Market analysis and potential marketsize for taco autocomponents aftermarket and study of its pot

A
PROJECT REPORT
ON
MARKET ANALYSIS OF AUTO-COMPONENT
AFTERMARKET AND STUDY OF ITS POTENTIAL MARKET
SIZE IN PUNE
FOR
TATA AUTOCOMP SYSTEMS LIMITED (TACO)
IN PARTIAL FULFILLMENT OF
MASTER IN BUSINESS ADMINISTRATION
UNIVERSITY OF PUNE
BY
CHINMAY OAK
M.B.A.
(2005 2007)
GUIDED BY
MR. RAJESH CHAWLA (TACO)
PROF. MAHESH HALALE (VIM)
VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE

Acknowledgement
At the outset I wish to thank Mr. Sudhansu Misra, Manager HR, TACO
for giving me opportunity to do this project in Tata Autocomp Systems
Ltd. I wish to express my sincere and heartfelt gratitude towards my
guide Mr. Rajesh Chawla of Tata Autocomp Systems Ltd., without
whose support and guidance completion of this project would not have
been possible.
I am extremely grateful to Prof. Mahesh Halale of Vishwakarma
Institute of Management of his wholehearted support and guidance at
every stage of this project.
I am very thankful to other faculty members and Dr. Sharad Joshi,
Director, VIM for their guidance.
Last but not the least , I also wish to appreciate all my friends and well
wishers who have in one way or the other helped me to complete my
project.

Contents
Sr. No. Topic Page No.
1 Executive Summery 1
2 Purpose .. 3
3 Objective 4
4 Scope of Project .. 5
5 Company Profile .. 6
6 Theoretical Background 30
7 Research Methodology .. 32
8 Data Analysis and Interpretation . 34
9 Findings . 58
10 Limitations 63
11 Conclusions 64
12 Recommendations .. 65
13 Bibliography . 66
14 Annexure ... 67

Data Analysis and
Interpretation

1
Executive Summery
The project topic was chosen as per requirements of Tata Autocomp Systems Ltd.
(TACO). TACO was interested in finding out the potential market size for
marketing its auto-components in aftermarket. Also analysis of current status of
aftermarket with respect to existing players, their market shares, their relative
strengths and weaknesses was required to be found out.
Due to limited resources only Pune market was selected for the study. The project
was done during the months of June and July 2006. To find out details about
various suppliers of auto-components, retailers were selected to be surveyed as
they are aware about many suppliers, stock many auto-components and are aware
about customer preferences.
As per MCCIA (Mahratta Chamber of Commerce, Industries and Agriculture)
industrial and commercial dictionary there are 150 retailers of 4 wheeler auto-
components. A sample of 30 retailers was chosen for the survey.
The survey was done through a questionnaire in which the questions were open
ended. It was more like a data sheet. Retailers were asked to name various vehicle
models for which they sell spares. For each auto-component how many suppliers
are in market, fro which vehicle models they supply parts, what are their prices
and their strengths and weaknesses as per customer preferences were collected. To
find out potential market size of aftermarket, approximate sales of these retailers
for various models was found out. This data was extrapolated for approximately
150 retailers to get the total market size in Pune.
By tabulating the data market share in terms of Number of parts sold per month
and their monetary value for different suppliers of each auto-component was
found out. Also total sales of each auto-component for each vehicle model were
tabulated. Assuming minimum 150 retailers in Pune, potential market was
calculated.
Observations regarding the preferences of customers and retailers and insights
from discussion with retailers are also included in the report.

2
The facts and figures itself talk about he market structure and potential market for
auto-components in Pune. There is substantial retail market for auto-components.
Also Tata original auto-components have large market share for most of the
components and is in top two in market shares. TACO can use this strength to
enter in the auto-component aftermarket

3
Purpose
Auto component manufacturers supply to two kinds of buyers original
equipment manufacturers (OEM) and the replacement market or aftermarket.
TACO is already supplying components to every automaker in India and has
strong relationships with all its customers in India.
It reaches its aftermarket customers for Tata Motors through authorized
dealerships and service centers. It is currently not supplying auto-components for
vehicles other than Tata vehicles in aftermarket. TACO has proven technical and
manufacturing capabilities to enter into this auto-component aftermarket.
However, before taking the decision of entering this market it is important to find
out the potential market size of this auto-components aftermarket. In addition,
information about the current market players, their market share, strengths and
weaknesses was required for strategic planning for TACO s entrance in the
market.
For this purpose this project was undertaken. Though the study was conducted
only in Pune, similar studies can be conducted for whole Maharashtra and across
India for taking the right decision.

4
Objectives
Primary Objectives
1. Find out current market shares of available brands in auto-component
aftermarket.
2. To find out the current market size for auto-components aftermarket.
Secondary Objectives
1. Find out various brands available for auto-components in the retail market
in Pune
2. To find out responses / preferences of retailers and customers for specific
brands
3. Strengths and weaknesses of TACO auto-components with respect to other
brands.

