Pest Brazil

BRAZIL PEST Political environment †¢Greed and Corruption †¢Increase in government expenditures †¢Political stability and emphasis on consistent economic policies and growth †¢Position of international influence and power (BRIC) †¢Many environmental restrictions and regulations (Protection of Amazon) †¢Going into business: High bureaucracy, lack of transparency of rules and slow legal procedures (are hurdles to overcome and make brazil a difficult country to do business in) †¢The huge opportunities for foreign companies in Brazil's growing economy have to be weighed up against the country's relatively high taxes and labor costs // labour rules are generous to workers †¢Foreign exchange rules are in favour for investors outside the country but with some restrictions by certain states (freely allow dividends and capital to be repatriated to investors outside the country, but some restrictions are imposed by certain states // differences in risk be tween its 27 states) Economic environment †¢The world’s sixth largest economy (GDP: $2. 089) †¢Poor GDP growth of 3. % in 2011,(was high in 2010 but dicreased due to measures to decrease inflation) the economy is expected to grow strongly. †¢inflation 5% †¢expanding its presence in world markets. ($256 billion (2011 est. ) – 24th worldly) †¢ high interest rates make it an attractive destination for foreign investors. explain †¢Imports: $226,2 billion (2011 est. ) – 23rd world – cost to import/per container:1. 730 †¢large and well-developed agricultural, mining, manufacturing, and service sectors, †¢capital inflows over the past several years have contributed to the appreciation of the currency, hurting the competitiveness of Brazilian manufacturing and leading the govern (exchange rates: 1,6728 (2011 est. – 2(2009) †¢Stock of direct foreign investment – abroad: ? 171,7 (2011 est. ) †¢foreign direct investment unflows:31 †¢still has a relatively high debt burden †¢Several Brazilian companies ranking of the world’s largest companies. †¢unemployment (6,7%) – high rate o job creation †¢South America's leading economic power and a regional leader, one of the first in the area to begin an economic recovery. †¢Brazil managed to go from a net importer of food to one of the world’s leading exporters of agricultural products. †¢ease of doing business (ranked 124th) – corruption major business constraint (67% of managers believe that) Socio – cultural environment world’s fifth largest country by both population and total area. (Large and growing population (191mn in 2010, 1,5% growing, 5th in the world) ) †¢Large % of youth population (51,3% of population is under 30 †¢Urban population: 84,3% †¢increase in living standards. From 1980 to 2010, Brazil’s Human Development Index (HDI) increa sed by 30. 8 percent from 0. 549 to 0. 718. but bad gini index †¢Poverty / inequality (21,4% of population is below poverty line + Gini index:56. 99, equality of distribution of income 0-100 †¢Consumer expenditure per capita is low ($6. 619,8) †¢ Consumers rapidly adopting spending habits that are more characteristic of consumers in developed countries.According to Credit Suisse Research’s Emerging Consumer Survey 2011, Brazilians’ devote a considerably larger share of income to discretionary spending than consumers in other BRIC countries. †¢Brazilian respondents reported saving a relatively modest 10 percent, and more than half (52 percent) were not able to set aside any income for savings. (high inflation – uncertain environment) †¢favelas or shanty towns stand in striking proximity and sharp contrast to the city’s upscale environs and stunning scenic backdrop. Fortunately, some have seen fit to aid the residents of Brazil†™s favelas. The plight of Brazil’s large population of urban poor has given rise to a number of innovative social programs. increasing number of consumers attaining middle-class status (more than 32 million the past 7years) while another 20 million have escaped a state of poverty. (reach a low-income market segment of new consumer) †¢Sharing borders with 10 neighbours in Latin America †¢troubled and combative social situation †¢ illegal narcotics trafficking / border disputes Urugua-Brazil border – 1st country of number of murders by youth: 20. 