Indian Auto

Industry
Economic Diplomacy Division
Ministry of External Affairs
Where does India stand?
Largest TRACTOR manufacturer

Largest TWO WHEELER manufacturer

2nd Largest BUS manufacturer

3rd Largest HEAVY TRUCK manufacturer

6th Largest CAR manufacturer

6th Largest COMMERCIAL VEHICLE manufacturer

Source: SIAM
 Vehicle Market Share
Segment Market Share

Passenger Vehicles 14%

Commercial Vehicles 3%
Three Wheelers 3%
Two Wheelers 80%

Low Vehicle Penetration

Vehicle per 1000
Segment
persons
Passenger Vehicles 20
Two-wheelers 108
Buses 0.11
Cities: Delhi, Gurgaon, Illustrative list of
Noida, Ghaziabad, Ludhiana,
Haridwar
Auto Clusters manufacturing
facilities of Indian and
Eicher Global OEMs
Escorts North
Hero Motor Cities: Kolkata
Honda Motorcycle Tata Cummins
Honda Cars Tata Motors
ICML
JCB East
Maruti Suzuki
Mahindra
Mazda
New Holland
Cities: Motorcycles
Suzuki Baroda, Halol,
Sanand,
Tata Mumbai, Pune,
Motors West Cities: Chennai, Hosur,
Nashik,
Yamaha Aurangabad.
Bajaj Auto Honda Bengaluru
Ashok Leyland
Fiat Motorcycle BMW
Force Motors Mercedes Benz Sout
GM Skoda
Caterpillar
John Deere Tata Hitachi h Daimler
Mahindra Tata Motors Ford
Suzuki Volkswagen Hyundai
Ford Volvo Eicher Nissan
Renault
 Units of vehicles expressed in ’000
units
Passenger Vehicles Production Figures for financial year – April to
March

4,000  CAGR 2013-17: 4%

3,792
3,465
3,500
3,234 3,221
3,087
3,000

2,500

2,000

1,500

1,000

500

0
2012-13 2013-14 2014-15 2015-16 2016-17
 Units of vehicles expressed in ’000
Other Vehicles Production units
Figures for financial year – April to
Commercial Vehicles MarchTractors
850 833  CAGR 2013-17: -1%  CAGR 2012-16:
810 800 -3%
800 787 697
700 640 613
600
579 572
750
500
699 697 400
700
300
200
650
100

600 0
2012-13 2013-14 2014-15 2015-16 2016-17 2011-12 2012-13 2013-14 2014-15 2015-16

Two & Three Wheelers Construction Vehicles

 CAGR 2013-17: 6% 80  CAGR 2012-16: 76
25000
70 66.4 3% 68.2
19764 20712 60.7
19439
20000
17713 60 55.9
16584
50
15000
40
10000
30

5000 20

10
0
2012-13 2013-14 2014-15 2015-16 2016-17 0
2011-12 2012-13 2013-14 2014-15 2015-16
Top 5 players in Each Segment in 2016-17
Passenger Vehicles : +9.23% Commercial Vehicles : +4.16%

Leading Players Leading Players

Maruti Suzuki (47%) Tata Motors (43%)
Hyundai Motor Mahindra &
(17%) Mahindra(25%)
Mahindra (8%) Ashok Leyland (19%)
Tata Motors (6%) VECVs - Eicher (7%)
Honda Cars (5%) Force Motors (3%)

Two Wheelers : +6.89% Three Wheelers : -4.9%

Leading Players Leading Players

Hero MotoCorp Bajaj Auto (50%)
(37%) Piaggio
Honda MSI (27%) Vehicles(30%)
TVS Motor (14%) Mahindra (10%)
Bajaj Auto (11%) Atul Auto (7%)
India Yamaha (5%) TVS Motor (2%)
Note: FY means 12 month ending March
Auto Component Industry: 2015-2016
Turnover • USD 39.0 billion

