CHAPTER-1
INTRODUCTION
1.1 INDUSTRY DETAILS
Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years have made remarkable impacts on Indian Automobile Industry. 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.
A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy.
Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 3 broad categories: Cars, two-wheelers and heavy vehicles.
I. The first automobile in India rolled in 1897 in Bombay. II. India is being recognized as potential emerging auto market.
III. Foreign players are adding to their investments in Indian auto industry.
IV. Within two-wheelers, motorcycles contribute 80% of the segment size.
V. Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%). VI. Tata Motors dominates over 60% of the Indian commercial vehicle market.
VII. 2/3rd of auto component production is consumed directly by OEMs. VIII. India is the largest three-wheeler market in the world.
IX. India is the largest two-wheeler manufacturer in the world.
X. India is the second largest tractor manufacturer in the world.
XI. India is the fifth largest commercial vehicle manufacturer in the world. XII. The number one global motorcycle manufacturer is in India.
XIII. India is the fourth largest car market in Asia - recently crossed the 1 million mark. The Indian economy has been influenced by impressive industrial resurgence and automobile industry is definitely one of them. The automotive industry has played a commendable role in the rapid industrial and economic growth of the country. Due to the economic liberalization a number of global automobile manufacturers have found India as one of the premier business destinations. With an annual growth of about 18 percentages in 2009, prospects of the Indian automotive industry are very bright. Overview of the automobile industry worldwide suggests
that in the sectors of automobile manufacturing, automobile assembling and automobile components, India has come up with a huge potential market. Apart from being one of the largest car markets in Asia, India ranks 1st in the manufacturing of three wheelers and 2nd in two wheeler production. With more money spend on the research and developmental activities, more upgraded version of three wheelers would be hitting on the Indian roads. An overview of the automotive industry of the country clearly indicates that the emergence of three wheelers as an effective mode of transportation has benefited millions of Indians. Three wheelers are not only used for carrying passengers but are also used as luggage carriers. In India the three wheelers usually run on diesel and petrol but of late in some of the cities CNG run three wheelers have also come up in large numbers. The three wheelers used for carrying passengers in India are usually referred as Auto-rickshaws. Most of the state governments in the country are supporting the operation of CNG run Auto-rickshaws and also three wheelers with four stroke engines as they produce lesser harmful emissions. It has been found that most of the three wheelers running on the roads of the country come with mileage of about 34-36 km per liter of petrol.
The three wheelers have successfully helped to overcome the dearth of jobs in the country. Numerous people could be seen driving auto-rickshaws on the roads of cities like Delhi, Mumbai, Kolkata, Hyderabad, Bangalore and many more. Due to their simple construction and limited amount of investment the three wheelers as a mode of conveyance and commercial mechanism has gained popularity. What's more, their maintenance is also quite simple. Bajaj Auto has dominated the three wheeler market in the country for years. Several other companies like Piaggio Vehicles and Mahindra & Mahindra have made a late foray into this field. An overview of the current automobile market indicates that the tremendous demand of three wheelers in India and abroad has also allured several other automobile manufacturers like Honda India and TVS Motor to start producing the three wheelers.
Over the years the automobile industry in India has been growing rapidly. Along with the surging growth of the number of cars, the two wheelers and three wheelers have also come up in large numbers in this country. At present in India, Bajaj Auto is the market leader in the segment of three wheelers, the other two major manufacturers being Mahindra & Mahindra and Piaggio Vehicles. Seeking the immense potential of three wheeler market in India, more players are coming into the foray to launch their three wheelers. Very soon companies like Honda India and TVS Motor would be introducing three wheelers in India. Before buying a three wheeler, it is imperative to go through a relevant and proper three wheeler consumer guide that will help to find out the best of three-wheeler with the best of the options.
The three wheeler segment in India is currently small in size, but growing at a fair clip. These vehicles find use as passenger vehicles (auto-rickshaws) as well as small capacity commercial vehicles (pick-up vehicles) 3-wheelers are an important element of goods transportation network in the country and provide last mile connectivity in the metro and urban markets where entry of large commercial vehicles into city limits is increasingly getting restricted. It is also the ideal and most widely used mode for goods transportation in rural and semi urban markets. Three wheelers are also a cost effective mode for public transportation. Export markets include developing and under-developed countries like Bangladesh, Sri Lanka, African countries & Thailand.
Model of Three Wheelers:
In the recent years, the three wheeler segment has been witnessing the introduction of various new models that are equipped with some fantastic features. Bajaj Auto has got models based on diesel and CNG versions with different features on commercial and passenger three
wheelers. One needs to determine his precise needs and go for the relevant model of three-wheeler.
Three Wheeler Finance:
The emergence of the several financial institutions has come as a boom to the numerous consumers of three wheelers. By availing an auto loan you can buy a brand new three wheeler. You can even get to buy a used three wheeler with an auto loan. Several auto financing companies' like ICICI, Associates Finance, FISAF, HDFC Bank. Are some of the popular names in the field of three-wheeler financing.
Three Wheeler Insurance:
There are various automobile insurance companies in India providing insurance for three wheelers. You should always insure your vehicle to get secured from any financial loss that may be incurred due to accident or theft. Some of the popular automobile insurance companies are: ICICI Lombard, Bajaj Allianz, New India Assurance Co., National Insurance Company, HDFC Chubb etc.
Three -Wheeler Maintenance:
It has been found that three-wheeler maintenance can effectively increase their performance. You must follow the basic three wheeler maintenance tips in order to ensure proper functioning of the automobile. Regular checking the engine oil, removing dirt from the braking system and checking the level of brake fluids and proper check of the air pressure of the tires would certainly enhance the work life of your vehicle.
Eco Friendly Three Wheeler Engine:
Apart from the diesel engines, three wheelers are also available with CNG engines and LPG engines that are known for emitting lesser harmful gases and thus would be preferred.
Safety Tips:
Knowledge about the safety tips is quite essential for the safety of the vehicle and the occupants. You should know in detail about all the rules and regulations of driving on the Indian roads to enjoy hassle free driving of a three wheeler.
Three Wheeler Manufacturers
The two and four wheelers are quite a hit all around the world. While the two wheelers have undergone significant improvement and transformation resulting in categories like scooters, scooter, mopeds and motorcycles, the four wheelers too have come up in different shapes, size, design and forms. The cars have evolved into so many forms with light commercial and heavy commercial vehicles too making deep inroads into the global automobile markets. However, it is the three wheeler segment of the automobile that has lagged behind its other counterparts. No wonder, as against them, the number of popular three wheeler manufacturers is quite limited and in India, one comes across only three leading three wheeler manufacturers. The leading three wheeler manufacturers in India are Bajaj Auto, Mahindra & Mahindra and the Italy-based Piaggio. While Bajaj Auto is a leading name in the Indian two wheeler segment, Mahindra & Mahindra is known more for its sports utility vehicles and jeeps like Bolero and Scorpio.
In the three wheeler segment, the classification is broadly in terms of carriage and passenger vehicles. Since the former does have a very limited capacity to carry goods and is not preferred by many, the three wheeler manufacturers are more into the passenger three wheelers. Bajaj Auto has a range of models for passenger three wheelers namely RE 2S, RE
4S, RE 4S CNG, RE 4S LPG, RE Diesel and RE Diesel Mega while its existing carriage three wheeler is called GC 1000.
