GROSS TUNROVER OF THE AUTOMOBILE INDUSTRY IN INDIA

Year 2004-05 2005-06 2006-07 2007-08 2008-09

(IN USD MILLION)

20,896 27,011 34,285 36,612 38,238

Conversion Rate Rs.40 = 1USD

Domestic Market Share for 2010-11 Passenger Vehicles 16.25 Commercial Vehicles 4.36 Three Wheelers 3.39 Two Wheelers 76.00

Automobile Production Trends Category Passenger Vehicles Commercial Vehicles Three Wheelers 2004-05 1,209,876 2005-06 2006-07 1,309,300 2007-08 2008-09 2009-10 2,357,411 567,556 619,194

(Number of Vehicles) 2010-11 2,987,296 752,735 799,553

1,545,223 1,777,583 1,838,593 519,982 556,126 549,006 500,660 416,870 497,020

353,703 391,083 374,445 434,423

Two Wheelers 6,529,829 Grand Total

8,466,666 8,026,681 8,419,792 10,512,903 13,376,451 7,608,697 8,467,853 9,743,503 11,087,997 10,853,930 11,172,275 14,057,064 17,916,035

Automobile Domestic Sales Trends

Category 2004-05 2005-06 2006-07 2007-08 2008-09 Passenger 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,951,333 2,520,421 Vehicles Commercial 318,430 351,041 467,765 490,494 384,194 532,721 676,408 Vehicles Three 307,862 359,920 403,910 364,781 349,727 440,392 526,022 Wheelers Two 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,370,951 11,790,305 Wheelers Grand Total 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,295,397 15,513,156

(Number of Vehicles) 2009-10 2010-11

AUTO POLICY OF GOVERNMENT OF INDIA VISION

TO ESTABLISH A GLOBALLY COMPETITIVE AUTOMOTIVE INDUSTRY IN INDIA AND TO DOUBLE ITS CONTRIBUTION TO THE ECONOMY BY 2010 1. POLICY OBJECTIVES This policy aims to promote integrated, phased, enduring and self-sustained growth of the Indian automotive industry. The objectives are to:

Exalt the sector as a lever of industrial growth and employment and to achieve a high degree of value addition in the country. Promote a globally competitive automotive industry and emerge as a global source for auto components. Establish an international hub for manufacturing small, affordable passenger cars and a key center for manufacturing Tractors and Two-wheelers in the world. Ensure a balanced transition to open trade at a minimal risk to the Indian economy and local industry. Conduce incessant modernization of the industry and facilitate indigenous design, research and development. Steer India's software industry into automotive technology. Assist development of vehicles propelled by alternate energy sources. Development of domestic safety and environmental standards at par with international standards.

SIAM welcomed the announcement of Auto Policy, and feels that the policy would serve as a reference document for all stake holders and other interested parties. The Auto Policy has spelt out the direction of growth for the auto sector in India and addresses most concerns of the automobile sector, including

Promotion of R&D in the automotive sector to ensure continuous technology upgradation, building better designing capacities to remain competitive. Impetus to Alternative Fuel Vehicles through appropriate long term fiscal structure to facilitate their acceptance. Emphasis on low emission fuel auto technologies and availability of appropriate auto fuels and encouragement to construction of safer bus/truck bodies - subjecting unorganised sector also to 16% excise duty on body building activity as in case of OEMs

The policy has rightly recognised the need for modernising the parc profile of vehicles to arrest degradation of air quality. The terminal life policy for commercial vehicles and move toward international taxing policies linked to age of vehicles, are steps in the right direction. SIAM has always been advocating encouragement of value addition within the country against mere trading activity. However, this aspect has not been fully addressed. The Auto Policy allows automatic approval for foreign equity investment upto 100% in the automotive sector and does not lay down any minimum investment criteria. The recommendation of promoting passenger cars of length upto 3.8 meters through excise benefits is not in line with the free market concept and may lead to market distortion.

However, with the Auto Policy in place, the automotive industry would get further fillip to become vibrant and globally competitive. The industry would get the required support from other Ministries and departments of Government of India in achieving the goals laid down in the auto policy.

Highlights Inception in 1960 5 Manufacturing locations Technical partnerships Access to best technology Profile Inception of manufacturing facilities in the year 1960 Manufacturer of steering & suspension systems for every segment of automobile industry, viz Passenger cars, Multi utility vehicles, Light commercial vehicles, Heavy commercial vehicles and Farm tractors Branched in Hydraulic products in anticipation of shift in customer requirements Best in class manufacturing facilities Strategic Technical partnerships with M/s TRW Inc, USA for Steering Gear Products & TRW Ehrenreich GmbH & Co., Germany for Steering Linkage Products Holds major market share in India both in Manual steering gear systems & suspension systems Design Core design philosophy of getting it right the first time Contemporary computer aided engineering and design applications Finite element analysis for all critical parts Vehicle steering system analysis to simulate real life conditions Manufacturing The production plants at Chennai (2 plants), Mysore, Puducherry each address a specific industry segment. Independent manufacturing cells produce specialised high end Components Chennai plant - Light Commercial vehicle, Heavy Commercial vehicle and Utility vehicles segments - Tractor and Commercial vehicle segments, and Hydraulic Products - Passenger car segments - Exports market - Caters specifically to the customers in the North of India Market leader in India Worldwide exports Deming Application Prize in 2007

Mysore plant Puducherry plant Varanavasi (Chennai) plant Uttarakhand plant Quality

IS0/TS 16949:2002 certificationsfor each of its manufacturing locations IS0 14001 certified plants OHSAS 18001 certified Deming Application Prize winner in the year 2007

SALES AND OPERATING REVENUE

2010 Sales 6,212,936

2009 4,412,949

2008 3,760,963

2007 3,819,863

Moving average Year 2005 2006 2007 2008 2009 2010

2011

Sales 224.79 317.36 375.91 392.82 387.59 448.73

631.82

2 years moving average

Exponential smoothening(.3) 292.23

271.08 346.64 384.37 390.21 418.16

540.28

398.68

317.36=224.79+224.79*x 375.91=224.79*x+224.79-224.79*x A=2/n+1

Moving average Year Sales 2 years moving average Exponential smoothening

2005 2006 2007 2008 2009 2010

2011

224.79 317.36 375.91 392.82 387.59 448.73

631.82

271.08 346.64 384.37 390.21 418.16

540.28

Trend Projection
1200 1000 800 600 400 200 0 1 2 3 4 Series1 Linear (Series1) y = 183.09x + 265.64 R = 1

Least Square method

700 600 500 400 Series1 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Linear (Series1) y = 53.411x + 183.36 R = 0.8465

Regression

Sales= 53.411* year 106852.429