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AUTOMOBILE INDUSTRY OVERVIEW
• An annual contribution of 4% to the GDP and accounting for about 5% of
the total industrial output, this segment clearly stands out as a significant contributor to the economic growth. The industry has grown at a CAGR of 16% p.a over the last 5 years.
• With the potential to emerge as one of the largest in the world. Presently,
• 2nd largest two wheeler market in the world • 4th largest commercial vehicle market in the world • 11th largest passenger car in the world and is expected to be the 7th
largest market by 2016
• The industry has emerged as a key contributor to the Indian economy
OVER 9.9 MILLION VEHICLES ARE BEING PRODUCED BY INDIA - 1.3 million passenger cars and about 400 000 commercial vehicles
2 – wheelers 3 – wheelers
(400 000 veh.)
(1 308 913 )
(296 000 7600801 veh.) 424) (434
8 manufacturers 8 Escorts manufacturer M&M s Hero L&T Honda Punjab Bajaj Tractors TVS New Yama Holland ha ITL – LML Renault Honda John-Deere Kineti c Steyr
LCV’s (171 781 .)
M&HCV’s & Buses (219 297 veh.)
7 manufacturers Tata Ashok Leyland Mahindr a Eicher Force Swaraj Mazda HM
7 manufacturers Tata Ashok Leyland Eicher Swaraj Mazda Volvo Tatra
13 manufacturers Suzuki Tata Hyundai Mahindra Toyota Honda GM Ford HM/ Mitsubishi Skoda Force Fiat Mercedes
6 manufacturers Bajaj Piaggio Mahind ra Force Atul Auto Scooter s India
Royal Enfiel d
enduring and self-sustained growth of the Indian automotive industry. • Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms • Confirms the government’s intention on harmonizing the regulatory standards with the rest of the world .Policies relating to the Auto sector: Auto Policy • In 2002. • Allows automatic approval for foreign equity investment up to 100% in the automotive sector and does not lay down any minimum investment criteria. the Indian government formulated an auto policy that aimed at promoting integrated. • lays emphasis on R & D activities carried out by companies in India • Weighted tax deduction of up to 150% for in-house research and R & D activities. phased.
Pune (Maharashtra) Proving ground at Indore (MP) Up-gradation of VRDE at AHMEDNAGAR New complete proving ground at INDORE Up-gradation of ARAI at PUNE New test & homologation center near CHENNAI • Hill Driving Training Centre at Silchar (Assam) .State-of-the-art test facilities will support the growth of the auto industry • The Government of India is promoting National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth of the auto industry in India New testing & homologation center at MANESAR New testing & homologation center New testing center forat MANESAR tractors & off-road vehicles. Chennai (Tamil Nadu). accident data analysis and specialised driving training at RAE BAREILLY Hill Area driving training center and Regional In-Use vehicle management center at SILCHAR • NATRIP envisages setting up of five independent and up gradation of existing test centres • Testing centres at Manesar • • Tractor testing facility at Rae Bareilly (UP) (Haryana).
01.Indian Automotive Industry Government of India SIAM ACMA Automotive Mission Plan 2016 On 29.1 billion at present Provide employment to additional 25 million people by 2016 By 2016. the Prime Minister released Automobile Plan 2006 -2016 to give a road map to Indian Automobile Industry Increase turnover to $145 billion by 2016 from $ 35 billion at present Increase export revenue to $ 35 billion by 2016 from $ 4. the Automotive sector is expected to contribute 10% of the country’s GDP and 30~35% of the Industry 7 .07.
Automotive Components Industry Automotive Mission Plan 2016 ACMA VISION 20:20:1 20 Achieve $20 billion in Domestic Sales 20:20:1 20 Achieve $20 billion in Exports Sales VISION 1 20:20:1 Create 1 million additional Jobs 8 .
has positioned India as one of the leading low cost manufacturing sources .India Advantage and business opportunities Attractiveness of the Indian automotive industry Large and growing domestic demand • Demand growth expected tocapabilities Proven product Development be around 10 % CAGR making India one of the fastest • Capabilities to develop complete vehicles growing markets and systems Export Potential • Increased outsourcing has led to a large potential to export components and vehicles to other markets High quality standards • 12 Indian component manufacturers have won the Deming Prize for quality • Most leading component manufacturers are QS and ISO certified • More than 125 Fortune 500 (including large auto companies) have R&D centres in India • Companies can leverage India’s acknowledged leadership in the IT industry Indian Auto Industry Stable economic policies • Continuity in reforms and policies • India targets to emerge as the “manufacturing hub” for small cars Competitive manufacturing cost •Implementation of VAT.
Golden Quadrilateral Increasing disposable income with the service sector Easier finance schemes Replacement of aging four wheelers Graduating from Two wheeler to Four wheeler Increasing dispensable income of rural agri sector Growing Concept of Second Vehicle in Urban Areas Two wheeler story could be repeated in the car segment 10 .Growth Drivers Higher GDP growth India’s huge geographic spread Increasing Road Development.Indian Automotive Industry .
