15015226 Automobile Industry

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    AUTOMOBILE INDUST

    AMIT SINGH

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    AUTOMOBILE INDUSTRY OVERVIE

    An annual contribution of 4% to the GDP and accounting for about 5% of the total industrial output, this segment clearly stands out as a significantcontributor to the economic growth. The industry has grown at a CAGR of 16% p.a over the last 5 years .

    With the potential to emerge as one of the largest in the world. Presently,India is

    2nd largest two wheeler market in the world

    4th largest commercial vehicle market in the world11 th largest passenger car in the world and is expected to be the 7 thlargest market by 2016

    The industry has emerged as a key contributor to the Indian economy

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    POLICIES RELATING TO THE AUTO SECTOR: AUTO POLICY

    In 2002, the Indian government formulated an auto po licy that aimed atpromoting integrated, phased, enduring and self-sustained growth of the Indian automotive industry.

    Allows autom atic app roval for foreign eq u ity investment up to 100%in the automotive sector and does not lay down any minimuminvestment criteria.

    lays e mp hasis on R & Dacti vities carried out by companies in India

    Weighted tax deduction of up to 150% for in-house research and R & Dactivities.

    Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms

    Confirms the government s intention on harmonizing the regulatorystandards with the rest of the world

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    S tate-of-the-art test facilities willsupport the growth of the auto

    industryThe Government of India ispromoting N ational AutomotiveTesting and R&D Infrastructure

    Project (N ATRIP) to support thegrowth of the auto industry in India

    N ATRIP envisages setting up of fiveindependent and up gradation of existing test centres

    Testing centres at Manesar(H aryana), Chennai (TamilN adu), Pune (Maharashtra)Proving ground at Indore (MP)Tractor testing facility at RaeBareilly (UP)H ill Driving Training Centre atSilchar (Assam)

    N ew testing &

    homologation center atMANES AR

    Up-gradation of V RDE at AH MEDN AGAR

    Up-gradation of ARAI at PUNE

    N ew testing center fortractors & off-roadvehicles, accident dataanalysis and specialiseddriving training at RA E BAREILLY

    N ew test &homologation centernear C HENN AI

    N ew complete

    proving ground atIN DO RE

    H ill Area drivingtraining center andRegional In-Usevehiclemanagement centerat SILCH AR

    N ew testing &homologation center atMANES AR

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    Increase ex po rt re ven ueto $ 35 b illion by 2016 f rom$ 4.1 b illion at present

    On 29 .01.07, the Pri me Minister released Automob ile

    Plan 2006 - 2016 to give a road map to Indian

    Automob ile Ind ustry

    Indian Automotive Industry

    Increase turn over to$14 5 b illion by 2016f rom $ 35 b illionat present

    Prov ide e mp loyment toadditi onal 25 m illion pe op leby 2016

    Automo tive Missi on Plan 2016

    By 2016, the Automo tive sect or is expected to contri bu te

    10% of the cou ntry s GDP and 30~35 % of the Ind ustry

    Govern ment of India

    SIAMACMA

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    ACMA VISION 20:20:1

    VISION

    20:20:1

    2020

    11

    202020:20:1

    Achie ve $20 b illion in Domestic SalesAchie ve $20 b illion in Domestic Sales

    Achie ve $20 b illion in Expo rts SalesAchie ve $20 b illion in Expo rts Sales

    Create 1 m illion additi onal Job sCreate 1 m illion additi onal Job s

    Automo tive Missi on Plan 2016

    Automotive Components Industry

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    8 out of top 10 globalcompanies have India presence

    They contribute 60 % of global production

    but25 % of India Production

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    The Motorization ProcessThe Motorization Process

    200019901960 19801970

    Cars for 1.000 inhabitants in different countries

    150

    300

    750

    450

    600

    2010

    2006USA 813Italy 673Germany 597France 595Japan 593UK 571Poland 385S.Korea 322Brasil 124China 23India 12

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    GROWTH ASPECTSIndia has a low vehicle presence (with passenger car stock of onlyaround 14 per 1,000 population in 2008), and so possessessubstantial potential for growth.

    Passenger car production in India is projected to cross three millionunits in 2014-15.

    Sales of passenger cars during 2008-09 to 2015-16 are expected togrow at a CAGR of around10%.

    Export of passenger cars is anticipated to rise more than thedomestic sales during 2008-09 to2015-16.

    Motorcycle sales will perform positively in future, exceeding 10million units by 2012-13.

    Value of auto component exports is likely to attain a double digitfigure in 2012-13.

