PROJECT REPORT

MARKET POTENTIAL OF NEW TECHNOLOGIES IN AUTOMOTIVE AFTERMARKET:

A STUDY WITH REFERENCE TO ‘BOSCH LIMITED’

A dissertation report submitted in partial fulfillment of the requirement for MBA degree course

ByH N Jyothi

Enrolment No: 072371947

Under the Guidance ofDr O P Goel

Academic CounselorIGNOU STUDY CENTRE

Bangalore

SCHOOL OF MANAGEMENT STUDIESINDIRA GANDHI NATIONAL OPEN UNIVERSITY

NEW DELHI-110 068

MAY 2010

1

Dedicated

To my beloved

Parents, Husband & Child

2

INTRODUCTORY PAGES

3

PREFACE

The automotive aftermarket is the part of the automotive industry concerned with the manufacturing, distribution, retailing, and installation of all vehicle parts, tools, equipment and accessories for light and heavy vehicles, after the sale of the automobile by the original equipment manufacturer (OEM) to the consumer.

The focus on getting more power from the engines, higher safety needs and lower emissions has resulted into Automobile engineers trying and developing new technologies like Common Rail Diesel Injection, Multi point Fuel Injection, Anti lock Braking system and air bags.

The study has focused on finding out the market potential of these technologies, with special reference to Bosch, a World leader in automotive technologies.

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ACKNOWLEDGEMENTS

A study like this is not the outcome of the efforts of a single person. The study would not be completed if I do not take on the names of those personalities who have directly or indirectly helped me in carrying out the study. It gives me immense pleasure to put on their names here.

I wish to extend my reverence to Dr O P Goel Academic counselor IGNOU study Centre, Bangalore for his guidance & genuine support, who was constant source of inspiration during the entire project work..

I also express my sincere gratitude to all the respondents for providing the valuable data.

Finally, I express my gratitude towards my parents and family for their continuous support during the study.

H N Jyothi

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CONTENTS

Page No.

INTRODUCTORY PAGES...................................................................................................3PREFACE.............................................................................................................................4ACKNOWLEDGEMENTS....................................................................................................5CONTENTS.........................................................................................................................6SYNOPSIS APPROVAL.......................................................................................................7CERTIFICATE OF ORIGINALITY........................................................................................8GUIDE BIO-DATA...............................................................................................................9SYNOPSIS.........................................................................................................................11CHAPTER 1.......................................................................................................................17INTRODUCTION...............................................................................................................17

1.1 INDIAN AUTOMOBILE INDUSTRY........................................................................181.2 AUTOMOTIVE TECHNOLOGIES IN INDIA...........................................................281.3 CHANGES IN AUTOMOBILE ENGINE TECHNOLOGY........................................281.4 CHANGES IN VEHICLE TECHNOLOFY................................................................291.5 KEY AUTOMOTIVE TECHNOLOGY MANUFACTURERS IN INDIA:....................31

CHAPTER 2.......................................................................................................................40RESEARCH METHODOLOGY..........................................................................................40

2.1 OBJECTIVES OF THE STUDY:..............................................................................412.2 RESEARCH DESIGN..............................................................................................41

2.2.1 Sample Size & Design...............................................................................412.3 PROFILE OF RESPONDENTS................................................................................42

CHAPTER 3.......................................................................................................................45DATA ANALYSIS AND INTERPRETATIONS...................................................................45

3.1 ANALYSIS OF SERVICE STATIONS DATA...........................................................46CHAPTER 4.......................................................................................................................55CONCLUSIONS, RECOMMENDATIONS AND DIRECTIONS FOR FUTURE RESEARCHES...................................................................................................................55

4.1 DIRECTIONS FOR FUTURE RESEARCHES.........................................................594.2 LIMITATIONS OF THE STUDY..............................................................................59

ANNEXURES.....................................................................................................................60BIBLIOGRAPHY................................................................................................................63

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SYNOPSIS APPROVAL

7

CERTIFICATE OF ORIGINALITY

This is to certify that the project report entitled “MARKET POTENTIAL OF

NEW TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH

REFERENCE TO ‘BOSCH LIMITED’ is an original work of the student and is

being submitted for the award of the Degree of Master in Business

Administration of Indira Gandhi National Open University, New Delhi. The

report has not been submitted, earlier, either to this or to any other

University/Institution for fulfillment of the requirement of a course of study.

Student Supervisor H N Jyothi Dr O P Goel

Date:Place: Bangalore

8

GUIDE BIO-DATA

9

SYNOPSIS

MARKET POTENTIAL OF NEW TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH REFERENCE TO ‘BOSCH LIMITED’

10

1. Rational Behind the Study

The Automotive Industry is one of the core industries in the Indian economy,

whose prospect is reflective of the economic resilience of the economy. Global

manufacturers’ are setting up units, not only for the local market but also to

function as export base. The qualitative analyses of the various trends reveal

that the Automotive Aftermarket in the industry has a huge potential to be

tapped in years to come. Annual cars production in India has already exceeded

1 million no in the year 2009 (Source: Society of India Automotive

Manufacturers’ – SIAM industry report, Jan.2010) , thereby posing big capacity

and competence challenge to the Auto Service Sector.

The need for newer technologies in the Cars is being driven by stringent

Emission norms, Safety regulations and riding comforts. The technologies like

CRDi (Common Rail diesel Injection), Air Bags & ABS (Anti - lock Breaking

System) respectively, are some of the newer products which are being adopted

by most of the car manufacturers’ in the Country. These technologies are, by

and large, already standard fitments in European countries and with the entry

of all major car MNCs in India, are slowly but surely going to change the market

potential of automotive components in the country. Automotive Components

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Manufacturer’s Association (ACMA, Industry Report 2009) has estimated that

an average car will have 30% of the electronic components contributing to its

costs by 2013.

Bosch, a fortune 100 Global Company with its headquarters in Germany, is

represented by Bosch Ltd, in India (Turnover 2009: Rs. 6700 crores) and is the

largest automotive technology supplier to all the car manufactures in the

country, including for Tata Nano.

