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Emerging opportunities for auto components industry MANUFACTURING IN INDIA

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Page 1: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Emerging opportunities for auto components industry

MANUFACTURING IN INDIA

Page 2: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Setting the stage and Welcome Shri Dhruv Lal

Principal, BCG

Page 3: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Members in the Panel

Department responsible for

promoting engineering

industry in India viz. machine

tools, heavy electrical,

industrial machinery and auto

industry

Smt. Ritu PandeDirector, Department of Heavy

Industries, Government of India

Responsible for driving and

facilitating investments in

the state of Tamil Nadu

Shri Neeraj MittalMD and CEO, Guidance Tamil

Nadu

Responsible for driving and

facilitating investments in

the state of Karnataka

Smt. Gunjan Krishna,Commissioner for Industrial

Development, Govt. of

Karnataka

Shri Soumitra BhattacharyaManaging Director, Bosch India

Heads Bosch's India

Operations

Member of the auto practice

area for BCG

Mr. Natarajan ShankarManaging Director and Partner,

BCG

Page 4: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Agenda

Time (CET) Topic of discussion Speaker / Moderator

1:00 – 1:05 pm Opening RemarksMr. Frank Schlehuber

Senior Advisor Market Affairs, CLEPA

1:05 – 1:10 pm Setting the stage and WelcomeMr. Dhruv Lal

Principal, BCG

1:10 – 1:20 pm India's Auto VisionSmt. Ritu Pande

Director, DHI, Govt. of India

1:20 – 1:30 pm India's Value PropositionShri Nehal Singh Bajwa

Auto Sector Head, Invest India, DPIIT

1:30 – 1:40 pm Presentation by Tamil Nadu GovernmentShri Neeraj Mittal

MD and CEO, Guidance Tamil Nadu

1:40 – 1:50 pm Presentation by Karnataka Government

Smt. Gunjan Krishna

Commissioner for Industrial Development,

Govt. of Karnataka

1:50 – 2:00 pm India journey of Bosch, a global auto component manufacturerShri Soumitra Bhattacharya

MD, Bosch India

2:00 – 2:15 pm Break-out, Q & A

Page 5: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Smt. Ritu Pande

Director, Department of Heavy Industries,

Government of India

Vision for auto components

manufacturing in India

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Page 6: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

India's value proposition: Current

landscape, business environment

and key central & state policies

Shri Nehal Singh BajwaAuto Sector Head, Invest India,

DPIIT

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Page 7: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

66

Introduction: Invest India

Invest India objective is to facilitate

trade and FDI into India

Invest India is the National

Investment Promotion & Facilitation

Agency under Govt. of India

Facilitate companies in their India

journey

Provide knowledge & facilitation

support to cos. exploring

opportunities in India

1

2

3

4

Connect with the

government on any

challenges faced

Assistance with future

projects

On-going support for

expansion

Market research

FDI regulation analysis

Segment information

Consumer market

analysis

Analysis on tax

structures

Information on

commercial aspects

Pre-Investment

Property/ location

search

Assist with local

planning issues

Explain importing

/exporting duties

Industry association

and govt connects

Clarify Compliance

Regulations

Investment After-care

We will be happy to support any of your India plans going forward

SERVICES

Page 8: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

77

Assessment of a countries political stability, regulatory quality, absence of crime, government effectiveness, etc.

Country Risk levels

Capacity of country to efficiently move goods across the border

Logistics Reliability

Assessment of a country's regulatory environment including ability to access credit, enforce contracts, resolve insolvency

Ease of Doing Business

Total landed manufacturing costs taking into account labor, electricity, power and other cost categories

Manufacturing Cost levels

Size of the industry, sub segments, presence of ecosystem

Industry Size/ Maturity

India has a strong value proposition across each parameter

5 metrics essential for an auto component manufacturer

Page 9: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

88

5th largest market for passenger cars and LCVs; Poised to grow faster than others

3rd largest market for Medium & Heavy commercial vehicles; Growth driver for this segment

24.4

10.69.2

4.9 4.2

IndiaGermanyJapanChina USA

Mn Units produced(2019)

Projected CAGR '19-'30

Source: IHS

1.5

0.4 0.4

0.2 0.2

IndiaChina USA Mexico Japan

Mn Units produced(2019)

