Automobile Industry Essay

Strong demand growing due to lifting incomes. turning in-between category. and a immature population is likely to impel India among the world’s top five auto-producers by 2015 Growth in export demand is besides set to speed up.

Tata Nano and the approaching Pixel have opened up the potentially big extremist low cost auto section Invention is likely to escalate among engine engineering and alternate fuels.

Advantage India
Rising investings

Policy support
India has important cost advantages ; car houses save 10-25 per cent on operations in India compared to Europe and Latin America A big pool of skilled work force and a turning engineering base will bring on greater investings.

The authorities aims to develop India as a planetary fabrication every bit good as R & A ; D hub There has been a broad array of policy support in the signifier of sops. revenue enhancements and FDI encouragement.

FY10
Market size: USD57. 7 billion

Notes: R & A ; D – Research and development. FDI – Foreign direct investing ; FY – Indian fiscal twelvemonth ( April – March ) ; FY16E – estimated figure for fiscal twelvemonth 2016 ; estimations are from the government’s Automotive Mission Plan ( 2006 – 2016 ) ADVANTAGE INDIA.

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3.

Automotives

AUGUST

2012

Contentss
? Advantage India ? Market overview and tendencies ? Growth drivers ? Success narratives: Maruti. Tata Motors ? Opportunities ? Useful information

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Development of the Indian automotives sector
20. 4 million units ( 2012 ) 11 million units ( 2007 ) 2008 onwards 0. 6 million units ( 1992 ) 1983 – 1992 0. 4 million units ( 1982 ) Before 1982 • Closed market • Merely 5 participants • Joint venture ( JV ) Indian authorities and Suzuki to organize Maruti Udyog ; started production in 1983 • Component makers besides entered via JV path • Buyer’s market 1993 -2007 • Sector de-licensed in 1993 • Major original equipment makers ( OEMs ) started assembly in India • Imports allowed from April 2001 • Introduction of value added revenue enhancement in 2005 • More than 35 participants in the market • Removal of most import controls • Indian companies deriving planetary individuality

• Long waiting periods and out-of-date theoretical accounts
• Seller’s market

Beginning: Tata Motors. Society of Indian Automobile
Manufacturers ( SIAM ) . Aranca Research. Notes: JV – Joint Venture MARKET OVERVIEW AND TRENDS

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The automotives market is split into four sections
Cars

Two-wheelers

Passenger vehicles

Commercial vehicles

Three-wheelers

Mopeds

Passenger autos

Light commercial vehicles

Passenger bearers

Water scooters

Utility vehicles

Motorcycles

Multi-purpose vehicles

Medium and heavy commercial vehicles

Goods bearers

Electric twowheelers

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Market OVERVIEW AND TRENDS

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Grosss have been turning at a strong gait
>

Gross turnover of car makers in India expanded at a CAGR of 17. 7per cent over FY07-1 1 Excluding three Wheelers. autos account for the largest portion of grosss ( 66. 2 per centum in 2010 ) Revenue trends over the past few old ages in USD million

70. 0 60. 0 50. 0 40. 0 30. 5 30. 0 20. 0 10. 0 0. 0 FY07 FY08 FY09 FY10 FY11 66. 2 % 36. 6 33. 3 21. 5 % Trucks Cars 58. 6 CAGR: 17. 7 % 43. 3

>

Market* break-up by grosss ( 2010 )

12. 3 %
Two Sir mortimer wheelers

Beginning: SIAM. Datamonitor. Aranca Research
Note: *does non include three Wheelers

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Market OVERVIEW AND TRENDS

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Automotives

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2012

Sector’s turning strength evident from rise in entire production figures Entire production of cars in India ( million units )
16. 0
>

>

12. 0 7. 6 8 8. 4 10. 0 8. 0 6. 0 1. 3 0. 4 0. 4 1. 2 0. 4 0. 4 1. 6 0. 6 0. 5 1. 3 0. 5 0. 6 1. 8 2. 4 4. 0 6. 5 8. 5

Notes: CAGR – Compound one-year growing rate

10. 5

Passenger vehicles was the fastest turning section during that period with a CAGR of 14. 5 per cent

14. 0

13. 4

0. 8 0. 8

3. 0

2. 0
0. 0

FY05

FY06

FY07

FY08

FY09

0. 4 0. 5

FY10

0. 6 0. 6

FY11

FY12

Passenger Vehicle Three Sir mortimer wheelers

Commercial Vehicle Two Sir mortimer wheelers

Beginning: SIAM. Aranca Research

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Market OVERVIEW AND TRENDS

0. 8 0. 8

3. 1

15. 5

Cars production increased at a CAGR of 13. 2 per cent over FY05-12

18. 0

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Market break-up by production volume

>

Two Wheelers dominate production volumes ; in FY12. the section accounted for more than three quarters of entire automotives production in the state

Market portion by volume ( FY12 )

>

In fact. India is the world’s 2nd largest two Wheeler manufacturer ; the state is besides the 4th largest commercial vehicle manufacturer

4 % 4 % 16 % Two Wheelers Passenger Vehicle Commercial Vehicle Three Wheelers 76 %

Beginning: SIAM. Aranca Research

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Market OVERVIEW AND TRENDS

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Automotives

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Market break-up of single sections by production volumes … ( 1/2 )

Shares in production of rider vehicles ( FY11 )

Shares in production of commercial vehicles ( FY11 )

11. 5 %
Passenger autos

8. 1 % 36. 0 % MCV & A ; HCV Passenger Carriers MCV & A ; HCV Goods Carriers LCV Passenger Carriers 49. 7 % 6. 1 % LCV Goods Carriers

