Legal and political environment

Topic: AutomotiveCommercial
Sample donated:
Last updated: June 9, 2019

This environment is composed of laws, government agencies, and pressure groups that influence and limit various organizations and individuals. • Sometimes these laws create new opportunities for business. Various associations have been formed in India for automobile industry ? ACMA and SIAM are two major automobile association in India. ? acma(Automotive Component Manufacturers Association of India ) ? siam (Society of Indian Automobile Manufacturers ) ? Almost all major automobiles manufacturers are the members of these two association . these association perform various function and ? they keep the manufacturers informed of the various rules and regulation formulated by government.

Various legal that have been made by the govt relate to ¦ safety measures ¦ government’s intention on harmonizing the regulatory standards with the rest of the world ¦ approval for foreign equity investment up to 100% ¦ Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms ¦ Plan to have a terminal life policy for CVs along with incentives for replacement for such vehicles. Assist development of vehicle using alternate energy source. ¦Promoting R&D activities in India by giving a weighted tax deduction of up to 150% for in house research and R&D activities. Natural environment Natural environment of the country is greatly affected by commercial vehicle industry mainly because of emissions from factory and vehicles . the Major global concern Various measures are being taken by the govt and the commercial vehicle manufacturers to protect the natural environment . these include :- ¦ Use of alternate biofuels ¦ Use of eco friendly commercial vehicles Anti pollution pressures ¦ Implementation of Euro norms – Tata Motors is the first Indian Company to introduce commercial vehicles with Euro norms ahead of the mandated dates. Ashok Leyland a leading Indian commercial vehicle manufacturing company is A perfect example for commercial manufacturer company following natural enviornment .

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strongest commitment to environmental protection, utilizing eco-friendly processes in their various plants.They even maintain an R&D group that aims to find ways to make their vehicles more fuel efficient and reduce emissions. Ashok Leyland has developed Hythane engines. hich uses Hythane (H-CNG,) which is a blend of natural gas and around 20% of hydrogen. Demographic environment ¦ People make up markets.

Hence Marketers should keep a close watch on various demographic factors such as ¦ Size of population ¦ Growth rate of population ¦ Age distribution of population ¦ Education levels ¦ Rural urban ratio ¦ Literacy levels ¦ Changing income levels All these factors would either lead to increase or decrease in the demand of commercial vehicles Technological environment ¦ technology is the key to survival as well as growth in the CV industry. the changing technological environment may pose threats or present opportunities. Major components of technological environment are 1 ) innovation :- The demand for CV is highly technologically driven.The various innovations that have been made in the few years with respect to environment are :- ¦ Fuel Efficiency ¦ Low emission ¦ – Quietness 3)Increased Regulations of technological change : o Safety Technology o Wheel lock up o Additional breaking force o Air Bag o Front Side Rear end collision o Whiplash Injury lessening o Vehicle stability control )Research and development ¦ Global auto and component makers invest between 5 and 8% in R&D. ¦ Spending on R&D in India up from 243cr to 954cr in past four years. ¦ Cost advantage India offers makes more players likely to scale up R&D outsourcing to India – Increasing role of IT in automotive space IT companies are developing solutions for the automotive sector.

by building collision avoidance systems ,engine management systems and even entertainment features in vehicles”• More and more emphasis is being laid on R & D activities carried out by companies in India. Weighted tax deduction of up to 150% for in-house research and R & D activities. • The Government of India is promoting National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth of the auto industry in India • Internet makes it easy to collect and analyse customer feedback • With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. • With the development or evolution of alternate fuels, hybrid cv’s have made entry into the market. • Few global companies have setup R &D centers in India.


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