REPORT

Introduction
The Indian automobile industry became the 4th largest in the world with sales increasing
9.5% Y-O-Y to 4.02 million units (excluding two wheelers) in 2017. In 2018 it was the 7th
largest manufacturer of commercial vehicles year-on-year followed by three-wheelers at
10.27% year-on-year. In Indian economy automobile sector today is one of the key sectors of
the country contributing majorly. In terms of volume owing to a growing middle class and a
young population the Two Wheelers segment dominates the market. The growing interest of
the companies in exploring the rural markets further aided the growth of the automobile
sector. The Indian automobile exports registered a 22.30% growth in the year 2009. The
growth was as follows: Two Wheelers- 32.31%, Commercial Vehicle - 19.10% and Passenger
Cars by - 19.10%. Two-wheelers dominate the industry and made up 81% share in the
domestic automobile sales in FY’19. Automobile exports grew 14.5% during FY’19.

Top 10 companies in Automobile Industry

1. Tata Motors – Tata engines is the Asia's biggest and seventeenth biggest vehicle
assembling organization on the planet. The organization is generally known for its creation of
autos, trucks, vans, etc. Goodbye engines record the most astounding deals and is generally
prominent the nation over in 2017.

2. Mahindra and Mahindra Ltd - Mahindra and Mahindra Ltd is a US $19 billion worldwide
organization of organizations. As we as a whole realize this organization is world's biggest
tractor assembling organization and India's top SUV assembling organization that produce
business and non - business vehicles. This organization put resources into innovation and
worldwide nearness.

3. Maruti Suzuki – Maruti Suzuki is a broadly known organization over the world this is one
of the old organizations that mastery in field of creation of vehicles. This organization has
produced vehicles, for example, Alto, Omni, etc. Maruti Suzuki works with a mission to give
a vehicle to each person, family, need, spending plan and Way of Life.

4. Hero MotoCorp Ltd - Hero MotoCorp Ltd is perhaps the best organization in India. It is
the universes biggest maker of two – wheelers situated in India. Legend MotoCorp bikes are
produced crosswise over 4 comprehensively benchmarked fabricating offices.

5. Toyota Motor Corporation - Toyota Motor Corporation is one of the topmost cars
assembling organizations on the planet. This organization structures, makers and markets
different car item goes from SUVs, minivans, extravagance and game utility vehicles, trucks
and transports among others.

6. Bajaj Auto Limited - Bajaj Auto Limited is one of the main business houses and the
organization's lead organization, Bajaj Auto, is positioned as the world's fourth biggest three
and two - wheeler maker.
7. Chevrolet - Chevrolet is an American division of the General Motors. The organization has
a variety of trucks, autos and business vehicles as the items it offers with its administrations
including oil changing, vehicle protection, vehicle financing, vehicle deals and vehicle fixes.

8. MITSUBISHI MOTORS CORPORATION: - Mitsubishi Motors Corporation creates plan,

and production, deal and buy cars and segment parts, new parts. This organization makes
segment parts, new parts and adornments

9. Honda Motor Co Ltd. Organization - Honda Motor Co Ltd. Organization is a world driving
automaker and the biggest bike maker on the planet. Its cruiser lines include everything from
super bicycles to bikes.

10. Ford Motor Company - Ford Motor Company is one of the main vehicle makers on the
planet that positions high among the top car organizations. A portion of its most staple
brands.

Top 10 Car Manufacturers Market Share

Car deals in INDIA sold a sum of 32,29,109 units in the Indian residential market announcing
a development in 2017 contrasted with 2016 in number interest in SUVs pulled in the most
development in traveller vehicle

Maruti Suzuki holds the principal rank in Top vehicle creators in India. It is viewed as the
India's biggest automaker Maruti overwhelms Indian market with an enormous piece of the
overall industry of 49.6 percent in Indian traveller vehicle and even the organization is
developing very nearly 15 percent with fares

Hyundai engines in India crossed 5 lakh deals mark for the second time in succession after
Maruti Hyundai has a tremendous piece of the pie in India. The organization has detailed an
offer of 5.27 lakhs unit and its plants are in Chennai which are working at a full ability to
meet the local and fare requests.

India Auto portable makers have a decent piece of the overall industry they are running at
around 60-65 percent of complete generation limit and fares

Implementation of GST has seen an antagonistic effect in vehicle in vehicle sends out from
India and the automobile business is yet hanging tight for an assessment discount of over Rs
2000 crore from the Government of India.

