CERTIFICATE: A Project Report for the Partial Fulfillment of the Award of Degree of Master of Business Administration (M.B.A.) Under the Guiance of Prof. Soma Dey

Threat and Opportunity
Analysis of Technology in
the Automobile Sector
A Project Report Submitted for the partial fulfilment of the award of degree of
Master of Business Administration (M.B.A.)
Under the Guidance of
Prof. Soma Dey
Submitted by-
Shreya Kashyap
F-350, MBA (FT) – 2017-2019
Area Code: SBM
Faculty of Management Studies
University of Delhi
February 2019

CERTIFICATE
This is to certify that the project titled, “Threat and Opportunity Analysis of Technology in
the Automobile Sector” submitted in partial fulfilment of the requirements for the Degree
of Master of Business Administration is a record of original research work carried out by
myself. Any material borrowed or referred to is duly acknowledged.
Student
Shreya Kashyap
Roll No. F-350
MBA(FT)-2017-19
This is to certify that the above-mentioned project titled, “Threat and Opportunity Analysis
of Technology in the Automobile Sector” submitted by Shreya Kashyap, MBA(FT) Batch of
2019, Roll No. 350 has been carried out under my supervision.
Project Guide
Prof. Soma Dey
Faculty of Management Studies
University of Delhi

ACKNOWLEDGEMENT
I would like to express my heartfelt gratitude to my guide Dr. Soma Dey for providing me the
opportunity to work under her guidance. Ma’am provided me with constant help and
support throughout the duration of this project. Pursuing a project in such a vast and
dynamic field would not have been possible without her encouragement.
Apart from the project work, I would also like to hereby thank Dr. Soma Dey for being a
faculty member who has always laid strong emphasis on creative thinking and always been
there for her students whenever they needed her support and guidance.
I would also like to thank the entire faculty at FMS, Delhi for providing me with an enriching
and I have learnt from several articles, research studies and papers from national and
international entities. I acknowledge the value I have received from these bodies of
knowledge.
Last but not the least, I would like to thank my colleagues and friends for their support and
words of motivation during the project tenure.
Shreya Kashyap
Faculty of Management Studies
University of Delhi
February 2018

INDEX

EXECUTIVE SUMMARY
The automobile sector is at an interesting crossroad today. Over the past few years, the
explosion of digital and the introduction of smart technologies have pushed this sector into
the next stage of its growth trajectory. Clean fuels and climate change concerns have put
great pressure on this industry to innovate. This makes it important to optimise the impact
of technological developments on the business and avoid threats that come from both
within and outside the sector/industry.
In this project, using a technology planning support function, the technology maturity of the
automobile sector in India will be estimated. This function highlights possible threats and so
helps planners and decision makers in making the right decision before the anticipated
problem occurs. Based on the function output estimates and prediction of the future
landscape, recommendations will be provided for the automobile sector in India.
This research is aimed to provide a 3rd party analysis of the sector, a view that is different
from individuals working in this sector currently. Apart from technology readiness,
environmental enablement through policy and regulations along with marketplace forces
play an important role in the success of an industry.

LITERATURE REVIEW
1 MANAGEMENT OF TECHNOLOGY
The term technology refers “not only to physical items (e.g. machines or tools), but also to methods,
techniques, or software that humans require in order to solve a problem or gain achievement. The
term technology has evolved more so with the managerial concept compared to any other concept.
When technology is defined in the literature, it is described as applied knowledge focusing on the
know- how of the organisation. Technology management is a process, which includes planning,
directing, controlling, developing and implementing technological capabilities to shape and
accomplish the strategic and operational objectives of an organization. Irrespective of what is
managed, management involves concerns about the future. In technology management a decision
must be made by managers today that will affect the organisation’s future. This decision process
needs accurate inputs to support technology managers in anticipating the future. This could be using
technology forecasting, which is further discussed.”
2 TECHNOLOGY FORECASTING
Technology is responsible for many changes. The decision-making process can be greatly improved
by technology forecasting due to greater accuracy of the future. “A technological forecast includes
four elements: the time of the forecast or the future date when the forecast is to be realised, the
technology being forecast, the characteristics of the technology or the functional capabilities of the
technology, and a statement about probability. The greater part of the technological forecasting
literature since the 1960s has been devoted to structured judgmental approaches such as Delphi
surveys and cross impact matrices. There are few real industrial applications of technology
forecasting and most of the tools are described only in theoretical terms. Therefore, there is a need
for a systematic process that can generate dynamic support for technology planning and can use
simple and useful tools.”
3 TECHNOLOGY INTELLIGENCE (TI)
Most strategic managers claim that their companies keep up-to-date in their field but they do not
have a systematic way to capture the important elements of technology changes from the general
information around them. In today’s world, an arbitrary process is insufficient. “Methods and tools,
primarily in the technology intelligence field such as those described in are needed to offer actions
to cope with threats that are not necessarily obvious to detect. Such a threat, in the form of an
emerging technology or new technological innovation, product or service, may replace the existing
dominant technology in the market, despite the fact that it may initially perform worse in terms of
the measures used by the current market leaders; this concept is referred to as disruptive
technology. The activity of collecting and evaluating information on technology developments is
called technology intelligence (TI) or technology watch. Literature on technology intelligence
describes many processes. TI is an important subject matter in this dissertation in helping to develop
technology watch (TW) framework that will work as a tool for monitoring; identifying and assessing
the technologies that emerge and could disrupt the business by affecting or replacing the existing
technologies which comprise the bottom line of the company.”