The components supplied to the Original Equipment Manufacturers’ (OEMs)

carry a Warranty of 1 to 3 years, before the ‘Potential’ becomes accessible to

the automotive aftermarket business decision makers. The motive behind

proposed study is to find out as to how this business shall shape up in next 5 to

10 years, what will be the market trends in servicing these ‘electronics loaded

vehicles’ and if the service providers in the country are prepared to ‘take on’

this new market development.

2. Objective of the Study:

I. To find out the market potential of new technologies (CRDi, ABS & Air

Bags) in the Indian automotive Aftermarket.

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II. To find out the preparedness level of Automotive Service providers to

handle new technology fitted cars.

III. To evaluate the strengths and weaknesses of the marketing

Strategies of Bosch Limited, India to tap the Market potential of new

technologies.

3. RESEARCH METHODOLOGY

3.1 Sample Size & Design: It is proposed to limit the sample size

to 100 service technicians, who are engaged in diagnosing and

repairing new generation cars. The technicians from both, organized

sector (Car Manufacturing Companies’ Authorized Dealers) as well as

unorganized sector ( roadside small garages) shall be included as

below:

13

Geographical area covered shall be Bangalore city which is one of the

fastest growing car market in the country. Due consideration shall be

given to include car repairing workshops which deal into various

makes and models. From organized sector, car authorized service

workshops of Indian and Multinational manufacturers’ shall be

included.

3.2 Tools for Data Collection:

A self administered, well structured questionnaire shall be designed and

distributed for the collection of primary data. The technicians who

actually deal in diagnosis and repair of the cars shall be target

population. Interviews shall also be held with service Station Managers,

Spare Parts In charges and industry experts, including Bosch Marketing

Strategy officials on various aspects of the research. Random sampling

technique is proposed to be used. Questionnaire shall have both – closed

ended as well as open ended questions.

Secondary data shall be collected from the company (Bosch Ltd)

publications, website and the publications from Industry Associations

( SIAM, ACMA).

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Period:

Data is proposed to be collected personally by the researcher between

15.06.10 to 15.07.10.

4. Expected Contribution From the Study

It is expected that the study will help in the following areas:

I. To know the market status of new technology components fitted in

the Cars plying in the country.

II. To know the strengths and weaknesses of marketing strategies of

Bosch Ltd in tapping the current and increasing potential.

III. To know as to what extent the Service Stations are prepared to meet

the diagnosis and repair needs of the new generation cars.

IV. An ideal service station incorporating all the facilities and

equipments to service new technology cars, may be imagined.

5. Limitations of the Study

I. The data shall be collected from the technicians, including

those who own very small shops and are not well educated. Study

outcome shall depend on the quality of data they are able to provide.

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II. Current market strategies of Bosch Limited are proposed

to be evaluated. Company Managers’ willingness to open up and

provide realistic data shall be the basis for developing the

construct for the study.

Name: H N Jyothi

Enrollment No. : 072371947

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CHAPTER 1

INTRODUCTION

CHAPTER 1

INTRODUCTION

1.1 INDIAN AUTOMOBILE INDUSTRY

India has overtaken traditional car manufacturing nations such as France,

Spain, United Kingdom, Canada, Italy and Russia and became the seventh

largest motor vehicle/car manufacturer in the world in 2009. Indian auto

manufacturers produced 2.63 m (million) cars and commercial vehicles in

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2009 out of which 2.17 m were cars. Domestic passenger vehicle sales hit a

new record in 2009-10 (Apr-Mar) when over 1.95 million vehicles were sold.

India is the largest manufacturer of three-wheelers (444,000 in 2009-10) and

the eighth largest commercial vehicle (0.53 m in 2009-10). India is also the

largest tractor manufacturing country (around 1/3 of global output) having

produced around 370,000 units in 2009-10. ( Source: Society of Indian

Automobile Manufacturers, SIAM)

India's automobile exports in 2008-09 (1,530,660 units in total) included

331,539 passenger cars and 1,004,174 two-wheelers. India is the second

largest motorcycle (6.54 m produced in 2007-08) and the fourth largest

commercial vehicle manufacturer in the world. India's auto industry produced

a total of 14.1 million motor vehicles during 2009-10. Auto exports amounted

to almost USD 2.3 billion in the year 2005-06. Over 13 million people work

directly or indirectly in the auto industry. Indian car exports have increased at

a rapid pace reaching 210,088 units (mostly Maruti-Suzuki and Hyundai

models) during the first half (Apr-Sep) of 2009-10, well ahead of China (SIAM).

The size of the Indian automotive component industry is estimated to be

approx. USD 21 billion. Auto ancillary exports increased to USD 3.6 bn in 2007-

08 while the total turnover of India's vehicle tyre industry amounted to an

estimated Rs 142.5 bn in 2005-06. The total number of registered motor

vehicles on Indian roads is approx. 100 million ( Automotive Components

Manufacturers Association, ACMA).

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Established auto manufacturers and new entrants in the Indian auto market

are expanding their production capacities on a large scale. Companies

undergoing expansion include Maruti-Suzuki, GM, Tata Motors, VW Group,

Toyota, Honda and Hyundai. The Renault-Nissan Alliance's new auto plant

near Chennai is expected to commence production in May 2010. Peugeot-

Citroen is planning a comeback to India.

Cars have till now been affordable to only a fraction of India's over 200 m

households. With the advent of the Tata minicar, the Nano, which received top

marks for its styling and design, retails for approx. USD 3,000 (Delhi on-road)

and therefore has created a completely new segment in the car market and

made autos within the reach to a substantial segment of the approx. 50

million current 2-wheeler owners and first time car buyers (SIAM).