386 †¢education level low 9average education 14 years old) – education spending: 4,2%of GDP Technological environment †¢Energy independent / rich in natural recourses †¢Strengths in agricultural research, know-how and technology. (Much of the credit goes to Embrapa, Brazil’s highly accomplished, public agricultural research organization. †¢Initiatives on R( that promote South-So uth cooperation in several arenas, including science and research collaboration in fields such as nanotechnology, oceanography and Antarctic research. ) †¢Many transportation routes and infrastructures ( ports (atlantic ocean) ) †¢Transportation note : the International Maritime Bureau reports that the territorial and offshore waters in the Atlantic Ocean remain a significant risk for piracy and armed robbery against ships; 2010 saw an 80% increase in attacks over 2009; numerous commercial vessels were attacked and hijacked both at anchor and while underway; crews were robbed and stores or cargoes stolen †¢Growing Infrastructure programs due to world cup / olympics (government’s Growth Acceleration Program has pumped $250 billion into infrastructure projects. †¢Recent discovery of huge offshore oil deposits near Rio de Janeiro will further promote future growth, transforming Brazil into one of the world’s biggest oil producers †¢creativity and flair for design and innovation that are ingrained in the Brazilian national character and enhanced by the country’s newfound financial fitness, telecoms talent and entrepreneurial energy. DATA SOURCES †¢Euromonitor: https://www. portal. euromonitor. com †¢IMF website: http://www. imf. org/external/country/BRA/index. htm †¢CIA website: https://www. cia. gov/library/publications/the-world-factbook/geos/br. html †¢UNCTAD: http://unctadstat. unctad. org †¢World Bank World Development Indicators: http://data. worldbank. org/data-catalog/world-development-indicators. †¢United Nations Development Programs: http://www. undp. org/content/undp/en/home. html †¢CEBR website: http://www. cebr. com/ †¢Forbes magazine website: http://www. forbescustom. com/index. html †¢CNN Money website: http://money. cnn. com/

The Sustainability Development in Russia Essay Example | Topics and Well Written Essays - 2000 words

The Sustainability Development in Russia - Essay Example Russia strongly focuses on effective social, economic, political and environmental policy development in order to maintain the constant sustainable growth rate of the country. In addition to this, the country has significantly improved business environment through the development of unique domestic and foreign policies. The government of Russia effectively follows the traditional political structure and charismatic leadership style to increase the rate of sustainable development for a long time period. However, this essay will discuss about the adopted and developed strategies by the government of Russia in order to attain the sustainable growth rate. It is highly important for a government of a country to adopt and implement effective leadership style in order to maintain sustainability in the country. Russia can be considered as one of the developed economies in this world. In addition to this, people of different cultural and religion backgrounds used to stay together in Russia. Therefore, it is highly essential for the government to develop unique and significant policies in order to reduce the possibilities of cultural or religion conflict among the individuals within the societies in Russia. Day-by-day, several countries in this globe are becoming interdependent. Therefore, it is highly important for the government of Russia to ensure effective natural and business operation resources in order to increase the degree of interdependence of the country. The country follows socialist ideology. It has helped the country to maintain the sustainability in the lives of citizens of Russia. On the other hand, the government of Russia also has developed different types of strict sustainable business operation policies for the organizations in order to maintain sustainability in the economic and social growth rate of the country.