Indian car organizations Mahindra and Tata engines remains at third and fourth place
separately and furthermore to contend in the market Mahindra and Tata thought of different
variations as Tata have propelled three new vehicles in 2017 Tata Hexa, Tata Tigor, Tata
Nexon.

Both organizations additionally won the delicate to supply government with electric autos in
2017. Mahindra has a piece of the overall industry of 7.5 percent in India while Tata engines
piece of the pie has gone up to 5.91 percent.

With loan costs dropping down in December 2017 the viewpoint for the last quarter of the
continuous monetary year stays positive. SIAM accepts that traveller vehicles deals will be
developed at 9 percent before the part of the arrangement FY 2017-18. Beginning of the last
quarter, all carmakers in India have expanded its vehicle costs crosswise over range by 3-5
percent because of rising information costs and higher ware costs.
All around, India's has an awesome development rate in the initial 11 months of 2017 after
Brazil that has announced an enormous development of 55.18 percent by selling over 6.66
lakh vehicles when contrasted with a lower base in 2016. Going ahead SIAM, Auto industry
is all preparing for Auto Expo 2018 which is when numerous future autos and SUVs will be
exhibited and anticipate some huge declarations from all taking an interest vehicle producer.
 Impact of Macroeconomic Factors on Automobile
Industry
The Indian automobile industry is growing at extreme speeds after 1991. The main reason
behind this is India's growing openness to new brands, rising income of the population, the
addition of new models of cars and brands already in the market, easy availability of finance
in terms of loans at extremely low rates of interest, and heavy discounts offered by the
dealers and manufacturers of the cars.

Although the demand of the cars depends on a lot of factors, but this industry report is aimed
at exploring the interactions between India's automobile sales and the perpetual rising petrol
and diesel prices, bank interest rate, and Gross Domestic Product per capita contribution from
the automobile industry in India. Hence, this industry report is an attempt to analyse the
possible relationship between the factors mentioned above.

The result and evidence of a positive and long-run relationship between automobile sales and
Gross Domestic Product per-capita and the remaining variables have an inverse relationship
with automobile demand, wherein an increase in the variables causes a decrease in demand
for automobiles and on the other hand a decrease in the variables causes an increase in
demand of automobiles in India. All these factors play an important role in determining the
level of automobile demand.

This industry report will suggest that if the Government of India helps by making sure
automobile manufacturers follow higher fuel efficiencies for all their cars and models and
provide facilities for improving loan availability from the banks and financial institutions and
reduce the dependence we have on foreign oil, it will cause an extreme rise in demand and
also for the sales in Indian automobile industry.
 Passenger Vehicle

According to the Society of Indian Automobile Manufacturers, more than seven lakh
passenger vehicles were exported from India in the year 2018. That is 5.26% per cent
compared to seven lakh forty thousand passenger vehicle that were exported during the year
of 2017.

The top five passenger vehicle that were exported were Ford India, Hyundai Motor, Maruti
Suzuki, Volkswagen India and General Motors, which contributed to 83% of the total
passenger vehicle exports from India in 2018. Indian passenger vehicle makers shipped a
total of 583,576 units. While the top three Passenger Vehicles exporters contributed over
60% of the total exports.

Exports 2018

Ford India Hyundai Motor Maruti Suzuki General Motors

Nissan Motor Volkswagen India Renault India M&M
FCA India Toyota Others

Apart from Hyundai Motors, who had a contribution growth 2% in total exports to 22.8% in
the year of 2018, all the other top five players witnessed a reduction in exports from India. At
the same time, Hyundai Motors India exported 160,010 units last year alone. Then on the
fourth spot, Volkswagen India's exports declined sharply by 30% at 64,165 units during the
year of 2018 while the contribution to exports fell to 9.15% from 12.44% which they
achieved last year.

In total, 505 of the 14 major passenger vehicle makers shifted to negative growth in export
during the year 2018. The downward spiral that the auto exports faced last year came mainly
due to a reduction in shipments to key exports markets such as Indonesia and Sri Lanka
globally.
 Company Exports Share in total Exports Share in total %
2018 exports 2018 2017 exports 2017 Change

Ford India 167,910 23.94% 175,106 23.66 % -4%

Hyundai Motor 160,010 22.82% 150,890 20.4% 6%

Maruti Suzuki 111,441 16% 121,107 16.37% -8%

General Motors 79,495 11.33% 81,157 10.97% -2.04%

Nissan Motor 64,720 9.2% 76,577 10.35% -15.5%

Volkswagen 64,165 9.15% 92,088 12.44% -30.3%

India

Renault India 12,129 1.73% 11,329 1.53% 7%

M&M 11,925 1.7% 6,337 0.9% 88.2%

FCA India 9,809 1.4% 3,222 0.44% 204%

Toyota 9,361 1.33% 13,684 1.85% -31.6%

Others 9,117 1.65% 8,459 0.84% 7.87%

Total 701,157 740, 095 -5.26%

In the recent years, Indonesia has imposed restriction on passenger vehicle being imported
due to reduced trade deficit in the country. Sri Lanka used to be another major player in the
exports market for India, however, today the used car market business is increasing in Sri
Lanka resulting in a reduction in demand of new passenger vehicles from India. On the other
hand, political instability in some regions and trade deficit also contributed to the reduction of
exports.

