automotive industry analysis

24

Upload: harsh-pathak

Post on 21-Apr-2017

15.411 views

Category:

Automotive


0 download

TRANSCRIPT

Page 1: Automotive industry analysis
Page 2: Automotive industry analysis

Indian Auto IndustryFacts•Second Largest two wheeler

manufacturer in the world•Largest tractor and three wheeler

manufacturers in the world•Fourth largest Commercial vehicle

market in the world•Eleventh largest passenger car

market in the world

Growth Potential•Can become World’s third largest automobile market in 2030.•By 2016, Automotive sector can DOUBLE its percentage contribution to GDP from current levels of 5% (US$50 billion) to 10% ($180 billion).

Trends•Growth of exports of 33.57 % FY

2011-12. •Output of commercial vehicles has

grown 2.8 times compared to the 2.2 times increase in passenger cars

•For every passenger car turned out, there are almost 7 two-wheelers produced

Page 3: Automotive industry analysis

The Growth JourneyPre 1983 1983-1993 1993-2012

Era of globalisation andevolution of India as a globalmanufacturing hub

Closed market

• Growth of market limited by supply• Outdated modelsPlayers• Hindustan Motors• Premier• Telco• Ashok Leyland• Mahindra & Mahindra

Japanisation - GOI- Suzuki joint venture to form Maruti Udyog• Joint ventures with companies in commercial vehicles and componentsPlayers• Maruti Udyog• Hindustan Motors• Premier• Telco• Ashok Leyland• Mahindra & Mahindra

Delicensing of sector in 1993• Global major OEMs start assembly in India (Toyota, GM, Ford, Honda, Hyundai)• Imports allowed from April 2001; alignment of duty on components and parts to ASEAN levels• Implementation of VAT

Page 4: Automotive industry analysis

Automotive Companies in India

Major Multi-national companiesMajor Indian Companies

Page 5: Automotive industry analysis

Booming Indian Economy

Page 6: Automotive industry analysis

Key Growth Drivers

Page 7: Automotive industry analysis

Auto Industry Numbers• Overall Market• Over all Production increased to 14.82 million vehicles in 2010-11 from 11.17

million vehicles in 2009-10• Passenger vehicles increased marginally from 1.95 million from 1.83 million • Two-wheelers increased from 9.11 million to 9.51 million

• Domestic Market •  Vehicles sold including PV,CV 2W and 3W in 2008-09 was 9.72 million as

compared to 9.65 million in 2007-08.

• Exports• Sales was 1.53 million units in 2008-09• As per the Automotive Mission Plan (AMP) 2006-2016 total turnover of the

automotive industry in India would be in the order of US$ 122 billion-159 billion in 2016

Page 8: Automotive industry analysis

Category wise numbers

Two Wheeler

Passenger Vehicles

Commercial Vehicles

Three Wheeler

Dominated by Motorcycles 80% , Scooters 14% Mopeds 6%Domestic - 7.25mn units . Hero mocorp.35% & Bajaj 32% share CAGR – 9.5%Exports 819000 units (07-08) . Bajaj Auto 59% TVS 17% share CAGR – 41% Dominated by Cars 78% , MUV/SUV 22%

Domestic – 1.5mn units Maruti-46% Tata-15% Hyundai 14% CAGR -14.8%Exports - 217000 units (07-08) Maruti 66% Hyundai 24% CAGR – 26% Dominated by M&HCV – Goods 48% Passenger 38% , Rest by LCV -14%Domestic – 487 thousand units , Tata-62% Ashok Leyland -15% CAGR- 22%Exports – 59 thousand units, Tata 67% Ashok Leyland 12% CAGR -30.6%

Dominated by Passenger Carriers with 64% share , Goods Carrier -36%Domestic – 365 thousand units , Bajaj -42% Piaggio-41% CAGR- 10.5%Export – 141 thousand units , Bajaj -97% CAGR -44.5%

Page 9: Automotive industry analysis

Production data

Page 10: Automotive industry analysis

The Indian Auto Components Market

• Original Equipment Manufacturers (OEMs)• Replacement Parts Production and Distribution : e.g. Air

filters, oil filers and replacement lights • Rubber Fabrication : tyres, hoses, belts etc.• Estimated component market size is US$ 8.7 bn • The exports of auto components industry has grown at a

rate of nearly 30 per cent CAGR over the last four years.

Page 11: Automotive industry analysis

Second Hand Automobile Market• Used car market demand : 1.4 million cars annually• Market Structure :

– Organized : 10%– Unorganized : 90%

• Vendor Based – 30%• Direct Dealings – 70%

• Certified used car dealers in India are – Maruti TrueValue, Honda Auto Terrace, Ford Assured, Toyota U Trust, Hyundai Advantage, Mahindra and Mahindra’s First Choice, General Motors - Chevrolet-OK

• Unorganized market lacks services like  -warranties, OEM equipments, insurance and taxes

• Second hand market expected to grow at 12-15 per cent in the next five years to touch a robust 2.5 million units and a turnover of Rs 50 thousand crore

• Estimations are that 50 percent of the used cars sales will be brought under organized car market by 2013

Page 12: Automotive industry analysis

1 year 1-5 year 5-10 years•Increased access to credit and lower interest loans

•Investment in Infrastructure spending can boost the commercial vehicles segment.

