1

May 2021
Cars & UVs

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 Presentation Flow
Short Term

Demand Long Term

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Exports

Competitive Scenario

Profitability

Supply

2
3
Demand Estimation

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4
Short term

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 Domestic demand forecast

2018-19 A 2019-20 A 2020-21 A 2021-22 P 2022-23 P

Units Growth Units Growth Growth Growth Growth

© 2018 CRISIL Ltd. All rights reserved.

('000) (%) ('000) (%) (%) (%) (%)

Passenger Vehicles 3,378 3 2,772 (18) (2) 15-19% 2-7%

Passenger Cars 2,219 2 1,698 (24) (9) 15-19% 2-7%

Small Cars 2,031 3 1,591 (22) (8) 15-19% 2-7%

Large Cars 188 (9) 107 (43) (29) 7-12% (2)-2%

Utility Vehicles and Vans 1159 4 1075 (7) 8 16-20% 3-8%

Utility Vehicles 942 2 943 0 12 16-20% 3-8%

Vans 217 13 132 (39) (18) 12-17% 2-7%

Source: SIAM, CRISIL Research

5
 Ray of hope? The top 10 districts, with 28% share of daily cases,
indicate lowering curve
Flattening of 7 Day
moving average
100000
90000
Delhi
80000 Mumbai + Thane
70000 Bengaluru
60000 Pune
50000 Nagpur

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40000 Nasik
30000 Chennai
20000
Ahmedabad
10000
Lucknow
0
May/20 Jun/20 Jul/20 Aug/20 Sep/20 Oct/20 Nov/20 Dec/20 Jan/21 Feb/21 Mar/21 Apr/21 May/21

District and Case share Share in CV Share in PV Share in TW Share in

case share sales sales sales Tractor sales

Top 10 districts 28% 9% 15% 8% 1%

Top 20 districts 36% 11% 20% 10% 3%

Source: GOI
Note: Second wave is considered from 1st Mar 2021 to 13th May 2021. Cities named in green have the 7 day moving average reducing, amber is flat, and red in
6 increasing.
 Demand indicators improving sequentially, factors favorable in fiscal 2022 and
2023
on-year growth FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Apr-21 Parameters Impact

Passenger vehicles (Sales in ‘000s) Fiscal 2020 Fiscal 2021 Fiscal 2022P Fiscal 2023P

Overall demand -18% (2)% 15-19% 2-7%

Retail Sales 2778 175 526 811 812 209
Demand side variables
Personal vehicles retail sales 2565 169 513 796 791 203
-- Real GDP growth 4.2% -7.7% 10%
Fleet retail sales 214 6 13 15 20 6 -- CPI growth 4.8% 6.2% 5%

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Wholesale Sales 2774 154 726 897 934 286 -- Crop Value index F* F* F* F*
-- Average Car Price growth 2-4% 0-2% 2-4% 2-4%
Measure of economic activity
Cost of ownership
IIP Consumer Durables -9% -68% -10% 7% 16%
-- Petrol Prices (Rs./ liter)** 75 84 85-90
IIP Consumer Non-Durables 0% -17% 0% 3% 4% -- Diesel Prices (Rs./ liter)** 68 76 77-82
-- Car finance rates N F F
Petrol consumption 6% -36% -5% 6% 10%

Financing Supply side variables & financing

-- Finance Penetration 77-79% 76-78% 77-80% 77-80%

PV Interest rates 9% 8.6% 8.4% 8.2% 8% 8%
-- LTV 88% 88% 86-90% 86-90%
Cost Economics
-- Model launches F F F F
Petrol prices -4% 1% 11% 10% 20% 28% N N N N
-- Regulations/taxes

Diesel prices -4% -1% 14% 10% 22% 30%

-- Capacity expansion/constraints N N N N

NOTE : NF: Not favorable, N: Neutral, F: Favorable (GDP Forecasts are subject to downward revision), NA: Apr-20 wholesale sales were nil
CPI index base 2000-01 ; *Fiscal 2021 crop value index favorable assuming normal monsoon; **assuming taxes will stay at the current level and benefit of reduction in crude oil price will be
passed to customer
Source: CRISIL Research
7
7
 Revenue of larger companies as well as urban income relatively less hit
in fiscal 2021
Employee expense of manufacturing cos, domestic services and IT strengthen