8 out of top 10 global companies have India presence They contribute 60 % of global production but 25 % of India Production .
000 inhabitants in different countries 750 600 450 300 USA Italy Germany France Japan UK Poland S.Korea Brasil China India 150 2006 813 673 597 595 593 571 385 322 124 23 12 12 1960 1970 1980 1990 2000 2010 .The Motorization Process Cars for 1.
• Value of auto component exports is likely to attain a double digit figure in 2012-13. .GROWTH ASPECTS • India has a low vehicle presence (with passenger car stock of only around 14 per 1. exceeding 10 million units by 2012-13. and so possesses substantial potential for growth. • Motorcycle sales will perform positively in future. • Sales of passenger cars during 2008-09 to 2015-16 are expected to grow at a CAGR of around10%. • Passenger car production in India is projected to cross three million units in 2014-15.000 population in 2008). • Export of passenger cars is anticipated to rise more than the domestic sales during 2008-09 to2015-16.
000’ car Suzuki’s JV in India and the largest passenger car manufacturer in India The third largest passenger car manufacturer in India and one of the largest exporters of vehicles. including the ‘100. Has established India as one of its manufacturing bases in the world. Is planning to invest heavily to boost exports from India Has vision of capturing 10 % share of the Indian passenger car market by 2010 One of the leading players in the Indian premium cars segment One of the leading players in the Indian premium cars segment .Key players in the Indian auto industry Passenger Cars and Commercial vehicles The largest player in the Indian industry. Plans to launch new and exciting products in the Indian markets.
One of the leading players in the Indian premium cars segment. Plans to enter the small car segment by re-launching the Matiz One of the largest players in the UV / MUV segment The 2nd largest CV manufacturer in India .
Has plans for establishing a manufacturing facility in Indonesia Has recently entered the Indian market through its direct subsidiary ( in addition to its JV – Hero Honda) Has recently entered the Indian market through its direct subsidiary .wheeler manufacturer in India and the largest 3 wheeler manufacturer. Has plans for establishing a manufacturing facility in Indonesia . The 2nd largest 2.Key players in the Indian auto industry . The third largest 2 wheeler manufacturer in India.Two wheelers The largest 2 wheeler manufacturer in the world and 1st in India.
02 .26 31.03 1.31 --- 2.24 32.27 06-07 60.12 6.90 26.62 04-05 63.85 6.62 Swaraj Mazda Man force Trucks Asian Motor works 1.70 0.PAST PERFORMANCES & CURRENT TRENDS Market share trends : 2003-04 to 2006-07 Medium & heavy commercial vehicles Company TATA Motors Ashok Leyland Eicher motors 03-04 63.50 -0.08 0.20 --- 2.69 05-06 60.58 4.55 30.03 5.
37 2.25 04-05 52.62 5.50 3.26 6.05 32.03 0.85 06-07 64.25 Swaraj Mazda Force Motors Ashok Leyland 6.47 2.22 26.26 .40 6.82 26.31 5.• Light commercial vehicles Company TATA Motors Mahindra & Mahindra Eicher Motors 03-04 48.41 4.68 0.31 2.41 0.66 0.86 05-06 61.75 4.36 33.85 2.
22 1.67 1.80 14.54 04-05 39.95 8.37 1.24 23.38 6.54 1.45 1.51 5.99 22.95 1.43 .35 11.10 8.76 4.30 4.57 05-06 40.12 5.60 2.• Passenger cars Company Maruti Suzuki Hyundai TATA Honda Ford GM Benz Hindustan Motors 03-04 42.77 22.21 14.38 5.09 4.57 3.27 14.83 06-07 38.39 2.47 22.58 4.05 15.
27 1.91 0.10 1.15 29.85 33.61 04-05 39.96 .26 1.59 29.44 22.05 0.• MUVs Company Mahindra & Mahindra 03-04 38.09 4.29 4.78 TATA Force Motors Maruti Suzuki Hindustan Motors Toyota Kirloskar 19.98 0.71 21.26 25.17 32.83 4.55 0.25 05-06 42.36 1.50 06-07 38.27 4.
80 24.17 3.69 4.31 10.88 05-06 50.24 04-05 52.48 34.80 32.03 14.98 06-07 48.94 .• MOTORCYCLES Company Hero Honda Bajaj TVS Yamaha 03-04 48.86 3.72 11.16 27.64 6.98 11.
97 Mahindra & Mahindra Scooters India 10.97 4.• THREE WHEELERS Company Bajaj Piaggio 03-04 61.74 24.87 3.36 06-07 54.83 7.57 4.73 .26 5.17 3.46 5.10 8.74 11.73 05-06 48.55 2.77 24.89 4.87 2.14 4.08 10.14 9.80 28.19 Atul Auto Force Motors 2.01 04-05 48.