Mahindra & Mahindra has got the Champion range of three wheelers. There are Champion pick up and Champion delivery vans while the Champion Passenger carrier is mostly seen in the western parts of the country. The Alfa three wheeler carriages of the M& M has a wide and tall cabin, heavy duty gear box, unique designed chassis and hydraulic shock absorbers. The Italian auto major Piaggio manufactures Ape 50 in association with Bajaj Auto at Pune with a 150cc engine. This three wheeler has different body forms and matches the specifications of various countries wherever it is produced. TVS Motor has recently entered the fray with its own model of a three wheeler and with the market recording an impressive 18% CAGR rate over the last fiscal, the three wheeler manufacturers still have plenty to laugh about.
Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India, with overseas players gathering the same momentum as the domestic participants. Every other day, we have been hearing about some new launches, some low cost cars – all customized in a manner such that the common man is not left behind. In 2009, the automobile industry is expected to see a growth rate of around 9 percentages, with the disclaimer that the auto industry in India has been hit badly by the ongoing global financial crisis.
The automobile industry in India happens to be the ninth largest in the world. Following 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 as well, asking for more investments in the Indian automobile sector by the MNCs.
Over the years, the world has been witnessing fantabulous development in the sector of automobile industry. With their advanced engineering techniques, the major auto giants like Mercedes, Ford Motors, General Motors, Audi, BMW, Hyundai, Mitsubishi etc have come up with some of the most sophisticated vehicles that a human mind could have hardly imagined just a few years ago. The global automobile manufacturers have found huge potential markets in a number of developing countries. It is not only the cars, consumer vehicles and two wheelers that are sold in these various countries in large numbers, but the three wheeler market is also quite big in these nations. You will get to see innumerable three wheelers running on the roads of various Southeast Asian countries like India, Thailand, Sri Lanka, Pakistan, Philippines, Nepal, and Bangladesh etc.
There are a number of reasons that have resulted into the proliferation of the three wheelers in umpteen countries. Three wheelers are quite economical in terms of manufacturing and maintenance. They have also earned huge popularity due to their easy maneuvering capabilities through the narrow lanes that are prevalent in most of the developing countries. It is not that three wheelers are used only in the developing nations.
1.2 DETAILS OF FIRM
MISSION:
To become a market leader in light transport vehicle segment and achieve the status of world class Company which manufactures and markets a wide range of high quality products to the total satisfactions of customers in the domestic and overseas market by ensuring:
1. Low cost of manufacture 2. Highly profitable growth
3. Sustainable domestic and global competitiveness 4. Maximum stake holders satisfaction and pride 5. Business ethics
Though a continuous improvement of process & focus on: 1. Total quality
2. Resource productivity 3. Technology
4. Cost effectiveness
And by creating an interactive professional environment of trust, openness, self confidence and commitment which encourages team effort among the stakeholders, suppliers and dealers for profitable venture.
VISION:
“TO BE THE NO.1 AND THE MOST PROFITABLE GLOBAL PLAYER WITH WORLD-CLASS QUALITY AND TECHNOLOGY LEADERSHIP IN THE LIGHT TRANSPORT VEHICLE SEGMENT OFFERING THE TRANSPOTATION SOLUTION TO SATISFY ULTIMATE CUSTOMER NEEDS.”
CORPORATE PROFILE:
Today, when you see or travel by the convenient 'chhakada' you rarely realize who invented this amazing people-friendly transportation vehicle. Well, we take pride in mentioning our founder’s name – the Late Mr. Jagjivanbhai Karsanbhai Chandra. Back in the 1970’s, when transportation was a crucial problem especially in rural areas, he decided to blaze a new trail. He was thinking of an affordable mode of transportation which can benefit rural folks of Saurashtra. The road conditions were not good but the need for transportation was increasing day in and day out. After thorough research and planning, he came up with a vehicle which was skillfully engineered from a motorcycle. And this is how the first 'chhakada' was developed which later became a way of life for the people of Saurashtra.
The improvements in technologies were done from time to time to make it a sturdy and comfortable vehicle. And like father like son, Mr. Jayantibhai Chandra also joined this mission. He took his illustrious father’s vision further. He introduced diesel ‘chhakada’ with many new features, and soon 150,000 'chhakadas' were rolling all over Saurashtra making it easy for passengers. Our passion did not end with success of 'chhakada'. The Group’s main focus was now to engineer similar product for semi-urban and urban areas. Soon, 'Shakti' was on the road which proved to be a runaway success and other vehicles like Half Tonner, Commercial 3-wheeler and more were also introduced under the brand name of shakti.
What’s more, in the last three years, the production and turnover has doubled. Today the combined turnover of the Atul Group is approximately Rs. 1.5 Billion (US $30 Million) and it is achieved only because of the far-sightedness of Late Mr. Jagjivanbhai Karsanbhai Chandra and unending efforts of Mr. Jayantibhai Chandra. Thanks to them, the Atul Group of Industries is pronounced as a leading manufacturer of three-wheeled commercial vehicles in Gujarat.
GROUP COMPANIES:
Atul Auto Limited (Manufacturers of Diesel 3-Wheelers)
Atul Motors Pvt. Ltd. (Marketing of Maruti Range of Cars & 4-Wheelers) Atul Auto Agencies (Distributors of Honda 2-Wheelers)
Atul Automotives (Distributors of Mahindra LCVs) Atul Petroleums (Dealing in Petroleum Fuels & Products) Atul Tele Services (Mobile and Tele Communication Services) Atul Rachna Pvt. Ltd. (Real Estate Developers & Builders) Atul Auto Batteries Pvt. Ltd. (Batery Manufacturer) Khushbu Auto Finance Ltd. (Auto Finance Company)
Khushbu Auto Pvt. Ltd. (Centralised Marketing Organisation)
New Chandra Motor Cycle House (Distributors of LML Vespa Scooter, Royal Enfield
Motor Cycles, etc.)
1.3 HISTORY OF FIRM:
The Company was originally incorporated as a Private Limited Company on 18th June, 1986 under the Companies Act, 1956, in the State of Maharashtra. The Registered Office of the Company was transferred to Jamnagar in the State of Gujarat on 24-01-92. Subsequently on 20-4-94 the Registered Office was transferred to Dist. Rajkot, Gujarat. The Name of the Company was changed from Atul Auto (Jamnagar) Pvt. Ltd. to Atul Auto Pvt. Ltd. on 12-08-94. The Company was subsequently converted into Public Limited Company and fresh certificate of incorporation was obtained on 12-08-94 from the Registrar of the Companies, Gujarat. The Company has set up its present plant at village Shapar, Dist. Rajkot with a financial assistance from GSFC in the year 1992. The project was successfully implemented and commercial production was started in July, 1992.
The Company is presently engaged in the manufacture of Diesel Three Wheelers like 6-seater Auto Rickshaws, Pick-Up Vans and Chassis of Passenger Vehicles. These vehicles are marketed under the brand name of KHUSHBU, which is well established and very popular. 6-seater Diesel Auto Rickshaw with steering wheel is used for local passenger traffic while Pick-Up Vans for local transportation of goods/ groceries etc. in the urban/semi urban centers. Passenger vehicles popularly known as CHHAKDAS are useful for the movement of passengers from one urban/rural center to another for distances upto 100 kms. or so. The
Company manufactures chassis of CHHAKDA, while the Body Building and fitting of other Accessories are mainly done at the Associate Units.
