India Auto Matrket Report 2020 PDF

Booz & Company Delhi, 2011
India Automotive Market 2020
This document is confidential and is intended solely for

the use and information of the client to whom it is addressed.
The key 5s
1. Going forward, India is a key pillar of global automotive market - policy, actions and
strategies of players in India will have a fundamental impact on the global auto landscape
2. By 2015, India will exceed every major European market inc. Germany, France and UK in
automotive sales - making India the 4th largest automotive market by volume in the world
3. Over the next 20 years, India will be part of global automotive triumvirate - the global BIG 3
4. In fact, we expect the India automotive sales to exceed the US market by mid 2030s
5. The global automotive game will be pretty much decided by twin forces for China and India
Booz & Company India Auto Market.ppt Prepared for client name
DATE
1
India is booming – and projected to maintain the trajectory
Regional: Percentage of World GDP Real GDP Growth
2005-2020
2004
India China
2% 4% 4.0
China
Other Japan
Growth Rate (Base=2005)

20% 12%
3.5
India
US EU
28% 34% 3.0
2.5
2050 Estimate
Other
India 2.0
10% Thailand
17%
US
26% 1.5
China United Kingdom
28%
EU
Germany
15% 1.0
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Japan
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
4%
Source: Global Insights Database, Business Week, Booz & Company analysis
DATE
2
Emerging markets are transforming the economic landscape —
could the future repeat the past ?
Percent Contribution of India & China,
US, Western Europe and UK to World Economy
80% (1500–2050 AD)
Percentage Contribution to World Economy
80%
60%
60%
India & China India & China
40%
40%
Western Europe US
(excluding UK)
20%
20%
Western Europe
(excluding UK)
UK
UK
0%
1500
1800 1850
1850 1900
1900 1950
1950 2000
2000 2050
Year
Note: UK, US and W. European countries do not include GDP from former British colonies
Source: The World Economy-Historical Statistics; Goldman Sachs BRIC Report; Booz & Company research and analysis
DATE
3
An assessment of parallels with markets such as China strengthen
our belief in tomorrow
GDP Growth GDP Per Capita Growth FDI Trends – India and China
$3,000 $3,000 $90,000
$80,000
$2,500 $2,500
$70,000
$2,000 $2,000 $60,000
In $ Mn
In $ Bn
$50,000
In $
$1,500 $1,500
$40,000
$1,000 $1,000 $30,000
$20,000
$500 $500
$10,000
$0 $0 $0
1 3 5 7 9 11 13 15 17 19 21 22 25 27 1 3 5 7 9 11 13 15 17 19 21 23 25 27 1 3 5 7 9 11 13 15 17 19 21 23 25 27
Years Since Liberalization Years Since Liberalization Years Since Liberalization

China – 1979 India – 1991
Source: Economic Intelligence Unit, Booz & Company analysis
DATE
4
The twin pillars of the global economy, India & China, will define the
economic landscape for generations to come
GDP Trends Real GDP Growth

2005 Constant Prices ($Trillion) (Base = 2005)
Growth relative
$ Trillion to 2005
25 China 11 China
India
10
9
20
8
15
7
6
10 5
India
4
Pakistan
Japan 3
5 Russia
Germany
2 Germany
Russia 1 Japan
Pakistan
0 0
2000 2010 2020 2030 2040 2000 2010 2020 2030 2040
Source: Global Insight Database, Booz & Company analysis
DATE
5
Wealth is being generated via a positive structural shift in the
economy
Shift in GDP composition by sector
(1950 to 2020E)
100%
90%
30%
35% 39%
80%
48% 49% 50%
% contribution to GDP
70%
14%
60%
50%
36%
40% 38%
37%
30% 40%
56% 42%
20%
29%
10% 22%
15%
11% 8%
0%
1950 1990 2000 2007 2012 2020
Agriculture Industry Services

Source: Global Insights Database, Economic Intelligence Unit, Booz & Company analysis
DATE
6
Industry is likely to benefit from the change in consumption
pattern of an increasingly prosperous society
Private Consumer Spending Private Consumption Growth
1994-2015 Base - 1994
Index
100% 15 Transport / Comm.
14
29% Food & Beverages 13

40% 12
55% 11 Recreation
% consumption of total
8% Clothing & Footwear 10

9
7% 13% Housing
8
4% Total Consumption
16% Health 7
6%
6
5% 23% Transport / Comm. 5
15%
4 Food & Beverages
3% 20%
5% Recreation / Education 3
11% 2
3% 19% Miscellaneous
3% 1
6% 9%
0
1994 2005 2015 1990 1995 2000 2005 2010 2015
Note: Miscellaneous includes personal care goods and other services

