Download - India Automotive Market 2020
Booz & Company
Delhi, 2011
India Automotive Market 2020
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
The key 5s1. Going forward, India is a key pillar of global automotive market - policy, actions and strategies of players in India will have a fundamental impact on the global auto landscape 2. By 2015, India will exceed every major European market inc. Germany, France and UK in automotive sales - making India the 4th largest automotive market by volume in the world 3. Over the next 20 years, India will be part of global automotive triumvirate - the global BIG 3 4. In fact, we expect the India automotive sales to exceed the US market by mid 2030s 5. The global automotive game will be pretty much decided by twin forces for China and India
Booz & Company DATE
Summary.ppt
Prepared for client name
1
India is booming and projected to maintain the trajectoryRegional: Percentage of World GDP2004India 2% Other 20% Japan 12% China 4%
Real GDP Growth2005-2020
4.0
China Growth Rate (Base=2005)3.5
India
US 28%
EU 34%
3.0
2050 EstimateOther 10%India 17%
2.5
2.0
Thailand
US 26%
China 28%
1.5
United Kingdom Germany
EU 15% Japan 4%
1.020 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20
Source:
Global Insights Database, Business Week, Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
2
Emerging markets are transforming the economic landscape could the future repeat the past ?Percent Contribution of India & China, US, Western Europe and UK to World EconomyPercentage Contribution to World Economy 80% 80% (15002050 AD)
60% 60%India & China India & China
40% 40%Western Europe (excluding UK)
US
20% 20%
UK
Western Europe (excluding UK) UK
0% 1500 1800
1850 1850
1900 1900 Year
1950 1950
2000 2000
2050
Note: UK, US and W. European countries do not include GDP from former British colonies Source: The World Economy-Historical Statistics; Goldman Sachs BRIC Report; Booz & Company research and analysisBooz & Company DATE Summary.ppt Prepared for client name
3
An assessment of parallels with markets such as China strengthen our belief in tomorrowGDP Growth$3,000 $3,000
GDP Per Capita Growth$90,000 $80,000
FDI Trends India and China
$2,500
$2,500 $70,000
$2,000
$2,000
$60,000
In $ Bn
In $ Mn1 3 5 7 9 11 13 15 17 19 21 23 25 27
$1,500
In $
$50,000 $40,000 $30,000 $20,000
$1,500
$1,000
$1,000
$500
$500 $10,000
$0 1 3 5 7 9 11 13 15 17 19 21 22 25 27
$0
$0 1 3 5 7 9 11 13 15 17 19 21 23 25 27
Years Since Liberalization
Years Since Liberalization China 1979 India 1991
Years Since Liberalization
Source:
Economic Intelligence Unit, Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
4
The twin pillars of the global economy, India & China, will define the economic landscape for generations to comeGDP Trends2005 Constant Prices ($Trillion) $ Trillion 25 China Growth relative to 2005 11 10 9 20 15 8 7 6 10 India Japan 5 Germany Russia 0 2000Source:
Real GDP Growth(Base = 2005)
China India
5 4 3 2 1 0 2000 2010 2020 2030 Pakistan Russia Germany Japan 2040
Pakistan 2010 2020 2030 2040
Global Insight Database, Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
5
Wealth is being generated via a positive structural shift in the economyShift in GDP composition by sector (1950 to 2020E)100% 90% 30% 80% 35% 39% 48% 14% 49% 50%
% contribution to GDP
70% 60% 50% 40% 30% 20% 29% 10% 0% 1950 1990 2000 2007 2012 22% 15% 56%
36% 38% 37% 40% 42%
11%
8% 2020
AgricultureSource: Global Insights Database, Economic Intelligence Unit, Booz & Company analysisSummary.ppt Prepared for client name
Industry
Services
Booz & Company DATE
6
Industry is likely to benefit from the change in consumption pattern of an increasingly prosperous societyPrivate Consumer Spending1994-2015Index 100%15 14
Private Consumption GrowthBase - 1994
Transport / Comm.
29% 40%
Food & Beverages
13 12 11
% consumption of total
55%8% 7% 16% 5% 20% 13% 4%
Recreation
Clothing & Footwear Housing Health
10 9 8 7 6
Total Consumption
6% 15% 3% 11%
23%
Transport / Comm.
