opportunities in automotive engineering services in india

8/6/2019 Opportunities in Automotive Engineering Services in India

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GIL 2010 : Automotive TrackGIL 2010 : Automotive Track

Opportunities in Automotive Engineering Services in IndiaOpportunities in Automotive Engineering Services in India

1st September 2010By

Mr. V G Ramakrishnan

Senior Director, Automotive & Transportation Practice


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Agenda

Opp

ortunitiesin

Automotive

Opportunitiesin

Automotive

E

ngineeringS

ervicesin

E

ngineeringS

ervicesin

IndiaIndia

Engineering Services Market in India An Overview

1

2

Click to add Title3

Future of Automotive engineering services in India?

4

Challenges Faced by Engineering Service Providers

Key Issues to be Addressed by ESPs and OEMs


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Engineering Research and Development Scenario

An Overview (2010)

$ 209.5

BillionRest of the World

$ 0.5

Billion

Automotive EngineeringServices Market in India

$ 74.4

Million

DomesticMarket

$ 348.6

Million

ExportMarket

$ 1.1

Trillion

Global Engineering ServicesMarket

$ 210

Billion

Global AutomotiveEngineering Services Market

$ 890

Billion

Global Non-AutomotiveEngineering Services Market

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

18.9% 81.1%

0.24% 99.76%

17.5% 82.5%


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Is India Underleveraged in Automotive Engineering

Services?

62.2

2.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Global India

210.0

0.5

0.0

50.0

100.0

150.0

200.0

250.0

Global India

Production Volumes of Light Vehiclesin Global and Indian Market, 2010

Engineering Services in Global andIndian Market, 2010

Indian Market is4.2% of thetotal global

market

Indian Market is

0.24% of thetotal global

market

Where is the Gap?

MillionUnits

MillionUnits

USDBillion

USDBillion


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How is this Vehicle Growth in India going to impact

Indian Automotive Engineering Services Market?

7-8% ofglobalproduction


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Why is Engineering Services Market not growing in line

with the Vehicle and Auto Components Market?

Auto ComponentsAuto Components

GrowthGrowth 18.2%18.2%

InUSDBillion

InUSDBillion

Forecast of Auto Component Industry (India), 2010-2020


25.0

113.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2010 2020

Auto componentsector to see

4-fold growth by2020


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Is Indian Engineering Services An Export dependent

market?

423.0

855.0

0.0

200.0

400.0

600.0

800.0

1000.0

2010 2015

75.0

93.9

0.0

20.0

40.0

60.0

80.0

100.0

2010 2015

Forecast of Indian Automotive EngineeringServices Market (India), 2010-2015

Forecast of Indian Automotive EngineeringServices Market Indian Business (India),

2010-2015

USD

Million

USD

Million

USD

Million

USD

Million


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Where is All this going to culminate?

How is it going to benefit the Automotive Engineering Services?


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Share of the Wallet of Engineering Services by Program Area

Body In

White

HVAC /Thermal

Electrical &Electronics

8.2%

ProductSystems

Engine /Powertrain

Drivetrain &TRIM

24.4%

23.1%

16.7%16.3%

11.4%


Chassis


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Automotive Engineering Services Industry Structure

Source: Frost & Sullivan

MahindraEngineering

TataTechnologies

DefianceTechnologies

Eicher

Engineering

Plexion Onward

Technologies Neilsoft Cades Satyam

Ventures

TCS Wipro Infosys Tata Elxi

AVL IAV Ricardo Magna FEV EDAG KPIT Cummins MIRA

IDEA Pinninfina

Simulation

Services

Only virtual /simulationservicesprovided

Only virtual /simulationservicesprovided

End to endsolutions

End to endsolutions

MNC firms havesupport of theirparent firms to

give entiregamut ofservices

Subsidiariesof Indian

OEMs

SubsidiariesSubsidiaries

of Indianof Indian

OEMsOEMs

EngineeringDesignFirms

EngineeringEngineering

DesignDesign

FirmsFirms

IT ServicesFirm

IT ServicesIT Services

FirmFirm

MNC EnggServices

Firm

MNCMNC EnggEngg

ServicesServices

FirmFirm

VMs / AutoComponent

Mfrs

VMsVMs / Auto/ Auto

ComponentComponent

MfrsMfrs

Companies

Companies

Companies

Services

Servic

es

Servic

es

GM techCentre

Daimler TechCentre

Delphi Bosch Visteon


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Is Domestic Market, A Small Piece in the Larger Pie?

Is Cost Arbitrage the Only USP of Engineering Service Providersin India?


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Engineering Service ProvidersEngineering Service ProvidersEngineering Service Providers

Challenges Faced by

Availability ofAvailability of

Few DomesticFew Domestic

VehicleVehicle

ManufacturersManufacturers

EstablishmentEstablishment

of Captives byof Captives by

MNCsMNCs

Component MfrsComponent Mfrs

Taking Up DesignTaking Up Design

& Development& Development

for OEMsfor OEMs

Modularization ofModularization of

Indian SupplierIndian Supplier

BaseBase


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Availability of Few Domestic Vehicle Manufacturers

Comercial Vehicles

11.8%Off Highway Vehicles

1.4%

Tier-1 Companies

6.3%

Passenger Vehicles80.5%

80.5% of Outsourced AutomotiveEngineering Services in India is by

Passenger Car Manufacturers

Market Share outsourced engineering services bytype of vehicle manufacturers (India), 2009

Market Share of Passenger Car Manufacturers(India), 2009



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Establishment of Captives by MNCs

30.0% of the AutomotiveEngineering business inIndia is captured by MNC

Captives

Engineering Design Firms

7.2%

MNC Captives

30.0%

IT Services Firms10.7%

International Firms

24.8%

Subsidiaries of Indian

OEMs 27.3%

Outsourced Engineering Services Market byNature of the Firm (India), 2009



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Fundamental Issues to be Addressed by ESPs

and OEMs

Engineering

Service ProvidersLacking Domain

Expertise

Expansion ofOEMs

Impacting theBusiness of

ServiceProviders

Need for OEMs

to Outsource toCompanies(ESPs) Outside

India

Cost Arbitragein India

SpecificReasons for

OEMs toOutsource

EngineeringActivity

Resulting in Ideal Opportunities for Engineering Service providers

Come, Let Us Work Together To AchieveThem Through This Exclusive Forum


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Sessions in this Event Aimed to Achieve Ideal

Future Strategies

Five Things That Indian Off shoring Companies Need to Do to Retain Competitiveness

Inhouse / Captive competency of vehicle manufacturers - A threat to Engineering serviceproviders

Role of Engineering services companies in helping the Indian OEMs go global (RoundTable Discussion)


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Thank You

opportunities in automotive engineering services in india

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