The Company has recently introduced Diesel Mobike in the market under the brand name of FUZI vide the envisaged expansion cum diversification programme. The prototypes of the proposed Diesel Two Wheelers developed by the Company has 4 stroke, Diesel Air Cooled 350 c.c., C.I. Engine, having maximum Horse Power of 6.4 H.P. The Gross Vehicle Weight (GVW) is 330 kgs. The Company has already obtained Certificate for compliance to the Central Motor Vehicles (Amendment) Rules (CMVR) and Roadworthiness Certificate from the Automotive Research Association of India (ARAI), Pune - a Research Institution of the Automotive Industry with the Ministry of Industries, Government of India.
The Company had also obtained CMVR and Roadworthiness Certificates as above for the existing range of products viz. Chassis for goods carriage/ 6-passenger Auto Rickshaw with steering wheel and Pick Up Vans. As per the notifications No. P & D Registration/ 813 dated 15.2.93 of Road Transport Commission's Office, Ahmedabad, Government of India, Regional R.T.Os. are authorised to grant clearance certificates on the basis of ARAI's certificates of Roadworthiness and CMVR. Thus, the Company may be in a position to sell its vehicles on All India Bases after obtaining the clearances from R.T.Os. The Company has already obtained Road Transport Offices (RTO) Clearance from the States of Gujarat, Mahrashtra, Kerala and Andhra Pradesh.
SUBSIDIARIES OF THE COMPANY
There are no subsidiaries of the Company in terms of the Companies Act, 1956.
1.4 OBJECTIVES
The objectives of our study are as under
1. Study of the Indian automobile industry structure.
2. Analysis of performance of Company, sub-segments and their future outlook. 3. Understanding the demand of Indian auto market and its growth aspects. 4. Evaluation of factors fuelling growth in the Indian automobile market. 5. Discussion of the forces countering the market growth.
6. Identification of future prospects of the Company for the Indian automobile industry.
METHODOLOGY
Our methodology consist the following major information
In this comprehensive project we used secondary data only. There are many other types of methodology. We are not using primary data or limited use of that data. There are various tools of secondary data. We are using the common tools like;
1. Magazines 2. News papers 3. Journals 4. Internet 5. Internal report 6. 2009-10 Annual Report 7. 2008-09 Annual Report
LIMITATION OF STUDY:
Our study limitations are as following
1. Limited knowledge2. No comparisons of companies with national & international level. 3. Insufficient data with respect to 2010-11.
4. Only use secondary data
5. Time limitation during semester
6. Some of the company is producing the 2 & 3 wheeler vehicles both so, we cannot get the exact financial data of 3 wheeler vehicles.
1.5 GLOBAL PRESENCE OF THE FIRM
During the year under report, the global economy as well as Indian economy is in the phase of recovery after 2008-09 global melt down. The India’s GDP growth for 2009-10 is estimated at 7.2% in 2008-09. Indian industry recovered substantially in fiscal 2009-10. According to index of industrial growth industrial production registered 10.4% growth in 2009-10 as against 2.8% in 2008-09 fourteen out of seventeen industries achieved higher growth than in the previous year 2008-09.
In fiscal 2009-10 the Indian economy has shown large capital flight in portfolio investment throughout the year. During the year 2009-10 total foreign investment amounted to be USD 66.5 billion as against USD 21.3 billion recorded during the same period last year and as result BSE Sensex rose from 9 K points in April 2009 to 16 K points in March 2010.
Coupled with the outlook of automobile industry and increased investment in infrastructure industry, the company foresee outlook of three wheeler industry very bright. It is believed that 3 wheeler is cheapest mode of transportation for passengers as well as goods and demand for this three wheeler increasing in under developed countries. Export market is also expected to record impressive growth.
1.6 DETAILS OF PROMOTERS AND OWNERS
OWNER'S PROFILENAME
DIREECTOR
SINCE AGE QUALIFICATION EXPERTISE
MR. J .J. CHANDRA CHAIRMAN & MD 18/10/1986 54 YEARS UNDER GRADUATE EMINENT INDUSTRIALIST MR.MAHENDRA J. PATEL JOINT MD 30/11/1994
46
YEARS UNDER GRADUATE PRODUCTION/PERSONNEL MR. SUNIL KUMAR
WHOLE TIME
DIRECTOR 31/10/2007 50
YEARS B.E. MECHANICAL ENGINEER MR. RAJESH H. DHRUVE DIRECTOR 19/12/1994
54 YEARS
COMMERCE GRADUATE
AND CA FINANCE & FOREX MR. SURESH T. KANERIA DIRECTOR 8/3/2004
49
YEARS COMMERCE GRADUATE
GENERAL ADMINISTRATION MR. HAKUBHAI J.
LALAKIYA DIRECTOR 31/05/2006 55
YEARS M.COM. L.L.M. ADVOCTE MR. RAMNIKLAL
KOTECHA DIRECTOR 31/01/2009 54 YEARS B.E. MECHANICAL ADMIN.MANAGEMENT AND MR. VIJAYKUMAR KEDIA DIRECTOR 31/01/2009
49
DIRECTORS
Shri M. J. Patel and Shri Rajesh Dhruv, directors of the company retire by rotation at the ensuring Annual General Meeting and being eligible offer himself for reappointment. The board of director of the company has passed resolution for reappointment of Shri J.J. Chandra as chairman & Managing Director and Shri Sunilkumar Mittal as Whholetime Director, w.e.f. 1st April, 2010, subject to approval of the members in the ensuring Annual General Meeting. Shri J. J. Chandra is one of the founder promoter of the company and is associated with the company since its inception. Mr. Chandra has, through his foresight and visionary approach, coupled with sound understanding of the automobile industry, has led the Company to the path of growth. Mr. M. J. Patel, is has been associated with the Company since long. Mr. Patel is supervising the production facility of the Company and has proven management skill. The Company has benefited a lot from the expertise and vision of Mr. Patel. Mr. Mittal is a B.E. Mechanical. He is engineer by profession and has developed expertise in designing complete vehicle and components wide experience of more than twenty years in automobile industry. He had joined the company from 1st December 2006 as Vice President Technical. Mr. Mittal has been entrusted with research & development of new vehicle of the Company viz. Atul Gem (three-wheeler with rear engine).
A brief resume of Mr. Rajesh Dhruva containing details of nature of their expertise in specific functional areas and names of the companies in which they hold directorship, membership and chairmanship of the board committees, as stipulated in clause 49 of the Listing Agreement with the Stock Exchange in India, are provided in the report of Corporate Governance forming part of the Annual Report.
AUDITORS
M/s Maharishi & Co., Chartered Accountants, and Statutory Auditors of the Company, hold office until the conclusion of the ensuing annual general meeting and are eligible for reappointment. The company has received letter from auditors to effect that their appointment, if made, will be within the prescribed limits under section 224(1B) of the companies act 1956 and that they are not disqualified for such appointment / reappointment within the meaning of section 226 of the Companies Act 1956.