Culinary history of Georgia Essay Example | Topics and Well Written Essays - 2500 words

Culinary history of Georgia - Essay Example a Christian nation, Georgia has historically looked more often to the West-so much so that the capital city of Tiflis (Tbilisi) was once known as the Paris of the Caucasus. Lying athwart the major trade routes between East and West, Tiflis maintained a grand caravanserai where merchants could stable their animals, store their wares, and themselves find shelter. Thanks to its agriculture riches and long tradition of hospitality, Georgia was an object of desire for many outsiders, not all of whom were good guests. (â€Å"A Culinary Crossroads† 11) Georgian cuisine is not only influenced by Middle Eastern and European but it also influenced different neighboring and invading nations. According to Plotkin and Gregory, Georgia and Armenia contributed to the Russian cuisine, for instance, chickpeas and pine nuts including dishes such as grilled lamb shashlyk, stuffed grapes leave dolmas and nut pastry, baklava (13). The Georgians date the beginnings of their culture to the sixth century BCE.The ancient Greeks established colonies along the Blank Sea coast in a region they called Colchis.In 66 BCE, when the Roman general Pompey invaded and brought the area under Roman rule, Greek control came to an end, but the outposts in Colchis remained important links in the trade route to Persia†¦By the early Middle Ages Tiflis had become a major stopover on the medieval trade routes, a midpoint between Moslem East and Christian West. (Goldstein â€Å"A Culinary Crossroads† 11) Until nineteenth century, there was no concept of tea in Georgia; it became a major crop in Russian era. It is quite a recent phenomenon as there are no tea consumption traces in history. Georgians prefer Turkish coffee over tea and cups of strong coffee with a glass of cold water are a common sight in cafes (Goldstein â€Å"The Georgian Feast† 6). Tbilisi itself founded in the fifth century when, according to legend, King Vakhtang Gorgaslani, on a hunt near the Kura River, killed a pheasant, which he

Answer the questions Essay Example | Topics and Well Written Essays - 1000 words

Answer the questions - Essay Example Operations managers make use of appropriate operations strategies to deal with the overall business strategy designed by the top management of a company. â€Å"Operational strategy begins with defining your business in terms of the present opportunity in relation to the customer and product of the business† (Wasmund 2006). The management of operational activities, which accepts inputs in order to delivers usable outputs, is called operations management (Sankaranrayanan 2011). Operations management incorporates the use of both operational efficiency and operational strategy to manage the business operations. Operational efficiency is related to the completion of tasks in an appropriate manner whereas operational strategy is the set of plans, which are developed to achieve competitive advantage in the market. A key point regarding operations strategy is that it is developed after development of the business strategy to establish a right path, which includes a sequence of decisio ns that makes a business achieve all goals and objectives effectively and efficiently. The operational activities included in the operations strategy play role of the competitive weapons, which can be used to achieve competitive advantage in the market. ... Workplace analysis refers to the evaluation of business operations and the physical environment of a workplace. Managers can analyze the workplace by identifying all sorts of risks and hazards associated with the overall workplace environment of a company. Workplace analysis provide many benefits to a company, such as, prevention of workplace accidents and employee injuries, identification of risks and steps for the elimination of those risks, creation of a safe workplace environment, and installation of safety mechanisms in the workplace. Workplace analysis is a step-based procedure, which involves four different stages. In the first stage, the management reviews the previous injury and hazard records related to the workplace. The review makes the management know the basic aspects of the workplace related accidents, which include nature of the injuries, workplace equipment, and the time at which