india - small car hub [not complete]



ContentsO bjectives of the PresentationO verview of the Automobile and Automotive Component IndustryMajor PlayersAutomotive Clusters

Automobile Production TrendsSmall car SegmentIndustry Analysis - Porter's DiamondTrends in domestic salesExport TrendsGrowth DriversRole of GovernmentFuture of Indian Small Car IndustryConclusion

References



Obj ectives of the Presentation

Aditee - Please complete this part!



Profile: Indian Automotive IndustryThe industry has grown at a CAGR of 8.9% p.a over the last 5 years , with sales of 14 million vehicles in

2008-09With the potential to emerge as one of the largest in the world. Presently, India is

2nd largest two wheeler market in the world4 th largest commercial vehicle market in the world7 th largest passenger car in the world and is expected to be the 7 th largest market by 2016

The industry has emerged as a key contri butor to the Indian economy. Contri butes 7% of the country sGDP.

Source : SIAM

CAGR8.9% P.a.



Players: Indian auto industry

GlobalO EM

IndianO EM

Indian

Suppliers

Global

SuppliersEngineering

&Development

Companies

IndianAuto

Industry

GMToyotaFordHyundaiMaruti SuzukiHondaSkodaVolvoMercedes

Tata MotorsMahindra & MahindraBa ja j AutoTVS MotorsHero Honda

Ba ja j TempoAshok Leyland

Bharat ForgeSundram FastenersRane Group

Shriram PistonsRICO AutoSono Koyo Steering

DelphiVisteonBoschDensoValeoThyssen Krupp

The Indian auto industry is highly competitivewith a num ber of glo bal and Indian auto companies present



Delhi-Gurgaon-Noida-Ghazia bad

Kolkata

Mum bai-Pune-NasikAuranga bad

Jamshedpur

Chennai Bangalore Hosur

Ra jkot-Halol

Hydera bad

Ludhiana Haridwar

Pitampur

Automotive clusters in India

Ashok Leyland EnfieldFord GreavesHindustan Motors HyundaiMahindra & MahindraToyota Kirloskar TVS Motors Volvo

Ashok Leyland EicherForce Motors Hero HondaHindustan Motors HondaHonda SIEL ICMLKinetic LMLMajestic Maruti

SuzukiPiaggio YamahaSwaraj Mazda Tata Motors

N orth / Central

Ashok Leyland Atul AutoBajaj Auto DaimlerChrysler

FIAT Force MotorsGM GreavesKinetic M & MPremier Skoda

Tata Motors

West

Hindustan MotorsTata Motors

East

South

Source: SIAM, IMaCS analysis

Major automotive clusters -Mum bai-Pune-Nasik-Auranga bad(West), Chennai -Bangalore-Hosur

(South) and Delhi-Gurgaon-Farida bad(North)



Automo b ile Production Trends

0

2000

4000

60008000

10000

12000

14000

16000

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

CVs 354 391 520 549 417 5663 Wheelers 374 434 556 501 501 619Passenger vehicles 1210 1301 1545 1778 1839 2351

2 Wheelers 6530 7609 8467 8027 8419 10512

No. of vehicles (In thousands)



Small Car Sector In India Add more points

One of the largest car segments in India.Can be defined as a car that has length between the range of 3.8 to 4 meters.Comprises of nearly two-third of the total passenger vehicles sales in the

country.Ma jor players: Maruti, Hyundai, Tata, General Motors, Honda etc.



Top 6 small cars in 2009

0

50

100

150

200

250 212

134 111 110 106 91

Sales

No. of vehicles (In thousands)

Maruti emerges asthe largest player insmall car segment with48% market share.

3 out of top 6 bestselling models in 2009are from Maruti.