1.7 ORGANIZATION STRUCTURE
CHAIRMAN AND MD DIRECTOR PRODUCTION AND1.8 LOCATION OF OFFICES AND BRANCHES
Company Facts – ATUL AUTO LIMITED Registered Address
Survey No.86,
Plot No. 1 to 4 N H 8-B,,Near Microwave Tower, Rajkot Dist. Gujarat 360002 Tel: 02827-253299 Fax: 02827-252254 02827-666029 Email: [email protected] Website: http://www.atulauto.co.in Group: Not Applicable
Explore Atul Auto connections
Registrars
Sharex Dynamic (India) Pvt. Ltd. 17/B, Dena Bank Building, 2nd Floor, Horniman Circle,
Fort
Tel: 22702485, 22641376, Fax: 22641349
Email: [email protected]
Website: http://www.sharexindia.com Location Details - Atul Auto
Location Type Address
Registered Office & Factory Survey No.86 Plot No. 1 to 4 N H 8-B, Kotdasangani Shapar (Verval) Rajkot Dist. - 360002 Gujarat - India Phone : 253299, 254499, 252996, 252998, 252999 Fax : 252254 Email : [email protected] Internet : N.A.
Corporate Office Jimmy Tower, Gondal Road, Opp. Swaminarayan Gurukul Rajkot - 360002 Gujarat - India Phone : 2374991, 2374992, 2374993, 6546999 Fax : 2374994 Email : N.A. Internet : N.A.
Factory/plant Three Wheel Manufacturing Unit Sector 2 Plot No 5, IIE SIDCUL Ranipur, Haridwar -
Phone : Fax :
Email : N.A. Internet : N.A.
Factory/plant Wind Turbine Generator Village Soda-Mada Jaisalmer - Rajasthan - India Phone : Fax : Email : N.A. Internet : N.A.
Factory/plant Wind Turbine Generator Village Gandhvi Lamba, Kaiyanpur, Jamnagar - Gujarat - India Phone : Fax : Email : N.A. Internet : N.A.
Factory/plant Wind Turbine Generator Village Soda, Jaisalmer - Rajasthan – India. Phone :
Fax :
Email : N.A. Internet : N.A.
Registered Office & Factory Survey No.86, Plot No. 1 to 4 N H 8-B, Near Microwave Tower, Shapar (Verval), Rajkot Dist. - 360002
Gujarat - India
Phone : 253299, 254499, 252996, 252998, 252999, 666000 Fax : 252254, 666029
Email : [email protected] Internet : N.A.
Factory/plant Wind Turbine Generator, Village Soda Jaisalmer - Rajasthan - India Phone : Fax : Email : N.A. Internet : N.A.
Factory/plant Wind Turbine Generator: Village Gandhvi Lamba, Kaiyanpur Jamnagar -
CHAPTER 2
MARKETING AND SALES
2.1 INTRODUCTION
Marketing cannot be considered a separate function. It is whole business seen from the point of view of final result that is from the customer's point of view. Business success is not determined by the producer but by the customer. Marketing consists of all activities by which a company adopts itself to its environment cravenly and profitability. One can safely say that marketing is a social & managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging product value with other. "Marketing consists of all the potential customers sharing a particular need or wants, who might be willing and able to engage in exchange to satisfy that need or want".
"Marketing management is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individuals & organizational goals." Marketing management plays a dynamic and vital role for the business enterprise under marketing management; a marketing programmed is prepared on the basis of need, wants, tests and fusion of customers today new and new technology comes into market every day. Customer's demand also changes with technology. Today new and new technology comes into market every day. Customer's demand also changes with technology. Now a day, market is customer oriented, rather than producer.
Marketing Organisation
Marketing structure is deliberate conscious creation to implicate marketing philosophy into practice. It can be referred as a network (arrangement) made up of people task, responsibility and authority and communication flow to achieve interaction and co-ordination among efforts of company's people. The marketing department can be organized around the product to be sold if we have a line of products. It will be organized on the basis of marketing functions. Like, selling, marketing information and research, advertising, sales promotion, physical distribution, branding, packaging, pricing and channel choice, product planning and development, marketing control, marketing organization is very useful for analysis, planning, implementing & control of marketing programme. It is also useful for fixing of responsibility & authority and maintains good relations among different department & people.
Marketing occupies an important position in the organization of a business unit. As traditionally defined “Marketing consists of those efforts which effect transfers in ownership of goods and care for their physical distribution”.
F.E. Clark The above definition of marketing is a description of the physical activities involved in the process of distribution of goods. However marketing is more than a mere physical process or a set of activities. The purpose of a business is to create a customer. “Marketing is the function of business concerned with the creation of a customer”.
2.2 ORGANISATION STRUCTURE OF MARKETING DEPARTMENT
The organizational chart of Atul Auto Ltd. of marketing department is as under.
2.3 DETAILS OF COMPETITORS
Competition Market Cap. (Rs. cr.) Sales TurnoverNet Profit Total Assets
Bajaj Auto 35,010.52 11,920.98 1,700.11 4,266.92 Hero Honda 29,388.01 15,860.51 2,231.83 3,531.05 TVS Motor 2,213.91 4,430.13 88.02 1,868.67 Mah Scooters 387.31 4.42 8.41 200.56 LML 75.02 315.44 -50.64 -75.57 Kinetic Motor 56.06 6.36 -6.56 29.99 Atul Auto 60.33 120.68 3.17 56.82 OTHERS:
SCOOTERS INDIA LIMITED VCCL
PIAGGIO
2.4 CUSTOMER SEGMENTATION AND TARGET MARKETS
Managing Director Executive Director General Manager Marketing Manager Marketing Executive Marketing Assistant
Segment Knowhow
Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda contributes 50% motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country.
40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers.
Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multipurpose vehicles. In utility vehicles Mahindra holds 42% share.
In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer.
2.5 DISTRIBUTION NETWORK
The media through the product is made available to the customers are called the channels of distribution. The selection of a good channel of distribution in the marketing of the goods services must be proper and affordable by the company. A marketer must see the factors, which are helpful to market his product and to decide the channel of distribution.
There are mainly two methods of distribution. Direct method refers to the selling of the product directly by the manufacturer to customer. While indirect method refers to selling of the product through various Medias such as wholesaler, retailers, agents’ etc. channel which is most suitable to him.
Atul Auto Ltd. has adopted direct method of selling as well as the level of distribution in which they hire dealer (agents) to sell their products. In Gujarat there are 25 dealers and in other states out of Gujarat there are 3 dealers working for Atul Auto Ltd.
DIRECT METHOD
Manufacture Customer
INDIRECT METHOD (One level method)
Manufacture Authorized Dealer Customer
Channel Management
"Channel of distribution, indicates routes or pathways through which flow or move from producer to costumers. "
We define the distribution channel as the set of interdependent marketing institutions participating in the marketing activities involved in the movement or the flow of goods or services from the primary producer to the ultimate consumer.
Marketing institutions considered as channel components are :-
2) All types of agents such as commission agents, factors brokers, warehouse keepers and so on.
3) All other facilitating agencies, such as commission agents, common carriers, bankers, advertising agencies and so on.
