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Autor:   •  February 10, 2019  •  Case Study  •  3,791 Words (16 Pages)  •  40 Views

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Submitted by:

Team Castle Black Ananya Utkarsh Manish Jain Yogesh Gidwani

The IB League 2018 STG Campus Case Study

Auto ancillary industry

Demand drivers: Sales of automotive vehicles Growth in economic activity Increase in the personal

disposable income Growth in rural economy Multiple finance options Decline in tax rates

Value Chain

Downstream Upstream R&D Design Concepts

Component Specialists Component Manufacturer

Tier n suppliers

Tier 2 suppliers Tier 1 suppliers

Government initiatives Significant push for rejuvenation of rural economy and economic

development for better infrastructure connectivity Greater availability of credit facilities

OEM/ Automaker Retailers

Increased customs duty rates (15%) on completely knocked down

component imports to encourage ‘Make in India’ Lower corporate income tax of 25% for companies upto Rs 250 crores

in revenues (MSME)

Future trends Expected revenue growth estimate (ICRA)from 9%-11% to 13%-15%

for FY2018e driven by increase in commodity prices Robust growth estimated in domestic passenger vehicles, commercial

vehicles, tractor and 2W segment Strong growth in rural income and infrastructure activity driven by growth in construction and mining equipment and tipper segment

Key characteristics Cyclical Industry Fragmented with large

and small players


Industry analysis

Source: IBEF; OECD

Supply drivers: Interdependent on industries of raw materials: steel, aluminum and copper Lower labour costs per unit Regulatory measures of government(GST, demonetization) Integration of local markets with

the supply chain Localization of advanced

manufacturing capabilities Arrival of international car makers operating as joint ventures with local partners

Bargaining power of suppliers (Low): Well established supplier base network

Competitive rivalry: Medium

Bargaining power of customers (Medium): Prevalence of alternative options Price sensitive customers

Industry overview

Raw Materials

Barriers to entry (Low) Need of huge capital High degree of

precision requirement and technical knowhow Government


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