Manufacturing (23%) IT (37%) Services, excl IT (6%)

19%
11% 16%
11%
10%
9% 9%
7% 7%
7% 7% -6%
3% 3%
1% 0%
5% -17% -26%

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-7% -27%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY20 FY21 FY20 FY21 FY20 FY21

Smaller the player, greater the dip in revenue#

18% 14% 17%

10%
2% 4% 9%
5% 9% -4%
-5% -20%
-15%
-17%
-38%
-44%
Q1 FY19

Q4 FY21

Q1 FY19

Q4 FY21

Q1 FY19

Q4 FY21

Q1 FY19

Q4 FY21
Q2 FY 19
Q3 FY 19
Q4 FY 19
Q1 FY 20
Q2 FY 20
Q3 FY 20
Q4 FY 20
Q1 FY 21
Q2 FY 21
Q3 FY 21

Q2 FY 19
Q3 FY 19
Q4 FY 19
Q1 FY 20
Q2 FY 20
Q3 FY 20
Q4 FY 20
Q1 FY 21
Q2 FY 21
Q3 FY 21

Q2 FY 19
Q3 FY 19
Q4 FY 19
Q1 FY 20
Q2 FY 20
Q3 FY 20
Q4 FY 20
Q1 FY 21
Q2 FY 21
Q3 FY 21

Q2 FY 19
Q3 FY 19
Q4 FY 19
Q1 FY 20
Q2 FY 20
Q3 FY 20
Q4 FY 20
Q1 FY 21
Q2 FY 21
Q3 FY 21
Large Corporate (27) Mid Corporate (38) Small (11) 76 Cos
Note: Growth in employee cost calculated for listed players and their representation towards the overall industry is - auto-related (56%), textiles (6%), pharmaceuticals (76%), chemicals (45%)
together are considered as manufacturing; IT (52%); airlines services(49%), organised retail(<5%) and construction (<5%) together are considered as services (ex IT)
Percentages next to represent % of total employee cost for set of ~8,000 companies which amounts to Rs 8 trillion
Source: MOSPI, industry, Company Reports, CRISIL Research
8
 PVs: Lower TCA rise, financing support and new launches
support retail offtake
Rise in total cost of acquisition (TCA) modest post fiscal
Favourable financial conditions to support purchases
2020

157k 160k
166k
20%
78% cars purchases are financed
129k 20% 20%
16%

42%
39% 39% 41% <10% loans under moratorium (majorly in fleet)

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42% 41% 41% 39%
~2% GNPA for PV loans (lowest in auto segment)
FY18E FY19E FY20E FY21P FY22P
Down Payment Registration Insurance 110 bps fall in interest rates vs. Jan 2020
New models have contributed significantly to overall sales
Low dealer inventory to support growth in fiscal 2022
volumes; continue to aid volumes in fiscal 2022
Sonet (Days)
40 127% 180%
(%) Aura, Altroz Sonet, 120%
30
Magnite, 17-22 19% 30% 17% 17% 23% 60%
Triber, Seltos, S-Presso 0% 9% 16%
Kiger, 20
Urban -50% 29-34 0%
Venue 17-22
Cruiser 10 -100% -83% 15-20 -60%
11-16
- -120%

Oct-20
Apr-20

Jul-20
May-20

Nov-20

Dec-20
Aug-20

Sep-20
Jun-20

Jan-21

Mar-21
Feb-21
22% 26%
16% 20% 20% 20%
8% 10% 10%
Inventory days Wholesale growth (y-o-y)
FY21P

FY22P
FY20

FY20

FY20

FY20

FY21

FY21

FY21
Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Note: April 2020 inventory days are considered as starting inventory days. Cost of acquisition calculated for the compact segment (Dzire base model). A vehicle is considered a new launch for a year and a half
post its launch. A new launch grabbing at least 1% share of total PV sales in that fiscal is considered a major launch,
E: Estimated, P: Projected
9 Source: SIAM, CRISIL Research
 Fuel-wise analysis indicates petrol variants a beneficiary of BS6
transition; EVs are the fastest growing segments
Petrol has gained significant EV vehicles have witnessed steady Maharashtra is the top states in terms
share post BS-6 transition growth over a low base of EV sales (FY21)
0.1% 0.1% 0.2%
1.0% 2.8% 120%
6.9% 5.5% 6.4% 6.4% 4.2%
7.0% 7%
2% Maharashtra
16.7% 3% 23%
40.3% 38.0% 35.2% 31.8% 58% 52% 4% Delhi
23%
14% 14% 5% Karnataka
6%
-7% Kerala