Consumer satisfaction is the basic objective for most of the business houses and it can be achieved through availability of product to customer at the right time, at right place, at right place, at right price and at right quality & quantity.
From the very beginning Atul Auto Ltd. Have good number of distributors & dealers at different places. At present Atul Auto Ltd. Is having 25 dealers in Gujarat and 6 are out of Gujarat.
The number &channel levels involved can describe distribution channel. A Manufacturer has various available channel choice as given below :
1) Manufacture---Consumer
2) Manufacture---retailer ---consumer
3) Manufacturer---wholesales ---retailer ---consumer
4) Manufacturer---jobber ---wholesales ---retailer---consumer Atul Auto Ltd. has the following channels of distribution of three wheelers.
The company is also sales directly from factory too.
Atul Auto Ltd
Distributors (State Level)
Authorizes Dealer (District Level)
Sub Dealer (Taluka Level)
Atul Auto Ltd. has selected such distribution levels, as because the product is 3-wheeler, so definitely it has to face the situation of less bulky but scooter demand of product. And so for Gujarat is considered, it has to put dealers as sub-dealers to meet the demand at taluka level and at village too. As far as co-operation and conflict is considered. Atul Auto Ltd. does not have to bother about it. Atul Auto Ltd's distribution channel is so simple that does not create any conflict situations. And Atul Auto Ltd. is such a big name in 3 wheelers automobile industry that can make dealer satisfied financially and psychologically.
2.6 STUDY OF GENERIC LEVEL COMPETTION
The competition is the term where the cut throat competition views remain. There are many players in India which are manufacturer of three wheeler in the industry. The three wheeler is the important segment of the automobile industry. India is one of the largest manufacturers of the three wheeler. The export and import of three wheelers by companies in India is improving. The Bajaj Auto, Scooters India, Piaggio, Mahindra and Mahindra, Atul Auto Limited, VCCL, etc are the key players of three wheeler manufacturers. The Bajaj Auto is the leading player in the India. The Bajaj Auto has the almost 60% market share in the India. If we see, the Piaggio is the market leader in the southern India. There is only one brand which sells the maximum volume per annum. The west side or Gujarat, we can see the market leader is ATUL AUTO LIMITED. Atul Auto has maximum market share in Gujarat especially in SAURASHTRA region. The three wheeler model CHHAKADA is very popular in the Gujarat as well as India. It is the gift from the Atul Auto.
2.7 PRICING POLICY
Price has operated as the major determinant of buyer choice. This is still the case in poor nations, among poor group and with commodity type products. Price still remains one of the most important elements determining company market share & profitability. Price is only element in the marketing mix that producer revenue, the other elements like production cost, price is also one of the most flexible-elements of marketing mix, in that it can be changed quickly unlike product features and channel commitment. At the sometime pricing & price competition are the number one problem faced by marketing executives.
A firm must set a price for the first time when firm develops or acquire a new product, when it introduces its regular product into new distribution channel or geographical area and when it enters bid on new contract work. In setting its pricing policy a company follows following six procedures.
1. Selecting Price Objectives:
The company fist has to decide what it wants to accomplish with its particular product offer. If company has selected its target market and market positioning carefully then, marketing mix strategy including price will be fairly forward.
(a) Maximum Current Revenue: - Company sets a price that maximizes sales revenue. They believe that revenue maximization will lead to long run profit maximization & market share growth.
(b) Survival: Company want to survive as their major objective if they are plagued with intense competition, over capacity, or changing consumer wants. However, survival is only a short run objective.
2. Determining Demand:
In normal case, demand & price are inversely related i.e. the higher the prices lower the demand and lower the price, higher the demand. Atul Auto Ltd. Use following two methods for estimating demand curve.
(A) They analyses existing data on past price, quantities sold & other factors to estimate their relations.
(B) They ask buyer to state how many units they would buy at different proposed prices.
3. Estimating Price:
To charge a price that covers its cost of producing, distributing & selling the product including a fair return. So company fix price of products by considering fixed cost, raw material cost, and management cost, distribution cost, advertising cost & government taxation.
4. Analyzing Competitor's Cost Price & Offers:
Within range of possible prices determined by market demand and cost competitors cost, prices and possible price relations help the company establish where to set its price. So company always tries to set up prices lower than competitors.
5. Selecting Pricing Method:
Companies resolve the pricing issue by selecting a pricing method that includes one or more of these considerations. The pricing methods will then bad to specific price. Company has to accept the method of cost plus mark up. Cost plus pricing method is considered best approach to pricing. It is based on the seller's per unit cost of the product and additional margin of profit.
There are four items in determining the sales prices. (a) Cost of Production
(b) Operation Cost (Variable Cost) (c) Expected Unit Sales
(d) Expected Mark Up
So, the pricing policy in term of product is as follows, Unit Cost = Fixed Cost
Unit Sales
Dealer Billing Price = unit cost of product + overhead + 4% C.S.T. + 16% excise + Transportation + Profit
6. Final Price of Vehicle:
Price methods narrow the price range from which the company must select its final price. In selecting final price, Atul Auto Ltd. Consider additional factors including psychological
pricing, influencing other marketing mix element on price, company pricing policy & impact of price on other parties.
2.8 SALES PROMOTION
Sales promotion is an important instrument in marketing investments in sales promotion can pay very rich dividends. Sales promotion is connecting link between advertising and personnel relationship. It covers displays, exhibitions, demonstrations, coupons and various other selling efforts. Sales promotion uses all those techniques, which help in giving an extra effort to the sales to make it more productive.
“Any steps those are taken for the purpose for increasing sales, the efforts are made to supplement personnel selling and advertising are temped as sales promotion.”
Atul Auto Ltd. In their sales promotion program arranges a free demonstration and free services camps time to time for sales promotion dealers are also given some rate of discount. Through sales promotion company has decided to increase the production and its capacity of workers so that more demand because of sales promotion can be fulfilled.
ADVERTISING
In order to attract the buyers to purchase the product advertising is the most efficient tool of marketing. Sometimes it may happen that those who are in need of the product are totally unaware of the product so advertising plays a vital role in such cases. Advertising may be sent through newspaper, magazines, television, exhibition, fairs, wall painting, hoardings etc. The manufacturers if not able to spare time for advertising then he can give the contact to advertising agency also.
The basic function of advertising is to attract and influence the people to buy products. The messages given through advertising must be conveyed clearly. To make advertising effective, procedures must have a constant touch of new ideas and methods which are beneficial to all. It must be of lower rate so that it may not affect the capital of the company.
Atul Auto Ltd. Products highly demanded by the customers as they are fulfilling the demand of each section of society. At present they are not in position to increase supply up to the demand of their product. Through they advertise their product but very less investment is made on advertisement in local newspapers and to make brand image of their product in well known magazines like ‘ABHIYAN’, ‘AUTOCAR’ etc.
PRODUCTS MIX
Product mix is the set of all products and items that a particular seller offers for sale to buyers, the product mix of a company has four main parts as under :
1) Product Width - It means total number of product line. a) Loading Rickshaw
b) Passenger Rickshaw 2) Product Length - It means total product
b) Shakti Rural (Loading & Passenger) c) Atul Shakti (Passenger)
3) Product Depth - It means average number of product lines
The product line is group of products that are closely related because they perform a similar function, are sold to customer groups, are marketed through the same channels or fall within given price ranges. Atul Auto Limited has three product lines.
