BY

RAMA KRISHNA (34)

AJAY BABU(03)
Contents
• History of Indian Automobile.
• Market Overview
• Government regulations & policy
• India Advantage
and business opportunities
What is Auto mobile industry?

Importance of Automobile industry?

What is role of Auto mobile industry on

Indian economy?
 History
 Indian Automotive industry can be
classified into three main phases.
First phase(mid 1980)-protection.
Second phase(post1991)-liberalization.
Third Phase(early 2000)-Globalization.
 SEGMENTS
Hatchback
Eg-Tata indica, Maruthi zen etc..,
Sedan
Eg-Ambassador,Tata Indigo etc…,
Sports Utility Vehicle(SUV)
Eg-Mahindra Scorpio,Tata Safari etc..,
Luxury cars
Eg-Audi R8,Volvo S80 etc..,
sedan
Hatchback
Sports Utility Vehicle(SUV)-
Market Overview
Profile: Indian Automotive Industry
•Growth rate- CAGR of 14% p.a over the last 5
years,
•2nd largest two wheeler market in the world
•4th largest commercial vehicle market in the
world
•11th largest passenger car in the world and is
expected to be the 7th largest market by 2016
 key contributor to the Indian economy
 Vehicle sales in India in 2005 - 06 ( in mil)

0.36
7.05
0.35
1.14

0 2 4 6 8
Cars CVs Two wheelers Three Wheelers
Auto components industry has
also grown at a rapid pace ...
Size of Component Industry (US$ mn)

10000
8700

6730
5430
4470
3849 3965

FY00 FY01 FY02 FY03 FY04 FY05 FY 06

• grown at -17% CAGR

Players: Indian auto industry
Indian
• GM Auto • Tata Motors
• Toyota
Indust • Mahindra & Mahindra
• Ford • Bajaj Auto
• Hyundai ry • TVS Motors
• Maruti Suzuki Global Indian • Hero Honda
• Honda • Bajaj Tempo
• Skoda OEM OEM • Ashok Leyland
• Volvo
• Mercedes

• Delphi Global Indian • Bharat Forge

• Visteon • Sundram Fasteners
• Bosch Suppli Engineer Suppli • Rane Group
• Denso ers ers • Shriram Pistons
• Valeo ing & • RICO Auto
• Thyssen Krupp • Sono Koyo Steering
Develop
ment
Compan
ies
Automotive clusters in India
North / Central
Delhi-Gurgaon-Noida-
Ghaziabad
Ashok Leyland Eicher South
Ludhiana Haridwar Force Motors Hero Honda Ashok Leyland Enfield
Hindustan Motors Ford
Honda Greaves
Pitampur Honda SIEL ICML Hindustan Motors
Hyundai
Kinetic LML
Jamshedpur Mahindra & Mahindra
Majestic Maruti Tatra
Rajkot-Halol
Kolkata Suzuki Toyota Kirloskar TVS Motors
Piaggio Yamaha Volvo
Swaraj Mazda Tata Motors
West
Mumbai-Pune-Nasik Ashok Leyland
Aurangabad Hyderabad East Atul Auto
Hindustan Motors Bajaj Auto Daimler
Tata Motors Chrysler
FIAT Force
Major automotive clusters - Mumbai- Motors
Chennai Bangalore Hosur Pune-Nasik-Aurangabad (West), Chennai GM Greaves
-Bangalore-Hosur (South) and Delhi- Kinetic
Gurgaon-Faridabad (North) M&M Premier
Skoda Tata
Motors
Exports are rising - India has the potential
to become the global outsourcing hub
Vehicle Exports from India

600000 60

500000 50

Export of auto components

400000 40
(USD million )
Units

300000 30 1,800

%
1400
200000 20
25% 1020
625 760
456 578
100000 10

0 0
CV Cars 2 Wheelers 3 Wheelers FY00 FY01 FY02 FY03 FY04 FY05 FY06

Exports (2005-06) Growth rate ( 4 year CAGR)

Indian vehicle exports - 40 % over

the last few year
component exports -25 % per annum.
Growth drivers for the
Indian automotive industry
 Overall economic
growth
Governme  Lower duties &
nt Policies
taxes

 Contemporary Increasin  Growth in

New
products Indian Automotive g Income levels
product
Industry consumer  Easier
 Shorter life launches
demand financing
cycle

 Export
Cost
Competitiveness
 Reduced cost
Competitivenes
s
to consumer
 India emerging as a
manufacturing hub
Growth potential of the
Indian automotive industry
Projected size of Auto Components industry - 2015

