Automobile Industry

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Automotives

AUGUST

2012

For updated information, please visit www.ibef.org

1

Automotives

AUGUST

2012

Contents
 Advantage India  Market overview and trends

 Growth drivers
 Success stories: Maruti, Tata Motors  Opportunities

 Useful information

For updated information, please visit www.ibef.org

2

Automotives
Advantage India

AUGUST

2012

Growing demand


Innovation opportunities


FY16E
Market size: USD145 billion

Strong demand growth due to rising incomes, growing middle class, and a young population is likely to propel India among the world’s top five auto-producers by 2015 Growth in export demand is also set to accelerate

Tata Nano and the upcoming Pixel have opened up the potentially large ultra low cost car segment Innovation is likely to intensify among engine technology and alternative fuels





Advantage India
Rising investments


Policy support


India has significant cost advantages; auto firms save 10-25 per cent on operations in India compared to Europe and Latin America A large pool of skilled manpower and a growing technology base will induce greater investments

The government aims to develop India as a global manufacturing as well as R&D hub There has been a wide array of policy support in the form of sops, taxes and FDI encouragement

FY10
Market size: USD57.7 billion





Notes: R&D – Research and development, FDI – Foreign direct investment; FY – Indian financial year (April – March); FY16E – estimated figure for financial year 2016; estimates are from the government’s Automotive Mission Plan (2006 – 2016) ADVANTAGE INDIA

For updated information, please visit www.ibef.org

3

Automotives

AUGUST

2012

Contents
 Advantage India  Market overview and trends  Growth drivers  Success stories: Maruti, Tata Motors  Opportunities  Useful information

For updated information, please visit www.ibef.org

4

Automotives

AUGUST

2012

Evolution of the Indian automotives sector
20.4 million units (2012) 11 million units (2007) 2008 onwards 0.6 million units (1992) 1983 - 1992 0.4 million units (1982) Before 1982 • Closed market • Only 5 players • Joint venture (JV) Indian government and Suzuki to form Maruti Udyog; started production in 1983 • Component manufacturers also entered via JV route • Buyer’s market 1993 -2007 • Sector de-licensed in 1993 • Major original equipment manufacturers (OEMs) started assembly in India • Imports allowed from April 2001 • Introduction of value added tax in 2005 • More than 35 players in the market • Removal of most import controls • Indian companies gaining global identity

• Long waiting periods and outdated models
• Seller’s market

Source: Tata Motors, Society of Indian Automobile
Manufacturers (SIAM), Aranca Research, Notes: JV – Joint Venture MARKET OVERVIEW AND TRENDS

For updated information, please visit www.ibef.org

5

Automotives

AUGUST

2012

The automotives market is split into four segments
Automobiles

Two-wheelers

Passenger vehicles

Commercial vehicles

Three-wheelers

Mopeds

Passenger cars

Light commercial vehicles

Passenger carriers

Scooters

Utility vehicles

Motorcycles

Multi-purpose vehicles

Medium and heavy commercial vehicles

Goods carriers

Electric twowheelers

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

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Automotives

AUGUST

2012

Revenues have been growing at a strong pace


Gross turnover of automobile manufacturers in India expanded at a CAGR of 17.7per cent over FY07-1 1 Excluding three wheelers, cars account for the largest share of revenues (66.2 percent in 2010) Revenue trends over the past few years in USD million

70.0 60.0 50.0 40.0 30.5 30.0 20.0 10.0 0.0 FY07 FY08 FY09 FY10 FY11 66.2% 36.6 33.3 21.5% Trucks Cars 58.6 CAGR: 17.7% 43.3



Market* break-up by revenues (2010)

12.3%
Two...
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