3 acma iaa-india-day 2010

8/6/2019 3 Acma Iaa-India-day 2010

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Indian Auto Component Industry Opportunities Unbound

Presentation by:

Srivats RamPresident, ACMA

24 th September 2010; Hanover, Germany


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Automotive Component Manufacturers Association of India

India: A Vibrant Economy

Automotive Industry in India

Auto Component Industry in India

Capabilities & Challenges of Component Suppliers Indo - German Auto Component Trade

The Way Forward

About ACMA

Agenda


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Largest Democracy in the world 1.18 billion people

4 th largest GDP ( PPP ) and 11 th largest GDP ( Nominal )

2nd fastest growing economy (RBI estimate 2010-11 8.5%)

3rd

largest investor base in the World Robust Legal and Banking Infrastructure

Demographics of Youth 50% under 25 years & 65% under 35 years

Rural to Urban Migration - 140 million by 2020; 700 million by 2050

2nd largest pool of certified professionals and highest number of qualified

engineers in the world



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61.478.2

111.5

149.2

291279

181.3

253

27%

43%

34%

15%

-4%

40%

22%

0

50

100

150

200

250

300

350

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

-10%

0%

10%

20%

30%

40%

50%

Imports(US $ bln) Growth rate(%)

Imports

52.763.8

83.5

103.1

182.6 177

124.6

163

21%

31%

-3%

12%

23%

31%

21%

0

20

40

60

80

100

120

140

160

180

200

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10-5%

0%

5%

10%

15%

20%

25%

30%

35%

Exports(US $ Bln) Growth rate(%)

Exports

4.23.1

5.5

27.3

33

2.6

24.57

15.7

-16%

-26%

185%

56%

112%

11%21%

0

5

10

15

20

25

30

35

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10-50%

0%

50%

100%

150%

200%

FDI(US $bln)# Growth rate(%)

FDI

75.4

107

142

252274

173.1

281

1369%

-10%

4%

62%

22%

42%

27%

0

50

100

150

200

250

300

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

FE Reserves* ( US $ bln) Growthrate(%)

FE Reserve

# Partly Estimated * As on May 19, 2010

Growing trade, Investments & Forex reserves

I n

U S

$ b

n

I n

U S

$ b

n

I n

U S

$ b

n

I n

U S

$ b

n


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Automotive Industry in India


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Vehicle Production in India

2,200

150 120200

10,230

420

40

5,100

670

360

710

100

0

500

1,000

1,500

2,000

2,500

3,000

Passengervehicles

SCVs LCVs M&HCVs Two- & Three-wheelers

Tracto rs Co nst ructio nequipments*

2009 2015 (E) 2020 (E)

470 530

540 600

30,000 33,500

940 1,050

170 190

1,100 1,220

390

8,700 9,700

22,100

*Includes backhoes, track exc avators, wheeled load ing shovels, vib ratory rollers and liftall

0 0

0 u

n i t

s

q 7 th largest vehicle manufacturers in the world.

q Vehicle production in India is expected to grow by 3 fold from 2009figure by 2020.

q SCV is expected to grow faster.

Source: ACMA - EY Vision 2020


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Auto Component Industry in India


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Auto Component Industry Growth Drivers

G R

O W

T H

D R I V E R S

Availability of low-costskilled manpower

Increasing demand forvehicles

Low-cost and high-qualitystandards

Policy initiatives toPromote growth in the

sector

India generates about 0.4 million engineering graduates every year. The cost of entry-level engineers is as low as US$ 8,000 per year. India accounts for 26% of the worlds Engineering Service

Outsourcing (ESO)

Vehicle production grew to ~ 14 million in 200910. Global OEMs are entering India to set up their manufacturing base.

India offers low labor costs. This has resulted in a significant cost reduction as opposed to

overseas production maintaining international quality standards.

De-regulation and policy initiatives such as lower excise duties,realization of VAT, etc., have been implemented.

FDI up to 100 per cent is permitted through the automatic route formanufacturers of automobiles and components.

Source: IBEF


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Auto Component Industry: Size &Product Range

6.7 8.712

18 18.422

26

1529%

38%

20% 18%2%20%

25%

05

1015202530

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11(E)0%

10%

20%

30%

40%

Growth rate(%)

CAGR: 21%CAGR: 21%

Engine Parts31%

Drive Transmission &Steering Parts

19%

Equipments

10%

Electrical Parts9%

Others7%

Suspension &Braking Parts

12% Body & Chassis12%

Turnover

Product Range

I n U S

$ b n


q The Indian auto component industryhas an opportunity to tap a potential~ $ 110 bn by 2020.


