Indian

Foundry Industry
Overview By
Subodh Panchal
Past President
The Institute of Indian Foundrymen

11th September, 2010

International Foundry Forum, Barcelona
 Major Foundry Pockets in India

Jaipur

Ahmedabad
Bhilai
Nagpur

Pune

Hyderabad

Bangalore

International Foundry Forum, Barcelona (September, 2010) 2

Overview
 The Indian Foundry industry produces approx
7 Million MT of castings employing estimated
500,000 persons directly & another 1.5 millions
indirectly.

 The growth of foundry industry is very important for

inclusive growth, other engineering sectors & the
overall Indian Economy .

International Foundry Forum, Barcelona (September, 2010) 3

Significance of Foundry Industry
 Foundry Industry is Major Feeder to following sectors:-
 Automobiles & Auto Components
 Railways
 Power Sector
 Tractor Industry
 Earth Moving Machinery
 Pumps, Compressors, Pipes Valves & Pipe Fittings
 Electrical/Textile/Cement/Agro Machinery
 Machine Tools & Engineering Industries
 Sanitary Castings
 Engineering Exports

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Significance of Foundry Industry
 Approx 32% Output of Foundry Industry goes to
Auto Industries & Balance to other downstream
Engineering Sector
 Automotive Mission Plan (AMP) 2006-2016
envisages 4 Fold Growth by 2016. i.e. from
$34 Billion industry to $ 122-160 billion industry and
employing about 25 millions by 2016
 AMP 2006-16 will drive demand of Castings from
Foundry Industry

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Significance of Foundry Industry

 Corresponding Growth in Foundry Sector

Vital to sustain Growth in Auto & Other
Engineering Sectors

 Graph below Depicts Sectorwise

Consumption of Castings in percentage

International Foundry Forum, Barcelona (September, 2010) 6

 Sector wise consumption of castings as %
Significance of Foundry Industry
of Total Production

International Foundry Forum, Barcelona (September, 2010) 7

 Production Trend
9 Malleable Iron
Non Ferrous 7.77
8
S G Iron 7.18
6.84
7 Steel
6.05
6 Grey Iron
Million MT

5 Total 4.62
4.04
4 3.51
3.22 3.12 3.16
2.77 2.90
3
2
1
0

International Foundry Forum, Barcelona (September, 2010) 8

Export Trends

International Foundry Forum, Barcelona (September, 2010) 9

Types of Metal Castings Share in %

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 Top Ten Casting Producing Countries
(Figures in Million MT)
Korea 2.1

France 2.4

Italy 2.6

Brazil 3.4

Japan 5.7

Ger… 5.8

India 7

Russia 7.8

USA 10.8

China 33.5

0 10 20 30 40
Million MT

International Foundry Forum, Barcelona (September, 2010) 11

 Outsourcing Trends for
Auto Components
25
20
20
USD in Billions

15

10
5.9
5 2.95

0
2006-07 2008-09 2013-14

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Indian Automobile Industry Overview

 The Indian Automobile industry is the seventh

largest in the world with an annual production
of over 2.6 million units in 2009.
 In 2009, India emerged as Asia's fourth largest
exporter of automobiles, behind Japan, South
Korea and Thailand.
 By 2050, the country is expected to top the
world in car volumes with approximately 611
million vehicles on the nation's roads.
International Foundry Forum, Barcelona (September, 2010) 13
Indian Automobile Industry Overview

 India has emerged as one of the world's largest

manufacturers of small cars.
 According to New York Times, India's strong
engineering base and expertise in the
manufacturing of low-cost, fuel-efficient cars has
resulted in the expansion of manufacturing
facilities of several automobile companies like
Hyundai Motors, Nissan, Toyota, Volkswagen
and Suzuki.

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World Automobile Giants in India
 In 2008, Hyundai Motors alone exported
240,000 cars made in India.
 Nissan Motors plans to export 250,000 vehicles
manufactured in its India plant by 2011.
 Similarly, General Motors announced its plans to
export about 50,000 cars manufactured in India
by 2011.

