Automotives 2012
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AUGUST Automotives 2012 For updated information, please visit www.ibef.org 1 AUGUST Automotives 2012 Contents Advantage India Market overview and trends Growth drivers Success stories: Maruti, Tata Motors Opportunities Useful information For updated information, please visit www.ibef.org 2 AUGUST Automotives 2012 Advantage India FY16E Growing demand Innovation opportunities • Strong demand growth due to rising • Tata Nano and the upcoming Market size: Pixel have opened up the incomes, growing middle class, and a USD145 young population is likely to propel potentially large ultra low cost India among the world’s top five car segment billion auto-producers by 2015 • Innovation is likely to intensify • Growth in export demand is also among engine technology and alternative fuels set to accelerate Advantage India Rising investments Policy support • India has significant cost • The government aims to develop advantages; auto firms save 10-25 India as a global manufacturing as per cent on operations in India well as R&D hub compared to Europe and Latin America • There has been a wide array of policy • A large pool of skilled manpower FY10 and a growing technology base will support in the form of sops, taxes and induce greater investments FDI encouragement Market size: USD57.7 billion Notes: R&D – Research and development, FDI – Foreign direct investment; FY – Indian financial year (April – March); FY16E – estimated figure for financial year 2016; estimates are from the government’s Automotive Mission Plan (2006 – 2016) For updated information, please visit www.ibef.org ADVANTAGE INDIA 3 AUGUST Automotives 2012 Contents Advantage India Market overview and trends Growth drivers Success stories: Maruti, Tata Motors Opportunities Useful information For updated information, please visit www.ibef.org 4 AUGUST Automotives 2012 Evolution of the Indian automotives sector 20.4 million units (2012) 11 million units (2007) 2008 onwards 1993 -2007 0.6 million • More than 35 players units (1992) in the market • Sector de-licensed in • Removal of most 1983 - 1992 1993 import controls • Major original • Indian companies equipment 0.4 million • Joint venture (JV) - gaining global manufacturers (OEMs) units (1982) Indian government and identity started assembly in Suzuki to form Maruti India Udyog; started Before 1982 production in 1983 • Imports allowed from April 2001 • Component • Closed market manufacturers also • Introduction of value • Only 5 players entered via JV route added tax in 2005 • Long waiting • Buyer’s market periods and outdated models Source: Tata Motors, Society of Indian Automobile • Seller’s market Manufacturers (SIAM), Aranca Research, Notes: JV – Joint Venture For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 5 AUGUST Automotives 2012 The automotives market is split into four segments Automobiles Two-wheelers Passenger vehicles Commercial vehicles Three-wheelers Mopeds Passenger cars Light Passenger commercial carriers vehicles Scooters Utility vehicles Goods carriers Medium and heavy commercial vehicles Motorcycles Multi-purpose vehicles Electric two- wheelers For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 6 AUGUST Automotives 2012 Revenues have been growing at a strong pace → Gross turnover of automobile manufacturers in India expanded at a CAGR of 17 .7per cent over FY07-11 → Excluding three wheelers, cars account for the largest share of revenues (66.2 percent in 2010) Revenue trends over the past few years in USD million Market* break-up by revenues (2010) 70.0 58.6 60.0 12.3% CAGR: 17.7% 50.0 43.3 Two Wheelers 36.6 40.0 33.3 21.5% 30.5 Trucks 30.0 20.0 66.2% Cars 10.0 0.0 FY07 FY08 FY09 FY10 FY11 Source: SIAM, Datamonitor, Aranca Research Note: *does not include three wheelers For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 7 AUGUST Automotives 2012 Sector’s growing strength evident from rise in total production figures → Automobiles production increased at a CAGR of 13 .2 Total production of automobiles in India (million units) per cent over FY05-12 18.0 15.5 16.0 → Passenger vehicles was the fastest growing segment 14.0 13.4 during that period with a CAGR of 14 .5 per cent 12.0 10.5 10.0 8.5 8.4 8 Notes: CAGR – Compound annual growth rate 8.0 7.6 6.5 6.0 3.1 3.0 4.0 2.4 1.8 1.6 1.3 1.3 1.2 0.8 0.8 0.8 2.0 0.8 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Passenger Vehicle Commercial Vehicle Three Wheelers Two