1) Loading
2) Loading Passenger 3) Passenger
4) Product consistency - It means close relation between the line
Products Life Cycle
PLC concept derives from the fact that a product sales. Atul Auto Ltd. products are in mature stage. During this stage keen competition brings pressure on prices. There are on step in this stage i.e. sales increase but it decreasing rate in Atul Auto Ltd. At this stage, sales increases but at decreasing rate because the product has achieved acceptance by most potential buyers. Here, profit declines because of increasing marketing expenditure to defend the product against competition, so company adopt measure to stimulate demand & face competition through additional advertising & sales promotion.
2.9 MARKETING STRATEGIES
Company should consider strategies of production and marketing mix modification.
1. Market Modification: - Company might try to expand the market for its mature brand by working with the factors that make up sales.
2. Product Modification: - also try to stimulate sales by modify the product’s characteristic through stages: (A) Quality improvement (B) Style improvement (C) Feature improvement. 3. Marketing Mix Modification: - Company also t to stimulate sales by Modifying marketing mix element like price, place & promotion
BRANDING & PACKAGING
"Branding" is one of the most eye-catching phenomena in this world of competition in any business whether manufacturing or service industry.
In any company, it has its product but the company produces the same product with different features, so separate this product by feature wise, company gives it a different name. The name is called "Brand Name".
Atul Auto Limited has two main brands called "Khushbu" & "Shakti" And both the brands have their other sub brand, which includes special feature of that 3 wheeler.
"Khushbu" Branded:
1. Khushbu Road King 2. Khushbu Road Master 3. Khushbu Mark II Passengers 4. Khushbu pick up Van
“Shakti” Branded:
1. Atul Shakti
2. Atul Shakti Passenger Deluxe
3. Atul Shakti (4 passengers + 1 driver) 4. Atul Shakti delivery van
5. Atul Shakti drive away chassis 6. Atul Shakti pick-up standard 7. Atul Shakti pick-up van angle body 8. Atul Shakti pick-up soft drinks carrier
Enterprises owned or significantly influenced by key personal management of their relatives.. I. ATUL AUTO AGENCY
II. ATUL UTO INDUSTRIES III. ATUL AUTOMOTIVES
IV. ATUL MOTORS PRIVATE LIMITED V. ATUL PETROLIUM
VI. KHUSHBU AUTO PRIVATE LIMITED VII. NEW CHANDRA MOTOR CYCLE AGENCY VIII. NEW CHANDRA MOTOR CYCLE HOUSE
2.10 EXPORT POTENTIAL
The products of a company when sold in the markets or foreign countries are known as exports. It helps in increasing the foreign exchange of a country. Thus, the export activities plays a significant role in the economic upliftment of a nation.
The company ATUL ATUO LTD. supplies its vehicles with brand name “ATUL SHAKTI” in an African Country Nigeria. It supplies 50 vehicles to a transport agency in Nigeria. This agency uses these vehicles mainly for transportation or as load carrier.
The company with its brand name “KHUSHBU” has exported in Asian and African Countries.
2.11 COMPARISION WITH INDUSTRY
Global Players in India:
Segments
Companies
Cars/ SUVs
Daimler-Chrysler
Daewoo Motors
Fiat
Ford
GM
Honda
Hindustan Motors
Hyundai
Mahindra & Mahindra
Maruti Udyog Ltd
Mitsubishi
Skoda
Suzuki
Tata
Toyota
Two-wheelers/
Three-wheelers
Bajaj Auto
Hero Honda
Hero Motors
Honda
Kinetic
VCCL
Scooters India limited
Piagio
LML
Royal Enfield Motors
Ltd.
Suzuki
TVS
Yamaha
M&M
Other local
CVs
Ashok Leyland
Eicher
Mahindra & Mahindra
Mitsubishi
Swaraj Mazda
Tata
Volvo
Tractors
Eicher
Escorts Limited
ITL-Renault
John-Deere
L&T
M & M
Mahindra & Mahindra
New Holland
Punjab Tractors
Steyr
CHAPTER 3
PRODUCTION AND OPERATION
3.1 INTRODUCTION
Atul Auto Ltd. is largest in Gujarat and key player three wheeler manufacturing Company in the country having its manufacturing facility at Rajkot in the state of Gujarat with a total installed capacity of 24,000 vehicles annually. Atul produce Diesel as well as CNG operated Three Wheeled Micro Commercial vehicles. Also have full-fledged R&D center at Pune in the State of Maharashtra. Apart from Atul Gem, Atul manufactures, market and export both cargo and Passenger three wheelers under the brand name "ATUL SHAKTI" More than 200,000 Atul vehicles are on the Indian as well as foreign roads with commendable success, both in terms of workmanship and after sales service through their well spread Authorized Dealer's Network operating in 10 Indian States and export destination. Production department is one of the main parts of whole company management. Production department is also called manufacturing department where production process is carried out. It is department where raw materials are converted to finished goods by the utility of different workers and machines. Production department keeps company’s external relations by internal activity i.e. production, which company’s production department work efficiently than that company has good feature. In short production department combines of man power and machine power without manpower or without machine power this department cannot be possible and if this department is not possible, production is not possible.
3.2 ANALYSIS OF FACILITY LOCATION
INFRASTRUCTURE
The backbone of their business is their infrastructure which empowers them to create and deliver superior quality and world-class products. Today, they have manufacturing units with all the advanced equipments and machineries like CNC machine shop, fabrication shop, paint shop, test house and much more.
Manufacturing Units:
Manufacturing plant situated at Shapar 18 Kms. away from Rajkot. This plant is having production capacity of 24000 vehicles per annum in single shift basis.
NAME OF MACHINERY:
For the production of finished foods, raw-materials are the most important. Then second important point for the production of finished product is machinery. “ATUL AUTO LTD.” Uses various types of machines like;
• Welding and casting machine
• Sub-assembling machines
• Studs and nuts
• Testing machine.
RAW MATERIALS:
ATUL AUTO LTD. Uses raw-materials like steel sheets, pipes, bright bars, engine oils, ball-bearings, etc. the unit mostly purchases this material from TATA Ahmadabad depot. It also uses semi-finished products from various places like Aurangabad, Delhi, Ahmadabad and Rajkot.
POLLUTION CONTROL:
The problem of pollution is nearly Nil. This because no smoke as produced during the production process. Also no water or land pollution bring caused by the industry. So the company has received a no objection certificate from government.
INDUSTRY AND BUSINESS OUTLOOK:
During the year 2009-10 under report, the production of 3 wheeler vehicles has increased by 25.92%.
Product Performance: 1. Production
Production of vehicle for the year 2009-10 is 12,379 as compared to 11,437 in 2008-09 showing increase of 8%.
2. Sales
Total sales turn over presented in number of vehicles, is 12,329, which in terms of amount is 114.44 crores, against previous year turnover of Rs. 112.15 crores [vehicles sold 11,488 in previous year].
