

Headquarters Mumbai, Maharashtra , India

Revenue 15284.6 million

(US$250 million)

Employees 1500

Website www.onida.com

Onida is an electronics brand of Mirc Electronics, based in India. Onida is well known in India for its colour CRT televisions.

History

Onida was started by G.L. Mirchandani and Vijay Mansukhani in 1981 in Mumbai. In 1982, Onida started assembling television sets at their factory in Andheri,

Mumbai. It was established as "Mirc Electronics" in 1981.[4] Since then, Onida has evolved into a multi-product company in the consumer durables and appliances sector. Onida achieved a 100% growth in ACs and microwave ovens and a 40%

growth in washing machines last year.

Onida came out with the famous caption 'Neighbour's Envy, Owner's Pride'.

Another popular theme of the ads was a devil complete with horns and tail in the 1980s. The devil was replaced by a married couple later.[5] Onida has a network of 33 branch offices, 208 Customer Relation Centers and 41 depots spread across

India.[6] As on 31 March 2005, Onida had a market capitalization of 3014.6 million.

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Mirc Electronics won an “Award for Excellence in Electronics” in 1999, from the Ministry of Information Technology, Government of India.[7] Onida with its Sales

& Marketing office in Dubai reported a 215 per cent export growth in two years, setting the base for an increased robust international presence.

Products

Onida brand has following range of products.

1. LCD TVs 2. Plasma TVs

3. Televisions 4. DVD and Home Theater Systems

5. Air Conditioners 6. Washing machines

7. Microwave Ovens 8. Presentation Products

9. Inverters 10. Mobile phones 11. LED TV

12. LCD monitor 13. LCD TV

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British Physical Laboratories Group (BPL)

British Physical Laboratories Group (BPL) is an Indian electronics company [1] that deals with consumer appliances (such as refrigerators and washing machines), home entertainment products and health care devices.

Type Public (BSE: 500074)

Industry Electronics

Founded 1963

Headquarters Bengaluru, India

Products

Medical equipment,

televisions, refrigerators, washing machines, microwaves & audio

equipment

Revenue 118.50 crore

(US$19 million)

Operating

income

Rs 90 Crores

Net income

Rs 77 Crores (Extraordinary income inclusive)

Employees around 250

Website www.bpl.in

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History

In 1963, BPL founder and Group Chairman TPG Nambiar began manufacturing

hermetically sealed precision panel meters in Palakkad, Kerala, under the name of British Physical Laboratories. Having worked in the United Kingdom and United

States, when he came back to India with a vision of pioneering the manufacture of superior quality electronic products, he dreamed of making BPL a household name.

Over the years, BPL's growth has been subject to constant challenges. The company was started during the Licence Raj, a time when the government had

reserved many areas of business for the public sector. It had also virtually barred most entrepreneurs from entering other fields through reservations on licensing.

1980s

From 1980 onwards, when the industrial licensing was relaxed, BPL began

manufacturing televisions and telecommunications equipment, demonstrating its potential and future business area. In the early 1990s, after globalisation and

liberalization of the Indian economy, competition entered the market. BPL retained its strong presence and growth rate.

BPL concentrated on importing technology, improving product quality,

innovations and manufacturing of electronic products. In late 1980s, BPL had metamorphosed from an entrepreneurial venture, into India's biggest consumer

electronics & telecommunication company; the slide from the top was equally quick after liberalisation.

Performance

BPL Ltd has reported a net loss of 34.76 crore (equivalent to 732 crore or

US$12 million in 2014) in the second quarter of fiscal 2005-06, on gross sales of 34.71 crore (equivalent to 731 crore or US$12 million in 2014). Operating losses

were at 13.91 crore (equivalent to 293 crore or US$4.8 million in 2014).

Gross sales were 64.45 crore (equivalent to 1,357 crore or US$22 million in 2014) in the corresponding period during 2004-05 while net loss was at 41.59

crore (equivalent to 875 crore or US$14 million in 2014).

According to the company, the promoters have brought in 50.08 crore (equivalent to 1,054 crore or US$17 million in 2014) as contemplated in the corporate debt

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restructuring scheme. The amount was to pay statutory liabilities, unsecured, pressing creditors, dealers, credit balances, employee dues and working capital

requirements, in part.

In respect to the auditors' qualification of the company's accounts for the period

ended March 31, 2005, about undisputed amounts payable in respect of income-tax ( 4.44 crore (equivalent to 9.3 crore or US$1.5 million in 2014)), dividend tax (2.51 crore (equivalent to 5.3 crore or US$860,000 in 2014)), wealth tax ( 0.11

crore (equivalent to 2.3 million or US$38,000 in 2014)), TDS ( 6.77 crore (equivalent to 142 crore or US$2.3 million in 2014)) and customs duty ( 1.68

crore (equivalent to 3.5 crore or US$580,000 in 2014)), the Chairman and Managing director, Mr Ajit G. Nambiar said the company had earlier not been able

to remit the dues because of cash flow constraint but in July 2005, remitted the entire dues except 1.26 crore (equivalent to 2.7 crore or US$430,000 in 2014) in

customs duty.

Company Profile

BPL was incorporated in 1963 and promoted by T P G Nambiar of the BPL group. Its subsidiaries are BPL Display Devices, BPL Soft Energy Systems and

Bharat Energy Ventures. Other group companies include Electronic Research, BPL Systems and Projects, BPL Sanyo, Dynamic Electronics, etc. It is having

manufacturing facilities in Palakad, Bangalore, Noida and Doddaballapur. The company came out with a public issue in Mar.'94.Products manufactured by BPL include televisions, test and measuring equipments, medical electronic

equipments and office automation products. The technical tie-up with Sanyo, Japan, has helped the company widen its product range making it a formidable

player in the Indian electronic industry. BPL is the only company to be awarded with the BZT reputation for export to Germany. BPL was granted recognition as

an export house in 1993. It had won the Elcina award (1991-92) for export of electronic equipment like color TVs, oscilloscopes, copiers, PCBs, etc to

competitive markets of GCA countries. Nokia Phones has appointed BPL as its local distributor in India. It was awarded the Certificate of Merit for outstanding

export performance in consumer electronics from the Export Promotion Council in 1995-96. In 1996-97, the company sucessfully completed an export-oriented

project for the manufacture of alkaline batteries at a cost of Rs 120 cr at

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Dobaspet, Tumkur district, Karnataka, with technical collaboration from Sanyo, Japan. In 1998-99, BPL Automation, one of the subsidiary of the company was

amalgamated with the company. The amalgamation benefit the company in terms of better control over the affairs of plastic moulding and tool room division. BPL

is India's first television company to cross the one million mark (sales in volume). It continues to retain its No 1 position in the colour television market across all

segments with a composite retail marketshare of 19%. BPL acquired 2 crore equity shares of BPL PTI Limited which was engaged in the manufacture and

marketing of dry cell batteries. This company is now a subsidiary of BPL with effect from Aug.'00. During the 4th qtr of 2001-02 the company introduced the

first integrated Home Theatre Solution with 4000 MW PMPO output. The Company got ISO 14000 EMS (Energy Management Systems) Certification for

conserving energy

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BPL

Parent Company BPL(originally British Physical Laboratories) Group

Category Consumer Electronics

Sector IT & Technology

Tagline/ Slogan Believe in the Best; Happier Living Everyday

USP Renowned Indian electronics brand with high emphasis on quality

STP

Segment Consumer appliances, home entertainment, health equipment (under “SureCare” brand)

Target Group Middle class segment and health care providers

Positioning A complete day-to-day solution (for consumer electronics);

SWOT Analysis

Strength

1. Ranked among the top 100 most trusted brands in India 2. Tie up with Sanyo for technology transfer to manufacture CTVs

3. Strong brand with a legacy of making smart and popular TVs

4. Brand had strong advertising through TVCs and print media

5. Entire portfolio includes Medical equipment, televisions,

refrigerators, washing machines, microwaves & audio equipment

Weakness

1.Expansion into several unrelated sectors led to the downfall

2.Lack of economies of scale compared to the Korean giants 3.Being an Indian brand leads to lower brand perception compared to the global brands

Opportunity

1.Medical devices market market is likely to grow annually in the coming years

2. Growing consumer appliances market in tier -2,3 cities

Threats

1.Overseas competitors winning over BPL’s customer segment 2. Rapidly changing technology and new features being added by

foreign players

Competition

Competitors

1.Samsung 2.LG electronics 3. Videocon

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Akai Consumer Electronics India Ltd

Akai Electric Company Ltd established in July 15th 1929. There was a time when

Akai was known as"Akai, the tape deck manufacturing company". This is a story, which cannot be left out whenever mentioning Akai, a company that was founded

upon audio recoding and reproduction technology. Sound technology has changed with time, from open reel tapes to cassettes, from CDs to MDs, from VTRs to

DVDs. But within the history of product development, it is the shift from analog to digital technology that has had the greatest impact. Akai has developed business in

foreign markets far and wide especially in Europe, the middle and near east, Asia, and Oceania. Akai’s development base is located in Japan and our production and

marketing base in Hong Kong.

Akai’s goal is to become a company that people love and know well. Akai continues to carry out global activities through our subsidiaries and distributors in different countries. And while Akai is establishing its brand image, Akai is making

an effort to enrich its product line at the same time. One example of this is the professional editing equipment for broadcasting stations and movie studios in

which Akai is now active.

In 1999 Akai Electric Co Ltd. and Videocon Ltd. came up with a joint venture company, Akai India Ltd.Having used Baron's aggressive pricing tactics to make a

splash, Akai will use Videocon's distribution and marketing strengths to consolidate itself in India. Akai's market share, according to ORG figures, rose to

16 per cent in 1998-99. Akai India plans to make and sell 3.5 lakh color TV sets in the first year of operations, and 5 lakh by 2001. While the design and micro

components would be imported, all other parts, including picture tubes and other critical components, will be sourced in India. The company intends to introduce seven colour TV models, a flat screen TV model called Plasma, audio products in

the 270-4,000-watt range, digital video discs, dolby prologic home theatre systems and a combi-system inclusive of a television and a video-compact disc player.

Akai was launched in India in 1995 and there after the CTV market was never the

same. Before Akai, the CTV was a luxury affordable only to the middle class and

above. The starting price of CTV at that time was Rs 15000 and above. It was a big

task for a middle-income family to afford one at that time.

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Players like Videocon, BPL, Philips and Onida dominated CTV market at that

time. Akai had to break the stronghold of these players and how they did it is one

of the greatest marketing success stories ever.

From 0 to14% market share within 18 months. That was the outcome. Akai did this

by going by the advice of Don Corleone “ Make an offer that no one can refuse”.

“ Rs.9999 for a 21 inch color television” screamed full-page ads in newspapers. It

was for the first time that a consumer durable marketer took full pages that too

frequently. Along with the price, Akai invented the concept of exchange schemes

into the Indian market and customers loved it. Nobody could believe the offer and

the price. I don’t think anyone now also knew how it worked out.You go to the

dealer with an old TV and you could get a discount of Rs 5000 on the new one.

WOW…

Akai positioned itself as a price warrior and the heritage factor of being a Japanese

company boosted the brand image of the company. The tag “Made in Japan”

always impresses Indian consumers and it helped Akai to scale up in the market

with in a short span of time.

Baron also took an unconventional distribution strategy by advertising heavily

before the product hit the market. This created rush in the market and distributors

paid upfront to get the orders and the company had the money before selling its

product. The additional margins also satisfied the dealers.

The price and the hype affected the market share of the leaders in CTV market .All

the players cut their prices as high as 40% so as to survive. This prompted

customers to believe that they were being forced to pay a higher price before Akai

came into the market. The price offers expanded the Indian CTV market like a

rocket propeller

Akai ran into rough weathers shortly after 1998. Akai globally was owned by

Ontario based Semi Tech corporation. Baron ‘s relationship with Semi Tech

became rough. Baron, to tide over the probability of severing ties with Akai,

forged a deal with Aiwa of Japan for marketing Hi Fi music systems.

Kabir Mulchandani did the same with Aiwa selling the brand at a price unheard of

and making the product category reachable to middle class. But Aiwa as an upscale

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brand ( 51% of the co is owned by Sony) was not happy by this positioning

,however an the brand was looking for an upstart in the Indian market and Kabir’s

strategy helped Aiwa to create a brand awareness and expand the market.

Akai thus severed its association with Baron and forged a marketing relationship

with Videocon. Videocon was marketing the brands of Semitech like Sansui.

Akai struggled to shrug of the image of a low price brand which was strongly

embedded in the mind of the Indian consumer. As Mr Abrahan Koshy of IIMA

says ‘ Discounted brands are promotion dependant” so to survive Akai had to

spend heavily on Advertisements and it was a difficult proposition.

Baron later tried its luck with another Chinese brand TCL but could not succeed.

Once a poster boy in the media and once acclaimed as a marketing whiz kid, Kabir

Mulchandani has faded in to history as a one product wonder. He is battling lot of

legal issues and nobody talks about him now. But marketing history remembers

him as a Disruptive Marketer who made two luxury product categories CTV and

Hi-FI systems affordable to the Indian consumer.

Akai expanded the Indian CTV market which is now estimated to be 80 lakhs units

per year. The Korean majors currently dominate the market. Since the launch of

Akai in 1995, the entry-level models are ranging sub 10000, which was

unthinkable in the 90’s. Now all the major players including SONY have a CTV

model below Rs 10000. Even Flat TV starts in this range. All these, thanks to

AKAI. But the brand has now become a marginal player in the Indian market.

Videocon is finding it difficult to fit this brand into its already crowded product

portfolio. Aiwa is fighting it out at the affordable TV and Music system category

with the backing of SONY.

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159

Demand Factor in the Industry

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Professional Trade Bodies Of Indian Electronic industry :

ELCINA ELECTRONIC INDUSTRIES ASSOCIATION

OF INDIA

ELCINA was established in 1967 while India's Electronics industry was still

in its infancy. Since then the organization is well known as an interactive forum

for electronics and IT manufacturers. Including the basic objective of promoting

hardware manufacturing through active representation and advice to the

Government, it has been also networking with national and international

technical institutions and business promotion bodies to further the interests of its

members. Today, in this increasingly liberalised environment, there is greater and

more focus on professional and value-added services rendered by the Association to the Electronics and IT Community.

As India’s oldest and largest electronics association, Elcina has always remained

committed to the promotion of the electronics manufacturing culture in the

country, which is mostly focusing on components - the building blocks of

electronics industry. Elcina, now has been renamed as Elcina electronic

industries association of India, and even widened its horizons and broadened its

activities to include the development of the entire electronics and its hardware,

including components and assemblies, consumer electronics, telecoms, IT,

industrial/professional, defense/strategic electronics and other emerging areas

like medical and automobile electronics, embedded systems and hardware design.