5
Scope
The project was limited to Pune market only.
The survey was limited to 4 wheeler vehicles in all segments i.e. cars,
utility vehicles to commercial vehicles.
Not all auto-components but only 10 components are covered in the study.
The selection of these components was done according to requirements of
TACO.
These auto-components include
o Bumpers
o Coil Springs
o Control Cables
o Coolant tank
o Head lamp
o Oil chamber
o Radiators
o Rear view mirror
o Shock absorbers
o Tail lamp
As not all the retailers in Pune city could be covered due to shortage of
resources sample is taken. 30 retailers from different areas of Pune are
surveyed.

6
Company Profile
Tata Group
The Tata Group is India's best-known industrial group with a turnover of US$
17.6 billion (equivalent to 2.9 per cent of India's GDP). Known for its adherence
to business ethics, it is India's most respected private business group. With more
than 220,000 employees across 91 major companies, it is also India's largest
employer in the private sector. The Tata Group operates businesses in seven key
industry sectors.
Business sectors - Tata Group
Founded by Jamsetji Tata in the 1860s, the Tata Group pioneered several firsts in
Indian industry including India's first private sector steel mill, first private sector
power utility, first luxury hotel chain and first international airline.
In more recent times, the Tata Group's pioneering spirit continues to be showcased
by companies like Tata Consultancy Services (TCS), Asia's largest software and
services company, and Tata Motors, the first car maker in a developing country to
design and produce a car from the ground up.
The business operations of the Tata Group currently encompass seven business
sectors engineering, materials, energy, chemicals, consumer products, services,
and communications and information systems. The scale of the Tata Group's
operations is increasingly turning global. Tata Tea was the first Indian MNC in the
global tea industry; Tata Steel is one of the world's lowest cost producer of steel;

7
Tata Chemicals is one of Asia's largest manufacturers of soda ash; Titan is one of
the world's top six manufacturer-brands in the watch segment and Tata Motors is
amongst the top six commercial vehicle manufacturers in the world.
The Tata Group is increasingly focusing on new technology areas, and has the
largest footprint in the information technology and communication sector in India.
Besides being the largest software services provider in the country, it is also one
of the leading private sector telecom service providers and is also India's largest
international long distance and Internet services provider.
By combining ethical values with business acumen, globalisation with national
interests and core businesses with emerging ones, the Tata Group aims to be the
largest and most respected global brand from India whilst fulfilling its long
standing commitment to improving the quality of life of its stakeholders.

8
TACO Tata Autocomp Systems Ltd.
TACO is part of the Tata Group -- India's best-known industrial group. It was
established in 1996 to serve Indian and Global Auto Industry.
TACO serves every OEM in India, provides complete programme management
capabilities and is focused on building exports and being a system supplier.
TACO's 14 manufacturing partners and 3 engineering partners from the US,
Europe, Japan, Korea and Asia-Pacific, bring the latest technology to its
customers.
The company has built strong manufacturing facilities in partnership with global
and Indian companies to supply auto components to the Indian and global
automotive industry. It also offers automotive companies in India and abroad
capabilities in processes and systems to ensure world-class design skills at
competitive costs besides providing supply chain management capabilities
TACO has demonstrated the power of alliances to build the automotive
components business. Beginning with one joint venture for seating equipment,
with Johnson Controls of the US, the TACO group now has 14 manufacturing
joint ventures offering a range of automotive components and three engineering
joint ventures offering their services at locations across India. Their partners from
the US, Europe, Japan, Singapore and Korea are bringing the latest technology to
their customers.
TACO is already supplying components to every automaker in India and has
strong relationships with all its customers in India. With every programme for
each customer, our relationships have deepened. Our management processes and
support have ensured that each joint venture is profitable.
TACO s joint ventures in India have provided strong support to our partners'
global operations.

9
Given that India is becoming a global automotive location, both as a market and
as a base for global manufacturing and engineering, TACO is believed to be the
best partner both to bring India's strengths to business, establish leadership in the
India market for the product range and to use low-cost Indian engineering and
manufacturing to support global business.

10
TACO Vision
To become customers first choice, in the global automotive domain, by focusing
organisational energy on understanding and delivering on their need for state-of-
the-art technology, cost and quality benchmarks, and overall relationship, which
they expect from a world class supplier.
TACO Mission
Exceed the expectations of our customers
Excellence in technology and engineering
Our Core Values : Simplicity, Frugality, Integrity, Respect and Harmony
Teamwork, training, transparency, emphasis on performance and merit
Protection of environment and service to society

12
Customers
TACO has customers in all segments cars, trucks, tractors and two wheelers.
TACO serves every OEM in India and offers complete program management
capabilities. TACO is consistently recognised by their customers for their
performance.
Domestic Customers
Araco
Behr
Delphi
Escorts
Gabriel
Hindustan Motors
Kinetic
New Holland
Tata Motors
Ashok Leyland
Cummins
Eicher
Fiat
General Motors
Honda Siel
L&T John Deere
Piaggio
Toyota Kirloskar
Bajaj Auto
DaimlerChrysler
International Customers
Albion
Ficosa
GM (Opel)
John Deere
Peugeot
Valeo
Volkswagen
Faurecia
Ford
GM SAAB
Lotus Cars
Rising Sun
Visteon
Fiat
General Motors
MODENAS
Slater Yendall
Volvo
Yazaki Honeywell

