Professional Documents
Culture Documents
History:
•Introduced to India in the late 1890’s and the manufacturing industry
only took off after independence in 1947.
•The protectionist economic policies of the government gave rise in the
1950's to the Hindustan Motors Ambassador.
•Hindustan Motors and a few smaller manufacturers such as Premier
Automobiles, Tata Motors, Bajaj Auto, Ashok and Standard Motors held
an oligopoly until India's initial economic opening in the 1980's.
•The maverick Indian politician Sanjay Gandhi championed the need for a
"people's car"; the project was realized after his death with the launch of
a state-owned firm Maruti Udyog which quickly gained over 50% market
share.
•Tata Motors exported buses and trucks to niche markets in the
developing world.
AUTOMOBILE
COMMERCIAL
2 WHEELER 3 WHEELER PASSENGER VEHICLE
VEHICLE
2003 6.25
Commercial 517,648 4.7% 26.7%
2002 5.41 Vehicles
0 5 10 15
Automotive clusters in India
Major automotive clusters - Mumbai-Pune-
Nasik-Aurangabad (West), Chennai -
Bangalore-Hosur (South) and Delhi-Gurgaon-
Faridabad (North)
Delhi-Gurgaon-Noida- North / Central South
Ghaziabad Ashok Leyland Enfield
Ludhiana Ashok Leyland Eicher
Haridwar Ford Greaves
Force Motors Hero Honda
Hindustan Motors Hyundai
Hindustan Motors Honda
M&M Tata
Honda SIEL ICML
Pitampur Toyota Kirloskar TVS Motors
Kinetic LML
Volvo
Majestic Maruti Suzuki
Jamshedpur
Piaggio Yamaha
Rajkot-Halol Swaraj Mazda Tata Motors
Kolkata
East West
Ashok Leyland Bajaj Auto
Mumbai-Pune-Nasik Hindustan Motors DaimlerChrysler
Aurangabad Hyderabad FIAT Force Motors
Tata Motors
GM Greaves Kinetic
M&M Premier
Skoda Tata Motors
• Shrinking of mini car segment, and increasing share of compact cars in Indian market.
• Impressive growth of executive segment(D), with CAGR of 112% from FY’ 2001-02 to
FY’2006-07
• Emergence of India as Global manufacturing base for mini and compact cars.
• Exports from passenger vehicle segment has grown significantly, with a CAGR of 30%
from FY’2001-02 to FY’2006-07.
Domestic Passenger Vehicle Industry
Sales Break-up of the Industry by
Segment for 2007
2007 1379.1
2002 675.1
Passenger
Cars 46% 16% 14% 7% 4% - - - - - - - -
Utility
Vehicles 2% 18% 1% 42% 21% 1% 10% 1% <1% - 4% - %
Multi
Purpose 40% - - - - - - - - - - - -
Vehicles
• The motorcycles market had witnessed the fastest growth rate in the two wheeler
segment, with a CAGR of 19.2%.
• Exports from two-wheeler industry has increased with a CAGR of 42.8%, from FY’2001-
02 to FY’2006-07.
• The total sales of the Indian Commercial vehicles industry has grown at a CAGR of
26.1% between FY’2001-02 and FY’2006-07.
• With increased industrial production and investments in real estate CVs market has
witnessed good growth.
• CV exports has grown from 12000 units in FY’2001-02 to 50,000 units in FY’2006-
07, showing a CAGR of 33.2%.
Segment-wise Analysis of Indian Two Wheeler
Market
Segment Description Share in 2001-02 Share in 2006-07 CAGR
Others 3% Others 4%
Indian 2-Wheeler Market
Competitive Scenario
- - 82% - - - 8% 10% -
• The Indian economy has grown at 8.5 per cent per annum.
• The manufacturing sector has grown at 8–10 per cent per annum in the
last few years.
• More than 90 per cent of the CV purchase is on credit.
• Finance availability to CV buyers has grown in scope during the last few
years.
• The increased enforcement of overloading restrictions has also
contributed to an increase in the number of CVs plying on Indian roads.