Elcina has been continuing to work towards correlating the common interest of

electronic hardware manufacturers with that of manufacturers of electronic

materials, machinery and service providers, for accelerating growth. Elcina has

taken much initiative to create awareness on issues impacting hardware

manufacturing, such as policy and environmental developments, drawing up a

well-defined agenda for both the government as well as the industry.

.

Services

ELCINA, as an ISO 9001:2008 Association (certified by UL), constantly

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endeavours to upgrade services which include, among others, active industry-

government interface and networking with key decision making bodies with

quick and effective representation to government and continuous follow up on

policy. Swift dissemination of the most relevant information/data, circulars and

notifications using electronic media and providing value added information and

updates as well as promoting business with the support of ELCINA's dynamic

website.

Publications, Reports and Surveys to capture the latest in the industry. Training

Programmes, conferences, workshops on emerging business practices and

quality, Self Empowerment Programmes (SEPs such as Six Sigma Black Belt,

TQM, TPM, Environment Management, Scheduling, Customer Satisfaction,

Benchmarking, etc.Advisory and Consultancy services, infrastructure support for

business meets, conferences and promotional activities at ELCINA's Conference

and Committee Room,Annual Awards for Excellence, and permanent Product

Display Facility at ELCINA House, including virtual display in the ELCINA

website are some of its other services.

The interests of members are best served by catering to the larger interest of the

country. Also keeping in mind the sweeping pace of liberalisation and the

integration with the global economy, ELCINA services are constantly evaluated

and upgraded to suit the best interest of its members and the global electronics

community.

In its endeavor is to catalyse the flow of investment funds and rapid growth of the

Indian Electronics industry, ELCINA had launched its consultancy services.

Apart from in-house database and expertise, which is ELCINA’s consultancy

division, it has tie-ups with three professional organisations with sound track

record records and expertise in the electronic industry.

These tie-ups help to tailor the client’s projects to their specific requirement and

allocate optimum skilled manpower and time for each project. The tie-ups also

enable to take up diverse projects from different clients simultaneously and also

adhere to tight deadlines.

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INDIAN ELECTRICAL AND ELECTRONICS

MANUFACTURERS ASSOCIATION

IEEMA was instituted in 1948 by most of the pioneers of the electrical and

electronic industry to provide guidance and leadership mostly to the fledgling

Indian electrical Industry which was aligning itself to the national goal of self

sustenance and import substitution. The Foundation was laid in 1948. IEEMA

represents the entre Indian electrical and industrial electronics industry in today's

rapidly changing business environment. IEEMA promotes and protects the

interests of the Indian company’s active in the area of electrical and presents the

sector on many councils and committees constituted by the Government. In

January 1998, IEEMA became the first industry association in India to obtain ISO certification.

The visionaries who founded IEEMA were: Mr. N.K Gurjar, Kirloskar Electric Co., Mr. B.K. Rohatgi, Indian Electrical Works Ltd, Mr. C.M. Shaw, General

Electric Co. Ltd, Mr. Kishenchand, Kaycee Industries Ltd, and Mr. C.G. Gorton, National Insulated Cable Co. of India Ltd. Indian Electrical and

Electronics Manufacturers’ Association (IEEMA) is the apex association of manufacturers of electrical, industrial electronics and allied equipment in India.

IEEMA has a pan India presence with its headquarters in Mumbai and regional offices in New Delhi, Kolkata and Bengaluru.

IEEMA, the first ISO certified industry association in India, has over 750

member organisations encompassing the complete value chain in power

generation, transmission and distribution. Its membership base, rangingfrom

public sector enterprises, multinational companies to small and medium

companies, gives IEEMA a truly national representative character. IEEMA

members represent a combined annual turnover in excess of Rs. 1, 10,000 crores

(approximately US$ 22 billion) and have contributed to more than 95% of the

power equipment installed in India. India’s exports of electrical equipment are

around Rs. 18,000 crores (approximately US$ 4 billion) and the industry provides

direct employment to over 5 lakh persons and indirectly to over 10 lakhs.

Vision and Mission

Electricity for all, and Global Excellence, which leads to Human Enrichment

would cater to the needs of the industry in the changed economic environment.

IEEMA has taken the bold step to restructure itself and has drawn an ambitious

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medium term programme. As a first step while restructuring itself to serve its

stakeholders better, IEEMA evolved a Vision, ‘Electricity for All and Global

Excellence leading to Human Enrichment’ based on the five building blocks viz;

‘Credibility with Stakeholders, Excellence, Global Presence, Environment and

Enabling Power to All’.

Services

With expertise resident in its product divisions and cells, IEEMA is the natural

voice of the Indian electrical industry and plays a crucial policy advocacy role

with the government and its agencies. IEEMA facilitates a robust two-way flow

of customized and value added information between the government and the

industry. It sensitizes all stakeholders on the future requirements for development

of the power sector in the country. IEEMA also engages proactively in

government-industry consultative mechanism through its representation on

councils and committees constituted by the government and its agencies in

policy, strategy and other matters.

IEEMA provides a vibrant platform for knowledge sharing, adoption of best

practices and networking opportunities for manufacturers, utilities, professionals,

international experts and organizations. It organizes technical product-specific

international seminars, national conferences and workshops, as also numerous

training programmes for capacity building of technical personnel in the country

and abroad. IEEMA works closely with government agencies, utilities,

standardization bodies, research and development organizations and testing

institutes for formulating Indian standards for electro-technical industry and

developing energy efficient products.

WINDING WIRES MANUFACTURERS’

ASSOCIATION (WWMAI)

Winding Wires Manufacturers’ Association (WWMAI) was incorporated in

November 1973, and is the Representative Association of Indian Copper

Winding Wires Manufacturers. The Members of the Association are generally

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engaged in the production of : Enamelled Copper/Aluminium winding wires,

Paper covered or Fibre Glass / Nomex covered conductors and Continuously Transposed Conductors (CTC)

Objectives

Some of the main objects for which the Association is established are:

To promote and protect trade, commerce, manufacture and sale of Winding Wires and Insulated Strips.

To make representations to guide the Government Departments and officials in matters of common interest to the Industry.

To enable a feeling of evenness, fraternity and co-operation amongst its Members and others in the Industry.

To develop co-operation amongst all the Members, to promote healthy

competition, to safeguard and protect the interest of the Domestic Winding Wire Industry in all possible ways.

To get affiliated with all the other Associations with a view to promote measures for the protection of the interests of the Winding Wire Industry.

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Online presence of electronic industry

Canon, LG, Samsung Among Cos Creating Online Communities To Connect With Consumers

BUOYED by their successful Tweets and YouTube promos, brands such as

Canon, LG, Samsung and Adidas are now busy creating online consumer communities. Marketers feel that besides increasing brand salience, online communities can emerge as a platform for cross-selling products, thanks to the

ever-increasing relevance of the internet as a medium to reach out to consumers. .

LG will soon come up with an online community that will be used “to receive consumer feedback and directly talk to them and thereby increase consumer

bonding with the LG brand”. Others such as Sony PlayStation, Tata Teleservices, Philips, Samsung Mobile, Canon and Adidas too believe that the internet lends

itself as a big medium for brands to connect faster with consumers than traditional media. Tata Teleservices is using online communities to track consumer behaviour

for its three brands — Tata Indicom, Photon and Tata Docomo. “In a category like telecom, where tariffs are changing everyday, it helps us to hear the inherent voice

of consumers,” says Lloyd Mathias, the telco’s CMO. Canon and Samsung Mobile, which were among the earliest to roll out online

consumer communities in India, claim huge dividends. Canon has logged in 80,000 members in its Canon Edge community. “Since a lot of consumers participating in our community are interested in serious photography, this translated into nearly

100% growth in the digital SLR camera business,” says Alok Bharadwaj, senior VP at Canon India. “Next month, we will launch an online photo gallery that will

provide further thrust.” While money spent on online promotion is still less than 5% of the overall

marketing budget for most brands in India, brands like LG and Canon are increasing their online investments 50-100% every year. This is because the return

on marketing investment on the internet is high as its cost is minimal and the reach measurable. But the companies are not betting big on online sales. Canon manages

to sell some ten cameras every month online, but average monthly revenue of Rs 1 lakh is nothing great.

However, in digital categories such as gaming and software, companies are looking at online sales. Sony Computer Entertainment, for example, plans to

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replicate its hugely successful online store in India along with online community, according to its country manager in India Atindriya Bose.

Similarly, Samsung Mobile, which has more than three million users in India in its online community Samsung Fun Club, plans to use it as a platform to distribute

and sell mobile phone applications. “We have just launched applications for Samsung phones through the Fun Club, which will be expanded into areas like

maps, instant messaging, sports and news,” says Ranjit Yadav, director (mobile & IT) at Samsung India. European electronics firm Philips is planning to start online

communities for its B2B business in healthcare and lighting. “We are already running a couple of pilots targeting doctors, radiologist and architects,” says Vivek

Sharma, CMO of Philips India. Marketers say the internet is a great enabler for building brands in the tech space

and for products that target the youth.

CONNECTING PEOPLE

LG Online Presence: Interactive website, online sales, plans to roll out online

consumer community social networking 0.5 million users per month in India Canon Online Presence: Online consumer community, online sales 80,000 users in India

Samsung Mobile Online Presence: Online consumer community 3 million users in India Adidas

Online Presence: Social networking, specific online groups focusing on key areas such as football and running

75,000 people joined the Adidas India community during a recent promotion on Facebook

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Chapter 2 : Promoters and management ethos

L.G. Electronics India Private Limited

Bon-Joon Koo

Vice Chairman, LG Electronics

Bon-joon Koo assumed the role of Vice Chairman of LG Electronics on October

1, 2010.

Born in 1951, Mr. Koo is the grandson of In-hwoi Koo, the founder of the LG Group. Mr. Koo has nearly a quarter of a century of experience working for

various LG companies.

Prior to his appointment to Vice Chairman of LG Electronics, Mr. Koo served as the Vice Chairman and CEO of LG International.

From 1999 to 2006, Mr. Koo created and led the joint venture LG.Philips LCD, which became LG Display in 2008. He set the stage for LG Display to become the leading global LCD manufacturer that it is today.

Earlier in his career, Mr. Koo held various executive roles overseeing semiconductors, PCs, IT and chemicals. He returned to LG Electronics where he

worked from 1986 to 1995 across a range of business areas.

Mr. Koo graduated from Seoul National University in 1978 with a degree in computational statistics and received his MBA from the University of Chicago

Booth School of Business.

Mr. Bon-Joon Koo has been the Chief Executive Officer of LG Electronics Inc. since October 1, 2010 and has been Head of Business Innovation Office since

November 2010. Mr. Koo served as the Chief Executive Officer of LG International Corp. Mr. Koo served as Chief Executive Officer of LG Display Co.

Ltd. (formerly LG.phillips Lcd Co., Ltd.) since July 1999. Mr. Koo served as President and Chief Executive Officer of LG Semicon, Executive Vice President of

LG Chemical and also as Vice President of LG Electronics. He served as Vice Chairman of LG International Corp. Mr. Koo serves as Vice Chairman of LG Electronics Inc and serves as its Director. He served as Vice Chairman and Joint

Representative Director of LG Display Co., Ltd. (Also Known as LG Philips LCD

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Co. Ltd) since July 1999. He served as Joint Representative Director of Koninklijke Philips Electronics NV until February 16, 2007. Mr. Koo holds a

Bachelor of Science degree in Computer Science and Statistics from Seoul National University in Korea and an M.B.A. degree from the University of

Chicago in the USA.

Mr. Soon H. Kwon serves as an Executive Officer of LG Electronics U.S.A., Inc.

Mr. Kwon has been the Managing Director at LG Electronics India Pvt. Ltd. since

January 1, 2011. Mr. Kwon serves as Senior Vice President of India Operations at

LG Electronics Inc. and served as its Chief Executive Officer of South West Asia

and Senior Vice President. Mr. Kwon is responsible for LG's growing revenue and

building LG Business Solutions Company as a leading B2B supplier. He serves as

an Executive Officer of LG Electronics U.S.A., Inc. and is responsible for digital

appliance sales and marketing in the Americas, Asia, the Middle East and Africa.

He served as the Global Head of Business Solutions at LG Electronics and also

served as the Managing Director at LGE Australia since 2009. His earlier stints

within LG Electronics includes the Corporate Marketing Vice-President in Korea

and senior positions in the US and Canada markets. Mr. Kwon served as President,

Digital Appliance Division of LG Electronics USA until January 2007. He has

spent 22 years at LG, and served as President of LG Electronics-Canada. He served

a variety of senior positions, with an emphasis on brand management and LG's

OEM appliance business operations. Since 2002, he served as President of LG

Electronics-Canada, based in Mississauga, Ontario. He has been a Director at LG

Electronics India Pvt. Ltd. since January 1, 2011. Mr. Kwon has Bachelor of Arts

degree in Economical Statistics from Sung Kyun Kwon University, in Seoul,

Korea

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Samsung Electronics India Limited

B. D. Park No

Relationships

Managing Director, Chief Executive

Officer of Samsung South-West Asia

Operations and President of Samsung

South-West Asia Operations

--

H. B. Lee No

Relationships

Chief Executive Officer of South West

Asia Regional Quarters and President

of South West Asia Regional Quarters

--

Sameer Garde No

Relationships

Head of Enterprise Business --

Mahesh Krishnan No

Relationships

Business Head of Home Appliances

and Vice President

46

Raj Kumar Rishi No

Relationships

Business Head of Audio Visual (AV)

Business and Vice President of Audio

Visual (AV) Business

--

Vineet Taneja

B.Tech., PGDM

No

Relationships

Head of Mobile and Digital Imaging

Business

49

Ravinder Zutshi No

Relationships

Deputy Managing Director

Lee Kun-hee

(born January 9, 1942) is a South Korean business magnate and the Chairman of Samsung Electronics. He had resigned in April 2008, owing to Samsung slush

funds scandal, but returned on March 24, 2010. In 1996, Lee became a member of the International Olympic Committee. With an estimated net worth of

$12.6 billion, he and his family rank among the Forbes richest people in the world. He is the third son of Samsung founder Lee Byung-chull.[3]

Early life

170

Lee has a degree in economics from Waseda University and an MBA from George Washington University.

Samsung

Lee Kun-hee joined the Samsung Group in 1968 and took over the chairmanship on December 1, 1987, just two weeks after the death of his father and Samsung's

founder Lee Byung-chull.[4] In the early 1990s, believing that Samsung Group was overly focused on producing massive quantities of low-quality goods and that it

was not prepared to compete in quality, Lee famously said in 1993 "Change everything except your wife and kids" and true to his word attempted to reform the

profoundly Korean culture that had pervaded Samsung until this point. Foreign employees were brought in and local employees were shipped out as Lee tried to foster a more international attitude to doing business.