DOMESTIC CAR SALES

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

2007-08: Indicates April 2007-March 2008, FY09=Apr'08-Mar'0906-07: Indicates April 2006-March 2007

* Incl. of exports ** Apr-Dec 2006

¹ Estimate² 2004-05³ 2003-04

@ 04/04-12/04

Audi A4 - - 102 1,050 1,658 (All 1,400

19

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

(All Audi

models)

Audi models)

(Jan-Jun, all

models)

Audi A6105 (all

Audi models-'

05)

300 (all Audi

models)

349 (all

Audi model

s)

111 (Jan-Apr)

396

BMW 3 Series - - 9461,075 (FY09

)1,155

2,183 (all BMW

models Jan-Jun)

BMW 5 Series - - 8221,352 (FY09

)1,590

Chevrolet Aveo - - 5,624 1,174 (Jan) 746 (Feb) 364 (Jan)

Chevrolet Aveo U-VA - - 11,523 434 (Jan)

Chevrolet Captiva - - 607

2,134 (FY09

)201 (Feb) 72 (Jan)

Chevrolet Cruze         812 (Oct) 686 (Jan)

Chevrolet Optra Magnum 9 191 Na

6,058 (inc. SR-V

model)

1287 (Jan-Mar)

89 (Feb) 51 (Jan)

Chevrolet - - 22,060 7,265 2,940 (Feb) 3,477

20

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

Spark (Jan-Mar) (Jan)

Chevrolet Tavera

18 622 (2005) Na 20,671

4,892 (Jan-Mar)

945 (Feb) 1,512 (Jan)

Ford Fiesta ca 3 500 Na 22,855    

Ford Fusion 329 Na 2,678    

Ford Ikon 24 536 Na 4,797    

Hindustan Ambassador 12 740 Na 8,487    

Honda Accord 3 324 2,728 2,133 4,108 948 (Jan-Apr) 288 (Jan)

Honda City37 545 (2005-

06)40,464 (06-07)

40,536 (incl.

Marina STW)

  18,482 (Jan-Apr)

4,485 (Jan)

Honda Civic na 16,262 (06-07) 16,723   2,386 (Jan-

Apr) 644 (Jan)

Honda CR-V 1 858 (05-06)

1,873 (06-07) 3,425   501 (Jan-

Mar) 76 (Jan)

Honda Jazz         3,069 (Jun-Jul) 490 (Jan)

Hyundai Accent 24 383 Na 8,274    

Hyundai Elantra

2 331 (2005)

1,683 (06-07)

  10 (Mar)

 

21

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

(discontd.)

Hyundai Getz Prime 5 483 Na 16,787

9,442 (FY09

) 

Hyundai i10 - - 14,451 (2007)

106,110

24,990 (till Mar 12)

Hyundai i20 - - -4,991 (FY09

)4,940 (Oct)

Hyundai Santro Xing

103 301²

163,838 (06-

07)121,16

3

91,466

(FY09)

 

Hyundai Sonata

806 (2005) 506 577

486 (FY09

)232 (Jan-

Apr) 29 (Jan)

Hyundai Tucson

884 (March-Nov 05)

533 (incl.

Terracan)

18850

(FY09)

13 (Jan-Apr)

Hyundai Verna na Na 24,370 2,132 (Feb)   5,502

(Jan)

Land Rover ca 30 Na  ~90

(2008)

242 (incl. Jaguar) 35 (Jan)

Mahindra Bolero - - 51,009

55,924

(FY09)

 

22

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

Mahindra Max - - -

3,000 (Apr0

8-Feb0

9)

 

Mahindra Scorpio

31,661 (05-06)

38,015 (06-07) 41,443 27,00

0) 3,200 (Mar)

Mahindra Xylo - - -7,201 (FY09

)~10,500 (Jan-Apr)

Maruti 800 116 262²

79,245 (06-07) 69,553

49,383

(FY09)

9,915 (Apr-Jul)

Maruti DZire - - 5,658

Maruti Esteem (discontd.) 18 379 Na 12,485    

Maruti Grand Vitara na Na 795

270 (FY09

) 

Maruti Gypsy na Na 3,1327,219 (FY09

) 

Maruti Omni 60 377² Na 88,273    

Maruti Ritz         6,214 (Jun)

Maruti Swift 34 463 (May-

Nov 05)

Na 88,745 110,071

(FY09

 

23

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

)

Maruti SX4 - - 31,192 1,953 (Feb)  

Maruti Versa 4 291³ Na 1,4561,440 (FY09

) 

Maruti Wagon R 79 712² Na 132,72

7

134,768

(FY09)

140,000

Maruti Estilo 65 345² Na50,635

(Zen and

Estilo)

32,694

(FY09)

 

Mercedes E-Cl 825 (05) 922 1,048 1,167 1,048 245 (Jan)

Mercedes S-Class

144 (2005) 248 518 561 467 22 (Jan)

Mercedes CLS/SLK/SL/CL

K/M  na 118

141 (incl.

80 M-class)

125 (models

other than C,E and S

class)

6 CBU imports(Ja

n)

Mitsubishi Lancer/Cedia 2 509 Na 2,582

1,570 (FY09

) 

Mitsubishi Outlander - - -

278 (FY09

) 

24

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

Mitsubishi Pajero/Montero na Na 1,676

1,814 (FY09

) 

Nissan Teana - - 34758

(FY09)

 

Nissan X-Trail 253 (2005) 250 173

100 (FY09

) 

Opel Corsa 8 369 Na      

Porsche (various models)

ca 100 (2005) 160 168 168  

Renault Logan - - 25,88413,41

9 (FY09

2,520 (Feb-Apr) 555 (Jan)

Rolls-Royce 5 (2005) 7 (2006)

12 (2007)

14 (2008

) 

Škoda Fabia - - 1,906 6,634  5,510

(Jan-Mar) all Škoda

Škoda Octavia/Laura

9 559 (05-06) 11,433 10,944

7,459 (FY09

) 

Škoda Superb na 769 586694

(FY09)

541 (Apr-Jun)

25

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

Tata Indica 111 574 (05-06)

144,690 (06-

07)135,64

2

111,257

(FY09)

