status indian auto industry

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INDIAN AUTO COMPONENT INDUSTRY

AN OVERVIEW

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ContentsContents

The Indian EconomyThe Indian Economy

The Automotive IndustryThe Automotive Industry

Capabilities & Challenges of Component SuppliersCapabilities & Challenges of Component Suppliers

The Way ForwardThe Way Forward

About ACMAAbout ACMA

Automotive Mission PlanAutomotive Mission Plan

Auto Component Industry of IndiaAuto Component Industry of India

Introduction

Automotive Component Manufacturers Association of India

Role

Members

Quality System

Re-Christened

Inception

An apex agency of the Indian Automotive Industry

588+ companies forming majority of the auto component output in the organized sector

ACMA operates on Quality System basedon ISO 9001:2000. Getting upgraded to

ISO 9001 : 2008 version by end June 2010

In the year 1959 as The All India Automobile & Ancillary IndustriesAssociation (AIA & AIA)

As Automotive Component Manufacturers Association of India in the year 1982

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Collection &Dissemination of

Information

QualityEnhancement

TechnologyUp-gradation

Promotes IndianAutomotive Component Industry

Vital Catalyst for Industrial Development

Trade Promotion

ACMA and Its ServicesACMA and Its Services

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ContentsContents








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The Indian economy poised for Growth...

2.9

5.1

6.77.2

8.2

-2.2

2.7

3.6 4.05.6 5.2

7.99.2 9.8 9.3

5.7 5.45.9 5.8

4.3

-4

-2

0

2

4

6

8

10

1950's 1960's 1970's 1980's 1990's 2001-03 2004 2005 2006 2007 2008 2009 2010

Gro

wth

(%)

IndiaWorld

Slow growing closed economy Fast growing open economy

Transformation

Real GDP growth rate: India vs. World

Source: IMF Apr’09, Economic Survey 2008-09 & RBI Bulletin

Manufacturing27%

Agriculture21%

Services52%

Composition of GDPAverage Real GDP growth in last 5 year was 8.5%.

GDP Per Capita is US $ 1018

Projected GDP growth in 2010-11 is 8.2%

Estimated

7

111.5

279

177

33

291

253

78.2

61.4

149.2

181.3

52.763.8

83.5103.1

124.6

163

182.6

4.2 3.1 2.6 5.5 15.724.57 27.3

274

75.4

107136

142173.1

281

252

0

50

100

150

200

250

300

350

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Imports(US $ bln)

Exports(US $ Bln)

FDI(US $ bln)#

FE Reserves* ( US $ bln)

# Partly Estimated * As on May 19, 2010

Growing trade, Investments & Forex reserves…

8

47.0

49.044.9

44.3

45.5

39.5

44.4

7.5*7.5*7.5*8.51015 12.5

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Exchange Rate Import Tariff

Source: Economic Survey 2007-08

Exchange Rate is Market Driven & Continued Import Tariff Reduction

* As on April 20, 2010* As on April 20, 2010

Indian Indian Economy

* Peak rate 10%

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Low cost of Skilled Manpower & Rapidly growing Design Capability

Easy access to capital although interest rate is high

Continuously Improving Quality resulting in Export of Automobiles and Auto components

Low penetration rate of Cars (8/1000)

According to McKinsey, the middle class will grow from 50 million to 550 million by 2025

Infrastructure development (US $750 billion investment between 2007 – 2015*)

Long TermShort Term

Demand Drivers and their Impact…

*Source :CII( IECIAL)

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Auto Investments & Their Spread

Large number of Indian & Global OEMs across the CountryLarge number of Indian & Global OEMs across the CountryLarge number of Indian & Global OEMs across the Country

WEST EAST

NORTH

SOUTH

12Source: SIAM & ACMA-McKinsey Report

608842

1028 11131323

1532 1620

2078

114 146 182 196 222 246 218 273

722

988

12101309

1545

17781838

2351

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10Cars MUVs Total Pass Veh

2014-15

2654

277

2002-2009 CAGRCars - 19.2%MUV’s - 13%Overall - 18.4%

3.0m

Passenger Vehicle Production (Qty in ’000 Nos.)