5 4
Food & Beverages
5% 19%
Recreation / Education Miscellaneous
3 2 1 0 1990 1995 2000 2005 2010 2015
3% 6% 1994Note: Source:
3% 9% 2005
2015
Miscellaneous includes personal care goods and other services Central Statistics Organization (GOI), Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
7
This rise in per capita GDP will lead to higher vehicle ownershipCars / 1000 People Versus GDP / CapitaCars / 1000 People 600 550 500 450 400 350 300 250 200 150 100 50 0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 GDP / CapitaSource: Economist Intelligence Unit; Booz & Company analysisSummary.ppt Prepared for client name Booz & Company DATE
1990 - 2013 Germany
USASaturated penetration levels in developed economies
Russia
India China
Rising per capita income leading to increased penetration; trend expected to continue given low current levels
8
The result: India is an anchor of future growth in the auto industryGDP Growth by Country2010 2020
> 5% projected GDP growth 3.5 % - 5% projected GDP growth < 3.5% projected GDP growthSource: Global Insight Database, Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
9
Automotive sales are destined to resonate with global economic shift - India is the place to be for the global OEMsAutomotive Sales by Geography(Passenger Vehicles, Commercial Vehicles and Two Wheelers)
1980 Market size: 60 M units Asia & Japan: 7% Europe: 42% NA: 41%
2009Market size: 102 M units Asia & Japan: 45% Europe: 32% NA: 18%
2020
Market size: 205 M units Asia & Japan: 65% Europe: 20% NA: 15%
Shift in center of gravity
1) Source:
Includes passenger vehicles, commercial vehicles and two-wheelers Global Insight Database, March 2009; Wards Auto; Booz & Company analysisSummary.ppt Prepared for client name
Booz & Company DATE
10
Indias car market has the potential to grow up to 6+ millions units annually by 2020Passenger vehicle sales in India (2001 2020)Million Units 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Italy Car Sales 2008 - 1.9 M Units Spain Car Sales 2008 - 1.6 M Units Germany Car Sales 2008 - 3.1 M Units
Aggressive
Base Case Consensus Conservative
Note: Note:
Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc Aggressive scenario 14% CAGR upto 2015, after which market stabilizes (based on similar growth seen in the Chinese markets under similar macroeconomic conditions) Base Scenario 8% CAGR over 2009-2020; based on historical growth trends of the Indian car market Conservative Scenario 6% CAGR; car sales negatively impacted by economic downturn or unfavorable government policies (high interest rates, financing not easily accessible, etc) Source: Global Insight database, Booz & Company AnalysisBooz & Company DATE Summary.ppt Prepared for client name
11
India will soon be bigger than most other marketsWestern Europe (1998) and India (1998)4,500 4,000 3,500 Sales Volume (in thousands of units) 3,000 2,500 2,000 1,500 1,000 500 0DI A D S G DO M IT AL Y SP AI N G AL RK LA N DE N CE EL AN AN C AN BE LG IU RL AN RW A TR G ER M SW E AU S ZE R PO RT G R DE N FI NL A FR IN M A EE IN U ND IA E M D Y D Y
3920
2,534 2,488 2,289
1,446
640
538
530
369
320
316
280
196
192
174
147
141
K
NE TH E
Source:
Global Insight Database, Booz & Company analysisSummary.ppt Prepared for client name
UN
IT ED
SW IT
NO
IR
Booz & Company DATE
12
India will soon be bigger than most other marketsWestern Europe (2009) and India (2009)4,500 4,035 4,000 3,500 Sales Volume (in thousands of units) 3,000 2,500 2,000 1,500 1,071 1,000 581 500 0DI A D S G DO M IT AL Y SP AI N G AL RK LA N DE N CE ND IA E M Y D Y BE LG IU RL AN G ER M SW E AU S ZE R G R PO RT DE N FI NL A FR IN EL AN IR AN C AN RW A TR M A EE IN U D
2,678 2,3602,262 2,216
451
349
294
247
236
203
131
126
102
64
K
NE TH E
Source:
Global Insight Database, Booz & Company analysisSummary.ppt Prepared for client name
UN
IT ED
SW IT
NO
Booz & Company DATE
13
Much earlier than 2020, India will exceed the major EU marketsWestern Europe (2015) and India (2015)5,500 5,070
4,500 Sales Volume (in thousands of units) 3,693 3,500 2,598 2,566 2,500 2,434 1,624 1,500 617 500 608 342 341 323 299 245 203 171Y
160ND
151D
DI A
G DO M
S
IA
E
D
IT AL Y
SP AI N
G AL
M
CE
LA N
BE LG IU
RL AN
G ER M
SW E
AU S
ZE R
PO RT
G R
DE N
NO
FI NL A
FR
IN
K
NE TH E
Note: Source:
Forecasts for 2015 Global Insight Database, Booz & Company analysisSummary.ppt Prepared for client name
UN
IT E
SW IT
D
IR
EL AN
AN C
RW A
TR
EE
M A
IN
U
-500
DE N
AN
RK
Y
D
Booz & Company DATE
14
India and China dwarf existing automotive markets such as Germany or UKAutomotive sales volume by country2030
Number of unit sales> 10 M 3 M - 10 M 1M-3M $75K
$25K - $35K
Global Insight 2009, Booz & Company AnalysisSummary.ppt Prepared for client name
Booz & Company DATE
17
The market of tomorrow will reflect increased prosperity of the nationIndian household income & car sales distribution2030% of households40%
% of total car sales60%
Household income distribution Distribution of car sales by segment30% 40% 33% 20% 20% 10% 11% 5% 2% 0% 0% 30% 50%
20% 12% 5% 0% 12% 10%
Car Segments Income distributionSource:
A < $1K $1K - $3K
B $3K - $5K
C $5K - $10K
D $10K - $15K
E&F $15K - $25K
MPV
SUV
PUP $35K - $50K
Other $50K - $75K > $75K
$25K - $35K
Global Insight 2009, Booz & Company AnalysisSummary.ppt Prepared for client name
Booz & Company DATE
18
Interestingly, Indias market is expected to overtake the US auto sales by ~2035Light Vehicle Sales Projections - US, China, IndiaThousand Units 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2004 Chinese automotive sales exceeds U.S Indias automotive sales is expected to exceed U.S CHINA
2004-2040, Thousand Units
INDIA UNITED STATES
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc Source: Global Insight Database, Booz & Company analysesBooz & Company DATE Summary.ppt Prepared for client name
19
Contacts
Vikas Sehgal Partner, Booz & Company 225 West Wacker Drive, Suite 2270 Chicago, IL 60606-1228 Tel (312) 578 4828 [email protected]
Booz & Company DATE
Summary.ppt
Prepared for client name
20