Racing its wayto Growth

AUTOMOTIVEAUTOMOTIVE

Madhya Pradesh Trade and Investment Facilitation Corporation Limited (MPTRIFAC)AVN Towers,192, Zone -1, M.P Nagar, Bhopal 462011Tel.: (+91) 755 4270246. Fax: (+91) 755 2559973. E-mail: facilitation@mptrifac.org Website: www.investmp.com National Partner Knowledge Partner

• Growing Automotive Market - Indian Scenario

• Our Edge - Madhya Pradesh Scenario

• World Class Infrastructure

• Access to Skilled Talent

• Government’s proactiveness • Fiscal Incentives to Automotive Industry

• Non Fiscal Incentives to Automotive Industry

• Recent Success Stories

• Other Key Players

• Opportunities

• Investor’s Speak

• Key Contact

Content

Source: Society of Indian Automobile Manufacturers (SIAM)

Growing Automotive Market- Indian Scenario

Contributing to India’s Growth StoryMarket Size: The market size of the Indian automotive industry is estimated to reach USD 145 billion by FY16 from USD 57.7 billion in FY10

Market Segmentation: The Indian automotive market is divided into 4 major segments i.e. Two - Wheelers, Passenger Vehicles, Commercial Vehicles and Three Wheelers

Global Share: India’s share in the global passenger vehicle market is estimated to double from 4% in 2010-11 to 8% in 2020

Growth in Sales: Passenger vehicle sales in India is estimated to nearly triple from 3.2 million units from FY13 to 9 million units in FY20 at a CAGR of 16% making India the 3rd largest automobile industry by 2020

Growth in Export: Automobile export volumes have grown consistently from 1.2 million units in 2007-08 to 3 million units in 2013-14 (till Dec 2013)

0.22 0.44 0.55

0.06 0.074 0.079 0.14 0.27 0.3

0.82

1.53

1.96

0

0.5

1

1.5

2

2.5

2007-08 2010-11 2012-13

Passenger Vehicles Commercial Vehicles

Three Wheelers Two Wheelers

Growth in Export Volumes (No. of Units in millions)

77%

15%

4% 4%

Market Share by Volume

Two Wheelers

Passenger Vehicles

Commercial Vehicles

Three Wheelers

Our Edge - Madhya Pradesh Scenario

On a higher growth trajectory

Pithampur Auto Cluster, Indore

Locational Advantage: Madhya Pradesh, being the centre of India, enjoys strategic locational advantages like close proximity to major Indian automotive markets, including the automotive hub of NCR.

Presence across segments: Strong presence in Tyre manufacturing, OEMs, Auto components.

Presence of auto cluster: Self sufficient auto cluster consisting of heavy engineering and assembly activity exists in Pithampur. A high-end automated OEM unit is also proposed to promote the OEM industry in the state.

Strong presence in Tyre manufacturing: Major producer of radial tyres in India with the presence of major players such as JK Tyres and Bridgestone.

Skilled Workforce: With the presence of 224 engineering colleges and 79 Polytechnic colleges, the state provides a large number of talented and skilled workforce for the automobile industry. There are many premier Engineering institutes in the state, such as, IIT, IIITM, IIITDM, MANIT etc.

Presence of Major Automotive Players: Big players like Eicher, Force Motors, TAFE Tractors, MAN Trucks, John Deere, Hindustan Motors and Mahindra 2 Wheelers have their state-of-the-art manufacturing facility in Madhya Pradesh

Presence of Defence Vehicle Factory: Indian defence forces have two of their vehicle manufacturing facilities in Jabalpur, Madhya Pradesh

Pithampur, one of the largest growth centres in central India, is spread across a total area of nearly 2,000 hectares with an annual automotive production of

USD 500 million.

122 LMI units and more than 455 SSI units with a combined investment of USD 11.3 billion providing employment to approximately 25,000 people.

Pithampur Auto Cluster Ltd. (PACL) is an organization dedicated towards addressing the needs of the automotive industry in

Pithampur and developing Pithampur into elite clubs of global automotive hubs.

