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The Indian automotive industry is one of the largest in the world. India ranks number two globally in the two-wheeler segment next only to China. It ranks 11th in car production and 13th in commercial vehicle production globally. With increasing industrial production and growing spending power of the Indian middle class households, the country is expected to make it to the top five markets in the cars and commercial vehicles segment by 2020. In the year 2009-010, sales of the Indian automotive industry crossed the historic landmark of10 million units. Sales (domestic as well as exports) of the industry had grown from 5.51 million units in 2001-02to 11.12 million units in2006-07, at an impressive Compound Annual Growth Rate (CAGR) of 15.5 per cent. This extraordinary growth had been driven by a buoyant economy, increasing purchasing power of the Indian middle class, new product launches and attractive finance schemes from automobile manufacturers and financial institutions. Of the total sales, roughly 10 per cent was contributed by exports to various countries. In terms of volume, the two wheelers segment with sales of 8.48 million units in 2006-07had the highest share of more than 76 per cent in the industry, followed by passenger vehicles, three wheelers and commercial vehicles. The maximum growth, however, had occurred in the commercial vehicles segment, which grew at a CAGR of26.6 per centin the last five years to reach a sales figure ofroughly 518,000 units in 2006-07. The next highest growth was witnessed in the three wheelers segment, which grew to roughly 548,000units. The Indian automotive industry is highly competitive with a number of global and Indian companies present in the market. The foreign companies are present in India either through joint ventures with local
Domestic Market Share for 2009-10 Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers 15.86 4.32 3.58 76.23
Commercial Vehicles form an essential part of the Indian automobile industry. They are manufactured in various models and designs, and are used for transporting industrial outputs and other commodities to their allocated destinations.
000 units and the remaining were exported. Domestic sales have been growing at a CAGR of 26. A customer can now select among the various commercial vehicle deluging the markets in reasonable rates. Commercial Vehicles Production Production of Commercial Vehicles has taken a center stage in the automobile industry of India. The share of LCV is increasing rapidly.( Previously known as Bajaj Tempo Ltd) Eicher Motors Ltd. having gross vehicle weight below 7. The share of the 3. Domestic sales has been growing at a CAGR of 26. the market is still quite untapped. As per statistics. This shift indicates the evolution of a hub and spoke model. However. the expansion in commercial vehicles sales in 2009 stood at 92. The latter is dominated by multi axle vehicles.1 per cent in the last fve years. Mahindra & Mahindra Ltd. According to the Economic Survey of Indian Government. After globalization came into effect in mid 1990's and the automobile sector of India was opened for global players. capital investment is mo more a problem. The demand of skilled technicians and labor has also been met. The main mantra of the manufacturers of Commercial Vehicles in India is very simple. State-of-the-art facilities have been installed at the various manufacturing plants by the fore runners of this industry. And they also predict a future growth of 22% in the near future. In 2006-07. the Commercial Vehicle sector made a growth of about 10%. The steady development in Commercial Vehicles Industry has lead to cutthroat rivalry among the various Commercial Vehicles Manufacturers in India. today. there has been an immense flow of capital in this particulate sector. Telco Force motors Ltd. The number of automobile manufacturing facilities in India has grown to nine for Commercial Vehicles as well. and M&HCV. there has been a growth of about 20% in the last couple of years or so. and M&HCV. They are into indigenization of the products.5 tones pickups increased to 36 per cent from 15 per cent during the period 2001-02. having gross vehicle weight above 7. Hence all the factors together have led to the increase in the Production of Commercial Vehicles in India.000 units in the year 2006-07.000 units in the year 2006-07.5 tones.5 tones.000 units and the remaining were exported. Tata Motors Commercial Vehicle Market Size AND SEGMENT-wise Growth The total sales of the Indian commercial vehicles (CV) industry had grown to reach more than 518. Swaraj Mazda Ltd. According to the manufacturers of Commercial Vehicles in India. goods vehicles witnessed an impressive growth.1 per cent in the last fve years. The growth in the CV industry has been driven by increased industrial production as well as the growth in investments made in building infrastructure in the country. Ashok Leyland Ltd. having gross vehicle weight below 7.5 tones. Due to the opening up of the Indian market.5 tones Commercial Vehicle Market MARKETSIzE AND SEGMENT-wISEGROwTh The total sales of the Indian commercial vehicles (CV) industry had grown to reach more than 518. But there has been a considerable amount of growth in this particular sector. Hindustan Motors Ltd.Commercial Vehicles Industry in India has witnessed speedy growth post independence and at present is considered as one of the flourishing sector of Indian economy. While the passenger bus industry has seen moderate growth. The CV industry is segmented broadly into LCV. Out of which domestic sales were nearly 468.6% besides witnessing a decline in product prices by 20% in the first quarter of FY 10 assisting the CV industry growth. Out of which domestic sales were nearly 468. The Light Commercial Vehicles (LCVs) grew by more than 19% during 2005-06 as compared to 2004-05. The CV industry is segmented broadly into LCV. wherein multi axle trucks . To survive in the competitive market every CV manufacturer is coming up with something new yet affordable to meet the Indian market requirement. The composition of the CV industry has been changing over the period of time. The following are the main players in the Production of Commercial Vehicles in India. having gross vehicle weight above 7. the total share of the multi axle vehicles in the CV market was 21 per cent when compared to 8 per cent in 2001-02.