However, players that are exporting a small number of units, Original Equipment
Manufacturers like Mahindra & Mahindra, Renault India and Tata Motors remained in
positive showing a growth of 88%, 7% and 18% at 11,925 units, 12,129 units and 2,773 units
respectively.

Commercial Vehicle

The demand for commercial vehicles that are made in India were popular in the year 2018
with the manufacturers shipping 104,352 units to the overseas markets, contributing to a
growth of 12% over the previous year export data. The medium and heavy commercial
vehicle segment grew faster than light commercial vehicle, however the volume for the light
commercial vehicle was more than double of the heavy commercial vehicles.

The top three positions in terms of CV exports were captured by homegrown auto makers in
2018. Tata Motors retained top position with 54,845 units capturing a humongous chunk of
52.55 per cent in the total exports of commercial vehicles in 2018. The company's export
volume grew by 11.83 per cent in 2018 over previous year.

Exports 2018

Tata Motors M&M Ashok Leyland

Eicher Trucks and Buses Maruti Suzuki India Others

Mahindra & Mahindra witnessed a healthy growth of 29 per cent as it exported 22,307 units
last year as against 17,314 units in CY 2017. With this, the company grabbed 21.38 per cent
of the total commercial vehicle exports. Ashok Leyland, the third largest exporter saw a
20.17 per cent decline to 12,690 units in 2018 as compared to 15,897 units a year ago.

This resulted in contraction of their exports volume from 17 per cent in 2017 to 12.16 per
cent in 2018. Volvo Eicher company’s commercial vehicles is a joint venture between India’s
Eicher Motors, and the Swedish Volvo Bus & Trucks dispatched 10,212 units in in 2018,
which was the highest growth they ever saw of 29.2% among the top five exporters in terms
of volume.
 Company Exports Share in total Exports Share in total %
2018 exports 2018 2017 exports 2017 Change

Tata Motors 54,845 52.55% 49,041 53% 11.83%

M&M 22,307 21.38% 17,314 19% 28.83%

Ashok Leyland 12,690 12.16% 15,897 17% -20.17%

Eicher Trucks and 10,212 9.8 7,905 8.48% 29.2%

Buses

Maruti Suzuki 2,377 2.27% 2,047 2.2% 16.12%

India

Others 1,921 1,021 0.89%

Maruti Suzuki with its Light Commercial Vehicles Super Carry occupied the fifth spot by
exporting 2377 units. The companies recorded a growth of 16.12% in export volumes last
year, even though its share in total exports was almost same as compared to the previous
year.

The growth was mainly caused because of medium & heavy commercial vehicle segment
which grew by 14.61% to exports of 49952 units while light commercial vehicle exporters
grew by 12% to exports of 104352 units.
NET PROFITS IN AUTOMOBILE INDUSTRY
In FY19 Indian automotive industry saw marginal increase of 5% at 26,267,783 units as per
the report by SIAM. in April-March’19 automobile industry produced a total 30,915,420
vehicles which includes three wheelers, two wheelers, passenger vehicles and commercial
vehicles as against 29,094,447 in April-March’18, registering a growth of 6.26% over April-
March’18.

Segment FY18 FY19 YoY

Passenger Vehicles 3,288,581 3,377,436 2.7%

Commercial Vehicles 856,916 1,007,319 17.6%

Three wheelers 635,698 701,011 10.3%

Two-wheelers 20,200,117 21,181,390 4.9%

Grand total (including all

24,981,312 26,267,783 5.1%
categories)

The sale of Passenger Vehicles grew by 2.70% in April-March’19 over the same period last
year. In Passenger Vehicles segment Passenger Cars, Utility Vehicle & Vans grew by 2.05%,
2.08% and 13.10% respectively in April-March’19 over April-March’18.

The overall Commercial Vehicles segment registered a growth of 17.55% in April- March’19
as compared to the same period last year. Medium & Heavy Commercial Vehicles increased
by 14.66% and Light Commercial Vehicles grew by 19.46% in April-March’19 over the
same period last year.

