indian automobile sector

14
Presentation on Landscape of Automobile Industry in India Consulting Club

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a brief about the automobile sector of India, the market share of different companies...

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Page 2: Indian Automobile Sector

Evolution of Automobile Industry

Initial Years Manufacturing was licensed

•High Customs duty on import

•Steep excise duties & •sales tax

•2 Major players: Premier Automobiles Ltd & Hindustan Motors

1980s

•Entry of MUL, better product, with government support

•Seller’s Market

•Long Waiting Periods

Early to mid 90s

•Seller’s market and long waiting periods

•Delicensing in 1993

•Removal of capacity restrictions

•Decrease in customs & excise

•Auto finance boom- more players (foreign banks & non banking companies, better schemes.

Mid 90s – Early 2000s

•Buyers market

•Increase in Indigenization

•Easy Auto finance

•Manufactures diversifying into related activities: finance lease, fleet management, insurance and used car market

Page 3: Indian Automobile Sector

AUTOMOBILE

2 WHEELER 3 WHEELERPASSENGER

VEHICLECOMMERCIAL

VEHICLE

MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS

I.C.V. M.C.V. H.C.V.

Page 4: Indian Automobile Sector

Trends in the automobile sector…Production of automobiles

4.8 5.36.3

7.28.5

0

2

4

6

8

10

2000-01 2001-02 2002-03 2003-04 2004-05

mil

lio

n n

um

ber

s

Domestic Sales of automobiles

4.6 5.25.9

6.87.9

0

2

4

6

8

10

2000-01 2001-02 2002-03 2003-04 2004-05

mil

lio

n n

um

ber

s

Exports of automobiles

0.17 0.18

0.31

0.48

0.63

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2000-01 2001-02 2002-03 2003-04 2004-05

mil

lio

n n

um

ber

s

CAGR 15.4% CAGR 14.2%

CAGR 39%•Domestic Sales have been growing strongly

• Exports have nearly tripled in the last 5 years

•Largest three wheeler market in the world

•4th largest passenger vehicle in Asia

•4th largest tractor in the market

•5th largest commercial vehicle market in the world

Page 5: Indian Automobile Sector

Segment wise market share…

Growth Rates of different segments

23.5

11.314.3 14 14.2

0

5

10

15

20

25

CommercialVehicles

PassengerVehicles

Twowheelers

Threewheelers

totalAutomobiles

Segments

4 ye

ar C

AG

R

Two Wheeler

Three Wheeler

Passenger vehicles

CVs

•The industry has not experienced much change in its structure over the last 6 years

•Two- wheelers form the major share of domestic sales

•Passenger vehicles lead the exports market(57.4%)

•2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles

•The growth in the two wheeler market is driven by the motorcycle market and is expected to grow at 14-15 % YOY

78.63%

13.44%

4.03%3.9%

Page 6: Indian Automobile Sector

The Key Players…

Commercial vehicles

TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors, Eicher Motors

Passenger vehicle

TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler Bajaj Auto, Piaggio India

Two wheeler Passenger vehicle

Page 7: Indian Automobile Sector

• Favorable Demographics • Improving income curve • Reducing interest rates

•Cost Pressure •High Expectations •Inadequate Infrastructure Development

KEY CHALLENGESKEY ENABLERS

Key Focus Areas• Product development( includes collaboration, new products developed)• Vendor base (quality of vendors, skill levels , size etc.)• Manufacturing capability( quality levels, productivity & skill levels, technology )• Service levels• Supply chain• Labor law• Leverage IT

Key Features of Future Auto Policy• Foreign Direct Investment • Import tariff • Incentives for Research and Development (R&D) • Environmental Aspects • Other measures

Page 8: Indian Automobile Sector
Page 9: Indian Automobile Sector

Domestic Market Share for 2009-10

Passenger Vehicles

15.86

Commercial Vehicles

4.32

Three Wheelers 3.58

Two Wheelers 76.23

 

Page 10: Indian Automobile Sector
Page 11: Indian Automobile Sector

Automobile Production Trends (Number of 

Vehicles)

Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Passenger Vehicles

989,560 1,209,876 1,309,300 1,545,223 1,777,583 1,838,593 2,351,240

Commercial Vehicles

275,040 353,703 391,083 519,982 549,006 416,870 566,608

Three Wheelers

356,223 374,445 434,423 556,126 500,660 497,020 619,093

Two Wheelers

5,622,741 6,529,829 7,608,697 8,466,666 8,026,681 8,419,79210,512,88

9

Grand Total

7,243,564 8,467,853 9,743,50311,087,997

10,853,930

11,172,275

14,049,830

Page 12: Indian Automobile Sector

Automobile Domestic Sales Trends (Number of

Vehicles)

Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Passenger Vehicles

902,096 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776

Commercial Vehicles

260,114 318,430 351,041 467,765 490,494 384,194 531,395

Three Wheelers

284,078 307,862 359,920 403,910 364,781 349,727 440,368

Two Wheelers

5,364,249 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231

Grand Total

6,810,537 7,897,629 8,906,42810,123,988

9,654,435 9,724,24312,292,770

Page 13: Indian Automobile Sector

Automobile Exports Trends (Number of 

Vehicles)

Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Passenger Vehicles

129,291 166,402 175,572 198,452 218,401 335,729 446,146

Commercial Vehicles

17,432 29,940 40,600 49,537 58,994 42,625 45,007

Three Wheelers

68,144 66,795 76,881 143,896 141,225 148,066 173,282

Two Wheelers

265,052 366,407 513,169 619,644 819,713 1,004,174 1,140,184

Grand Total

479,919 629,544 806,222 1,011,529 1,238,333 1,530,594 1,804,619

Page 14: Indian Automobile Sector