Indian Automotive Industry: Market and Opportunities

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  • Topic: Automotive industry, Motor vehicle manufacturers of India, Tata Nano
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  • Published : May 3, 2011
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Automotive
MARKET & OPPORTUNITIES

Automotive
MARKET & OPPORTUNITIES

CONTENTS
Indian Automotive Industry Market Size and Growth Overview of the Two Wheeler Market Overview of the Passenger Vehicles Market Overview of the Commercial Vehicles Market Overview of the Three Wheeler Market Indian Partnerships with Foreign Firms Automotive Clusters in India India’s Automotive Policy and Status of Regulations Growth Potential of the Indian Automotive Industry 2 4 9 12 15 17 18 19 22

A report by IMaCS for IBEF

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MARKET & OPPORTUNITIES

Indian Automotive Industry – Market Size and Growth

Indian Automotive Industry – Development and Growth Pre 1983 • Closed market • Growth of market limited by supply • Outdated models Players • Hindustan Motors • Premier • Telco • Ashok Leyland • Mahindra & Mahindra 1983-1993 • Suzuki, Japan and GOI joint venture to form Maruti Udyog • Joint ventures with companies in commercial vehicles and components Players • Maruti Udyog • Hindustan Motors • Premier • Telco • Ashok Leyland • Mahindra & Mahindra 1993-2007 • Delicencing of the sector in 1993 • Global major OEMs start assembly in India (GM, Ford, Honda, Hyundai, etc.) • Imports allowed from April 2001; alignment of duty on components and parts to ASEAN levels • Implementation of VAT

The Indian automotive industry has the potential to emerge as one of the largest in the world. India ranks number two globally in the two-wheeler segment next only to China. It ranks 11th in car production and 13th in commercial vehicle production globally. With increasing industrial production and growing spending power of the Indian middle class households, the country is expected to make it to the top five markets in the cars and commercial vehicles segment by 2020.

AutomotiveSales(DomesticandExports)
2007 2006 2005 2004 2003 2002 0 2 4 5.41 6 million units 8 10 12 6.25 7.29 8.53 CAGR 15.5% 9.71 11.12

Source:IndianAutomotiveSector

In the year 2006-07, sales of the the Indian automotive industry crossed the historic landmark of 10 million units. Sales (domestic as well as exports) of the industry had grown from 5.51 million units in 2001-02 to 11.12 million units in 2006-07, at an impressive Compound Annual Growth Rate (CAGR) of 15.5 per cent. This extraordinary growth had been driven by a buoyant economy, increasing purchasing power of the Indian middle class, new product launches and attractive finance schemes from automobile manufacturers and financial institutions. Of the total sales, roughly 10 per cent was contributed by exports to various countries. In terms of volume, the two wheelers segment with sales of 8.48 million units in 2006-07 had the highest share of more than 76 per cent in the industry, followed by passenger vehicles, three wheelers and commercial vehicles. The maximum growth, however, had occured in the commercial vehicles segment, which grew at a CAGR of 26.6 per cent in the last five years to reach a sales figure of roughly 518,000 units in 2006-07. The next highest growth was witnessed in the three wheelers segment, which grew to roughly 548,000 units. The Indian automotive industry is highly competitive with a number of global and Indian companies present in the market. The foreign companies are present in India either through joint ventures with local

AU TO M OT I v E

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Segment-wise Sales, Share and Growth in the Indian Automotive Industry

Leading Players and Segments in which they Operate Manufacturer Ashok Leyland Asian Motor Works Atul Auto Bajaj Auto BMW India Daimler Chrysler India Eicher Motors Electrotherm India Fiat India Force Motors Ford India General Motors India Hero Honda Motors Hindustan Motors Honda Hyundai Motors Kinetic Motor Mahindra & Mahindra Majestic Auto Maruti Suzuki Piaggio Reva Electric Car Co. Royal Enfield Motors Scooters India Skoda Auto India Suzuki Motorcycles Swaraj Mazda Ltd. Tata Motors Tatra Vectra Motors Toyota Kirloskar TVS Motor Co. Volvo India...
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