Term paper

Sub: Managerial economics

Topic- Performance of Automobile Sector
post liberalization regime

Submitted to:
Submitted by:
Acknowledgement
I am thankful to Mr.Varun Nayyar for providing me the task of
preparing the Term Paper on Performance of Automobile
Sector post liberalization regime. We at Lovely believe in
taking challenges and the term paper provided me the
opportunity to tackle a practical challenge in the subect of
economics. This term paper tested my patience at every step of
preparation but the courage provided by my teachers helped me
to s!im against the tide and move against the !ind.
I am also thankful to my friends and parents for providing me
help at every step of preparation of the Term Paper.
Pallavi Modi

Index
About Indian Automobile Industry
Performance of automobile sector post
liberalization regime.
Hypotheses
Indian automobile sector - A Booming Market
Auto sector set for a smooth drie
Automobile Sector adertising on !" in the year
#$$%
Bibliography
About Indian Automobile Industry
Following India's growing openness, the arrival of new and
existing models, easy availability of finance at relatively low rate
of interest and price discounts offered by the dealers and
manufacturers all have stirred the demand for vehicles and a
strong growth of the Indian automobile industry.The data
obtained from ministry of commerce and industry, shows high
growth obtained since 200! 02 in automobile production
continuing in the first three "uarters of the 200#!0$. %nnual
growth was &.0 per cent in %pril!'ecember, 200#( the growth
rate in 200)!0# was $. per cent The automobile industry grew
at a compound annual growth rate *+%,-. of 22 per cent between
//2 and //0. 1ith investment exceeding -s. $0,000 crore, the
turnover of the automobile industry exceeded -s. $/,$2 crore
in 2002!0). Including turnover of the auto!component sector, the
automotive industry's turnover, which was above -s. 2#,000 crore
in 2002!0), is estimated to have exceeded -s.,00,000 crore
* 34' 22. 0# billion. in 200)!0#. %utomobile Dealers Network in
ndia!
In terms of +ar dealer networ5s and authori6ed service stations,
7aruti leads the pac5 with 'ealer networ5s and wor5shops across
the country. The other leading automobile manufactures are also
trying to cope up and are opening their service stations and
dealer wor5shops in all the metros and ma8or cities of the country.
'ealers offer varying 5ind of discount of finances who in tern pass
it on to the customers in the form of reduced interest rates.
Ma"or Manufacturers in Automobile ndustry
7aruti 3dyog 9td.
,eneral 7otors India
Ford India 9td.
:icher 7otors
;a8a8 %uto
'aewoo 7otors India
<ero 7otors
<industan 7otors
<yundai 7otor India 9td.
-oyal :nfield 7otors
Telco
T=4 7otors
'+ 'esigns
4wara8 7a6da 9td
#o$ernment %as liberalized t%e norms for foreign
in$estment and import of tec%nology and t%at appears to
%a$e benefited t%e automobile sector! The production of total
vehicles increased from #.2 million in //2! // to 0.) million in
200)!0#. t is likely t%at t%e production of suc% $e%icles will
e&ceed '( million in t%e ne&t couple of years!
The industry has adopted the global standards and this was
manifested in the increasing exports of the sector.%fter a
temporary slump during //2! // and ///!00, such exports
registered robust growth rates of well over $0 per cent in 2002!0)
and 200)!0# each to exceed two and! a!half times the export
figure for 200!02.
Automobile Export Numbers
Category 199899 !""#"$ %Apr&ec'
Passenger "ar #$%&' (#(%)'
Multi *tility Vehicles #&$% +',#
"ommercial Vehicles (-(-' (,,+(
T!o Wheelers (----# #$&)&$
Three Wheelers #((+' $($+$
(ercentage )rowt* 1+.+ ,!.8
T%e )ey *actors +e%ind T%is ,pswing
4ales incentives, introduction of new models as well as variants
coupled with easy availability of low cost finance with comfortable
repayment options continued to drive demand and sales of
automobiles during the first two "uarters of the current year. The
ris5 of an increase in the interest rates, the impact of delayed
monsoons on rural demand, and increase in the costs of inputs
such as steel are the 5ey concerns for the players in the industry.
