AUTOMOBILE INDUSTRY

INTRODUCTION
By 2020, India's share in the
8.00%
global passenger vehicle market
Third-largest automobile
industry by 2016 to touch 8 per cent from
2.40% 2.40 per cent in 2015

2015 2020

CAGR: 15.97%
34

18.8 Two wheeler production to rise

Worlds second-largest two from 18.8 million in FY16 to 34
wheeler manufacturer million by FY20E

FY16 FY20E
million

CAGR: 30.96%
10
Passenger vehicle production to
Passenger vehicle production to increase from 3.4 million in
nearly triple by 2020E 3.4 FY16 to 10 million in FY20E

FY16 FY20E
million

Source- ibef.org
 INTRODUCTION

Domestic sales of two wheelers CAGR: 11.9%

is the most growing segment, >50.6
Domestic sales of two wheelers
with domestic two wheeler
in India is expected to increase
sales expected to grow from
16.46 at a CAGR of 11.9 per cent
16.46 million in 2016 to 50.60 - during 2016-2026
55.5 million by 2026
2016 1 million 2026

Production of passenger CAGR: 3.05%

vehicles, commercial vehicles, >4.86
three wheelers and two 3.6 Automobile exports to grow at
wheelers grew at a CAGR of
a CAGR of 3.05 per cent
2.74 per cent, 0.57 per cent,
during 2016-2026
3.16 per cent and 7.12 per
cent, respectively, during
20161 million 2026
FY11-16

Source- ibef.org
 EVOLUTION OF THE INDIAN AUTOMOTIVES
SECTOR

21.5 million units (FY16)

units (FY14)
11 million
units (2007)

0.6 million
units (1992)

2008 onwards
19932007
0.4 million
More than 35 market players
units (1982) Sector de-licensed in
198392 1993 Indian companies gaining
acceptance on a global scale
Major Original
Equipment Setting up of National
Joint Venture (JV): Manufacturers (OEMs) Automotive Board to act as
Before 1982 Indian government and started assembly facilitator between the
Suzuki formed Maruti operations in India government and industry
Udyog; commenced Government has proposed
Imports permitted from
production in 1983 GST to support lower raw
April 2001
Component material cost
Introduction of value-
manufacturers entered Launch of Automotive Mission
added tax in 2005
the market via JV Plan 2016-26 in 2015
Buyers market
Source- ibef.org
 PLAYERS IN AUTOMOBILE INDUSTRY

Passenger
Market leader Others
Vehicles

Passenger Cars 52.8% 21.2% 9.3% 5.6%

Utility Vehicles 36.4% 14.7%

13.6% 9.9%

Vans 81.8% 12.26% 5.98%

Commercial
Market leader Others
Vehicles

M&HCV 52.9% 31.7% 10%

LCV 42.9% 37% 7.4%

Source- ibef.org
 THREATS OF NEW ENTERANTS

Since it required a high capital investment to set up manufacturing facilities

and a distribution network Very few new players or entrepreneurs are capable
of venturing into the automotive industry

In addition, the fact that existing multi-national major competitors benefit

from economies of scale and scope, makes it very difficult for a new entrant
to offer competitive pricing.

Because the issues of safety, reliability and durability are so salient, and
because buyers base their impressions of a model on the manufacturer's
previous performance on these issues, a new entrant will have extreme
difficulty competing.

It takes many years for a new entrant to build a strong enough reputation to
be competitive