corporate professionals automobile industry ebizwire september 2012

7/30/2019 Corporate Professionals Automobile Industry EbizWire September 2012

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F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i n

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Insight

Biz India News 2

Biz Policy Updates 3

The Indian Automobile Industry 4

Business Idea of the Month 8

StartBizIndia Discussion Platform 9

Upcoming Business Summit 10

Contact us 11

eBizWireVol. I Issue. VIII, September 2012

Industry of the Month

Automobile Industry i

India
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Biz India News

On August 29, 2012, Automotive components maker Piolax India, asubsidiary of Piolax of Japan, inaugurated its first Indian facility at the Sri Citymulti-product special economic zone in Andhra Pradesh.The plant is slated

to commence commercial production shortly. Piolax is a global manufacturerof auto parts such as industrial fasteners, coil springs, flat springs andcompact units. It has facilities in the US, the UK, China and Thailand.

The Volkswagen Group aims to increase output by 10-15 per cent on a100-million investment at its production facilities in Aurangabad and Chakanin Maharashtra. On September 06, 2012 John Chacko, Volkswagen GroupChief Representative for India, said the investment would go towards minormodel changes and upgradation of the two factories. The funds will alsobenefit Skoda and Audis domestic operations.The German automaker has a1.3-lakh annual production capacity at Chakan, where it makes the Polo,Vento and Skodas Fabia and Rapid models.

On September 05, 2012, In a bid to replicate the success of Israel in thefarm sector, the Gujarat Government plans to set up a farming educationalinstitute in collaboration with Israel, offering post-graduation and Ph.Dprogrammes with practical training and degree from Israeli universities.

India and Pakistan will soon sign three agreements on customs co-operation, trade grievances redressal and mutual recognition, Commerceand Industry Minister Anand Sharma said on Tuesday. India and Pakistanwill soon sign three agreements on customs co-operation, trade grievancesredressal and mutual recognition, Commerce and Industry Minister AnandSharma said on Tuesday on September 05 2012.

The production of cement from Reliance Cement Company Private Ltd, a

subsidiary of Reliance Infrastructure Ltd (Reliance Infra), has begun from thefirst manufacturing unit at Butibori, Nagpur in Maharashtra. On September04, 2012, the unit would essentially meet the needs of the market inVidarbha, the company said in a communication to the stock exchanges.

Storage technology software maker EMC has signed Netmagic Solutions fordesign, architect and run its cloud computing infrastructure for Indian andglobal companies. As a part of this tie-up, Netmagic will consolidate ITinfrastructure that is hosted on private or public cloud and consolidate it intoa hybrid cloud computing environment. On September 03, 2012, a hybridcloud environment helps in a mix and match of public and private ITinfrastructure that can be hosted and accessed as per their requirements.

Four leading Chinese companies will visit Ahmedabad in September toexplore investment opportunities in Gujarat. The companies- Wuxi XinjeAutomation, Sunfar, Estun Automation and Zhejiang Chint Electric Co-areeyeing investments in greenfield projects and partnerships in Gujarat. TheChinese companies will meet entrepreneurs in Gujarat at a businessconference organized by India China Economic & Cultural Council (ICEC) onSeptember 12, 2012.

Headlines

Japanese auto parts makesets up unit at Sri City SEZ

Volkswagen to invest 10million in India

Israel to set up 3 centres excellence on farm tech

Gujarat

India, Pakistan to sign pacts soon to boost tradAnand Sharma

Reliance Cement beginproduction from Butibori un

EMC ties up with NetmagSolutions

Leading Chinese companieeye Greenfield projects Gujarat


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Biz Policy Updates

RBI allows direct investment by Indian entities in Pakistan

On September 10, 2012.Reserve Bank of India has allowed Indian entitiesto make direct investment in Pakistan, giving push for bilateral trade andinvestments. It has now been decided that the overseas direct investmentby Indian Parties in Pakistan shall henceforth be considered under theapproval route, RBI said in a notification on Friday.

Reserve Bank of India has allowed Indian entities to make directinvestment in Pakistan, giving push for bilateral trade and investments.

It has now been decided that the overseas direct investment by IndianParties in Pakistan shall henceforth be considered under the approvalroute, RBI said in a notification on Friday.