Economic Factors

•Growing working population (441 million people in 2015/16)

•Upward migration of household income levels (600 million people have annual income of more than $10,200)

•Middle class expanding by 30 - 40 million every year

Can propel growth

Page 13: Automotive industry analysis

1 year 1-5 year 5-10 years•Impact of delayed monsoon (85% of normal, subsequent impact on paddy cultivation) on rural demand.

•Non-availability of Key raw material (like Steel) at cheap price.

•Possible increase of interest rates (by 2-2.5% BPLR) because of planned government borrowing.

Economic Factors•Non- availability of supplier base with demanded capability (Quality and Quantity).

•Poor execution of Infrastructure investments. (Construction of Highways of 16km per day against the target of 32 km per day)

•Increase in crude oil price($ 35/barrel to $ 70/ barrel in 14 months).

Can Stunt Growth

Page 14: Automotive industry analysis

Social Factors• Rapid Urbanization of semi urban regions • Rising aspirational levels. Improvement in

living standards of middle class• Increased spending on Fashion & lifestyle

comforts.• Seeking “Value for money”- consumer behavior• Increasing customer emphasis on aesthetics

and comfort.

• A perfect marriage of rise in disposable income and demographic dividend (From US$ 556 per annum US$ 1150 by 2015)

Page 15: Automotive industry analysis

Technological Factors

Page 16: Automotive industry analysis

India as a Testing Hub : NATRIP

Page 17: Automotive industry analysis

RATIO ANALYSIS

Page 18: Automotive industry analysis

Key Financial Ratios of maruti suzuki

Page 19: Automotive industry analysis

Key Financial Ratios of Tata Motors

Page 20: Automotive industry analysis

FUTURE GROWTHAccording to the Society of Indian Automobile Manufacturers, •Annual vehicle sales are projected to increase to 5 million by 2015 •more than 9 million by 2020. •By 2050, India is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.

Page 21: Automotive industry analysis

India : A Developing Hub for Compact Cars

Maruti Suzuki :• New car plant to make 2,50,000 cars per annum (total 10,00,000 cars/annum)

• total investment worth 6,000 crores. Hyundai :

Already a big player in the small car segment Increase capacity to 600,000 cars per annum over next 1 year.• plans to hire 877 more workers to add a third shift at its Montgomery, Ala. plant Nissan :

• Micra, UK India

– Four more models in India, involving a total investment of over Rs 2,000 crore.

Ford :• Plans to unveil its new small car with 1.2 ltr engine by 2013

Honda : Investing US $ 250 million in a new plant in

Rajasthan with capacity of 60,000 car per year (First car to roll out in 2009).

Tata Motors :Tata Nano became a big success gaining worldwide popularity with Tata planning to increase capacity

Toyota :• Toyota Kirloskar motors planning to launch its own small car in India by 2013

General Motors : • New Capacity to manufacture small cars at

its Talegaon, Maharashtra plant with 80% local inputs.Brought in Spark small car in 2007

Nissan-Renault : 50:50 JV, to make 400,000 cars a year with an investment of over US $ 1 billion. Coming up with the $2500 car to compete with Tata Nano in 2013.

VW :• Investing 500 million euro to import parts from India for next five years

Compact cars account for 70% of the total car market. Compact car sales increasing at about 20% each year Excise duty on small cars increased from 22% to 24% in the present budget.

Page 22: Automotive industry analysis

•India will be a Automotive hub, led by small cars and auto component domains

•Export of automotive components to ASEAN,BRIC,EU and USA for OEMs as well as Aftermarket

•Booming Automobiles (Particularly cars) second sales and remodeling

•Increased deployment of IT-enabled Automobile support systems like GPS,ABS,ASR and Safety systems.

•Quality Certification (Deming, Six Sigma,TQM,TS16949) amongst suppliers have attained critical mass and the entire market will follow to get quality certifications.

•Will be a hub for optimal cost, high quality vehicular testing and terrain data acquisition services

•Alternate fuel (Bio fuel, electricity) and environment friendly green engines (Bharat emission norms)

Break through future trends

Page 23: Automotive industry analysis

References• www.acmainfo.com• www.wikipedia.org• www.siamindia.com• www.ibef.org• Ernst & Young Auto Track• www.economywatch.com• www.business-standard.com• The Economic Times• Hindu Business Line• www.automobileindia.com• automobiles.mapsofindia.com

Page 24: Automotive industry analysis