000 units capacity by 2010. • • Tata Motors : New plant to manufacture 100K car in West Bengal with an investment of US $ 0.000 cars per annum over next 1 year. • • General Motors : New Capacity to manufacture more small car like spark.EXPANSION PLANS • • • Maruti Suzuki : New car plant to make 250. capacity to produce 400.000 cars/annum) 10 new Component JVs to support new Diesel Engine Plant. • • Toyota : Target of 200. – Nissan – Compact SUV .000 units in seven years.000 cars per annum (total 800. • • Nissan Team up with Mahindra & Mahindra and Renault to invest in a $905 million car project in India.24 Billion. • • Hyundai : Increase capacity to 400.
Very Competitive Market • From 20 models available in year 1995 to 93 available today (Not counting the variants) • 60 new launches done in 2008 .
Recent Newsmakers .
500 Car (The NANO) .The $ 2.
Apr .Vehicle Production Car & MUV production .Sep 1000000 900000 800000 700000 600000 Nos 7% growt 29% growt 28% growt 18% growth 14% growth 500000 400000 300000 200000 100000 0 2000-01 Catg I -4% 2% 2001-02 Catg II 2002-03 Catg III 2003-04 Catg IV 2004-05 Catg V 2005-06 MUV 2006-07 Total 2007-08 Growth over previous period growth 27 .
622 (DEC 2008) WHERE AS IN PREVIOUS YEAR IT WAS 7.• AUTOMOBILE SALES ALL TIME LOW: declined by 18. • ALL MAJOR COMPANIES REDUCED THE PRICES OF VECHICLES TO INCREASE DEMAND. • THE TOTAL VECHICLE SALES IN DOMESTIC MARKET STOOD AT 5. • THE CUT IN EXCISE RATE (4%) ITS BENEFIT WAS DIRECTLY PASSED TO CUSTOMER.97. • VARIOUS AUTOMOBILE COMPANIES SHUT THEIR PLANT TEMPORARILY BECAUSE OF DEMAND NOT MEETING THE TOTAL PRODUCTION. BANKS TO PROVIDE CREDIT TO NBFC’S (NON BANKING FINANCIAL INSTITUTION) SPECIFICALLY TO BUY COMMERCIAL VECHCILES.2 % in December 2008. • IN BAILOUT PACKAGE OF JANUARY GOVT INSTRUCTED GOVT.30.603 (DEC 2007). Current trend .
2% .3% • Sale of 2 wheelers fell by 9.2% • Sales of passenger cars & muvs fell by 8.Current Scenario • Nov-2008 • Automobile industry reported one of its worst performance • Decline in sale of commercial vehicles by 48% & production by 57.
• India is the strongest player in the small car segment of the global automobile market • Indian companies are the best cost innovators • The automotive industry has long been known for its development and promulgation of the assembly-line.SWOT Analysis Strengths • Automobile industry is an established and an evergreen industry. .
. assembly line manufacturing. • Through the use of advanced technologies. the automotive industry has been able to achieve significant gains in productivity.• Some of the greatest developments in the automotive supply chain lie in the development of Just-In-Time (JIT) inventory methods. and JIT inventory management.
• This is slowing the pace of growth of auto industry • Companies are not improving after sale services .Weakness • Indian is lacking in proper infrastructure.
depending upon boundary conditions such as fuel taxation and emissions regulation set by governments as well as oil price development. and globalization. • storage is in the heart of the next generation of efforts for fuel economy. technology development. • While demand for incumbent technologies will remain strong. • Intelligent use of NCES (Non conventional energy sources) for powering Public Transport. with increasing challenges in consumer demands. alternative power trains could capture more than 20 percent of the global market by 2020. • More realistic scenario will emerge for technologies using Hydrogen as automotive fuel.Opportunities • The automotive ecosystem is in the midst of significant change. .
Threats • Global Crisis • Companies not focusing on R & D are under great risk • High competition from foreign players • Lack of technology for Indian companies .
• Good job opportunity is there. supply chain mgt . • We can join there in sales & marketing.R.SCOPE IN THIS INDUSTRY • It comes under manufacturing industry. • Pay package is also very good . Finance. . H.R&D as well as in operations department .
Critical Analysis • Automobile Industry in India is still in its developing stage. • The Industry would also need to provide energy solutions for economic activities to sustain. . we cannot think about the growth of the automobile enterprise without also paying attention to the safeguarding of the world environment. • The industry would have to develop vehicles which would have minimum impact on Air Quality and confirm to the Safety Norms with cost of fuel increasing rapidly. • When we compare 2020 with the present. we will experience more change than in the 50 years before. • In the next ten years.
• Challenges beyond 2016 would make it necessary for Private & Public Sector to join hands and come out with effective solutions for sustainable mobility .• The industry would not only need to address the technology challenges but also look at cost competitiveness and human resources challenges. • The policy makers would have to provide infrastructure to absorb the volumes that are expected to come into existence.
Sources • • • • • • • • • Society of Indian Automobile Manufacturers (SIAM) CMIE REPORT INDIAN BRAND EQUITY FOUNDATION AUTO CAR INDIA : ECONOMIC TIMES GOOGLE BUSINESS WORLD TIMES OF INDIA BUSINESS LINE ECONOMIC TIMES .
Thank You JAN 19 2009 39 .
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