Contribution to GDP • 3.5% - 4%

Foreign Exchange • USD 10.81 billion

Earnings/ Exports

Share of India’s • 4%
Exports

Domestic Aftermarket • USD 6.8 billion

Direct Employment • 1.50 million

Auto Component Industry Turnover:
2015-16 CAGR: 6%
Turnover in INR’ 00 Crore (USD Billion)

3000 40%

35.9% 2556

Growth Rate in Rupee Terms

2500 2348 (39.0)
2160 2117 (38.5)
30%
2046 (39.7)
(42.2) (35.1)
2000 1883
(41.3) 20%

1500
11.1%
8.7% 8.8% 10%
1000 5.6%

-2.0% 0%
500

0 -10%
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

9
(Turnover includes supplies to OEMs, aftermarket sales and exports)
Auto Components Supply to OEMs
Three- Two-wheelers Backhoe
21%
Wheeler Loaders
4% 2%
HCV Others
9% 2%
MCV Tractors
5% 7%
LCV Passenger
4% Vehicles
SCV 44%
1%

Small Commercial
Less than 2 T
Vehicles (SCV)
Light Commercial Vehicle
2 to 7.5 T
(LCV)
Maneuver Combat Vehicle
OEMs consumption includes locally produced Components and Imports 7.5 to 16 T
 Exports - Auto Component Industry: 2015-16
800 CAGR: 18% 80%
685 (11.2) 709 (10.8)
Turnover in INR’ 00 Crore

615 (10.2)
600 60.7% 527 (9.7) 60%
(USD Billion)

427 (8.8)
40.7%

\
400 303 (6.7) 40%
23.3%
200 16.7% 20%
11.4%
3.5%
0 0%
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Exports Destinations: Top 10 Countries

South Africa, 6% in %
America, 4% USA 25 Thailand 3.18
North Asia, 25%
America, Germany 6.96 UAE 3.15
25%Europe, Turkey 6.22 France 2.99
New Zealand & 36%
Australia
Central UK 5.43 Brazil 2.62
1%
America, 3% Italy 3.86 Mexico 2.59
11
Increased Component Outsourcing (Illustrative List)

Over 35 IPOs of Global OEMs & Tier 1 Procuring from India

OEMs Tier 1 Component Manufacturers

• BMW • Bosch
• Caterpillar • Continental
• Ford • Cummins
• DANA
• FIAT
• Delphi
• GM • Denso
• John Deere • Eaton
• MAN • Getrag
• Mercedes-Benz • GE
• Nissan • Kohler
• Peugeot • Kolbenschmidt
• Renault • Magna
• Toyota • Meritor
• TRW
• Volkswagen
• Valeo

Indian Auto components already driving on international roads 12

Strengths & Challenges of Indian Component Suppliers
Indian Suppliers’ Focus – Global Best Practices
Industry fast embracing modern
Focus on Quality shop-floor practices:
 5-S; 7-W
OHSAS… 162  Kaizen
ISO 14001 287  TQM
TS 16949 546  TPM
ISO 9001 651
 6 Sigma
 Lean Manufacturing

Deming Award Japan Quality TPM Award – Shingo Silver JIPM –

– 16 Medal – 15 Medallion - 2 3
5
Largest no. of Deming Award winning companies outside Japan
 Increasing focus on Innovation and
Research
Design & Research Centers of leading Global companies in India

• Bosch • Honeywell
• Caterpillar • Hyundai
• Continenta • Magna
l • Mercedes
• Cummins Benz
• Ford • Renault
• GM Nissan
• Honda • Suzuki (Illustrative List)
Auto Components Industry Aspirations
Objectives of Automotive Mission Plan 2026
• Achieve top-line of USD 260-300
Automotive
billion
industry to be the • Increase export intensity to 35 - 40%
engine of “Make • Attract investments of USD 70 - 90
in India” billion over the next decade