13
Engineering Division
TACO offers automotive companies in India and across the globe world-class
design skills at competitive costs. It has proven capabilities in CAD, CAE,
engineering design, analysis, testing and homologation and prototype
development and has a well-established offshore model.
TACO has the critical ability to understand customer expectations and
requirements, review designs and execute engineering projects within cost, quality
and delivery targets. It offers its customers reduced engineering costs and a faster
development cycle with round-the-clock development.
Quality certifications like ISO-9000:2000 and Six Sigma ensure customer
satisfaction, project monitoring, performance assessment and resource
management.
Range of services offered by TACO Engineering SBG.

14
Infrastructure and technology
TACO business units use modern state-of-the-art, computer-aided design tools;
computer-aided engineering analysis tools and world-class communication
infrastructure. The business units have knowledge of all the applied sciences
necessary to meet the requirements of its customers.
Software
Styling: Alias, ICEMsurf
CAD / PDM: Catia, Ideas, UGS, PTC, and Metaphase
CAE software: Hypermesh, LS Dyna, MSC software, Moldflow
Skills
Product design: Styling, class ACAD, CAE, PDM, and KBE reverse engineering
Scalability of technology
TACO can scale up its skills, manpower, software, hardware and space to meet
spurt requirements and higher customer demand levels by utilising the abundant
resources of the group or by having committed resources wherever they can be
fully utilised on a continuous basis
Manpower
A team of well-qualified engineers support TACO's engineering services. The
engineers are trained to think analytically, learn quickly and communicate well.
Their skills are constantly updated to help them stay at the cutting edge of
technological change.
Facilities
TACO has three state-of-the-art engineering offices at Pune, India.

15
Engineering SBG Offers
Cost Reductions
o Reductions in engineering costs (50% as compared to USA, Europe
and Japan)
Faster Development Cycle
o Two shift operations in TACO Engineering.
o Possibility of round the clock development (24/7 development).
Availability of Quality Engineers
o Academic curriculum based on British system.
o Extensive internal training in TACO Engineering.
o English language is medium of instruction
Engineering businesses established
Johnson Controls
o 290 engineers
TACO Engineering Centre
o Customers include Yazaki, Valeo Sylvania, Visteon.
o 90 engineers
Yazaki Engineering Centre
o Being set-up
TACO FAURECIA Design Centre
o Planned for 150 engineers in 18 months
TACO Tooling Business Unit (TTBU)
o Customers include Toyota, Honda, Ford, Cummins
o US$ 5.5 mln

16
TACO Tooling Business Unit
TACO undertakes complete Tool Management Program
Some of the recent Tool design and development projects undertaken by
TACO are:
Toyota Kirloskar Motors Ltd.: Skin panel tooling for the Rear door
of Qualis.
Honda Siel: Tooling for the new car.
Toyota : Tooling for Indonesian project
Nucleon, USA : Tool design
Cummins, UK : Dies for Rotor Laminations and Stator Lamination
Magnetti Marelli: Instrument cluster in Plastic.
Besides these projects, several other customer programs which include both
development of Tooling (Sheet Metal, Plastics and Composites) and components
have been undertaken by TACO Manufacturing Joint Ventures

17
Supply Chain Management SBG (SCM SBG)
Objective
To offer cost effective Total Procurement Service and Solutions to Indian and
Global
Automotive OEMs
Tier I suppliers
Select Tier II suppliers
Products and Services
Principal Offering
o Auto-components
o Sub-assemblies
o Aggregates
Allied Services
o Logistics
Techno-commercial Services
o Supplier Technical Assistance (STA)
o Process Stream Improvement (PSI)
o Localization
Complementary Services
o Engineering Services, Tooling and Prototyping
Capabilities of SCM SBG
Powerful Vendor Base
o Vendor identification and selection system (Via TACO)
o Commodity-wise Trained Buyers
o Certified Assessors as STA s
Process Improvement Capability
o 6 Sigma
o Lean Manufacturing

18
Logistics Service
o Partnership with international logistics companies
IT and Program Management Capabilities
Sourcing Business Established
GM-SAAB
o Gear shift Rails
Honeywell-Garrett
o Machined Castings, Sintered Parts, Bearings
American Axle and Manufacturing
o Axle Components
Lotus Cars
o Steering gear, Wiper Assemblies, Ball Joints
UFI and Unimacts
o Aluminum Die Castings
Modenas
o Carburetor, Brake Discs, Clutches
Tata Motors
o Logistics responsibility for CKD exports

19
MANUFACTURING CAPABILITIES
TACO has built strong manufacturing facilities in partnership with global
companies to supply auto components to the Indian and global automotive
industries. The key intent of the business unit is to become the leader in the
domestic space and achieve global competitiveness in quality, cost and delivery
capabilities and to become the outsourcing base of choice for the global
automotive industry.
In each of its joint ventures, TACO has focused on:
Integrating the partner's best practices and absorbing its processes,
technologies and skills. Building product development and program
management capabilities;
Building a strong vendor base that can contribute to the global ambitions
of the joint venture;
Developing world-class quality, cost and delivery capabilities;
Continuously benchmarking the joint venture with partner locations and
with global supplier evaluations by OEMs.