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71.7% 2% -5% Tamil Nadu
51.1% 54.0% 54.9% 57.9% 1% -2% 9%
-8% -16%
-13% Gujarat
-55%
Rajasthan
19%
FY17 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 West Bengal
13% 16%
Petrol Diesel Petrol / CNG Uttar Pradesh
Petrol Diesel Petrol / CNG EV
Petrol / Hybrid EV Others

Nexon has helped Tata Motors

Price increases with range for EVs Kona has the highest km / kWh
gain the largest share
500 Kona Km / kWh
3% Battery
450
4% 14
400 ZS Warranty
Range (in kms)

350 Nexon EV 12 Yellow – 3 yrs

22% 300 10 Green > 3 yrs
Tata Motors 250 Tigor EV
8
MG Motor 200
150 6
Hyundai 100 e-Verito 4
Others 50 2
0
0
71% 0 5 10 15 20 25
e-Verito Tigor EV Nexon EV Kona ZS
Price (in Rs.. Lakhs)

Note: Sales from AP, MP and Telangana are not included in above assessment. Source: MoRTH, Company Reports, CRISIL Research
10
 Recovery expected in fiscal 2022 due to significant growth in the
first quarter
Cars and UVs: Low base in the first half of this fiscal and pent-up demand to drive growth in fiscal 2022
1.0 Mn 0.9 0.9 300%
0.8 0.7
0.8 0.7 0.7
0.6 200%
0.6 43%
100%
0.4 17% 14% 279%
0.2 0%
0.2

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- -18% -1% -22% -100%
-29% -78%
Q1

Q2

Q3

Q4

Q1

Q2

Q3E

Q4P

Q1P

Q2P

Q3P

Q4P
FY20 FY21 FY22
Volume y-o-y growth rate

Cars and UVs: Fiscal 2022 volumes to reach only fiscal 2018 levels
4.0 (Mn) 30%
3.4 3.1-3.3
3.5 3.3 25%
20%
3.0 29% 15%
2.5 10%
2.0
9% 15-19% 5% D
1.5 7% 8% 0%
1.0
4% 2% 4% 3% -5% Z
-6% -18% -2% -10%
0.5 -15%
- -20%

FY21E

FY22P
FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20
Volumes y-o-y growth
Note: E: Estimated: P: Projected
Source: SIAM, CRISIL Research

11
12
Long term

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 Healthy growth post fiscal 2021 over low base
Cost is most important factor for driving Cars & Utility vehicle volumes

Million
units New Launches - Launch of One-time event - Pay
5.0 Innova, Sumo, Indigo, Verna, commission Regulation - Excise for Low Base – Consecutive years of double-
i10, Swift; disbursement SUV increased but then One-time event - Demonetisation impact digit decline is estimated to boost wholesale
in 2016-17 COVID-19
decreased subsequently over low base of FY21
Regulations - Excise duties for Regulation - Fiscal impact on
small cars reduced stimulus, cut in excise volumes
duties Regulation - Slightly lower tax rates post
4.0 GST in 2017-18

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3.4

3.0 2.8
2.7
2.5

0% CAGR Total PV domestic demand

1.9
2.0 (2010-11 to 2013-14)
1.5

Cost of ownership: Cost of Ownership Cost of ownership: GDP is

1.0 Cost of ownership: Cost of ownership:
8% CAGR 3% CAGR ~0-2% CAGR proxy for
2% CAGR 5% CAGR
income
Real GDP: Real GDP: Real GDP: Real GDP: Real GDP: growth
9.4% CAGR 8.1% CAGR 5.1% CAGR 7.2% CAGR <7% CAGR
0.0

FY 22P

FY 26P
FY 05

FY 06

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14

FY 15

FY 16

FY 17

FY 18

FY 19

FY 20

FY 21
Source: SIAM, CRISIL Research

13
 Expected fuel cost rationalization, low interest rates and increase in fuel
efficiency to restrict higher TCO growth in next 5 years
Cost of ownership to not rise substantially in long term Huge potential exists in India in terms of cars per 1000