• Provide incremental employment to 65

Contribute
million persons
significantly to • Quality of employment a key feature of
“Skill India” this industry

• Focus on promoting safe, efficient and

Focus on comfortable mobility for every person
promoting in the society, with an eye on
Mobility environmental protection through both
public and personal transport option
 • Foster the promotion of “Brand India”
Promote India as by developing a sophisticated ecosystem
a preferred of research, design, engineering and
manufacturing that is conducive for a
destination for variety of players - both mass market
every segment of and niche seekers.
the automotive • To rank within the top three of the
value chain world in engineering, manufacture
and export of vehicles and components
• India & EU norms from current 6-7
years
• Harmonisation: Clear roadmap to
Define a Road
adhere to 1998 Agreement of UN
map for
Global Technical Regulations (WP.29)
Implementing • Fuel Efficiency: Define clear roadmap
policies and for all categories of vehicles
regulations • Road Safety: Reduction in accidents
and fatalities as per norms specified in
Road Transport & Safety Bill.
 Automotive Mission Plan 2026: Aspirations for
Vehicle Industry (million units)

Segment 2004-2005 2016-2017 2025-2026

Passenger Vehicles 1.2 3.7 9.4 - 13.4

Commercial Vehicles 0.39 0.8 2.0 - 3.9

Two Wheelers 7.6 18.5 50.6 - 55.5

Three Wheelers 0.43 0.95 2.8 - 3.0

Tractors 0.25 0.6 1.5 - 1.7

Total 9.87 24.55 66.3 - 77.5

Source: Automotive Mission Plan: 2016-26

19
Tax Structure/Regimes in India
 Current Excise Duty Structure
Vehicle Category Excise Duty
Small cars, Commercial Vehicles and 12.5%
Two/Three wheelers
Length >4m and engine capacity < 1500cc 24%
Length >4m and engine capacity > 1500cc 27%
SUVs/MUVs with Ground clearance >170mm 30%
Hybrid cars 12.5%
Specified components of Hybrid vehicles 6%
Electric cars, 2W & 3W and specified 6%
components
 Import Duty Structure
Basic Customs Duty
Vehicles Completely Built Up Completely Knocked
(CBU) Down (CKD)
Passenger vehicles 100%*/60 10%/30%+
Two wheelers 75%**/60% 10%/30%+
Three wheelers 60% 10%/30%+
Commercial vehicles 20% 10%
Components*** 7.5%-10%

* With CIF value >US $ 40,000 or engine capacity >3000 cc for petrol and >2500 cc
for diesel vehicles, or both.
** For motor cycles with engine capacity of 800 cc or more
+CKD containing engine or gearbox or transmission mechanism in pre-assembled
form but not mounted on a chassis or a body assembly
*** Some components progress down to nil on FTAs
 Other Domestic Taxes
Tax Category Rate
Infra Cess 1%, 2.5%, 4%
R & D Cess 0.125%
National Calamity Contingent Duty 1%
Central Sales Tax (CST) for out of state 2%
sale
State Value Added Tax (VAT) 12.5%
Octroi (in one state only) 4%
State Road/Registration Tax 4-20%
Infrastructure Cess:
• 1% on small petrol, LPG, CNG cars,
• 2.5% on small diesel cars of less than 1500 cc and
• 4% on other higher engine capacity vehicles and SUVs
was levied last year.
 Rates Proposed Under GST
Vehicle Category GST Rate
Passenger Vehicles (Petrol, Diesel, CNG)/Commercial 28%
Vehicles/Three-wheelers/Two-wheelers
Electric Vehicles 12%

Vehicles that would attract GST plus Cess. Cess as provided below:

Vehicle Category Cess

>4m passenger vehicles (All) 15%
<4m passenger vehicles (petrol) 1%
<4m passenger vehicles (diesel) 3%
>350cc two-wheelers 1%
10 – 13 seater public transport vehicles 15%
Thank You