20
Lets have a look at various manufacturing facilities in partnership with the
following global companies:
1. Tata Johnson Controls
Tata Johnson Controls Automotive Limited (TJCAL), is a 50:50 joint venture
between TACO and JCI. It is one of the largest seating systems suppliers in India
with products spanning passenger cars, commercial vehicles, utility vehicles,
earth-moving equipment and two-wheelers.
TJCAL has one of the largest offshore engineering centers in India, dedicated to
servicing the global automotive seating, interior and electronics design needs of
Johnson Controls Inc (JCI).
Product: Automotive Seating Systems, Seating components
Partner: Johnson Controls Inc., U.S.A
Facilities:
Complete Design and Manufacturing facilities
Production facilities Pune, Chennai & Lucknow. Sales Office in
Jamshedpur
Largest Design centre in India for seating system development.
Access to latest design and technology through JCI.
Prototype & trim development capability
Robotized metal welding plant
Highly Efficient Cut-&-Sew Operations
o CNC fabric cutter first seating company with this facility
o Micro-processor based Sewing machines
Foam Plant with robotic foam pouring and air circulation system
Low cost testing capability. TJC testing lab certified for ISO/IEC 17025
Well-entrenched Mfg-Pro ERP system

21
Quality Systems
Conformance to international quality standards TS16949, QS9000,
ISO14001, OHSAS 18001
Follows JCI BOS, TBEM and Six Sigma in its operations
Domestic Customers
Araco, DaimlerChrysler, Fiat, Ford, John Deere, Royal Enfield, Tata Motors
Overseas Customers
Export of Seating Systems components to JCI, John Deere
2. Tata AutoPlastic Systems
This facility offers high quality products with cost effective design and
manufacturing capabilities in automotive plastic interior and exterior products to
meet the growing demands of the global automotive industry.
Present Products: Dashboards, Bumpers, Package Tray, Door Modules, Air
Vents
Future Products: Headliners, Boot trim + Insulation, Acoustic Package
Technology partner: Faurecia (Sommer Allibert Industries)
Facilities:
Injection Moulding Machines - 60 to 2700T
Woodstock press with Infra red heating systems
Assembly lines equipped with Ultrasonic welding and designed to achieve
Cockpit Approach .
Modern paint shop as per Sommer Allibert Standards.
Complete Tool Design and Development Program
Tie up with Tool Makers from Europe and Far East for large size tools

22
Air Ventilation Nozzles Capabilities
Endurance Test facilities (for life of product)
Quality Systems:
QS 9000 and ISO14000 certification achieved
Customers:
Bajaj Auto, Fiat, Fiat - South Africa, Ford India, Ford of Europe, General Motors,
L&T John Deere Tractors, M&M, Tata Motors, TKML, Volvo.
3. Tata Yazaki AutoComp
Product: Wiring harness
Partner: Yazaki corporation, Japan
Facilities:
An International Production Centre for customers, worldwide
(QCDF+QS9000+ISO 14001)
Conveyorised Wiring Harness assembly line.
Plant capacity : 1000 car sets/day
Customers :Behr India, Behr Germany, Escorts , General Motors, Honda Siel,
Piaggio Vehicles, Mahindra & Mahindra , Tata Motors, Toyota, Yazaki (Japan
and Europe).

23
4. Tata Ficosa Automotive Systems Ltd.
Tata Ficosa Automotive Systems Limited (TF) offers complete solutions for
parking-brake, automotive command-and-control, rod-and-cable gear-shifting and
washer systems and rear-view mirror products.
Products : Rear view mirror systems, Command and Control Cables, Windshield
Washer Systems, Gear Shifter Systems, Parking Brake Systems
Partner: Ficosa International, Spain
Facilities:
State of the art assembly lines for Rear-view mirror, Gear shifter systems
and Washer system
Prismatic Glass Line and Moulding Machine
Compatible CAD systems
Integrated solution - modeling, CAM, DoE, Mould flow
Quality System: QS 9000 and ISO14000 certified
Customers: Ford (India and Europe), GM, Mitsubishi Lancer, Mahindra &
Mahindra, Tata Motors, Toyota, Honda, Ficosa International, Fiat, BROSE
5. T C Springs
Present products: Hot coil springs, Torsion bars, Stabilizer bars
Partner: Chuo Spring Company Ltd., Japan (CHKK)

