Automobile & Auto Component Sector j TAMIL NADU GLOBAL INVESTORS MEET 2019Overview of the sector in India India is expected to be the world's third-largest automotive market in terms of volume by 2026 Automobile sector contributes 7.1% to India's GDP Auto component sector contributes 2.3% to India’s GDP ‘Twowheelers account for 80% of the automobile market share Overall automobile exports reached 4.04 million units in FY18 FDI inflow from Apr 2000 to Jun 2018 - USD 19.29 Billion Source: Invest India, Make in India, IBEF 2018, DIPP Major automobile and auto component manufacturing Indian clusters Jas so O">" DELP | Ee a "e B OFERS ALSTOM sxthan— Grulnental s+ BOSCH & om | amc 2. JB BD vasa ~~) <= f eon DD eve O re Tamil Nadu = LT aE ey mnt zuninon stoAutomobile Sector 35 30 25 20 15 10 ene tac er Ocal mike ey eee Pee) 30 25 20 15 10 eo eae ecm A0 HHA (oy [alee ee. ea Automobiles produced in India (In millions) CAGR 7.08% 29.07 23.36 24.02 zoe [ I [ [ I FY 13 FY14 FY 15 FY 16 FY 17 FY 18 Automobiles sold in India (In millions) CAGR 7.01% 24.97 1972 2047 21.86 I I [ [ Fy 13 FY 14 FY 15 FY 16 FY 17 FY 18Robust growth of Auto Component Industry Aggregate Turnover (USD Billion) 49 43.55 aig1 4268 39.69 38.41 39.05 35 29.23 26.44 : 24.09 : 8E FY08 FYO9 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY ui ey Revenues increased at a CAGR of 5.70% during the period 2008-2017 Revenues from the sector estimated at USD 200 billion by 2026 oe og 6 The market size increased by 11.5% in FY17 = Exports of auto components estimated to be USD 10.9 billion in FY17, increasing at a CAGR of 9.96% during FYO9 - FY17 by Asia (27%) and North America (26%) in FY17 a i wag \ . ik 9 Europe accounted for 35% of auto component exports followedTamil Nadu Scenario‘State Govt. instrumental in. Ancillary industry flourished with Several policies introduced providing licenses ‘access to foreign technology Including Ultra Mega Integrated a, Several ato component ‘Auto component Policy relaxation and OEMs like TVS, Standard majors tke and declcensing Motors, Ashok Leyland, ‘Sundaram, helped FDI inflow ‘Ammalgamations, Simpsons, Lucas, Kokusan into the sector MRF established in Chennai Denki established French auto company Yamaha & Michelin Tyres set up PSA stepsin. Tamil Nady plants in Chennat and SIPCOT simsto reach 58 Millon Industrial Park, Thervoy Kandigai nits of automobile “Tirwvallur District production by 2020 fea Derg oa Rey Lad eek eas Pi tasiy fel Re milks Bey Mans ad A) ‘Automobile Projects ee Ford establishes BMW starts plant in Chennal production in (Other Auto giants such Mahindra World as Hyundai City in Maraimaai also establish unit "Nagar. Hyundai atlrungattukotal becomes the largest neat Chennai exporter in India ‘through Chennai Port ‘Ato & Auto Component Nissan Policy released, Nissan & establishes plant Ford sign long term contract in Oragadam with Ennore Port Dente cath Peoria mura! Roe co aa Ion Pee aa ere) high value and critical Eric est nc pero icc eT Sa Ca Motor Co., BMW, Daimler, eRe eee ea toe Ee RUE CreesAutomobile & Auto component sector at a glance (2/2) 45% of India’s motor vehicles / cars exports in 2017 - 18 Export hub of Passenger Vehicles, accounting for 70% of India's overall exports Largest contributor to the automobile sector in India in terms of industrial output Largest tyre manufacturer in the country Auto clusters near Chennai - Sriperumbudur, Oragadam, Maraimalai Multiple R&D centres - Mahindra Research Valley, NATRIP etc 1393 Number of factories producing motor vehicles, trailers and semi- trailers in Tamil Nadu Automobile & Auto components exports from Tamil Nadu (USD billion) ra zm i 2013-14 2014-15 2015-16 2016-17 2017-18 PRS eet eae eae U Cee nes Source: Invest India, IBEF 2018, AS| 2015-16, DGCISNo. of Units (In ‘000) Cars Heavy Vehicles No. of Units (In Millions) 482 3.18 071 ‘Two Wheelers Total Installed Capaciy m Production 2017-18 Export 2017-18 eee aCe cue achA snapshot of auto companies (Cars) in Chennai in 2017-18 Installed Capacity (Laks Production (Units) | Exported Vehicles (Nos Ford Motors 2 146,000 90,929 Production used only for pM Rd domestic sales Renault Nissan 48 240,087 68,516 Hyundal Motors 7 693,467 153,943 HM Mitsubishi 0.12 Ss — @ © i 2 hs HYUNDAI Source: Guidance Bureau Well developed Automobile ecosystem Midhani, Swaraj, Nelcast DUE Lcuc ly Dey Veale) 4 StS rs eet : eres Peed ila ebalal Ur eteartiny eR re nee) rated A Be Seer asd [ecre ala