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    Keyplayers in the Indian auto indu stry -Passenger Cars and Commercial vehicles

    The largest player in the Indian industry. Plans to launch new and excitingproducts in the Indian markets, including the 100,000 car

    Suzuki s JV in India and the largest passenger car manufacturer in India

    The third largest passenger car manufacturer in India and one of thelargest exporters of vehicles. H as established India as one of its manufacturingbases in the world. Is planning to invest heavily to boost exports from India

    H as vision of capturing 10 % share of the Indian passenger car market by 2010

    O ne of the leading players in the Indian premium cars segment

    O ne of the leading players in the Indian premium cars segment

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    O ne of the leading players in the Indian premium carssegment.Plans to enter the small car segment by re-launching theMatiz

    O ne of the largest players in the U V / MUV segment

    The 2nd largest C V manufacturer in India

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    The largest 2 wheeler manufacturer in the world and 1 st in India.

    The 2nd largest 2- wheeler manufacturer in India and the largest3 wheeler manufacturer. H as plans for establishing amanufacturing facility in Indonesia .

    The third largest 2 wheeler manufacturer in India. H as plansfor establishing a manufacturing facility in Indonesia

    H as recently entered the Indian market through its direct subsidiary( in addition to its J V H ero H onda)

    H as recently entered the Indian market through its direct subsidiary

    Keyplayers in the Indian auto indu stry

    - Two whee lers

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    PAST PERFO RMAN CES & CURREN T TREN DS

    M ARKET SHARE TRENDS : 2003-04 TO 2006-07 M EDIU M & HEAVY CO MM ERCIAL VEHICLES

    Comp any 03-04 04-0 5 05-06 06-07

    TATA Motors 63.26 63.90 60.55 60.24

    Ashok Leyland 31.58 26.85 30.12 32.03E

    icher motors 4.62 6.69 6.27 5.62Swaraj Mazda 1.20 2.31 2.50 1.70

    Man force Trucks -- -- -- 0.08

    Asian Motor works -- -- 0.03 0.02

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    LIGHT CO MM ERCIAL VEHICLES

    Comp any 03-04 04-0 5 05-06 06-07

    TATA Motors 48.05 52.36 61.82 64.22Mahindra & Mahindra 32.26 33.31 26.41 26.75E icher Motors 6.25 5.86 4.85 4.25Swaraj Mazda 6.40 5.31 3.37 2.47

    Force Motors 6.41 2.66 2.68 2.03

    Ashok Leyland 0.62 0.50 0.85 0.26

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    Passenger cars

    Comp any 03-04 04-0 5 05-06 06-07

    Maruti Suzuki 42.99 39.77 40.24 38.47

    H yundai 22.80 22.21 23.05 22.27

    TATA 14.38 14.95 15.10 14.35

    H onda 6.30 8.09 8.58 11.12

    Ford 4.57 4.38 4.51 5.76GM 3.67 5.37 5.22 4.95

    Benz 1.39 1.60 1.45 1.54

    H industan Motors 2.54 2.57 1.83 1.43

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    MUVs

    Comp any 03-04 04-0 5 05-06 06-07

    Mahindra & Mahindra 38.61 39.25 42.50 38.78

    TATA 19.83 21.09 22.29 25.27

    Force Motors 4.10 4.27 4.26 4.36

    Maruti Suzuki 1.91 1.98 1.55 1.05

    H industan Motors 0.85 0.17 0.15 0.59

    Toyota Kirloskar 33.71 32.44 29.26 29.96

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    MO TO RCYCLES

    Comp any 03-04 04-0 5 05-06 06-07

    H ero H onda 48.80 52.16 50.80 48.48

    Bajaj 24.03 27.98 32.31 34.72

    TVS 14.64 11.69 10.86 11.17

    Yamaha 6.24 4.88 3.98 3.94

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    TH REE WHEE LERS

    Comp any 03-04 04-0 5 05-06 06-07Bajaj 61.08 48.77 48.80 54.74

    Piaggio 10.01 24.73 28.36 24.97

    Mahindra & Mahindra 10.46 11.14 8.89 9.97

    Scooters India 5.74 4.10 4.14 4.19

    Atul Auto 2.83 3.26 3.57 2.87

    Force Motors 7.17 5.87 4.55 2.73

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    EXPANSION PLANS

    Mar u ti Suzuk i :N ew car plant to make 250,000 cars per annum (total 800,000 cars/annum)

    10 new Component J Vs to support new Diesel En