Market share of the players figs page no. Export market share-pageno 14 TYPE OF MARKET-LIKE OLIGOPOLY/HELPIHNDALE INDEX LAST 5 YEARS SALES TREND . with improvements in the road infrastructure. a leading player in luxury passenger buses and heavy duty tippers. has formed a joint venture with International Trucks to manufacture M&HCV trucks in India. Eicher Motors. followed by Mahindra & Mahindra. (Domestic commercial vehicle ind.& break up-in graphs) Tata Motors clearly leads the market in both the goods and passenger segments of CV with a total market share of 64 per cent. a shift in the market to tractor trailers is expected to start in the near future. Ashok Leyland ranks next and has a considerable market share in M&HCV segment.000 units. Other key players include Swaraj Mazda.2 per cent between 2001-02 and 2006-07 to reach nearly 50.are used for long distance hauls and pickups are used for the last mile logistics. LCV goods carriers accounted for more than 50 per cent of the overall exports. The LCV market is dominated by Tata Motors. the Gulf countries and Africa. Tata Motors accounts for more than 70 per cent of the CV exports. All the major players in the CV segment are in the process of enhancing their capacities and launching new products. having a 6 per cent share in the overall market. is a leading player in the LCV trucks segment and has recently entered the M&HCV trucks segment. present in the LCV segment and Volvo India. The introduction of Tata Ace in the sub 1 tonne segment has shown signifcant growth in the CV market. The latter a relatively new player in the CV segment.13 Most of the exports are made to Sri Lanka. It has formed a joint venture to manufacture LCV with Nissan. Exports ofCvsfrom India The exports of Indian CVs have grown at a CAGR of 33. However.
Emergence o Road as Primar o Transportation Mode The share o roads in transportation in India has been constantly increasing with a corresponding decline in the share o railways. In the 1950s the share o road transport in the overall transportation o goods was roughly 15 per cent. The manu acturing sector has grown at 8 10 per cent per annum in the last ew years. reduction in di erential between road and rail costs and advantages provided by road in terms o last mile connectivity. A host o nance companies have entered into the CV business. Finance availability to CV buyers has grown in scope during the last ew years. some states have curbed the usage o old CVs. In addition. today it is almost 60 per cent. This has made the availability o nance much easier or the consumers.5 per cent per annum over the last ew years and has emerged as one o the astest growing economies in the world. Increasing Access to C eaper inance More than 90 per cent o the CV purchase is on credit. Implementation of Regulations on O erloading and ot er Regulations The increased en orcement o overloading restrictions has also contributed to an increase in the number o CVs plying on Indian roads. This development is due to improved road in rastructure. This has created the need or transportation o goods and increased demand or CVs. which has contributed to an increase in the demand or replacement in this segment.FUTURE GROWTH GROwTh PROSPECTS AND KEyDRIvERS O ThE INDIAN COMMERCIAL vEhICLEINDUSTRyGro t in Industrial Production The Indian economy has grown at 8. .
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