the accidents took place. Next step is to use the reviews to identify all possible hazar ds and risks. After identification of hazards, the management evaluates the workplace equipment, employee behaviors, and workstations to know the causes of the accidents. In the last step, the management identifies all possible ways to eliminate, contain, or reduce the occurrence of workplace hazards. Devil is in the detail refers to the concept of identifying hidden elements which can cause some specific incident. â€Å"In one sense, one might say â€Å"the devil's in the details† to refer to very small but ultimately important components of a larger task† (Smith 2011). This phrase is used to explain small details of a large incident. In workplace settings, this concept is used to identify the reasons behind any specific workplace incident. Explain How Demands

Management Essay Example | Topics and Well Written Essays - 2500 words - 5

Management - Essay Example Figure 1 shows how this disruptive model works. The focus of this paper is to ascertain the secrets of success in sustaining long-term performance and growth; in essence, how to become an innovator. In MGT class, we have asserted that it is no simple matter for a firm to be a long-term innovator and that accomplishing this requires capable performance in corporate strategy, culture, architecture, leadership and decision making (taken from topic question). During the process of researching this paper, the realization I came to is that sustainable growth comes from many different factors but they are all under one subheading: This one heading encompasses the myriad of topics that were and still are discussed in MGT. These areas also contain the seeds of creating sustainable growth and innovation in companies. I will discuss how these areas manifested in various companies for their betterment or their detriment. My position is that I agree with Christensen and Raynor in that disruptive sustainable growth, while not yet fully experienced by any company to date (except possibly for Microsoft), is within the realm of possibility. Sustainable growth and innovation is a product of one seamless thread of business concept and application from top to bottom. How this thread is severed can come from many different areas, one of the most important being from the management team level. Executives are charged with the task of creating profit in various business and product lines within their companies. How does a manager allocate his time and resources to do this? For me, the concept of disruptive growth is a Rosetta stone in this topic. To me, it holds within it the essence of growth and success along with chaos theory. These two concepts create a complexly rich look at how managers can conceptualize and manage their businesses without forcing control onto their businesses. Chaos theory ‘deals with unpredictable complex systems’ (â€Å"What is Chaos

Describe the main features of virture project management techniques in Essay

Describe the main features of virture project management techniques in the digital age and provide a critieal reflection on their use in managing projects - Essay Example The study has been conducted in several stages. The first stage was a review of relevant literature, followed by a discussion on specific topics. Leading textbooks on PM and publications in various journals have been referred to. The study has been laid out in several sections. Sections include principal characteristics of virtual and global projects; attributes of virtual teams and communication channels; motivating teams and PM environment; agile PM; change management for agile PM; and conclusion. Throughout the study, the focus has been on the agile aspect of PM. Ideas, human resources, products, services, and skills move freely regardless of boundaries in global economies. The flow of knowledge, products and services, and capital reflects the economic interdependence between organizations and countries. In globalized economies, resources could be obtained in one market and used for business in another. For example, it is possible to purchase manufacturing equipment from Germany, make products in Greece, and sell products all over Europe. In summary, a firm’s competitive environment is shaped by the global economy. A significant change in the practice of PM has been information management. Burke (2008) observed that the availability of powerful software has seen a shift in data processing from a separate department to the professional’s desk. Project planning software helps the project manager plan and control projects. However, it can be effective only when planning and control techniques are clearly understood. Projects are generally subdivided into different phases for ease of management. These phases are collectively termed as the project lifecycle. According to Burke (2008) techniques for PM include critical path method; work breakdown structure; earned value; resource smoothing; and configuration control. According to Cadle and Yeates (2004) characteristics of projects include finite and transitory nature; uniqueness;

Indian Automobile Industry Analysis Essay Example for Free

Indian Automobile Industry Analysis Essay Today the automobile sector in India contributes 5% to the nation’s GDP, making it a prominent player in the economy. It will contribute around 19% of the Tax collection for financial year 2009-10. Following have been the features of Auto industry in the past financial year. The following tables and charts consist of the performance of Auto industry in past few years. Industry Aggregate (Rs in million)| | AMJ 10 (E)| Net Sales| 363904. 38| Change (%)| 39%| EBITDA| 64665. 22| Change (%)| 94%| Depreciation| 7303. 60| Interest| 3348. 58| Other Income| 7118. 93| PBT| 61131. 97|. Tax| 16645. 21| Effective tax rate| 27%| Reported PAT| 44486. 77| Change % (Reported PAT)| 92%| Market Cap (Rs in bn)| 1647. 17| Source: BSE India; Cygnus Research| Note: The aggregate consists of the following companies- Bajaj Auto, Ashok Leyland, Tata Motors, TVS Motors, Force Motors, Hero Honda, Escorts Ltd. , Eicher Motors, Maruti Udyog Limited, Punjab Tractors Limited, Mahindra Mahindra, and Hindustan motors Source: QPAC Indian Automobile industry Apr-Jun 2010 INDIAN AUTOMOBILE INDUSTRY AND TRENDS Overview The auto industry in India is the ninth largest in the world. After Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile manufacturers have spread their operations globally. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. The Indian automobile industry is going through a phase of rapid change and high growth. With new projects coming up on a regular basis, the industry is undergoing technological change. The major players are expanding their plants and focusing on mass customization, mass production. Yearly-Analysis Year on year as the Indian population grows the requirement for the transportation will also grow, so it is clear that the industry demand is directly proportional to the population. Presently in India there are 100 people per vehicle while the figure in china is 82. Indian automotive industry is strong and productive sector for the economy growth. It gives nearly 5% of the employment to the country’s population. Continue improving quality results in exports of automobile and ancillary industry is boosting out the demand in oversees business. The Indian auto-players are expanding their presence in oversees market. In the last 5 years the foreign investment in this sector nearly doubled. Production Trend: The Indian automotive industry face a tough time during FY08 and its production were almost stagnated. From the early FY09, the industry started showing marginal growth in terms of production and reached to 14. 04m units till FY10. Due to the huge insist in the domestic market company’s sale nearly 88% of their total production in the country and rest 12% vehicles they export. Domestic and Exports sales trend: In terms of domestic sales the industry is showing positive approach from the last 3-years. During FY10 the industry domestic sales reached to 12. 29m units. The Indian exports are increasing gradually form the past 5-years and reached to 1. 