+2% +1% -1% +0% +4% -2% 0% +4% -2% -2%Projected CAGR '19-'30

1 India one of the largest and fastest growing auto markets globally

Page 10: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

99

$75+ B industry growing at CAGR of 10–12% Spread across six major sub segments

Source: ACMA

1

15

38

60

70–80

10

2014 2019

25-40

Vision 2026

48

75

120-140

10%

CAGR

10–12%

CAGR

Domestic Market Exports

Powertrain Transmissionand steering

Suspensionand breaking

Market size

$18B $14B $11B

Body andstructure

Electricals,Electronics

Others

$9B $9B $14B

… resulting in $75B auto component industry growing at over 10%+

Page 11: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1010

Indexed productivity adjusted manufacturing labor costs ('19) Indexed manufacturing labor cost

Source: Economist Intelligence Unit, BCG analysis

2

1.7x

IndiaThailandChina

1x

Vietnam

2x

1x 2000 20102005

15

2015

10

2020

5

Indexed overall labor productivity

2015

5

2

202020052000 2010

1

3

4

China

Vietnam

Thailand

India

China

India

Thailand

Vietnam

Labor costs in India cheapest amongst low cost countries; Productivity increasing much faster compared to wages

Page 12: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1111

*Source: World Bank Quality of Electricity Supply, 2017; On scale of 1-7

2

CountriesQuality ofpower supply* Power cost Water cost Steel Production

World Bank Score USD/KWh USD/m3 MnT/Annum

China 4.98 0.15-0.16 55-60 993

India 4.68 0.10-0.12 16-20 111

Vietnam 4.34 0.08-0.10 50-80 7

Thailand 5.18 0.10-0.14 35-52 5

Moreover, India is competitive on availability and cost of other factors of production

Page 13: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1212

1. For container cargo; Source: World Economic Forum, UNCTADSTAT

3

Pan-India and global connectivity via extensive railroad, air and water network

12 major ports with high operational efficiency; Plan to double Capacity by 2025

Western DPC Line

Major Port

Major Airport

Road/Rail networkWaterways

Eastern DPC Line

Mumbai JNPT

NMPT

Cochin

Bangalore

Tuticorin

ChennaiKattupalli

Vizag

Paradip

Kolkata

Kanpur

Allahabad Sonnagar

Merut

Ludhiana

Delhi

Ajmer

Surat

KandlaAhmedabad

Western Corridor (1499km)

Dankuni

PuneHyderabad

Median Time in Port (days)1

0.93

0.62

0.760.97

2nd largest road (59 lac kms) and 4th largest rail network (67000 kms), outperforming peers in railroad density

Railroad Density (out of 100)

19.1

17.1

17.956.6

Robust logistics network to support global trade; $1.4 trillion being invested in next 5 years to reduce the logistics cost by 5-10%

Page 14: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1313

6 World Bank Indicators compared to identify country risk Composite Score

Source: 2018 World Bank country risk index;

4

Rule of Law Voice and Accountability

Regulatory Quality

Governance Effectiveness

Political Stability

Lack of corruption

41 43 4448

Vietnam China Thailand India

India fares better than other low cost countries in World Bank's relative country risk assessment

Page 15: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1414

20142019

142 63

Further steps being taken to improve this ranking further

• Single window clearance portal being designed for all Central and State approvals

• National Land bank designed to enable hassle free land acquisition by mapping 3000+ parks covering 5 lac acres

• EGoS and PDC formed under each ministry to resolve bottlenecks and support investors

5

India jumped 79 places on World Bank’s Ease of Doing Business ranking surpassing Vietnam & Indonesia

Rolling out the red carpet: Vastly improved business climate will further accelerate pace of investments into India

Page 16: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1515

5

Karnataka (3)Key players: TVS Motors, Toyota

Kirloskar, Tata, Volvo, Honda Motorcycle &

Scooter India, etc.

8

4

1

5

Maharashtra (4&5)Key players: Mahindra, Tata, Bajaj Auto, India

Kawasaki Motors, Sangyong Motor

Company, Fiat, Jeep India etc.

6

Gujarat (6&7)Key players: MG

Motors, Tata, Suzuki, Toshiba, Denso, Atul Auto, Ford India etc.

7Andhra Pradesh (1)

Key players: Isuzu Motors, Kia Motors, Ashok Leyland, Hero Motorcorp, Kobelco Cranes, etc.