Source: Central Statistics Organization (GOI), Booz & Company analysis
DATE
7
This rise in per capita GDP will lead to higher vehicle ownership
Cars / 1000 People Versus GDP / Capita

Cars / 1000 People 1990 - 2013
600 Germany
550
500 USA
450
Saturated penetration levels in
400 developed economies
350
300
Russia
250
200
Rising per capita income leading to
150 increased penetration; trend expected
100 to continue given low current levels
India
50 China
0
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000
GDP / Capita
Source: Economist Intelligence Unit; Booz & Company analysis
DATE
8
The result: India is an anchor of future growth in the auto industry
GDP Growth by Country
2010 – 2020
> 5% projected GDP growth
3.5 % - 5% projected GDP growth

< 3.5% projected GDP growth
DATE
9
Automotive sales are destined to resonate with global economic
shift - India is the place to be for the global OEMs
Automotive Sales by Geography
(Passenger Vehicles, Commercial Vehicles and Two Wheelers)
2009
1980 2020
Market size: 60 M units Market size: 102 M units

Asia & Japan: 7% Asia & Japan: 45%
Europe: 42% Europe: 32% Market size: 205 M units
NA: 41% NA: 18% Asia & Japan: 65%
Europe: 20%
NA: 15%
Shift in center of gravity
1) Includes passenger vehicles, commercial vehicles and two-wheelers

Source: Global Insight Database, March 2009; Wards Auto; Booz & Company analysis
DATE
10
India’s car market has the potential to grow up to 6+ millions units
annually by 2020
Passenger vehicle sales in India
(2001 – 2020)
Million Units
6.5
6.0 Aggressive
5.5
5.0 Base Case
4.5 Consensus
4.0 Conservative
3.5 Germany Car Sales 2008 - 3.1 M Units
3.0
2.5
Italy Car Sales 2008 - 1.9 M Units
2.0
1.5 Spain Car Sales 2008 - 1.6 M Units
1.0
0.5
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc
Note: Aggressive scenario – 14% CAGR upto 2015, after which market stabilizes (based on similar growth seen in the Chinese markets under similar macroeconomic conditions)
Base Scenario – 8% CAGR over 2009-2020; based on historical growth trends of the Indian car market
Conservative Scenario – 6% CAGR; car sales negatively impacted by economic downturn or unfavorable government policies (high interest rates, financing not easily accessible, etc)
Source: Global Insight database, Booz & Company Analysis
DATE
11
India will soon be bigger than most other markets
Western Europe (1998) and India (1998)

4,500
3920
4,000
3,500
(in thousands of units)
3,000
2,534 2,488
Sales Volume
2,500 2,289
2,000
1,446
1,500
1,000
640 538 530
500 369 320 316 280 196 192 174 147 141
0
D
M
DS
ND
A
E
D
Y
AL
K
N
Y
CE
EN
AY
N
DI
RI
DO
AN
C
AL
AR
AN
AI
IU
LA
N
AN
LA
RW
EE
ED
IN
ST
SP
LG
IT
LA
EL
G
NM
M
N
RT
FR
R
SW
AU
N
ER
NO
BE
ER
ZE
IR
FI
G
KI
DE
PO
G
IT
TH
ED
SW
NE
IT
UN
DATE
12
India will soon be bigger than most other markets

4,500
4,035
4,000
3,500
3,000
2,678
Sales Volume
2,500 2,360 2,262

2,216
2,000
1,500
1,071
1,000
581
451
500 349 294 247 236 203 131 126 102 64
0 D
M
DS
A
ND
IA
E
D
Y
AL
K
N
CE
EN
NY
AY
N
DI
AN
DO
C
AL
AR
AI
IU
G
LA
AN
AN
A
RW
EE
ED
A
IN
ST
SP
LG
IT
NL
EL
G
NM
M
R
RL
RT
FR
R
SW
AU
N
ER
NO
BE
ZE
IR
FI
G
KI
DE
E
PO
G
IT
TH
ED
W
NE
IT
S
UN
DATE
13
Much earlier than 2020, India will exceed the major EU markets

5,500
5,070
4,500
3,693
3,500
Sales Volume
2,598 2,566
2,434
2,500
1,624
1,500
617 608
500 342 341 323 299 245 203 171 160 151
D
M
S
A
D
A
E
D
Y
AL
K
N
CE
EN
AY
NY
N
-500
DI
AN
RI
AN
DO
AL
AR
AI
IU
G
LA
AN
AN
RW
EE
ED
A
IN
ST
SP
LG
IT
NL
EL
G
NM
M
R
RL
RT
FR
R
SW
AU
N
ER
NO
BE
ZE
IR
FI
G
KI
DE
HE
PO
G
IT
ED
SW
NE
IT
UN
Note: Forecasts for 2015

