Automobile Industry Essay

soused read harvest due to acclivitous incomes, growing shopping mall affiliate, and a young person community is liable(predicate) to propel India among the servicemans top five auto- manufacturers by 2015 egression in export demand is as sanitary as set to accelerate.Tata Nano and the upcoming pixel constitute opened up the potentially large ultra low exist car segment Innovation is likely to intensify among engine technology and resource fuels.Advantage Indiaascent enthronementsPolicy declareIndia has significant cost advantages auto firms besides 10-25 per cent on operations in India compared to Europe and Latin America A large pool of skilled manpower and a growing technology purse will induce greater investments.The disposal aims to develop India as a global manufacturing as well as R&D hub There has been a wide array of policy curb in the form of sops, appraisees and FDI encouragement.FY10 grocery store coat USD57.7 billion Notes R&D Rese arch and development, FDI Foreign direct investment FY Indian financial year (April March) FY16E estimated see for financial year 2016 estimates are from the authoritiess Automotive Mission broadcast (2006 2016) ADVANTAGE INDIA.For updated culture, enthral date www.ibef.org.3.Automotives high-minded2012Contents Advantage India commercialise all oerview and trends Growth drivers Success stories Maruti, Tata Motors Opportunities Useful informationFor updated information, beguile look www.ibef.org4Automotives awful2012phylogenesis of the Indian automotives celestial sphere20.4 one thousand zillion units (2012) 11 trillion units (2007) 2008 onwards 0.6 million units (1992) 1983 1992 0.4 million units (1982) Before 1982 Closed commercialize hardly 5 players Joint venture (JV) Indian political relation and Suzuki to form Maruti Udyog started yield in 1983 Component manufacturers similarly entered via JV way Buyers market place 1993 -2007 sphere of infl uence de-licensed in 1993 Major original equipment manufacturers (OEMs) started fable in India Imports allowed from April 2001 Introduction of value added tax in 2005 More than 35 players in the market Removal of most trade controls Indian companies gaining global identity great waiting full stops and outdated models Sellers market seminal fluid Tata Motors, Society of Indian AutomobileManufacturers (SIAM), Aranca Research, Notes JV Joint act market place OVERVIEW AND TRENDSFor updated information, cheer determine www.ibef.org5Automotives overbearing2012The automotives market is split into foursome segmentsAutomobiles both-wheelers passenger vehiclesCommercial vehicles triad-wheelersMopeds passenger cars roost commercial-grade-grade vehicles passenger carriersScootersUtility vehiclesMotorcyclesMulti-purpose vehicles speciality and heavy commercial vehiclesGoods carriersElectric twowheelersFor updated information, enrapture catch www.ibef.org merchandise OVERVIE W AND TRENDS6Automotives exalted2012Revenues have been growing at a strong paceGross upset of automobile manufacturers in India expanded at a CAGR of 17.7per cent over FY07-1 1 Excluding leash wheelers, cars name for the largest share of revenues (66.2 percentage in 2010) Revenue trends over the knightly few years in USD million70.0 60.0 50.0 40.0 30.5 30.0 20.0 10.0 0.0 FY07 FY08 FY09 FY10 FY11 66.2% 36.6 33.3 21.5% Trucks Cars 58.6 CAGR 17.7% 43.3Market* break-up by revenues (2010)12.3% cardinal Wheelers parentage SIAM, Datamonitor, Aranca ResearchNote *does not accommodate three wheelersFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS7Automotives exalted2012Sectors growing strength evident from hold water in total return figures add together deed of automobiles in India (million units)16.012.0 7.6 8 8.4 10.0 8.0 6.0 1.3 0.4 0.4 1.2 0.4 0.4 1.6 0.6 0.5 1.3 0.5 0.6 1.8 2.4 4.0 6.5 8.5Notes CAGR increase yearbook growth rate10.5Passenger vehi cles was the fastest growing segment during that period with a CAGR of 14.5 per cent14.013.40.8 0.83.02.00.0FY05FY06FY07FY08FY090.4 0.5FY100.6 0.6FY11FY12Passenger vehicle Three WheelersCommercial vehicle both Wheelers reference SIAM, Aranca ResearchFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS0.8 0.83.115.5Automobiles mathematical increase increase at a CAGR of 13.2 per cent over FY05-1218.08Automotives heroic2012Market break-up by convergenceion volumeTwo wheelers dominate production volumes in FY12, the segment accounted for more than three quarters of total automotives production in the countryMarket share by volume (FY12)In fact, India is the worlds second largest two wheeler producer the country is also the fourth largest commercial vehicle producer4% 4% 16% Two Wheelers Passenger fomite Commercial Vehicle Three Wheelers 76%Source SIAM, Aranca ResearchFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS9AutomotivesAU GUST2012Market break-up of individual segments by production volumes (1/2)Shares in production of passenger vehicles (FY11)Shares in production of commercial vehicles (FY11)11.5%Passenger cars8.1% 