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Factors affecting automobile industry in economics
- 1. AUTOMOBILE INDUSTRY GROUP 3: LAKSHAY SHARMA (20DM110) GARV JAIN (20DM078) KAVITA CHOUDHURY (20DM103) HIMANSHU TALMALE(20DM084) KANISHKA SINGH (20DM096) JAYANT NARBAR (20DM090)
- 2. Introduction The automobile industry designs, develops, manufactures, markets, and sells the world's motor vehicles. The automotive industry is one of the most important economic sectors by revenue. In 2021, the automobile industry is expected to see a growth rate of around 7%, with the disclaimer that the auto industry in India has been hit badly by the ongoing global financial crisis.
- 3. Problem • The automobile industry crisis of 2008—2010 and the current crisis. • Fewer fuel-efficient models to offer to consumers • Creative marketing strategies to entice reluctant consumers • Substantial increase in the prices of automotive fuels • High profit margins
- 4. The ongoing automobile industry crisis makes us wonder what are the factors which lead to such a crisis. Let us discuss in detail the various demand and supply factors which affect the automobile sector.
- 5. Demand Factors Ways of buying Auto industry observers car loans as the biggest driving factor for the expansion of the Compact Car segment. Advertising and Marketing Companies now a days are using even aggressive selling techniques for which they are even coping with the Film celebrities and Cricket stars. Price of The Automobiles Law of demand also states that with an increase in price the demand of the commodity decreases and vice versa. Income of Consumer / Buyer We have seen that due to increase in the Income of the general public, there has been a shift from the Lower CC-segment cars to the Upper CC- segment cars.
- 6. New Offerings Due to escalation in competition in the Indian car market, the frequency of new model launches has increased Demographic Drivers Increase in per capita income increases the consumption tendency of the customer. Affordability Passenger cars is driven mainly by greater affordability, which in turn increases the aspiration level of the customers.
- 7. Supply Factors Presence Across Segments Various product segments can ensure higher volume and better capacity utilization by using the common manufacturing capacity. Efficient Operations Effective and successful operation methods have a positive effect on supply. Wide Dealer Network A wide dealer network helps the company serve customers over wide geographical area.
- 8. Access to Latest Technologies Substantial portion of Indian customer is looking to upgrade in higher segment. Price of The Car 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. Factors of Production Cost of the raw material (Steel, Spare Parts, Rubber) increases there will be an increase in the cost of production leading to decrease in profit margins. Government Policies and Taxes Change in the government policies regarding the increase in the road tax charged or the tax which is to be paid per unit sold.
- 9. Conclusion • Market economies are assumed to have many buyers and sellers, high competition and many substitutes. • Demand and supply refer to the relationship price has with the quantity consumers demand and the quantity supplied by producers. • By studying various demand and supply factors affecting the automobile industry we can conclude that an upturn or downturn in this sector is due to an aggregate effect of multiple factors.
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