Under Lee's guidance, the company has been transformed from a Korean budget name into a major international force and arguably the most prominent Asian

brand worldwide. One of the group's subsidiaries, Samsung Electronics, is now one of the world's leading developers and producers of semiconductors, and was listed in Fortune magazine's list of the 100 largest corporations in the world in 2007.

Today Samsung's revenues are now 39 times what they were in 1987, it generates around 20 percent of South Korea's GDP, and Lee is the country's richest man. [5]

On April 21, 2008, he officially resigned, and stated: "We, including myself, have

caused troubles to the nation with the special probe; I deeply apologize for that, and I'll take full responsibility for everything, both legally and morally."[6] On

December 29, 2009, the South Korean government moved to pardon Lee Kun-hee.

On March 24, 2010, he announced his return to Samsung Electronics as its chairman.

Awards

In 2004, Lee received the Legion of Honour from French government at Paris.

In September 2006, Lee received the James A. Van Fleet Award from the Korea Society.

171

Mr. Oh-Hyun Kwon has been the Chief Executive Officer of Samsung

Electronics Co. Ltd. since March 14, 2013. Mr. Kwon served as Chief Executive

Officer of Samsung Display Co., Ltd. He served as the Chief Executive Officer at

Samsung Electronics Co. Ltd. since June 2012. Mr. Kwon served as the President

of Device Solutions and Head of LCD Business at Samsung Electronics Co. Ltd.

from July 2011 to December 2011. Mr. Kwon also served as President of

Semiconductor Business and Display Operations at Samsung Electronics Co. Ltd.

from May 2008 to December 2011. Mr. Kwon headed the Non-memory Chip

Division of Samsung Electronics Co. He serves as the Chairman of the Board at

Samsung Electronics Co. Ltd. Mr. Kwon served as Vice Chairman of Samsung

Electronics Co. Ltd. since December 2011 and serves as its Director. He has a BS

in Electrical Engineering from Seoul National University

Mr. B. D. Park has been the Managing Director of Samsung India Electronics

Private Ltd., since January 10, 2012. Mr. Park has been Chief Executive Officer of

Samsung South-West Asia Operations and President of Samsung South-West Asia

Operations at Samsung Electronics Co. Ltd., since January 10, 2012. He oversees

the operations of Samsung India Electronics, Samsung India Software Operations

(SISO) and Samsung's R&D centre at Bangalore. Mr. Park has over 28 years of

work experience at Samsung, having started his career with Samsung Electro

Mechanics Co in 1983. He joined Samsung Electronics Co. Ltd. in 1991 and has

worked in the Overseas Marketing Planning Group in Korea; Samsung Latin

America RHQ and was the Head of the Samsung’s subsidiary at Chile. He became

the Director of the Mobile Export team in 2001 and the Head of South East

Asia/South West Asia/Middle East Marketing Group in Global Mobile Business in

2004. He served as Head of the Mobile and IT division at Samsung since 2008

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Videocon Industries

Venugopal Dhoot

Venugopal Dhoot (born 30 September 1951 in Bombay, India (now Mumbai)) is

an Indian businessman. According to Forbes Magazine, his wealth in 2013 is $1.25 billion. He is said to be the thirty eighth richest man in India.

He is an alumnus of the College of Engineering, Pune, India. He is married to

Rama Dhoot and has two children, Anirudh and Surbhi.

Career

His father, the late Nandlal Madhavlal Dhoot, was an Indian industrialist who

made his earlier fortune in the sugarcane and cotton industry. Nandlal Dhoot was the founder of Videocon Corporation and other businesses ventures such as

Videocon Electronics. The company's major breakthrough came when it received one of India's first licenses to manufacture color televisions.

Mr. Venugopal Nandlal Dhoot serves as the Chairman of the Board of Videocon

Industries Ltd. and has been its Managing Director since September 1, 2005. Mr.

Dhoot serves as the President of Indo Japanese Association. He is one of the

promoters of the Videocon group of companies and has been instrumental in

growth and promotion of the Videocon group. He is an Advisor to the Government

of Orissa on issues of industrial development in Orissa. He has been associated in

the consumer electronics and home appliances business for over 30 years. He

served as the Chief Executive Officer of Videocon Industries Ltd. since September

1, 2005. Mr. Dhoot has been a Director of Videocon Industries Ltd. since June 1,

2005. He served as a Non-Executive Director of Trend Electronics Ltd. since

December 29, 1998. He served as an Independent Director of Rural Electrification

Corporation Limited from December 20, 2007 to December 19, 2011. Mr. Dhoot

served as a Director of Value Industries Ltd (Alternate Name: Videocon

Appliances Ltd) from March 8, 1988 to February 1, 2012. He serves as the

President of the Electronic Industries Association of Marathwada. He was the

President of the Associated Chambers of Commerce and Industry in India. He

holds a BE in Electricals Engineering from the Pune University. He studied at

Pune Engineering College, Pune.

173

Founding Father

Shri Nandlal Madhavlal Dhoot, the founder of the Videocon Group,

completed his education from Ahmednagar and Pune. After a successful stint with sugarcane and cotton cultivation, he boldly ventured into importing

machinery from Europe to set up the Gangapur Sakhar Karkhana (Sugar Mill) in 1955. Those were the times when the villages did not even have electricity. Thus, was unleashed an Industrial Revolution. The die was cast. Over the years,

Nandlalji's path-breaking attitude found expression in a myraid ways, earning him the well-deserved reputation of The Pioneer of industrial activity in

Marathwada, Maharashtra, India. In early 80's, Nandlalji introduced his three sons - Venugopal, Rajkumar and Pradipkumar into business

Board of Directors

Mr. Venugopal N. Dhoot

Mr. S. Padmanabhan

Maj. Gen. S. C. N. Jatar

Mr. A. G. Joshi

Mr. Radhey Shyam Agarwal

Mr. B. Ravindranath – Nominee IDBI Limited

Promoters

Mr. Venugopal N. Dhoot

Mr. Rajkumar N. Dhoot

Mr. Rajkumar N. Dhoot, Member of Parliament (Rajya Sabha) and Immediate Past-President of the Apex Indian Chamber of Commerce & Industry,

ASSOCHAM (The Associated Chambers of Commerce and Industry of India) is also the Promoter & Owner of the diversified Videocon Group of Companies.

He is a well known Industrialist and was born on 11th September, 1955 at Ahmednagar in Maharashtra, India.

174

Mr. Dhoot did his Graduation with Honors in Commerce from S.B. College, Aurangabad, Maharashtra. Apart from Trade and Politics, he is vigorously

involved in social work which includes promoting education especially among girls by running a Girls High School at Gangapur for 1100 girls of First to

Tenth Standard. He runs a leading multi-Super Specialty Charitable Hospital - ‘Nandlal Dhoot Charitable Hospital’ at Aurangabad with an investment of -

Rs.100 crores, providing only second Cobalt-60 facilities for Cancer treatment, a fully developed Cardiac Center and allied treatment. He has also undertaken

construction of roads in Gangapur, Aurangabad and adjoining areas.

Mr. Dhoot was first elected to Rajya Sabha in April 2002 and served the Parliamentary Standing Committee on Finance, Consultative Committees for

the Ministry of Commerce and Industry as also the Ministry of Urban Development and Poverty Alleviation.

Mr. Dhoot has been a Consultative Committee member for the Ministry of

Finance and permanent Special Invitee at the Consultative Committee for the Ministry of Communications and IT and for the Ministry of Petroleum and

Natural Gas. He was a special invitee to the Consultative Committee for the Ministry of Information and Broadcasting. In May 2008, Mr. Dhoot was re-

elected to Rajya Sabha and had been a Member of the Standing Committee on Information Technology apart from being a Member of the Rajbhasha Samiti of

the Ministry of Textiles. At present he is a Member of the Standing Committee on Health and Family Welfare. Apart from keenly raising the issues of

Maharashtra through Parliamentary Questions, No-Day-Yet Named Motions, amendments on the Motion of Thanks on Presidents’ Address etc, he has introduced key Private Members Bills in the Rajya Sabha.

Mr. Dhoot is the Former President of Marathwada Industries Association (MIA), now Chamber of Marathwada Industries and Agriculture (CMIA) which

actively promotes industries in Marathwada region and is a Member of India-France Parliamentary Friendship Group.

Mr. Pradipkumar Nandlal Dhoot

Mr. Pradipkumar N. Dhoot has been involved with the Videocon Group since

its inception. He was a Director of Videocon Industries Ltd from 16th February 1991 to 14th August 2012. At various stages he held a number of directorships

with companies involved in manufacturing and trading of consumer electronic goods and home appliances, real estate and infrastructure development,

175

telecom, industrial finance and oil and gas companies. Presently he heads the International Oil & Gas business of Videocon Group from its business head

office in Dubai. He holds a bachelor of commerce degree. In past he was a full time director of VIL and was responsible for managing the overseas operations

of the group which are spread over three continents. He received the Man of Electronics award in 2005 from the Consumer Electronics and TV

Manufacturers Association.

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ONida Electronics

Mr Gulu Mirchandani CHAIRMAN & MANAGING DIRECTOR

Mr. Gulu L. Mirchandani, the Chairman & Managing Director of Mirc Electronics Limited is an alumnus of BITS Pilani and holds a degree in BE (Mechanical). Mr Mirchandani is closely involved in the development of corporate strategy and

formulating, incubating and delivering emerging technologies and services in the area of televisions and other products of the company. Mirc won the award of

excellence in Electronics under his able leadership in 1999 from the Ministry of Information Technology, the Government of India.

Mr Mirchandani has held several key positions in the industry. He was appointed

as the president of Consumer Electronics & TV Manufacturer Association ( CETMA) for two consecutive years in 1992 & 1994. He was appointed as the

Chairman of the Bombay chapter of the World Presidents' Organisation (WPO), an International Organisation of more than 3000 CEO's with operation in more than 60 countries and presently he is the Chairman of the South Asia Region. Mr

Mirchandani is also on the Board of many companies, including Shoppers Stop Limited, VIP Industries Limited and KEC International Limited Etc

Mr. Vijay J. Mansukhani MANAGING DIRECTOR

Mr. Vijay J. Mansukhani is a co-promoter of Mirc Electronics Limited and is also its Managing Director. He has been associated with Mirc since its inception

in1981. A graduate from the College of Marine Engineering, Mumbai. Mr. Mansukhani has over 30 years of experience and proven expertise in driving the

organisational growth through the enhancement of existing growth areas and developing potential opportunities. As the key member in devising and

implementing corporate growth strategy for Mirc, he is also involved in the telecom sector. He is the Managing Director of Adino Telecom Limited, a joint Venture with Enkay Telecommunications (India) Limited. Mr. Mansukhani is also

on the Board of several companies, including Akasaka Electronics Limited etc.

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Mr. Gulu Mirchandani CHAIRMAN & MANAGING DIRECTOR

Mr. Gulu L. Mirchandani, the Chairman & Managing Director of Mirc Electronics Limited is an alumnus of BITS Pilani and holds a degree in BE ( Mechanical). Mr Mirchandani is closely involved in the development of corporate strategy and

formulating, incubating and delivering emerging technologies and services in the area of television and other products of the company. Mirc Electronics won the

award of excellence in Electronics under his able leadership in 1999 from the Ministry of Information Technology, the Government of India.

Mr Mirchandani has held several key positions in the industry. He was appointed as the president of Consumer Electronics & TV Manufacturer Association

(CETMA) for two consecutive years in 1992 & 1994. He was also appointed as the Chairman of the Bombay chapter of the World Presidents' Organization (WPO), an

International Organization of more than 3000 CEO's with operation in more than 60 countries and presently he is the Chariman of the South Asia Region. Mr Mirchandani is also on the Board of many companies, including Shoppers Stop

Limited, VIP Industries Limited and KEC International Limited Etc.

Mr Vijay Mansukhani MANAGING DIRECTOR

Mr Vijay J Mansukhani is a co-promoter of Mirc Electronics Limited which he founded in 1981. Currently he is the Managing Director of the company. A graduate from the college of Marine Engineering, Mumbai, Mr Mansukhani has

over 30 years of experience and proven expertise in driving organizational growth through the enhancement of existing growth areas and development of potential

opportunities.

He is a key member in devising and implementing corporate growth strategy for

Mirc Electronics.

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BPL

Mr.Ajit Nambiar is instrumental in setting up of the following manufacturing

facilities: Colour Television Manufacturing Facility at Old Madras Road,

Bangalore. Alkaline Battery Manufacturing Facility in Dobaspet, near Bangalore.

He has been an Executive Chairman of Bpl Ltd. since April 1, 2008 and served as

its Chairman since 1999. He serves as Vice Chairman of BPL Display Devices

Limited. Mr. Nambiar serves as an Executive Director of BPL Ltd. He serves as a

Director of BPL Soft Energy Systems Limited, Anan Properties & Finance

Company Limited, BPL Telecom Private Limited, Electro Investment Private

Limited, Nambiar International Investments Private Limited, Aquabionics Holding

Corporation Pvt Ltd., Phoenix Holdings Pvt Ltd., Stallion Computers Pvt Ltd., E R

Computers Pvt Ltd., Electronic Research Pvt Ltd., Bharat EPDC Energy Private

Limited, BPL Power Projects (AP) Private Limited, BPL Power Projects (Kerala)

Pvt Ltd., NI Micro Technologies Private Limited, SANYO BPL Private Limited,

Dynamic Electronic Private Limited, Zyfax systems (Bangalore) Pvt Ltd., Bartons

Sons & Company Pvt Ltd., Merino Finance Private Limited, and BPL Techno

Vision Private Limited. Mr. Nambiar holds Degree in Electrical Engineering from

Boston University, USA.

Name Designation

Ajit G Nambiar Chairman & Managing Director K S Prasad Director K Jayabharath Reddy Director

Subhash Bathe Director Name Designation

Anju Chandrasekhar Director S Prabhala Director

Suraj L Mehta Directo

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Akai Cosumer Electronics India Limited

Akai Electric Company Ltd. was founded by Masukichi Akai in Tokyo Japan

in July of 1929 as a manufacturer of radio components, sockets and other electrical parts.

Masukichi's business expanded rapidly through the 20's and 30's. Masukichi's

eldest son, Saburo, grew up in the factory and later enrolled himself in night school at the Tokyo Institute of Technology to study electrical machinery.

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Corporate Social Responsibility

L.G Electronics India Private Limited

Environment

LG Electronics constantly researches and introduces a full range of innovative,

greener products and services, and continue to be a leader in developing green innovations. We are always looking for innovative ideas and technologies which

will support our efforts as, a leading company in practicing environmental management.

Every dream a company has for its future is founded upon the health and

prosperity of the community it serves. As a biomedical enterprise, LG Life Science is even more keenly aware of this fact. We strive to protect and nurture people's

health, the environment and our local communities not as separate activities, but as an integral part of our normal daily work.