Three Wheelers sales increased by 10.27% in April-March’19 over the same period last year.
In Three Wheelers, Passenger Carrier registered a growth of 10.62% and Goods Carrier
registered a growth of 8.75% in April-March’19 over April-March’18.

Two Wheelers sales registered a growth at 4.86% in April-March’19 over April-March’18. In

Two Wheelers segment, Scooters declined by (- 0.27%), whereas Motorcycles and Mopeds
grew by 7.76% and 2.41% in April-March’19 over April-March’18.
Major Players

Passenger Vehicle 2017-18 2018-19 YoY

Maruti Suzuki 1,753,700 1,862,449 6.20%

Mahindra & Mahindra 249,505 254,701 2.10%

8.10%
Honda Cars India 170,026 183,787

Toyota Kriloskar Motors 140,645 150,525 7.00%

Commercial Vehicle 2017-18 2018-19 YoY

Tata Motors 399,317 468,692 17.4%

Mahindra & Mahindra 216,802 248,601 14.7%

Ashok Leyland 158,612 185,065 16.7%

VECV 55,876 61,733 10.5%

Two-wheeler 2017-18 2018-19 YoY

3.1%
Hero Motocorp 7,587,130 7,820,745

Honda Motorcycle and Scooter 5,775,243 5,520,000 -4.4%

Bajaj Auto 2,344,214 2,940,773 25.4%

TVS Motor 3,367,000 3,757,000 11.6%

With 30.92 million vehicles manufactured in the country in FY19 domestic automobile
production increased at 6.96 per cent CAGR between FY13-19.

Analysts says the passenger vehicles industry to grow 4-6% in financial year 2019, down
from earlier expectation of 7-8%.
2 & 3 Wheelers

Company Name Last Price Change % Change Net Profit

(Rs. Crore)

Bajaj Auto 2,877.90 25.95 0.91 4,675.18

Hero Motocorp 2,776.55 39.25 1.43 3,384.87

TVS Motor 390.25 0.55 0.14 670.14

Atul Auto 227.00 4.50 2.02 53.12

Passenger Cars

Company Name Last Price Change % Change Net Profit

(Rs. Crore)

Maruti Suzuki 6,449.80 58.00 0.91 7,500.60

Hind Motors 7.02 0.84 13.59 26.72

LCVS/ HVCS

Company Name Last Price Change % Change Net Profit

(Rs. Crore)

Eicher Motors 16,694.70 24.05 0.14 2,054.44

TML-D 59.65 1.05 1.79 2,020.60

Tata Motors 129.55 1.60 1.25 2,020.60

Trucks/LCVs

Company Name Last Price Change % Change Net Profit

(Rs. Crore)

Ashok Leyland 63.40 0.90 1.44 1,983.20

Force Motors 1,197.95 -14.80 -1.22 147.18

SML Isuzu 618.95 0.60 0.10 19.57

(Source- Money Control)

 Market Statement
Automakers continue to face the heat of the weak consumer sentiment due to the high cost of
vehicle ownership in the month of August (2019). All automakers have reported strong
double-digit slide in the month under review.

Segment leaders like Maruti Suzuki, Tata Motors and Hero MotoCorp have reported de-

growth of 34.53%, 45% and 20% respectively giving a clear indication of a prolonged
slowdown in the sector.

Rajan Wadhera (President of SIAM - Society of Indian Automobile Manufacturers): The

sales report coming out from various companies for the month of August 2019 has been very
dismal with over 30% erosion of sales for Passenger vehicles.

Announcements on credit availability and also reducing the cost of credit were not seem to
have percolated down to the Non-Banking Financial Company it supports the bulk of finance
for the automotive industry.

Industry executives are hopeful of the festive season with the recent measures taken by the
hon'ble finance minister Nirmala Sitharaman to revive the auto sector.

Passenger vehicles

For the first time (in 25 months) segment leader Maruti Suzuki posted sales below one lakh
units in the month of August 2019. The company posted a dip of 34.53 per cent in its sales in
the last month, when compared to the sales of 147,700 units in the same month last year. 

Honda cars India and Tata Motors passenger vehicle division, on the other hand, posted the
worst decline of 51% and 58% where sales stood at 10 year low.

HCIL senior vice president and director of Sales and Marketing Rajesh Goel said: “The auto
sector continues to witness high de-growth due to poor consumer sentiment”. This is despite
the high discounts prevailing in the market which makes it the best time to buy cars, added in
his statement.

