Recommendations for Automotive Industry

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14th Jul 2017 Economics Reference this


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The Automobile companies must improve their process and should be efficient in order to implement their strategies quicker than competitors in times of economic downturns.

The National level Automotive Institute for training on automobile at International Training Institutes (ITIs) and Automotive Training Institute (ATIs) have to be set up.

The Government of India should promote manufacturing and encourage exports of small cars, multi-utility vehicles, two and three wheelers, tractors and components which infuse necessary foreign currencies to India. Specific measures should be taken for expansion of domestic market.

Government should hike its spending to create more jobs and boost the manufacturing sectors in the country.

The Automobile companies should use their core competencies to overcome turbulent economic times.

The Strategic alliance or acquisitions of Automobile companies encourage the morale of those lost markets and help them to experience a new life in a given bridge of time through collective efforts. The reason for acquiring the businesses is seen as a dependable strategy by the companies in a period of economic downturn.

Advertising is an important factor for the Automobile companies to overcome economic downturns as it helps the affected companies to showcase their products in the market.

The Automobile companies have to come out with new innovative products to attain advantage over their competition in the market. They must do it on priority and development of the most promising products should meet the immediate needs of their customers.

The Automobile companies have to re-evaluate the marketing plan and business strategies as and when needed.

Aviation Industry

Strategic alliances need to be encouraged by the government of India. The leading few aviation industries like Jet Airways and Kingfisher airlines which together contribute sixty percent of the Indian economic market have entered into a strategic alliance for sharing information regarding the travel maps of other countries and Indian states, ground staff, to help in planning and execution of flight programs . The strategic alliance helps the Aviation Industries to reduce costs incurred during operations, to share logistics, fuel, code, and can combine training for staff on those types of aircrafts that are common.

Aviation industries must not reduce on marketing and advertising of their Industries during periods of economic slowdown as it may become detrimental to their business. The industries have to emphasis on advertising during economic downturn as it provides an opportunity to find good number of clients who may require the services of the industries to fulfill their projects or assignments on time.

The Aviation companies have to frame contingency strategies in adverse times well in advance before it occurs. This helps the companies to survive turbulent times.

The Research and Development has to be focused on priority by the Aviation companies to fulfill the various needs of their customers especially those who are hit badly due to recession. The companies must market their innovative products to gain advantage over their competition.

The Government of India has to focus on Pilot flying, rest hours and pilot pay structure.

The Number of operational fleet in airports needs to be increased.

Banking and Financial Institutions

The Banking and Financial Institutions have to make a fundamental shift from credit centric model by deepening customer relationships, acquiring new customers and innovating new products for the market.

The Banking and Financial Institutions have to build winning teams for well diversified and profitable future growth which has to be driven by superior skills and capabilities.

The Banking and Financial Institutions should emphasis on high performance driven culture with efficient processes, systems and controls enabled by best-in-class technology. The institutions have to emphasis on improvement of their process and efficiency during recessions. They should be fast and flexible in implementing strategies to overcome recession.

The voting rights of shareholders of nationalized banks have to be increased to 10.0% from the existing 1.0%.

The nationalized banks should be given powers to release the shares and rights which will generate help to get funds from the capital market in order to expand the banking business.

The banking and financial institutions should plan for strategies in advance to overcome difficulties which may surface at the time of recession or during unknown contingencies.

The banking and financial institutions should encourage marketing, advertising and promotions during economic slowdown. This helps to strengthen demand for their products. The increased advertising and marketing will improve the probability to gain new projects or portfolios in the market.

There is a need for Research and Development in banking and financial institutions. The companies have to increase their product innovations and introduce new lucrative policies, offers and discounts to gain advantage over competitors.

The banking and financial institutions have to change their marketing plan by considering the policies, price and performance of employees and products. The employees have to be requested to provide their co-operation and provide the chance to suggest measures to overcome recession.

Hospitality industry

The Hospitality Industry should not diversify from their core business. The companies may lose focus not only from their core competencies but also may lose opportunities to gain market share from their competitors.

The hospitality industry provides extreme opportunity to India in terms of contribution to its Gross Domestic Product and employment generation. The Government policies should focus at increasing tourist arrivals in the country and facilitate investments in tourism infrastructure, which will lead to significantly higher multiplier effect on the key economic parameters of the Indian economy.