LGLS willingly donates stocks of free medications to help disaster victims,

working through the Korean Red Cross, Korean Medical Association and other organizations to assist people affected by flood, earthquake and other large-scale

emergencies. We also provide direct funding to Korea's Childhood Leukemia Foundation, Kidney Patients Association, and Organ Donation Campaign, and

donate antibiotics and vaccines to North Korea. In cooperation with the LG Welfare Foundation, LG Life Sciences supplies our growth hormone product,

Eutropin, to treat growth-impaired children. The Foundation has helped treat over three hundred children with short stature since 1995.

"One company, One mountain, One river" is the name for our long-running

campaign of regular environmental clean-up activities. LGLS has operated waste-reduction programs at its worksites since 1999 to reduce the company's landfill,

water and energy usage, targeting an ultimate goal of 'zero pollution.' When a marine accident caused over 10 thousand tons of oil to spill into the waters of

Korea's Taean peninsula in 2007, we mobilized 100 employee volunteers to participate in the clean-up.

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Through such diverse activities, LG Life Sciences is fulfilling its corporate social responsibility.

Helping out in our local communities is an important element of earning society's trust for our company. Each of our workplaces is active in local volunteer work.

LGLS supports blood drives and operates a 'science teacher-for-a-day' program that dispatches LGLS's staff to local schools. We donate osteoarthritis drugs to help low-income seniors and target our employee volunteer corps to assist elderly

households, teenage heads of households and disabled persons. LGLS tries to foster a 'participatory CSR' culture among its workers, encouraging everyone to

give some of their time for the benefit of society. Examples include the 'Health & Youth Fund', to which employees donate a portion of their monthly salaries, and

'Heath & Youth Volunteers' group, which our employees created themselves to provide assistance to elderly persons living alone.

LG Runs Corporate Social Responsibility Campaign On Facebook July 29, 2011 at

5:44 pm by Agung Dwi Cahyadi Share 0 1 1 0 0 LG-loves-indonesiaThe large number of Facebook users in Indonesia has prompted LG to run its corporate social

responsibility (CSR) campaign on the popular platform. The company has developed the LG Click and Donate program to raise funds from each ‘like’ on the

LG Loves Indonesia Facebook page. The program turns each ‘like’ into a brick that will be used to build a library for homeless children. Just a few days after it

was launched on May 15, 10,000 Facebook users got in on the action by clicking the button. In order to get even more support, LG adjusted the program slightly by

turning each click into a Rp1,000 donation ($US0.10). By the end of the campaign just a few days ago, Rp34,172,000 ($US4028 ) and 10,000 bricks had been collected. Touched by participants’ enthusiasm, the company increased the

donation to Rp200,000,000 ($US23,577) and gave it to the Kick Andy Foundation, a partner of the program. “Hopefully, we can build a proper library with an

adequate book collection,” said the CEO of LG Electronics Indonesia, Kim Weon Dae. In the wake of this program’s success, LG has launched a similar one for

Ramadan called the Cup of Faith. It will turn every ‘like’ on the LG Loves Indonesia Facebook page and every tweet using #SharetheJoy on Twitter into a

cup of rice (approximately 250 grams) for the less-fortunate. The program is certainly a good example of how a corporation can employ Facebook in a manner

that is socially responsible. We have written in the past about the frequent misuse of Facebook in Indonesia, so this story is somewhat refreshing, as it shows that the

platform can indeed be used to do some good.

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LG Electronics’ Environmental Vision

LG Electronics will realize Global Top Company in the EESH area through corporate level EESH management system operation, energy efficiency optimization, eco-friendly process & product development, business site safety &

health, and employee health improvement activities. Also, by providing differentiated customer value, LG Electronics will pursue earth environment

preservation, sustainable social advancement, and improve the quality of life for stakeholders.

LG Electronics constantly researches and introduces a full range of innovative, greener products and services, and continue to be a leader in developing green

innovations. We are always looking for innovative ideas and technologies which will support our efforts as, a leading company in practicing environmental management. Since it first announced its environmental vision in 1994, LG

Electronics has been practicing environmental management throughout the life-cycle from development and purchasing through production and use to disposal,

and reducing the environmental impacts that occur during business activities. Furthermore, LG Electronics make every effort to provide better quality to

consumers and to contribute to more sustainable communities.

LG Electronics’ Environmental Product Policy

LG Electronics is committed to providing a better experience for its customers, by contributing to environmental protection efforts, and offering green values.

1) Comply with international conventions, standards, and local laws associated with the environment and engage in voluntary activities to improve the environment.

2) Develop and implement a system to reduce greenhouse gas emissions, measure

and improve the performance of this system, and always make the results available to the public.

3) Identify and meet the needs of green consumers, by promoting the sustainability

of our products and stimulating the consumption of greener products.

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4) Make all manufacturing processes, throughout the product life cycle, comply

with environmental protection initiatives.

5) Recognize eco-friendliness as a vital part of product development and manufacturing, and take preventive measures to minimize the environmental

impact throughout a product’s life cycle, including raw materials, production, use, and disposal.

6) Take the lead in establishing a sustainable society by developing new

environmental and energy businesses.

7) Educate our employees on green issues and environmental initiatives while teaching them to develop greener products and reduce greenhouse gases.

8) Expand cooperation with our stakeholders to protect the environment.

.

Eco-Design - LG's Eco-Design strategy works to reduce the environmental impact

of a product's development, production, and circulation while improving efficiency of resources, recycling, and reducing hazardous materials.

Eco-Products - LG's Eco-Products from HDTVs to clothes washers to mobile

phones use the Eco-Design. Such Eco-Products are resource- and energy-efficient, generating less waste.

Hazardous Materials - LG adheres to strict requirements regarding the

management of hazardous materials in its production processes.

Take-Back & Recycling - LG Electronics has established several take-back programs and recycling facilities, allowing consumers to return end-of-life

products. Products are recycled in a responsible manner.

Climate Change - LG will announce a set of global green policies called "Life's Green 2020" at CES. To address global climate change, LG is pledging to work to

reduce greenhouse gases emitted both in the production process and over the lifetime of its products.

. In products, LG intends to reduce greenhouse gasses emitted over the lifetime of its products by 30 megatons by 2020.

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Samsung Electronics India Private Limited

Samsung India wins the prestigious Golden Peacock Award for its CSR

initiatives

Samsung Electronics Co. Ltd, a global leader in technology has been awarded the prestigious 'Golden Peacock Award for Corporate Social Responsibility 2013’for

its Samsung Smart School initiative. The Award recognises Samsung’s work to improve the quality of education provided to underprivileged children in the

country through its CSR initiatives.

The Samsung Smart School initiative seeks to address the digital divide in the country by providing students an interactive learning environment in the

classroom, facilitated by Samsung products like the Smartboard, laptops and tablets. Several Smart Classes have been set up in Navodaya Vidyalaya schools

across the country in the Year 2013. Most recently the Company has set up a Samsung Smart Class in Sriperumbudur in Tamil Nadu. Samsung is also partnering with Industrial Training Institutes (ITIs) in the country to enrich the

quality of course content relevant to its business.

Noida, Uttar Pradesh, India

Samsung today announced the launch of its ‘Nanum Village' project in India, with

the adoption of Baidpura village near its Noida manufacturing facility. One of the first of its kind CSR initiatives by Samsung in India, the Nanum Village project

will see Samsung bringing in several improvements in the infrastructure, health and education facilities in the village.

As part of its Nanum Village initiative, the Company will construct a community

centre for Baidpura residents at the Sri Sant Vinobha Bhave Inter College, which will house recreation facilities, a library as well as computers for the benefit of the community. With education as a strong focus for its Corporate Social

Responsibility initiatives, the Company plans to set up a Smart Class in the school. By providing computers, tablets and Smart board in the Samsung Smart class, the

Company plans to enrich the quality of education being provided to the students and open up a whole new world of possibilities for them. The Company will also

carry out other health and community development initiatives at Baidpura going forward.

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The Nanum Village project in Noida is the latest addition to several CSR projects

undertaken by Samsung in India. A group of volunteers from Samsung Electronics' headquarters in Korea have been working in Sriperumbudur, Tamil Nadu and now

in Delhi, for the past three weeks, as part of the Company's global employee volunteer program. The volunteers set up a Samsung Smart Class in the

Keeranallur Government High School, carried out repair works in the school, taught students basic hygiene and involved them in various physical education

activities. Some volunteers also supported health check-up camps organised by Samsung India in around 10 villages in Sriperumbudur. Samsung volunteers are

currently working in the Sarvodaya Secondary School, Sawada carrying out educational activities.

About Samsung's CSR Initiatives in India: Samsung's CSR program in India

places substantial focus on providing quality education to underprivileged children in the country. The company is in the process of setting up Samsung Smart Classes at Navodaya Vidyalayas in different parts of the country. This initiative is helping

bridge the digital divide in the country while at the same time improving the quality of education being provided in these schools.

Samsung Hope Project to Provide Quality Education to Underprivileged

Children in Tamil Nadu

Samsung Electronics Co Ltd has announced the launch of “Samsung Hope

Project”, which aims to make a difference in the lives of underprivileged children by providing them quality education.

“Samsung aims to reach out to children across 100 villages in Tamil Nadu through

Aid India, its selected partner and in Delhi and Uttar Pradesh through Smile Foundation. Consumers too will get an opportunity to participate in this

educational initiative and support this movement. For every Galaxy Note sold in the period between February and June 2012, Samsung will contribute Rs 100

towards supporting the selected projects.” Company sourced said.

Samsung had constituted a high profile jury to evaluate and select partners for this programme. The jury was headed by Dr Raghunath A Mashelkar, former Director

General of Council of Scientific and Industrial Research (CSIR), and currently the President of Indian National Science Academy (INSA).

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AID India – Samsung SuperKidz Program

AID India was founded in July 1997 and has been working in Tamil Nadu for the

last 14 years in the field of education. Founded by IIT and BITS alumni, it works closely with the Government and UNICEF to develop curriculum and

methodologies to improve education quality in schools. Under the ‘Samsung SuperKidz Program’ children from 100 villages in Tamil Nadu will benefit from AID India’s vast experience and will learn Tamil, English, Math and Science

through innovative teaching techniques. Comprehensive skill assessment and monitoring, individual attention, special focus for weaker students and regular

interaction with parents, will ensure that the development of each child is taken care of. Through the program, children will be enabled to improve their grades and

those that are drop outs are encouraged to re-join the formal school system.

Smile Foundation Mission Education Program

Mission Education, established in the year 2003, is the flag ship programme of

Smile Foundation. The programme reaches out to more than 12000 children across 19 states in India. The program ensures education of under privileged children from backward rural/ urban locations. It aims at imparting education to bring

changes not only in the amount of knowledge gained but also in the abilities to think and acquire habits, skills and attitude which characterize an individual who is

socially accepted and adjusted. Through Samsung’s support, Smile Foundation will reach out to children at two centres in New Delhi and Noida. The program will

enrol children in the age group of 6-16 years in bridge courses and enable them to get mainstreamed in formal schools. Children will learn subjects including Maths,

Science, English and EVS. To ensure their overall development, regular events, extra-curricular activities and medical aid will also be provided.

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Videocon Industries

As a reciprocity to society, Videocon Group is committed to fulfilling its

obligations of social responsibility, as well as genuine community initiatives. These include, among others, a first-rate academic haven for the high-school education of underprivileged children and a world-classcardio vascular treatment,

charitable hospital at Aurangabad, Maharashtra in India, specializing in cancer and heart surgery for the benefit of society's marginalized sections. Videocon organizes

regularly Blood Donation Camps at the above charitable hospital. Videocon's deep-rooted commitment to environment conservation translates into process

improvements that help recycle CRT glass, curb carbon emissions and other pollutants. Among others, the Group's India glass plant has supported a large-scale

initiative like the plantation of over 200,000 teak trees.

The group's sponsorship of cricketing events across the globe underlies its commitment and passion for sports as well as its goal to uplift the spirits of a

global audience. Videocon has not forgotten the grassroots either; the Videocon School of Cricket launched in Kolkata under the guidance of former India captain,

SauravGanguly, aims to inspire and train budding cricketers in the age group of 10 to 17 years to greater heights.

CSR activities:

Hospital

In the memory of our founder Videocon runs a world class hospital with the latest equipments, MRI, CT scan machines run by dedicated doctors specializing in

Cancer and heart surgery. The hospital is 100% charitable and caters to the people in Indian villages which cannot even support their families let alone afford

medicines. Schools

The group runs a world class school dreamt by our LATE founder in the village of Gangapur, dedicated to giving high quality high school education to

underprivileged girls inspiring them to aim higher and work for the development of the country.

Creative quality circle team won manufacturing trophy for excellence case study in 3rd convention held at Jawaharlal Nehru Engineering College Aurangabad and

distinguished award in 17th National Convention at Madurai between 04/12/2003 to 07/12/2003.

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BHARARI Team won distinguished award in 3rd convention of at Jawaharlal

Nehru Engineering College Aurangabad and also won excellence award in 17th national convention at Madurai between 04/12/2003 to 07/12/2003.

Charities

To pay homage to our beloved chairman late SHRI NANDALALJI DHOOT / (KAKASAHEB) we have arrange Bhajan program & blood donation on date 26th

April every year. Most of our employees participate in blood donation camp. In year 2004 & 2005 90 to 110 employees have donated blood. The blood donation

camp is arranged at our Dhoot Hospital Blood Bank.

Sports

Cricket The Videocon School of cricket was launched in Kolkata to train budding talent in

the age group of 10 to 17. The academy has been undertaken in cooperation with the captain of the Indian cricket team, Saurav Ganguly, who has been designated

Chief Coach. It aims to put about 700 students through the paces every year.

Sponsorship of cricketing events across the globe underlies Videocon's commitment and passion for sports as well as its goal to connect with a global

audience.

Sponsorship

Videocon is inspired heavily by the uplifting values perpetuated by sports. Its ability to draw people together irrespective of differences in race, gender, religion and country. Unity of spirit and purpose is ultimately what builds bridges between

diverse cultures. This is the core belief of a group that today has operations spread over a cross-cultural milieu worldwide. Also, at the heart of sports is fair play, a

virtue which enjoys exalted status among values cherished by Videocon.

The group has been deeply involved in supporting sports. Its sponsorship of cricketing events across the globe underlies its commitment and passion for sports

as well as its goal to connect with a global audience.

It is a matter of pride that Videocon's Audio Visual products entertain enthusiasts and fans passionate about watching sports worldwide.

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Energy Conservation

The Company consistently pursues reduction in energy consumption in its manufacturing process on an ongoing basis.

An overall awareness has been created among the employees/workers to avoid

wastage of water and power by shutting the power off when not in use. A parameter has been developed in office atmosphere to shut power off for some part

of day so as to take up manual work and complete the manual activity during that part of the day. The lighting fixture in the administrative areas has been optimized.

