15015226 Automobile Industry

8/6/2019 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

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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 Engine Plant.

Hyundai :Increase capacity to 400,000 cars per annum over next 1 year.

Nissan Team up with Mahindra & Mahindra and Renault to invest in a $905 million car project in India,capacity to produce 400,000 units in seven years.

Tata Mo tors :N ew plant to manufacture 100K car in West Bengal with an investment of U S $ 0.24 Billion.

Toyota :Target of 200,000 units capacity by 2010.

General Mo tors :N ew Capacity to manufacture more small car like spark.

Nissan

Compact SUV


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Very Competitive Market

From 20 models available in year 1995 to93 available today (N ot counting the variants)

60 new launches done in 2008


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Recent N ewsmakers


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The $ 2,500 Car (The N ANO )


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Car & MUVproduction - Apr - Se

0

100000

200000

300000

400000500000

600000

700000

800000

9000001000000

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

N o s

Catg I Catg II Catg III Catg IV Catg V MUV Total

-4% 2%

18%

Growth over previous period

7%

28%

29%

14%

Vehicle Production


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CURRENT TRENDAUTO MO BILE SALES ALL TIME LO W: declined by 18.2 % inDecember 2008.THE TO TALVE CH ICLE SALES IN DO MES TIC MARKET STOO D AT5,97,622 (DEC 2008) W HE RE AS IN PREV IO US YEAR IT WAS 7,30,603 (DEC 2007).VARIO US AUTO MO BILE CO MPAN IES SH UT THE IR PLAN T

TEMPO RARILY BECAUSE O F DEMAN D NO T MEE TIN G THE TO TAL PRO DUCTION .THE CUT IN EX CISE RATE (4%) ITS BENE FIT WAS DIRECTLYPASSE D TO CUSTO MER.

ALL MAJO R CO MPAN IES REDUCED THE PRICES O F VE CH ICLES TO IN CREASE DEMAN D.IN BAILO UT PACKAGE O F JAN UARY GOV T INS TRUCTED GOV T.BAN KS TO PROV IDE CREDIT TO N BFCS (NON BAN KIN GFIN AN CIAL INS TITUTION ) SPECIFICALLY TO BUY CO MMERCIALVE CH CILES .


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Current S cenario

NOV-2008AUTO M OBILE INDUSTRY REPORTED ONE

OF ITS WORST PERFOR M

ANCE DECLINE IN SALE OF CO MM ERCIAL VEHICLES BY 48% & PRODUCTION BY 57.3%

SALE OF 2 WHEELERS FELL BY 9.2% SALES OF PASSENGER CARS & M UVSFELL BY 8.2%


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SWO T Analysis STRENGTHS

Automobile industry is an established and an evergreen industry.

India is the strongest player in the small car segment of the globalautomobile market

Indian companies are the best cost innovators

The automotive industry has long been known for its development andpromulgation of the assembly-line.


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Weakness

Indian is lacking in proper infrastructure.

This is slowing the pace of growth of autoindustry

Companies are not improving after saleservices


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O pportunities

The automotive ecosystem is in the midst of significant change, withincreasing challenges in consumer demands, technology development, andglobalization.While demand for incumbent technologies will remain strong, alternative

power trains could capture more than 20 percent of the global market by2020, depending upon boundary conditions such as fuel taxation andemissions regulation set by governments as well as oil price development.storage is in the heart of the next generation of efforts for fuel economy.More realistic scenario will emerge for technologies using Hydrogen as

automotive fuel.Intelligent use of NCES (Non conventional energy sources) for poweringPublic Transport.


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Threats

Global Crisis

Companies not focusing on R & D are undergreat risk

H igh competition from foreign players

Lack of technology for Indian companies


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S CO PE IN TH IS IN DUSTRY

It comes under manufacturing industry.We can join there in sales & marketing, H .R,

Finance, supply chain mgt ,R&D as well as inoperations department .Good job opportunity is there.Pay package is also very good .


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Critical Analysis

Automobile Industry in India is still in its developing stage.The industry would have to develop vehicles which would have minimumimpact on Air Quality and confirm to theS afety Norms with cost of fuelincreasing rapidly.The Industry would also need to provide energy solutions for economicactivities to sustain.When we compare 2020 with the present, we cannot think about the growthof the automobile enterprise without also paying attention to the

safeguarding of the world environment.In the next ten years, we will experience more change than in the 50 yearsbefore.


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The industry would not only need to address the technology challenges butalso look at cost competitiveness and human resources challenges.

The policy makers would have to provide infrastructure to absorb thevolumes that are expected to come into existence.

Challenges beyond 2016 would make it necessary for Private & PublicS ector to join hands and come out with effective solutions for sustainable

mobility


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Sources

S ociety of Indian Automobile Manufacturers (S IAM)CMIE REPO RTIN DIAN BRAN D EQUITY FO UN DATION

AUTO

CAR IN

DIA :E

CONO

MIC TIMES

GOO GLE

BUS INESS WO RLDTIMES O F IN DIABUS INESS LINEECONO MIC TIMES


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JAN 19 2009 39

Thank You

Documents

15015226 Automobile Industry