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Automotive Sector ʹ India

  
    
    
Indian Automobile industry
¢ 9th largest industry
¢ Largest 3 wheeler market
¢ 2nd largest producer of 2 wheelers
¢ 4th largest car market
Indian Automobile Industry
¢ 5th in the production of CVs
¢ Asia͛s 4th largest exporter of automobiles behind
Japan, South Korea, and Thailand
¢ India set to overtake China as 2nd largest
automobile market
Úre-Liberalisation
¢ First Indian car rolled out in 1897 in Bombay
¢ Automobile Industry started emerging in 1940͛s
¢ Automotive component manufacturing industry took
priority
¢ Growth was slow in 1950͛s and 1960͛s
Úost-liberalisation
¢ Industry was open for 100% FDI
¢ 17% annual growth rate since 1991
¢ 30% y-o-y growth rate of Automotive parts and exports
India͛s In The Global
Auto Industry Landscape

¢ Impact of slowdown on global automotive industry

¢ Nano - R&D, engineering, manufacturing, innovation
¢ India͛s strength in CV and two-wheelers
¢ Indian auto components industry has grown >500%
India ʹ EXIM Forecast
Úassenger Vehicles
¢ ÚV production grew >300%
over last decade
¢ CAGR at 11.5% for last 5 years
Car prices and personal disposable income
¢ India is a small-car market
¢ 75% of total ÚVs are small cars
¢ Innovative capabilities ʹ Nano
¢ Increasing penetration of CNG
Share in new passenger car sale by fuel type
Car penetration
Reason why car penetation is low
ÚV industry growth drivers
Challenges
¢ Increasingly Stringent
Emission & Safety Regulations
¢ Technological capability
¢ Cost
Increase in input prices
Ferrous & Non-Ferrous Metals
Crude oil & derivatives
Natural rubber
¢ Rising Customer Expectations
Úroduct features
Quality & reliability
¢ Integration with Global
Markets
Lowering product life cycles
Reducing time-to-market for
new products
Threat of new competition
ÚV Exports

¢FY09, exports accounted for 17.8% of the total ÚVs sold

¢By 2014, India is expected to become:
¢sixth-largest ÚV market
¢fifth-largest ÚV producer

ÚVs: manufacturer͛s exports share (FY09)

 Commercial Vehicles
¢ Fourth-largest CV market in the world
¢ 60+% of the total freight movement
¢ 90% market share - Tata Motors, Ashok Leyland, M&M & Eicher Motors
¢ Úassenger carrier segment - decreased by 7%
Commercial Vehicles
¢ Exports:
¢ LCVs export share ʹ 60%
¢ M&HCVs export share ʹ 40%
¢ 2010 - tough year for CVs given strong correlation of
CV sales with level of economic activity

Summary of Recent JVs in India

Two-wheelers
¢ Second largest 2 wheeler industry
¢ CAGR of 7% during FY 05-09
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 Two-wheelers
¢ Exports had a CAGR of 31% in FY05-09
¢ Segment-wise breakup

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Auto components
¢ Highly fragmented
¢ 2,500+ players
¢ Grown >500% last 10 years
¢ 500 players constitute the
organized sector
¢ These contribute >70% of
total auto component
production
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Auto components
¢ Auto component exports ʹ US $3.8b
¢ Investment in auto components

Auto component production worth US$20

billion to US$25 billion is expected to be
outsourced to India by 2015

 

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 India as an emerging R&D destination
¢ Cumulative R&D expense of 10 major players increased at a
CAGR of 47%
¢ R&D stands at Rs. 20 b in FY08
¢ Maruti Suzuki R&D plans
¢ Indian government promoting R&D .(  
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Thank You