Domestic USD 13 - 15 bn
Components

Components USD 20 - 25 bn
Exports

0 5 10 15 20 25
$ Billion

• Expected Exports growth- USD 33- 40 bn

by 2015
 Potential Vehicle sales in India in 2015 - 06 ( in mn)

0.87
27.8
2015-16
0.64
2.65

0 10 20 30
Cars CVs Two wheelers Three Wheelers

•Expected to grow at 13% p.a to

reach around USD 120 - 159 bn
by 2016.
• total investments required-USD 35
- 40 bn
Government regulations and
policy
•In 2002 auto policy

•allows automatic approval for foreign

equity investment upto 100%

• lays emphasis on R & D activities

•Weighted tax deduction of upto 150% for

in-house research and R & D activities
Regulation Road Map Approach
Targets • Harmonization with ECE
• Industry challenges to standards
development • Homologation and Certification
• Better vehicles: safer and testing agencies and centres
more environment friendly
200 200 200
2004 2007 2008 2010
5 6 9

• Crash requirements aligned with EU

• Mandatory Airbags
• Bharat Stage IV in Metros and Bharat
Stage III in rest of the country
• NATRIP National Automotive
Testing and R&D centres
• Testing centres at Manesar
(Haryana), Chennai (Tamil
Nadu), Pune (Maharashtra)
• Proving ground at Indore
(MP)
• Tractor testing facility at Rae New complete
proving ground at
INDORE
Bareilly (UP)
• Hill Driving Training Centre
New test &
homologation
center near
CHENNAI

at Silchar (Assam)
India Advantage and business
opportunities
Large and growing domestic Export Potential
demand • Increased outsourcing
• Demand growth expected to be has led to
around 10 % CAGR making India a large potential to
one of the fastest growing export components and
markets vehicles
to other markets
Proven product Development High quality
capabilities standards
• Capabilities to develop • 12 Indian component
complete vehicles and systems manufacturers have
won the Deming
• More than 125 Fortune 500
(including large auto Indian Prize for quality
companies) have R&D centres in Auto • Most leading
India Industry component
manufacturers are
• Companies can leverage India’s QS and ISO certified
acknowledged leadership in the
IT industry Competitive
Stable economic policies manufacturing cost
• Continuity in reforms and •Implementation of
policies VAT, has positioned
• India targets to emerge as India as one of the
the “manufacturing hub” leading low cost
manufacturing
for small cars sources
Domestic Opportunities Global outsourcing
Opportunities
• Participate in domestic growth Indian
• Exports of vehicles
opportunities Automotive
• Exports of components
Sector • Engineering and Design
Services

•Investment potential -USD 35 - 40 bn

•various forms
•100 % subsidiary - 100 % FDI through
automatic route allowed in this
sector
•JVs with local firms
Tata Nano was finally
launched in Mumbai on
23rd March,2009.
The largest player in the Indian industry. Plans to launch new and exciting
products in the Indian markets, including the ‘100,000’ car

Suzuki’s JV in India and the largest passenger car

manufacturer in India

The third largest passenger car manufacturer in India and one of the
largest exporters of vehicles. Has established India as one of its manufacturing
bases in the world. Is planning to invest heavily to boost exports from India

Has vision of capturing 10 % share of the Indian passenger car market by 2010

One of the leading players in the Indian premium cars

segment

One of the leading players in the Indian premium cars

segment
One of the leading players in the Indian premium cars
segment.
Plans to enter the small car segment by re-launching the
Matiz
One of the largest players in the UV / MUV segment

The 2nd largest CV manufacturer in India

The largest 2 wheeler manufacturer in the world

The 2nd largest 2- wheeler manufacturer in India and

the largest
3 wheeler manufacturer. Has plans for establishing a
manufacturing
facility in Indonesia
The third largest 2 wheeler manufacturer in India. Has
plans for establishing a manufacturing facility in
Indonesia
Has recently entered the Indian market through its
direct subsidiary
( in addition to its JV – Hero Honda)
Has recently entered the Indian market through its
direct subsidiary
SWOT ANALYSIS-
Strenghts-
Availability of human Resource
Raw material
Growing markets
Availability of latest technology(R&D)
Weakness-
Lack of trained manpower
Interest on international brand
Opportunities-
India source base for global auto majors
Rapid Growth
Threats-
Raise of fuel prices
Raise of raw material prices
Lack of availability of customer finance
PEST Analysis-
Change of policies
 global warming
Employment to rural people
Nurturing Manpower