Audyogik Kendra Vikas Nigam (AKVN) Industrial Areas Growth Centres

Indore Automotive hub of the state

Presence of automotive cluster

Large presence of auto component manufacturers

Upcoming world class auto testing track

Presence of prominent automotive players

Besides Indore, there is a strong OEM manufacturers presence in districts like Gwalior, Bhopal and Dewas

World Class Infrastructure

Providing thrust to the automotive sector

BhindMorena

Gwalior

DatiaSheopur

Shivpuri

GunaNeemuch

Mandsaur

UjjainRatlam

Jhabua

Dhar

IndoreDewas

WestNimarBarwani East

Nimar

Harda

Hoshangabad

Betul

Chhindwara Seoni

Balaghat

MandlaDindori

Narsimhapur

JabalpurShajapur

SehoreRaisen

Tikamgarh

Rewa

ChhatarpurPanna

DamohSagarVidishaRajgarh

Bhopal

Satna

Sidhi

Katni

UmariaShahdol

AKVN, Gwalior

AKVN, Sagar

AKVN, Indore

AKVN, Bhopal

AKVN, Ujjain

AKVN, Rewa

AKVN, Jabalpur

Automotive Hub of Madhya Pradesh

World Class Infrastructure

Auto Testing Track, Indore • National Automotive Testing and R&D Infrastructure Project (NATRiP) - the largest and one of the most

significant initiatives in the automotive sector

• Aims to create core global competencies in automotive sector in India

• Indore hosts one of the seven test facilities under this initiative

• Key features of Auto Testing Track, Indore

• Longest testing track in the world

• 4,140 acres land allotted by the State Government

• Total cost of project: USD 72.3 million

• 4-lane high speed track of 13.6 km designed for a neutral speed of 250 kmph on curves

• Major facilities includes Vehicle Dynamic Lab (Centre of Excellence), R&D tracks, NVH (testing on tracks), Fatigue (testing on tracks) and Powertrain Lab

• Press tools/sheet metal toolings

• Die-casting dies

• Jigs/fixtures and guages

• Precision machining

Production

• Design of press tools, moulds, jigs & fixtures and gauges

• Computer aided design for solid and surface modelling

• Tool related innovations

• Standardisation of tooling components

Design & Development

• Providing consulting in effective use of press tools, moulds, jigs & fixtures and gauges

• Increasing customer awareness for introduction of modern tools

Consultancy & Marketing

• Full fledged training centre equipped with CNC & conventional machines

• Provides long term AICTE approved courses like Advance Diploma in Tool & Die making

• Also provides short-term courses

Skill Development

Indo German Tool Room, Indore

An initiative between Government of India and Federal Republic of Germany

• Incorporated between Government of India and Government of Federal Republic of Germany in 1995 to assist small, medium and large scale industries in manufacturing new and innovative technologies

• An ISO 9001:2008 certified organization

• Focus areas of operation

• Production

• Design & Development

• Skill development

• Consultancy & Marketing Facilities

• Internationally acclaimed centres of excellence in product development, tool engineering and allied fields

• State-of-the-art tool room, equipped with ultra modern machine tools

• One of the leading institute for technical training in Tool & Die Technology, CNC Programming and CAD/CAM

The strong presence of engineering and technical education provides a large base of skilled and technical manpower for the automotive industry in the state.

The combined intake capacity of Engineering institutes have increased from 12,801 in 2003-04 to 97,640 in 2013-14, showing a growth of 96% in the last 6 years.

The Department of Technical Education & Training and Directorate of Skill Development exercise administrative controls on all the state run autonomous and government engineering/polytechnic colleges,and also looks after the policy and administrative matters on vocational training.