"We hope the recent measures taken by the government will help in improving consumer
sentiment and demand creation as we move forward. The sales are likely to pick-up in
coming months" said by Rajesh Goel.

Mayank Pareek, President of Passenger Vehicles Business Unit, Tata Motors said: “Marking
the onset of the festive season, we will drive positive sentiments with special offers and
several special editions. We have kick-started this by further increasing the style quotient of
the Harrier with the Harrier Dark Edition. We are hopeful that the recently announced
financial package by finance minister will help in improving the liquidity of the market and
to reduce the ownership cost. This will certainly help the industry to revive and drive
growth.”

OEMs August 2019 August 2018 % Change

Passenger Vehicle

Maruti Suzuki 95,506 147,700 -34.53

Hyundai India 38,205 45,801 -16.58

Mahindra & 13,507 19,758 -32

Mahindra

Toyota 10,701 14,100 -24

Tata Motors 7,316 17,351 -58

Honda Cars India 8,291 17,020 -51.28

MG Motor 2,018 - NA

Commercial Vehicle - - -

Tata Motors 21824 38,859 -45

Mahindra & 14, 684 20,326 -28

Mahindra

VECV 3,538 6,069 -41.7

Two-Wheeler - - -

Hero MotoCorp 543,406 685,047 -20

Bajaj Auto 205,470 237,511 -13

The company is continuing to focus on improving retail sales. Its retail sales were 42% more
than offtake and as a result, the network stock came down by over 3000 vehicles. “This
prepares dealers well for the festival season. Our aim is to improve the retail capability till
August 2019, 72 new sales outlets were added and 3500+ sales executives were recruited,”
said Pareek.

South Korean carmaker, Hyundai Motor India posted the least decline of 16.58 among all the
carmakers. 
The carmaker sold 38,205 units in the domestic market and exported 17,800 units taking the
cumulative sales of 56,005 units in August 2019.

Vikas Jain, National Sales Head - Hyundai Motor India said, “In August, HMIL has
continued to be the market leader in Utility Vehicle Segment while maintaining its market
share in Passenger Vehicles segment with the strong performance of Grand i10, Venue, Creta
and Elite i20. We expect the coming festive season will be a turnaround period in the market
with positive customer sentiments.”

MG Motor India recorded retail sales of 2,018 units of Hector in August 2019. It plans to
increase the production of the Hector SUV to 3,000 units this month.

Commercial Vehicles

The commercial vehicle segment witnessed a double-digit drop in domestic sales on the back
of axle load norms and current market situation, said, industry leaders. 

India’s largest commercial vehicle manufacturers, Tata Motors sales halved last month when
compared to August 2018. The company sold 21,824 units in the last month compared to
38,859 units in the corresponding month previous fiscal.

The second largest commercial vehicle manufacturer Mahindra & Mahindra sold 14, 684
vehicles as against 20,326 units a year ago, down 28%.

Chief of Sales and Marketing Automotive division of Mahindra, Mr. Veejay Ram Nakra said,
“The auto industry continues to be subdued in the month of August due to several external
factors. We are optimistic and hopeful of a good festive season going ahead.”

Two Wheelers 

Showing a similar trend of downward sales, world’s largest two-wheeler manufacturer Hero
MotoCop posted a 20% decline in domestic sales. It sold 543,406 units in August 2019, as
compared to 685,407 units in the same month last year. 

Bajaj Auto also reported a decline of 13% in its domestic sales to 205,470 units in August
2019. Bajaj Auto said in a statement that the company’s domestic sales stood at 237,511 units
in August 2018. Domestic sales (April-August 2019) also declined 3% to 902,623 units.

HERFINDAHL-HIRSCHMAN INDEX
The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration and is
used to determine market competitiveness.

Data on sales in the U.S. and market shares are from Ward’s Automotive. Ward’s offers the
most comprehensive and historical data on U.S. market sales. According to the data on total
light vehicles sales from Ward’s Auto, the nine firms in our sample dominate the automobile
industry with an average market share of 91% over the sample period 1969 to 2012.

In below diagram HHI is calculated for 9 Companies: -

Firm Mean S.D. CV %

GM 34.3 8.6 25.1
Ford 22.2 3.9 17.5
Chrysler 12.6 1.8 14.3
Toyota 7.8 4.3 54.8
Honda 5 3.2 63.7
Nissan 4.6 1.7 36.9
VW 2.2 1.1 50.2
BMW 0.8 0.7 85.7
Daimler 1.1 0.7 67.3
HHI (9
firms) 2066.4 580.9 28.1

Below is the diagram in which HHI is calculated for 14 companies: -