Hira Automobile Ltd Management Discussions

1. Industry structure and development

In the current financial year, the industry showed a minor decline in volumes and except for one or two companies the others showed a de-growth. Your Principal company Maruti Suzuki worked efficiently to register growth in this financial year. The selling was hard which was undertaken by your company (and principals too) to mark a growth and increase its market share.

Still the Indian market is at the adolescence stage as the number of cars per 100 populations is quite low as compared with the west or the developed economies. In India we have a large scope to increase our sales and create new markets for us keeping in view the potential available. The opportunity in the replacement segment is immense as the used car industry has just started to become organized. All these opportunities put together makes our future bright and we have to make efforts to grab the required share. There are no major threats that looms the industry or our company. The competition is intensifying and all companies are making their best efforts to grab the market available. We are in a position where the market forces may retard our pace of growth but cannot stop it. So no threats are perceived for your company.

Maruti Suzuki has its strength in the range of products. At every Lac they have a car to offer to their customers. We are at an advantage that we can supply the products to whichever segment the customer is ready. With the stagnation looming across the industries the small cars are more in demand which is the strength of your company. The focus is continuous on the sales of each segment and growth is being monitored on every product.

The company is very buoyant about the future as the demand for its products is on the rise. The demand for the vehicles in the segments being catered to is growing and with the 7th pay commission on the anvil and OROP gaining steam the future seems bright for the company. The smart city projects, the industrial policies of the Central Government are sure to give new life to the recessionary economy. The principals have quite a few new product line-ups which will increase the demand.

The competition and the recessionary economy is always perceived as a threat but with us it is an opportunity. Cars now are necessary comfort for each individual who is mobile and has to move to places. So, for him/her we are the choice as our vehicles are economical to buy and easy to maintain. The share is growing hence we do not feel any risk to our business.

The internal controls have been made more stringent with team of auditors working to check each transaction and verify the same. The audit, pre-audit and the concurrent audit is keeping the operation team on their toes and let them not make any mistake.

Due to overall recessionary economy, there has been minor adverse impact on the financial stability of the company with respect to operational performance as the working capital limits of the company has increased substantially in comparison to minor growth in operational performance. Profitability of the company has been stable during the year in spite of higher burden of interest expenditure.

Human Resource is considered to be the most prized asset of the company by the management. Hence the work-force is being looked after well and ensured that they remain motivated. The 360-degree appraisal system ensures their satisfaction and brings out their concerns and bickerings which are addressed by the management immediately. This improves the employee-management relationship and makes them work for the better future of the company.

As Company has a network of branches viz: showrooms and workshops being managed by a rich experienced deemed CEO who is also known deemed key managerial personnel. All the branches key Managerial Personnel are reporting to the Senior Most KMP sitting at Patiala corporate office of the company.