Colleges and their training capacities

Availability of Skilled Manpower

Enabling investments through quality workforce

Num

ber of Institutions

Bachelor of Engineering224 9764012801

199801645

52902600

180016035

83401150

6768018000

FY14

FY03

49

21126

7745

4479

11720

133415

Management Colleges

Computer Application

Polytechnics

Pharmacy

Industrial Training Institutes

Source: Department of Technical Education & Skill Development

Trai

ning

Cap

acity

Source: Department of Technical Education & Skill Development

Premier Institutes in the state

• One of the premier management institutes in India

• Spread over a 193 acre campus a top a scenic hillock in Indore

• Provides academic and executive management courses and produces top management executives for the industry

• Started functioning from 2009-10 in a temporary campus at Institute of Engineering and Technology of Devi Ahilyabai University under mentorship of IIT Bombay

• One of the premier technical institutes in India

• Spread over a 510 acre campus at Simrol, 25 Km from the city of Indore and offers courses in engineering

• National level college producing skilled manpower of the highest quality by offeringadiversifiedsetofcourses

• Spread over 265 acres campus and offers UG and PG courses and Research programmes in technology

• An Indian Institute of Information Technology and a deemed university in Jabalpur that focuses on Information Technology enabled design and manufacturing.

• It was declared an Institute of National Importance by Government of India under IT Act

• Premier national institution devoted to Academic, Technology Support & Research (ATR) activities for the growth of polymer & allied industries in the country

• State-of-the-art infrastructural facilities in the areas of design, CAD/CAM/CAE, tooling & mould manufacturing, plastics processing, testing and quality control to cater to the needs of polymer & allied industries in the country

• One of India’s Institute of Information Technology

• Established in 1997 and named after Atal Bihari Vajpayee

• Recognised as an Institute of National Importance.

• The university campus is spread over 160 acres (0.65 km2) in the foothills of the Gwalior Fort

• Boasts of a Tool Room and Technical Service Centre providing technical services like design and development, materials testing, calibration, and technical & quality advise required by the local automotive Industry

• PACL also envisages to set up a state-of-the-art Industrial Training Institute (ITI) by tying up with world-class technical training institution

• NID is recognised by the Department of Scientific and Industrial Research under theMinistry of Science and Technology, Government of India as a scientific and industrial designresearch organisation

• The institute functions as an autonomous body under the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India

IIM, Indore

IIT Indore

MANIT, Bhopal

Central Institute of Plastics Engineering & Technology, Bhopal

IIITDM, Jabalpur

IIITM, Gwalior

Pithampur Auto Cluster Ltd., Indore

NID, Bhopal

Availability of Skilled Manpower

Government’s Proactiveness

Fiscal incentives to automotive industry

Incentives and concessions in Industrial Policy of Madhya Pradesh provide a strong policy framework for doing business in the state.

Customized Incentives

• Customised incentive package for automotive industry with fixedcapital investmentofmorethan INR 500 crores on case to case basis

• The incentive package shall also be extended to vendor units, similar to mother units

Exemption of Electricity Duty

• Electricity duty exemption of 5, 7 and 10% for projects with investment of upto 100 crores, 100 – 500 crores and more than 500 crores respectively on captive power plants

• Electricity duty is also exempted for customers taking HT connection from the grid (5, 7 and 10 years for 33KV, 133 KV and 220 KV respectively)

• The incentive package shall also be extended to vendor units, similar to mother units

Entry Tax Exemption

• Entry Tax exemption provided for a period of upto 10 years (including additional 1 year for NRI/FDI investment)

VAT + CST• Value Added Tax (VAT) refund

for up to 14 years – up to 100% of capital (including 2 years additional for investments with more than 1000 employees[of which 90% are state domicile], and 2 years additional for NRI/FDI investments

Government’s Proactiveness

Non-fiscal incentives to automotive industry

Presence for strong infrastructure framework and Single Window Mechanism for Investment Facilitation creates a proactive business environment in the state.

Infrastructure Framework

• Seven Audyogik Kendra Vikas Nigam (AKVN) established to promote industrialization by providing industrial infrastructure

• 19 Industrial Growth centres under 7 AKVN’s Centres

• Dedicated auto cluster at Pithampur under AKVN, Indore

• 185 Industrial Areas under District Trade & Industries Centres (DTIC)

Regulatory Framework

• MPTRIFAC – Single Window Secretariat for Investment Facilitation to attract investments and promote industrial growth