Auto OEMs Ee ecg es RTE rT) i: ne Mitre) [ase Cee) ieee ete & @ lia fee mc) Sr Ce Sd il aie oT Cr Soy a ceil) PAE ase ey VER Cet acme eatin Avtec India, erie oMr I) Fairfield, Caparo India ene ZcROYAL ENFEID 423 Ashok Leyland Auto ee OR —— Components TVS & & Brakes India limitee Tyre Mfg @ Witt tLe MRE Ay HYUNDAI DAIMLER Auto A < ‘as> Components — gaint-GoBain &? HWASHIN aa, files nda tit, ao Soave Oey -EVeE male ltr |) ” OEMs a & © oar KOMATSU actu Auto Components W151i Og Senc2ram - Clayton Limited Tyre Mfg apollo 10Growth of auto components sector Tamil Nadu has the largest auto components industry base and accounts for 35% of India’s auto component production (USD 6.2 Billion) . Chennai’s auto components sectoris likely to grow by 20% annually and exportsare likely : grow to by 30% over the next five years The industry developed the capability of manufacturing all the components required =~ for manufacturing vehicles, which is evident from high levels of indigenization achieved invehicle industry Component - wise Production Lol Tn ae at raagiel) Parts 8% Source: IBEF 2018 EyAuto components sector making a global hub (2/2) {C} Presently Tamil Nadu has 100+ key players with an investment of — USD 553.85 million Just - In - Time practice by auto manufacturers resulted in rise of auto components sector around the plants The output is worth USD 1.2 billion, with exports of USD 140 oy million, directly employing about 45,000 people produce more than 25% of their components in Chennai 8 out of 10 Deming Awards awarded to Indian auto component {Cp Auto component manufacturers like Visteon, Delphi, etc. o manufacturers are based out of Chennai {Venturing into non-auto sectors is being explored to reduce the over-dependence on the vehicle market Structure of Auto Component Industry PC ey Supply Large & SMEs ES Supply, 7 setae " ten h : ATES Srgacrectuitater cates eld aie Source: IBEF 2018, KPMG Analysis 12Growth factors driving Tamil Nadu’s auto sector Excellent Port Logistics Ports in Chennai provide an easy gateway for exports and imports with dedicated berths for automobile exports Mature Auto Components Base Chennai has 350+ Tier | to Ill suppliers apart from 4000+ SMEs under Tier IV segment, all mega projects also have dedicated vendor parks next to them Testing & Certification Centres NATRIP & CVRDE facilitates automotive safety, safety emission & performance standards in India Abundant Availability of Skilled Manpower Presence of surplus shop floor operators, technicians, diploma holders and graduate engineers Reliable Infrastructure infrastructure in terms of power, roads, ‘communication, water availability, waste disposal Policy Support ‘Support incentive packages to attract major auto players 13Where does TN stand in Automobile ecosystem in India?Kamarajar Port serves the demands of major automobile players Kamarajar Port in Ennore set a record by handling 2.12 lakh automobile units, exported till March 2017 Nissan Motor India achieved a remarkable milestone for export of 700,000" car through general cargo berth Since the commencement of automobile exports, this port handled 14 lakh units till March 2017 A total of 30.45 MMT cargo was handled in the year 2017 - 18 Port provides end - to - end services from stevedoring to custom documentation An average output of ship berthing is 24,719 tonnes as on May 2018 Tamil Nadu has 3 major Govt. ports which handled 17.5% of India’s cargo traffic in 2017 - 18 Source; IBEF 2018Mahindra Research Valley ~ Asia's largest RED Daimler R&D Center for Vehicle Design Ashok Leyland R&D & Technical Center Visteon RED Center Research & Development Centres Renault & Nissan RED Center Hyundai Vehicle Development Ford Technical Support Center State of the art National Automobile Testing and R&D centerO@ 9 *# BOpportunities in Automobile & Auto Component SectorInvestment opportunities Passenger vehicles, passenger cars, utility vehicles, multi-purpose vehicles Two wheelers: scooters, mopeds, motorcycles Three wheelers: passenger and goods carriers Commercial vehicles - light, medium and heavy commercial vehicles Auto parks / industrial infrastructure development on PPP mode Auto ancillaries / Auto parts manufacturing 20Policy support Auto & Auto Component Policy 2014Infrastructure Facilities Power: If the power requirement is in excess of 25 MVA, then TNEB will provide a substation (230 KV SS / 110 KV SS depending on the power requirement) at its cost and