A Quality team has been appointed to closely monitor the consumption of fuel and lying emphasis on non-conventional energy sources.

The group takes environment conservation seriously. It is working to equip its

facilities with methods that help recycle CRT glass, curb carbon emissions and other pollutants. Videocon's India glass plant has supported plantation of over 2,00,000 teak trees

Garbage Free India (GFI)

With the help and support from IIFA, Wizcraft & Bollywood, Videocon partnered

with Garbage Free India (GFI) program, 2013. The motive of this social cause was to spread awareness about the huge garbage problem in India and what citizens can

do about it. The program was focused towards changing the public behaviour and attitude, spreading awareness and helping the municipal corporations to be more successful in keeping the cities of India clean. The Videocon sponsored, citizen

driven movement was also recognized by superstar Shah Rukh Khan on the prestigious stage of IIFA 2013. Other Bollywood stars like Ayushmann Khurrana,

Shahid Kapoor, Parineeti Chopra, Boman Irani and Shabana Azmi extended their whole hearted support to the initiative.

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Onida Electronics

In Pursuit of Excellence

Whether you're a veteran professional or a recent graduate, you'll find an environment that allows you to explore and map out a dynamic career path tailored to your personal goals, and a supportive community of colleagues working

together toward real opportunities to positively impact our company, our customers, and their own careers.

Our responsibility towards new employees doesn't stop at salaries and compensation alone. To enrich the skills of employees, we organize training at regular basis on latest technologies and new product.

We strongly believe that health is wealth; a healthy body reflects a healthy mind. At MIRC we occasionally organize health camps and we have dedicated in - house

health care centre at our WADA Plant.

In this fast pace life at MEL we also ensure fun at work via festival celebration, entertainment activities by maintaining high appetite for work. While enjoying our

life we do ensure that each one at MEL individually contributes back to the society in which ever possible away. Some of our CSR activities which we religious

ensure are blood donation camps, development of rural areas, providing education aid for poor children.

Our commitment to our work will reflect in our attitude at work, our discipline and

decorum while at work

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BPL

BPL participates regularly in preventive healthcare camps in Tamil Nadu. BPL and Health Management & Research Institute (HMRI) jointly work on

telemedicine projects in Andhra Pradesh.

BPL supports frontline clinic in rural Palakkad, Kerala. BPL is spearheading promoting the revival of the family physician and

enhancing primary healthcare in the country. BPL is actively participating in FICCI’s Skill Development Taskforce for

Healthcare. BPL has set up a mentoring program for start-ups in the field medical device

innovation Our level of commitment to education is evident in the major sponsorships

BPL gives to colleges and elementary schools. BPL also sponsors basic electronic courses to high school students in

cooperation with St. Josephs College, Bangalore. In addition, BPL provides music learning experiences and support for

TAAQADEMY, a music school in Bangalore where one gets an on-the-road experience, expert schooling, and customised classes, courses and workshops for beginners to advanced players.

Corporate Social Responsibility

Every product or service we provide is always weighed in against meeting unmet needs in an affordable way. Our constant endeavour is therefore to use technology

to find innovative solutions that will transform lives for the better at every level of society, and provide a cleaner, healthier, secure and enjoyable world to live in. At

BPL being socially responsible has become a way of life

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Chapter 3 : External Evvironment

PEST Analysis of Indian Electronic Industry

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Department of Electronics and Information Technology

Government

agency executive J. Satyanarayana, Secretary

Parent

department

Ministry of Communications

and Information Technology

Child

Government

agency

see below

Website deity.gov.in

The Department of Electronics and Information Technology (DeitY) comes under The Indian Ministry of Communications and Information Technology. It was earlier called The Department of Information Technology, but in 2012 it was

renamed to The Department of Electronics and Information Technology.

This is a list of organizations that come under The Department of Electronics and

Information Technology.

Controller of Certifying Authorities (CCA) Cyber Appellate Tribunal (CAT)

Semiconductor Integrated Circuits Layout-Design Registry Indian Computer Emergency Response Team (ICERT)

.in Registry

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Ministry of Communications and Information Technology (India)

Emblem of India

Jurisdiction Government of India

Headquarters

Sanchar Bhawan

New Delhi

22°37′20″N 77°12′50″E

Minister

responsible Kapil Sibal

Agency

executive

, Minister of Communications and

Information Technology (India)

Child agencies

Department of

Telecommunications

Department of Electronics and

Information Technology

Department of Posts

Website www.mit.gov.in

The Ministry of Communication and Information Technology is an Indian government ministry. It contains three departments:

Department of Telecommunications Department of Electronics and Information Technology

Department of Posts

The following cadre controlling authority of the Civil Services (including Indian

Telecommunication Service, Indian Postal Service, Telegraph Traffic Service and

195

Indian Posts and Telegraphs Accounts and Finance Service) are under the administration and supervision of the Ministry of Communications and

Information Technology.

The Government of India, Ministry of Communications & Information

Technology, Department of Electronics and Information Technology (formerly

the "Department of Information Technology") has a mission to promote the e-

Development of India through a multi-pronged strategy of e-Infrastructure creation

to facilitate and promote e-governance, promotion of the Electronics &

Information Technology-Information Technology Enabled Services (IT-ITeS)

Industry, providing support for the creation of Innovation/Research &

Development (R&D), building a knowledge network and securing India's

cyberspace

National Policy on Electronics

National Policy on Electronics is formulated by the Government of India to boost

India's Electronics Systems and Design Manufacturing industry and improve its share in global market. The policy was drafted in 2011 by the Department of Information Technology of the Ministry of Communication and Information

Technology.[1][2] It is the first of the three policies for IT, Telecom and Electronics released by the government.

Salient features

The strategies included in the policy are listed below.

1. Provide incentives through Modified Special Incentive Package Scheme (M-SIPS)

2. Setting up of Semiconductor Wafer Fabrication facilities 3. Preferential market access to domestically manufactured electronic products

4. Provide incentives for setting up of 200 Electronic Manufacturing Clusters (EMCs) - setting up of greenfield EMCs and upgradation of brownfield

EMCs 5. Establish a stable tax regime and market India as a destination to attract

investments

6. Create a completely secure cyber ecosystem in the country

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7. Implementation of e-waste (Management and Handling) Rules, 2011 8. To set up National Electronic Mission

Electronic System Design & Manufacturing

Over the last couple of decades India has been the epicenter of consumer demand

fuelled by a phenomenal GDP growth. While demand increased across all sectors,

demand for high technology products, specifically electronic products has registered significant growth and going by current estimates, the demand for

electronics hardware in the country is projected to increase from USD 45 billion in 2009 to USD400 billion by 2020 (Source: Task Force Report).

The estimated production will reach USD 104 billion by the year 2020, creating a

gap of USD 296 billion in demand and production. This creates a unique opportunity for companies in the ESDM (Electronic System Design &

Manufacturing) sector to look at India as their next destination to cater to the domestic Indian demand as well as act as an exports hub.

Accordingly, the Government has initiated several initiatives for the development

of electronics sector in the country. The Government has recently approved National Policy on Electronics (NPE). One of the important objectives of the NPE

is to achieve a turnover of about USD 400 Billion by 2020 involving investment of about USD 100 Billion and employment to around 28 million by 2020. This interalia, includes achieving a turnover of USD 55 Billion of chip design and

embedded software industry, USD 80 Billion of exports in the sector. Moreover, the policy also proposes setting up of over 200 Electronic Manufacturing Clusters.

Another important objective of the policy is to significantly upscale high-end human resource creation to 2500 PhDs annually by 2020 in the sector.

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Industry Welcomes New Electronics Policy

.

The key objectives of the Policy are:

(i) To create an eco-system for a globally competitive Electronic System Design and Manufacturing (ESDM) sector in the country to achieve a turnover of about

USD 400 billion by 2020 involving investment of about USD 100 billion and employment to around 28 million people at various levels.

(ii) To build on the emerging chip design and embedded software industry to achieve global leadership in Very Large Scale Integration (VLSI), chip design

and other frontier technical areas and to achieve a turnover of USD 55 billion by 2020.

(iii) To build a strong supply chain of raw materials, parts and electronic

components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020.

(iv) To increase the export in ESDM sector from USD 5.5 billion to USD 80

billion by 2020.

(v) To significantly enhance availability of skilled manpower in the ESDM sector. Special focus for augmenting postgraduate education and to produce about 2500 PhDs annually by 2020.

(vi) To create an institutional mechanism for developing and mandating standards

and certification for electronic products and services to strengthen quality assessment infrastructure nationwide.

(vii) To develop an appropriate security ecosystem in ESDM.

(viii) To create long-term partnerships between ESDM and strategic and core

infrastructure sectors - Defence, Atomic Energy, Space, Railways, Power, Telecommunications, etc.

(ix) To become a global leader in creating Intellectual Property (IP) in the ESDM

sector by increasing fund flow for R&D, seed capital and venture capital for start-

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ups in the ESDM and nanoelectronics sectors.

(x) To develop core competencies in strategic and core infrastructure sectors like telecommunications, automotive, avionics, industrial, medical, solar, Information

and Broadcasting, Railways, etc through use of ESDM in these sectors.

(xi) To use technology to develop electronic products catering to domestic needs, including rural needs and conditions, as well as international needs at affordable

price points.

(xii) To become a global leader in the Electronic Manufacturing Services (EMS) segment by promoting progressive higher value addition in manufacturing and

product development.

(xiii) To expedite adoption of best practices in e-waste management. (xiv) To source, stockpile and promote indigenous exploration and mining of rare

earth metals required for manufacture of electronic components.

To achieve these objectives, the policy proposes the following strategies:

(i) Creating eco-system for globally competitive ESDM sector: The strategies include provision of fiscal incentives for investment, setting up of electronic

manufacturing clusters, preferential market access to domestically manufactured electronic products, setting up of semiconductor wafer fabrication facilities,

industry friendly and stable tax regime. Based on Cabinet approval, a high level Empowered committee has been constituted to identify and shortlist technology

and investors for setting up two semiconductor wafer manufacturing fabrication facilities. Based on another Cabinet approval a policy for providing preference to domestically manufactured electronic goods has been announced. Separate

proposals have also been considered by the Cabinet for approval of Modified Special Incentive Package for the ESDM Sector and for setting up of Electronics

Manufacturing Clusters (EMCs).

(ii) Promotion of Exports: The strategies include aggressive marketing of India as an investment destination and providing incentives for export,

(iii) Human Resource Development: The strategies include involvement of

private sector, universities and institutions of learning for scaling up of requisite

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capacities at all levels for the projected manpower demand. A specialized Institute for semiconductor chip design is also proposed.

(iv) Developing and mandating standards to curb inflow of sub-standard and

unsafe electronic products by mandating technical and safety standards which conform to international standards.

(v) Cyber security: To create a complete secure cyber eco-system in the country,

through suitable design and development of indigenous appropriate products through frontier technology/product oriented research, testing and validation of

security of products.

(vi) Strategic electronics: The strategies include creating long-term partnerships between domestic ESDM industry and strategic sectors for sourcing products

domestically and providing Defense Offset obligations for electronic procurements through ESDM products.

(vii) Creating ecosystem for vibrant innovation and R&D in the ESDM sector including nanoelectronics. The strategy includes creation of an Electronic

Development Fund.

(viii) Electronics in other sectors: The strategy includes supporting and : developing expertise in the electronics in the following sectors of economy:

automotive, avionics, Light Emitting Diodes (LEDs), Industrial, medical, solar photovoltaics, Information and Broadcasting, Telecommunications, Railways,

Intelligent Transport Systems, and Games and Toys.

(ix) Handling e-waste: The strategy includes various initiatives to facilitate environment friendly e-waste handling policies.

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Challenges Facing Indian Electronics Industry

Real challenges

There are some integral challenges that the Indian electronics industry is facing

today. If not controlled in time, it can pose some serious challenges. PVG Menon, president, India Semiconductor Association (ISA) says: "A significant challenge

is the cost of finance, especially working capital. Capital is scarce to come by in India, and the cost of borrowing is very high, as compared to some other countries

where electronics is flourishing. Another challenge is hard infrastructure, such as power, water, roads, etc. India will need to make significant and fast investments

into infrastructure if domestic manufacturing has to get an impetus, and grow to global scale."

The serious obstacles observed in the path of growth are the lack of friendly ecosystem for growth, inconsistent government initiatives, unstable exchange

rate, poor infrastructure, and so on. It gets even harder to for India to catch up with the major global electronics manufacturing centers as the gap widens.

Dhar elaborates: "Looking at the rate at which electronics import is projected to

grow, electronics hardware has potential to surpass oil import bill. Herein lies the challenge and also an opportunity for the industry. The demand for electronics is

growing significantly, but so is the competition from globally competitive manufacturing centres. Industry and government must jointly put their act

together, turn a new leaf, and invigorate this lacklustre sector of our economy." Breaking down the challenges, the severe price pressure on India-made products

and the inverted duty structure play spoilt sport too. Menon adds: "There is severe price pressure on India-made products from imported products, some of which

seem to be suspiciously low priced with respect to BOM-to-manufacturing cost ratios. Moreover, the inverted duty structure on some of the components actually

makes it cheaper to import them, than to design and make them indigenously in India."

The existent supply-chain issues are also prevalent but it is expected to ease out

with the policy for development of clusters, which will hopefully lead to gradual

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reduction of these bottlenecks.

Learning from global market

First and foremost, we need to be able to somehow attract the large Indian

diaspora, most of whom are highly qualified and experienced - to come and set up companies in India.

Countries like China, Taiwan and Korea have been hugely successful with this

approach. "The NRI community constitute a very rich source of ideas, talent, cutting-edge technological capability and of course investment potential. As a

nation we should make it very easy and attractive for them to come in and set up companies here to develop 'Made in India for the world' products. Second, capital

must be available at a significantly lower rate than what it is presently. Multiple routes are available for this, and all of them should be explored. Third, domestic manufacturing should be encouraged and incentivised, as only scale can bring

about efficiency and economy in the supply chain. Many countries have adopted different policies to stimulate domestic manufacturing, and India too should learn

and emulate this," Menon elaborates.

The key learning is that opportunity does not knock the doorstep twice. India needs to learn to catch the wave and ride it! We missed the wave a few times in

past, from semiconductor fabs to mobile phones. It is time to grab the next wave in time!

Industry Promotion Activities

Department of Electronics and Information Technology (DEIT) through numerous

industry promotion programs continues to give a fillip to the IT and Electronics Hardware sector. A few broad initiatives are discussed here.

Infrastructure Support

Inadequate infrastructure has been identified as one of the constraining factors

202

being faced by the Electronics Hardware manufacturing sector. In order to address the same, the Department has notified the Policy Resolution for setting up of

Information Technology Investment Regions (ITIRs)* in the Gazette of India dated 28.5.2008. These regions would be endowed with excellent infrastructure and

would reap the benefits of co-siting, networking and greater efficiency through use of common infrastructure and support services.