24
Facilities:
Production Facilities :Hot Coiling , Torsion Bar Setting, Induction Heating,
Heating and Tempering Furnace, Shot Peening System, Powder Coating, Coil
Scragging, End Forming
Testing Facilities: Metallurgical Laboratory, Chemical Laboratory, Measurement
Facility, Functional Testing, Product Life Testing Facilities
Design Facility:
By using high stress technologies we design low-cost high-performance
springs.
All validation tests done locally.
Quality System: QS 9000 certified
Domestic customers:
Toyota Kirloskar Motor, Tata Motors , Ford India, General Motors India,
Mahindra & Mahindra , Eicher Motors , Fiat India,, Honda Motorcycle and
Scooters India,, Gabriel India
6. Tata Toyo Radiator
Products: Aluminum brazed Radiator, Intercooler, Heater Cores Engine Cooling
Module comprising of Fan, motor and shroud along with radiator
Partner: Toyo Radiator Company, Japan; Mitsubishi Corporation

25
Facilities:
Local design capabilities
Vibration, external corrosion, pressure cycle, heat cycle, plastic impact,
heat performance
Additional test facilities available at Toyo, Japan
C Press Line,Brazing Oven, Core Assembly,Tube Mill and Fin
Rolling, Leakage Testing.
Quality System: QS 9000, ISO 14001
Customers: 30% share of Indian market (by volume)
Ashok Leyland, Bajaj Tempo, Cummins, Eicher Motors, GMI, HSCIL, Mahindra
& Mahindra, TAFE - Massey Fergusson, Tata Motors, Swaraj Mazda, Eicher,
Rising Sun Taiwan (Exports), L &T, John Deere
7. Automotive Composite Systems International
Automotive Composite Systems International Limited (ACSI) provides total
composite solutions to the automotive and electrical equipment industries
Products:
Sheet Moulded composites:
Exterior body panels foot steps, Hoods, Fenders, Doors, Side panels, Roof,
Spoilers, Sill Vallence Cover
Structural parts - Integrated front end
Under the hood parts - Engine valve covers, Oil sumps, Push Rod Cover,
Noise Shield
Partner: Owens Corning, U.S.A
Quality System: QS9000 and TS 16949 certification achieved

26
Customers : Ashok Leyland, Eicher Motors, L&T John Deere, New Holland
tractors , Tata Motors, Punjab Tractors, TVS, Cummins India
8. Tata Yutaka AutoComp
Products: Exhaust Systems for four wheelers & two wheelers Brake discs for two
wheelers, Catalytic Converters (Canning)
Partner: Yutaka Giken, Japan
Quality System: TS169 Certification
Domestic Customers: Tata Motors (Exhaust System), Hero Honda (Brake Disc),
Honda Siel.
9. Automotive Stampings and Assemblies Ltd
Automotive Stampings and Assemblies Limited (ASAL) provides a complete
range of sheet metal components and welded assemblies to leading automotive
companies through its three large manufacturing facilities in India.
Products: Steel stampings including Skin Panels, Welded assemblies.
Facilities:
Plants at Pune (2 Plants), Vadodara
4 Press lines ; No. of Presses Installed 22
1000 Tons Hydraulic Press.
Double action presses-1000Tons and 1500 Tons
Single action presses upto 800 Tons
Bed size of presses ranging from 3500 X 2200 MM to 1800X1200 MM
Weld shop consisting of SPMs, Portable, Projections & CO2 welding
machines
Powder Coating facilities

27
Die spotting press, CMM inspection machine
Quality System: QS 9000, TS169 for All plants
Customers: DaimlerChrysler, Fiat, General Motors, Kinetic Engineering, L&T
John Deere, Mahindra and Mahindra, Piaggio Vehicles, Tata Motors, Volvo
10.JBM SungWoo
Products: Stampings and assemblies
Partner: SungWoo Hi-Tech, South Korea
Facilities:
HPS and LPS mechanical press lines. Total 20 presses.
5 Press lines (3 Heavy and 2 Light) ; Presses ranging from 1000T to 200T
Weld Shop (CO2 , Projection, Spot Welding)
Die Maintenance facility
Quality Systems:
TS16949, ISO14000 and OHSAS 18001
Awarded 100 PPM status award by HMI
Rated as one of the best vendors by HMI
Customer : Hyundai Motor India Ltd

28
11.Knorr Bremse Systems for Commercial Vehicles India Ltd.
Knorr Bremse Systems for Commercial Vehicles India Private Limited (KBSCV)
offers comprehensive state-of-the-art solutions for air-brake systems to the
medium and heavy commercial vehicles segments of the automotive industry.
Scope: The manufacture and sale - together with the providing of support services
of modern air braking systems for commercial vehicles in the Indian subcontinent.
Location: Green field site in Pune for the assembly and testing of braking system
components together with engineering and sales teams to provide customer
support.
12.TACO MobiApps Telematics
Vehicle tracking system:
Product: VTS hardware (vehicle mounted units)
GPS based location tracking systems
GSM and CDMA based communication
Services: Web, SMS, phone and paper based system to
Continuously track vehicles for location and status
Monitor parameters like off-route movement, unscheduled stops and over
speeding. Alerts on the web and SMS
Generate reports periodically, trip wise or exception
Two way communication with the driver
Emergency messaging in case of accidents and delays
Critical vehicle data to be communicated Fuel level, coolant temp.,
battery charging voltage etc.