91,295 (Apr-Jan

'10)11,448

(Jan)

Tata Indigo/Indigo XL/Indigo CS

39 377 (05-06)

34,310 (06-07) 31,416

49,190

(FY09)

41,724 (Apr-Jan

'10)7,258 (Jan)

Tata Marina 2 050 Na      

Tata Nano         21,535 (Jul-Jan '10)

4,001 (Jan)

Tata Safari 4 692 (05-06)

15,816 (06-07) 19,078  

25,630 (Sumo+Safari: Apr-Jan

'10)

3,538 (Safari/Su

mo Jan)

Tata Sumo / Sumo Victa

33 213 (05-06)

32,077 (06-07) 28,622    

Toyota Camry 794 (2005)

1,001 (06-07) 988

182 (Apr-Jun)

44 (Apr-Jun)

Toyota Corolla Altis

8 974 (2005) na 6,204    

Toyota Fortuner         ~3,100

(Aug-Dec)

Toyota Innova 32 000 (2005) Na 48,069   ~2,200

(Feb)

Toyota Land Cruiser Prado

162 (2005)

Na 141 109 (FY09

 

26

Domestic Car Sales Model wise 2004-09

Model 2004/05 2006 2007

-08 2008 2009 2010

)

Toyota Qualis 31 759 Na      

VW Jetta - -  

1,566 (all VW

models)

1,957 (Jan-Aug: all VW

models)

Volvo S80 - -ca 100

(all Volvo)

ca 90 ( all

Volvo mode

ls)

 

1.2 AUTOMOTIVE TECHNOLOGIES IN INDIA

Automotive technology refers to the technologies that are incorporated in

automobiles or vehicles. With the continuous advancement of technologies

new inventions in the field of automobile technology is only paving the way for

more and more technologically superior and sophisticated vehicles. Automobile

technology is one of the most essential parts of the automobile industry today.

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There are a number of vehicles available in the market all of which require

different technologies to support their smooth functioning.

1.3 CHANGES IN AUTOMOBILE ENGINE TECHNOLOGY

However the most important changes that has taken place in the automobile

industry in India pertains to the development of the engine. In the cars using

petrol the carburetor engine has been replaced by the Multi Point Fuel injection

(MPFI) engine. Similarly the engines running on diesel have undergone a sea

change from the time Rudolf Diesel to the Rail Direct Injection (CRDI).

1.3.1 Multi Point Fuel Injection (MPFI)

This technology sticks to stricter auto emission norms and manages to squeeze

out the maximum benefit of the fuel by making optimum use of even the last

drop of petrol or diesel and providing the vehicle with a great mileage.

1.3.2 Common Rail Direct Injection (CRDI)

If you have the benefit of a Common Rail Direct Injection engine fitted to your

car you will know that you have invested your money in the right place (CRDI)

offers 25% more power than the normal direct injection engine and also a

soundless pick up with mileage of about 24 kilometers to one liter of diesel.

1.4 CHANGES IN VEHICLE TECHNOLOFY

Along with the engine the vehicle has also undergone an enormous

improvement in the form of:

Autopilot cars: Driverless cars also known as autopilot, autonomous vehicle

or auto-drive car are intelligent vehicles because of the simple fact that they

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drive themselves, to put it in a better way they actually do not require drivers

to drive them. These vehicles navigate the roads themselves and give you a

taxi experience.

Emission Standards: With the help of the advancement in automobile

technology a check can be put on the emission of harmful pollutants like NO 2 ,

particulate matter (PM) or soot, carbon monoxide (CO) or volatile hydrocarbons

which would by far help to save the planet from global warming.

Automotive Engine: Coming from the first steam engine built by Nicolas-

Joseph Cugnot ( 1769 ) to the modern day four stroke internal combustion

engine, the automobile engine has survived a long journey. It is simply the

determination and power of the human mind that has kept improving the

steam engine and today excelled in making it a fast and smooth running

engine.

Suspension technology: The suspension system of a vehicle consists of

springs, shock absorbers and linkages these together connect the vehicle to its

wheels. However the main function of the suspension system remains to

minimize jerks and to provide a smooth journey to its occupants.

Apart from the above mentioned technologies steering technologies and safety

technologies have also helped the automotive industry to reach great heights.

AIRBAG : An airbag is a vehicle safety device. It is an occupant restraint

consisting of a flexible envelope designed to inflate rapidly in an automobile

collision, to prevent vehicle occupants from striking interior objects such as the

steering wheel or window. Airbags for passenger cars were introduced in the

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United States in the mid-1970s, when seat belt usage rates in the country were

quite low. Ford built an experimental fleet of cars with airbags in 1971,

followed by General Motors in 1973 on Chevrolet vehicles. The early fleet of

experimental GM vehicles equipped with airbags experienced seven fatalities,

one of which was later suspected to have been caused by the airbag.

ANTILOCK BRAKING SYSTEM (ABS) : An anti-lock braking system, or

ABS is a safety system which prevents the wheels on a motor vehicle from

locking up (or ceasing to rotate) while braking.

A rotating road wheel allows the driver to maintain steering control under

heavy braking by preventing a skid and allowing the wheel to continue

interacting tractively with the road surface as directed by driver steering

inputs. ABS offers improved vehicle control and decreases stopping distances

on dry and especially slippery surfaces. However, on loose surfaces like gravel

and snow-on-pavement, it can slightly increase braking distance while still

improving vehicle control.[1] On others, it may not improve control at all.

Since initial widespread use in production cars, anti-lock braking systems have

evolved considerably. Recent versions not only prevent wheel lock under

braking, but also electronically control the front-to-rear brake bias. This

function, depending on its specific capabilities and implementation, is known

as electronic brake force distribution (EBD), traction control system,

emergency brake assist, or electronic stability control.