CHAPTER 1: INTRODUCTION
Globalisation of competition and the accelerating rate of technology change have created
difficult challenges for advanced technology-based industries in this new millennium.
Companies in these industries must now continually reduce costs and develop better
products and services in order to maintain a competitive advantage in an environment that
is constantly changing.
High costs for research and development (R&D) force high technology companies to choose
which technologies to invest in more carefully. Technologies are introduced into a company
in order to make a positive contribution to its products and services. Companies need
technology planning in order to make better decisions with regard to strategic corporate
planning, R&D management, product development, production and marketing.
The automobile sector has long been at the forefront of embracing new-age technology.
The technology future of this industry is ACES (Automated-Connected-Electrified-Shared). As
the automotive sector keeps innovating and the competition intensifies alongside, the risks
associated with extensive R&D in one field can have a detrimental impact on market share
and bottom line. Unpredictability of results and secrecy involving competitor R&D
investments makes technology planning and forecasting extremely important for a company
in this sector.
As the developing countries’ gross incomes rise, more and more people in these countries
are willing to make investments in the auto industry; buy cars for personal travel, trucks for
transporting goods or tractors for field work or even put in money for further avenues of
income generation. Since level of transportation and the GDP of any country are inter-
linked, improved GDPs of developing countries like BRICS (Brazil, Russia, India, China and
South Africa) indicate greater scope for automobile sector growth and penetration within
these countries. New technologies bring in benefits of greater cost to scale, improved
efficiency, increased comfort to end consumers and at times, a competitive advantage to
companies.
India is expected to emerge as the world’s 3rd largest passenger market by 2021 and also a
leader in shared mobility by 2030. It is expected to be at the forefront of electric and
autonomous vehicles in the years to come. With the benefits of growing demand due to
rising incomes of the middle class and young population, improving regulatory processes in
FDI and FII and a fairly competitive marketplace, India becomes an interesting geography for
this study.
As Uber and Ola are changing marketplace dynamics in the shared mobility space, Indian
government is going ambitious with its Electric Vehicles Plan, it is important to understand
the opportunities and threats that come with such developments. Understanding India’s
maturity in accepting these factors as well their feasibility of implementation are important
considerations for this study. Indian automobile companies in three segments will be
analysed using this model – Premium, Middle Segment and the Economy Segment. Before
delving into that, a background is provided in the initial segments of this report.

3.1 WORLDWIDE AUTOMOBILE SECTOR AT A GLANCE
The global economy is transforming dramatically, triggered by the accelerated increase in
new technologies, development in emerging markets like India, policies towards
sustainability and evolving consumer preferences with respect to ownership. The mobility of
people and goods has also witnessed a considerable transition over the last century. As
claimed by the experts, the automobile industry is at the cusp of disruptive in the last
decade. For instance, the sale of new passenger vehicles1 has grown at a CAGR of 3.15%2 as
shown in exhibit 1.
2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
74.9
78.2
82.1
85.6
88.3
89.7
93.9
96.8
99.1
Gl o b a l T r en d s i N P A S S en g er Veh i c l e S a l es
Year
Sales in Millions
While the automobile industry is primarily dominated by manufacturers based out of
Germany, US and Japan as highlighted in exhibit 2, their new profits is likely to come from
emerging markets of BRICS countries, whereas the growth in US, Europe, Japan and South
Korea is expected to remain stagnant in terms of profitability.
Toyota Motor
Volkswagen
Daimler
General Motors
Ford Motor
Honda Motor
Fiat (FCA)
SAIC Motor
BMW Group
Nissan Motor
0 50 100 150 200 250 300
265.4
261.1
185.4
160
158
140.1
133.7
130.4
112.3
109.8
Revenue of the leading automotive manufacturers worldwide
in FY 2018 (in billion U.S. dollars)
3
1 Passenger vehicles
2 Taken from Statista
3 Statista