29
13.TACO Visteon Automotive Private Limited
Product range:
Automotive lighting systems
Engine induction system (including plastic manifold)
14.Tata Hendrickson Suspension System
TACO Hendrickson Suspension Systems Pvt Ltd (THSL) offers comprehensive
state-of-the-art truck, bus and trailer suspension systems ranging from medium to
heavy duty applications, providing air, steel and rubber as the spring media.
Products
TACO Hendrickson manufactures cost effective solutions in the following
categories:
Bus suspension systems
Front axle long parabolic springs
HAS230 Drive axle suspension system
HA4 - 4 Bag suspension system
Truck suspension systems
Tandem bogie suspension
Tipper suspension systems
Air suspension systems
Truck air suspension systems
Trailer suspension systems
Auxiliary axles systems

30
Theoretical background
Indian auto-component industry
According to Mr. Ratan Tata, the role of the ancillary industry to mould the
mainline auto industry is not only very significant but crucial. The Automotive
Components Industry is the backbone of automobile industry. It may not be
possible for all automobile manufacturers to produce a complete range of
components internally or by establishing their own ancillary units manufacturing
different variety of auto components as it may require huge investment. At times,
such units may not be economically viable. . It is the component industry which
bears the brunt of keeping the vehicles moving.
Indian automotive component industry manufactures the entire range of parts
required by the domestic automobile industry and currently employs more than
250,000 persons. Auto component manufacturers supply to two kinds of buyers
original equipment manufacturers (OEM) and the replacement market or
aftermarket. The replacement market is characterized by the presence of several
SSI suppliers who score over the organized players in terms of excise duty
exemptions and lower overheads. But the demand from the OEM market, on the
other hand, is dependent on the demand for new vehicles.

31
Aftermarket
After-market refers to any market where the customers who implement one
product or service are likely to purchase a related, follow-on product.
In automobile industry aftermarket is used as an umbrella term for the collective
network of vendors who design and sell auto-components that are intended to
replace the stock manufacturer's parts. Any part made by the original
manufacturer is considered OEM or original equipment manufacturer. Most
performance parts are manufactured by aftermarket companies due to their ability
to specialize in particular field.
The two main reasons for aftermarket are
in order to alter the appearance or performance of the vehicle; or
As a straight replacement for a stock item at a lower price, with no
intention to cause such a change in appearance or performance.

32
Research Methodology
Research can be defined as a scientific and systematic search for pertinent
information on a specific topic. Research can be classified in two broad categories
basic research and applied research. Basic or fundamental research deals with
fundamental problems whereas applied research deals with problems with
immediate commercial potential.
This project is basically an applied or decisional research. It is a descriptive
research including surveys and fact findings. The main characteristic of this
method is that the researcher has no control over the variables; he can only report
what has happened or what is happening.
Data to be collected
Automobile spares retailers in Pune.
Various auto-components sold by these retailers.
Brands available in the aftermarket for each auto-component.
Monthly sales quantity of various auto-components.
Retail prices, retailer margin.
Reason for demand of particular brand if applicable (price, quality,
promotion, brand name)
Data collection method
Data required is of two types, Primary data and secondary data. The primary data
are those which are collected afresh and for the first time and thus happen to be
original in character. The secondary data on the other hand are those which have
already been collected by someone else and which have already been passed
through statistical process.

33
Primary Data
This was collected through a auto-component retailers survey conducted in Pune
during month of June and July. The survey was done by using questionnaire,
which was filled up by personally meeting retailers. Also while filling
questionnaire retailers insights about particular brand, their prices, was also
recorded.
Secondary data
Secondary data about automobile retailers in pune region, their addresses etc. was
collected through Mahratta Chamber of Commerce, Industries and Agriculture s
industrial and commercial dictionary. Also insights about auto-component were
gathered from various internet sites.
Research Instrument
The research instrument used to collect primary data was a questionnaire. The
questionnaire was more of a data collection sheet having open ended questions.
Researcher personally visited the auto-component retailers and the data was filled
in the response sheet. Also by interviewing the retailer insights about the customer
and his preferences about a particular auto-component supplier were recorded.
Sampling
Sample is a small group taken under consideration from the total group. This
small group represents the total population. In this project as all the auto-
component retailers (150 listed in Mahratta Chamber of Commerce, Industries and
Agriculture s industrial and commercial dictionary) could not be covered, only 30
retailers were surveyed based on convenience. These retailers were chosen from
all parts of Pune city and in nearby areas like Shivaji Nagar, Chinchwad,
Kasarwadi etc.