%s the players continue to introduce new models and variants, the
competition may intensify further. The ability of the players to
contain costs and focus on exports will be critical for the
performance of their respective companies.
Performance of automobile sector post liberalization
regime.
Introduction
'eveloping an appropriate public policy towards the industrial
sector has been an
important tas5 for Indian policy ma5ers for a long time. 1hen
India moved away from an
inward loo5ing industrialisation strategy to a more >open?
economy in //, industrial firms
needed to restructure themselves to retain competitiveness.
7uch of these restructuring is
needed to correct the inefficiencies created by operating in a
protected mar5et. The automobile
sector has been a ma8or candidate in the industrialisation process
since the beginning of planned development. The policy changes
were in two doses and too5 the form of partial
de!regulations introduced in /2$ and 9iberalisation measures
launched since //. The pre
/2$ regime could be described as an era of strict controls and
regulations. The initial changes,
introduced in /2$, eased the licensing re"uirements, broad!
based the classification of vehicles
for issue of licenses, allowed selective expansion of capacity and
partially relaxed controls with
regard to foreign collaborations, imports of capital goods, raw
materials and spares. Though
these measures represented a @domestic 9iberalisation@, the
policy environment continued being
geared towards imposing trade and investment regulations,
constraining the growth of big
business houses and regulating exchange rates. It was only after
// that notable broad!based
changes in policy that had far reaching implications actually came
into being. These changes
dispensed with the bul5 of controls and regulations and for the
first time since independence
assigned a central role to mar5et forces. This paper analyses the
behaviour of Indian automobile firms operating under regulated
and liberal economic policy regimes. -esults from the step!wise
discriminant analysis presented in this paper reveal that the
conduct and performance of firms in this sector differ significantly
between the regulated A/2$!2& to //0!/B and liberal A//!/2
to //$!/&B economic policy regimes with respect to foreign
e"uity participation, in!house - C ' efforts,technology imports,
capital intensity, advertisement, exports, growth and profits.
Policy -egimes. *irms/ 0onduct and
Performance
The automobile industry in India grew under a highly regulated
and protected economic
environment over the period /$0 to /2$. %utomobile
manufacturing firms were sub8ected to
strict product specific and capacity licensing and as a result very
few firms dominated all the
products. These restrictions provided no motivation or incentive
for the firms to bring about
technological upgradation.
The policy environment during the period /2$!2& to //0!/
permitted a limited
increase in technology inflow through various modes. Inflow of
technology from abroad
brought about a shift in the technology frontier as well as a
change in the technological
tra8ectories in which the firms had been operating. <owever,
partial relaxation of this 5ind
failed to bring about a drastic change in the non!competitive
environment in which the firms
had been operating for a long time
liberalisation of economic policies and the outward orientation
introduced since //,
on the other hand, brought about a dramatic change in this
industry. These policy measures considerably transformed the
environment in which the firms had been operating. %s a
conse"uence, the industry witnessed the entry of new firms and
adoption of strategies by the already existing firms to introduce
technological change and improve their performance. The new
players brought in modern engineering, efficient processes and
effective shop!floor layouts. The new manufacturing strategies
include brea5ing up of the plant into modules and cells, reduce
the complexity of purchasing logistics, reduction of inventories
and product complexity, and creation of simpler processes by
encouraging flexibility and teamwor5. These firms also ma5e
extensive use of +%'D+%7 in their plants.
En the whole, Indian %utomotive sector grew at a much faster
rate in the post // eraA#.) F per annumB when compared to
A2.$& F per annumB the period of /2$!/ ATable B.The growth
rate of all the sectors within the # wheelers and +ommercial
vehicles has been in double digit with the 9+= sector registering
the maximum Aof /./) F per annumB in terms of the growth rate
as well as increase over the earlier period. 7edium and <eavy
commercial vehicles sector also registered a growth rate of about
F per annum, which is a 00F increase over the previous
period, /2$!2& to //0!/. In the #!wheeled drives sector Geeps
Aother utility vehiclesB experienced the maximum increase in
growth Afrom about $.$0 F per annum to #.# F per annumB
between the two periods. The +ar sector also had an increase of
about 2.$ percent in its growth rate over the two periods. This
was the only sector which had a double! digit growth rate during
the first period Awhich can be attributed to 7arutiB and has
improved its performance during the //0s.