9

Delhi NCR Region (8&9)

Key Players: Hero MotorCorp, Honda, Yamaha, Maruti Suzuki, Harley-Davidson, TVS etc.

3

2

Tamil Nadu (2)

Key players: Hyundai, Eicher, TVS, BMW, Ford India, Yamaha, Royal Enfield, Ashok Leyland, Nissan & Renault etc.

Hyundai's Tamil Nadu Facility

Maruti's Gurugram Facility

Kia's Andhra Pradesh Facility

Large Clusters spread across India offer complete ecosystems for auto component manufacturing

Page 17: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1616

5

To provide support and facilitation to investors for investing in India and to boost growth in keysectors of the economy

Empowered Groupof Secretaries

To identify issues that need to be resolved to finalise investments and put forth these before the Empowered Group; To create projects with all approvals, land available for allocation;

ProjectDevelopment cells

Excerpts from the Cabinet note

This will make India a more investor-friendly destination and to handhold and further smoothen investment inflows into the country. It will give a fillip to our domestic industries

EGoS and PDC is an important step in realizing Prime Minister NarendraModi’s vision of a $5 trillion economy

Further, EGoS and PDC are setup to resolve bottlenecks and support investors

Page 18: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Shri Neeraj Mittal

MD and CEO, Guidance Tamil Nadu

Presentation by Tamil Nadu: State

ecosystem, incentives and value

proposition

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Page 19: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1818

Tamil Nadu has been a leading State across

several Key Performance Indicators with a

Conducive Eco System for Industries

Tamil Nadu

2nd largest economy in India, 8% of National GDP. USD

250 Billion* at the end of 2018-19 (equivalent to the 46th

largest economy in the world)

Leader in renewable energy

1300+ factories present in Tamil Nadu for

producing motor vehicles, trailers & semitrailers

High Human Development / Urbanisation - Presence of

surplus shop floor operators, technicians, diploma

holders and graduate engineers

TN rank 14th in India in Ease of Doing Business

Top 10th automobile hub in the world account for 35%

of India auto component production

Emerging as an electronic hardware manufacturing hub in

India

Tamil Nadu | Overview

Page 20: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

1919

Auto components

Existing Players

India Tamil Nadu

Turnover USD 57 Billion 25 %

Exports USD 15.16 Billion 20 %

Employment 50 Lakh (direct- approx)15 Lakhs (direct – approx)

40 Lakhs (indirect – approx)

Auto Component Industry Snapshot: 2018-19

Sector Capabilities

Page 21: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

2020

Sector Specific Infrastructure Key Incentives/Schemes

Capital Subsidy: Special Capital Subsidy* of up to 25% of eligible

fixed assets or SGST Refund* (up to 100%)

Training Subsidy and/or Payroll Subsidy*: USD 55 per

Month/ Employee for up to 6 months and/or Payroll Subsidy

Electricity Duty Exemption: Up to 5 years from date of

commercial production

Global Accessibility – 4 international and 2

domestic airports

Environmental Protection Infrastructure Subsidy: 25% of cost

of setting up ETPs up to USD 40,000

Land Allotment Concession: 50% subsidized rate for Industries

in SIPCOT of Southern districts

Stamp Duty Reimbursement*: Up to 100%

Relocation Incentives to be provided for companies relocating

to Tamil Nadu from other countries on a case to case basis

Excellent Port Logistics – 3 large sea port and 22

minor ports

Testing & Certification Centers - Multiple R&D centers

like Mahindra Research Valley, NATRiP etc

Reliable infrastructure – High quality infrastructure in

terms of power, roads, communication, water

availability and waste disposal

Policy Support – Support incentives package to attract

major auto players

*case to case basis

Tamil Nadu | Highlights

Page 22: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

2121

Industrial Parks and Plug &

Play Facilities in Tamil Nadu Plug & Play Facilities: 5 Million Sq.Ft of Plug and Play Facility available for Immediate Production

Industrial Parks:Total of 45,929 acres of Industrial Park land available

Region Nearest Airport Nearest Port

Private Parks Government ParksGrand

TotalFree Hold

Land

Industrial

ParksDTA SEZ

Sick

Units

Chennai Chennai Airport Chennai Port 7,737 1,340 1,955 159 331 11,567

Coimbatore Coimbatore Airport Thoothukudi Port 40 330 1,450 56 486 2,362

Krishnagiri Bangalore Airport Chennai Port 240 1,513 138 329 2,220

Thoothukudi Thoothukudi Airport Thoothukudi Port 12,710 14,500 1,888 130 552 29,780