• Several Indian firms have partnered with global players. While some have
formed joint ventures with equity participation, others have entered into
technology tie-ups.
• Establishment of India as a Manufacturing hub, for mini, compact
cars, OEMs, and for auto components.
Key Market Drivers Key Trends
Increasing disposable incomes
Market evolution from Mini cars
Rising aspirational levels to Hatchbacks to Compact Sedans
• Closed market • Suzuki, Japan and GOI joint • Delicencing of the sector in 1993
• Growth of market venture to form • Global major OEMs start
limited by supply Maruti Udyog assembly in India
• Outdated models • Joint ventures with (GM, Ford, Honda, Hyundai, etc.)
companies in commercial • Imports allowed from April 2001;
vehicles and components alignment of duty on components
and parts to ASEAN levels.
• Easy auto finances.
• Implementation of VAT.
Players Players Players
• Hindustan Motors • Maruti Udyog • Entry of Global players
• Premier • Hindustan Motors
• Telco • Premier
• Ashok Leyland • Telco
• Mahindra & Mahindra • Ashok Leyland
• Mahindra & Mahindra
Current Political Environment
• Indian government auto policy aimed at promoting an integrated, phased and
conducive growth of the Indian automotive industry.
• Allowing automatic approval for foreign equity investment up to 100 per cent, with
no minimum investment criteria.
• Establish an international hub for manufacturing small, affordable passenger cars
as well as tractors and two wheelers.
• Ensure a balanced transition to open trade at minimal risk to the Indian economy
and local industry.
• Assist development of vehicles propelled by alternate energy sources.
• Laying emphasis on R&D activities carried out by companies in India by giving a
weighted tax deduction of up to 150 per cent for in-house research and R&D
activities.
• Plan to have a terminal life policy for CV along with incentives for replacement for
such vehicles.
• Promoting multi-modal transportation and the implementation of mass rapid
transport systems.
Social Environment
• Growth in urbanization, 4th largest economy by PPP index.
• Upward migration of household income levels.
• Increase in PPP , led to the increase in market share of compact cars.
• 85% of Cars are financed in India (15% in China).
• Cars priced below USD 12000 account for nearly 80% of the market.
• Vehicles priced between USD 7000 –12000 form the largest segment in the
passenger car market.
• Indian customers are highly discerning, educated and well informed. They are
price sensitive and put a lot of emphasis on value for money.
• Preference for small and compact cars. They are socially acceptable, even amongst
the well-off.
• Preference for fuel efficient cars with low running costs. The Tata Indica has the
lowest running cost at US 8.5 cents per mile.
Technological Environment
• With the entry of global companies into the indian market, advanced
technologies ,both in product and production processes have developed.
• With the development or evolution of alternate fuels, hybrid cars have made
entry into the market.
• Major global players like audi, BMW,Hyundai etc have setup their
manufacturing units in India.
• Government initiatives regarding tax rebates has led to global players setting
up their R&D centres in India.
• Govt. initiatives in establishing NATRIP network across the country will further
lead to enhancing R&D and technological advancements.
NATRIP Network
New testing center for
tractors & off-road
vehicles, accident data
analysis and specialised
driving training at RAE Hill Area driving
BAREILLY training center and
Regional In-Use
vehicle
management center
New testing & at SILCHAR
homologation center at
MANESAR
Up-gradation of VRDE
at AHMEDNAGAR
New complete
proving ground at
INDORE
Up-gradation of
ARAI at PUNE
Number of
Status of Indian Regulation regulations
Total 114
Emission Compliance
Emission Standards Status
Cars Two Wheelers C Vs
Bharat Stage III From April 1, 2005 From April 1, 2008 From April 1, 2005
Bharat Stage IV From April 1, 2010 From April1, 2008 From April 1, 2010
Growth Forecasts as per Automotive Mission
Plan
• The size of the Indian automotive industry is expected to grow at a rate of 13% per
annum over the next decade to reach around 31.96 Mn in 2016 from 11Mn in
2007.
• The total investments required to support the estimated growth are around US$
120-159 billion by 2016.
CV 0.64
Total 31.96
Thank You