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THE INDIAN AUTOMOBILE INDUSTRYA PERSPECTIVE
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Automobile Industry in India
Automobile Industry in India has witnesseda tremendous growth in recent years.
Come a long way since the first car ran onthe streets of Bombay in 1898.
It employs more than 10 million people.After independence Indian automobile
industry was plagued by unfavourablegovernment policies. All it had to offer inthe passenger car segment was a 1940sMorris model called the Ambassador anda 1960s Suzuki-derived model called theMaruti 800.
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The automobile sector in Indiaunderwent a metamorphosis as a
result of the liberalization policiesinitiated in the 1991
Measures such as relaxation of theforeign exchange and equityregulations, reduction of tariffs onimports, and refining the bankingpolicies played vital role.
after the sector opened to foreigndirect investment in 1996 globalmajor moved in.
Matured in last few years and offers
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Today Scenario
1) India is on every major globalautomobile player's radar.2) Indian automobile industry is also
fast becoming an outsourcing hub forautomobile companies worldwide, asindicated by the zooming automobileexports from the country.
3)Due to rapid economic growth andhigher disposable income it is
believed that the success story of theIndian automobile industry is notgoing to end soon.
4)Today, Hyundai, Honda, Toyota, GM, Ford
and Mitsubishi have set up theirmanufacturin bases in India
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Major characteristics of Indian automobilesector
Second largest two-wheeler market inthe world.
Fourth largest commercial vehicle market
in the world.11th largest passenger car market in theworld
Expected to become the world's thirdlargest automobile market by 2030,behind only China and the US.
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Indian automobile sector-A boomingmarket
Allowance of 100% FDI in 2002 made theindustry easily attractive for the globalplayers. Japanese, Korean, European, andAmerican OEMs entered the Indianmarket and added more than 1 Millionfour-wheelers during 2005-06.
The production of 2-wheelers grew at a
CAGR of 14.6% from FY2001 to FY 2006.In passenger car segment, rise indisposable incomes has opened theroads for luxury cars too in India.
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Key findings
It is expected that per head disposal income in India will grow atCAGR of 12.11% from fiscal year (FY) 2007 to FY 2010. It is likelyto boost purchasing powers of population, and consequently, the sale ofmotorcycles and compact cars will increase.
In commercial vehicles segment, light commercialvehicles are expected to register a higher growth rate than the heavy
and medium commercial vehicles from FY2007 to FY 2010.
India had the lowest penetration rate of motorcycles in comparison toIndonesia, Thailand and Malaysia in 2005, indicating good growthprospects for the motorcycle manufacturers.
Car stock per 1000 population is expected to increase at a CAGR of9.14% during the forecasted period from FY2007 to FY2010. * Newpassenger car registration is expected to grow at a CAGR of 11.41%during the forecasted period.
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A U TO M O B ILE
2 W H E E L E R 3 W H E E L E RPA S S E N G E R
V E H IC LE
C O M M E R C IA LV E H IC LE
M O T O R C YC LE S C O O T E R S S C O O T E R E T T E S M O P E D S
. . .I C V . . .M C V . . .H C V
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Segment wise market share
The industry has not experienced much change in its structure over the last 6years
-Two wheelers form the major share of domestic sales
( . %)Passenger vehicles lead the exports market 57 4
,2 wheelers form the bulk of exports as well but are losing share to Passengervehicles
The growth in the two wheeler market is driven by the motorcycle market and- %is expected to grow at 14 15 YOY
Growth Rates of different segme
23.5
11.314.3 14 14.2
0
5
10
15
20
25
Commercial
Vehicles
Passenger
Vehicles
Two
wheelers
Three
wheelers
total
Automobiles
Segments
4yearCAGR
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Key players
Commercialvehicles TATA Motors, Ashok Leyland, Swaraj
Mazda,Mahindra & Mahindra ,Force motors,Eicher Motors
PassengervehicleTATA Motors, Maruti Udyog, Honda Motors, Toyota,Skoda, Mahindra & Mahindra, Daimler Chrysler,Hindustan Motors.
TwoWheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors,
Yamaha , Kinetic MotorsThreeWheeler Bajaj Auto, Piaggio India
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A r a i c o u p e
TATA E leg a n te In d ig o A d ve n t
TA TA In d iv aC ro ss O ve r
C O N C E PT C A R S
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Market share of two wheelers
Bajaj Auto,24.4%
TVS Motors,17.7%
Yamaha,
3.8%
Others, 5.8%
Honda
Motors, 8.5%
Hero Honda,
39.8%
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Passenger vehicles market share
Maruti, 50.37
Hyundai, 19.17
Tata Motors,
17.19
Honda, 5.33
Others, 5.73
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Favorable Demographics
Improving income curve
Reducing interest rates
Cost Pressure High Expectations
Inadequate InfrastructureDevelopment
EY CHALLENGESEY ENABLERS
ey Focus Areas Product development( , )includes collaboration new products developed Vendor base ( , , .) quality of vendors skill levels size etc
Manufacturing capability
( , & ,quality levels productivity skill levels
)technology Service levels Supply chain Labor law Leverage IT
ey Features of Future Auto PolicyForeignDirectInvestmentImporttariffIncentives ( & )for Research and Development R DEnvironmentalAspects Other measures
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HANKS YOUHANKS YOU