R&D Promotion

Major highlights include promoting Startups focussed on technology and innovation, a weighted deduction of 150% of expenditure incurred on in-house

R&D is also available under the Income Tax Ac. In addition to the existing scheme for funding R&D projects, the department has put in place the 2 key schemes.

Support International Patent Protection in Electronics & IT (SIP-EIT), Multiplier Grants Scheme (MGS),

Tax Incentives

Over the years, the Government has been taking steps to bring down the total taxation level on electronics Hardware. The general rate of excise duty (CENVAT)

has been reduced to 8% and Central Sales Tax (CST) has been reduced from 3% to 2%. VAT on IT products is @4%.

Task Force to Stimulate Growth

A Task Force was set up by the Department of Electronics and Information Technology vide Office Order dated 11th August, 2009 to make recommendations

on the following issues:

Strategies to augment the growth of the IT software and IT enabled services sector in the context of global developments.

Steps needed to accelerate domestic demand for (i) Electronics Hardware products and (ii) IT & IT enabled services.

REGULATORY ENVIRONMENT

Implementation of ITA-I under WTO

India has been successfully promoting reforms in all the constituents of the Internet, Communication and Entertainment sector. Being a signatory to the Information

Technology

203

Agreement (ITA-I) of the World Trade Organization and with effect from March 1, 2005

the customs duty on all the specified 217 items has been eliminated. Electronics and Information Technology industry can be set up anywhere in the

country, subject to clearance from the authorities responsible for control of environmental

pollution and local zoning and land use regulations.

Foreign Investment Policy A foreign company can start operations in India by registration of its company

under the Indian Companies Act 1956. Foreign equity in such Indian companies can be up to

100 per cent. At the time of registration it is necessary to have project details, local partner

(if any), structure of the company, its management structure and shareholding pattern. Registration is

a kind of formality and it takes about two weeks. It can forge strategic tie up with an Indian

partner. Foreign Trade Policy

In general, all Electronics and IT products are freely importable, with the exception of some

defence related items. All Electronics and IT products, in general, are freely exportable, with

the exception of a small negative list which includes items such as high power microwave

tubes, high end super computer and data processing security equipment. Export Promotion Capital Goods scheme (EPCG) allows import of capital goods on

payment of 5 per cent customs duty. The export obligation under EPCG Scheme can also be

Corporate Catalyst India A report on Indian Electronics Industry fulfilled by the supply of Information Technology Agreement (ITA-1) items to the

DTA provided the realization is in free foreign exchange.

SEZ Scheme Special Economic Zone (SEZ) is a specifically delineated duty free enclave and

shall be

204

deemed to be foreign territory for the purposes of trade operations and duties and tariffs.

SEZ unit may import/procure from the DTA without payment of duty all types of goods

and services, including capital goods, whether new or second hand, required by it for its

activities or in connection therewith, provided they are not prohibited items of imports.

The units shall also be permitted to import goods required for the approved activity,

including capital goods, free of cost or on loan from clients. SEZ unit may, on the basis of a

firm contract between the parties, source the capital goods from a domestic/foreign leasing

company. SEZ unit shall be a positive Net Foreign Exchange earner. Net Foreign Exchange Earning (NFE) shall be calculated cumulatively for a period of five years from the

commencement of production. Export Oriented Units

Special schemes are available for setting up Export Oriented Units for the Electronics/IT

Sector. Various incentives and concessions are available under these schemes. The schemes

are: • Export Oriented Unit (EOU) Scheme

• Electronics Hardware Technology Park (EHTP) Scheme • Software Technology Park (STP) Scheme

• EOU/EHTP/STP Schemes Units undertaking to export their entire production of goods and services, except permissible sales in the Domestic Tariff Area (DTA), may be set up under the

EOU, EHTP or STP Scheme for manufacture of goods, including repair, re-making, re-

conditioning, reengineering and rendering of services. Trading units, however, are not covered under these

schemes. Economic Zones (SEZ) policy – and further relaxing the minimum area

requirements (to

qualify for an SEZ status), for the IT-BPO sector..

205

Chapter 4 : Financials

L.G. Electronics India Limited

Revenue

US$ 29.387 billion (2013)

US$ 11.635 billion (2013)

Financial Highlights

Parent Consolidated

2011 2012 2013 2011 2012 2013

KRW bn KRW bn KRW bn KRW bn KRW bn KRW bn

Sales 28,097 25,427 28,079 57,740 55,123 58,140

Operating Profit (Loss) -264 46 -214 332 1,217 1,285

Net Profit (Loss) -278 -352 -189 -479 103 223

Total Assets 24,199 23,832 24,971 35,519 34,766 35,528

Total Liabilities 13,704 13,809 15,138 22,363 22,060 22,839

Total Shareholder's Equity 10,495 10,023 9,833 13,156 12,706 12,689

Income Statement

Income Statement

Parent Consolidated

2011 2012 2013 2011 2012 2013

KRW bn KRW bn KRW bn KRW bn KRW bn KRW bn

Sales 28,097 25,427 28,079 57,740 55,123 58,140

Cost of goods sold 23,053 19,986 22,650 45,151 42,252 44,721

Gross profit 5,044 5,411 5,429 12,589 12,870 13,420

SG&A 5,308 5,395 5,643 12,258 11,654 12,135

Operating income (Loss) -264 46 -214 332 1,217 1,285

Non operationg income (Loss) -138 -286 -33 -803 -668 -708

Net profit (Loss) before tax -402 -240 -247 -472 549 577

Tax -124 113 -58 7 446 354

Net profit (Loss) -278 -352 -189 -479 103 223

Balance Sheet

Balance Sheet

Parent Consolidated

2011 2012 2013 2011 2012 2013

KRW bn KRW bn KRW bn KRW bn KRW bn KRW bn

Assets Current Assets

24,199 8,150

23,832 7,548

24,971 7,853

35,519 17,280

34,766 16,308

35,528 16,325

206

Cash and cash equivalents

Accounts receivable

Inventory Other

1,364

5,077

886 823

1,114

4,693

922 819

1,298

4,697

917 941

2,781

7,339

5,322 1,838

2,185

7,333

5,075 1,716

2,645

7,117

4,839 1,724

Non-current Assets 16,046 16,282 16,282 18,240 18,458 19,203

Investment

PP&E

Intangible assets Other

7,965

5,191

916 1,974

7,950

5,437

962 1,933

8,006

6,045

1,086 1,145

4,252

9,593

1,168 3,226

4,183

9,889

1,222 3,163

4,330

10,342

1,364 3,168

Liabilities 13,704 13,809 15,138 22,363 22,060 22,839

Accounts payable

Debt

Other

3,854

5,826

4,025

3,996

5,264

4,549

4,327

5,942

4,869

5,751

9,680

6,932

5,627

8,638

7,795

5,691

9,211

7,937

Equity 10,495 10,023 9,833 13,156 12,706 12,689

Financial Ratios

Financial Ratios Parent Consolidated

2011 2012 2013 2011 2012 2013

Operating Profit Margin

Net Profit Margin

ROA ROE

-0.9%

-1.0%

-1.2% -2.7%

0.2%

-1.4%

-1.5% -3.4%

-0.8%

-0.7%

-0.8% -1.9%

0.6%

-0.8%

na na

2.2%

0.2%

0.3% 0.8%

2.2%

0.4%

0.6% 1.8%

Liabilities -to- Equity Ratio

Debt -to- Equity Ratio

Net Debt- to- Equity Ratio

130.6%

55.5%

42.5%

137.8%

52.5%

41.4%

154.0%

60.4%

47.2%

170.0%

73.6%

52.4%

173.6%

68.0%

50.8%

180.0

%

72.6%

51.7%

Sales Growth

Operating Profit Growth

Net Proft Growth

Total Assets Turnover

-3.9%

nm

nm

1.2

-9.5%

nm

nm

1.1

10.4%

nm

nm

1.2

na

na

nm

na

-4.5%

266.9%

nm

1.6

5.5%

5.6%

nm

1

LG India unit sees revenue doubling by 2015

The Indian unit of South Korea’s LG Electronics expects to double its revenue to

$9 billion by 2015, a top executive said, as rising incomes and growing urban

households expand the consumer durables market in Asia’s third largest economy.

LG Electronics India Pvt Ltd, which sells consumer appliances, IT hardware and

mobile devices, also plans to grow its revenue by 25% in 2011 and 2012 each,

chief operating officer Yasho V. Verma told Reuters in an interview, surpassing

industry-wide growth estimates.

207

In addition to the manufacturing plant at Greater Noida, LG operates a second

plant in western India, manufacturing GSM phones, colour televisions, air

conditioners, washing machines, refrigerators and optical disc drives.

The company set up its wholly-owned Indian unit in 1997, and has grown to be

among the leading brands in the country’s fast growing consumer durables market,

estimated to have annual sales of Rs65,000 crore ($14.7 billion).

The firm currently exports to countries in the Middle East, Africa, southeast Asia

and Europe from India.

208

Samsung Electronics India Private Limited

Revenue ₩201.103 trillion (2012)

Operating income US$18.8634614 billion (2012)

Profit ₩23.845 trillion (2012)

Total assets ₩181.071 trillion (2012)

Total equity ₩121.480 trillion (2012)

Employees 326,000 (2014)

209

Videocon Industries

Key Ratios

Years Jun-13 Dec-11 Dec-10 Sep-09 Sep-08

Debt-Equity Ratio 2.1 1.6 1.3 1.2 1.1

Long Term Debt-Equity Ratio 1.1 0.9 1.2 1.2 1.0

Current Ratio 1.3 1.6 5.4 4.7 3.6

Fixed Assets 1.2 1.3 1.2 1.0 1.2

Inventory 5.9 6.3 6.2 5.6 6.8

Debtors 4.5 4.8 5.4 5.7 7.0

Interest Cover Ratio 0.9 1.7 2.1 1.9 4.0

PBIDTM (%) 18.1 18.8 18.5 19.4 23.6

PBITM (%) 13.7 14.1 13.6 13.3 17.0

PBDTM (%) 3.4 10.7 12.0 12.3 19.3

CPM (%) 3.7 8.9 9.9 10.4 15.9

APATM (%) -0.7 4.2 5.1 4.3 9.3

ROCE (%) 5.5 7.3 8.5 8.0 13.4

RONW (%) -0.9 5.6 7.1 5.7 15.2

PE 0.0 9.9 11.2 14.9 5.3

EBIDTA 3,463.0 2,426.1 2,713.9 1,821.1 2,259.0

DivYield 0.3 0.3 0.5 0.8 0.5

PBV 0.6 0.5 0.7 0.8 0.7

EPS 0.0 17.6 19.5 16.9 36.9

Balance Sheet of Videocon

Industries ------------------- in Rs. Cr. -------------------

Jun '13 Dec '11 Dec '10 Sep '09 '08

18 mths 12 mths 15 mths 12 mths ths

Sources Of Funds

Total Share Capital 334.09 333.94 347.96 275.42

Equity Share Capital 318.76 303.01 301.95 229.41

Share Application Money 0.00 0.00 0.00 95.00

Preference Share Capital 15.33 30.93 46.01 46.01

Reserves 9,783.90 9,619.04 9,085.92 6,929.63

Revaluation Reserves 0.00 0.00 0.00 0.00

210

Networth 10,117.99 9,952.98 9,433.88 7,300.05

Secured Loans 18,575.73 9,835.64 5,937.61 6,735.04

Unsecured Loans 3,321.99 8,820.38 5,836.16 2,349.51

Total Debt 21,897.72 18,656.02 11,773.77 9,084.55

Total Liabilities 32,015.71 28,609.00 21,207.65 16,384.60

Jun '13 Dec '11 Dec '10 Sep '09

18 mths 12 mths 15 mths 12 mths

Application Of Funds

Gross Block 11,317.42 10,246.63 9,536.60 9,004.95

Less: Accum. Depreciation 5,389.10 5,142.52 4,804.07 4,298.83

Net Block 5,928.32 5,104.11 4,732.53 4,706.12

Capital Work in Progress 667.46 1,244.09 1,270.58 1,314.15

Investments 4,936.94 4,743.71 4,267.96 3,064.90

Inventories 2,157.90 2,080.71 2,040.14 1,763.49

Sundry Debtors 2,832.70 2,750.44 2,647.33 1,708.11

Cash and Bank Balance 485.83 117.94 401.24 318.80

Total Current Assets 5,476.43 4,949.09 5,088.71 3,790.40

Loans and Advances 19,920.03 15,580.58 6,639.36 4,850.78

Fixed Deposits 0.00 386.61 915.20 179.71

Total CA, Loans & Advances 25,396.46 20,916.28 12,643.27 8,820.89

Deffered Credit 0.00 0.00 0.00 0.00

Current Liabilities 4,671.37 3,298.72 1,588.71 1,391.29

Provisions 242.07 100.47 117.98 130.19

Total CL & Provisions 4,913.44 3,399.19 1,706.69 1,521.48

Net Current Assets 20,483.02 17,517.09 10,936.58 7,299.41

Miscellaneous Expenses 0.00 0.00 0.00 0.00

Total Assets 32,015.74 28,609.00 21,207.65 16,384.58

Contingent Liabilities 10,899.36 433.02 191.47 122.93

Book Value (Rs) 316.92 327.44 310.89 312.07

Profit & Loss account of

Videocon Industries ------------------- in Rs. Cr. -------------------

Jun '13 Dec '11 Dec '10 Sep '09

18 mths 12 mths 15 mths 12 mths

Income

Sales Turnover 18,157.28 12,919.47 14,675.93 9,381.27

Excise Duty 0.00 269.25 266.24 218.23

Net Sales 18,157.28 12,650.22 14,409.69 9,163.04

Other Income 418.27 -57.83 -138.26 -52.73

Stock Adjustments 57.73 14.04 15.34 12.45

Total Income 18,633.28 12,606.43 14,286.77 9,122.76

Expenditure

Raw Materials 11,577.75 7,906.48 9,127.65 5,626.84

Power & Fuel Cost 142.11 84.51 91.32 80.84

Employee Cost 397.99 225.35 228.01 126.42

Other Manufacturing Expenses 1,266.83 891.59 796.17 692.90

211

Selling and Admin Expenses 0.00 984.06 1,216.60 692.21

Miscellaneous Expenses 1,823.93 88.37 113.08 82.30

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00

Total Expenses 15,208.61 10,180.36 11,572.83 7,301.51

Jun '13 Dec '11 Dec '10 Sep '09

18 mths 12 mths 15 mths 12 mths

Operating Profit 3,006.40 2,483.90 2,852.20 1,873.98

PBDIT 3,424.67 2,426.07 2,713.94 1,821.25

Interest 2,714.82 1,045.14 950.54 665.75

PBDT 709.85 1,380.93 1,763.40 1,155.50

Depreciation 824.35 607.56 712.96 577.15

Other Written Off 0.00 0.00 0.00 0.00

Profit Before Tax -114.50 773.37 1,050.44 578.35

Extra-ordinary items 0.00 -5.65 -5.78 73.68

PBT (Post Extra-ord Items) -114.50 767.72 1,044.66 652.03

Tax -42.88 227.81 305.75 177.68

Reported Net Profit -71.63 545.56 744.69 400.66

Total Value Addition 3,630.87 2,273.88 2,445.17 1,674.67

Preference Dividend 2.77 3.38 4.61 3.68

Equity Dividend 19.88 15.94 30.20 46.25

Corporate Dividend Tax 3.85 3.13 5.78 8.49

Per share data (annualised)