ANN-A. A/E0A)E )012T3 14 (01&-CTI1N 14 A-T1516I.E7
.ector/Period (,'$0'& to
(,,(0,#
(,,(0,# to
(,,$0,&
"12.
344P.
1LL %
W544L42.
M65"V.
L"V.
1LL "Vs
T7T1L
(#.&+
$.$)
((.(-
$.+,
).++
&.-+
'.$&
($.()
(%.%-
(%.'%
((.+#
(,.++
(+.,+
(%.+(
'uring this growth process, the industry experienced changes in
the strategy adopted by many firms in that efforts were made to
build up technology ac"uisition, product "uality was improved
and in general the industry became more competitive. :conomic
policy forces have an impact on the extent and direction of
technological efforts of firms. 1hile the technological efforts
during import substitution era were generally directed at
increasing the local content of products, the export!oriented
policy induced the firms to direct efforts to reduce costs and
improve "uality by implementing changes that upgrade the
production process. -ao A//)B found that the investment
strategies for - C ', plant modernisation and expansion, material
and machine tool inputs underta5en by Indian automobile firms
are all related to the technological position of the firm on product
and process dimension. Harayanan A//2B also found that inter!
firm differences in competitiveness in the automobile sector in
India, depended on technological tra8ectory advantages during
the licensing regime and on the variables capturing technological
paradigm shifts after the introduction of de!regulation policies
during the mid /20s. ;efore /2) the passenger +ar sector of
the Indian automobile industry consisted of only three firms with
limited capacity. In /2), Maruti Awhich is a 8oint venture of the
,overnment of India and 4u6u5i 7otors, GapanB entered the
industry and dramatically affected the mar5et share of all firms.
7aruti en8oyed as much as $0F of the mar5et share during the
first period of this study. 9ater 7aruti, with its range of four
wheeled vehicles, was able to push up its mar5et share during the
//0s to &0F. Telco. a leading +ommercial =ehicle manufacturer
in India, also entered the +ar segment after // and introduced
four wheeled passenger cars that are ideally suited for long
distance travel on Indian roads. The entry of Telco virtually
decreased the mar5et share of the two formerly leading car
manufacturers in India ! 1industan Motor and Premier
Automobiles ! to single digit. These two firms, <industan 7otor
and Iremier %utomobiles, continue to struggle for survival in the
face of competition that has resulted from the entry of new
subsidiaries of the world's leading auto manufacturersJ #eneral
Motors and *ord Motor 0ompany Afrom 34%B, Mercedes
+enz Afrom ,ermany, Daewoo 0orporation Afrom KoreaB and
Automobiles Peugeot Afrom FranceB. %ll these firms have
entered into the Indian +ar segment after this sector was de!
licensed in //) and their products hit the mar5et in //&.
-ecently there are two more entrants in the +ar segment !
1onda AGapanB and 1yundai AKoreaB ! which have introduced
small si6ed cars to compete with Suzuki! 7ar5et share of 7aruti
4u6u5i has declined from as high as 2/F during the early //0s
to $#F by the late //0s. Telco also introduced a small si6ed car
during //2, 5eeping in mind the idiosyncrasies of the Indian
mar5et. T%e 0ar segment. t%erefore. %as emerged as a
leading competiti$e sector in ndia during t%e post
2iberalisation period!
3ypot*eses
En the basis of these possible effects of 9iberalisation on the
behaviour of firms and
drawing upon the empirical 5nowledge, this study formulates
hypotheses Ain 4ection )B
concerning the nature of differences in the behaviour of firms
across the two policy regimes.
The parameters to capture the behaviour of firms have been
classified into technology
ac"uisition, product improvements through imports of
components, vertical integration, product differentiation and
performance.