Utility vehicles/multipurpose vehicles 88. 5 %

Beginning: SIAM. Aranca Research Notes: LCV – Light commercial vehicle ; MCV – Medium commercial vehicle ; HCV – Heavy commercial vehicle

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Market OVERVIEW AND TRENDS

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Automotives

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2012

Market break-up of single sections by production volumes … ( 2/2 )

Shares in production of three Wheelers ( FY12 )

Shares in production of two Wheelers ( FY12 )

15. 8 % Goods bearers

15. 6 %

5. 3 % Mopeds

Motorcycles Passenger bearers Scooters 84. 2 % 79. 1 %

Beginning: SIAM. Aranca Research

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Market OVERVIEW AND TRENDS

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Exports have besides grown strongly … ( 1/2 )

>

Cars export volumes increased at a CAGR of 22. 4 per cent over FY05–FY12 Over this period. the fastest growing was in the two Wheeler section ( 25. 8 per cent ) followed by three Wheelers ( 21. 9 per cent )

Exports of cars from India ( million units )
2 1. 8 1. 6 1. 4 1. 2 1 0. 8 0. 6 0. 4 0. 2 0 2 0. 5 0. 6 0. 8 1 0. 5 1. 1 0. 5 1. 5 0. 4 0. 5 0. 3 0. 2 0. 03 0. 1

>

0. 2 0. 04 0. 1

0. 2 0. 05 0. 1

0. 2 0. 06 0. 1

0. 04 0. 2

0. 04 0. 2

0. 08 0. 3

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

Passenger Vehicle

Commercial Vehicle

Three Sir mortimer wheelers

Two Sir mortimer wheelers

Beginning: SIAM. Aranca Research

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Market OVERVIEW AND TRENDS

0. 1

0. 4

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2012

Exports have besides grown strongly … ( 2/2 )

>

Two Wheelers accounted for the largest portion in exports ( by volume ) at 67 per cent in FY12 Passenger vehicles account for a ample 18 per cent of overall exports

Exports portions by volume ( FY12 )

>

18 % Passenger Vehicle 3 % 12 % 67 % Commercial Vehicle Three Wheelers Two Sir mortimer wheelers

Beginning: SIAM. Aranca Research

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Market OVERVIEW AND TRENDS

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Presence of a clear leader in each section of the market
>

The automotives industry is concentrated with market leaders in each section commanding a portion of over 40 per cent

Market Leader Passenger Vehicles MCVs & A ; HCVs LCVs Three Wheelers 45 % 16 %

Others
15 % 7 %

63 %

23 %

7 %

59 %

30 %

4 %

4 %

41 %

40 %

10 %

Motorcycles
Water scooters

59 %

24 %

7 %

6 %

51 %

21 %

14 %
Beginning: SIAM. Aranca Research
Notes: Data is for FY10

10 %

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Market OVERVIEW AND TRENDS

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Automotives

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2012

Noteworthy tendencies in the Indian automotives sector
• Large figure of merchandises available to consumers across assorted sections ; this

New merchandise launches

has gathered gait with the entry of a figure of foreign participants • Reduced overall merchandise lifecycle have forced participants to use speedy merchandise

launches

Bettering productdevelopment capablenesss

• Increasing R & A ; D investings from both the authorities and the private sector • Private sector invention has been a cardinal determiner of growing in the sector ;

two good illustrations are Tata Nano and Tata Pixel – while the former has been a success in India. the latter is intended for foreign markets

• In FY11. the CNG market was worth more than USD330 million and CNG autos

Alternate fuels

and taxis are expected to register a CAGR of 28 per cent over FY11-FY14 • The CNG distribution web in India is expected to increase to 250 metropoliss by

2018 from 30 metropoliss in 2009

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Market OVERVIEW AND TRENDS

15

Automotives

AUGUST

2012

Contentss
? Advantage India ? Market overview and tendencies

? Growth drivers
? Success narratives: Maruti. Tata Motors ? Opportunities

? Useful information

For updated information. delight visit World Wide Web. ibef. org

16

Automotives

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2012

Sector has been profiting from strong demand and merchandise invention

Turning demand Turning demand

Policy support Strong authorities support

Increasing investings

Rising incomes. immature population
Inviting Greater handiness of recognition and funding options

Goal of set uping India as an automanufacturing hub
R & A ; D focal point ; GOI has set up engineering modernization fund Large domestic market Policy sops. FDI encouragement

Resulting in

Rising investings from domestic and foreign participants Greater invention in merchandises ; market cleavage

Strong growing in exports as good

Strong projected demand doing returns attractive
Notes: GOI – Government of India ;

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GROWTH DRIVERS

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Automotives

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2012

Rising incomes and a turning in-between category driving domestic demand growing Rising incomes ; turning in-between category

Changing income kineticss of India’s population
70 million families Aspirants: one-year income INR90. 000200. 000 Seekers: one-year income INR200. 000500. 000 Strivers: one-year income INR500. 0001. 000. 000 Globals: one-year income & gt ; INR1. 000. 000

Personal ( nominal ) disposable income is expected to lift yearly at 8. 5 per cent over FY11-15 Rising in-between category – size of the in-between category expected to touch 550 million by 2025 from 50 million in 2010 Favorable demographics – a immature population is besides driving up the demand for autos Demand for commercial vehicles have got a encouragement due to development of roadways and greater market entree

60
50 40 30 20 10 0 2005 Slaves 2010 Seekers 2015 Deprived

Deprived one-year income

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