Grand Total 20,487 16,410 6,807 483 1,698 45,929

Tamil Nadu | Investment in industrial infrastructure

Page 23: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

2222

About guidance & contact details of key personnel

First point of

contact for

investors

Policy evaluation

About Guidance: Key Support Activities

Nodal Agency for investment

Investment Promotion & Facilitation

Single Window Portal with Information

wizard

https://easybusiness.tn.gov.in/

https://easybusiness.tn.gov.in/msme/

Country DesksSector-Specific

Desks

Industry Locational Support

Ease of Doing Business

BizBuddy - Investor Helpdesk/ Grievance

redressal

https://www.bizbuddy.tn.gov.in/#/home

Dr NEERAJ MITTAL, I.A.S

MD & CEO | Guidance

Phone: +91 44 28553118 |

Fax: +91 44 28/553856 |

[email protected]

Leadership Team

Thank You

www.investingintamilnadu.com

Auto sector team

AVP – Clifford Li ( [email protected] )

Manager – Prabakaran ( [email protected] )

Page 24: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

Smt. Gunjan Krishna

Commissioner for Industrial development,

Government of Karnataka

Presentation by Karnataka: State

ecosystem, incentives and value

proposition

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Page 25: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

2424

Strong growth in Auto components expected from import substitution, as well as domestic demand growth in 3 key OEM segments

2-wheeler: Strong demand

for low cost transport

4-wheeler: Higher focus

on SUV segment

EV: Continued focus on

EV ecosystem

Auto components

• Preference for personal

vehicle over public

transport post COVID

• Higher export potential-

Two-wheelers form

~75% of auto exports

• The only growing segment

in passenger cars and

expected to continue

growing

• SUV players like Kia

setting up mfg. in India

• Govt. policy support to

boost EV ecosystem mfg.

• FAME-II scheme with

outlay of ~$1.5 Bn

• Strong export potential- export

benefits by Govt

– ~$80 Bn exp. by 2026

($15 Bn in 2019)

– 26% contribution to India

production

– 17% YoY growth in exports

• Significant potential for import

substitution:

– 30%+ demand met through

imports

Domestic demand growth drivers

Double click on Electric Vehicles

Page 26: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

25

Co

pyr

igh

t ©

201

9 b

y B

ost

on

Co

nsu

ltin

g G

rou

p. A

ll ri

ghts

res

erve

d.

Electric Vehicles market size in India expected to be $12-14 Bn by 2025; substantial subsidies and tax benefits by Govt to ensure EV adoption

1. Limited profitability — dependent on business model

Plays

Personal 2W

Bus

Shared 4W

Personal 4W

3 wheeler

EV market size (2025)

% of market

15-20%

8-10%

15-20%

2.5-3%

20-25%

Revenue

($ bn)

5.3-6

1-1.2

0.8-1

2.9-3.1

1.3-2

1

2

3

4

5

Overall

market size,

2025 (Mn

units)

26-27

0.07-0.08

0.7-0.8

3-3.2

1-1.2

• Incentives under FAME II per vehicle (% of vehicle cost)

– E2W – 12.5–15% ($250-$300)

– E3W – 12-13% ($650-$700)

– E4W – 9-10% ($2000)

– E-Bus – 25-30% ($66,000-$67,000)

• FAME II scheme announced for all EVs with an outlay

of $1.3 Bn

Faster Adoption & Manufacturing of EVs (FAME)

Consumer subsidies & tax benefits

announced by Govt of India

• GST on EVs and EV chargers at 5% compared to 18-28%

for ICEs

• Upto $2000 tax benefit on interest paid towards EV

vehicle loan

• 1 slow charger per e-bus and 1 fast charger for every

10 e-buses to be funded by Govt.

