FUTURE TRENDS IN INDIAN MOBILITY www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 1 FUTURE TRENDS IN INDIAN MOBILITY NOTE FROM CONFERENCE CHAIRMAN Dear Readers, The National Mission on Electric Mobility was unveiled in 2013 to promote electric mobility in the country. Since then, the Department of Heavy Industries has introduced the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME-India) scheme, which has moved into phase-II this year. Through the mission, the government hopes to have a cumulative fuel saving of 9,500 million litres by extending support to the hybrid/electric vehicles market development. It is heartening to see that the Government of India is enthusiastic about promoting clean automobile technology in the country. While phase-I of FAME was focused upon creating a place for electric vehicles in the Indian automobile space, FAME-II lays emphasis on giving an impetus to electric vehicles in public transport, encourage greater adoption of EVs, create charging infrastructure, and push for R&D in technologies. Since the inception of the scheme, the government has given financial support to about 2,61,507 electric/hybrid vehicles. In October 2017, electric buses were added to the scheme as part of modernising the public transport system, and, so far, DHI has sanctioned 455 electric buses for 9 cities. The knowledge paper - Future Trends in India Mobility, prepared by MarketsandMarkets, offers in-depth analysis of how India’s automobile industry is recreating itself as per the existing government policies and the current market dynamics. It studies India’s EV market scenario and future outlook, with a special focus on the key government policies, including FAME. The paper goes on to explore the future trends in public transportation, including aspects such as intelligent transportation systems, alternative fuels in public transport, effective traffic management and safety, future mobility trends, etc. MarketsandMarkets is a leading global revenue impact company that helps its clients identify new high-growth and niche revenue opportunities. Our partnership presents new opportunities for both organisations to share best practices and industry experiences, and we hope that this association and the resultant knowledge paper will be not only appreciated by the industry, but also recognised for its value content. PREM BEHL Chairman Exhibitions India Group www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 2 FUTURE TRENDS IN INDIAN MOBILITY TABLE OF CONTENTS INDIAN AUTOMOTIVE INDUSTRY 01 ELECTRIFYING THE FUTURE LEARNING AND 02 WAY FORWARD FROM GLOBAL LEADERS INDIA’S EV MARKET SCENARIO AND FUTURE OUTLOOK 03 SHARED AND CONNECTED 04 MOBILITY IN INDIA FUTURE TRENDS IN PUBLIC TRANSPORTATION 05 www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 3 FUTURE TRENDS IN INDIAN MOBILITY 01 INDIAN AUTOMOTIVE INDUSTRY The Indian automotive industry is the 4th largest industry in the world with production increasing to 5.17 million units in 2018, inclusive of passenger cars and commercial vehicles. The country is also a prominent auto exporter and has growth expectations for the future. The automobile exports grew 15.54% during FY2018. In FY2018–2019, overall automobile exports grew by 14.50% with passenger car exports registering a decline of (-) 9.64% while commercial vehicles, three- and two-wheelers registering a growth of 3.17%, 49.00%, and 16.55% respectively. ADVANTAGE INDIA GROWING DEMAND POLICY SUPPORT . Rise in middle class income . The government aims to develop and young population may India as a global manufacturing result in strong growth center. The government has also come up with reforms like GST to boost the growth in the sector. OPPORTUNITIES RISING INVESTMENT . India is expected to become a leader in . FDI inflow in the automobile sector shared mobility by 2030, providing stood 19.29 billion between April opportunities for electric and 2000- June 2018. autonomous vehicles . India also has a significant cost . Shifting focus towards electric cars can advantage that attracts investment also provide opportunities in the sector in the sector. Source: IBEF Organizations, Secondary Research, Expert Interviews, and MarketsandMarkets Analysis www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 4 FUTURE TRENDS IN INDIAN MOBILITY India is witnessing sustainable economic growth on the backdrop of various factors such as strong economic expansion, socio- cultural transformation, strong demographic dividends, growing urbanization, etc. India is the 7th largest country by area, the second-most populous country in world with over 1.3 billion people. Figure below