30

1.5 KEY AUTOMOTIVE TECHNOLOGY MANUFACTURERS IN

INDIA:

DELPHI INDIA

Delphi India was incorporated in April 1995 as a wholly owned subsidiary of

Delphi. It operates in several locations, including three manufacturing facilities

located in Greater Noida, Dharuhera, and Gurgaon, a technical centre in

Bangalore and the Delphi – TVS joint venture in Chennai. Delphi India employs

a local workforce of highly skilled personnel intensively trained at Delphi

facilities both in India and abroad.

Delphi facilities boast the conveniences and tools necessary to safely and

efficiently produce the high-quality products that help make Delphi a leading

global supplier of electronics and technologies for automotive, commercial

vehicle and other market segments. Delphi India facilities are steadily

increasing product engineering capabilities to keep pace with the increasing

prevalence of electronics in vehicles.

Delphi India is linked into the global Delphi engineering network. Web-enabled

design and development tools enable the company to keep projects moving

forward around the clock.

Established in Bangalore in 2000, Delphi India's Technical Centre India (TCI)

has grown rapidly and has emerged as the largest Delphi technical center

31

outside of the United States. TCI complements Delphi's strong manufacturing

base in India and in the rest of the Asia Pacific region. Advanced engineering

activities at Delphi India's TCI include:

Embedded software — Embedded software is integral to technological

leadership for many of Delphi's fastest growing product lines, such as

diesel common rail engine management systems and advanced mobile

multimedia systems.

Mechanical engineering — In addition to expanding the electronics lab for

testing and verification, Delphi India's TCI includes a mechanical

engineering lab.

Product engineering — By expanding its scope into product engineering,

TCI can now offer a range of engine controls for both gasoline and diesel

engine management systems, along with additional mobile multimedia

products.

Design and engineering — TCI enables Delphi India to provide support for

fuel handling systems and engine management systems.

Delphi India has an engineering and manufacturing center where there is a

strong focus on localization of engineering validation and manufacturing

capabilities. Delphi is the first wiring harness manufacturer in India to be

certified for ISO TS/16949 and ISO 14001. Supplying products to major OEMs in

India as well as exporting to North America, Delphi India specializes in the

design, development as well as mass supply of electrical/electronic distribution

32

systems. Delphi India is also involved with bi-fuel, CNG (compressed natural

gas) and gasoline engine management system activities. Delphi produces a

wide range of products at its facilities in India, including:

Electrical/Electronic Architecture Products

o Electrical centers

o Wiring harnesses

Electronics & Safety Products

o Antennas

o Battery chargers

o Body computers

o Clusters

o DC-DC converters

o Immobilizers

o Li-Ion battery packs and power boxes

o Navigation systems

o Start-Stop systems

o Traction inverters

Powertrain Products

o Engine management systems

o Evaporative emissions canisters

o Fuel modules

o Fuel pumps, including modular reservoir fuel pump assemblies

33

o Throttle bodies

Thermal Products

o Air-conditioners

o Compressors

o Condenser assemblies

o Heat exchangers

o HVAC (heating, ventilating, and air conditioning) modules and

systems

o Lines and hoses

o Powertrain cooling systems

In 2009, a grand opening ceremony was held for Delphi Product & Service

Solutions (DPSS) Authorized Wholesale Distributor's sales outlet in Coimbatore,

India. The sales outlet at Stanes Motors Limited features hands-on displays of

Delphi's complete product portfolio available for purchase in the Indian

aftermarket, and offers automotive replacement parts as well as vehicle

audio/video products. Delphi is devoted to providing original equipment quality

parts and services to the Indian aftermarket.

Delphi aftermarket products are distributed through national, regional and sate

level distributors reaching to over 5000 distributors/retailers in India.

Wholesale distributors also support Delphi's aftermarket products across India,

making products available in many cities.

Aftermarket Products

34

o Brakes

o Consumer electronics

o Evaporative canisters

o HVAC products

o Lubricants

o Oil filters

o Radiator coolants

o Steering products

o Suspension products

o Vehicle electronics

o Wiring harnesses

Denso India Limited

Denso Corp is one of the world's largest automotive parts manufacturers,

employing 112,000 people in 32 countries. Its automotive product range

includes climate control, engine management, body electronics, driving control

and safety.

Toyota is Denso's largest customer, accounting for 49% of the company's

turnover in the financial year ended 31 March 2007. Its other OEM customers

include (ranked in order of sales in the year ended 31 March 2007) Honda,

Suzuki, Subaru, Mitsubishi, General Motors, Isuzu, Ford, Jaguar, Volvo, Land

Rover, Mazda, Chrysler, Mercedes-Benz, Fiat, Hyundai/Kia, Volkswagen, BMW,

35

Renault/Nissan and PSA Peugeot Citroen. None of these account for more than

10% of sales.

Denso's automotive business is divided into six main product segments:

* Thermal Systems;

* Powertrain Control Systems;

* Electronic Systems;

* Electric Systems;

* Information and Safety Systems; and

* Small Motors.

Denso India’ principal products include magneto, capacitor discharge ignition

(CDI), alternator, starter, fan / blower motor and wiper. Its subsidiaries include

Tianjin Denso Engine Electrical Products Co. Ltd., China; Denso Manufacturing

Italia S.P.A., Italia; Denso E& TS Training Centre Corporation, Japan; Denso

International Asia PTE Ltd., Singapore; Denso (Thailand) Co. Ltd., Thailand;

Denso (Malaysia) Sdn. Bhd., Malaysia, and Denso Manufacturing Tennessee

Inc., China.

BOSCH LIMITED

The Bosch Group is one of the world’s biggest private industrial

corporations. Headquartered in Stuttgart, Germany, the Bosch Group has

some 280,000 employees worldwide, and generated annual sales revenue

of 41.1 billion euros in 2009. There are about 300 subsidiary and regional

companies around the world. 

36

Bosch India is a leading supplier of technology and services, and has a

strong presence in the country at numerous locations in diverse industry

segments. Bosch set up its manufacturing operations in 1953, and has

grown over the years to 14 manufacturing sites and 3 development

centers. Bosch employs about 18,030 associates in India, and in business

year 2008 achieved total consolidated revenue of over Rs. 6400 crores.