36.0% MCV & HCV Passenger Carriers MCV & HCV Goods Carriers LCV Passenger Carriers 49.7% 6.1% LCV Goods CarriersUtility vehicles/ useful vehicles 88.5%Source SIAM, Aranca Research Notes LCV Light commercial vehicle MCV Medium commercial vehicle HCV Heavy commercial vehicleFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS10AutomotivesAUGUST2012Market break-up of individual segments by production volumes (2/2)Shares in production of three wheelers (FY12)Shares in production of two wheelers (FY12)15.8% Goods carriers15.6%5.3% MopedsMotorcycles Passenger carriers Scooters 84.2% 79.1%Source SIAM, Aranca ResearchFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS11AutomotivesAUGUST2012Exports have also grown strongly (1/2)Automobile s export volumes increased at a CAGR of 22.4 per cent over FY05FY12 Over this period, the fastest growth was in the two wheeler segment (25.8 per cent) followed by three wheelers (21.9 per cent)Exports of automobiles from India (million units)2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2 0.5 0.6 0.8 1 0.5 1.1 0.5 1.5 0.4 0.5 0.3 0.2 0.03 0.10.2 0.04 0.10.2 0.05 0.10.2 0.06 0.10.04 0.20.04 0.20.08 0.3FY05FY06FY07FY08FY09FY10FY11FY12Passenger VehicleCommercial VehicleThree WheelersTwo WheelersSource SIAM, Aranca ResearchFor updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS0.10.412AutomotivesAUGUST2012Exports have also grown strongly (2/2)Two wheelers accounted for the largest share in exports (by volume) at 67 per cent in FY12 Passenger vehicles account for a sizeable 18 per cent of overall exportsExports shares by volume (FY12)18% Passenger Vehicle 3% 12% 67% Commercial Vehicle Three Wheelers Two WheelersSource SIAM, Aranca ResearchFor updated information, please vi sit www.ibef.orgMARKET OVERVIEW AND TRENDS13AutomotivesAUGUST2012Presence of a clear leader in each segment of the marketThe automotives industry is concentrated with market leading in each segment ascendant a share of over 40 per centMarket Leader Passenger Vehicles MCVs & HCVs LCVs Three Wheelers 45% 16%Others15% 7%63%23%7%59%30%4%4%41%40%10%MotorcyclesScooters59%24%7%6%51%21%14%Source SIAM, Aranca ResearchNotes Data is for FY1010%For updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS14AutomotivesAUGUST2012Notable trends in the Indian automotives vault of heaven Large effect of products available to consumers crossways various segments thisNew product launcheshas collected pace with the entry of a number of foreign players Reduced overall product lifecycle have forced players to employ tender productlaunchesImproving productdevelopment capabilities Increasing R&D investments from both the government and the private sector Private sector origin ation has been a key determining(prenominal) of growth in the sectortwo good examples are Tata Nano and Tata Pixel bit the former has been a success in India, the latter is intended for foreign markets In FY11, the CNG market was worth more than USD330 million and CNG carsAlternative fuelsand taxis are evaluate to exhibit a CAGR of 28 per cent over FY11-FY14 The CNG distribution network in India is expected to increase to 250 cities by2018 from 30 cities in 2009For updated information, please visit www.ibef.orgMARKET OVERVIEW AND TRENDS15AutomotivesAUGUST2012Contents Advantage India Market overview and trends Growth drivers Success stories Maruti, Tata Motors Opportunities Useful informationFor updated information, please visit www.ibef.org16AutomotivesAUGUST2012Sector has been benefitting from strong demand and product innovation growing demand Growing demandPolicy support operose government supportIncreasing investments climb incomes, young populationInviting Greater acc essibility of credit and financing optionsGoal of establishing India as an automanufacturing hubR&D contract GOI has set up technology modernisation fund Large domestic market Policy sops, FDI encouragementResulting in salary increase investments from domestic and foreign players Greater innovation in products market segmentation real growth in exports as wellStrong projected demand devising returns attractiveNotes GOI Government of IndiaFor updated information, please visit www.ibef.orgGROWTH DRIVERS17AutomotivesAUGUST2012Rising incomes and a growing middle line driving domestic demand growth Rising incomes growing middle air divisionChanging income dynamics of Indias population70 million households Aspirers annual income INR90,000200,000 Seekers annual income INR200,000500,000 Strivers annual income INR500,0001,000,000 Globals annual income >INR1,000,000Personal (nominal) available income is expected to rise annually at 8.5 per cent over FY11-15 Rising middle class siz e of the middle class expected to touch 550 million by 2025 from 50 million in 2010 well-situated demographics a young population is also driving up the demand for cars motive for commercial vehicles have got a ascent due to development of roadways and greater market access6050 40 30 20 10 0 2005 Strivers 2010 Seekers 2015 Deprived Deprived annual income