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Overview By Subodh Panchal Past President The Institute of Indian Foundrymen Indian Foundry Industry 11 th September, 2010 International Foundry Forum, Barcelona

Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

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Page 1: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Overview By

Subodh Panchal

Past President

The Institute of Indian Foundrymen

Indian

Foundry Industry

11th September, 2010

International Foundry Forum, Barcelona

Page 2: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Major Foundry Pockets in India

International Foundry Forum, Barcelona (September, 2010) 2

Ahmedabad

Jaipur

Pune

Bangalore

Bhilai

Hyderabad

Nagpur

Page 3: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Overview

The Indian Foundry industry produces approx 7 Million MT of castings employing estimated 500,000 persons directly & another 1.5 millions indirectly.

The growth of foundry industry is very important for inclusive growth, other engineering sectors & the overall Indian Economy .

3 International Foundry Forum, Barcelona (September, 2010)

Page 4: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Significance of Foundry Industry

Foundry Industry is Major Feeder to following sectors:-

Automobiles & Auto Components

Railways

Power Sector

Tractor Industry

Earth Moving Machinery

Pumps, Compressors, Pipes Valves & Pipe Fittings

Electrical/Textile/Cement/Agro Machinery

Machine Tools & Engineering Industries

Sanitary Castings

Engineering Exports

4 International Foundry Forum, Barcelona (September, 2010)

Page 5: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Significance of Foundry Industry

Approx 32% Output of Foundry Industry goes to

Auto Industries & Balance to other downstream

Engineering Sector

Automotive Mission Plan (AMP) 2006-2016

envisages 4 Fold Growth by 2016. i.e. from

$34 Billion industry to $ 122-160 billion industry and

employing about 25 millions by 2016

AMP 2006-16 will drive demand of Castings from

Foundry Industry

5 International Foundry Forum, Barcelona (September, 2010)

Page 6: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Significance of Foundry Industry

Corresponding Growth in Foundry Sector

Vital to sustain Growth in Auto & Other

Engineering Sectors

Graph below Depicts Sectorwise

Consumption of Castings in percentage

6 International Foundry Forum, Barcelona (September, 2010)

Page 7: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

7 International Foundry Forum, Barcelona (September, 2010)

Significance of Foundry Industry Sector wise consumption of castings as %

of Total Production

Page 8: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

International Foundry Forum, Barcelona (September, 2010) 8

2.77 2.90 3.22 3.12 3.16

3.51 4.04

4.62

6.05

7.18 7.77

6.84

0

1

2

3

4

5

6

7

8

9

Mil

lio

n M

T

Malleable Iron

Non Ferrous

S G Iron

Steel

Grey Iron

Total

Production Trend

Page 9: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Export Trends

International Foundry Forum, Barcelona (September, 2010) 9

Page 10: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Types of Metal Castings Share in %

10 International Foundry Forum, Barcelona (September, 2010)

Page 11: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Top Ten Casting Producing Countries

(Figures in Million MT)

International Foundry Forum, Barcelona (September, 2010) 11

33.5

10.8

7.8

7

5.8

5.7

3.4

2.6

2.4

2.1

0 10 20 30 40

China

USA

Russia

India

Ger…

Japan

Brazil

Italy

France

Korea

Million MT

Page 12: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Outsourcing Trends for

Auto Components

2.95

5.9

20

0

5

10

15

20

25

2006-07 2008-09 2013-14

US

D i

n B

illi

on

s

12 International Foundry Forum, Barcelona (September, 2010)

Page 13: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Indian Automobile Industry Overview

The Indian Automobile industry is the seventh

largest in the world with an annual production

of over 2.6 million units in 2009.

In 2009, India emerged as Asia's fourth largest

exporter of automobiles, behind Japan, South

Korea and Thailand.

By 2050, the country is expected to top the

world in car volumes with approximately 611

million vehicles on the nation's roads.

International Foundry Forum, Barcelona (September, 2010) 13

Page 14: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Indian Automobile Industry Overview

India has emerged as one of the world's largest

manufacturers of small cars.

According to New York Times, India's strong

engineering base and expertise in the

manufacturing of low-cost, fuel-efficient cars has

resulted in the expansion of manufacturing

facilities of several automobile companies like

Hyundai Motors, Nissan, Toyota, Volkswagen

and Suzuki.

International Foundry Forum, Barcelona (September, 2010) 14

Page 15: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

World Automobile Giants in India

In 2008, Hyundai Motors alone exported

240,000 cars made in India.

Nissan Motors plans to export 250,000 vehicles

manufactured in its India plant by 2011.

Similarly, General Motors announced its plans to

export about 50,000 cars manufactured in India

by 2011.

International Foundry Forum, Barcelona (September, 2010) 15

Page 16: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

World Automobile Giants in India

In September 2009, Ford Motors announced its

plans to setup a plant in India with an annual

capacity of 250,000 cars for US$500 million.

The cars will be manufactured both for the

Indian market and for export.

The company said that the plant was a part of its

plan to make India the hub for its global

production business.

International Foundry Forum, Barcelona (September, 2010) 16

Page 17: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

World Automobile Giants in India

Fiat also announced that it would source more

than US$1 billion worth auto components from

India.

According to Bloomberg L.P., in 2009 India

surpassed China as Asia's fourth largest

exporter of cars.

International Foundry Forum, Barcelona (September, 2010) 17

Page 18: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Rank wise Largest Automobile

Manufacturers in India by Sales

1. Maruti Suzuki

2. Hyundai

3. Tata Motors

4. Mahindra

5. GM Chevrolet

6. Honda

7. Toyota

8. Ford

9. Fiat

10. Škoda

International Foundry Forum, Barcelona (September, 2010) 18

Page 19: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Locally manufactured Automobiles of

Foreign Brands

Audi: A4, A6, A8, Q5, Q7, TT, R8.

Bentley: Continental GT, Continental FS,

Continental GTC, Mulsanne.

BMW: 3 Series, 5 Series,M3, GT 5,6 Series,7

Series, X3, X5, X6, Z4.

Chevrolet: Spark, Beat, Aveo U-VA, Aveo,

Optra, Cruze, Tavera.

Fiat: Grande Punto, Linea, Palio Stile.

International Foundry Forum, Barcelona (September, 2010) 19

Page 20: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Locally manufactured Automobiles of

Foreign Brands

Ford: Ford Figo, Ikon, Fiesta, Endeavour.

Honda: Jazz, City, Civic, Accord.

Hyundai: Santro, i10, i20, Accent, Verna

Transform, Sonata Transform.

Lamborghini:Gallardo, Murciélago.

Mercedes-Benz: C-Class, E-Class.

Mitsubishi: Lancer, Lancer Cedia, Pajero.

Nissan: Micra, Teana, X-Trail.

International Foundry Forum, Barcelona (September, 2010) 20

Page 21: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Locally manufactured Automobiles of

Foreign Brands

Rolce Royce:Phantom, Ghost.

Škoda: Fabia, Octavia, Laura, Superb.

Toyota: Corolla, Innova, Camry, Fortuner,

Prado.

Volkswagen: Polo, Jetta, Passat, Beetle,

Phaeton, Vento.

International Foundry Forum, Barcelona (September, 2010) 21

Page 22: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Commercial Vehicle Manufacturers

in India (Local Brands)

Local Brands

Ashok Leyland

Force

Mahindra Navistar

Premier

Tata

International Foundry Forum, Barcelona (September, 2010) 22

Page 23: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Commercial Vehicle Manufacturers

in India (Foreign Brands)

Foreign Brands

Volvo

Audi

BMW

Mercedes-Benz

International Foundry Forum, Barcelona (September, 2010) 23

Page 24: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Electric Car Manufacturers in India

Ajanta Group

Mahindra

Hero Electric

REVA

Tata International

Tata

International Foundry Forum, Barcelona (September, 2010) 24

Page 25: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Automobile & Auto Component

Industry Turn Over

The Automotive Component Industry's output

amounted for the financial year 2008-09 US$ 19

billion with a growth rate of 6.1% against

financial year 2007-08

International Foundry Forum, Barcelona (September, 2010) 25

Page 26: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Car Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 26

0.26

0.35 0.41 0.40 0.39 0.57 0.52 0.56

0.61 0.84

1.03 1.11

1.32

1.52 1.52

1.93

0.00

0.50

1.00

1.50

2.00

2.50 M

illi

on

s

Page 27: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

MUVs Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 27

0.05

0.07

0.13 0.13 0.11

0.12 0.13

0.11 0.11

0.15

0.18 0.20

0.22 0.25

0.22

0.27

0.00

0.05

0.10

0.15

0.20

0.25

0.30

Mil

lio

ns

Page 28: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

LCVs Prduction (Nos. in Milkions)

International Foundry Forum, Barcelona (September, 2010) 28

0.09

0.13

0.09 0.07

0.06 0.06 0.06 0.07

0.08

0.11

0.14

0.17

0.23

0.25

0.22

0.32

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35 M

illi

on

s

Page 29: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

M&HCVs Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 29

0.10

0.13

0.15

0.10 0.08

0.11 0.09 0.10

0.12

0.17

0.21 0.22

0.29 0.29

0.19

0.25

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

Mil

lio

ns

Page 30: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Tractors Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 30