Shares in issue (lakhs) 3,187.72 3,030.22 3,019.64 2,294.07

Earning Per Share (Rs) -2.33 17.89 24.51 17.30

Equity Dividend (%) 20.00 5.00 10.00 20.00

Book Value (Rs) 316.92 327.44 310.89 312.07

Directors Report

212

Onida Electronics

Mar '13

Mar '12 Mar '11 Mar '10

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- --

Operating Profit Per Share (Rs) -0.02 -0.03 -0.03 -0.03

Net Operating Profit Per Share (Rs) -- -- -- --

Free Reserves Per Share (Rs) -- -- -12.00 -11.97

Bonus in Equity Capital -- -- -- --

Profitability Ratios

Operating Profit Margin(%) -- -- -- --

Profit Before Interest And Tax Margin(%) -- -- -- --

Gross Profit Margin(%) -- -- -- --

Cash Profit Margin(%) -- -- -- --

Adjusted Cash Margin(%) -- -1,260.36 -38,403.75 -2,474.84

Net Profit Margin(%) -- -1,260.36 -38,403.75 -2,474.84

Adjusted Net Profit Margin(%) -- -- -- --

Return On Capital Employed(%) -- -- -- --

Return On Net Worth(%) -- -- -- --

Adjusted Return on Net Worth(%) -- -- -- --

Return on Assets Excluding Revaluations -2.05 -2.03 -2.00 -1.97

Return on Assets Including Revaluations -2.05 -2.03 -2.00 -1.97

Return on Long Term Funds(%) -- -- -- --

Liquidity And Solvency Ratios

Current Ratio 0.39 0.40 0.40 0.41

Quick Ratio 0.39 0.40 0.40 0.41

Debt Equity Ratio -- -- -- --

Long Term Debt Equity Ratio -- -- -- --

Debt Coverage Ratios

Interest Cover -- -- -2,764.07 --

Total Debt to Owners Fund -- -- -- --

Financial Charges Coverage Ratio -- -- -2,764.07 -707.66

Financial Charges Coverage Ratio Post Tax -- -- -2,764.07 -707.66

--

--

--

--

--

--

--

--

--

213

Key Financial Ratios of Mirc

Electronics

Mar '12

Mar '11 Mar '10 Mar '09

Investment Valuation Ratios

Face Value 1.00 1.00 1.00 1.00

Dividend Per Share -- 1.00 0.95 0.95

Operating Profit Per Share (Rs) 1.28 5.09 4.00 7.94

Net Operating Profit Per Share (Rs) 116.45 134.92 105.96 213.17

Free Reserves Per Share (Rs) 13.71 16.46 15.70 35.68

Bonus in Equity Capital 66.01 66.01 66.01 66.01

Profitability Ratios

Operating Profit Margin(%) 1.10 3.77 3.77 3.72

Profit Before Interest And Tax Margin(%) -0.20 2.63 2.45 2.42

Gross Profit Margin(%) -0.20 2.64 2.46 2.42

Cash Profit Margin(%) -0.53 2.57 2.51 1.93

Adjusted Cash Margin(%) -0.53 2.57 2.51 1.93

Net Profit Margin(%) -2.35 1.42 1.22 0.62

Adjusted Net Profit Margin(%) -2.35 1.42 1.22 0.62

Return On Capital Employed(%) -0.53 12.62 10.18 8.14

Return On Net Worth(%) -17.11 10.24 6.98 3.63

Adjusted Return on Net Worth(%) -13.35 10.36 6.84 3.74

Return on Assets Excluding Revaluations 16.05 18.80 18.04 36.69

Return on Assets Including Revaluations 16.05 18.80 18.04 36.69

Return on Long Term Funds(%) -0.68 14.73 10.96 9.69

Liquidity And Solvency Ratios

Current Ratio 1.02 1.11 1.19 1.49

Quick Ratio 0.68 0.66 0.65 1.12

Debt Equity Ratio 0.60 0.58 0.52 0.83

Long Term Debt Equity Ratio 0.25 0.36 0.41 0.63

Debt Coverage Ratios

Interest Cover -0.06 4.33 2.67

Total Debt to Owners Fund 0.60 0.58 0.52

Financial Charges Coverage Ratio 0.63 4.22 3.42

Financial Charges Coverage Ratio Post Tax 0.44 3.76 3.20

Management Efficiency Ratios

Inventory Turnover Ratio 5.77 5.82 6.36

Debtors Turnover Ratio 11.34 15.22 15.44

Investments Turnover Ratio 5.77 5.82 6.36

Fixed Assets Turnover Ratio 4.30 4.60 3.71

Total Assets Turnover Ratio 4.53 4.54 3.86

Asset Turnover Ratio 4.20 4.71 3.46

Average Raw Material Holding 45.99 70.26 86.32

214

Average Finished Goods Held 45.52 40.27 24.95

Number of Days In Working Capital 37.67 35.40 32.15

Profit & Loss Account Ratios

Material Cost Composition 78.27 82.62 75.61

Imported Composition of Raw Materials Consumed

68.81 70.19 67.17

Selling Distribution Cost Composition 7.19 8.12 8.48

Expenses as Composition of Total Sales 0.73 1.35 0.39

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit -- 60.36 88.63

Dividend Payout Ratio Cash Profit -- 33.69 42.06

Earning Retention Ratio -- 40.38 9.59

Cash Earning Retention Ratio -- 66.54 57.54

AdjustedCash Flow Times -- 3.16 3.54

Mar '12

Mar '11 Mar '10

Earnings Per Share -2.75 1.93 1.26

Book Value 16.05 18.80 18.04

2004-

03

2005-

03

2006-

03

2007-

03

2008-

03

2009-

03

2010-

03

2011-

03

2012-

03

2013-

03 TTM

Revenue INR Mil — — — 15,302 15,420 14,492 15,267 19,397 16,752 12,904 12,904

Gross Margin % — — — 24.4 24.3 22.4 23.4 23.0 20.4 21.6 21.6

Operating

Income INR Mil — — — 729 653 380 423 554 -8 -469 -469

Operating Margin % — — — 4.8 4.2 2.6 2.8 2.9 — -3.6 -3.6

Net Income INR Mil — — — 361 355 80 200 290 -387 -286 -286

Earnings Per

Share INR — — — 2.54 2.50 0.56 1.37 2.05 -2.73 -2.02 -2.02

Dividends INR — — — — — 1.00 0.40 0.95 1.00 — —

Payout Ratio % — — — — — 84.2 28.4 46.4 — — —

Shares Mil — — — 142 142 67 142 142 142 142 142

Book Value Per

Share INR — — — 15.91 17.24 39.24 17.50 — 16.05 14.01 14.01

Operating Cash — — — 454 50 489 1,787 315 307 781 781

215

Margins % of Sales 2004-

03

2005-

03

2006-

03

2007-

03

2008-

03

2009-

03

2010-

03

2011-

03

2012-

03

2013-

03 TTM

Revenue — — — 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

COGS — — — 75.57 75.74 77.56 76.58 77.03 79.58 78.38 78.38

Gross Margin — — — 24.43 24.26 22.44 23.42 22.97 20.42 21.62 21.62

SG&A — — — — — — — — — — —

R&D — — — — — — — — — — —

Other — — — 20.06 20.41 20.18 20.93 20.38 20.64 25.55 25.55

Operating Margin — — — 4.76 4.23 2.62 2.77 2.86 -0.05 -3.63 -3.63

Net Int Inc & Other — — — -1.35 -1.52 -1.99 -1.16 -0.93 -2.42 — —

EBT Margin — — — 3.41 2.71 0.63 1.61 1.93 -2.47 -3.63 -3.63

Profitability 2004-

03

2005-

03

2006-

03

2007-

03

2008-

03

2009-

03

2010-

03

2011-

03

2012-

03

2013-

03 TTM

Tax Rate % — — — 30.38 14.68 13.38 18.87 22.37 — — —

Net Margin % — — — 2.36 2.30 0.55 1.31 1.50 -2.31 -2.22 -2.22

Asset Turnover

(Average) — — — 2.33 2.21 2.08 2.21 2.39 2.01 1.72 1.72

Return on Assets % — — — 5.49 5.09 1.14 2.89 3.57 -4.64 -3.81 -3.81

Financial Leverage

(Average) — — — 2.91 3.02 2.48 2.94 3.43 3.50 3.65 3.98

Return on Equity % — — — 15.96 15.09 3.14 7.82 11.41 -16.05 -13.61 -

13.61

Return on Invested

Capital % — — — 5.56 3.71 -3.71 1.33 3.76 -22.02 -13.61

-

13.61

Interest Coverage — — — 3.52 2.78 1.32 2.40 3.07 -0.16 — —

216

BPL

Balance Sheet of BPL ------------------- in Rs. Cr. -------------------

Mar '13

Mar '12 Mar '11 Mar '10

12

mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 218.47 218.26 218.10 218.10

Equity Share Capital 48.89 48.67 48.51 48.51

Share Application Money 0.00 0.00 0.00 0.00

Preference Share Capital 169.59 169.59 169.59 169.59

Reserves 148.69 159.39 97.80 19.50

Revaluation Reserves 0.00 0.00 0.00 0.00

Networth 367.16 377.65 315.90 237.60

Secured Loans 0.00 0.00 118.47 275.09

Unsecured Loans 0.00 25.00 0.00 0.00

Total Debt 0.00 25.00 118.47 275.09

Total Liabilities 367.16 402.65 434.37 512.69

Mar '13

Mar '12 Mar '11 Mar '10

12

mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 78.76 86.53 223.61 277.66

Less: Accum. Depreciation 58.39 60.15 151.85 164.37

Net Block 20.37 26.38 71.76 113.29

Capital Work in Progress 0.00 0.00 0.00 0.00

Investments 115.40 115.40 137.00 318.52

Inventories 8.07 9.43 8.43 9.82

Sundry Debtors 18.39 12.95 17.75 15.80

Cash and Bank Balance 7.07 5.67 0.45 2.42

Total Current Assets 33.53 28.05 26.63 28.04

Loans and Advances 234.95 277.81 257.84 317.67

Fixed Deposits 0.00 0.00 3.41 5.13

Total CA, Loans & Advances 268.48 305.86 287.88 350.84

Deffered Credit 0.00 0.00 0.00 0.00

Current Liabilities 32.13 40.30 62.26 88.43

Provisions 4.96 4.69 0.00 181.52

Total CL & Provisions 37.09 44.99 62.26 269.95

Net Current Assets 231.39 260.87 225.62 80.89

Miscellaneous Expenses 0.00 0.00 0.00 0.00

Total Assets 367.16 402.65 434.38 512.70

Contingent Liabilities 62.72 49.66 28.82 31.47

Book Value (Rs) 40.42 42.75 30.16 14.02 95

217

BPL's Financial Summary

Parameter MAR'13 MAR'12

Operational & Financial Ratios:

Earnings Per Share (Rs) -2.11 12.47

DPS(Rs) 0.00 0.00

Book NAV/Share(Rs) 40.42 42.54

Margin Ratios:

Yield on Advances 0.00 0.00

Yield on Investments 0.00 0.00

Cost of Liabilities 0.00 0.00

NIM 0.00 0.00

Interest Spread 0.00 0.00

Performance Ratios:

ROA(%) -5.01 25.41

ROE(%) -5.09 34.41

ROCE(%) 8.53 13.04

Efficiency Ratios:

Cost Income Ratio 0.00 0.00

Core Cost Income Ratio 0.00 0.00

Operating Costs to Assets 0.00 0.00

Capitalisation Ratios:

Tier 1 ratio 0.00 0.00

Tier 2 ratio 0.00 0.00

CAR 0.00 0.00

Valuation Parameters:

PER(x) 0.00 1.41

218

PCE(x) -7.94 1.25

Price / Book(x) 0.35 0.41

Yield(%) 0.00 0.00

EV / Net Sales(x) 2.41 3.56

EV / Core EBITDA(x) 6.77 4.19

EV / EBIT(x) 7.04 4.95

EV / CE(x) 1.13 1.32

M Cap / Sales 0.71 1.11

Growth Ratio:

Core Operating Income Growth -12.88 -65.00

Operating Profit Growth -47.95 -50.84

Net Profit Growth -116.95 -21.92

BVPS Growth -4.99 41.60

Advances Growth 0.00 0.00

EPS Growth(%) -116.88 -22.17

Liquidity Ratios:

Loans / Deposits(x) 0.00 0.00

Total Debt / Equity(x) 0.00 0.00

Current Ratio(x) 0.00 0.00

Quick Ratio(x) 0.00 0.00

Total Debt / Mcap(x) 0.00 0.00

Net NPA in Rs. Million 0.00 0.00

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Particular

201103 201003 200903 200803 200703

Liquidity Ratios

Debt/Equity Ratio 1.84 4.24 3.96 2.99 3.13

Current Ratio 1.16 1.23 1.28 1.29 0.96

Turnover Ratios

Inventory Turnover Ratio 10.18 8.20 6.92 7.79 5.78

Fixed Assets Turnover Ratio 0.37 0.28 0.25 0.38 0.41

Debtors Turnover Ratio 5.54 5.99 5.17 6.59 7.20

Interest Coverage Ratios 8.51 0.95 -5.70 -10.33 -1.55

Profitability Ratios

Operating Profit Margin 104.34 28.33 -71.33 -95.15 2.45

PAT/Total Income 33.63 0.28 -16.98 -38.49 -24.12

NPM (Net Profit Margin) 83.68 0.40 -17.13 -39.03 -23.78

Return on Capital Employed 18.78 2.42 -12.52 -22.65 -3.40

Return on Networth 72.53 0.49 -18.10 -48.75 -34.65

220

Akai Cosumer Electronics India Limited

'Akai India' - 5 News Result(s)

Akai launches Android-based Smart Box for Rs. 6,590

Press Trust of India | Thursday October 4, 2012

Akai launched a 'Smart Box', which allows users to surf Internet on their television sets, at a price of Rs. 6,590 in the country.

AKAI gears up for festive season with new TV launches

Surbhi Chawla | Thursday August 30, 2012

Gearing up for the upcoming festive season, AKAI has launched three new TVs in the Indian market.