(₹ '000) 700 car penetration vs GDP per capita

180
180 169 8
158 162 600
7 15
160 148 6 6 13 Italy
138 13
140 6 12 500 Germany
122 6 11 50
10 UK
120 6 55 61 400 Japan
10 55
51
100 47
300 USA

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80 45
S Korea
China
60 200 Brazil
107
40 80 85 89 88
76
62 100 India Mexico
20
-
Thailand
0
FY16E FY17E FY18E FY19E FY20E FY21P FY22P FY23P FY24P FY25P FY26P

10,000

20,000

30,000

40,000

50,000

60,000

70,000
Loan Repayment Fuel Cost Insurance Cost Maintenance Cost

Note: X-axis represents cars per 1000 population, Y-axis represents GDP per capita
Note: Numbers above the bar graphs represents total annual expenditure (cost of ownership) for an entry level Source: CRISIL Research, OICA (2015), World Bank
petrol car
mn
Source: CRISIL Research 400

350 46% of
total HH
300 29% of
• Subdued 1-3% cost of ownership in the long term as petrol prices rationalize, 250
24% of total HH
total HH
expected increase in fuel efficiency due to CAFE norms from FY23 onwards 200
10% of
337 11% of
8% of total HH
and low interest rates to aid long term demand 150
279
307
total HH
total HH
100
155
• Domestic potential to remain high given reasonably low penetration levels (23 50
67 24
88
32 38
0
cars/1000 people as of FY20). It is expected to reach ~25 in fiscal 2025 FY16E FY21E FY26P
Total Households Addressable households Total passenger vehicle population

Source: CRISIL Research

14
 Post significant decline, both small cars and UVs to witness healthy
growth in long term
PV industry is expected to grow post fiscal 2021 UVs’ contribution to overall sales to increase

8-10% 9% 8-10% 7-9%

27%
0-2% 39% 43% 43% 44%

-1% 8%
-4% 4%
3% 3% 2%

-20%

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64%
FY16-FY21

FY16-FY21

FY16-FY21

FY16-FY21
FY21P-FY26P

FY21P-FY26P

FY21P-FY26P

FY21P-FY26P
57% 54% 54% 54%

FY16 FY20 FY21 FY22P FY26P

Small cars Large Cars UV+Vans Overall Small Cars Large Cars UV+Vans

Source: SIAM, CRISIL Research Source: SIAM, CRISIL Research

• UVs and Vans to grow at higher pace compared to FY15-20 5Y CAGR in the long term
 The segment is expected to grow due to popular models, entry of new players & shift in preferences to UVs from large & mid-size car segment
 Compact UV segment growth trajectory gained momentum in the last 5 years with aggressive pricing, premium features as well as launches of
petrol variants.

• The growth for small cars in the long run is expected to be aided by rising income and traction in premium hatchback segment

• Demand for large cars will be impacted by intense competition from Compact UVs and as such, expected to decline

15
16
Exports

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 Domestic demand forecast

2018-19 A 2019-20 A 2020-21 A 2021-22 P 2022-23P

Units Growth Units Growth Growth Growth Growth

('000) (%) ('000) (%) (%) (%) (%)

© 2018 CRISIL Ltd. All rights reserved.

Passenger Vehicles 676 (10) 677 0 (40) 17-22% 8-13%
Source: SIAM, CRISIL Research

17
Exports declined in fiscal 2021 due to COVID-19 outbreak, to recover over low base
Exports estimated to have declined as global economy grapples with COVID-19 Share of exports improving in newer geographies
(%)
17-22%
16% 30%
8-13% 33%
45% 43%
5%
58% 56%
-1% -2% 4% 5%
-10% 4% 7%
2% 3%
4% 5% 11% 11%
4% 5%
1% 5% 11% 10% 8%
3% 4%
3% 3% 12%
3% 9% 17% 16%
12%
-40% 11%

© 2018 CRISIL Ltd. All rights reserved.