0.16

0.19

0.23

0.26 0.25 0.26 0.25

0.21 0.17

0.19

0.25

0.30

0.35 0.35

0.34

0.43

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Mil

lio

ns

Page 31: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Scooters Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 31

1.03

1.23

1.32 1.28

1.32

1.26

0.88 0.94

0.85

0.94 0.99

1.02

0.94

1.07 1.16

1.49

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

Mil

lio

ns

Page 32: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Motorcycles Production

(Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 32

0.65

0.81 0.99 1.13

1.39 1.79

2.18

2.91

3.88

4.36

5.19

6.20

7.11 6.50

6.80

8.44

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00 M

illi

on

s

Page 33: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Mopeds Production (Nos. in Millions)

International Foundry Forum, Barcelona (September, 2010) 33

0.52

0.62

0.67 0.67 0.67

0.72 0.69

0.43

0.35 0.33

0.35 0.38 0.38

0.43 0.44

0.57

0.20

0.30

0.40

0.50

0.60

0.70

0.80

Mil

lio

ns

Page 34: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Auto Component Industry Production

(in US $ BLN)

International Foundry Forum, Barcelona (September, 2010) 34

3.28 3.01 3.25 3.89 3.97 4.47 5.43

6.73

8.70

12.00

15.00

18.00 18.40

22.00

26.00

-8%

8%

20%

2%

13%

21% 24%

29%

38%

25%

20%

2%

20% 18%

-20%

-10%

0%

10%

20%

30%

40%

50%

-

5

10

15

20

25

30

Turnover

* Estimated

Page 35: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Auto Component Industry Exports

(in US $ BLN)

International Foundry Forum, Barcelona (September, 2010) 35

0.33 0.35 0.46

0.63 0.58 0.76

1.27

1.69

2.47 2.87

3.62 3.80 3.80

6%

30% 37%

-8%

31%

68%

33% 46%

16%

26%

5%

0%

-20%

0%

20%

40%

60%

80%

0

1

2

3

4

Exports

Page 36: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Auto Component Industry Investment

(in US $ BLN)

International Foundry Forum, Barcelona (September, 2010) 36

2.30 2.65

3.10

3.75

4.40

5.40

7.20 7.30

9.00

15%

17%

21%

17%

23%

33%

1%

23%

0%

5%

10%

15%

20%

25%

30%

35%

-

2

4

6

8

10

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Investment

Page 37: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

India as a hub of Cast Components

Now the fourth largest producer of metal

castings worldwide, India has increased its

casting production by more than 100% since

2002.

Expansion stems from India’s large and rapidly

growing economy, which has the potential to

raise its income per capita to 35 times current

levels over the next 40 years.

International Foundry Forum, Barcelona (September, 2010) 37

Page 38: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

India as a hub of Cast Components

According to Goldman Sachs, in 2059, India is

expected to have one of the three largest

economies (by GDP) in the world, along with China

(first) and the U.S. (second).

The automotive sector accounts for 4.2% of India’s

GDP, since 2002, production volume has a 16%

compund and annual growth rate (CAGR).

Some economists believe India has the potential to

own up to 7% of the world’s auto components

market.

International Foundry Forum, Barcelona (September, 2010) 38

Page 39: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Hurdles

However, India faces some hurdles. Along with

a lack of sufficient infrastructure, consumable

costs are higher in India than in developed

countries.

International Foundry Forum, Barcelona (September, 2010) 39

Page 40: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Future

Due to the growing expectations of OEMs regarding

the quality and quantity of castings, India is

expected to produce larger casting facilities over

the next few years.

The size and scope of large plants are required to

address investment requirements, power shortages

and a talent crunch.

This means that manufacturers with latest

technology of equipments and raw materials will

have a bright opportunity in India.

International Foundry Forum, Barcelona (September, 2010) 40

Page 41: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

Innovative Suggestions

Foreign manufacturers and suppliers should

help Indian foundries to introduce new markets

(Where European foundries have stopped

catering).

Differed payment terms of some European

countries can be a major attraction for Indian

Foundries going for expansion.

International Foundry Forum, Barcelona (September, 2010) 41

Page 42: Indian Foundry Industry - kastwel.com · Indian Automobile Industry Overview The Indian Automobile industry is the seventh largest in the world with an annual production of over 2.6

International Foundry Forum, Barcelona (September, 2010) 42