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Auto Component Industry Exports &Exports Markets

CAGR: 21%CAGR: 21%

Exports market size

Exports market

OEM/Trier-1: 80%

Aftermarket: 20%

Profile of ExportsAfrica7.4%

Asia28.1%

Australia1.1%Europe

36.9%

N.America24.0%

S.America2.5%

I n U S

$ b n


Exports could grow 6 fold by 2020Exports could grow 6 fold by 2020


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1.41.9

2.53.6

5.2

6.8

8.245%

20%

33%

45%

30%31%

0.0

2.0

4.0

6.0

8.0

10.0

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-100%

10%

20%

30%

40%

50%

Growth rate(%)

Imports market size

Auto Component Industry Imports & Sources ofImports

CAGR: 34%CAGR: 34%

Import Sources

Asia54.34%

Australia0.22%

Europe36.03%

N.America8.28%

Africa0.20%

S.America0.92%

I n

U S

$ b

n


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Auto Component Industry Investments

CAGR: 20%CAGR: 20%

I n U S

$ b n


Investments

~$ 2.5bn Investment is expected next year~$ 2.5bn Investment is expected next year


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Increased Component Outsourcing from India

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


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Vision 2020: The future

$ 30 bn

$ 69 bn

$ 110 bn

U S $ b n

* Imports is also included


$ 3.8 bn

$ 9.4 bn

$ 26 - 29 bn

U S $ b n

q Turnover is expected to grow by 3 folds by 2020

Exports PotentialTurnover


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Capabilities & Challenges of Component Suppliers


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Indian Auto Component Industry Focus:Global Best Practices

Largest Deming Prize Award winning companies outside JapanLargest Deming Prize Award winning companies outside Japan

11

15

32

99

208

445

562

Deming Award

TPM Award

QS 9000

OHSAS 18001

ISO 14001

TS 16949

ISO 9000

JIPM - 3 Japan Quality Medal - 1Shingo Silver Medallion - 1

Modern shop-floor practices 5-S; 7-W Kaizen TQM TPM 6 Sigma Lean Manufacturing

More than 600 members


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Design &engg. skills

Manufacturingskills

Manpowercost

Domesticdemand

Commercialenvironment

Supplierbase

Rawmaterial

Infrastructure

Korea 1 1 7 9 1 3 2 1

China 4 4 1 2 12 3 1 4

Thailand 8 11 7 8 1 6 11 2

Indonesia 8 7 3 9 5 7 11 11

Vietnam 13 13 7 14 5 12 15 11

Czech 1 1 7 9 5 1 6 3

Romania 13 13 7 6 10 14 13 15

Poland 8 9 15 8 3 8 13 6

Slovakia 11 4 7 14 5 10 6 5

Russia 5 11 3 1 10 14 3 8

Hungary 3 9 7 2 12 13 10 8

Turkey 13 7 6 9 3 8 5 8

Brazil 6 4 7 2 15 3 9 6

Mexico 12 13 3 6 5 10 4 13

India 6 3 1 2 12 1 6 13

E a s

t A s

i a

E a s

t e r n

E u r o p e

India is less competitiveIndia is more competitive India is comparable

L a

t i n

A m e r i c a

Note: Number inside each cell indicates country ranking

Other supporting factors

India is more competitive India is comparable India is less competitive

A comparison between India vis-a-vis other



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Indian Component Industry Development Capability

During the development process, TataMotors asked suppliers to think out of thebox and innovate products and processdesign.

This approach has resulted in 37 patentsbeing filed to cover innovations in the carand has given Indian Engineers a canvas toshow case their skills and capabilities.

Hyu ndai i20 , Made in India withEuropean Design feel

Hyundai exported 286K cars last yearwith a focus on Europe

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


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Some Design & Research Centers in India


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Challenges in the Auto Component Industry

1. Raising Capital to meet the growth trajectory

2. Scaling Capacities ahead of the demand

3. Infrastructure Deficit & Cost Energy & Logistics

4. Maintain productivity gains ahead of inflation

5. Availability of Skilled Manpower

6. Build R&D Competence

7. Develop Managerial Depth across Tiers of the Industry


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India-Germany : Auto Component Trade

