india's automotive industry market...

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2020/AD/CB/016 Agenda Item: 14.11

India's Automotive Industry Market Situation

Purpose: Information Submitted by: Society of Indian Automobile Manufacturers

Capacity Building and Economy Updates on Market Access in Auto Industry Impacted by COVID-19

Meeting of the 32nd Automotive Dialogue28 August 2020

26 8 2020 – Virtual Platform

Presented by

SIAM

Copyright © 2018 APEC Secretariat

Indian Automotive IndustryMarket Situation

Categories Total No.

of Manufactures/Companies

Total No. of New Entry Companies

in 2019

Total No. of Direct

Employment

Automobile Manufacturers

30 22 million

(Additional 6 million in

Components and Dealerships

including Service Centres)

Motorcycle Manufacturers

13 -

Parts Manufacturers

747 NA

Industry Overview

Indirect Employment: Additional 29 million

2

Automotive Production (Nos. in million)

Industry Overview

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20FY21Q1

3W 0.84 0.83 0.95 0.93 0.78 1.02 1.27 1.13 0.06

2W 15.72 16.88 18.50 18.83 19.93 23.15 24.50 21.04 1.25

CV 0.83 0.70 0.70 0.79 0.81 0.90 1.11 0.75 0.03

PV 3.23 3.09 3.22 3.47 3.80 4.02 4.03 3.43 0.14

YOY Growth 4% 9% 3% 5% 15% 6% -15% -79%

-100%

-80%

-60%

-40%

-20%

0%

20%

0

5

10

15

20

25

30

FY = April to March 3

Industry Overview

Automotive Sales (Nos. in million)


3W 0.54 0.48 0.53 0.54 0.51 0.64 0.70 0.64 0.01

2W 13.80 14.81 16.00 16.46 17.59 20.20 21.18 17.42 1.29

CV 0.79 0.63 0.61 0.69 0.71 0.86 1.01 0.72 0.03

PV 2.69 2.50 2.60 2.79 3.05 3.29 3.38 2.77 0.15

YOY Growth 3% 7% 4% 7% 14% 5% -18% -75%

-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%

0

5

10

15

20

25

30


Industry Overview

Automotive Exports (Nos. in million)


3W 0.30 0.35 0.41 0.40 0.27 0.38 0.57 0.50 0.05

2W 1.96 2.08 2.46 2.48 2.34 2.82 3.28 3.52 0.34

CV 0.08 0.08 0.09 0.10 0.11 0.10 0.10 0.06 0.00

PV 0.55 0.60 0.62 0.65 0.76 0.75 0.68 0.68 0.04

YOY Growth 7% 15% 2% -4% 16% 14% 3% -64%

-70%-60%-50%-40%-30%-20%-10%0%10%20%30%

0.00.51.01.52.02.53.03.54.04.55.0


FY2020 Performance - Negative Sales !

PV CV 2W 3W Overall

18% 29% 18% 9% 18%

FY 2020 Automotive Industry

performance vis-à-vis FY2019

Poor consumer

sentiments

Liquidity crisis with

NBFCsHigher acquisition

cost

Long term Insurance,

cost increase

Axle load norms, fleet

utilization

Lower rural

consumption

BS IV to BS VI

transition

Key Factors contributing Degrowth

6

FY21 - Demand Expected to Drop

27741914

718 413

17418

12018

637 465

21532

14810

0

5000

10000

15000

20000

25000

Sale

s V

olu

me (

‘000

)

Domestic Vehicle Sales & Projections PV CV 2W 3W Total

18% 29% 18% 9% 18%Gro

wth

%

(Yo

Y)

FY 20

40-

45%30-

32%26-

28%

30-

32%

30-

32%

FY 21 Scenario GDP Growth: (-2) – (-1)%

7

India’s Response to COVID-19

Government of India has been taking many important decision to fight against thespread of COVID-19 and minimizing the impact on economic activities:• Airlifting critical imports from China in early March• Invoked Disaster Management Act, 2005. as well as Epidemic Diseases Act to

deal with the situation• Country-wide lockdown from last week of March 2020 to early June 2020 with

only essential services allowed to operate• Important industries allowed to start operation from Mid-May with adequate

precautionary measures taken• Phased opening up of the lockdown started in June and States given control of

monitoring cases and taking action to reduce the rising numbers• More than US $ 260 Bn economic revival package announced by the Finance

Minster• Reserve Bank of India (RBI) provided financial support through repo rate

reduction and moratorium for loan repayment• Focus has been on Self Sufficiency in the recent past 8

9

Auto Industry Update

• Automobile industry in India reported ‘Zero’ sales in April 2020 due to Nation-wide Lockdown

• Operations for most of the Automobile plants were allowed to start by Mid-May 2020

• Supply chain concerns and subdued consumer sentiments, due to risingnumber of COVID-19 cases, continued to affect Production and Sales in Mayand June

• No direct stimulus was announced for the Automobile Industry, however somerelaxation was given for upcoming regulatory norms

• SIAM has been actively engaged with the Government on supporting theambition of ‘Make in India for Automobiles and Auto Components’

• Government of India is looking at increasing competitiveness and volumes forthe automotive sector to make India a hub for manufacture of Automobiles andAuto Components.

9

GST Rates for Vehicles

Vehicle Category GST Rate

Electric Vehicles and Fuel Cell Vehicles 5%

*Compensation Cess on various categories vary

Vehicle Category GST Cess* Applied Duty

Passenger vehicles (petrol, CNG, LPG) <4m in length and <1200cc engine 28% 1% 29%

Passenger vehicles (diesel) <4m in length and <1500cc engine 28% 3% 31%

Mid-size PVs (>4m in length with <1501cc engine) 28% 17% 45%

Large PVs (>4m in length with >1500cc engine) 28% 20% 48%

SUVs (>4m in length with >>1500cc engine & >169mm ground clearance) 28% 22% 50%

Hybrid cars (except small hybrid cars) 28% 15% 43%

>350cc two-wheelers 28% 3% 31%

10 – 13 seater public transport vehicles 28% 15% 43%

10 – 13 seater public transport vehicles <4m in length 28% - 28%

10

Custom Duty Structure- Conventional Vehicles

Tax RateType CBUs SKDs CKDs

Commercial Vehicles (Trucks & Buses) 40% 25% 15%

Cars with CIF value less than $40,000; or with engine capacity less than 3000 CC for Gas engine and less than 2500 CC for Diesel engine

60% 30% 15%

Cars with CIF value of more than $40,000; or with engine capacity more than 3000CC for Gas engine and more than 2500CC for Diesel engine

100% 30% 15%

Two - Wheelers 50% 25% 15%

11

Free Trade Agreements

Agreements Concluded

Regional: SAFTA, ASEAN

Bilaterals: Japan, The Republic of Korea, Malaysia, Singapore, Sri Lanka,Thailand, Bangladesh, Bhutan, Serbia/Montenegro, Chile

Under Negotiation: Australia, New Zealand, Canada, EU, EFTA, Mercosur,

Peru, Sri Lanka ETCA, Korea CEPA Upgradation

RCEP- India has withdrawn from the negotiations

12

Thank you for your attention!!!

13

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