Tec%nology Ac3uisition:
Technology ac"uisition by a firm can be facilitated through
imports Atechnology transfer
from abroadB and in!house -C' efforts. Technology ac"uisition
from abroad consists of
technology imports through the mar5et or @arms!length@ purchase
of technology against
lumpsum and royalty payments A2-B, intra!firm transfer of
technology through foreign direct
investment *foreign e3uity participation A*4B. and technology
transfer through the supply of
machinery and e"uipment, where the technology is embodied in
the imported capital good
itself AM0APB. An in-%ouse researc% and de$elopment
effort of firms 5-D6 is one of the
important methods of location, adaptation, assimilation and
development of the imported
technology. Following %nsal A//0B, ;asant A//0B and Harayanan
A//2B, it could be argued
that the technological strategies adopted by a firm could be
different during varying policy
regimes. The present study examines the role of all the four
technological factors identified
above during the two policy periods
ntra-firm Tec%nology Transfer : -estrictions on foreign
e"uity investment and selective permission allocate a limited
rolefor intra!firm transfer of technology. 7oreover, since
most of the firms during the first period were established
with minority foreign e"uity holding, diffusion of
technological 5nowledge in India could also have been
slower. 1ith 9iberalisation multinational firms could have
ma8ority e"uity holdings and therefore influence
management of the firm as well. This ability to influence the
management may have led to transfer of design and
drawings which accelerated the diffusion of technological
5nowledge and also enabled such concerns to develop
export mar5ets in association with the Indian firms.
Disembodied Tec%nology mports : -estrictions on
technology collaborations involving heavy lumpsum and
royalty payments resulted in selective use of imports of
disembodied technology during the first period.9iberalisation
of restrictions on lumpsum and royalty payments could have
led to an increase in the use of this mode of technology
imports. The increasing presence of multinationals and
transfer of better "uality technology could have also led to
an increase in technology Alumpsum and royaltyB payments.
n-%ouse - 7 D 4fforts: The absence of competitive
pressure and the perpetuation of sellers mar5ets may lead
tolow - C ' activity in firms belonging to a developing
country. 9imited use of in!house efforts, either for adaptation
of imported technology or in locating technology imports
could also explain low - C ' activity. 1ith a more open
policy environment, increasing competition and higher costs
of technology imports, firms may realise that to catch up
with technological frontier, they need to direct their efforts
to build capabilities for technology generation, rather than
depend on imports. %s a result expenditure on in!house - C
' would increase in a liberali6ed environment. -eddy A//0B,
on the basis of a survey of )2 - C ' units of transnational
corporations in India, found evidence suggesting an
increasing trend of investments on - C ' see5ing to develop
new products and processes. This, he argued, was facilitated
by the availability of trained personnel. 4ince auto industry
has been one of the ma8or beneficiaries of multinational
participation during the 9iberalisation period, it may be
appropriate to hypothesise an increasingly important role for
- C ' intensity
Tec%nology nteraction: %s stated earlier, firms operating
in a restrictive regime directed their in!house - C ' efforts
either to complement imported technology to facilitate
technological tra8ectory shifts or to locate their technology
imports. 4ome firms in the process of diffusion of imported
technology, as a result, could have used the interaction
between technological imports and in! house efforts. 1ith
the entry of leading multinationals and transfer of design
and drawings, the technological search activity during the
post 9iberalisation period may have resulted in bringing
about cost reduction and technological upgradation of
vehicles to face global challenges. This could have been
underta5en by developing technological tra8ectory
advantages. The study, therefore, analyses the difference in
the role played by technology interaction Abetween imported
technology and in!house - C 'B variables over the two policy
regimes. The means of all the three interaction variables
A*48-D. 2-8-D and M0AP8-DB are expected to be higher
in the second period over the earlier one and emerge as
important discriminants.
Imports of Components:
Firms use imported components and parts either as a part of a
'pac5age' in the transfer of
technology or due to certain costs and "uality advantages. In an
era of domestic 9iberalisation,
restricted trade and strict exchange rate control, imports of
components were used by some
firms as a source of technological upgradation of their product.
<igher imports could also be
because firms would choose the "uic5er option of importing the
parts and components rather
than encouraging parallel technology transfer to component
manufacturers as well. 1ith an
across the board change in trade policy, devaluation of the
currency, move towards tariff
controls and more realistic exchange rate, however, dependency
on imports of components may
actually decline. This is because of the choice between importing
at a higher price and domestic
procurement. To stay put in competition, firms may use the latter
option. The study, therefore,
expects a reduction in the dependency on imports of
components AM09MB between the two
policy regimes.