2004 2005 2006 2007 2008 2009

Auto ComponentExports to Germany 145.6 196.5 224.4 308.7 409.9 276.2

% of India's total AutoComponent Exports 9% 8% 7% 9% 10% 9%

Auto ComponentImports fromGermany 303.2 458.3 631.0 894.2 1,155.3 750.6

% of India's total Auto

Component Imports 14% 16% 18% 17% 15% 13%

Source: ACMA International Trade Year Book, DGCI&S

(In US $ mln)


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Major German Tier1 players presence in India

More than 125 JVMore than 125 JVMore than 125 JV

An Illustrative list:-

BROSE

CONTINENTAL AG

FEDERNFABRIK

GKN WALTERSCHEID GMBH HELLA KGAA HUECK & COM

HUBERT STUEKEN GMBH & CO.

HUGO KERN UND LIBERS GMBH

KAUTEX TEXTRON GMBH & CO

KNORR BREMSE SYSTEMS FUER NUTZFAHRZEUGE GMBH

KOSTAL

LUK

MAHLE VENTILTRIEB GMBH

MONARK DIESEL GMBH REINZ-DICHTUNGS-GMBH

ROBERT BOSCH GMBH

ZF


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Indias Exports to Germany : Top 15 Products

HS Code Product Name 2008-09 2009-10 % Growth

87089900 OTR PRTS&ACCSSRS OF VHCLS OF HDG 8701-8705 64.40 54.36 -16%

84099930 FUEL INJECTN EQPMNT EXCL INJCTN PUMPS 17.46 18.10 4%

73181500 OTHR SCREWS & BOLTS W/N WTH NUTS OR WASHERS THREADED 16.00 11.38 -29%

84822090 OTHER TAPERED ROLLED BEARINGS 6.77 10.71 58%

85119000 PARTS OF ARTICLS OF HDNG 8511 9.56 10.61 11%

84133010 INJECTION PUMPS FOR DIESEL ENGINES 16.82 10.10 -40%

85392120 OTHER HALOGEN LAMPS FOR AUTOMOBILES 4.97 9.31 87%

73072100 FLANGES OF STAINLESS STEEL 14.24 7.13 -50%

84099990 OTHER PARTS OF SEMI DIESEL ENGINES 9.85 6.99 -29%

84831099 OTHER TRNSMSN SHFT(INCL CAM & CRNK SHFT) 22.07 6.74 -69%

84825023THRUST ROLLER BEARINGS>100MM OR 4 INCHES BOREDIAMETER

15.32 6.27-59%

84831092 CRANK SHAFT FOR ENGINES OF HEADING 8408 0.88 6.10 597%

84833000 BEARING HOUSUNGS,NOT INCORPORATING BALL OR ROLLERBEARINGS;PLAIN SHAFT BEARINGS 4.62 6.09 32%

84099920 FUEL NOZZELES 6.27 5.99 -4%

84148030 TURBO CHARGER 1.31 4.71 260%


(In US $ mln)


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(In US $ mln)

Indias Imports from Germany : Top 15 Products

HS Code Products Name 2008-09 2009-10 % Growth

87089900 OTR PRTS&ACCSSRS OF VHCLS OF HDG 8701-8705. 91.02 94.58 4%

84834000

GEARS & GEARNG,EXCL TOOTHD WHEELS,TRNSMSN ELMNTSPRSNTD SEPRTLY;BALL SCRWS;GEAR BOXS& SPEED CHNGRS,INCLTORQUE CNVRTRS 160.26 71.80 -55%

84099990 OTHER PARTS OF SEMI DIESEL ENGINES 48.88 62.99 29%

84839000 PARTS OF THE ITEMS OF HDG 8483. 131.07 52.23 -60%

85030090 PARTS OF OTHR ROTATING ELECTRC PLANTS 53.79 44.90 -17%

90328990 OTHR ATMTC RGLTNG/CNTRLNG INSTRMNTS&APPRTS 32.61 26.79 -18%

84836090 OTHERS 22.87 25.18 10%

84821090 OTHER BALL BEARINGS 18.84 24.17 28%

84822090 OTHER TAPERED ROLLED BEARINGS 27.37 23.76 -13%

84823000 SPHERICAL ROLLER BEARINGS 24.18 22.27 -8%

84213990 OTHERS 19.98 20.86 4%

90319000 PARTS AND ACCESSORIES OF INSTRMNTS OF 9031. 23.56 18.93 -20%

73181500 OTHR SCREWS & BOLTS W/N WTH NUTS OR WASHERS THREADED 21.13 18.91 -10%

87082900 OTHR PRTS & ACCSSRS OF BODIES(INCL CABS) 10.34 18.89 83%

84833000BEARING HOUSUNGS,NOT INCORPORATING BALL OR ROLLERBEARINGS;PLAIN SHAFT BEARINGS 11.59 17.38 50%



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The Way Forward


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Areas of Cooperation

1. German SMEs can invest in green-field manufacturing in India tomeet growing domestic demand for auto-components.

2. Opportunities for Partnerships with Indian SMEs at Tier 2/3 level -Product and 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; ACMA has an MOU with Fraunhofer Institute, Germany.


