automotive industry analysis

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  • Indian Auto IndustryFacts Second Largest two wheeler manufacturer in the world Largest tractor and three wheeler manufacturers in the world Fourth largest Commercial vehicle market in the world Eleventh largest passenger car market in the worldTrends Growth Potential Can become Worlds third largest Growth of exports of 33.57 % FY 2011-12. automobile market in 2030. Output of commercial vehicles has grown 2.8 times compared to the 2.2 times By 2016, Automotive sector can DOUBLE its increase in passenger cars percentage contribution to GDP from current For every passenger car turned out, there levels of 5% (US$50 billion) to 10% ($180 billion). are almost 7 two-wheelers produced
  • The Growth Journey Pre 1983 1983-1993 1993-2012Closed market Japanisation - GOI- Delicensing of sector in Suzuki joint venture to 1993 form Maruti Udyog Global major OEMs Growth of market start assembly in Indialimited by supply Joint ventures with (Toyota, GM, Ford, companies in Honda, Hyundai) Outdated models commercial vehicles and Imports allowed fromPlayers components Era of April 2001; alignment of Hindustan Motors globalisation and Players duty on components Premier and parts to ASEAN evolution of India Maruti Udyog levels as a global Telco Hindustan Motors manufacturing hub Implementation of Ashok Leyland Premier VAT Mahindra & TelcoMahindra Ashok Leyland Mahindra & Mahindra
  • Automotive Companies in IndiaMajor Indian Companies Major Multi-national companies
  • Booming Indian Economy
  • Key Growth Drivers
  • Auto Industry Numbers Overall Market Over all Production increased to 14.82 million vehicles in 2010-11 from 11.17 million vehicles in 2009-10 Passenger vehicles increased marginally from 1.95 million from 1.83 million Two-wheelers increased from 9.11 million to 9.51 million Domestic Market Vehicles sold including PV,CV 2W and 3W in 2008-09 was 9.72 million as compared to 9.65 million in 2007-08. Exports Sales was 1.53 million units in 2008-09 As per the Automotive Mission Plan (AMP) 2006-2016 total turnover of the automotive industry in India would be in the order of US$ 122 billion-159 billion in 2016
  • Category wise numbers Dominated by Motorcycles 80% , Scooters 14% Mopeds 6% Two Wheeler Domestic - 7.25mn units . Hero mocorp.35% & Bajaj 32% share CAGR 9.5% Exports 819000 units (07-08) . Bajaj Auto 59% TVS 17% share CAGR 41% Dominated by Cars 78% , MUV/SUV 22%Passenger Vehicles Domestic 1.5mn units Maruti-46% Tata-15% Hyundai 14% CAGR -14.8% Exports - 217000 units (07-08) Maruti 66% Hyundai 24% CAGR 26% Dominated by M&HCV Goods 48% Passenger 38% , Rest by LCV -14%Commercial Vehicles Domestic 487 thousand units , Tata-62% Ashok Leyland -15% CAGR- 22% Exports 59 thousand units, Tata 67% Ashok Leyland 12% CAGR -30.6% Dominated by Passenger Carriers with 64% share , Goods Carrier -36% Three Wheeler Domestic 365 thousand units , Bajaj -42% Piaggio-41% CAGR- 10.5% Export 141 thousand units , Bajaj -97% CAGR -44.5%
  • Production data
  • The Indian Auto Components Market Original Equipment Manufacturers (OEMs) Replacement Parts Production and Distribution : e.g. Air filters, oil filers and replacement lights Rubber Fabrication : tyres, hoses, belts etc. Estimated component market size is US$ 8.7 bn The exports of auto components industry has grown at a rate of nearly 30 per cent CAGR over the last four years.
  • Second Hand Automobile Market Used car market demand : 1.4 million cars annually Market Structure : Organized : 10% Unorganized : 90% Vendor Based 30% Direct Dealings 70% Certified used car dealers in India are Maruti TrueValue, Honda Auto Terrace, Ford Assured, Toyota U Trust, Hyundai Advantage, Mahindra and Mahindras First Choice, General Motors - Chevrolet-OK Unorganized market lacks services like -warranties, OEM equipments, insurance and taxes Second hand market expected to grow at 12-15 per cent in the next five years to touch a robust 2.5 million units and a turnover of Rs 50 thousand crore Estimations are that 50 percent of the used cars sales will be brought under organized car market by 2013
  • Economic Factors 1 year 1-5 year 5-10 years Investment in Growing workingIncreased access to Infrastructure spending population (441 millioncredit and lower interest can boost the people in 2015/16)loans commercial vehicles segment. Upward migration of household income levels (600 million people have annual income of more than $10,200) Middle class expanding by 30 - 40 million every year Can propel growth
  • Economic Factors 1 year 1-5 year 5-10 years Non- availability of Non-availability of Key supplier base withImpact of delayed raw material (like Steel) demanded capabilitymonsoon (85% of at cheap price. (Quality and Quantity).normal, subsequentimpact on paddy Poor execution ofcultivation) on rural Possible increase of Infrastructuredemand. interest rates (by 2-2.5% investments. BPLR) because of (Construction of planned government Highways of 16km per borrowing. day against the target of 32 km per day) Increase in crude oil price($ 35/barrel to $ 70/ barrel in 14 months). Can Stunt Growth
  • Social Factors A perfect marriage of rise in disposable income Rapid Urbanization of semi urban regions and demographic dividend (From US$ 556 per Rising aspirational levels. Improvement in annum US$ 1150 by 2015) living standards of middle class Increased spending on Fashion & lifestyle comforts. Seeking Value for money- consumer behavior Increasing customer emphasis on aesthetics and comfort.
  • Technological Factors
  • India as a Testing Hub : NATRIP
  • Key Financial Ratios of maruti suzuki
  • Key Financial Ratios of Tata Motors
  • FUTURE GROWTH According to the Society of Indian Automobile Manufacturers, Annual vehicle sales are projected to increase to 5 million by 2015 more than 9 million by 2020. By 2050, India is expected to top the world in car volumes with approximately 611 million vehicles on the nations roads.
  • India : A Developing Hub for Compact Cars Compact cars account for 70% of the total car market. Compact car sales increasing at about 20% each year Excise duty on small cars increased from 22% to 24% in the present budget. Maruti Suzuki : Tata Motors : New car plant to make 2,50,000 cars per Tata Nano became a big success gaining annum (total 10,00,000 cars/annum) worldwide popularity with Tata planning to total investment worth 6,000 crores. increase capacity Hyundai : Already a big player in the small car segment Toyota : Increase capacity to 600,000 cars per Toyota Kirloskar motors planning to launch annum over next 1 year. its own small car in India by 2013 plans to hire 877 more workers to add a third shift at its Montgomery, Ala. plant General Motors : Nissan : New Capacity to manufacture small cars at Micra, UK India its Talegaon, Maharashtra plant with 80%

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