Future Trend in Indian Automobile Industry : A Statistical Approach

Transcription

1 Future Trend in Indian Automobile Industry : A Statistical Approach Pradeepta K. Sarangi Shahin Bano Megha Pant Asst. Professor, SCS Student, PGDM(IT), Student, PGDM(IT), Apeejay Institute of Technology Apeejay Institute of Technology Apeejay Institute of Technology Greater Noida Greater Noida Greater Noida Abstract: India is a bigger market for automobile industries. Despite a huge potential, this sector has not performed as expected. This sector suffers from slow growth, sometimes even negative growth has been reported. This research has made an attempt to figure out the growth of the Indian automobile industry for the next three years (till ) using statistical approach. Average growth rate of 6 to 11 percent has been reported for different categories in car segment. Keywords : Indian Automobile Industry, Future Trend, Statistical Approach I INTRODUCTION The automobile sector in India has come a long way. This sector has reported high growth rate from 26 percent to a worst negative growth in some segments during past years. Indian auto sector is one of the most vibrant industry. The automobile industry is one of India s major sectors; accounting for 22% of the country s manufacturing GDP. The Indian auto industry, comprising cars, two-wheelers, three-wheelers and al s, is the seventh-largest in the world with an annual production of 17.5 million s, of which 2.3 million are exported [1].Indian Auto market has the potential to dominate the Global auto industry, provided, a conducive environment is created for potential innovators to come up with new pilot projects. For the year , automobile sector has shown a sluggish growth citing high ownership costs like excise duty, cost of registration, fuel costs, road tax and slow rural income growth. Over the next few years, solid but cautious growth is expected due to improved affordability, rising incomes and untapped markets. All these give a promising opportunity for automobile manufactures in India. According to Macquaire equities research, s sales is expected to double in the next four years and growth is anticipated to be higher than 16 percent from the past 10 years [2]. In this paper, we have made an attempt to forecast the sales, production and export trend for Indian automobile industry over next three years. II RESEARCH OBJECTIVE & METHODOLOGY The objective of this research is to find out the growth of Indian automobile industry and to report the forecasted values for the next three years ( to ) using statistical technique (Graphical method with linear trend line). III RESEARCH DATA The data used in this research is the historical data of Indian auto mobile industry from the period to (for the segments of production trend, domestic sales trend and export trend) collected from [3] and downloaded from the website of Society of Indian Automobile Manufacturing, (SIAM) [4]. Each segment consists of two categories: and al s. Data collected from both the sources have been summarized in table 1. 28

2 TABLE 1 Historical data (car segment),indian automobile industry Productio n Productio n al Domestic sales Domestic sales al Export Export al ,777, ,006 1,549, , ,401 58,994 1,838, ,870 1,552, , ,729 42,625 2,357, ,556 1,951, , ,145 45,009 2,982, ,735 2,501, , ,326 74,043 3,146, ,136 2,618, , ,318 92,663 3,233, ,744 2,686, , ,686 79,944 IV EXPERIMENTAL DESIGN & RESULTS ANALYSIS Experimental design consists of graph plotting and prediction of future values by extrapolating the trend line. Six different experiments have been carried out. In each experiment, graph has been plotted using Spreadsheets and then linear trend line has been drawn and expanded to calculate forecasted values. The experiments are detailed below. Experiment-1: This experiment deals with the production trend- data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-1 below TABLE 2 29

3 Fig.1 Trend line for production trend- The trend line in the figure has an upward motion indicating an increasing growth for next three years. The forecasted values calculated from the trend line are shown in table 2. Experiment-2: This experiment deals with the production trend-al data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-2 below TABLE 3 Fig.2 Trend line for production trend-al The graph in the figure indicates that this segment has has seen negative growth during the period and Despite this, the trend line forecasts a positive growth for next three years. The forecasted values have been shown in table 3. Experiment-3: This experiment deals with the domestic sales trend- data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-3 below TABLE 4 Fig.3 Trend line for domestic sales trend- The domestic sales of s has also faced ups and downs during past few years. However, our prediction indicates positive growth for the coming years. The forecasted values have been shown in table 4. Experiment-4: This experiment deals with the domestic sales trend-al data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-4 below. 30

4 TABLE 5 Fig. 4 Trend line for sales trend-al The graph indicates a sharp decline in and a negative growth during Our experiments shows a positive growth for this segment for the next three years. The forecasted values are shown in table 5. Experiment-5: This experiment deals with the Export trend- data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-5 below TABLE 6 Fig. 5 Trend line for export trend- Export of s has not achieved much success in past years. This segment has also seen flat and negative growth. However, the trend line here indicates towards positive growth for next three years. The forecasted values are shown in table 6. Experiment-6: This experiment deals with the export trend-al data of Indian automobile industry. The graphical representation and trend line has been shown in the figure-6 below TABLE 7 Fig. 6 Trend line for export trend-al 31

5 The negative and flat growth rate of this segment is easily understood from the graph. However, the trend line indicates a positive growth for the next three years despite a negative growth in the last year. The forecasted values are shown in table 7. V CONCLUSION An attempt has been made to understand and analyze the current and future Indian automobile industries. Secondary data collected from website and research publications have been used. values have been calculated for the period to using statistical approach. Despite various ups and downs in the past years, our experiments show positive growth in all segments. The segment wise average forecasted growth rate for the next three years are given in table 8. TABLE 8 SEGMENT WISE AVERAGE FORECASTED GROWTH RATE Segment Average growth rate (%) Production trend Production trend-al 7.23 Domestic sales trend Domestic sales trend-al 6.01 Export trend Export trend-al VI DECLARATION This research does not challenge any other works/publications. The results are only indicative and on calculation basis which reflects the author s view. [1] Shankar Ajay,CII Media Release, February REFERENCES [2] Anjum Farhat,Buying Behavior and Customer Satisfaction of Hyundai Cars in Hyderabad City, International Conference ontechnology and Business Management, March 18-20, [3] Ray Sarbapriya, Economic Performance of Indian Automobile Industry: An Econometric Appraisal,Business Intelligence Journal, January 2012, pp [4] 32