3. Profitability
The company’s profit before tax stood at Rs.7,15,01,637/-, whereas as Net Profit after tax stood at
Rs.4,53,86,535/-4. WTG project
Member are aware that the company had already installed wind turbinegeneratorof 1.25 MV capacity atVillage Soda, Nr. Jaiselmer, State Rajsthan and has also installed 0.600MW wind turbine generator atgandhavi, dist. Jamnagar. The company ha erarned total income of Rs.1,40,62,368/-(out of which , electricity having value of Rs,76,10,785/- jas been used for selfconsumption) from power generation projectin the 2009-10ass compared totatal income of Rs. 1,35,78,109/- during last fiscal (out of which electricity having value of Rs. 69,27,181/- has been used for self consumption). The company has earned benefits of saving in power cost since then.
3.3 FACILITY LAYOUT
PLANT LOCATION:
The factors which usually determine the location of industries may be described as under:
• Availability of raw-material
• Markets
• Fuel and power
• Transport facilities
• Labor
• Future outook
The ATUL AUTO LTD. Is located at survey no. 86 on national highway 8-B, shaper (veraval). The firm selected this location because it is on industrial are and all the facilities like transportation, labor, raw material etc. are easily available.
3
.4 MATERIAL HANDLING:
In ATUL AUTO LTD. Material handling equipment are used in hydraulic trolley and simple trolley. Simple trolleys are more frequently used while hydraulic trolleys are used to carry very heavy materials. These trolleys are used to carry materials from one place to another. They are moved either manually or technically with the help of different types of material handling equipment.
3.5 INVENTORY CONTROL
:Inventory control means control ever material lying in store. Inventory control keeps continuous track of inventories. Inventory control aims of the following objective.
A. Never send out too many small costly order for more B. Never run out of anything.
C. Never build up a very large inventory.
There are five deferent types of stores department in ATUL AUTO LTD. A. General stores.
B. Tools stores finished goods store. C. Raw-material.
D. Fabrication store.
3.6 QUALITY CONTROL:
The quality control department of ATUL AUTO LTD. Checks the quality of the goods with the help of equipment like crack detector, harness tester, tec. This department checks the
quality of raw-materials and finished products. Now, only this it also checks the quality of at every stage of the production process. the responsibility of controlling the quality is held by the supervisor of production department in ATUL AUTO LTD.
SCRAP AND WASTE MANAGEMENT:
The unnecessary accumulation of absolute and scrap items is said to be waste and enough capital is blocked in it. The firm, ATUL AUTO LTD. Has a special scrap yard in which the scrap from machine shop and fabrication is assembled. This scrap is weekly collected and sold to person named Abdulbhai. This is a way of income for the company.
STORES MANAGEMENT:
The principle function of stores management is to act as a clearing house for goods i.e. receipt goods bought and issue of need materials in the plant against authorized orders. ATUL AUTO LTD. Maintains a computer online system of their own for the purpose of store management. This records of every materials starting from purchase to final production and finally to sale is maintained in this system. The head of stores management is Mr. j Mehta.
PDI DEPARTMENT OR Q. C. DEPARTMENT
After the successful manufacturing and assembling process the vehicle is sent to PDI department for proper inspection, in this department generally following types of testing procedure takes place.
3.7 SAFETY
Leakages at fuel lines Braking efficiency Brake pedal setting Level of brake fluid / leakage Electrical joint efficiency Steering freeness Accelerator freeness Oil leakages Oil level in engines Abnormal noise from engine Abnormal noise from gearbox
Horn sound Oil level in gear box Gear shifting
Reverse gear engagement Battery connection All electrical working Vehicle starting Hand brake lever position Head light focus
AESTHETIC
Paint quality (Dust, Rundown, Scratches uncovered) Welding joint finish
Front show glass / side glass
OTHERS
So, all mentioned activities and testing takes place at PD1 department. Generally 30-50 vehicles are checked every day and for that 5 people are required. One of most important activity takes place here is: History card it is prepared in PDI department which connects with warranty card in which all the details of vehicle like date of issue, vehicle sold by Ch. No. and engine no. also name and address of customer is mentioned in this card. Battery & warranty card also provided from PD1 department.
There are many levels in the production department. There are two types of manager. The purchase manager focusing on the raw material side and the production manager manage the whole thing about the production. He converts the raw material into semi finish or finish goods. There are few engineers who design the products. The assembly and paint department available under one roof. The workers are either engineer or skilled in automobile sector.
3.9 DIAGRAM OF THE PRODUCTION PROCESS
Board of Director Managing Director E. Director General Manager Purchase Manager Production Manager Sr. Eng. Fabrication Planning Engineers Sr. Eng. Testing Sr. Eng.Quality Control Sr. Eng. Design Workers Sr. Eng. Assembly
Materials
R.S.
Q.C.
F.R.C.
Proces
s store
General
store
Material
store
F. goods
store
Q.C.
Q
.
Genera
l
Assembly
P.D.I.
Dispatch
PRODUCTION PROCESS 1) Purchase of Raw Material
The main raw material is iron used by the company to manufacture vehcles. Company purchases different varieties of iron such as iron angles, iron sheets, iron pipes etc. The company generally purchased this raw material from shapar, Rajkot and Ahmedabad.
2) Cutting of Raw Material
After receiving the raw materials, the process of cutting as per requirement is done by the workers. Iron angle, sheets and pipes are cut as per the need of various products and range.
3) Shaping
The raw materials have been given shape on shaping machine by the workers or engineers. Iron pipes angles and sheets are given shapes as per its place in vehicles. The shaping is the stage where the product designs have been made.
4) Fixing of components
After giving shape to iron pipes, angles and sheets they are fixed with each other by bolts and welding and the vehicles gets their primary shape.
5) Assembling
Different components, which were fixed by joining different parts of irons, are assembled in assembling department and after completion of this process half of the process is finished over here. Generally assembly activity is also separated as an assembly department. So in the assembly department work is divided in four stages.
First Stage: Joining three parts, i.e. Fork,
Second Stage: Power Pack assembly of fixing gear box with engine Third Stage: Break Assembly.
Four Stage: Cabling work, clutch, gear cable and also Electric wiring is completed at this stage.
6) Sub-Assembling
The part before the assembly is of sub-assembly. Here in this stage all the small parts are assembled with each other and are forwarded to the assembly stage. The kinds of work done in this stage are of fork assembly, differential assembly, real excel Assembly, Handle assembly, Electric assembly etc. After the completion of the sub-assembly work they are forwarded to the assembly department for the further process.
7) Body-fitting
In this part of the process, the body of the vehicle is repaired and vehicle gets its original shape and different parts of the body are joined together in this department.
8) Gear-fitting
For any automobile industry the important part is gear. No commercial passenger vehicle or goods vehicle can be made without gear or rather it will be not economical for the customer from the view point of the mileage. Atul Auto Ltd. Manufacturing gears for its vehicle by the help of the specialist engineer’s team.
9) Engine
The next important part of the vehicle is the engine. Any vehicle for working purpose needs engine as a human being needs heart for its function. Company is not manufacturing engine by its own but is importing engine from Aurangabad. The company simply fixes up the gear with the engine and then it is installed into the vehicle. We will go through engine specification in later stage.