Product Differentiation:
%dvertisement is an important aspect of non!price rivalry among
firms. The absence of
effective competition during the first period could have been a
source of low advertisement
intensity. The presence of a number of multinationals after the
// policy reforms, and the
resultant scope for non!price competition may have led to an
increase in advertisement
xpenditures. 'unning A/2B has found an increasing dependency
on advertisement for a
given rise in multinational participation. 4ince the automobile
industry witnessed entry of a
number of multinationals during the post// period, it is only
appropriate to hypothesise a
positive and increased use of ad$ertisement AADB as a varying
strategy over the policy changes.
Vertical Integration:
Following 1illiamson A/2$B it could be argued that $ertical
integration A:B ta5es
place in order to economise on transaction costs. The restricted
policy environment during the
second half of the /20s would have encouraged firms to depend
on the easier options of either
importing or procuring re"uired components and parts from the
mar5et. 9iberalisation of
economic and trade policies Aespecially with a more realistic
exchange rateB can lead to higher
costs of imported components and parts. In addition the
emergence of non!price competition
may cause firms to produce most of the components and parts
themselves to ensure "uality and
timely delivery. The study, therefore, postulates an increased
vertical integration as a strategy
by firms operating under a liberalised regime in contrast to their
behaviour under the earlier
policy regime.
Performance:
The performance of automobile firms operating under partially de!
controlled and
liberalised regimes has been compared in terms of price-cost
margins AP0MB, growt%
A#-9;T1B and e&ports A4<B. 7ost of the studies lin5ing
9iberalisation to performance have
analysed the impact of trade 9iberalisation on productivity and
efficiency of firms. :vidence on the relationship between trade
9iberalisation and firm!level productivity improvements vary
across countries and industries ATybout, //2B.
Price-0ost Margins:
+ompetition see5ing to maximise profits could be a preferred
ob8ective of all firms in
the short!run. 'uring the initial period under study, which was
characterised by extensive
regulations and unfulfilled demand, the price!cost margins of
firms would have been "uite high.
<owever, introduction of products involving technological
upgradation by new firms, could
lead to lower profits for older firms. %s a result, during the first
period, the average profits earned by all firms in this industry
could be low. 1ith 9iberalisation and change in the macro
environment, profit margins can be expected to have gone up.
This is because most of the firms in all the segments of this
industry would have already been established and new firms
would not yet have garnered a large mar5et share.
#rowt%:
Following 7arris A/&#B, it could be argued that a shift to a higher
growth and profit
frontier usually ta5es place with a change in the economic
environment in which the firms
operate. 'uring the post/2$ period, firms in this industry
concentrated primarily on creating
capacity and obtaining a large mar5et share. 1ith the intense
competition that has come to
characterise the industry since the // policy changes, firms
would have attempted to shift to a higher growth!profit frontier.
4&ports:
,rowth through geographical diversification would have been a
preferred strategy by
firms, either due to insufficient domestic demand or to fulfil the
export obligations that the
,overnment has imposed from time to time. 'uring the first
period, increased production was
basically aimed at catering to the re"uirements of unfulfilled
demand. %s a result, barring a few firms, which had been
exporting their vehicles for a long time, achieving a high domestic
mar5et share was the preferred ob8ective of most of the firms.
<owever, with a more open. economic environment and
introduction of new technological sophisticated vehicles by both
the Indian as well as the multinational firms, there may have been
some orientation towards external mar5ets. Further, a fall in the
value of Indian rupee would have made Indian vehicles cheaper
internationally and could possibly have stimulated exports. The
study, therefore, postulates an increased role for exports in the
post 9iberalisation period in contrast to the second half of
eighties.