There is a need to generate Strong Sales and Marketing network in the Hospitality industry. The hospitality industry lacks highly trained and motivated sales force in India excluding few hotels like Taj, Oberio and Leela. A Strong sales force always provides extensive reach and penetration in the market.

There is a need to have Strong Food & Beverage Skills in the Hospitality industry as it becomes a forte of any hotel or restaurant. This strengthens the hospitality sector to open number of Food and Beverage outlets, in partnership with celebrity chefs.

The hospitality sector has to reduce the Geographical and economic risk in order to increase its presence internationally in key gateway cities and resorts in South East Asia and other countries.

The hospitality sector has to sweep up an undivided luxury tax across the country. To reduce the time lag a stipulation clearances through single-window system at the levels of State and Central Government has to be constituted. Tax holiday would encourage Foreign Direct Investment in this sector, more players to set up hotels and to bridge the shortage of rooms.

The Government of India should raise the floor ratio of the hotels, i.e. Must provide assistance to create more rooms in the subsisting properties so that there will no shortage of hotel rooms in the country.

To successfully counter the risk from growing competition and the new properties, the hotels and restaurants have to renovate and reposition all their key properties.

The hospitality sector should improve its service levels by providing uniform and best service across all their subsidiary hotels.

The hospitality sector has to aim for control its operating and financial leverage by expanding through management contracts and leveraging the strengths of their Associates.

The Hospitality sector has to initiate a number of steps to further strengthen the sales and marketing network in the domestic as well as the international markets by conducting successful road shows in international fairs and. New Personal Relations agencies need to be appointed in international level to achieve step-up media visibility in foreign countries.

The Hospitality industry should have contingency planning.

Most of the business owners of Hospitality industry should not reduce their marketing and advertising during economic slowdown. Advertising should be used effectively by the companies at the time of economic downturn as they will help to build up the requirement for their products.

The Research and Development has to be focused on priority by the Hospitality industries to fulfill the various needs of their customers especially those who are hit badly due to recession. The industries must market their innovative food and travel products to gain advantage over their competition.

The Hospitality Industry has to focus on business strategies that include policies, pricing, and employee performance. The employees are to be taken into confidence and seek their cooperation during the economic crisis. Once the employee confidence is won by the management, the loyalty factor gets boosted and out of the box thinking begins among the employees.

IT Industry

The company owners should encourage advertising and marketing during the recession which will help them to strengthen demand for their products. The foolish attitude of cost cutting on advertising will not only hamper the long term business interests but also loses the image and faith of the market on the business.

The Indian Information Technology industries must raise the value chain, get into the units of production, rise in attempts in the field of hardware and beef up its expedience in embedded software to overcome the recession in the form of creating opportunities.

To broaden the Information Technology industries in the foreign markets, the Information Technology professionals have to be properly trained and also provide classes on foreign languages.

The companies should focus on alternative strategies which will help the companies to survive the contingencies well in advance.

The Information Technology Enabled Services must follow up its importance and direction on innovation of the product during the economic recession. At the time of recession the Information Technology companies can not only survive but also grow, if they remain closer to their business by involving in the strategy making, plans and establish the Information Technology contacts through investments.

The Information Technology companies need to improve their process of manufacturing products and also should improve in enabling the services during recessions.

The Information Technology companies need to evaluate the marketing plan and business strategies to run their companies efficient and effectively.

The Information Technology companies need to re-invent itself and strive hard through new business models, global delivery, partnerships and transformation. A collaborative effort from all stakeholders is needed to ensure future growth of India’s IT-ITES sector.

The IT companies have to emphasis on Cyber security and quality management by adopting global standards.

Real Estate

The Real Estate companies have to reassess the marketing plan, policies, product pricing, and performance of employees. During tough times, employees are to be taken into confidence and seek their benign cooperation and advise them to cope with such crisis. Good employees always stand by the organization in times of emergency and protect the interests of not only customers but also stakeholders.

The Real Estate Companies have to focus on their core business during economic recession. By focusing on their core business, the companies can create chances of arriving at greater margin of market share.