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World Automobile Giants in India
 In September 2009, Ford Motors announced its
plans to setup a plant in India with an annual
capacity of 250,000 cars for US$500 million.
 The cars will be manufactured both for the
Indian market and for export.
 The company said that the plant was a part of its
plan to make India the hub for its global
production business.

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World Automobile Giants in India
 Fiat also announced that it would source more
than US$1 billion worth auto components from
India.
 According to Bloomberg L.P., in 2009 India
surpassed China as Asia's fourth largest
exporter of cars.

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 Rank wise Largest Automobile
Manufacturers in India by Sales
1. Maruti Suzuki
2. Hyundai
3. Tata Motors
4. Mahindra
5. GM Chevrolet
6. Honda
7. Toyota
8. Ford
9. Fiat
10. Škoda
International Foundry Forum, Barcelona (September, 2010) 18
 Locally manufactured Automobiles of
Foreign Brands
 Audi: A4, A6, A8, Q5, Q7, TT, R8.
 Bentley: Continental GT, Continental FS,
Continental GTC, Mulsanne.
 BMW: 3 Series, 5 Series,M3, GT 5,6 Series,7
Series, X3, X5, X6, Z4.
 Chevrolet: Spark, Beat, Aveo U-VA, Aveo,
Optra, Cruze, Tavera.
 Fiat: Grande Punto, Linea, Palio Stile.

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 Locally manufactured Automobiles of
Foreign Brands
 Ford: Ford Figo, Ikon, Fiesta, Endeavour.
 Honda: Jazz, City, Civic, Accord.
 Hyundai: Santro, i10, i20, Accent, Verna
Transform, Sonata Transform.
 Lamborghini:Gallardo, Murciélago.
 Mercedes-Benz: C-Class, E-Class.
 Mitsubishi: Lancer, Lancer Cedia, Pajero.
 Nissan: Micra, Teana, X-Trail.
International Foundry Forum, Barcelona (September, 2010) 20
 Locally manufactured Automobiles of
Foreign Brands
 Rolce Royce:Phantom, Ghost.
 Škoda: Fabia, Octavia, Laura, Superb.
 Toyota: Corolla, Innova, Camry, Fortuner,
Prado.
 Volkswagen: Polo, Jetta, Passat, Beetle,
Phaeton, Vento.

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Commercial Vehicle Manufacturers
in India (Local Brands)
 Local Brands
 Ashok Leyland
 Force
 Mahindra Navistar
 Premier
 Tata

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Commercial Vehicle Manufacturers
in India (Foreign Brands)
 Foreign Brands
 Volvo
 Audi
 BMW
 Mercedes-Benz

International Foundry Forum, Barcelona (September, 2010) 23

Electric Car Manufacturers in India
 Ajanta Group
 Mahindra
 Hero Electric
 REVA
 Tata International
 Tata

International Foundry Forum, Barcelona (September, 2010) 24

 Automobile & Auto Component
Industry Turn Over
 The Automotive Component Industry's output
amounted for the financial year 2008-09 US$ 19
billion with a growth rate of 6.1% against
financial year 2007-08

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Car Production (Nos. in Millions)
2.50 Millions

2.00
1.93
1.52 1.52
1.50
1.32
1.11
1.03
1.00 0.84
0.61
0.57 0.52 0.56
0.50 0.35 0.41 0.40 0.39

0.26
0.00

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 MUVs Production (Nos. in Millions)
0.30
0.27
Millions

0.25 0.25
0.22
0.20 0.22
0.20 0.18

0.15 0.15
0.13 0.13 0.12 0.13
0.11 0.11
0.11
0.10
0.07
0.050.05

0.00

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LCVs Prduction (Nos. in Milkions)
0.35 Millions
0.32
0.30
0.25
0.25
0.23 0.22
0.20
0.17
0.15 0.13 0.14
0.11
0.10 0.09 0.08
0.09 0.07 0.07
0.06 0.06 0.06
0.05

0.00

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 M&HCVs Production (Nos. in Millions)