0.65 0.76 0.75 0.68 0.66 0.40 26% 29% 24% 23% 23%
20%

FY21P

FY22P

FY 23 P
FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

YTD FY21
Exports (million units) Exports Growth
Mexico South Africa US Saudi Arabia Chile UAE Others
Source: SIAM, CRISIL Research Note: YTD – Apr-Feb
Source: DGFT, CRISIL Research

• Exports have declined in fiscal 2021 due to muted global automobile demand on account of COVID-19 outbreak
• Mexico and South Africa continue to remain the top 2 destinations for exports of passenger vehicles
• Post significant decline in fiscal 2021, exports expected to recover in fiscal 2022 at an estimated rate of 20% on-year
• Export growth momentum to continue in fiscal 2023 with ~11% on-year expected growth

18
 Maruti gains share in export at the expense of others, Kia Seltos 2nd most
exported model in FY21
Maruti and Kia have gained significant share in FY21 Production constraint has led to share of lower exports in production
(%) 100% 100%
5% 4% 6% 7% 7%
0% % 93%
7%
17% 16% 10% 9% 12% 10%
12% 9% 8%
74%
12% 11% 69%
11% 3% 9% 64% 61%
6% 9% 11% 10% 6% 50%
0%
17% 24% 19%
21% 24%
21%

© 2018 CRISIL Ltd. All rights reserved.

19% 20% 26%
16% 16%
16% 15% 18% 19% 21%
9% 6% 7%
25% 24% 25% 23%
22% 20%
PV industry Hyundai Maruti Nissan Ford India Volkswagen GM Kia
FY 16 FY 17 FY 18 FY19 FY 20 FY 21
Hyundai Maruti Ford GM Kia Volkswagen Nissan Others FY 16 FY 17 FY 18 FY19 FY 20 FY 21
Source: SIAM, CRISIL Research Source: SIAM, CRISIL Research

• Maruti and Hyundai, which account for ~65-70% of India’s domestic sales, account for ~44% of India’s exports in FY21
• As other OEMs struggled to ramp-up production due to COVID-19 outbreak, Maruti has gained significant share
• Comparatively lower decline has been observed in UV segment with inclusion of Kia Seltos – 2nd most exported model in FY21; as such, Kia is one of
the top 5 exporters and expected to fare well

• Exports have been aided by contribution from new models like Kia Seltos, Hyundai Venue and Maruti S-Presso
• Non-asian OEM’s Ford, Nissan, GM and VW continue to treat India as their key base for exporting to other countries

19
20
Competitive scenario

© 2018 CRISIL Ltd. All rights reserved.

 Competitive pressures has increased significantly in UV Segment
Launch of multiple models in UV reflects intense competition in the segment

10000 9327
69098085
8000
6000 4177 4629 4535
3072
4000 1826 30512765
20081829 2365 15491458
2000
0
Small Cars Large Cars UVs Vans PV

© 2018 CRISIL Ltd. All rights reserved.

FY16 FY17 FY18 FY19 FY20 FY21
Notes: Score represent HHI index; lower value indicates higher competition ,
Source: SIAM, CRISIL Research

Maruti loses share in small cars at the expense of Tata Motors, Kia now 4th largest player in UV within a year of launch
(%)

12% 10% 6% 5% 2% 2%
18% 22% 21% 11% 5% 22% 17% 21%
5% 9% 30%
7% 3%
18% 7% 6%
16% 56% 56% 9% 15% 8% 5% 6%
61% 6%
21% 8%
19% 15% 17%
29% 17% 17%
6% 8% 90% 97%
2% 84%
65% 65% 8% 20% 25% 13% 19% 20%
55% 47% 51% 48%
30% 24% 26% 25%
18% 22%
FY17

FY20

FY21

FY17

FY20

FY21

FY17

FY20

FY21

FY17

FY20

FY21

FY17

FY20

FY21
Small cars Large cars UVs Vans Passenger vehicles

Maruti Suzuki India Ltd Hyundai Motors India Ltd Tata Motors Ltd Mahindra & Mahindra Ltd Kia Motors India Ltd Others
Source: SIAM, CRISIL Research

21
22
Supply

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 Subdued demand in Q1 FY21 to impact utilisation in fiscal 2021
Utilization levels on a declining trend Top players running on optimum capacity
Effective Capacity
Player estimate (as on 31st Production (FY21) Capacity utilization in Capacity utilization in
Mar 2021) (in '000 (in '000 units) FY20 FY21
units)
Maruti 2050 1406 82% 69%
Hyundai 763 568 85% 74%
Tata Motors 564 213 26% 38%
75% 72% 75% 73%
69% 66% 66% Ford India 440 89 44% 20%
60% 56-61% 58-63%
52% Renault-Nissan

© 2018 CRISIL Ltd. All rights reserved.