Bosch India operates through the following companies -

Bosch Ltd.

Bosch Chassis Systems India Ltd.

Bosch Rexroth India Ltd.

Robert Bosch Engineering and Business Solutions Ltd.

Bosch Automotive Electronics India Private Ltd.

Bosch Electrical Drives India Private Ltd.

Automotive technology Business Group

Bosch innovations have shaped cars from the start and will keep doing so in

future. As the world’s biggest independent automotive supplier, Bosch focuses

on innovations to make driving safer, cleaner and economical. Automotive

Technology is the largest business segment of Bosch in India, supplying to the

local automotive industry, and exporting components overseas.

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Business divisions: Diesel Systems, Gasoline Systems, Chassis Brakes,

Automotive Accessories, Car multimedia, Starters and Generators, Energy and

Body Systems, Electrical Drives, Spark Plugs and Glow Plugs.

Industrial technology Business Group

Bosch Rexroth AG is an expert for all drive, control and motion technologies.

The Bosch Packaging Machines division in India brings the global expertise to

address the needs of the local confectionary and pharmaceutical industries.

The Special Purpose Machines (SPMs) and High Precision Tooling division

engineers customized equipment using cutting-edge technologies for

industries.

Business divisions: Automation technology, Packaging Machines, Special

Purpose Machines.

Consumer goods and building technology Business Group

The Bosch Power Tools division in India is the market leader in the segment,

offers a complete range of power tools for construction, woodworking and

metalworking industry; cordless tools, accessories and tools for DIY (Do-It-

Yourself) enthusiasts as well. The Security Systems division in India is one of

the leading security technology players with a comprehensive portfolio.

Business divisions: Power Tools, Security Systems.

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Engineering and IT Services Business Group

The Engineering and Information Technology division of Bosch in India is the

largest development center of Bosch outside Germany. For over 15 years, it

has been the preferred engineering services and solutions partner for the

Bosch Group worldwide.

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CHAPTER 2

RESEARCH METHODOLOGY

CHAPTER 2RESEARCH METHODOLOGY

2.1 OBJECTIVES OF THE STUDY:

1. To find out the market potential of new technologies (CRDi, ABS & Air Bags) in

the Indian automotive Aftermarket.

2. To find out the preparedness level of Automotive Service providers to handle

new technology fitted cars.

3. To evaluate the strengths and weaknesses of the marketing Strategies of

Bosch Limited, India to tap the Market potential of new technologies.

2.2 RESEARCH DESIGN

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2.2.1 Sample Size & Design: The design of the research was prepared to

make it an exploratory research. Survey method was used to collect the

data from 3 target respondents 1) Authorized service dealers of the car

companies 2) Un authorized garages , called roadside garages who repair

all makes of cars and 3) Bosch company officials from the aftermarket

division.

Two questionnaires were prepared to collect the data , 1) Service stations

of both categories, authorized and unauthorized and 2) second for Bosch

officials. The questionnaires’ design was structured. Also open ended

questions were included to give space to the respondents for providing

additional information. Questionnaires were self administered type, how

ever in most cases researcher herself was present and helped them in

understanding the questions where ever there was a doubt.

60 questionnaires each from both types of service stations were got filled

up. On careful scrutiny it was found that 59 nos. from authorized service

stations and 41 nos, from un authorized service stations were valid and

were included for analysis purposes. 25 questionnaires from Bosch officials

were included. The data collection was restricted to the geographical limits

of Bangalore city.

Secondary data was collected from the website of Bosch limited, Society of

Automobile Manufacturers of India (SIAM) and Automotive Components

Manufacturers’ Association of India (ACMA).

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2.3 PROFILE OF RESPONDENTS

1. Status of Authorization of the Service Stations

Data presented in Figure 3.1 indicates that 59% of the service stations

surveyed were ‘authorized dealers’ of respective car manufacturing companies

and 41% were unauthorized service stations (roadside garages) who deal into

multi brand cars

Fig 3.1: Distribution of Respondents – Authorization wise

2. No. of years in operation:

As per data depicted in tables 3.2a and 3.2b, it can be observed that

authorized dealers are more stable ( 37% are more than 5 years in existence,

as compared to unauthorized service stations who are 22% ).

No. of Years in operation % of respondents Less than 2 years 28%Between 2-5 years 35%More than 5 years 37%

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Figure 3.2a : No. of years in operation ( authorized dealers )

No. of Years in operation % of respondents Less than 2 years 42%Between 2-5 years 36%More than 5 years 22%

Figure 3.2b : No. of years in operation ( Un - authorized dealers )

3. No. of Vehicles attending per month:

No. of Vehicles attended by the service stations are shown in the Fig 3.3.

Authorized service stations are relatively bigger in size and capacity and none

of them was attending less than 100 vehicles pm ( that means 4 vehicles per

day X 25 working days). 18% of the Un authorized service station sfell uinto

this category. Sixty five percentage from authorized and 28% from

unauthorized categories were attending more than 250 vehicles pm.

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44

CHAPTER 3

DATA ANALYSIS AND INTERPRETATIONS

CHAPTER 3DATA ANALYSIS AND INTERPRETATIONS

The data collected has been organized and presented below, in two parts. First

part has data collected from Service Stations ( Both types I e authorized as well

un-authorized). Second part presents that data pertaining to Bosch officials,

collected as per the plan.

3.1 ANALYSIS OF SERVICE STATIONS DATA

1. No. of vehicles attended per month fitted with New Technologies:

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Average no. of vehicles being attended by Authorized service stations and the

un-authorized ones are shown in Fig 3.1. It is quite clear that the customers

owning new technology vehicles prefer to go to the company’s authorize

service stations and do not want to take chance with the roadside garages.

Data also indicates that the vehicles with Airbags ( normally high end cars like

Mercedes or BMW) are very few and only 3 vehicles in a month are being

attended by all the service stations in the sample ( that too all of them by the

authorized service stations).