PROJECTED CAGR 2009-2014

Cars - 6.3%

MUV’s - 0.4%

Overall- 6.3%

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2009-10(Apl-Mar)

Market Share- Passenger Cars

Tata10.5%

Others1.9%

Maruti46.3%

SkodaAuto0.9%

Hyundai30.5%

Ford 1.8% Fiat

1.3%

Honda 3.1%

GM3.6%

14

391

549

417

192

295294

219211

166

121

250225254

226

172139

10981

316

202

275

350

566520

0

100

200

300

400

500

600

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

M&HCVs

LCVs

CVs

2002-2009 CAGRM & HCVs = 11%

LCV’s = 21.5%Overall = 15.9%

Commercial Vehicles Commercial Vehicles Production(Qty in (Qty in ’’000 units)000 units)

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Tractors Production(in Nos)

167

346

433

353

340

192

249

296

-

50

100

150

200

250

300

350

400

450

500

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

CARG 11.1%

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5.1 5.66.5

7.6 8.4 8.0 8.410.5

-

5.0

10.0

15.0

20.0

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2014-15

??

CAGR2002-2009

11%

22--Wheeler ProductionWheeler Production(Qty in million Nos.)(Qty in million Nos.)

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The Future of Auto in India: The Future of Auto in India: 2016

35.003.0032.0Two Wheelers

.70.05.65Tractors

Segments Domestic Sales

Exports Total

Passenger Vehicles

3.00 1.10 4.10

Commercial Vehicles

0.70 0.08 0.78

Three Wheelers 0.97 0.50 1.47

(million units)Global

Position

Source : SIAM

7

4

1

2

Current Global

Position

7

8

2

Already achieved and now revise target has to be set

1

21

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“INDIA” – A Global hub for Compact Cars

Maruti Suzuki :Capacity 250,000 Investment US$ 380 million.

Hyundai :Capacity Increased to 600,000Investment US$ 1 billion

Tata Motors :Capacity 500,000Investment US$ 240 million.

Toyota :Capacity 200,000Investment US$ 310 million.

Ford :Capacity 200,000Investment US$ 500 million.

General Motors :Capacity 140,000Investment US$ 650 million.

Nissan-Renault : Capacity 400,000Investment US$ 1 Billion

VW : Capacity 110,000Investment US$ 750 million.

Honda :Capacity 60,000 Investment US$ 250 million.

Increased local content - Creating Global CompetenceIncreased local content Increased local content -- Creating Global CompetenceCreating Global Competence

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Indian Auto Indian Auto Component Component Industry Focus: Global Industry Focus: Global Best Practices Best Practices

Industry fast embracing modern shop-floor practices:

• 5-S; 7-W

• Kaizen

• TQM

• TPM

• 6 Sigma

• Lean Manufacturing

AC

MA

mem

bers

hip

Significant number of companies with Quality certifications &

recognition:

• ISO 9000 : 562

• TS 16949 : 397

• QS 9000 : 56

• ISO 14001 : 186

• OHSAS 18001: 60

• Deming Award : 11

• TPM Award : 15

• Japan Quality Medal : 1

• Shingo Silver Medallion : 1

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3.23.83.5

2.72.51.7

1.2

2.51.9

3.6

6.8

5.2

1.4

5.9

0

1

2

3

4

5

6

7

8

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

ExportsImports

Auto Component Industry Auto Component Industry –– Exports & ImportsExports & Imports

(US$ billion)

Europe 40.4%

N. America 22.6%

Africa 8.0%

Asia 23.8%

Australia 1.3% S. America 3.7%

Profile of Exports:

•OEM/Trier-1: 80%

•Aftermarket: 20%

CAGR:

Exports 18%

Imports 27%

22

6.78.7

12.0

15.0

18.0 18.419.2

0

5

10

15

20

25

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Source : MOHI Automotive Mission Plan (AMP)

US$ Billion

Auto Component Industry: Size & Product RangeAuto Component Industry: Size & Product Range