portrays some of the major factors of growth of country as whole; FIG INDIAN ECONOMY SNAPSHOT OPTIMISTIC INVESTMENT CLIMATE nd G20 2 th MEMBER RANK HIGHEST POPULATION ~55 GLOBAL COMPETITIVENESS GDP GROWTH RATE +7% LARGEST MARKET, DOUBLE DIGIT 550+ nd FOR CONSUMING - GROWTH IN CLASS HOUSEHOLDS MILLION INTERNET USERS, 2018 2 EXPORT & IMPORTS GROWING EDUCATION AND HEALTHCARE DOUBLE DIGIT GROWTH IN GROSS NATIONAL HIGHWAYS: 115,530+ KM ~50+ EXPENDITURE ON R&D STATE HIGHWAYS: 176,166+ KM GROSS VALUE ADDED (GVA) STRENGTHENING OF INDEX OF PURCHASING MANAGERS' INDEX INDUSTRIAL SECTOR GROWTH: +5% SERVICE SECTOR GROWTH: +8% INDUSTRIAL PRODUCTION MARKET SIZE The automobile production comprising passenger cars and commercial vehicles increased from 4.78 million units in 2017 to 5.17 million units in 2018 at 8.19%. The growth is due to several initiatives by the Indian government and major automobile players in the market. Moreover, automobile sales increased from 3.67 million units in 2017 to 4.02 million units in 2018 at 9.49%. INVESTMENTS THE RECENT/PLANNED INVESTMENTS AND DEVELOPMENTS IN THE INDIAN AUTOMOTIVE INDUSTRY ARE AS FOLLOWS: Ashok Leyland has planned a capital expenditure of INR 1,000 crore (USD 155.20 million) to launch 20–25 new models across various commercial vehicle categories during 2018–19. Hyundai is planning to invest USD 1 billion in India by 2020. SAIC Motor has also announced to invest USD 310 million. Mercedes Benz has increased the manufacturing capacity of its Chakan plant to 20,000 units per year—highest for any luxury car manufacturing in India. In November 2018, Mahindra Electric Mobility opened its electric technology manufacturing hub in Bangalore with an investment of INR 100 crore (USD 14.25 million) which will increase its annual manufacturing capacity to 25,000 units. www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 5 FUTURE TRENDS IN INDIAN MOBILITY FIG OEMs PRESENCE AND PLANT LOCATIONS MANUFACTURING CLUSTERS: INDIA AUTOMOTIVE INDUSTRY Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 6 FUTURE TRENDS IN INDIAN MOBILITY KEY OEMs THE KEY OEMS OPERATING IN INDIA ARE: MARUTI SUZUKI The company was formerly known as Maruti Udyog Limited and changed its name to Maruti Suzuki India Limited in September 2007. The company was founded in 1981 and is headquartered in New Delhi. Maruti Suzuki India Limited is a subsidiary of Suzuki Motor Corporation. The company designs, manufactures, and sells a range of automotive vehicles. The company offers passenger cars, utility vehicles, SUVs, and MUVs along with related parts and accessories. HYUNDAI MOTORS Hyundai is a Korea-based company engaged in the manufacture and distribution of automobiles and automobile parts. The company operates through three segments, namely, vehicle, finance, and others. The company offers hybrid and electric hybrid vehicles under the vehicle segment. The original equipment manufacturer offers vehicles under brand names such as Genesis, Tucson, Equus, Veloster, Azera, Ioniq, Sonata, Elantra, and Accent. TATA MOTORS Tata Motors Limited was founded in 1945 and is based in Mumbai. Tata Motors designs, manufactures, and sells a range of automotive vehicles. The company offers passenger cars, utility vehicles, SUVs, LCVs comprising pickup trucks and small commercial vehicles, and medium and heavy commercial vehicles consisting of trucks, tractors, buses, tippers, multi-axle vehicles, dump trucks, tractor-trailers, mixers, and cargo vehicles along with related parts and accessories. MAHINDRA & MAHINDRA Mahindra Electric Mobility Limited operates as a subsidiary of Mahindra & Mahindra Limited. The company was founded in 1994 and is based in Bengaluru. Mahindra Electric Mobility Limited manufactures and markets fuel-free electric cars to customers in India and internationally. The company also offers a smartphone application that allows car users to get real-time data and updates to control a host of car features remotely. In addition, it licenses out its electric vehicle technologies. TOYOTA MOTOR CORPORATION Toyota Motor Corporation is an automotive manufacturer established in 1937 and headquartered in Aichi, Japan. Toyota operates in various segments such as automotive and financial services. The company’s automotive segment engages in the design, manufacture, assembly, and sale of passenger vehicles, minivans, and commercial vehicles. www.marketsandmarkets.com | Future Trends in Indian Mobility - Whitepaper By MnM 7 FUTURE TRENDS IN INDIAN MOBILITY GOVERNMENT INITIATIVES AND FOREIGN INVESTMENTS The Government of India encourages foreign investments in the automobile sector and allows 100% FDI under the