80m units in FY10. Earlier the industry depended on the foreign auto parts, but due to the increase of the global players in the country and establishing the plants ended painless move to the Indian auto-players. INDUSTRY PERFORMANCE (YEARLY) Indian Automobile Industry Performance (Apr-Mar)| | Production| Domestic Sales| Exports| | 2009| 2010| %| 2009| 2010| %| 2009| 2010| %| Passenger vehicles (PVs)|. Passenger Cars| 1516967| 1926484| 27| 1220475| 1526787| 25| 331535| 441710| 33| UVs| 219498| 272848| 24| 225621| 272733| 21| 3034| 2823| -7| MPVs| 102128| 151908| 49| 106607| 150256| 41| 1160| 1613| 39| Total PV| 1838593| 2351240| 28| 1552703| 1949776| 26| 335729| 446146| 33| Commercial vehicles (CVs)| MHCVs| | | | | | | Passenger Carriers| 40995| 46026| 12| 34892| 43081| 24| 7456| 6069| -19| Goods Carriers| 151288| 204145| 35| 148603| 201977| 36| 9363| 14354| 53| Total MHCVs| 192283| 250171| 30| 183495| 245058| 34| 16819| 20423| 21| LCVs| | | | | | |. Passenger Carriers| 28635| 34751| 21| 26952| 34421| 28| 5426| 2708| -50| Goods Carriers| 195952| 281686| 44| 173747| 251916| 45| 20380| 21876| 7| Total LCVs| 224587| 316437| 41| 200699| 286337| 43| 25806| 24584| -5| Total CVs| 416870| 566608| 36| 384194| 531395| 38| 42625| 45007| 6| 3-wheelers| Goods Carriers| 417434| 530203| 27| 268463| 349662| 30| 146914| 172505| 17| Total 3-Wheelers| 79586| 88890| 12| 81264| 90706| 12| 1152| 777| -33| Grand total| 497020| 619093| 25| 349727| 440368| 26| 148066| 173282| 17| 2-Wheelers|. Scooter| 1161276| 1494409| 29| 1148007| 1462507| 27| 25816| 30125| 17| Motorcycles| 6798118| 8444852| 24| 5831953| 7341139| 26| 971018| 1103104| 14| Mopeds| 436219| 571070| 31| 431214| 564584| 31| 7300| 6905| -5| Electric Two Wheel| 24179| 2558| -89| 26445| 3001| -89| 40| 50| -| Total 2-Wheelers| 8419792| 10512889| 25| 7437619| 9371231| 26| 1004174| 1140184| 14| Grand Total| 11172275| 14049830| 26| 9724243| 12292770| 26| 1530594| 1804619| 18| source: SIAM; Cygnus Research| Demand-supply mismatch: The new capacity addition till 2012, may anticipate a demand and supply mismatch in the short term. Demand is only expected to grow by 10-12% every year. In 2009-10 the domestic auto industry was utilizing 80-85% of its capacity, but this may drop to 65% by 2012. India may be in a similar position in 2012 as the global auto industry is in right now. The global capacity utilization in 2009-10 was around 65%, down from 80% in 2008-09. In the near future it is expected that the mismatch is going to see between Demand and Supply. Capacity addition: Accoding to Fitch Ratings, by 2012, the existing players in the market are expected to add 0. 9m units to the 2. 6m units’ capacity of the passenger vehicle segment and 0.6m units to the 0. 75m units’ capacity of the commercial vehicle segment. Meanwhile, global automakers who currently only assemble in India, are expected to set up production units, in order to be more competitive with local players. Quarterly-Analysis Production Trend During AMJ10, the segmental market size of 2-wheeler stood at 77%, followed by Passenger vehicles at 16% and then followed by 3-wheelers at 4%. In this quarter the total industry production increased by 33. 27 to 4. 09m units from 3. 06m units in the previous year same period. The commercial vehicle segment production has increased by 57. 11% to 0.16m units and recorded top among the segments. Sales and Exports Trend From the past two years the sale of the vehicles are increasing during this quarter due to the domestic demand made by the festive season and the exports are declining. In terms of sales commercial vehicles sales had increased by 55% during AMJ10 and stood in top against AMJ09. Passenger vehicle sales increased by 33% next to Commercial Vehicles and stood at 0. 55m units followed by 2 and 3-wheelers. The total Indian automobile exports during AMJ10 increased by 59. 30% to 0. 58m units against 0. 36m units. The 3-wheeler segment stood in top in- terms of exports by 150. 33% increase followed by C. V and P. V. SEGMENTAL ANALYSIS OF THE INDUSTRY (QUARTERLY) Automobile Sales Performance in AMJ (in terms of Volume)| I PASSENGER VEHICLES| | AMJ09| AMJ10| % change| A. Passenger Cars| 324,985| 433,641| 33%| B. UVs| 60,969| 76,432| 25%| C. MPVs| 31,965| 44,493| 39%| TOTAL (A+B+C)| 417,919| 554,566| 33%| II. COMMERCIAL VEHICLES (CVs)| MHCVs| | | | A. Passenger Carriers| 7,482| 11,574| 55%| B. Goods Carriers| 31,408| 59,642| 90%| TOTAL (A+B)| 38,890| 71,216| 83%| LCVs| | | | A. Passenger Carriers| 9,601| 11,566| 20%| B. Goods Carriers| 48,376| 67,095| 39%| TOTAL (A+B)| 57,977| 78,661| 36%|. TOTAL COMMERCIAL VEHICLES (CVs)| 96,867| 149,877| 55%| III. THREE WHEELERS| A. passenger carrier| 72,339| 84,298| 17%| B. goods carrier| 18,963| 20,855| 10%| TOTAL (A+B)| 91,302| 105,153| 15%| IV TWO WHEELERS| A. scooters| 317,400| 470,323| 48%| B. motor cycles| 1,689,716| 2,097,415| 24%| C. mopeds| 128,738| 157,588| 22%| TOTAL (A+B+C+D)| 2,135,854| 2,725,326| 28%| Total volume (units)| 2,741,942| 3,534,922| 29%| Source: SIAM; Cygnus Research| SEGMENTAL PERFORMANCE Two-wheelers Note: Demand is expected on the base of country population bases and the base year is taken as 2000 for projections. The Indian 2-wheeler industry has reported a 26% (Y-o-Y) growth in FY10 with sales at 9. 