E ng ine P arts31%

Drive T ransmis s ion & S teering

P arts19%

B ody & C has s is12%

S us pens ion & B raking

P arts12%

E quipments10%

E lec tric al P arts9%

Others7%

CAGR : 19.2%

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3.13.8

4.4

5.4

7.2 7.37.4

0.0

2.0

4.0

6.0

8.0

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Auto Component Industry InvestmentsAuto Component Industry Investments(In US $ Billion) CAGR: 15 %

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Increased Component Outsourcing Increased Component Outsourcing from Indiafrom India

Indian Components already Driving on your Roads…Indian Components already Driving on your RoadsIndian Components already Driving on your Roads……

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ContentsContents






Automotive Mission Plan : ACMA VisionAutomotive Mission Plan : ACMA Vision


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Increase export revenueTo $ 35 billion by 2016 from

$ 4.1 billion at present

On 29.01.07, the Prime Minister released Automobile Plan 2006 -2016 to give a road map to

Indian Automobile Industry

Automotive Mission Plan 2016Automotive Mission Plan 2016

Increase turnover to$145 billion by 2016

from $ 35 billionat present

Provide employment toadditional 25 million people

by 2016

Automotive Plan 2016

By 2016, the Automotive sector is expected to contribute 10% of the country’s GDP and 30~35% of the Industry

Government of IndiaSIAMACMA

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2020

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2020

Achieve $20 billion in Domestic SalesAchieve $20 billion in Domestic Sales

Achieve $20 billion in Exports SalesAchieve $20 billion in Exports Sales

Create 1 million additional JobsCreate 1 million additional Jobs

20:20:120:20:1

ACMA Vision for 2016ACMA Vision for 201620 : 20 : 120 : 20 : 1

Growth of the Automotive Component Industry directly linked with the growth of Automobile Industry.

Over 70% sales to the OEM

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1. Conversant in all Global Automotive Standards

2. Investments in R&D to meet OE Customer requirements

3. Maintain quality in large volume production

4. Flexibility in small-batch production.

5. Build to Print (B to P) and Art to Print (A to P)

6. Respect for Intellectual Property

7. Growing IT Capability for Design, Development & Simulation.

Capability of Indian Component SuppliersCapability of Indian Component Suppliers

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Indian Component Industry Development Capability

During the development process, Tata Motors asked suppliers to think out of the box and innovate products and process design.

This approach has resulted in 37 patents being filed to cover innovations in the car and has given Indian Engineers a canvas to showcase their skills and capabilities.

“Hyundai i20, Made in India with European Design feel”

Indigenization levels for high volume cars are at 80-90%

Hyundai exported 286K cars last year with a focus on Europe

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Some Design & Research Some Design & Research CentresCentres in Indiain India

Challenges India is Committed to Address

1. Infrastructure Deficit

2. Talent Crunch

3. Scaling-Up the industry

4. Access to World-class Technology and Quality Practices

5. Remaining cost competitive

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• Manufacturing

• Technology

• Research & Development

• Quality

• Environment

Areas of Cooperation

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Areas of Cooperation

1. Global SMEs can invest in green-field manufacturing in India to meet growing domestic demand for auto-components.

2. Opportunities for Partnerships with Indian SMEs at Tier 2/3 level –the Next Wave - covering the entire automotive supply chain to address not only product technology, but also “Process Technology”.

3. Opportunity for supply base discovery.

4. Opportunity for Strategic Alliance to cover Global customers

5. Joint R&D with Indian companies for new product development and designing is also an attractive proposition.

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The Addressable Opportunity…

• Establish Partners/JV in India for

- Safety Components

- Auto Electronics, Electromechanical Sub assemblies

- Embedded Systems

- Informatics & Telematics

- New Material

- Simulation Technology

• Collaboration for Manufacturing Excellence and Process Design

• Production Sharing in India & abroad for a Holistic Service Capability

• Partnering for Global Requirements

• Merger & Acquisition

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ACMA OfficeThe Capital Court, 6th Floor, Olof Palme Marg, Munirka,

New Delhi – 110 067Tel: 011-26160315, 26175873, 74

Fax: 011-26160317E-mail: [email protected],

Website: www.acmainfo.com

status indian auto industry

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