the land for the substation will have to be provided by the developer agency free of cost. Rail: Only state to have dedicated car export Ports: Chennai, Ennore and Thoothukudi terminal connected to port through arailline Ports will ensure 24 hours movement of from Cheyyur. Export / Import Consignment Trucks / Lorries / Container Trailers. Roads: 95% of State Highways in Tamil Nadu are multi-lane compared to <50% in many other States. The government will build Chennai Peripheral Ring Road with 8-lane and 2 service lanes connecting Mamallapuram to Ennore Port with links to NH 45, NH 4, NH 205 and NH 5 to enhance port connectivity. Fiscal Incentives Other Measures In order to encourage setting up Federal issues like ' Automobile and Auto of Integrated Ultra Mega upgradation of port | Components Industry Automobile Projects, either new facilities, National ; Consultative Committee or expansion, Ultra Mega and Highway roads, taxation, : will meet periodically to Super Mega Auto & Auto anti-dumping, etc. willbe ; discuss the major issues Component Projects will be facilitated confronting the industry offered a rebate in cost of land and advise Government procured from SIPCOT at 10% on remedial measures and 5% respectively needed Automobile Hubs & Clusters will Private - Public - Partnership (PPP) will be be incentivized by providing 50% encouraged to implement infrastructure projects stamp duty concession and with the active participation of the automobile additional capital subsidy of 5% industryIndustrial Policy 2014 ero ad Sac Reno RU PN uracs Etta C Districts (Chennai, Tiruvallur, | (Other than A & C) (Cote Kancheepuram) districts) Mega Projects Above 500-1500 and crating ‘Above 250 1000and ‘Above 200-500 and nemployment of 00 3 year creating an employment of creating an employment 7004 years of 100 na years Super Mega Above 1500-3000 and creating ‘ove 1000 - 2000 and ‘Above 500 1500 and ACSe ee ae cresting sn empoyment of ee Soon Sear of as0mnS years Super Mega B Above 3000 5000 and creating ‘Above 2000 4000 and ‘Above 1500-2000 and in employmertof600 6 yeu creating an employment of creating a eee “fooineyeas of Ss0ing years Uta Meas ‘Above S000 ances Above 4000 and cestingan Above 2000 and creating employment of 700? years cimplymentof 00% 7 years anempoyment of SOD "Tyee nee “Theothukudl and Kanniyakumar Standard Incentives Capital Subsidy ‘* Subsidy ranging from INR 30 Lakhs to INR 2.25 crores * 50% additional subsidy for industries set up in SIPCOT Industrial Parks (other than Southern districts) * For investments made in B & C category districts, an additional 10% & 25% subsidy for industries located outside the SIPCOT Industrial Parks Stamp duty concession * 50% to industries located in SIPCOT parks in A & B districts and 100% in the case of Southern Districts Environmental Promotion Infrastructure Subsidy ** Subsidy of INR 30 lakhs or 25% of capital cost whichever is less Apart from the above, Industries adopting Zero Effluent or Waste Water Discharge, Clean Development Mechanism and Emissions Trading Mechanism will be given a higher amount of subsidy Electricity tax exemption * Period of exemption depends upon the quantum of investment and the employment criteria prescribed 23Incentives for Industrial Promotion in Southern Districts eames SCOR Eau Se Rom ee cp parks © SIPCOT will acquire & allot Land for new ventures in case SIPCOT Industrial Pree Oe eeu cua ara ch etre aoc rece eee oe comm nur OPS Can re gue Re eet a Rn een employment in the case of industries located outside SIPCOT Industrial Parks Investment Promotion Facilitators - Key Contacts TN Industrial Guidance and Export Promotion Bureau Coo ee UU AN mS ue LUE eek ele od eh eee LOREM aS CE hey SEU Rte raver urs Corporation Limited (TIDCO) SCE ne en acer aeRO} uke eeoe yeas E-mail: cmd.tideo@nic.in Meee naar enc SoU eure oc Ue) Renee DER ECSU RTR etc} uae LKB) Pease ere errd aC We Raa Electronics Corporation of BOUT ReMi ch skeen) 692, M.H.U. Complex, II Floor, Anna Salai, Dea CUCUMSU TTR etc} Phone: 91-44-6551 2330 E-mail: secyit@tn.nic.in Oe eae ea State Industries Promotion Corporation CaM ORC ece1)) pCa Te en nace PU eae) Phone: 91-44-2855 4787 er Cun en ay Were mea od Tamil Nadu Urban Infrastructure cue ecs 19, T P Scheme Road, Raja Muthaipuram, PE ee Cres Le nee Ls ue ers) aR Cranks Wee maa Rou Tamil Nadu Small Industries Pee ee eu eee) SM CMU ou o ce fe TERSUeKyy Ue ee CL SELL COL Pe ER eure ech neony Meare i