Presentation on Landscape of Automobile Industry in India

Consulting Club

Evolution of Automobile Industry
Initial Years Manufacturing was licensed •High Customs duty on import •Steep excise duties & •sales tax •2 Major players: Premier Automobiles Ltd & Hindustan Motors 1980s •Entry of MUL, better product, with government support •Seller’s Market •Long Waiting Periods Early to mid 90s •Seller’s market and long waiting periods •Delicensing in 1993 •Removal of capacity restrictions •Decrease in customs & excise •Auto finance boom- more players (foreign banks & non banking companies, better schemes. Mid 90s – Early 2000s •Buyers market •Increase in Indigenization •Easy Auto finance •Manufactures diversifying into related activities: finance lease, fleet management, insurance and used car market

AUTOMOBILE

2 WHEELER

3 WHEELER

PASSENGER VEHICLE

COMMERCIAL VEHICLE

I.C.V.

M.C.V.

H.C.V.

MOTORCYCLE

SCOOTERS

SCOOTERETTES

MOPEDS

Trends in the automobile sector…
Production of automobiles
CAGR 15.4%
million numbers . . .
million numbers

Domestic Sales of automobiles

CAGR 14.2%
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.

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.

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-

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Exports of automobiles

million numbers

•Domestic Sales have been growing strongly • Exports have nearly tripled in the last 5 years •Largest three wheeler market in the world •4th largest passenger vehicle in Asia •4th largest tractor in the market •5th largest commercial vehicle market in the world

. . . . . . .

CAGR 39%
. . . .

.

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-

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Segment wise market share…
Three Wheeler
3 .9 % 4 .03 %

CVs
1 3 .44 %

Growth Rates of different segments
.

Passenger vehicles

year CAGR

. .

.

Two Wheeler
78 .63 %

Commercial Vehicles

Passenger Vehicles

Two wheelers

Three wheelers

total Automobiles

Segments

•The industry has not experienced much change in its structure over the last 6 years •Two- wheelers form the major share of domestic sales •Passenger vehicles lead the exports market(57.4%) •2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles •The growth in the two wheeler market is driven by the motorcycle market and is expected to grow at 14-15 % YOY

The Key Players…

Two wheeler
Commercial vehicles Passenger vehicle Two Wheeler Three Wheeler

Passenger vehicle

TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors, Eicher Motors TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors Bajaj Auto, Piaggio India

KEY ENABLERS • Favorable Demographics • Improving income curve • Reducing interest rates

KEY CHALLENGES •Cost Pressure •High Expectations •Inadequate Infrastructure Development

Key Focus Areas • Product development( includes collaboration, new products developed) • Vendor base (quality of vendors, skill levels , size etc.) • Manufacturing capability( quality levels, productivity & skill levels, technology ) • Service levels • Supply chain • Labor law • Leverage IT Key Features of Future Auto Policy • Foreign Direct Investment • Import tariff • Incentives for Research and Development (R&D) • Environmental Aspects • Other measures

THANK YOU

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