Other Demand Incentives from Govt. of India

12-14Total

4-5

0.006-.008

0.1-0.15

0.08-1

0.2-0.3

No. of units

(Mn)

6 LCVs 8-10% 0.5-0.70.8-1 0.06-0.01

Page 27: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

26

Why Karnataka is an attractive destination for auto investors

Page 28: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

27

Karnataka is a leading investment destination in India

Capital – Bengaluru

• Startup Capital of India

• Among Top 3 startup

ecosystems globally $201 Bn GSDP - Almost the

size of Vietnam & growing at

9.6%

1st in total exports, among

all states

Economic Overview

3rd highest FDI among all

states

4th highest Industrial

output & GVA

Advantage Karnataka

400 out of Fortune 500 companies are in the State

New Delhi

Kolkata

Chennai

Ahmedabad

Mumbai

Hyderabad

Bengaluru

KARNATAKA

1st 1st 1st

In attracting

investments since 2016

In India

Innovation Index

In R&D

Centers

Page 29: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

28

1

2

3

Highly skilled & trained labor workforce; eased labor norms

4

Readily available industrial ecosystem (including land)

5

Revamped processes to facilitate Ease of doing business

Multiple financial incentives to create favorable cost economics

Existing strong ecosystem of auto & auto components manufacturing

Key reasons why Karnataka is the most attractive investment destination

6

Well connected and efficient logistics network6

Page 30: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

2929

100% reimbursement

of stamp duty

100% reimbursement

of land conversion fee

1. Subsidy applicable only for the first industry in sub-administrative zones; to encourage investments in taluks where there are no industries with investments above INR 100 Cr and direct employment of 75 persons;

$1-1.5 Mn subsidy to

anchor industries1

0.1% concessional

registration charges

Additional incentives can be considered for marquee projects

Investment

promotion subsidy

upto 2.25% of

annual turnover

for 6-10 years with a

ceiling of 40-60% Value

of Fixed Assets

Pre-setup charges Capital expenditureTurnover linked

subsidies

New Industrial Policy

released in August 2020

Auto & Auto

Components is a focus

sector for Karnataka

$80 Mn

NPV to investor on investment

of $500 Mn

Highest subsidies

benefit in Karnataka

vs. other states

1 Multiple financial incentives announced in Karnataka's new Industrial Policy 2020-25 to create favorable cost economics for investors

Page 31: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

3030

Pre operations setup Post operations setup

Subsidy on Capital Expenditure

100% reimbursement

of stamp duty

100% reimbursement

of land conversion fee

As per the New "Karnataka Industrial Policy" released in Aug 2020

1. Applicable for first few units in the state 2. Subsidy applicable only for the first industry in Sub- Administrative zone

Upto $2.5 Mn subsidy for EV cell/battery

pack mfg. units1

0.1% concessional

registration charges

Additional incentives can be considered for marquee projects

$ 1-1.5 Mn subsidy to anchor industries2

Upto $0.5 Mn subsidy for EV charging, EV

component mfg. units1

Investment promotion

subsidy of upto 2.25% of

turnover for 6-10 years

Interest free loan on 100%

of Net SGST upto 60-95% of

VFA (Value of Fixed Assets)

Demand Incentives

Zero Road tax for

EVs compared to

10-18% for ICEs

Zero Registration

charges for EVs

Investor Incentives Demand Incentives

1 Additional incentives in place in Karnataka for Electric Vehicles ecosystem

Page 32: MANUFACTURING IN INDIA - Aftermarket Suppliers in India.pdfTata, Bajaj Auto, India Kawasaki Motors, Sangyong Motor Company, Fiat, Jeep India etc. 6 Gujarat (6&7) Key players: MG Motors,

3131

• Home to 7 major auto OEMs and more than 50 auto

component manufacturers

• Home to Mahindra Reva, India's 1st indigenously built

electric car

• EV Cluster being set up in Bengaluru Rural (Ramanagara)

• R&D centers, Common Testing centers and Skill centers

being setup in the state

• More than 45 Electric Vehicle startups in Bangalore incl.

Ola Electric Mobility, Ather Energy, etc.