58
Findings
I. Accelerator cables
1. Out of surveyed 30 retailers, 25 retailers sell accelerator cables.
2. There are many local suppliers of accelerator cables. Even the retailers
don t know their names. But their market share is significant
3. MRP printed on accelerator cables for OEM and local suppliers are
generally same. But retailers have larger margin in local make. They can
even give discounts and still make more profit. The customers expect
discounts
4. The market share of Tata is almost half that of Remson for accelerator
cables. Remson has lower cost than Tata. Also local suppliers have
significant market share, collectively better that Tata. There is opportunity
to use Tata brand name and reduction in prices may help in increasing
market share.
II. Bumpers
1. Only 12 retailers out of 30 retailers surveyed sell bumpers. This is
basically because of low demand and high price of bumpers
2. There are local suppliers, which supply the bumpers to retailers, but these
were unbranded bumpers. They sell high volumes of about 35% but have
low cost and therefore only 11% market share.
3. Local make bumpers for Maruti, Indica and Sumo are popular among
customers. They have almost half the price and not much visible difference
in these and original parts. These are major threat to Tata, in case their
popularity rises and customer are willing to pay a little higher price.

59
III. Clutch cables
1. Out of surveyed 30 retailers, 25 retailers sell clutch cables.
2. There are many local suppliers of clutch cables. Even the retailers don t
know their names. But their market share is significant
3. MRP printed on clutch cables for OEM and local suppliers are generally
same. But retailers have larger margin in local make. They can even give
discounts and still make more profit. The customers expect discounts
4. The market share of Tata is considerably lower than that of Remson for
clutch cables. Remson has lower cost than Tata. Also local suppliers have
significant market share, collectively better that Tata. There is opportunity
to use Tata brand name and reduction in prices may help in increasing
market share.
IV. Coil Springs
1. Very few retailers sell coil springs (7 out of 30 surveyed). These are not
stocked and purchased only if demanded by customers. This is basically
due to low demand.
2. Some retailers feel that coil springs of Coventry are better in performance
compared to Tata Toyo coil springs.
3. Prices of Tata are only a little higher than that of Coventry but its market
share is comparatively much less than Coventry. The reason for this can be
due to better quality.
V. Coolant Tank
1. 17 retailers out of 30 retailers surveyed sell coolant tanks.
2. Most of the coolant tanks sold are unbranded or are of local make. They
sell 41 % of total parts sold which is better than Tatas.
3. These unbranded coolant tanks are manufactured in Pune and in Mumbai.
4. Cost wise the unbranded coolant tanks are much cheaper (cost 50% of
branded tanks), but their performance is satisfactory. Their high popularity
is because of this price factor.
5. Sale of coolant tanks is more in summer
6. In coolant tanks, Indica coolant tanks are fastest moving due to high
running and high population

60
VI. Head Lamp
1. All the 30 retailers covered in the survey sell headlights.
2. Lumax is clear-cut market leader, with Tatas lagging much behind both in
volume and value of sales. This may be due to high brand value of Lumax.
3. There are at least 22 smaller suppliers of head lamps in Pune. Most of
them are manufactured in Delhi region are much cheaper in price
compared to Tata genuine parts. They also eat significant market share.
4. Sale of head lamp, tail lamp is more in monsoon
VII. Oil Chambers
1. Only 8 of the 30 retailers surveyed sold oil chambers.
2. Oil chambers are replaced only in case of accident.
3. Most retailers keep local make oil chambers.
4. Tata is clear-cut market leader having no real threat from its competitors.
VIII. Radiator
1. Only 12 retailers out of 30 retailers surveyed sell radiators. This is
basically because of low demand and high price of radiators.
2. Most radiator sale is in summer when due to high heating radiator problem
occur.
3. Radiators are generally repaired and used. They are only replaced on
accident. This time mostly original components are preferred due to high
cost involved.
4. Very few retailers keep inventory of radiators. They are procured on
demand.

61
IX. Rear view mirror (outer)
1. All the 30 retailers covered in the survey sell Outer rear view mirror
2. Lumax is the market leader with Tata lagging much behind in sales
volume and sales value as well.
3. Local make have half the price of OEM / branded mirrors.
4. Indica s outer mirror body doesn t get easily damaged. Only the glass
breaks and can be changed easily
5. Commercial vehicles owners prefer cheap 5inch or 4 inch round outer rear
view mirrors (Rs. 40 50) compared to bigger mirrors from OEM
suppliers. (Rs. 200 onwards)
X. Shock absorbers
1. Of the 30 retailers surveyed only 13 retailers sold shock absorbers. This is
basically due to low consumption and high inventory cost.
2. Many customers instead of changing shock absorbers prefer to repair
them. This option though less costly is a temporary solution.
3. Gabriel is the market leader in terms of number of parts sold but has lesser
in market share compared to Tata s.
4. Gabriel can be major threat to Tata shock absorbers.
XI. Tail Lamp
1. All the 30 retailers covered in the survey sell Tail lamps.
2. Tail lamp of trucks breaks even due to vibrations. Very frequently needs to
be replaced, so cheap local suppliers are preferred over OEM suppliers.
Thus local suppliers supply as high as 51% of total parts sold in market.
3. Tata s cost is highest, higher than market leader, Also they sell low
volumes than market leader Lumax and local players taken together. Thus
due to lagging in cost and volume factors, market share of Tata is very
less.
4. Sale of head lamp, tail lamp is more in monsoon
7. Tail lamp demand for trucks is substantially more than that of headlamp,
in cars this difference is less. Local suppliers for tail lamps are preferred
due to price factor.