37m units as against 7. 43m units sold in FY09. On the exports front, the 2-wheeler industry with 1. 14m shipments in FY10 posted a growth of 14% (Y-o-Y). Hero Honda Motors Ltd. (HHML), the worlds largest two wheeler manufacturer continued to dominate the total 2-wheeler industry with a market share of 48. 10%. In the motorcycle segment, the domestic sales grew 26% (Y-o-Y) to 7. 34m units while the exports grew 14% (Y-o-Y) to 1. 10m shipments in FY10. Hero Honda dominated the motorcycle space with a market share of 44% followed by Bajaj Auto (21%) and TVS Motors (15%). Market Penetration The two-wheeler industry is growing at a good phase in the country and expected a presence of 92 per every 1000 people at the end of 2010. The segment expects huge demand in the next 5 years. The industry is expected to sell nearly 26. 56m units till 2015. The segment is expected to face a tough time in 2011, due to the heavy compilation by the low cast cars and the alternative electronic vehicles. From 2012 the segment is expected to grow at the CAGR of 19% till 2015. Segment Boosters. New launches, coupled with low base and festive (marriage) season, helped the 2- wheeler industry post an impressive volumes growth for the month of May 2010. While the low base helped Bajaj Auto Ltd. (BAL) posts a growth of 62% (Y-o-Y) in total sales over the same month of the last fiscal. Three Wheelers The 3-wheeler industry posted an impressive growth of 26% (Y-o-Y) to 0. 44m units in FY10 as against 0. 34m units sold in the last fiscal. On the exports front, the 3-wheeler industry reported 17% (Y-o-Y) growth with 0. 17m units shipments in FY10. The passenger carrier segment reported higher growth in the domestic market at 0. 34m units 30% (Y-o-Y), while the goods carrier segment posted a 12% (Y-o-Y) growth for FY10. On the exports front, the passenger carrier segment posted a 17% (Y-o-Y) growth with 0. 17m unit shipments, while the goods segment posted a 33% (Y-o-Y) decline with exports of 777 units in FY10. Market share and players performance: Piaggio Vehicles continued to dominate the 3-wheeler industry with a market share of 41% followed by Bajaj Auto (35%) and Mahindra Mahindra (11%). In this 3-wheeler segment 81% sub-segment is captured by Passenger carriers, which is primarily for the rural people moving long distances. The remaining 19% is covered by cargo or goods carriers; there are the versatile vehicles suitable for both intra and inter-city transport. Segment Boosters In suburban and rural areas 3-wheelers are primarily used as substitutes for buses. They thrive because of very poor public transport and on shorter trip distances. Some of the opportunities of this segment are; the inability of state government to provide the required number of buses, lack of political will to privatize public transport and free up fares. Increasing number of 3-wheelers on these routeswill bring download availability form 10-12% to 6-8%, people for 80% of the trips. PRINCIPLE APPLICATION OF 3-WHEELERS| Segments| Primary uses| Fuel used| Forecasted 3-yearsCAGR| In-city| Home-Office,Home-shopping,Schoolchildren, Home-Railways or Air port. | Petrol/LPG/CNG| 10%| Rural| Stage coach| Diesel| 11%| Cargo| Wholesaler to retailerRetailer to end user distribution| Diesel/CNG| -6%| Growth drivers and Indian in the world automobile industry (2010) Growth Drivers of Indian Auto Market| India in world production| ? Rising industrial and agricultural output? Rising per capita income? Favourable demographic distribution with rising working population and middle class? Urbanisation? Increasing disposable incomes in rural agri-sector? Availability of a variety of vehicle models meeting diverse needs and preferences? Greater affordability of vehicles? Easy finance schemes? Favourable government policies? Robust production| ? Well-developed, globally competitive auto ancillaryindustry? Established automobile testing and RD centers? Among one of the lowest cost producers of steel in the world? Worldssecondlargestmanufactureroftwo wheeler? Fifthlargestmanufacturerofcommercial vehicles? Largest manufacturers of tractors in the world? Fourth largest passenger car market in Asia? India is the second largest two-wheeler market in the world.? 