Indian Automobile Industry Analysis

Topics: Automotive industry, Automobile, Tata Nano Pages: 11 (2928 words) Published: September 5, 2010

Today the automobile sector in India contributes 5% to the nation’s GDP, making it a prominent player in the economy. It will contribute around 19% of the Tax collection for financial year 2009-10. Following have been the features of Auto industry in the past financial year.

The following tables and charts consist of the performance of Auto industry in past few years. Industry Aggregate (Rs in million)|
| AMJ 10 (E)|
Net Sales| 363904.38|
Change (%)| 39%|
EBITDA| 64665.22|
Change (%)| 94%|
Depreciation| 7303.60|
Interest| 3348.58|
Other Income| 7118.93|
PBT| 61131.97|
Tax| 16645.21|
Effective tax rate| 27%|
Reported PAT| 44486.77|
Change % (Reported PAT)| 92%|
Market Cap (Rs in bn)| 1647.17|
Source: BSE India; Cygnus Research|
Note: The aggregate consists of the following companies- Bajaj Auto, Ashok Leyland, Tata Motors, TVS Motors, Force Motors, Hero Honda, Escorts Ltd., Eicher Motors, Maruti Udyog Limited, Punjab Tractors Limited, Mahindra & Mahindra, and Hindustan motors

Source: QPAC Indian Automobile industry Apr-Jun 2010



The auto industry in India is the ninth largest in the world. After Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile manufacturers have spread their operations globally. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. The Indian automobile industry is going through a phase of rapid change and high growth. With new projects coming up on a regular basis, the industry is undergoing technological change. The major players are expanding their plants and focusing on mass customization, mass production.


Year on year as the Indian population grows the requirement for the transportation will also grow, so it is clear that the industry demand is directly proportional to the population. Presently in India there are 100 people per vehicle while the figure in china is 82. Indian automotive industry is strong and productive sector for the economy growth. It gives nearly 5% of the employment to the country’s population. Continue improving quality results in exports of automobile and ancillary industry is boosting out the demand in oversees business. The Indian auto-players are expanding their presence in oversees market. In the last 5 years the foreign investment in this sector nearly doubled.

Production Trend: The Indian automotive industry face a tough time during FY08 and its production were almost stagnated. From the early FY09, the industry started showing marginal growth in terms of production and reached to 14.04m units till FY10. Due to the huge insist in the domestic market company’s sale nearly 88% of their total production in the country and rest 12% vehicles they export.

Domestic and Exports sales trend: In terms of domestic sales the industry is showing positive approach from the last 3-years. During FY10 the industry domestic sales reached to 12.29m units. The Indian exports are increasing gradually form the past 5-years and reached to 1.80m units in FY10. Earlier the industry depended on the foreign auto parts, but due to the increase of the global players in the country and establishing the plants ended painless move to the Indian auto-players.


Indian Automobile Industry Performance (Apr-Mar)|
| Production| Domestic Sales| Exports|
| 2009| 2010| %| 2009| 2010| %| 2009| 2010| %|
Passenger vehicles (PVs)|
Passenger Cars| 1516967| 1926484| 27| 1220475| 1526787| 25| 331535| 441710| 33| UVs| 219498| 272848| 24| 225621| 272733| 21| 3034| 2823| -7| MPVs| 102128| 151908| 49| 106607| 150256| 41| 1160| 1613|...
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