The move comes days after India allowed investment from Pakistan. RBIsaid it will make amendments to the Foreign Exchange Management(Transfer or Issue of Any Foreign Security) Regulations, 2004, toincorporate changes. Bilateral trade between the neighbours stood atabout $3 billion and is expected to reach $6 billion in the next three years.Earlier, Pakistan had expressed concern over certain issues related withinvestments from India.

Legal Headlines

RBI allows direinvestment by Indi

entities in Pakistan


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The Indian Automobile Industry

Introduction:

Choices add the ultimate spice to life and India with the largest number of

people (well almost!) needs a lot of them. That is especially true when itcomes to things majorly characterized by the ever-evolving technology.And obviously, when theres a demand, theres going to be a largenumber of industry players competing with each other to bring out thebest possible product in a given price change.

One such industry is the Indian Automobile Industry which very visiblystays on its toes to bring new models for the domestic and internationalmarkets alike. The domestic players are sincerely trying to meet theinternational standards and yield the best quality.

Nissan's Managing Director in India, Mr. Kiminobu Tokuyama says Indiais a rapidly growing market, so therefore it is very important for global automanufacturers". Indias potential as a manufacturing country and as a

consumer base is being taken seriously all over the world. India is nomore just an information technology super power. A country which wasmore or less ignored by the rest of the Asia, India is now becoming hometo several Asian brands owing to increasing opportunities and aprogressive economy.

With a turnover of almost $59 Million US Dollars, this industry providesemployment to 13 million people in the Indian Work-class. This industry isone of the most competitive industries because the manufacturers facesome challenges like increasing fuel efficiency and reducing emissionsperpetually apart from doing something innovative on a continuous basis.

Indian Auto Market- Reasons to cheer:One of the largest automobile markets in the world, India has someremarkable facts to its credit which make it World renowned. The IndianAuto Industry has a bright future because of several factors workingtowards increasing demand for automobiles:

1. Rapid Urbanization: Currently only 21% of the population lives in theurban areas. Given how India is performing, the figures are hoped totouch 35% by 2020 and 40% by 2030.

[Source:www.newgeography.com]

2. Rising per capita GDP:The per capita GDP of India increased from1200 USD in 2011 to almost 1330 USD in 2012. This is further expectedcross the 2000 mark by 2015. Increasing GDP would mean increasedpurchasing power and hence increased demand for automobiles

[Source: www.tradingeconomics.com]

The Indian Automobile

Industry is broadly classified

into 4 categories:

Two Wheelers form tmajor segment of IndIndustry with almost 75market share and henleaving all other segmefar behind. India forms tprefect market for t

wheelers because of hupopulation the major chuof which is not urban clas

Passenger Motor VehiSegment consists Passenger Cars, UtVehicles & Multi PurpoVehicles.

Commercial Vehicles Three Wheelers combinhave a market share of 9

indicating that its thouseholds which are tmajor consumers in tindustry.

The automobile industryone of the mcompetitive industrbecause the manufacturface some challenges lincreasing fuel efficienand reducing emissioperpetually apart frdoing something innovaton a continuous basis.
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3. Overall growth of other industries: Industries are usuallyinterdependent on each other. The effect of expansion of other industriesis bound to percolate to the automobile industry as well. Since transport is

a basic need of every industry, demand for automobiles will rise withevery positive change in an industry. [Source: www.nasscom.org]

Source: ibef, SIAM, Nasscom

4. Car buyers getting younger: It is no more a hidden fact that India isone of the youngest countries in the world with a median age of almost 26years; much lower than the Worlds biggest economies. It only shows thatthe work class constitutes majorly of young individuals. The car buyingage has been on a decline. Where a person aged 39 used to buy a car inthe year 2000, this age has gradually come down to 33 in 2010. It is onlyexpected to become lesser in the coming years.

5. Growing Middle class: With the middle class of India growingannually, benefits of this sector are still untapped. It is the transition fromthe lower class to the middle class which converts car into a need from aluxury.

Other factors like affordability, innovation, infrastructure facilities and priceof fuel also affect the demand for automobiles to a large extent. Thesechallenges keep the automakers on their toes all the time. With the middleclass in India still growing annually, the benefits of this sector are stilluntapped.