10) Paint Shop
In paint shop the vehicle is brought in the store when it totally assembled. Here the color is done to the vehicle according to the company’s policy. The paint shop till today is manual but in shorter time Atul Auto Ltd. will have the Automatic plant for the Color. There are also some limited colors like yellow or green design on the auto. The government policy and the RTO rules have to be followed.
11) Final Testing
The last step in the process is of testing the vehicle before the final dispatch. Department where this final inspection is done is called PDI i.e. Pre Dispatch Inspection. Following inspection is made.
Visual Inspection: Visual Inspection of two types.
• Body Finishing and paint
• Body Alignment and seating hood.
Electric Testing:
Self-Charging, Head Lamp, Indicator Lamp, Cabin Lamp, Parking Lamp, Tale Lamp, Break Lamp, Home Mounting.
Fitting Testing:
Front Wheel and Rear Wheel Testing. Engine foundation. Differential assembly, front show. Body Mounting and Wiper assembly.
Oil and Air Testing:
All type of oil required in engine, gear box, Differential breaks are checked.
Cable and Pipe Testing:
All cable such as Accelerator cable, Clutch cable, Gear forward and reverse and etc, are checked up properly. Also all pipe such as Tank filter, Filter to pump, Return Pipe, Brake Pipe clamp, Pump to Banjo and etc. are also tested.
Road Trial, Distance cover, Break efficiency, Balance of the Vehicle, Maximum Speed, Vibrations.
3.10 PRODUCT RANGE
Atul Shakti 3+1 Passenger Atul Shakti 4+1 Passenger
Atul Shakti 6+1 Passenger
Atul Shakti Delivery Van
Atul Shakti Pickup Van Standard Atul Shakti Pickup Van
High Deck
Atul Shakti Re Passenger Atul Shakti LPG Passenger
Atul Shakti Tipper Atul Shakti Soft Drink Carrier
Atul Shakti Water Tanker
Atul Shakti Bio Hazard
Atul Shakti Mobile Shop Atul Shakti Vegetable Vending
CHAPTER 4
FINANCE AND ACCOUNTS
4.1 INTRODUCTION
Every other day a new model of auto is being launched in the country, how many times you must have wished to change that old auto of yours and buy a hot set of wheels. However as you come back to earth, bitter reality bites you; realization dawns in that you don't have such a big amount of money to invest in a new auto. Don't worry as several banks and financial institution have donned the role of new age Santa Claus to make sure that your dream comes true. Today auto loans are not only available for brand new autos but they are also available for used autos.
State Bank of India which is one of the largest nationalized banks in the country offers you the following advantages
1. Longer repayment periods up to 7 years
2. Low processing
3. No advance EMI along with the down payment effectively increasing the amount of loan
4. Interest is calculated on the reducing balance method meaning every time you repay an amount the interest is calculated on the remaining amount and not on the one which is out standing at the beginning of the year.
The company gives a loan which is up to 2.5 times of one's net annual income, with the minimum income cap of the applicant being 75000 rupees per annum. The company sanctions loans for all new autos and for second hand autos which are not more than 5 years old. The bank also provides loans to people who don't have an account with the bank provided they furnish address proof, identity proof and other relevant documents. UTI bank offers loans covering 85% of the cost of the vehicle plus registration and insurance or 20 times the net monthly salary and you can repay the loan with in a maximum period of 5 years or 60 monthly equated installments.
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the items of the balance sheet and the profit and loss account. The nature of analysis will differ depending on the purpose of the analyst like a trade creditor, suppliers of long-term debt, investor, and management. Here in three wheeler industry financial analysis is the key issue for that how industry could be growth and how their asset could be more resourceful than other.
4.2 ORGANIZATION STRUCTURE OF FINANCE DEPARTMENT
4.3 CAPITAL STRUCTURE
Capital Structure (Atul Auto)
Period Instrument Authorized Capital
Issued Capital P A I D U P
-From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2009 2010 Equity Share 8 5.85 5851520 10 5.85 2008 2009 Equity Share 8 5.85 5851520 10 5.85 2007 2008 Equity Share 8 5.35 5351520 10 5.35 2006 2007 Equity Share 8 5.35 5351520 10 5.35 2005 2006 Equity Share 8 5.35 5351520 10 5.35 2004 2005 Equity Share 8 5.35 5351520 10 5.35 2003 2004 Equity Share 8 5.35 5351520 10 5.35 2002 2003 Equity Share 8 5.35 5351520 10 5.35 2001 2002 Equity Share 8 5.35 5351520 10 5.35 1999 2000 Equity Share 8 4.46 4459600 10 4.46 1998 1999 Equity Share 8 4.46 4459600 10 4.46 1997 1998 Equity Share 8 5.1 5100300 10 5.1 1996 1997 Equity Share 8 5.1 5100300 10 5.1 1995 1996 Equity Share 8 5.1 5100300 10 5.1 1994 1995 Equity Share 8 1.8 1800000 10 1.8
Source : Dion Global Solutions Limited
Chief financial
officer
Controller
Treasure
Planning &
Budgeting
Officer
Accounti
ng
Officer
Assistant
Assistant
Assista
nt
Assista
nt
Assista
nt
Assista
nt
4.4 COSTING METHODS
4.5 COST STRUCTURE
Expenditure
a. Raw material consumption and processing charges
Raw material consumption and processing charges decreased by 0.65% to Rs.9,301.21 lacs for the march 31, 2010 from Rs.9,362.04 lacs for the March 31, 2009.
b. Staff cost
Staff cost increased by 19.23% to Rs.703.41 Lacs for the year March 31, 2010 from Rs.589.97 Lacs for the Year March 31, 2009.
c. Financial Expenses
Financial expenses increased by 12.95% to Rs.316.10 Lacs for the year March 31, 2010 from Rs.279.86 Lacs for the year March 31, 2009. It includes interest on term loan of Rs.183.99 Lacs, interest on cash credit of Rs.89.92 Lacs, other interest of Rs.4.19 Lacs and Rs.37.99 Lacs for bank charges.
d. Depreciation amortization
Company has provided Rs.354.70 Lacs for depreciation and Rs.32.52 Lacs for amortization of intangible asset for the year ended march 31, 2010.
e. Tax expenses
Company has provided for current tax of Rs.158.16 Lacs and deferred tax of Rs.102.32 Lacs for the year ended March 31, 2010.
Liquidity:
Company’s growth has been financed largely through cash generated from operations. Net cash generated from operations was Rs. 958.02 Lacs and Rs. 664.48 Lacs for the year ended March 31, 2010 and March 31, 2009 respectively.net cash used in investing activities was Rs. 193.74 Lacs and Rs.726.91 Lacs for the year ended March 31, 2010 and March 31, 2009 respectively. Net cash used in financing activities was Rs. 785.87 Lacs for the year ended March 31, 2010 and net cash raised by financing activities was Rs.211.20 Lacs for the year ended March 31, 2009.
4.6 CLASSIFICATION OF COSTS IN VARIOUS CATEGORIES
The company’s major cost classification are as above. The manufacturing, selling and marketing, general administrative expenses of company in last two year comparision gives some important views. The manufacturing cost of the company is decreasing on last year. The reason might be the use of modern technology. The selling and marketing expenses also declined. The only general and administrative expenses were increased.