Strong auto & auto components ecosystem

Mangalore

Mumbai

Chennai

Auto component

cluster

Auto cluster

Industrial

valve cluster

Manufacturing hubs

Bengaluru

Belagavi

Mysuru

Kolar

Dharwad

Upcoming EV

Cluster

Machine Tools SoftwareCapital Goods

Bengaluru alone produces ~60% of

the total value of machine tools

manufactured in India

Karnataka is the largest

software exporter in India

Karnataka is the second highest

producer of Special purpose and

Heavy Electrical machinery in India

With presence of 85+ Chip designing

companies, Karnataka is the second

largest chip design hub in the country

ESDM

Strong support from adjacent industries for Auto & EV Manufacturing

2 Karnataka has a strong auto ecosystem which will be further strengthened with upcoming EV cluster in the state

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2 Karnataka is the leader in innovation and R&D in India, and is home to R&D units of multiple global auto & auto comp. companies

• Home to 400+ MNCs with global R&D

Centres

• 1st in NITI Aayog’s India Innovation Index

• Leader in advanced manufacturing – Industry 4.0, Automation, IoT

• Partnership with Global Innovation Hubs -

Strategic Alliances with 15+ countries

• Over 1,500 Global In-House Centers

(GICs) with 1 Mn+ employees

• 50% of world’s SEI CMM Level 5 certified

companies - availability of high-end

technology skills

• Bengaluru – Hotbed for IoT; Home to

536 of the 971 IoT start ups in India

Leader in innovation and R&D Home to R&D units of global auto companies

Engineering and

Business Solutions

• Estd. in 1998 in Bengaluru

• Largest R&D center outside Germany

• Mobility Solutions, Industrial

Technology, Automotive Electronics

Mercedes-Benz R&D

India (MBRDI)

• Estd. in 1996 in Bengaluru

• One of the largest global R&D centers

outside Germany

• Around 5000 skilled engineers

Volvo India R&D Center

• Estd. in 2009 in Bengaluru

• Volvo's global truck design, 800 engineers

• IT (1500+ emp.) & Accounting (800+ emp.)

Great Walls India R&D

• Estd. in 2016 in Bengaluru

• Software Development for EVs, Art.

Intelligence for Self Driving Cars

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International Airport Major Port

Mangaluru

Mumbai

Chennai

12

3

45

6

7

8

9

10

Bengaluru

2

1

3

4

5

6

7

8

9

10

11

Kolar 191 Ac.

Chikkaballapura 293 Ac.

Belagavi 560 Ac.

Chamrajanagar 805 Ac.

Bellari 439 Ac.

Tumakuru 1,009 Ac.

Dharwad 435 Ac.

Mysuru 457 Ac.

Bengaluru (Rural) 488 Ac.

Yadgir 681 Ac.

Dakshin Kannada 349 Ac.

11

Major Developed Industrial Land Banks

3 Over 10,000 acres of developed industrial land available for investors

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Strong performance in introducing

business reforms…

1. 3 years or start of commercial operations, whichever is earlierSource: DIPT Website, Karnataka Facilitation Act

…along with transparent &

convenient processes

Time-bound grievance

handling

Spans across multiple

departments

Single portal for all

approvals & clearances

96.4%

Karnataka

92.7%

Tamil Nadu

90.7%

Maharashtra

Karnataka

Implementation

status of Business

Reforms Action Plan 2019

EODB score 2018

Facilitation Act amended for

improving EODB

100%score

approvals relaxed by

introducing moratorium

3years long moratorium

period1

departments covered7

11

Karnataka Land Reforms Act

amended for improving ease of

land procurement

Enables direct procurement of land

from farmers

4 Ease of doing business in Karnataka improved by latest Facilitation Act, Land & business reforms and transparent one-stop-shop approvals

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Highly skilled & trained workforce capable of

supporting industries across the value chain…

…further strengthened by recent relaxation in

labor laws

1stLargest workforce at the intersection of

advanced mfg. building blocks (AI, IoT)

and skilled mfg. craftsmanship

20.1 Mn

In age group of 16-35 years creating a

favorable demographic dividend

2/3rd population in working age group of 15-59

18.8 Mn

Karnataka is skilling 18.8 Mn

youth during the period 2017-2030

• Provision for industry to avail 'Fixed term employment' to

optimize labor capacity to cater to seasonality

• Recent amendments made to facilitate women's work

timings in night shifts, between 7 PM and 6 AM

• Longer validity period and auto renewals for labor licenses

• Flexibility in employment contracts

• Overtime limit per quarter increased from 75 to 125 hours

with the amendments to the Factories Act, 1948

• Exemption limit for Industrial Disputes Act increased from

100 to 300 workers

• Exemption limit for Contract Labor Act (seeking licenses)

increased from 20 to 50 workers

• Minimum wages linked to factors such as inflation (incl.