Recent Developments in the Industry: [Source: www.ibef.org]

Ford India: In the wake of increasing petrol prices, it hasexpanded its diesel engine production capacity of its Chennaiplant to keep pace with the changing demand. The plant that hadthe capacity to produce 2.5 Lakh engines annually in 2010; shallnow be able to produce 3.4 lakh engines. It also has the capacity

of producing 2 Lakh cars.

Isuzu Motors Limited (Japan): With a capital outlay of Rs. 1000

Crores, it is planning to build a Greenfield project to target the

small commercial vehicle and MUV segments.

Statistics India

[Source:www.ficci-b2b.com][www.ciiautoserve.in]

Largest Motorcycle Producer

in the World

6th Largest Passenger

Vehicle Producer in the world

2nd Largest Scooter

Producer in the World

5th Largest Auto Producer in

the upcoming economies

5th Largest Bus & Truck

Market in the World

5th Largest Commercial

Vehicle Market in the World

Largest Three Wheeler

Market in the World

2nd Largest Two Wheeler

Market in the World

10th Largest Passenger Car

Market in the World

4th Largest Tractor Market in

the World

81%

49%44% 42%

31%

21%

0

0.2

0.4

0.6

0.8

1

Growth Rate
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TheIndian Automobile Industry

Renault (French auto major): By launching it midsize SUVDuster in both petrol and diesel variants, it has successfully

entered the Indian SUV market. Renault has already launched 3more vehicles this year prior to this.

M&MGroup: M&M Group after spending 4 years in the Indian 2wheeler segment has launched its research and development(R&D) center for two-wheelers in Pune with an investment of Rs100 Crores.

MSIL (Indias largest auto maker): It shall merge the group unitSuzuki Powertrain India Ltd with itself so that all the dieselmanufacturing facilities are under the same management. Themerger will be conducted through share swap without any cashtransaction.

Prominent Players in the Indian Automobile Industry:

These are the names which have a brilliant Pan India coverage. Apart

from this, there are brands which dominate a particular region of the

country depending on their popularity in that area. This can be studied

from the following picture:

Recent Developments in th

Automobile Industry:

Ford India

Isuzu Motors Limite(Japan)

Renault (French auto majo

M&M Group

MSIL (Indias largest aumaker)

India has somecommendable players in theautomobile sector. Themarket shares of the majorautomotive companies at theend of May 2012 lookedsomething like this;

(Source: SIA


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Foreign Direct Investment Policy

A policy of automatic approval up to 100% FDI has been a boon for the

Industry. The policy alone has led to a turnover of 12 billion USD in theIndian auto industry. No need for licensing and no restriction on import ofauto components make this sector very attractive for foreign investors.Apart from this, advanced technology yet cost effectiveness and efficientmanpower add to the list of advantages which India offers as a targetcountry for investment.

With a lot of foreign players like General Motors, Toyota, Renault, BMW,

etc. already carrying out their activities successfully in India, FDI has

definitely contributed to the growth story of the Indian autoThe Future Forecast:

The future of Automobile Industry is so promising and cheerful that if thestatistics go as estimated, then, the share of Indian exports in the Global

auto market will almost triple in the years ahead. The overall automobile

production in India would expand by 9.6 per cent in 2012-13. The

Passenger Vehicle Market of India will sell almost 5 million vehicles by

2017-2018. The Indian Auto Exports will also grow and cross the 17 billion

USD mark by 2015-2016.

And, there are factors which are demand determinants playing in favour ofthe Indian automobile Industry like rising family Income, product innovations,demographics and favourable duty structure; there is a lot which the industryis yet to see.The future looks bright and being an entrepreneur, if someone is looking foropportunities in this Industry, anything creative/ innovative related to theautomobile industry is bound to work.

(Source: SIAM, ACMA, FICCI and CIME)

Some Companies Automobile Industry India


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Business IDEA OF THE Month

CarExchange.comFrom dreaming about buying a superfast car to actuallyexperimenting with it during the teenage; from buying a swankycar for the first time from your own salary to buying a big enoughand safe car when you finally have a family of your own; it is thesame story for all. And now, with the number of independent girlson the rise, the car story for them is pretty similar too. No wonder,a car is always one of the first things in everyones list of must-haves.