Akai launches smallest LED TV in India priced at Rs 11,000

Japanese electronics maker Akai today announced the launch of the smallest

LED TV in the Indian market priced at Rs 11,000.

Akai enters mobile market with 10 new models

Akai India on Tuesday forayed into the Indian mobile market with the

launch of ten new handsets with a price tag between Rs 1,800 and Rs 8,000. The range will appeal to consumers across all segments, with a special focus

on the youth, and are currently available across 8,000 retail outlets i...

Akai launches smallest LED TV in India priced at Rs 11,000

Japanese electronics maker Akai today announced the launch of the smallest LED TV in the Indian market priced at Rs 11,000.

221

Chapter 5: Recent Developments

The Indian Electronic industry constitutes less than 1% of the global market. However, demand for these products are growing rapidly and investments

are flowing in to augment manufacturing capacity. Today India remains a major importer of electronic materials, components

and finished equipment amounting worth of $20 billion (Rs84, 000 crore ) in 2007. The country imports electronic goods mainly from China

In past four years, production of computers has grown at a compounded annual growth rate (CAGR) of 31%, which is highest among the various electronic products in India. And then the production is followed by

communication and broadcast equipment (25%), strategic electronics (20%) and industrial electronics (17%).

The consumer electronics segment has grown at a CAGR of 10% in the last five years includes a wide range of products such as DVD, VCD/MP3

players, television sets and microwave ovens. The growth in demand for telecom products has been high, with India

adding two million mobile phone users every month, which serves as one of the main reasons for the growth in production of electronic goods. This

growth is expected to continue over the next decade, too. To attract foreign investment the government has adopted Chinese style

Special Economic Zones with the aim to provide islands of excellence where the infrastructure is world standard. Fifteen-year tax breaks given to foreign investors and SEZs are treated as foreign territories for the purpose of trade

operations, duties and tariffs. India has been a great success story in the IT services industry and the next

great opportunity is to create our own electronics product industry, which will help to move up the value chain and create global technology brands.

Today the market is at the threshold of a decisive phase in our growth where, if the government and entrepreneurs take concrete steps it can create a $100

billion electronics product industry from India in the next 10 years. Multi national corporations provide growing electronics market to India at

lower costs by manufacturing semiconductors in India. India has the potential to come up as the next electronics and hardware destination in the

world. The chip design and other complex components electronic device can be acquired from the Indian companies at low cost.

India is growing up to be one of the biggest markets for electronic

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instrumentations. The consumption value of electronic equipment in India in 2005 is estimated as US$ 28.2 billion. The main factor pertaining to the

success of the Indian Electronics and Hardware Industry is the growth in the market demand. The growth in the manufacturing of semiconductor serves

as the key driver in the emergence of India as one of the leaders. The advantages pertaining to the taxes and duties, the access to technical and

engineering expertise, proper manufacturing facilities, lucrative investment offers, etc.

R & D in Electronics

The Electronics sector is a key player in the economy and one of the most

globalised industries in the world. It is a strategic enabler and a driving force for all the services, be it Internet, telecom, precision engineering industries, aviation,

energy, banking imagine any service, nothing works without Electronics. The rapidly growing Indian electronics industry can be broadly categorised into six

segments. They are consumer Electronics (the largest chunk of the market), industrial Electronics, strategic Electronics, Computers, Communication and Broadcasting equipment and Electronic components.

A key focus in the Electronics sector is R&D leading to innovative products. Department of Information Technology has long acknowledged R&D as an integral part of Electronics ecosystem and is supporting the entire value chain of

R&D activities in the country ranging from the basic components to sophisticated product development.

As a roadmap for developing, strengthening and enhancing the competitiveness of the Indian Electronics sector DIT has constituted a group-R&D in Electronics Group to conduct sponsored R&D activities across India at various academic

institutions of higher learning and R&D laboratories, in the areas assigned to it through a variety of plan programmes. The sophisticated projects assigned to the

groups cover a wide spectrum of key technological areas. These include developments in Nanotechnology, Medical Electronics, Microelectronics,

Industrial Electronics et al.

The major R&D initiatives of the Group has been in the development of Linac tubes, Automation and Intelligent Transportation Systems (ITS) technology,

setting up of Nanoelectronics centers and generic Nanometrology facilities. Major divisions of the group include the following.

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Electronics Systems Development & Application Division Electronic Materials & Components Development Division

Microelectronics Development Division

Semiconductor ICs Layout Design Registry

Electronics industry demands for GST from next fiscal

Stating that present tax system is hindering its progress, the electronics

manufacturing industry has demanded implementation of GST in the next financial year.

Another industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) also said GST should be introduced without any delay.

The GST, which aims at replacing most of indirect taxes, is stalled for want of political census.

CEAMA has also asked the Finance Ministry to remove custom duty on colour

picture tube and LCD/LED panel below 19-inch.

Khanna said all manufacturers in the country have closed down their production lines thereby rendering 15,000 people directly and several thousand indirectly

unemployed and have put about Rs 40,000 crores of banks at stake.

"This (removing duty) will help about 15 small and medium companies to start manufacturing flat panel TV (FPT) in the country and create employment

opportunity for additional 10,000 people. With this, we hope about 9 million FPT will be made in 2014," Khanna said.

At present, there is 10 per cent tax on import of LED and LCD panel below 19-

inch size.

Goel said central sales tax is the worst enemy of high value added manufacturing in the country. So are special additional duty and high value added tax (VAT) on

raw materials,components and basic inputs, he said.

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"Zero customs duty on all IT products and electronic equipment covered under various Free Trade Agreement is a given for our industry and unless we ensure that

taxes are not having a negative impact on costs of manufacturing, we will not garner the benefits of the Electronics Policy," he said.

The electronics industry has received investment proposals of about Rs 75,000 crore within a year of government putting in place the National Policy on Electronics

Policies for Industry

o Foreign Investment Policy

India welcomes investors in Electronics and IT sector. Government of India is striving to bring greater transparency in policies and

procedures to provide an investor friendly platform.

A foreign company can start operations in India by registration of its company under the Indian Companies Act 1956. Foreign equity in

such Indian companies can be upto 100%. At the time of registration it is necessary to have project details, local partner (if any), structure

of the company, its management structure and shareholding pattern.

A joint venture entails the advantages of established contracts, financial support and distribution-marketing network of the Indian

partner. Approval of foreign investments is through either automatic route or Government approval.

Government of India facilitates Foreign Direct Investment (FDI) and

investment from Non-Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs), predominantly owned by them to

complement and supplement domestic investment. Foreign technology induction is encouraged both through FDI and through

foreign technology collaboration agreement. Foreign Direct Investment and Foreign technology collaboration agreements can be

approved either through the automatic route under powers delegated to the Reserve Bank of India (RBI) or otherwise by the Government

.

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Foreign Trade Policy

In general, all Electronics and IT products are freely

importable, with the exception of some defence related items. All Electronics and IT products, in general, are

freely exportable, with the exception of a small negative list which includes items such as high power microwave tubes, high end super computer and data processing

security equipment. Second hand capital goods are freely importable.

Zero duty Export Promotion Capital Goods scheme (EPCG) which allows import of capital goods at zero%

customs duty is available to exporters of electronic products. The export obligation under EPCG Scheme can

also be fulfilled by the supply of Information Technology Agreement (ITA-1) items to the DTA provided the

realization is in free foreign exchange. Special Economic Zones (SEZs) are being set up to

enable hassle free manufacturing and trading for export purposes. Sales from Domestic Tariff Area (DTA) to SEZs are being treated as physical export. This entitles

domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service Tax exemption.

Supplies of Information Technology Agreement (ITA-1) items and notified zero duty telecom/electronic items in

the Domestic Tariff Area (DTA) by EOU/EHTP/STP/SEZ units are counted for the purpose

of fulfilment of positive Net Foreign Exchange Earnings (NFE).

The import of second hand computers including personal computers/ laptops and refurbished/reconditioned spares

are restricted for import. However, second hand computers, laptops and computer peripherals including

printer, plotter, scanner, monitor, keyboard and storage units can be imported freely as donations by the following category of donees, subject to the condition

that the goods shall not be used for any commercial purpose and are non-transferable:

Schools run by Central or State Government or a local body

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Educational Institution running on non-commercial basis by any organization

Registered Charitable Hospital Public Library

Public funded Research and Development Establishment

Community Information Centre run by the Central or State Government or local bodies

Adult Education Centre run by Central or State Government or a local body

Organization of the Central or State Government or a Union Territory

Fiscal Policy

The salient features of the Fiscal Policy as applicable to the Electronics Hardware

Sector are as follows:

Peak rate of customs duty is 10%. The customs duty on 217 Information Technology Agreement (ITA-1) items is zero%. The Agreement covers the

following main categories of products and components: Computers and peripherals; Telecommunication equipment; Electronic components

including semiconductors; Semiconductor manufacturing equipment; Software and Scientific instruments.

All goods required in the manufacture of ITA-1 items have been exempted from customs duty subject to Actual user condition.

Customs duty on specified raw materials / inputs used for manufacture of electronic components and optical fibres and cables is 0%.

Customs duty on specified capital goods used for manufacture of electronic goods is 0%.

Customs duty on LCD Panels and Set Top Box is 5%. Parts, components and accessories of mobile handsets including cellular

phones are exempted from basic customs duty and excise duty/CVD.

Full exemption from 4% special CVD on parts for manufacture of mobile phones and accessories has been reintroduced for one year i.e. upto

6.7.2010. The mean rate of excise duty (CENVAT) is 8%.

Microprocessors, Hard Disc Drives, Floppy Disc Drives, CD ROM Drives, DVD Drives/DVD Writers, Flash Memory and Combo-Drives are exempted

from excise duty.

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VAT on IT items is @4% and non-IT electronic items is @12.5%. CST is 2%.

About Electronics and Computer Software Export Promotion Council

Electronics and Computer Software Export Promotion Council (ESC), sponsored

by the Government of India is India’s largest Electronics and IT trade facilitation organization. Starting in 1989, with an export performance of US$ 200 million,

ESC has successfully steered India’s Electronics and Software Exports to US$ 65

billion during 2010-11 with membership of over 2200 exporters today. ESC facilitates global interests of foreign companies interested in establishing business

linkages in India. ESC’s excellent match – making services help interested ICT companies to locate a reliable partner in India for their business requirements.

In an Industry where the degree of technological obsolescence is very high, ESC is

striving hard to elevate India’s position in the international trading arena of the Electronic and Computer Software.

Some Mergers and Acquisitions in the electronic industry

Acquisition of Thomson SA by Videocon

Videocon through a Wholly Owned Offshore Subsidiary acquired the Colour

Picture Tube (CPT) businesses from Thomson S.A having manufacturing facilities in Poland, Italy, Mexico and China along with support research and development

facilities.

Acquisition rationale

The acquisition came at a time when Thomson was facing a fall in demand in

developed markets for television with CPTs and was moving more towards Flat-screen and Plasma Television. However, Videocon saw an opportunity in the

emerging countries for CPTs and hence pursued with the acquisition. Besides, the acquisition gave Videocon, the access to advanced technology giving the company control over an R&D facility in Agnani, Italy. The major reasons behind this

acquisition were:[10]

Cost cutting – Videocon was better positioned to shift the activities to low-cost locations and also it could integrate the operations with the glass panel facility in

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India with the CPT manufacturing facilities acquired from Thomson S.A. Videocon wanted to leverage its position in the existing parts of the business and

this acquisition would give it a strong negotiation position and could reduce impact of glass pricing volatility. Videocon could also reduce the costs by upgrading and

improving the existing production lines.

Vertical Integration – The acquisition helped Videocon in vertically integrating its existing glass-shell business where it had been enjoying substantially high

margins.[11] Videocon’s glass division had the largest glass shell plant in a single location. This gave the company an unrivaled advantage in terms of economies of

scale and a leadership position in the glass shell industry. The acquisition also gave Videocon a ready-market for its glass business and it was part of Videocon’s long-

term strategy to have a global vertically-integrated manufacturing facility.

Rationalisation of Product Profile – Videocon modified its product profile to cater to the changing market needs like moving away from very large size picture

tubes to smaller ones.[12] Apart from the overall strategy Videocon also had a plan on the technological front. It wanted to improve the setup for the production line

and line speed post-merger. Its focus was to increase sales while reducing the costs and thereby improving the productivity of the existing line. The company also

wanted to foray in a big way into LCD panels back-end assembly . On the sales front the company wanted to leverage on the existing clients of Thomson and build

relation as a preferred supplier to maximise sales. Also, Videocon could benefit from OEM CTV business with the help of Videocon’s CTV division, invest for

new models and introduction of new technologies.[13]

Thomson’s perspective

In 2005 Thomson planned entry into the high-growth digital media and technology business. Also, Thomson wanted to exit consumer and electronics businesses as

they were incurring significant losses. After sale of its TV business to Chinese group TCL, and Tubes to Videocon, Thomson divested from the audio/video

accessories business which was the last unit of its consumer electronics business. The need to divest are quite evident from the losses that it incurred in these

businesses particularly that the unit that it sold off to Videocon, the Optical Modules activity, and the Audio/Video & Accessories businesses which totalled

around €749 million for 2005. Moreover Thomson had done some acquisitions that were in line with boosting their revenues in the following years. [14]

Other competitors for the acquisition

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When Videocon entered the race for the colour picture tubes manufacturing capacity of Thomson SA in November 2004, there were 16 other bidders.

Videocon stood slim chances given the fact that it had to battle it out with players like LG, Philips, Samsung and Matsushita, Daewoo and several Chinese

manufacturers but finally managed to close the deal. The deal catapulted Videocon into the No. 3 slot in the global pecking order for CPTs. An official of Videocon

said on the deal "The word is out in the world that India and Indian companies are not just a good bet by themselves, but also a hedge against China.“ [15]

Thomson’s exit from Videocon

Thomson is looking to sell out its share in Videocon (a 10 percent share via GDRs) and in most likelihood it would be bought by Videocon itself. Thomson would be exiting at a loss as it had acquired the stake at around 400 (US$6.50) per

share.The deal is expected to happen at current market prices. Videocon’s GDR is currently traded at around $5.06 on the Luxembourg Stock Exchange. On the

Bombay stock exchange its trading around 150 against the 52-week high of 868 in Jan 2008.

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Conclusion

From this Desk Reserch we concluded that,

The Indian Automobile Industry is the fastest growing industry in India.Many

foreign automobile players setuping its units in India.Almost all big automobile

players performs CSR activities.External environment factors affects a lot on

Indian automobile industry.Day by day profits of automobile industry is increasing

and lot of technological developments happening in the industry.

The Indian Electronic Industry is also big industry in India.Foreign electronic

players are enjoying high reputation in Indian market.This industry is also facing

different challenges.Indian Electronic Industry is closely related to Science and

Technology, so technological developments are very common in this industry.

Both these industries are manufacturing industry.