480 144 42% 30%
General Motors 165 28 42% 17%
Toyota 310 56 32% 18%
Honda 180 86 33% 48%
FY13 E

FY14 E

FY15 E

FY16 E

FY17 E

FY18 E

FY19 E

FY20 E

FY21 E

FY22 P

FY23 P
Volkswagen 179 51 44% 28%
Total 5915 3057 59% 52%

Source: CRISIL Research Source: CRISIL Research

Estimated capacity additions

Player Location
Capacity
Investment Commissioning
• Utilisation levels declined on account of subdued demand growth and
mn units
capacity additions in fiscal 2021
Kia Motors* Anantpur AP 0.3 Rs 70 bn In progress

MG** Halol, Gujarat 0.80 Rs. 20 bn FY 20

• Utilisation to be ~59% in fiscal 2022 due to limited recovery on account of
Source: CRISIL Research
Maruti Suzuki Mehsana Gujarat 0.25 Rs 100 bn In progress
2nd wave of COVID-19
PSA Tiruvallur , TN 0.1 Rs 7 bn FY 22
Kia Motors* Anantpur AP 0.15 Rs 41 bn Beyond FY22 • Higher demand in fiscal 2023 to aid recovery of utilisation to ~61% levels
Note: *Capacity for Kia will be incremental 0.1 mn each year; **MG has taken over GM’s Halol plant.
Source: CRISIL Research
23
24
Profitability

© 2018 CRISIL Ltd. All rights reserved.

 Operating margins to improve in FY22 aided by higher utilisation
Gross margins to be marginally impacted due to higher expected input costs Operating margin (%) for players
304-309 Player FY 17 FY 18 FY19 FY20
286-291 325
67% 262 265 300
246 250 239 248 241 275 Maruti Suzuki 15.3 15.0 12.7 9.8
62% 234
57% 207 250 Hyundai 11.8 11.7 11.2 9.7
225
52% 40-45% 200 Tata Motors 3.4 7.2 8.3
44% 41-46% 175 0.5
47% 40% 39-44%
42% 150 Ford India (9.3) (2.5) 7.1 16.3
35% 125
37% 31% 32% 100 Toyota 7.5 10.5 8.7 3.9
32% 27% 28% 75
25% Higher share of 50 Honda 9.5 9.2 7.1 1.6
27% traded goods 25
22% 0 GM -12.3 7 6.2 8.3
FY13 E

FY14 E

FY15 E

FY16 E

FY17 E

FY18 E

FY19 E

FY20 E

FY21 E

FY22 P

FY23 P

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Fiat 22.8 13.0 11.5 14.0
Industry 13.8 13.4 11.5 9.3
Raw material index
Source: CRISIL Research Gross margin
Note: The above data represents the financials of Maruti Suzuki, Hyundai Motors, Honda Cars and Fiat Source: Company Reports, CRISIL Research
India. Raw material prices indexed to 100 for fiscal 2002.

Operating margin to improve on account of higher utilisation

16.0% 87% 89% 92% 91% 100%
14.0% 76% 77%
82%
74% 72-77%74-79% • As a consequence of increase in share of traded goods over the past fiscals,
12.0% 65% 80%
13.0% 13.8% 13.4% higher gross margins witnessed optically
10.0% 11.5% 11.5% 60%
8.0% 10.5-11%
9.7% 9.3%
6.0% 8.1% 8.5-10% 40%
4.0%
7-7.5% • Higher raw material prices expected to lead to decline in gross margins to a
20%
2.0% certain extent in fiscal 2022
0.0% 0%
FY13 E

FY14 E

FY15 E

FY16 E

FY17 E

FY18 E

FY19 E

FY20 E

FY21 E

FY22 P

FY23 P
• Margins to recover in fiscal 2022 aided by higher utilisation as well as price hike
Op Margin Capacity Utilisation for partial pass-on of higher input costs.
Note: For industry EBITDA, we have considered financials of Maruti Suzuki, Hyundai Motors, Honda Cars and
Fiat India. Maruti operating margin – 7.8% in FY21
Source: CRISIL Research

25
 Working capital cycles to recovery marginally in fiscal 2021 as sales expected
to improve in H2 FY21
WC cycle estimated to have improved in fiscal 2021 in-line with recovery in sales in H2 FY21
(Days)

-16.2

-21.9 -23.1 (20)-(25)

-23.4 -24.3

© 2018 CRISIL Ltd. All rights reserved.