• It facilitates in –

• providing guidance and assistance to entrepreneurs

• designing growth strategies

• investment promotion strategies

• single point of contact for investors

• aid and feedback in policy formulation

Recent Success Stories

John Deere• Deere & Company, based in Moline, Illinois is one of the largest

manufacturers of agricultural machinery in the world

• Ranked 97th in the Fortune 500 America’s ranking and 190th in the Fortune 500 Global ranking in 2012

• Besides, agricultural machinery, it manufactures diesel engines and construction equipment

• Signed a MoU with GoMP with an investment commitment of INR 450 crores to set up a new manufacturing unit in Dewas, MP

• Commenced production in its new manufacturing plant in 2013

• New factory to manufacture 49,000 tractors for Indian and other Asian markets, and create around 1000 jobs

Volvo Eicher• Eicher Motors entered into a 50:50 Joint Venture with Volvo

Group in July 2008 to form VE Commercial Vehicles Ltd.

• After 5 years of partnership between the two, VE Commercial Vehicles started commercial production in 2013 in its new and most technologically advanced engine manufacturing plant in Pithampur, Indore

• VE has an investment of Rs. 2115 Crore in the state spread over 6 facilities, and is in the process of establishing the 7th facility

• VE provides employment to about 11700 people in the state

• The engine facility will be a global hub for meeting the medium-duty automotive engine requirements of Volvo Group globally

• VE has established the only plant in Asia producing Euro-6 compliant engines in Madhya Pradesh

Other Key Players

Mahindra Two Wheelers Ltd.

- Has a state-of-the-art manufacturing facility at Pithampur, Indore

- Produces a wide range of scooters in the Pithampur facility

- Investment: 192 crores

- Employment: 1500

Force Motors- Set up a plant in Pithampur in 1987 and expanded it in 1997.

- Involved in designing, manufacturing and marketing a wide range of vehicles

- Investment: INR 615 crores

- Employment: 3000

MAN Trucks India Pvt Ltd

- Has a state-of-the-art production facility at Pithampur with a production capacity of 24,000 trucks per year

- Range of products produced includes Mining & Construction Tippers, Haulage Tractors and Multi Axle Trucks

- Invetsment: INR 400 crores

- Employment: 500

JK Tyres

- It commenced production of tyres in Morena district in 1991

- It is a large facility with an installed capacity of 0.6 million units

- Investment: INR 643 Crores

- Employment: 1610

Hindustan Motors

- It commenced production of petrol engines and transmissions in collaboration with Isuzu Motor Company at Pithampur in 1987

- At present it produces Road Trusted Vehicles (RTV) in collaboration with Australian Oka Motor Company, along with passenger cars and Multi Utility Vehicles

- Investment: INR 184 Crores

- Employment: 879

Bridgestone Tyres

- It commenced production of steel belted radial tyres in Pithampur in 1998

- It is a large facility with an installed capacity of 3 million units

- Investment: INR 366 Crores

- Employment: 484

Rising Investment Prospects

Opportunities

• Assembling and manufacture of automobiles

• Manufacture of auto components for all types of vehicles

• CNG kits for automobiles, industrial automotive bearings

• Auto & ancillaries and Vendor park

• Machine Tools Park

• Research and development facilities

• Industry-specificeducationalinstitutesandtrainingcentres

• Automobile design centre

• Autofinancing

• Vehicle retailing

• Low cost vehicles

• Diversificationintwowheeler segment

Auto & auto ancilliaryInfrastructure

Centres of Excellence

Other Opportunities

“The state of Madhya Pradesh is not only a strategic

location, but also a friendly place to do business. This is

an ideal location for our second tractor manufacturing

facility in India because of its proximity to our farm

equipment customers as well as the cooperation of

the government leadership.”

David C. Everitt, PresidentDeere’s Worldwide Agriculture & Turf Division

Investor’s Speak

Industries Commissioner

Madhya Pradesh

(Off.) 0755-2677966, 2677988

(Fax) 0755 – 2677943

Email: indsbpl@mp.nic.in

Managing Director

MP Trade and Investment Facilitation Corporation Limited

(Government of Madhya Pradesh Undertaking)

(Off.) 0755-4270246, 2559978-79

(Fax) 0755-2559973, 2559971

Email: info@investmp.com, trifac@mptrifac.org

Key Contact