Indian automobile sector A 6ooming 5arket
'e!licensing in // has put the Indian automobile industry on a
new growth trac5, attracting foreign auto giants to set up their
production facilities in the country to ta5e advantage of various
benefits it offers. This too5 the Indian automobile production from
$.) 7illion 3nits in 200!02 to 0.2 7illion 3nits in 2000!02. The
other reasons attracting global auto manufacturers to India are
the country?s large middle class population, growing earning
power, strong technological capability and availability of trained
manpower at competitive prices.
In 200&!00, the Indian automotive industry provided direct
employment to more than )00,000 people, exported auto
component worth around 34L 2.20 ;illion, and contributed $F to
the ,'I. 'ue to this large contribution of the industry in the
national economy, the Indian government lifted the re"uirement
of forging 8oint ventures for foreign companies, which attracted
global to the Indian mar5et to establish their plants, resulting in
heightened automobile production.
Key Research Highlights

! Iassenger car production in India is pro8ected to cross three
million units in 20#!$.
! 4ales of passenger cars during 2002!0/ to 20$!& are expected
to grow at a +%,- of around 0F.
! :xport of passenger cars is anticipated to rise more than the
domestic sales during 2002!0/ to
20$!&.
! 7otorcycle sales will perform positively in future, exceeding 0
7illion units by 202!).
! =alue of auto component exports is li5ely to attain a double digit
figure in 202!).
! Turnover of the Indian auto component industry is forecasted to
surpass 34L $0 ;illion in 20#!$.
Auto sector set 8or a smoot* dri9e
%fter the strenuous, but fairly good growth of about # per cent in
the last fiscal, the automobile industry as a whole continues to be
on a roll. ;uoyed by the cut in excise duties announced in the
;udget, and a general improvement in consumer confidence,
domestic sales of passenger vehicles rose by ) per cent during
first two months of this fiscal compared to the corresponding
previous period. 4ales of motorcycles, the largest selling sub!
segment of two!wheelers, grew by &.0 per cent during the same
period. %nd, cumulative sales of the commercial vehicles segment
as a whole also went up by about 0 per cent.
+e%ind cars/ rally: The 5ey "uestion is whether the 5ind of
growth rates in the passenger vehicles segment is sustainable.
The sharp spi5e in volumes in %pril and 7ay has been influenced
by a few developments the benefits of which may not be available
through the rest of the year. For one, the expected cut in the
excise duty on passenger cars and the subse"uent 2 per cent
reduction effected in the ;udget, led to a substantial
postponement of purchases by potential buyers. The over )$ per
cent rise in car sales during %pril and 7ay is attributable to this
duty cut. En the other hand, the 8ump in sales could also have
been due to customers advancing their purchase decisions before
the expected round of price hi5es is announced by the car
manufacturers. In fact, price hi5es, which may be slapped on by
car ma5ers as early as next month *<yundai and 7aruti 3dyog
have already hi5ed prices of some of their products once this
fiscal., can potentially dent the benefit that the excise cut gave
away to customers. From the manufacturer's point of view, the
increasing cost of inputs, especially sheet metal, could prove to
be the reason for a gradual increase in prices.
,tility $e%icles on o$erdri$e: %mongst passenger
vehicles, the utility vehicles sub!segment is li5ely to sustain the
scorching 2).2 per cent growth witnessed during the first two
months of this fiscal. This is compared to a lower &.$ per cent
growth in the previous year. 1ith the launch of a bunch of new
upper end sports utility vehicles, such as the +hevrolet Forester,
the 4u6u5i ,rand =itara M9!0, and the soon to be introduced Ford
:xplorer, this sub!segment will corner more sales volumes later
this fiscal.
More models in store: Tal5ing of new product
introduction, the small car club could witness a further expansion
in terms of number of models available, and in terms of total
sales with the planned launch of at least two new cars.
They will include the Epel +orsa 4ail from ,eneral 7otors India
and possibly one new top!end small car model each from 7aruti
3dyog and <yundai 7otor India by early 200#. Further, with the
roll out of the +hevrolet Eptra also next month, a +N segment
car, ,7 India alone is li5ely to inch up the mar5et share ladder.