DATE
14
India and China dwarf existing automotive markets such as
Germany or UK
Automotive sales volume by country
2030
Number of unit sales

Potential
Potential for
for Indian
Indian market
market to
to
> 10 M reach revenues of $150 - $200
reach revenues of $150 - $200
3 M - 10 M
billion
billion
1M-3M
<1M
Note: 2030 sales and GDP projections are based on annual GDP growth rates projected by country per GS BRIC report
Source: Global Insight Database, March 2009; Goldman Sachs BRIC Report; Booz & Company analyses
DATE
15
By 2030, India will be among the GLOBAL BIG 3
Light Passenger Vehicle Sales Projections - 2030

Million units
Million Units
42
40.7
17.6
16
14
12 11.7
10
8 7.8
6 5.2
4 3.7
2.9
2.4 2.4
1.9
2
0
CHINA UNITED INDIA BRAZIL RUSSIA GERMANY FRANCE UNITED ITALY SPAIN
STATES KINGDOM
Source: Global Insight Database, Booz & Company analyses
DATE
16
We expect not just a quantitative but also a qualitative change in
the market…
Indian household income & car sales distribution
2008
% of % of total
households car sales
60% 60%
Household income distribution
50% Distribution of car sales by segment 50%

46%
40% 40%
30% 30%
20% 20%
15% 14%
10% 9% 10%
8%
4% 4%
0% 0%
0% 0%
Car Segments A B C D E&F MPV SUV PUP Other
Income
< $1K $1K - $3K $3K - $5K $5K - $10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K > $75K
distribution
Source: Global Insight 2009, Booz & Company Analysis
DATE
17
The market of tomorrow will reflect increased prosperity of the
nation
Indian household income & car sales distribution
2030
% of % of total
households car sales
40% 60%
Household income distribution
Distribution of car sales by segment 50%
30%
40%
33%
20% 30%
20%
20%
10% 12% 12%

11%
10%
5% 5%
2%
0%
0% 0%
Car Segments A B C D E&F MPV SUV PUP Other
Income
< $1K $1K - $3K $3K - $5K $5K - $10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K > $75K
distribution
Source: Global Insight 2009, Booz & Company Analysis
DATE
18
Interestingly, India’s market is expected to overtake the US auto
sales by ~2035
Light Vehicle Sales Projections - US, China, India
Thousand Units 2004-2040, Thousand Units
60,000
55,000 CHINA
50,000
45,000
40,000
35,000
India’s automotive sales is
30,000 expected to exceed U.S
Chinese automotive
sales exceeds U.S
25,000
20,000 INDIA
UNITED STATES
15,000
10,000
5,000
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
Source: Global Insight Database, Booz & Company analyses
DATE
19
For more information
please contact:
Chicago
Vikas Sehgal
Partner
+1-312-578-4828
vikas.sehgal@booz.com
DATE
20
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DATE
21

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Booz & Company Delhi, 2011

India Automotive Market 2020

This document is confidential and is intended solely for

Growth Rate (Base=2005)

$3,000 $3,000 $90,000

$2,000 $2,000 $60,000

$1,000 $1,000 $30,000

Years Since Liberalization Years Since Liberalization Years Since Liberalization

Source: Economic Intelligence Unit, Booz & Company analysis

GDP Trends Real GDP Growth

Source: Global Insight Database, Booz & Company analysis

Agriculture Industry Services

29% Food & Beverages 13

8% Clothing & Footwear 10

Note: Miscellaneous includes personal care goods and other services

Cars / 1000 People Versus GDP / Capita

> 5% projected GDP growth

3.5 % - 5% projected GDP growth

Source: Global Insight Database, Booz & Company analysis

Market size: 60 M units Market size: 102 M units

1) Includes passenger vehicles, commercial vehicles and two-wheelers

Western Europe (1998) and India (1998)

Source: Global Insight Database, Booz & Company analysis

Western Europe (2009) and India (2009)

2,500 2,360 2,262

Source: Global Insight Database, Booz & Company analysis

Western Europe (2015) and India (2015)

Note: Forecasts for 2015

Number of unit sales

Light Passenger Vehicle Sales Projections - 2030

50% Distribution of car sales by segment 50%

10% 12% 12%

For our management magazine strategy+business,

Visit booz.com to learn more about Booz & Company.

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