11th largest passenger car market in the world? Expectedtobetheseventhlargestauto industry by 2016| Inter- firm Comparison: Two – Wheelers Operational Performance The sales figure of Hero Honda is estimated to increase by 33. 73% in revenue terms from Rs3824. 40m in AMJ09 to Rs51116. 77m in AMJ10. Hero Honda scooter segment, pleasure sales have been growing at an average of 16000 units per month, it also crossed its land mark of 4. 5m unit sales for FY10. Bajaj Auto is estimated to show a sharp increase in sales figure by 33% from Rs 233384. 70m in AMJ09 to Rs31230. 88m in AMJ10, this has been led by its two game changing brands, Pulsar and Discover, with clocked robust volumes. TVS Motors is estimated to show an increase of 34% in sales from Rs9886. 97m in AMJ09 to Rs13254. 32m in AMJ10. Its scooter and motorcycle segment sales grew by 24% and 15% respectively; exports were increased by 22% to 20067 units during May. The newly launched TVS Jive and the TVS Wego have supported better volume growth for the month of March. Two-Wheeler Rs (m)| | AMJ 09 (A)| AMJ 10 (E)| Growth| Bajaj Auto| 23384. 70| 31230. 88| 33. 55| Hero Honda| 38224. 40| 51116. 77| 33. 73| TVS| 9886. 97| 13254. 32| 34. 06| Source: BSE India; Cygnus Research| Financial Performance The overall sale of all the companies is expected to rise. In case of TVS Motors OPM will improve mainly due to reduction in other expenses and raw material cost. The operational performance of Hero Honda has also improved and is directly reflected in its OPM and NPM growth which has increased by 837bps and 486bps respectively. Bajaj Autos OPM and NPM have been increased by 94bps and 170 bps points respectively. Overall in terms Hero Honda stood in top position in terms of operational and financial performance. | Bajaj Auto| Hero Honda| TVS| | AMJ 09 (A)| AMJ 10 (E)| AMJ 09 (A)| AMJ 10 (E)| AMJ 09 (A)| AMJ 10 (E)| Net sales| 23384. 70| 31230. 88| 38224. 40| 51116. 77| 9886. 97| 13254. 32| NPM (%)| 12. 55| 14. 25| 13. 08| 17. 95| 1. 84| 2. 85| OPM (%)| 18. 45| 19. 38| 17. 01| 25. 38| 6. 33| 6. 01| Source: BSE India; Cygnus Research| Cost Structure Analysis Cost Structure (as % of Net sales) AMJ09 Vs AMJ10| Company| Hero Honda| Bajaj Auto| TVS Motors| Industry| Year| 09| 10| 09| 10| 09| 10| 09| 10| (Increase)/Decrease in Stock| 0. 33| -2. 33| 2. 04| 1. 34| 3. 15| 4. 49| -0. 74| 0. 68| Consumption of raw materials| 67. 42| 62. 86| 60. 60| 64. 04| 67. 61| 60. 50| 65. 91| 62. 41| Purchase in stock in trade| 0. 00| 0. 00| 3. 51| 3. 67| 1. 62| 1. 88| 4. 44| 5. 55| Staff cost| 3. 62| 2. 76| 4. 83| 2. 98| 5. 29| 4. 87| 5. 34| 3. 86| Other expenditure| 11. 62| 11. 32| 10. 57| 8. 59| 15. 99| 22. 26| 12. 33| 9. 73| Depreciation| 1. 19| 0. 86| 1. 41| 0. 12| 2. 57| 1. 89| 2. 63| 2. 01| Interest Financial Charges| -0. 14| -0. 10| 0. 26| 0. 00| 1. 73| 0. 91| 1. 25| 0. 92| Tax| 3. 99| 7. 69| 5. 22| 6. 11| 0. 19| 0. 76| 2. 62| 4. 57| Source: BSE India; Cygnus Research|. Raw material cost forms the major chunk of cost for two-wheeler companies followed by other expenditure, staff cost. In terms of raw material, staff cost and other expenses the performance of Bajaj is better compared to its peers. Overall, Bajaj auto is efficient from operational point of view. It has declined its overall cost structure by 159 bps to 86. 84% from 88. 44% as the percentage of sales during AMJ09. Porter Five Forces model Here is the analysis of Auto Industry with help of the porter’s five forced model. This is common for auto industry in India. Supply | Some amount of excess capacity.while India would be capable of producing 5. 4 m cars a year by 2014, domestic demand is likely to edge up to between 3. 5 and 4. 8 m units. | Demand | Largely cyclical in nature and dependent upon economic growth and per capita income. Seasonality is also a vital factor. | Barriers to entry | High capital costs, technology, distribution network, and availability of auto components. | Bargaining power of suppliers | Low, due to stiff competition. | Bargaining power of customers | Very high, due to availability of options. | Competition | High. Expected to increase even further. | Now if we make the five-force model for two wheelers: