Automobile Industry Analysis

Introduction:

The automobile industry in India is expected to be the world's third largest by

2016, with the country currently being the world's second largest twowheeler manufacturer.
GDP Contribution 7.1% about $ 147 billion (India GDP - $ 2073 Billions)
Two Wheelers segment - 81% market share is the leader of the Indian
Automobile market owing to a growing middle class and a young population.
exploring the rural markets further aided the growth of the sector
Passenger Vehicle (PV) segment - 13% market share
In April-January 2016, exports of Commercial Vehicles registered a growth of
18.36% over April-January 2015

Market Share

Sales of passenger vehicles increased by 16.7% to 258,000 units in August

2016
Sales of commercial vehicles grew by 1.53% to 52,996 units
Motorcycle sales grew 22% to 1 million units
overall two-wheeler sales grew 26.3% to 1.64 million units
driven by better-than-expected monsoon and strong buying sentiment
SALES (2015): Passenger Vehicles- 3.2mn, Commercial vehicles- 0.7mn, 3
wheeler- 0.9mn, 2wheeler 18.5mn
Automobile Industry growing at a CAGR of 10.5% by from 2005-15.
Automobile exports grew at a CAGR of 14.65% during 2010-15. Passenger
Vehicles, Commercial Vehicles, Three Wheelers and Two Wheelers grew by
6.89%, 13.77%, 18.69% and 16.60% CAGR during 2010-15. Two wheelers
accounted for the largest share of exports at 69.4% in FY15. Passenger
vehicles comprised a sizeable 16.7% of overall exports. Exports of three
wheeler vehicles registered around 11.1% share in exports in FY15.

Investments:

As per DIPP auto industry attracted a FDI of USD 15.06bn between Apr 2000
and Mar 2016
MV Agusta, the Italy-based premium motorcycle manufacturer, has entered
India through an exclusive partnership with Pune-based Kinetic group with
the launch of three luxury bikes, which will be sold through the Motoroyale
chain in Pune
Isuzu Motors, the Japan-based utility vehicle manufacturer, has inaugurated
its greenfield manufacturing unit in SriCity, Andhra Pradesh, at a cost of fcRs
3,000 crore (US$ 450.94 million)
Japanese two-wheeler manufacturer Honda Motorcycle and Scooter India
(HMSI) has opened its fourth and worlds largest scooter plant in Gujarat, set
up to initially produce 600,000 scooters per annum to be scaled up to 1.2
million scooters per annum by mid-2016

Germany-based luxury car maker Bayerische Motoren Werke AGs (BMW)

local unit has announced to procure components from seven India-based auto
parts maker
Mahindra Two Wheelers Limited (MTWL) acquired 51% shares in France-based
Peugeot Motorcycles (PMTC)

Government Initiatives:

100% FDI under the automatic route. Excise duty reduced from 12% to 8%
Government of India aims to make automobiles manufacturing the main
driver of Make in India initiative,
GOI has setup a Technology Modernization Fund for R&D activities

Mr Nitin Gadkari, Minister of Road Transport, Highways & Shipping has

announced plans to set up a separate independent Department for Transport,
comprising of experts from the automobile sector to resolve issues such as
those related to fuel technology, motor body specifications and fuel
emissions, apart from exports.

In the Union budget of 2015-16, the Government has announced to provide

credit of Rs 850,000 crore (US$ 124.71 billion) to farmers, which is expected
to boost the tractors segment sales
The Government plans to promote eco-friendly cars in the country i.e. CNG
based vehicle, hybrid vehicle, and electric vehicle and made mandatory of
5% ethanol blending in petrol

Future Scope:

The Indian automotive sector has the potential to generate up to US$ 300
billion in annual revenue by 2026, create 65 million additional jobs and
contribute over 12% to Indias Gross Domestic Product#.

Automobile Companies in India:

Royal Enfield, The Escorts Group, Captain Tractors Pvt ltd, Force Motors, Eicher
Motors, Ashok Leyland, TVS, Bajaj Auto, TVS Motor Corp, Hyundai motors India ltd,
Tata Motors, Mahindra, Maruti Suzuki.