BRIEF INDUSTRY PROFILE:

(Automobile industry)

The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent year-
on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of
commercial vehicles in 2017. India is also a prominent auto exporter and has strong export growth
expectations for the near future. Automobile exports grew 26.56 per cent during April-July 2018. It is
expected to grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are expected to make
India a leader in the two-wheeler and four wheeler market in the world by 2020. Strong growth in
demand is due to rising income, middle class, and a young population.

Utility vehicle sales increased 19.95 percent year-on-year in April-November 2017. India has
significant cost advantages; auto firms save 10-25 per cent on operations vis-à-vis Europe & Latin
America. Focus shifting on electric cars to reduce emissions. Innovation is likely to intensify among
engine technology & alternative fuels. Government aims to build India into and R&D hub.

The government aims to develop India as a global manufacturing centre. Reforms like GST to help
boost the sector’s growth. The Presence of established domestic and international original
equipment manufacturers (OEMs) is also the plus point for automobile industry. It has Strong
market in terms of both, the domestic demand and exports. India is the only country among top
seven car markets globally to achieve double digit growth rate of 11 per cent during Jan-May 2017.

Despite the government’s push for electric vehicles, motorists in India are yet to warm up to the
concept of plugging into e-mobility. In FY2018, barely 777 electric cars were sold, which comprise
0.023 percent of overall PV sales. Going by the momentum gathered in the first two months of 2018,
India is on track to become the world’s third-largest PV market by 2020. With sales of 5, 60,806 units
in January-February 2018, India has unseated Germany, which sold 5, 31,100 units, to become the
fourth-largest PV market, according to SIAM data. Notably, India overtook Germany in calendar year
2017 with combined PV and commercial vehicle sales of 4.02 million units with Germany recording
3.81 million units.

• Automobile exports to grow at a CAGR of 3.05 per cent during 2016-2026.

• India is the 3rd largest automobile industry Automobile sector split into four segments each
having few market leaders.

• Two-wheelers and passenger vehicles dominate the domestic demand.

• Two-wheelers account for 80 per cent of domestic demand but the Four-wheelers market is
also growing on daily basis.