But, actually having a car; new, rented or second-hand is aseparate story in itself. The whole process of choosing a car,finding the appropriate dealers, negotiating and finalizing a deal

and everything else that follows surely; is a cumbersome process.What would you choose? Calling up and meeting each suitablevendor individually on your own? Or logging on to a website thatprovides all information at one place? So that the only thing thatyou need to do is choose the best deal and make a final call.

Well you know what we are hinting at. If you are tech savvy, knowthe importance of a good and interactive website and are a carlover; you have an interesting opportunity at hand. Taking cuefrom e-commerce based portals; you can create a similar websitegiving various details like: Different types of cars and theirvariants; the authorized company dealers and other vendors forselling & reselling of cars, individuals interested in purchase or

sale, etc. The main idea is to create an online car bazaar so thatyou can bring the buyers and sellers together and facilitate tradebetween them.Such a website will give people a one stop solutionto all their car woes.What more? You can even add informationabout various service stations for after sale requirements andpublicize attractive service packages offered by them.

For starting this; you will have to register your business entity, geta web domain registered which shall cost you anywhere from Rs.500 and up for a year, hire a web designer for your website,collect the database of all the information you decide to put onyour portal and tie up with a payment gateway like PayPal on yourwebsite. Last but not the least! Marketing! Everything done, yourbusiness will depend on this one magic word. To attract peopleyou have to let them know first of all.

You can go a step forward by including car accessories in the listof offerings. Keep updating regularly and add special features likelatest car news for the car enthusiasts and you should be ready tokeep this business going.


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Upcoming Business Summit

Indias first of its kind of show on Home Dcor, Home furnishing, and

Home Improvement Sector.

Indian Home Congress 2012

Date: - October 04, 2012 to October 05, 2012Venue: - Hotel Claridges, Surajkund, Delhi/NCR

[Source: www.siamindian.com]Forthcoming Auto Industry related Events

With India emerging as a leading export hub for automobile companies

and Sri Lanka coming up as a an important country for business

opportunities in the automobile sector for India; this second edition of the

Auto Show India organized by the Society of Indian Automobile

Manufacturers aims to establish good relations with the Automotive

market of Sri Lanka. The show will feature the latest vehicle models and it

is hoped that this edition will see far more visitors than the last time.

Auto Show India 2013

Date: - January 04, 2013 to January 06, 2013Venue: - Bandaranaike Memorial International Convention Hall (BMICH),Colombo, Sri Lanka

Bus & Utility Vehicles Show 2013

Considering the importance of buses in the country and the fact that theIndian bus industry is one of the largest in the world; SIAM is organizingthe Bus & Utility Vehicles Show 2013. Given the situation when utility

vehicles are rapidly seeing a lot of takers whether it is an SUV or an MUV;this show will focus on showcasing the latest developments in thetechnology and provide a platform for manufacturers to launch theirproduct and communicate with the prospective customers directly. Thiswill help the manufacturers understand the requirements of the targetaudience better.

Date: - February 14, 2013 to February 17, 2013Venue: - India Expo Mart, Greater Noida, Delhi-NCR, India

Motor Show Bengalore 2013

A show first of its kind, it is being organized to help automobilemanufacturers to present latest technology developments, innovations in

designs and features, latest products, etc to prospective customers. It isnot unknown that this city is the technology centre of India and one of themost financially sound cities too. With a large pool of young workingpopulation, Bangalore is definitely bound to benefit from the show.

Date: - April 04, 2013 to April 07, 2013Venue: - Bangalore International Exhibition Centre (BIEC), Bangalore

International

Auto Show India 2013

National

Indian Home Congress

2012

Bus & Utility Vehicles

Show 2013

Motor Show Bangalore

2013


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Disclaimer:

This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of this paper havbeen developed for the new startups. The author and the Company expressly disclaim all and any liability to aperson who has read this paper, or otherwise, in respect of anything, and of consequences of anything done, omitted to be done by any such person in reliance upon the contents of this paper.

Neha Seth

E: [email protected]

D: +91.11.40622239

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Shipra Paul


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corporate professionals automobile industry ebizwire september 2012

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