Government of India has to encourage trusts and mutual funds on Real Estate companies so that people can invest in these Real estate mutual funds.

The Government has to stress on proper infrastructure to open up possible opportunities on development of various cities in Mumbai. Due to non available of enough land and raising land prices, the work in terms of developments of residential and commercial properties have been stopped in many metropolitan areas.

The Government has to concentrate more on producing an interactive environment for enabling a maintained and fortunate presentation of public-private partnership projects.

The Real Estate Developers have to be organized, effective and practice finest practices of construction. The Real Estate companies have to practice finer technology in construction with best choice of raw materials and trained engineers.

The Real Estate companies have to compose strategies for untoward happenings well in advance before it occurs. This will help the companies to last in turbulent times.

In the economic battle ground, it is always advisable for the companies to go hand in hand by joining their business interests through strategic alliances and acquisitions. This enhances the market position of the companies as well as their image in the market. The morale of the lost markets will get boosted and can also be recaptured within a short span through collective efforts.

The Real Estate companies should give importance to Marketing and Advertising as it helps them to find good number of clients who may require the services of the companies to fulfill their projects or assignments on time. The companies should start contacting their past client and provide service from ground level.

The companies have to make an attempt to increase their innovations and introduce new product designs to quickly to gain advantage over competitors. The constant exercise of research and development on the part of good business houses will create confidence and a feeling of “never give up” amongst its loyal customers. The government of India should promote Research and Development in the country.

Other Suggestions

Entrepreneurship should be encouraged by the government of India to compensate the unemployment. More establishments’ means more jobs for the people which form as a source of income for the family.

The Indian Government should play a key role in facilitating infrastructure creation, promoting the country’s capabilities, create a favorable and predictable business environment and in attracting foreign investments to India.

The role of Industry will be in designing and manufacturing products of world-class quality standards, establishing cost competitiveness, improving the productivity of both labor and capital, achieving scale and Research & Development by enhancing the capability and showcasing India’s products in potential markets.

The corporate India has to give more importance in developing market and linking supply chains in markets of Asia and Europe.

The Government of India has to take care of negative like and rules of the country with current negotiation of Free Trade Agreement and Regional Trade agreement with countries like Thailand, Singapore, Malaysia, China, Korea, Egypt and Gulf.

The Companies have to focus on ensuring that the ‘mental drift’ of employees doesn’t happen when issues such as cost reduction and lay-offs are addressed. The fear that looms large for organizations in the turbulent economic times is that ‘talent’ may drift away from the organization. This could be a ‘mental drift’, wherein employees feel alienated or de-motivated. This ‘mental drift’ could later precipitate into a ‘physical drift’. Organizations must remember that any knee-jerk reaction now could be detrimental in the long run.

There is need to provide Capital Investment to the country.

The unnecessary Expenditures have to be controlled in the fields like promoting elections and films.

The Government of India has to improve their reforms and policies as Indian economy always faces challenges due to the government policy paralysis. The postponements of Foreign Direct Investment reforms, Postponement of approving the real estate properties and delay in approving the infrastructure projects, have caused anxiousness among the investors from foreign countries that are eager to do investments in India.

The implementation to allow 100 percent Foreign Direct Investment in multi-brand retailing must be taken earnestly by government of India.


Service sector plays important role in Indian economy. Within the Service sector tourism and hospitality industry, Aviation industry, real estate, banking and financial institutions, Information technology and automobile industry has more importance about generating employment, yielding foreign exchange.

Though Indian aviation industry holds a promising future compared to the premium coun­terparts due to the huge population, increased affordability and making the services accessible to the common man, the sector is highly susceptible to turbulence in economy.

The aviation industry had grown to twenty five percent in 2010. The growth of India’s Aviation sector has potential to absorb up to US$120 billion of investment by 2020. However, we must equalize the demand for aviation services and the ability of our aviation system to meet that demand. India must prepare a blue print for the expansion of system capacity while maintaining safety, security and the environment. We must develop a road map for infrastructure development beyond 2010. By Assuming a 6% GDP growth and a 1.5 times multiple, it is estimated that domestic aviation traffic alone will grow 2.5 times from the current 40 million passengers to 100 million passengers by 2020.The key drivers remain better cost management and higher aircraft utilization that helps to keep the technical reliability high and operating costs low.