X Passenger Vehicle X

Required Small cars Market Share

HyundaiMotors

77%

MarutiSuzuki21%

TataMotors2%

PV Exports: market share

MarutiSuzuki48%

Hyundai

Motors20%

TataMotors

15%

GeneralMotors

6%

Honda4%

Others7%

PV Market Share



Industry Analysis - Porter s Diamond

FirmStrategy, Structure, and

Rivalry

FirmStrategy, Structure, and

Rivalry

Demand ConditionsDemand Conditions

Related and SupportingIndustries

Related and SupportingIndustries

Factor ConditionsFactor Conditions

Low cost production of small family cars

High rivalryMaking India an export

hu b for small cars

Growing middle andupper-middle class

Rise in income levelsHuge population

Skilled and cheap la bourAvailab ility of manpowerTechnical expertiseAvailab ilty of raw

materials

Automo b ile clustersGlobally competitive auto

componentsmanufacturers

Presence of b ig steelmanufacturers



Trends : Indian Automo b ile Industry

Source : ACMA



Trends In Domestic Sales

Domestic sales of passengervehicles have grown at a CAGR of 12.2 per cent from 1.2 million unitsin 2004 05 to 1.8 million units in2008 09.Passenger cars, accounting for 78.6per cent of the total PVsproduced, grew at a CAGR of 15 percent in 2008 09.This segment is expected to grow at12 per cent annually over the nextfive years to touch 3.75 million unitsby 2014.



Exports Trends

In 2008 09, exports from thissegment accounted for 17.8 percent of the total PVssold, compared to 9.2 per cent in2003.Small cars constituted 90 percent of the total passengervehicle exports from India in2008 09.Ma jor export destinationsincludeAlgeria, Italy, Mexico, SouthAfrica and Sri Lanka.



Growth Drivers

Source: i bef.org



Role of GovernmentIn 2002, the Indian government formulated an auto policy that aimed at promotingintegrated, phased, enduring and self-sustained growth of the Indian automotiveindustry

It allows automatic approval for foreign equity investment upto 100%in the automotive sector and does not lay down any minimum investment criteria.

Lays emphasis on R & D activities carried out by companies in India

Weighted tax deduction of upto 150% for in-house research and R & D activities

Formulation of an appropriate auto fuel policy to ensure availa b ility of adequateamount of appropriate fuel to meet emission norms

Reduction in excise duties for cars having length less than 4.5 m

Confirms the government s intention on harmonising the regulatory standardswith the rest of the world



State-of-the-art test facilities will support thegrowth of the auto industry

The Government of India is promoting National Automotive Testing and R&DInfrastructure Pro ject (NATRIP) to support the growth of the auto industry in India

NATRIP envisages setting up of five independent and up gradation of existing testcentres

Testing centres at Manesar (Haryana), Chennai (Tamil Nadu), Pune (Maharashtra)

Proving ground at Indore (MP)

Tractor testing facility at Rae Bareilly (UP)

Hill Driving Training Centre at Silchar (Assam )



India as Small Car Hu b



The Future of Indian small car industry

Expected to grow to US$ 40 b illion by 2015 (current level US$7 b illion)By 2016 industry expected to contri bute 10% of nation s GDP.

Competitive advantage for the future:Highly competitive software sectorSkilled laborLow cost manufacturing

Chinese automotive industry would be the greatestcompetition.



Contd..

Rebound of the industry after the glo bal recession.Partnerships between Indian and foreign companies to launchnew cars on the Indian market:

Ba ja j Auto/ Renault : ULC model (1 lakh roupies) in2011Hindustan motors/ Mitsu b ishi: I-miev model in 2011

Hyundai motor: Small car for 140 000 rupees in 2012



Conclusion

Vib rant Indian EconomyAutomotive Industry showing dou b le digit growth in allsegmentsIndia becoming Glo bal and Regional hu b or leadcountry for vehicle programmesGrowing engineering and IT capa b ility formanufacturingAuto Component Industry :Culturally compati b le-

Quality, E xperience and ValuesOpportunity to partner in product & processinnovation

India : A gateway to growth



References ACMA. (n.d.). Retrieved 09 14, 2010, from ACMA:http://www.acmainfo.com/CII. (n.d.). Retrieved 09 14, 2010, from CII:http://www.cii.in/Sectors.aspx?enc=prvePU j2bdMtgTmvPwvisYH+5E nG jyGXO9hLECvTuNspZMG2krVmNXVq1Q z72doMIBEF . (n.d.). Retrieved 09 13, 2010, from IB E F:http://www.i bef.org/industry/automo b iles.aspxINDIA, K. (2010).INDIAN AUTOMOTIVE INDUSTRY -

EVOLVING DYNAMICS.KPMG INDIA.(2010). Status Indian Auto Industry pdf.YOUNG, E . &. (2010). Revving up!



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india - small car hub [not complete]

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