T%e e&port t%rust: %part from the developments in the
domestic passenger car mar5et, manufacturers could also get a
leg up from the steadily increasing exports of these vehicles,
especially in the small car segment. Korean +haebol <yundai
7otors and Gapanese auto giants Toyota 7otor +orporation and
4u6u5i 7otor +orporation are already sourcing out of or have
indicated their intention to source out of their Indian operations
and subsidiaries. The trend of increased exports from India even
evident during 2002!0), when the total export of passenger
vehicles from the country shot up by about )# per cent compared
to the previous year.
Monsoon dri$e two-w%eelersJ The prospects of the
other most watched segment of the auto industry O two wheelers
O should also improve with the expectations of a near normal
monsoon this year. Teetering on the brin5 of negative growth
rates during a few months of 2002, the motorcycles sub!segment
has now been drumming up good sales numbers during the last
four months. %fter a growth of over )0 per cent during the year
ended 7arch 200), for the first two months of the current fiscal,
motorcycles and step!throughs recorded a modest &.0 per cent
growth. The practice of price discounts, which had become
rampant amongst bi5e dealers *at the behest of the
manufacturers., has been on the decline, indicative of a revival of
demand in the segment. %gain, the two!wheelers segment as a
whole is li5ely to be positively influenced by the improvement in
the economy and new product introductions.
Top gear beckons: +ommercial vehicles, widely
considered to be the economy's barometer, have had a good start
for the year. %ccording to the 4ociety of Indian %utomobile
7anufacturers *4I%7., the auto industry's growth is li5ely to be
good this fiscal as industrial growth has been pro8ected to grow at
eight per cent in 200)!0# compared to the estimated & per cent
last year. Everall, the auto industry's prospects loo5 bright this
year. % good monsoon with widespread precipitation may help
automobile manufacturers ease into top gear.
Automobile 7ector ad9ertising on T/ in t*e year !""+
)ey *indings:
)0 per cent rise in ad volumes of
%utomobile sector on T= in 200& over
the previous year.
+arsDGeeps garnered half of the ad
volumes of %utomobile sector on T= in
200&.
7ost of the ads of %utomobile sector on
<indi Hews and -egional ,:+.
Tata 7otors topped advertising on T=.
+arsDGeeps saw the maximum new brands launched in the
year 200&.
,eneral 7otors and T=4 7otor had the maximum share of
endorsement advertising by +elebrities on T=.
%utomobile sector saw maximum share of endorsement by
%amir Khan in the year 200&.
#rowt% in ad$ertising of Automobile
Sector on T: in =((> compared to
pre$ious year .
)0 per cent rise in ad volumes of %utomobile sector on T= in the
year 200& compared to 200$.
%utomobile sector used maximum ad volumes in the fourth
"uarter across the years 200$!200& on T=.
S%are of sub-categories in
Automobile Sector on T: in t%e year
=((>!
$0 per cent of the ad volumes in %utomobile sector were
contributed by +arsDGeeps followed by 7otorcycles with )$
per cent share on T= in the year 200&.
4cooterette and +ommercial =ehicles had a share of 0 per
cent and # per cent of ad volumes respectively.
4ub!categories in %utomobile 4ector with the maximum growth in
ad volumes on T= in the year 200& compared to 200$.
Top New Automobile brands
launc%ed on T: in year =((>!
%mong the Top 0 new brands on T= in the year 200&, six of
them belong to 7otorcycles and rest four belong to
+arsDGeeps.
Tata Indica =2 Meta Ietrol topped among the new
%utomobile entrants on T= followed by T=4 %pache.
Top Ad$ertisers using 0elebrities for
endorsing t%eir Automobile brands
on T: in year =((>!
Top five advertisers contributed 20F share of advertising
endorsed by +elebrities on T= in the year 200&.
7aximum share of +elebrity endorsed advertising by
,eneral 7otors and T=4 7otor +ompany.
Ether three Top advertisers are Toyota Kirlos5ar 7otor, <ero
<onda 7otors and Ford India.
Profession of 0elebrities endorsing
Automobile brands on T: in year
=((>!
Film %ctors *0 are film actors out of # celebrities. had the
maximum $2 per cent share in endorsing of %utomobile
brands on T= in the year 200&.
Film %ctresses had a share of 2& per cent followed by 22 per
cent share by five of the 4ports celebrities.
6ibliograp*y
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