Investment Opportunities in the

Indian Auto Components Industry

January 2008

420 Lexington Avenue . Suite 300 . New York, NY 10170 . 212-297-6107 . www.virtusglobal.com
 Market Snapshot

$8.7 billion industry; 16% is exports ($1.4 billion)

The Auto Components industry has experienced

high growth in the past few years

 Domestic market CAGR of 23% in the last 4

years
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

 Exports CAGR of 34% in the last 4 years

India has a small, 0.4% share of the global Auto

Components Industry

Page 1 Confidential & Proprietary

www.virtusglobal.com
 Industry Structure

Industry highly fragmented: Fewer than 5 players with revenues over $250 million

Indian manufacturers are gaining recognition as “global quality” players

 50% of Indian Auto Components exports are to Europe and USA

 5 Indian companies in the automotive sector have received the coveted

Deming
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

Prize: the largest number outside Japan

Many international auto-component majors including Delphi, Visteon, Bosch and

Meritor have set up operations in India

Many auto manufacturers including GM, Ford, Toyota, etc. and Auto Components
manufacturers have set up International Purchasing Offices (IPOs) in India to feed
their global operations

India is also becoming a global hub for R&D: GM, Daimler Chrysler, Bosch, Suzuki,
Johnson Controls etc. have set up development centers in India

Page 2 Confidential & Proprietary

www.virtusglobal.com
 Policy

 100% FDI allowed through the

automatic route
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

Page 3 Confidential & Proprietary

www.virtusglobal.com
 Major Players
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

Page 4 Confidential & Proprietary

www.virtusglobal.com
 Outlook

 Auto Components Industry expected to

grow at a CAGR of 15% over the next
10 years

 India’s share in world Auto

Components to grow from 0.4% in
2003-04 to over 3% by 2015-16
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

 Domestic market projected to grow

at over 8% p.a. in the next 10 years

 Exports projected to grow at over

30% p.a.

Page 5 Confidential & Proprietary

www.virtusglobal.com
 Potential

India amongst the most competitive manufacturers of Auto Components;

especially,

 Metal-intensive components: Forgings, Stampings, Castings

 Skilled Labor-intensive components: Machining, wiring-harness, other electrical

components
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

 Hi-tech components: Electronic Fuel Injectors

Opportunity to address the global Auto Components market while leveraging India’s
large and growing domestic market

Opportunity to set up R&D centers in India

 Indian technical skills acknowledged as among the best in the world

Potential of over $5 billion for investment in India

Page 6 Confidential & Proprietary

www.virtusglobal.com
 About Virtus Global Partners

Virtus Global Partners is a global investment and advisory firm with offices in the US
and India. Our primary focus is on US and India based cross border businesses.
We provide a full range of investment banking services including cross border M&A,
strategic partnerships, fundraising and general advisory services. Our corporate clients
include mid to large size venture-backed enterprises as well as quoted companies.
Our focus sectors include technology and technology enabled businesses,
INDIAN AUT0 COMPONENTS MARKET ANALYSIS

pharmaceuticals, auto ancillary, food processing and industrials.

Virtus Global Partners provides:
 Deep knowledge of US and Indian core industry markets;
 Senior level access to leading industry executives, investors and entrepreneurs,
both in US and India;
 In-depth technical and financial skills for value-enhancing deal structuring;
 Refined and responsive transaction process;
 Corporate culture built on teamwork, integrity and professionalism; and
 Relentless focus on maximizing value for our clients.

For more information contact Robin Hughes at rhughes@virtusglobal.com

Page 7 Confidential & Proprietary

www.virtusglobal.com