Wheelers Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 8 AUGUST Automotives 2012 Market break-up by production volume → Two wheelers dominate production volumes; in FY12, Market share by volume (FY12) the segment accounted for more than three quarters of total automotives production in the country 4% 4% → In fact, India is the world’s second largest two wheeler producer; the country is also the fourth largest 16% Two Wheelers commercial vehicle producer Passenger Vehicle Commercial Vehicle Three Wheelers 76% Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 9 AUGUST Automotives 2012 Market 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% 8.1% MCV & HCV Passenger Passenger cars Carriers 36.0% MCV & HCV Goods Carriers Utility LCV Passenger Carriers vehicles/multipurpose vehicles 49.7% LCV Goods Carriers 6.1% 88.5% Source: SIAM, Aranca Research Notes: LCV – Light commercial vehicle; MCV – Medium commercial vehicle; HCV – Heavy commercial vehicle For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 10 AUGUST Automotives 2012 Market break-up of individual segments by production volumes … (2/2) Shares in production of three wheelers (FY12) Shares in production of two wheelers (FY12) 5.3% 15.8% 15.6% Mopeds Goods carriers Motorcycles Passenger carriers Scooters 84.2% 79.1% Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 11 AUGUST Automotives 2012 Exports have also grown strongly … (1/2) → Automobiles export volumes increased at a CAGR of Exports of automobiles from India (million units) 22.4 per cent over FY05–FY12 2 2 1.8 → Over this period, the fastest growth was in the two 1.6 1.5 wheeler segment (25.8 per cent) followed by three 1.4 1.1 wheelers (21 .9 per cent) 1.2 1 1 0.8 0.8 0.6 0.5 0.5 0.5 0.5 0.6 0.4 0.4 0.3 0.3 0.4 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.08 0.06 0.05 0.04 0.04 0.2 0.04 0.03 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Passenger Vehicle Commercial Vehicle Three Wheelers Two Wheelers Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 12 AUGUST Automotives 2012 Exports have also grown strongly … (2/2) → Two wheelers accounted for the largest share in Exports shares by volume (FY12) exports (by volume) at 67 per cent in FY12 → Passenger vehicles account for a sizeable 18 per cent 18% of overall exports Passenger Vehicle 3% Commercial Vehicle 12% Three Wheelers Two Wheelers 67% Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 13 AUGUST Automotives 2012 Presence of a clear leader in each segment of the market → The automotives industry is concentrated with market leaders in each segment commanding a share of over 40 per cent Market Leader Others Passenger Vehicles 45% 16% 15% 7% MCVs & HCVs 63% 23% 7% LCVs 59% 30% 4% 4% Three Wheelers 41% 40% 10% Motorcycles 59% 24% 7% 6% Scooters 51% 21% 14% 10% Source: SIAM, Aranca Research Notes: Data is for FY10 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 14 AUGUST Automotives 2012 Notable trends in the Indian automotives sector • Large number of products available to consumers across various segments; this has gathered pace with the entry of a number of foreign players New product launches • Reduced overall product lifecycle have forced players to employ quick product launches • Increasing R&D investments from both the government and the private sector Improving product- development • Private sector innovation has been a key determinant of growth in the sector; capabilities two good examples are Tata Nano and Tata Pixel – while 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 cars and taxis are expected to register a CAGR of 28 per cent over FY11-FY14 Alternative fuels • The CNG distribution network in India is expected to increase to 250 cities by 2018 from 30 cities in 2009 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 15 AUGUST Automotives 2012 Contents Advantage India Market overview and trends Growth drivers Success stories: Maruti, Tata Motors Opportunities Useful information For updated information, please visit www.ibef.org 16 AUGUST Automotives 2012 Sector has been benefitting from strong demand and product innovation Growing demand Policy support Increasing investments Growing demand Strong government support Goal of Rising establishing India Rising incomes, investments from as an auto- young population manufacturing domestic and Resulting foreign players Inviting hub in Greater R&D focus; GOI Greater innovation has set up availability of technology in products; credit and modernisation market