Consumer Price Index (CPI))2500+

Training institutes in the state, creating

a robust skill infrastructure

5 Karnataka, the knowledge capital of the country, provides highly skilled & trained labor force; along with relaxed labor laws

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Served by 13 major National Highways; Road

connectivity with all major economic hubs across

India

2 International airports and 6 Domestic airports

Bengaluru Airport – 3rd Largest in India providing

global connectivity

300 km Coastline

Major port at Mangaluru – amongst deepest harbors

on western coast. 9 Other Smaller Ports

Power Surplus State with highest installed capacity

of renewable energy (13.66 GW) in country

One of the Top Ranked on Logistics Ease Across

Different States (LEADS) score

• 2 ICDs, 7 CFSs

Mumbai

980 kms away

Chennai

347 kms awayBangalore

Tumakuru

Only state in India to have 2 industrial

corridors

• CBIC (Chennai-Bengaluru Industrial Corridor)

• BMEC (Bengaluru-Mumbai Economic Corridor)

6 Well connected and efficient logistics network ensuring access to logistics gateways and demand centers

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Popular tourism destination including UNESCO Heritage Sites, attracting tourists from across the world

Varied regional cuisine with specialties such as Mysore Pak, Kori Gassiwhich are popular worldwide

Rich culture and heritage, including Yakshanga dance form and a high theatre presence

40+ five-star hotels in the state, such as Taj Group of Hotels, Hyatt, etc.

Shopping malls in the state offering a wide variety of world-renowned brands

Bengaluru consistently ranked amongst the

best cities to live in India for expats

– Mercers quality of living report 2019

Bengaluru ranked most dynamic city in India

– JLL report 2019

Expatriate friendly ecosystem and lowest

crime rate in South IndiaOver 16 International Schools

Manufacturing ecosystem supported by World Class Social Infrastructure in Karnataka

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Shri Soumitra Bhattacharya

Managing Director, Bosch India

India journey of Bosch, a global Auto

component manufacturer

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

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3939

Bosch in India

Bosch LtdFlagship Company of the Bosch Group in India

M O B I L I T Y S O L U T I O N S

E N E R G Y & B U I L D I N G T E C H .

C O N S U M E R G O O D S

I N D U S T R I A L T E C H

15Group

Companies

16Manufacturing

Facilities 6manufacturing

Facilities of Bosch Ltd

Associates

31,5303,500Sales Outlet

Bosch Ltd Associates

7,5501,500Suppliers

Bosch Ltd

100Billion rupees

195Billion rupeesSales Revenue

In 2019

19221st Sales Office

in Calcutta

19531st Manufacturing

Operations in Bangalore

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Bosch Adugodi Campus under transformation (Started : 1953)

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Bosch AdugodiCampus under transformation (Started : 1953)

Status: 09.2020 (Building 45,000 Sq.m) Planned completion: 05.2022

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Bosch RBEI, KoramangalaSoftware Division (Established in 1998)

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Bosch BidadiManufacturing Plant (Started in 2015)

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Bosch NaganathapuraManufacturing Plant –Hangar expansion (Started in 1989)

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4545

Bosch DevarachikkanahalliBosch learning campus (Start planned in 11.2020)

Status: 09.2020 (Building 45,000 Sq.m)

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Social Engagement | Employment linked Vocational Training

BridgeModern ITI Transformation Artisan Centers BVC Awards

• 524 BRIDGE Centres

• Presence in 23 States and 402 Districts

• 30,000 youth trained and Employed

• 44 BRIDGE Centres in Karnataka, 4200 youth trained and employed

• Model ITI at Diary Circle, Bangalore

• New facilities created by Bosch include Mechatronics Lab, Advanced Manufacturing Lab, Modern Carpentry Lab, ICT Lab & Train the Trainer (TTT)

• First and Only Model ITI in the country

• Carpentry, Plumbing, Electricians

• State-of-the-art facilities in collaboration with leading suppliers

• 13 Multiplier centres

• 350 students trained and employed

• Carpentry and 4 multiplier centres in Karnataka

• 54 times President Award

• 245 Gold medals

• BVC-Bangalore-oldest vocational centre running German VET model

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Break-out and QnA

MANUFACTURING IN INDIA – Emerging opportunities for auto components industry

Smt. Ritu Pande Shri Neeraj Mittal

Shri Soumitra Bhattacharya

Smt. Gunjan Krishna

Mr. Natarajan Shankar