Download - Indian Automobile Sector
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 WHEELERPASSENGER
VEHICLECOMMERCIAL
VEHICLE
MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS
I.C.V. M.C.V. H.C.V.
Trends in the automobile sector…Production of automobiles
4.8 5.36.3
7.28.5
0
2
4
6
8
10
2000-01 2001-02 2002-03 2003-04 2004-05
mil
lio
n n
um
ber
s
Domestic Sales of automobiles
4.6 5.25.9
6.87.9
0
2
4
6
8
10
2000-01 2001-02 2002-03 2003-04 2004-05
mil
lio
n n
um
ber
s
Exports of automobiles
0.17 0.18
0.31
0.48
0.63
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2000-01 2001-02 2002-03 2003-04 2004-05
mil
lio
n n
um
ber
s
CAGR 15.4% CAGR 14.2%
CAGR 39%•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
Segment wise market share…
Growth Rates of different segments
23.5
11.314.3 14 14.2
0
5
10
15
20
25
CommercialVehicles
PassengerVehicles
Twowheelers
Threewheelers
totalAutomobiles
Segments
4 ye
ar C
AG
R
Two Wheeler
Three Wheeler
Passenger vehicles
CVs
•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
78.63%
13.44%
4.03%3.9%
The Key Players…
Commercial vehicles
TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors, Eicher Motors
Passenger vehicle
TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors
Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors
Three Wheeler Bajaj Auto, Piaggio India
Two wheeler Passenger vehicle
• Favorable Demographics • Improving income curve • Reducing interest rates
•Cost Pressure •High Expectations •Inadequate Infrastructure Development
KEY CHALLENGESKEY ENABLERS
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
Domestic Market Share for 2009-10
Passenger Vehicles
15.86
Commercial Vehicles
4.32
Three Wheelers 3.58
Two Wheelers 76.23
Automobile Production Trends (Number of
Vehicles)
Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger Vehicles
989,560 1,209,876 1,309,300 1,545,223 1,777,583 1,838,593 2,351,240
Commercial Vehicles
275,040 353,703 391,083 519,982 549,006 416,870 566,608
Three Wheelers
356,223 374,445 434,423 556,126 500,660 497,020 619,093
Two Wheelers
5,622,741 6,529,829 7,608,697 8,466,666 8,026,681 8,419,79210,512,88
9
Grand Total
7,243,564 8,467,853 9,743,50311,087,997
10,853,930
11,172,275
14,049,830
Automobile Domestic Sales Trends (Number of
Vehicles)
Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger Vehicles
902,096 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776
Commercial Vehicles
260,114 318,430 351,041 467,765 490,494 384,194 531,395
Three Wheelers
284,078 307,862 359,920 403,910 364,781 349,727 440,368
Two Wheelers
5,364,249 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231
Grand Total
6,810,537 7,897,629 8,906,42810,123,988
9,654,435 9,724,24312,292,770
Automobile Exports Trends (Number of
Vehicles)
Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger Vehicles
129,291 166,402 175,572 198,452 218,401 335,729 446,146
Commercial Vehicles
17,432 29,940 40,600 49,537 58,994 42,625 45,007
Three Wheelers
68,144 66,795 76,881 143,896 141,225 148,066 173,282
Two Wheelers
265,052 366,407 513,169 619,644 819,713 1,004,174 1,140,184
Grand Total
479,919 629,544 806,222 1,011,529 1,238,333 1,530,594 1,804,619