Fig 3.1

Even the customers of Anti Lock Braking System ( ABS) cars do not seem to be

taking chance with the un-authorized car service stations and out of total 81

cars in a month, 74 customers patronize the authorized ones.

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The data brings out that the customers still do not have much confidence in

the technical competence of the un authorized service stations , when it comes

to handing over their high end expensive cars for servicing.

2. Average no. of Technicians in the Service Station:

As per data depicted in Fig 3.2, authorized service stations had, on an average

14 service technicians each as compared to the 3 nos. each at un-authorized

service stations.

Fig 3.2

3. Training Status of Technicians :

The status of training on new technologies of the technicians working at both

types of service stations is depicted by the data in Fig 3.3. It is clear from the

data that the situation of training at un-authorized service station is abysmal,

which places them at a quite incompetent place in the service market of new

technology fitted vehicles.

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Even at authorized service stations, there is huge gap in training status and

particularly, in case of airbags, the companies need to focus on improving

technicians competence.

Fig 3.3

4. Availability of Tools & Equipments necessary for handling new technologies

The availability of tools and equipments required to handle new technologies

fitted in the cars is as important as a trained technician. As per data shown in

table no 3.1a and 3.1b, it is clear that only authorized service stations are

reasonably well equipped ( 90%) that too mainly to handle Common Rail Diesel

Injection (CRDi) and to some extent ABS (74%)

Authorized Service Stations

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CRDi ABS Airbags

Available 90% 74% 24%

Not Available 10% 26% 76%

Table 3.1a

Unauthorized service stations ( Table 3.1b) are far from equipping themselves

to handle all of these technologies except that only 12% are equipped to

handle CRDi and 8% for ABS.

Un- authorized Service Stations

CRDi ABS Airbags

Available 12% 8% 0

Not Available 88% 92% 100%

Table 3.1b

5. Preparedness to handle new technologies coming in next 5 years.

As more and more vehicles with new technologies start coming on the Indian

roads, preparedness of the service stations shall become crucial to ensure

proper running of these vehicles. Only 16% of the Authorized service stations

find themselves going in the right direction with excellent preparation ( Fig 3.4)

and none of the service station in unorganized sector seem to be coping with

the requirements.

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With 64% of the service stations in unorganized sector being completely un-

ware of the requirements as to how these vehicles will be diagnosed or

repaired, it appears a cause of concern, not only for the manufacturers but also

for the Govt. which poses newer and newer norms for emissions and safety.

Fig: 3.4

6. Rating of Marketing Mix for New Technologies

As per data shown in Fig 3.5, The products coming in are near excellent with

4.6 rating ( on a 5 point scale), followed by availability. The real issues

seems to be the ‘price’, which, with 1.9 rating appears to be very high.

Promotion of these parts at 2.5 rating also has considerable scope for

improvement.

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Fig: 3.5

7. Key Suggestions given by Service Technicians for the Companies

1. As there is very low level of awareness about compatibility of the components, the companies should provide application charts for each of the component fitted in the sub assemblies of new technology items.

2. On the spot, short duration training cum re-fresher training programmes should be organized more often.

3. As far as possible, compatible items should be produced by various manufacturers (means, components in one brand of the assembly, should be interchangeable with another brand). This will help reduce inventory.

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ANALYSIS OF BOSCH OFFICIALS DATA

8. Rating of Marketing Mix Strategies

Bosch Ltd, being the pioneer and market leader in supplying new technologies

to almost all the car manufacturers’ in the country, has its marketing

strategies which are evolving over time. The Company’s officials were

interviewed by the researcher with the help of a structured questionnaire (copy

appended in the annexure) and the findings are presented below.

Marketing Mix Strategy Mean Score Products 5Price 4.2Promotion 4Availability 4 Table 3.2

The company officials, with high ratings (Table 5) appear to be confident

about every element of their marketing mix strategies. The company has

strong product plate-form backing from its parent company in Germany

( Robert Bosch GmbH, Stuttgart), which supplies these technologies to most of

the car manufacturers in Europe and North America.

9. What % age of the vehicles are you able to service with your products in automotive aftermarket?

52

No. of officials ( Total : 25) % age of vehicles serviced with available products

21 More than 90%4 Between 75-90%0 Less than 75%

Table 3.3

As per data presented in table 3.3, Company officials are sure that their

product range takes care of majority of the vehicles in the market and the

product range in wide enough to cover 90% of the vehicles ( 21 officials).

10. What is the break - up of Service Technicians ( Authorized and un-authorized) who have undergone training organized by your company

Out of the total technicians trained by the company 82% were from authorized service stations and rest from unauthorized.

Fig 3.6

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CHAPTER 4

CONCLUSIONS, RECOMMENDATIONS AND DIRECTIONS FOR FUTURE RESEARCHES

CHAPTER 4CONCLUSIONS, RECOMMENDATIONS AND DIRECTIONS

FOR FUTURE RESEARCHES

54

1. Traditionally, India is low cost preference car service market. Companies

like Maruti Suzuki have been historically strategizing to increase service

load at their authorized Service stations from about 12% to 25%, which

means more than 75% of the vehicles are repaired at Un –authorized

Service stations operating in unorganized sector (popularly known as

roadside garages).

The study has brought out that, in case of new technologies the trend is

reverse, where majority of the vehicles are attended by company’s

dealers as they are better equipped to handle these products.

2. Common Rail Diesel Injection (CRDi) has emerged as relatively more

popular technology than Anti Lock Braking System (ABS) and Airbags.

With emission norms becoming stricter in the country and price gap

between Diesel and Petrol rates continuing to be high, CRDi appears to

be the technology for all new models of the cars coming in Diesel

Version. The companies manufacturing CRDi technology, led by Bosch

Ltd, in India has to start looking at it as basis for future business and start

investing in marketing activities more heavily.

3. Anti Lock Braking System is mandatory in each type of car sold in Europe

as it has strong link with the safety of the passengers. In India it is still

being used only in the high end , expensive cars like Mercedes and BMW.