-24.8
-27.3 (24)-(29)
-29.9 (27)-(32)
FY13 E

FY14 E

FY15 E

FY16 E

FY17 E

FY18 E

FY19 E

FY20 E

FY21 E

FY22 P

FY23 P
Source: CRISIL Research

Working Capital days deteriorated as sales have been impacted in fiscal 2020
FY 13 E FY 14 E FY 15 E FY 16 E FY 17 E FY 18 E FY 19 E FY 20 E
Days inventory 21.2 22.6 24.3 27.7 25.9 22.9 21.9 23.3
Debtor days 11.9 13.1 9.1 10.1 9.2 12.0 13.9 12.9
Creditor days 55.0 59.0 57.7 60.9 62.5 64.8 60.6 52.4
WC Cycle -21.9 -23.4 -24.3 -23.1 -27.3 -29.9 -24.8 -16.2
Source: CRISIL Research
Note: WC for Maruti in FY21 is -34 days
1. The above data represents the financials of Maruti Suzuki, Honda Cars India, Fiat India and Hyundai Motors.

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Annexure

© 2018 CRISIL Ltd. All rights reserved.

 EV penetration to reach ~4% in fiscal 2026 from current ~0.1% in fiscal 2019
TCO & COA of EVs for cab aggregator lower due to higher running TCO & COA of EVs for personal car remain a challenge

(₹ '000s) (₹ '000s) Cost of Acquisition (RHS) (in ‘0000 Rs.)

Cost of Acquisition (RHS) (in ‘0000 Rs.) 600 330
600 200
190 500
500 180 280
400 170 400
160 230
300 150 300
140 180
200 200
130
120 100 130
100

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110
- 100 - 80
FY21 FY26P FY21 FY26P

TCO Diesel TCO Petrol TCO CNG TCO BEV TCO Petrol TCO BEV

Source: CRISIL Research

Source: CRISIL Research

• Total Cost of Ownership (TCO) and Cost of Acquisition (COA) of Electric Vehicles (EVs) for cab aggregators are lower compared to diesel or CNG alternatives

• Taxi segment accounts for ~10-15% of sales within passenger cars and within taxi segment, cab aggregators are expected to lead adoption of Electric vehicles resulting
in an estimated ~25% adoption of Electric vehicles by fiscal 2026

• FAME-2 subsidy is incentivised only towards commercial use and no benefits are provided to personal car owners

• TCO and COA of EVs for personal car is still higher (~35% and ~27% respectively) compared to petrol alternative due to their low running and as such, not a viable
use-case for adoption of electric vehicle

• Thus, the share of EVs to total passenger car sales expected to remain low (~4%) in fiscal 2026; current penetration is ~0.2% in fiscal 202.

• Currently, charging infrastructure, range anxiety and lack of large OEM presence is hindering EV adoption.

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 EV Assessment framework

Total Cost of Ownership (TCO) Cost of Acquisition (COA) Charging Infrastructure

© 2018 CRISIL Ltd. All rights reserved.

Battery Prices
• Battery prices have been falling sharply over the last 10 years at a rate of ~20% annually. This fall is
expected to continue at a rate of ~10% annually over the next five years. Presently, a battery is priced at
around $260 per kWh and is expected to fall to around $143 per kWh in the next five years. • Globally, ~90% of cars are charged at
• Moreover, going forward, we believe battery production will take place in India although cell home and hence, it is not a deterrent
manufacturing will still be done outside India. This will also further reduce the battery prices. for adoption.
• However, considering that taxis run
more than they are stationary, they
Dependence on subsidy would require public charging
• India provides 50% lower incentive than the countries with lowest global incentives. EV subsidy is a lower infrastructure.
priority as compared to other social subsidies of the government as per market interactions.
• FAME II subsidy announced but it is expected to be exhausted by FY22; however, it is available only for
commercial use (taxi segment)

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Thank you

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