62
Other important findings
1. Most of the customers of high-end automobiles do not buy from retail market.
They prefer to buy directly from service centers.
2. Most auto-component retailers in Pune are located near Dhankawadi Katraj
region. Other retailers are scattered in all areas of Pune.
3. Most suppliers, other than OEM suppliers for auto-components are located in
Delhi.
4. Most retailers have no idea about potential demand of particular item in
Maharashtra.
5. Most retailers could not tell exact monthly sales for auto-components. The
data represents minimum figures.
6. Retailers business margin is at least 10 15 %. There is no fixed sales price
for auto-components. The selling price varies as per customer awareness about
the prices.
7. Retailers promote local suppliers as they have higher margins. Also they can
afford to give 10 20 % discount on MRP of local make components and still
make profit. Customer expects this discount.

63
Limitations
Sample size of 30 retailers was taken for the study. Based on this sample
and assuming 150 auto-component retailers in Pune, the potential market size is
found out. The study is based on the assumption that the randomly selected
retailers represent all the retailers.
Many retailers couldn t tell exact sales volume of various auto-
components according to specific supplier and vehicle models. The figures given
are approximate figures.
As the retailers sold auto-components for many vehicle models, only
significant sales data was taken.

64
Conclusion
The facts and figures itself talk about the market structure and potential market
for auto-components in Pune. There is substantial retail market for auto-
components.
The auto-component aftermarket for Tata vehicles namely Indica, Indigo,
Sumo, Safari and Tata commercial vehicles is substantial.
There are many competitors in the market. Main competitors are OEM
suppliers competing directly in the market. They are popular as customers are
aware about the OEM suppliers for auto-component. In addition, these are
cheaper to Tata Genuine Spare Parts, so customer prefers these.
Other than these, there are local players, which supply cheaper components.
These are well promoted by retailers due to high margins.
The survey was limited to Pune only. Further similar study is required to be
done for complete Maharashtra. Mumbai market is much bigger market
compared to Pune market and similar study in that market can give much more
insights about the market structure and market potential.

65
Recommendations
TACO shall do similar surveys for whole Maharashtra.
TACO should enter in the auto-component aftermarket as the Pune market
provides a substantial market of at least 1. 25 crores per month. Also Tata is
an established brand in automobile industry, so their entry in the market is
easy.
For accelerator cables the market share of local suppliers is substantial,
TACO shall stress on its brand image and quality and do customer education
to fight this competition and increase its market share.
Prices of clutch cables, coil springs, head lamp, rear view mirror, tail lamp
should be reduced to increase Tata s market share with respect to the market
leader.

66
Bibliography
Research Methodology, Methods and techniques
C R Kothari
Supply and demand survey on automotive components India
India Trade Promotion Organisation
TACO manuals
www.acmainfo.com
The Automotive Component Manufacturers Association of India
(ACMA) web site
www.tacogroup.com
TACO company web site

67
Appendix1: Market research for Auto-components Aftermarket
Retailer Name: _____________________________________________________
Address : _____________________________________________________
_____________________________________________________
Contact Number: ___________________________________________________
1. For which of the following vehicles do you sell Auto components?
Cars :1)___________ 2)___________ 3)___________
Utility Vehicles :1)___________ 2)___________ 3)___________
Commercial vehicles :1)___________ 2)___________ 3)___________
2. Which of the following categories of components do you sell? (Tick
mark)
Body Parts
i. Bumpers
Control cables
i. Clutch cables
ii. Accelerator cables
Engine cooling system
i. Radiators
ii. Coolant tanks
Engine components
i. Oil chambers
Lighting system
i. Head lamps
ii. Tail lamps
Mirrors
i. Outer rear view mirror
Suspension & Seals
i. Coil springs
ii. Shock absorbers

68
Auto-components Sales details
Bumpers
Reason for demand
(Rating 1 4)Sr.
No.
Vehicle Models Supplier
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Accelerator cables
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Clutch cables
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion

69
Radiator
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Coolant tank
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Oil chamber
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion

70
Head lamp
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Tail lamp
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Rear view mirror ( outer)
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion

71
Coil Springs
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion
Shock absorber
Reason for demand
(Rating 1 4)Sr.
No.
Monthly Sales
Quantity
Retail price
(Rs.)
Price Quality
Brand
name
Promotion

This document was created with Win2PDF available at http://www.daneprairie.com.
The unregistered version of Win2PDF is for evaluation or non-commercial use only.

Market analysis and potential marketsize for taco autocomponents aftermarket and study of its pot

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Market analysis and potential marketsize for taco autocomponents aftermarket and study of its pot

Ähnlich wie Market analysis and potential marketsize for taco autocomponents aftermarket and study of its pot (20)

Mehr von Supa Buoy

Mehr von Supa Buoy (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Market analysis and potential marketsize for taco autocomponents aftermarket and study of its pot