Govt. of India, in its Automotive Mission Plan ( AMP-2016) has indicated

about more stringent safety norms and the possibility of ABS becoming

mandatory for registration of Mid end cars in near future seems evident.

55

This norm will have immediate effect on the preparedness level of the

service stations in the country. While initially, until the vehicles are under

warranty period, the Authorized service stations shall be more in demand

for attending to the vehicles, as soon as the vehicles run out of the

warranty period, a surge in demand of unorganized sector shall be seen.

4. This research has brought out that the unorganized sector in servicing

vehicle is not only grossly unprepared- both in terms of training as well

as tools and equipment, they are not even fully aware of the changes

happening in the Automotive Technology space.

5. It is the joint responsibility of the Technology manufacturers and the

Govt. to start spreading the clear communications among the target

audience, as to what will be the technological future in next 5 to 10

years. The seminars can be organized to reach the unorganized players,

who then can be checked for their interest in acquiring the competence

and affordability.

6. Availability of Finance with the unorganized sector appears to be another

area of concern. With the Govt. focus on generating employment through

entrepreneurship, this is an area where micro-finance should be

promoted and low interest loans with longer repayment period should be

offered to the roadside garages, who are interesting in staying in the

business in the longer term.

7. Airbag as a technology has come out at its inception stage and even

authorized dealers of the company do not seem to be serious about it.

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Companies, manufacturing this technology as well as those who use this

as in OE ( Original Equipment) in their cars, need to organize seminars to

create awareness about this technology. Most of the states in the country

have ‘Auto Service Garages Associations’ and these forums should be

used to communicate such messages to the target audience.

8. Marketing strategist at Bosch need to look at these products from a

completely different perspective. As most of the components, at present,

are not interchangeable with other brands, it is inevitable that the

customer and the garages need ready – reference guides or application

charts about the right fitments. The company should invest more in

such activities to gain a first movers advantage in the market before the

completion picks up.

9. Companies should also look at the possibility of local tie ups of their

dealers with the nearest garages in the interest of better customer

service. If a customer approaches a roadside garage and he is not able to

diagnose or repair the product, help fro the nearest authorized dealer

should be possible.

4.1 DIRECTIONS FOR FUTURE RESEARCHES

1. The research has thrown some light on the status of Automotive new

technology service situation. As the under awareness and under

preparedness of unorganized sector has clearly emerged, The

researches in future may be directed at evaluating and profiling of

the garages , as to who can afford to upgrade and equip themselves.

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2. Researches in future can also be directed at understanding the

finance requirements of a garage to fully upgrade to handle these

technologies.

3. Role of Govt. in supporting the smaller garages through subsidy or low interest loans may also be an area of interest in future researches.

4.2 LIMITATIONS OF THE STUDY

1. The researcher had limited time and resources at her disposal and hence

the sample size taken was 100 service technicians from one city I e

Bangalore. The finding may not be true representative of the situation

countrywide.

2. Although complete confidentiality was assured, the responses from

Bosch Officials may not be completely free from biases as the there

might be a fear of their names coming out in disclosing the companies

strategies, which may affect the competitive market situation.

ANNEXURES

QUESTIONNAIRE 1 - Service Technicians

Dear Sir/Madam,

I am carrying out a study on “MARKET POTENTIAL OF NEW TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH REFERENCE TO ‘BOSCH LIMITED’. The information provided by you shall be

58

used for academic purposes only. Kindly give your free responses. Your cooperation will be highly appreciated.

H N Jyothi

1. Name of the service station:

2. Status: Authorized dealer Un-authorized service station

3. No. of years in operation:

4. No. of Vehicles attend per month:

5. Out of the above no. of vehicle per month fitted with:

CRDiABS

Airbags6. Total no of technicians in your service station:

7. How many of these technicians have undergone training on:

CRDiABSAirbag

8. Is your service station fully equipped with necessary tools & equipments to handle new technologies?

Yes NoCRDiABSAirbag

9. How do you rate your preparedness to handle new technology fitted vehicles likely to come to your workshop in next 5 years on a 5 point scale.

Excellent Very Good Good Fair Bad10. How do you rate the new technologies on following parameters ( on

5 point scale…5 for best and 1..for worst)

5 4 3 2 1ProductPrice

59

PromotionAvailability

11. Would you like to give any suggestions to the companies manufacturing new technology fitted vehicles.

QUESTIONNAIRE 2 – Bosch

Dear Sir/Madam,

I am carrying out a study on “MARKET POTENTIAL OF NEW

TECHNOLOGIES IN ‘AUTOMOTIVE AFTERMARKET’: A STUDY WITH

REFERENCE TO ‘BOSCH LIMITED’. The information provided by you shall be

used for academic purposes only. Kindly give your free responses. Your

cooperation will be highly appreciated.

H N Jyothi

60

Name :

Designation:

1. How do you rate your marketing strategies for new technologies on following parameters ( on 5 point scale…5 for best and 1..for worst) vis a vis competition.

5 4 3 2 1ProductPricePromotionAvailability

2. What % of the vehicles are you able to service with your products in Automotive aftermarket?

3. What is the break - up of Service Technicians ( Authorized and un-authorized) who have undergone training organized by your company

BIBLIOGRAPHY

Anastakis, D., 2005. Auto pact: creating a borderless North American

auto industry, 1960-1971. University of Toronto Press, Toronto.

Kotler on Marketing: How to Create, Win, and Dominate Markets, Philip

Kotler, April 1999

The New Strategic Selling : The Unique Sales System Proven Successful by the

World's Best Companies, Stephen E. Heiman, January 1998

The Soul of a New Machine, Tracy Kidder, June 2000

Advances in services marketing and management : research and practice.

61

Greenwich, Conn. : JAI Press, 1992.

Websites Visited

www.boschindia.com

www.acmainfo.com

www.siamindia.com

en.wikipedia.org

www.automotive-technology.com

www.automobileindia.com

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