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The Addressable Opportunity

Business opportunities in areas of technology:- Engine & Exhaust parts

- Auto Electronics & Electrical

- Transmission & Steering

- Informatics & Telematics

- New Material/ Light weighting- Simulation Technology

Collaboration for Manufacturing Excellence, Quality and ProcessDesign

Production Sharing in India & Europe for a Holistic Service Capability

Partnering for Global Requirements

Explore newer Areas - Environment

Merger & Acquisition


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Conclusion

Vibrant Indian Economy

Automotive Industry showing double digit growth in all segments

India fast becoming Global and Regional hub for vehicleprogrammes

Vision 2020: A USD 110 Billion auto component industry Growing engineering and IT capability for designing &

manufacturing

Auto Component Industry :Culturally compatible Values

Opportunity to partner in product & process innovation

India : A Gateway to Growth India : A Gateway to Growth


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About ACMA


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Introduction

Autom otive Component M anufacturers Association of I ndia

Role

Members

Quality System

Re-Christened

Inception

An apex agency of the Indian Automotive Industry

600+ companies forming majority of theauto component output in the organized sector

ACMA operates on Quality System basedon ISO 9001:2000

In the year 1959 as The All India Automobile & A ncillary Industries Association (AIA & AIA )

As Automotive Component Manufacturers Association of India in the year 1982


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A C MA m

e m

b e r s h i p

( M o r e

t h a n 6

0 0 m

e m

b e r s

) 46

51

82

179

245

> 100 Million US $

> 50 ~ 100 Million US $

> 25 ~ 50 Million US $

> 5 ~ 25 Million US $

< 1 ~ 5 Million US $

Annual Turnover

ACMA Membership

More than 70% of Companies are SMEsMore than 70% of Companies are SMEs


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Collection & Dissemination of

Information

QualityEnhancement

TechnologyUp-gradation

Promotes Indian Automotive Component Industry

Vital Catalyst for Indu strialDevelopment

Trade Prom otion

ACMA and Its Services


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Promote Indiaas a Brand

Promote Indiaas a Brand

Organize BusinessDevelopment Delegation

Overseas

Organize BusinessDevelopment Delegation

Overseas

Undertake ExportPromotional

Projects

Undertake Export

PromotionalProjects

Organize Participationin Overseas

AutomobileExhibitions & Fairs

Organize Participationin Overseas

AutomobileExhibitions & Fairs

Global Interactionthrough

Counterpart Association

Global Interactionthrough

Counterpart Association

Dissemination of Export Enquiries

Dissemination of Export Enquiries

Organize PrivateExhibitions &

Suppliers Conference

Organize PrivateExhibitions &

Suppliers Conference

Facilitate potentialBusiness Partnership of

JV / Strategic Alliance

Facilitate potentialBusiness Partnership of

JV / Strategic Alliance

ProvidingInternational

Sourcing Forums

ProvidingInternational

Sourcing Forums

Working closelywith IP Os in India

Working closelywith IP Os in India

International Business Development


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ACMA Center for Technology

ACMA Center forTechnology (ACT)

Support ACMA Activities

To establish WorldClass shop floor

In house

ACT Journal

To support and updatemembers on Standardization

and Technologyinterventions

Cluster Approach ACT Publication Technology Up gradation

h f k d


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ACMA Head OfficeThe Capital Court, 6th Floor, Olof Palme Marg, Munirka, New Delhi 110 067

Tel: 011-26160315, 2617 5873, 74,Fax: 011-26160317E-mail: [email protected] , Website: www.acmainfo.com

The Automotive After Market and ServiceExposition

.. BE A PART OF IT.. BE A PART OF IT
mailto:[email protected],http://www.acmainfo.com/


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Thank You

for any assistance contact [email protected]
mailto:[email protected]

3 acma iaa-india-day 2010

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