The need for travel and tourism in India will grow by eight point two percent between 2012 and 2019 positioning India at the third position in the world. With its close ties to the tourism industry, the Indian hospitality sector has tried to investment of $ twelve point seventeen billion during 2011, and in addition of over twenty new international hotel brands by 2012. Later the capital investiture in India’s travel and tourism sector is expected to grow at eight point eight percent between 2011 and 2019 while India is expected to get capital investiture worth $ Ninety four point five billion in the travel and tourism sector in 2019.

Foreign tourist arrivals are expected to grow to 10 million by 2012 and the domestic tourism is expected to increase by 15% to 20% by 2015 as per the Ministry of Tourism. Government of India is allowing 100% Foreign Direct Investment in Hotels and Tourism, through the automatic route. This forms as investment opportunity that helps the Indian hospitality sector to contribute Rs.8, 50,000 crores to the GDP by 2020 (approx. 1800 million USD).

The future growth of IT and IT enabled services will be fuelled by the verticals like telecom, insurance, banking, finance and lately by the retail. The future of Indian IT industry will see a significant rise in share of technology spend, as more and more service providers both Indian and global target the new segments and will provide low cost, flexible solutions to customers. In 2015, IT sector is expected to generate revenues of USD 130 billion (NASSCOM) which will create a transformational impact on the overall economy. IT spending is expected to increase in verticals like automotive and healthcare while the government will continue to be a major spender with its focus on e-governance.

The slowdown in the World economy had directly affected the reality sector due to reduction in stock markets, rise in interest rates, unemployment and inflation which resulted in difficulties to sell the projects. The Foreign investor and banks had withdrawn their money from this sector. The builders were forced to undergo the price cut of ten to twelve percent. In Thane, Lodha group reduced prices by thirty percent and in Mumbai (Lower Parel) Orbit group reduced prices by twenty percent. The DLF had seventy nine percent decline in profits & fifty seven percent decline in sales , Unitech had sixty three percent r decline in profits and fifty percent decline in sales , Parsvanath, Akruti, Shobha, Purvankara had reported decline in profits up to ninety five percent.

With reduction in prices by few of real estate developers and restructuring of business strategy had given some hope to the reality sector. The Indian economy in 2008-2009 had managed to contempt a growth of six point seven percent in spite of recession in the world economy. The positive developments in the economy created interest in the minds of customers and few of the developers started to experience the sale of their real estate properties. Further the Real estate companies are concentrating on keeping on the existing customers and to find fresh customers who would invest in their properties. Few of the Real estate developers thought of having collaborations in the areas of, procurement of raw materials, supply chain of raw materials and finished goods, production, promotion of brand and development of brand image. This was done in order to achieve benefits in pricing, gain in market share and to improve business strategies.

During 2010 Budget there were few needs of the real estate developers which were not fulfilled. They included need for infrastructure, need external commercial borrowings to pay for the projects, provision in breakup of deduction of Rs. 1 lakh for the repayment of housing loan or to increase the deduction under section 80C for Rs. 2 lakhs.

For 2012-2013 the need for residential properties was curbed due to the feeble thoughts of customers and increase in interest rates. Many of the reality companies could not sell their properties and launching of the project became slack. The 2013-2014 budget did not benefit the reality sector as for rich class it increased the tax slab that caused hindrance for them to purchase the residential property. There are chances of prices for residential properties getting hiked in the metro cities like Mumbai, Delhi, Pune, Bangalore and Chennai respectively. From long time there is a long standing demand of the reality sector for infrastructure status which is still not met in this budget.

The Government of India has framed some measures in terms of reducing the interest rates and in restructuring of loans. The Corporate like Tata have introduced housing loans called Nano Housing for Rupees three point nine Lakhs to Rupees six point seven Lakh called as Shubh Griha project. The State Bank of India introduced eight percent housing loan scheme for one year followed by the other Public Sector Undertaking & Private Sector Banks as well.

The near future about $seven billion to $eight billion of venture capital is likely to flow into real estate market of India. There are chances of substantial rise in execution of in projects through Public and Private-Partnerships. The infrastructure investments are not adequate to bridge the gap between need of properties and render the same.

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