automobile industry final 1

8/14/2019 Automobile Industry Final 1

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hailed as the industry ofindustries

- PETER

AutomobileIndustry


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Key facts

11th largest passenger car market in the

world and is expected to become the 7th

largest by 2016

4th largest car market in Asia

The first automobile in India was rolled in

1897 in Bombay.First Indian to own a car in India was

Jamshedji Tata

First woman to drive a car in India was


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History

Craft production (1890s) to mass production (1910s) to leanproduction techniques (1970s).

1940 - Automotive industry emerged in India

1953 to 1970 - Growth was relatively slow in the due to

nationalization and the License Raj

1970 - Tractors, CV and scooters.

1980s Major JVs happened

Weakening of the license raj, a number of Indian and multi-

national car companies launched operations.


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Growth & PerformancePre 1983 1983-1993 1993-2008

Closed Market

Growth Limited by

supply

Outdated models

Suzuki, Japan and

GOI JV to form

Maruthi Udyog

De licencing of the

sector in 1993.

OEMs in India.

Imports allowed

Easy auto finances

Implementation of

VAT

Hindustan Motors

Premier

Maruthi Udyog

Hindustan Motors

Premier

Telco

Entry of Global

players


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Total Auto Industry


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Automobile Industry andEconomics

5% - Auto Industry

FDI Inflows

2007-08 2008-09

Rs 2462 Cr Rs 5212 Cr

47.25% increase compare to

2007-08


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ForeignExchange


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Exports


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PLC

GrowthPV-

12%

Growth

rate

>GDP


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Demand Drivers


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SWOT

StrengthLarge domestic

market

Sustainable labor

cost advantageCompetitive auto

componentvendor base

Governmentincentives formanufacturingplants

Strong

Weakness

Low labor

productivityHigh interest costs

and highoverheads make

the productionuncompetitive

Various forms oftaxes push up the

cost of productionLow investment in

Research andDevelopment

Infrastructure


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Opportunity

Commercial

vehicles: SC ban

on overloading

Heavy thrust onmining and

construction

activity

Increase in the

income level

Threat

Rising input costs

Rising interest

rates

Cut throat

competition
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Key Players

8Com

paniesCon

tribute

s

60%o

fGlob

al

Produc

tion,

India

25%
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Market Share


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Auto Policies

In 2002, the Indian government formulated an autopolicy

Automatic approval for foreign equity investment up

to 100%

Weighted tax deduction of up to 150% for in-house

research and R & D activities.

JVs (major share) Invest $50 million

Budget 2009- Excise duty reduction

Alternative fuels Tax free


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Future

GM expansion plan at talegaon - $210

million .

Ford - $500 million ( 1500 jobs )

Volkswagen -- 135 million Euros ( 1500

jobs )

Honda and Toyota will be investing 3000

crores over the next decade for India .

With the development or evolution of

alternate fuels h brid cars have made


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Conclusion

Automobile Industry experts predict that by2050 every 6th car in the world will be forIndians.

By 2010 India will take over Germany insales volumes and Japan by2012.

By 2010, India is expected to witness overRs 30000 crore of investment.


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Thank

You

automobile industry final 1

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