0.35
Millions 0.29
0.30 0.29

0.25 0.25
0.22
0.21
0.20 0.19
0.17
0.15
0.15
0.13 0.12
0.10 0.11
0.100.10 0.08 0.09 0.10

0.05

0.00

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Tractors Production (Nos. in Millions)
0.50
0.45 Millions 0.43

0.40 0.35
0.35 0.34
0.35
0.30 0.30
0.26 0.25 0.26 0.25
0.25 0.25
0.23 0.21 0.19
0.20 0.19 0.17

0.15 0.16
0.10
0.05
0.00

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Scooters Production (Nos. in Millions)
Millions
1.50 1.49

1.40
1.32 1.32
1.30 1.28
1.26
1.23
1.20
1.16
1.10 1.07
1.02
1.03
1.00 0.99 0.94
0.94 0.94
0.88
0.90 0.85

0.80

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 Motorcycles Production
(Nos. in Millions)
9.00
8.44
8.00
Millions

7.11
6.50
7.00
6.20 6.80
6.00
5.19
5.00 4.36
3.88
4.00
2.91
3.00
2.18
2.00 1.79
1.39
1.13
0.99
1.00 0.81
0.65
0.00

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 Mopeds Production (Nos. in Millions)
Millions
0.80
0.72
0.69
0.70 0.67 0.67 0.67

0.62
0.60 0.57

0.52
0.50
0.43 0.43
0.44
0.40 0.38 0.38
0.35 0.35
0.33
0.30

0.20

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 Auto Component Industry Production
(in US $ BLN)
30 50%
Turnover 26.00
25 40%
38%
22.00
29% 25% 30%
20 18.00 18.40
24%
21%
20% 15.00 20% 18%20%
15 20%
13% 12.00 10%
8%
10 2% 8.70 2%
6.73 0%
-8% 5.43
4.47
5 3.28 3.01 3.25 3.89 3.97 -10%

- -20%

* Estimated

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 Auto Component Industry Exports
(in US $ BLN)
4 3.80 3.80 80%
3.62
Exports
68%
60%
3 2.87
2.47
46%
33% 40%
37%
30% 31%
2
1.69 26%
20%
1.27 16%
6% 5%
1 0.76
0.63 0% 0%
0.58
0.46
0.33 0.35
-8%
0 -20%

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 Auto Component Industry Investment
(in US $ BLN)
10 35%
Investment 33% 9.00
30%
8
7.20 7.30
25%
23% 23%
6 21% 5.40 20%
17% 4.4017%
15% 3.75 15%
4
3.10
2.65 10%
2.30
2
5%
1%
- 0%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

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India as a hub of Cast Components
 Now the fourth largest producer of metal
castings worldwide, India has increased its
casting production by more than 100% since
2002.
 Expansion stems from India’s large and rapidly
growing economy, which has the potential to
raise its income per capita to 35 times current
levels over the next 40 years.

International Foundry Forum, Barcelona (September, 2010) 37

India as a hub of Cast Components
 According to Goldman Sachs, in 2059, India is
expected to have one of the three largest
economies (by GDP) in the world, along with China
(first) and the U.S. (second).
 The automotive sector accounts for 4.2% of India’s
GDP, since 2002, production volume has a 16%
compund and annual growth rate (CAGR).
 Some economists believe India has the potential to
own up to 7% of the world’s auto components
market.
International Foundry Forum, Barcelona (September, 2010) 38
Hurdles
 However, India faces some hurdles. Along with
a lack of sufficient infrastructure, consumable
costs are higher in India than in developed
countries.

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Future
 Due to the growing expectations of OEMs regarding
the quality and quantity of castings, India is
expected to produce larger casting facilities over
the next few years.
 The size and scope of large plants are required to
address investment requirements, power shortages
and a talent crunch.
 This means that manufacturers with latest
technology of equipments and raw materials will
have a bright opportunity in India.
International Foundry Forum, Barcelona (September, 2010) 40
Innovative Suggestions
 Foreign manufacturers and suppliers should
help Indian foundries to introduce new markets
(Where European foundries have stopped
catering).
 Differed payment terms of some European
countries can be a major attraction for Indian
Foundries going for expansion.

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