Automobile Industry in India (Present and Future)

Presented By: Somnath BhaduriRoll No: 116/20151st Year, PGDM-GenLBSIM, Delhi

Flow of The Presentation

Introduction Present situation of Indian Automobile sector Market Shares of the companies. Investment and Development. Government Initiatives. SWOT Analysis. Road Ahead. Reference.

Introduction

2nd fastest growing automobile market in the world after China with annual production of 23.37 million vehicles in FY 2014-15( growth rate of 8.68% over last FY).

Accountable for the contribution of 7.1% to the GDP. Export grew at a CAGR of 14.65% over last five years(2010-2015). FDI received worth US$ 13.48 billion during period April 2000 to June

2015( Data released by DIPP). GOI encourages FDI upto 100% in the automobile sector under

automatic route.

Current Scenario of Indian Automobile Industry.

Market Share 12-13

Market Share 13-14

Market Share 14-15

15.6

5

14.3

6

13.7

8

4.03

3.25

2.984.07

3.86

4.06

76.2

5

78.5

3

79.1

7

ProductionPassenger Vehicles Commercial VehiclesThree Wheelers Two Wheelers

Source: Society of Indian automobile Manufacturers

Passenger Vehicles

Commercial Vehicles

Three Wheelers

Two Wheelers

0.00 20.00 40.00 60.00 80.00 100.00

14.98

4.46

3.03

77.54

13.59

3.44

2.61

80.37

13.17

3.11

2.69

81.03

Market Share of Sales

Market Share 14-15 Market Share 13-14Market Share 12-13

Current Scenario of Indian Automobile Industry( Cont…).

Passenger Vehicles

Commercial Vehicles

Three Wheelers

Two Wheelers

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

19.30

2.76

10.46

67.49

19.16

2.48

11.36

67.00

17.42

2.40

11.42

68.77

Market Share of Export

Market Share 14-15 Market Share 13-14 Market Share 12-13

Source: Society of Indian automobile Manufacturers

Current Scenario of Indian Automobile Industry( Cont…).

Company Name

Products manufactured

Manufacturing Locations

Total Group Turnover (in million)

Maruti Suzuki Cars Gurgaon 499706.00Mahindra & Mahindra

Commercial Vehicles

Nasik, Zahirabad, Chennai

389454.00

Tata Motors

Cars, Commercial vehicles

Pune, Jamshedpur, Ahmdabad

362947.00

Hero Motors Motorcycles Gurgaon 275853.00

Bajaj Auto MotorcyclesPune, Pantnagar, Aurangabad

216120.00

N.B: All the data are taken upto Mar'15 Source: Society of Indian Automobile Manufacturers

Major investments and developments in the automobile sector in India

Global auto major Ford plans to manufacture in India two families of engines by 2017, a 2.2 litre diesel engine codenamed Panther, and a 1.2 litre petrol engine codenamed Dragon, which are expected to power 270,000 Ford vehicles globally.

The world’s largest air bag suppliers Autoliv Inc, Takata Corp, TRW Automotive Inc and Toyoda Gosei Co are setting up plants and increasing capacity in India.

General Motors plans to invest US$ 1 billion in India by 2020, mainly to increase the capacity at the Talegaon plant in Maharashtra from 130,000 units a year to 220,000 by 2025.

US-based car maker Chrysler has planned to invest Rs 3,500 crore (US$ 525 million) in Maharashtra, to manufacture Jeep Grand Cherokee model.

Mercedes Benz has decided to manufacture the GLA entry SUV in India. The company has doubled its India assembly capacity to 20,000 units per annum.

Germany-based luxury car maker Bayerische Motoren Werke AG’s (BMW) local unit has announced to procure components from seven India-based auto parts makers.

Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares in France-based Peugeot Motorcycles (PMTC).

Government Initiatives Government of India aims to make automobiles manufacturing the main driver of ‘Make in

India’ initiative, as it expects passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.

In the Union budget of 2015-16, the Government has announced to provide credit of Rs 850,000 crore (US$ 127.5 billion) to farmers, which is expected to boost the tractors segment sales.

The Government plans to promote eco-friendly cars in the country i.e. CNG based vehicle, hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent ethanol blending in petrol.

The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission 2020 to encourage the progressive induction of reliable, affordable and efficient electric and hybrid vehicles in the country.

The Automobile Mission Plan (AMP) for the period 2006–2016, designed by the government is aimed at accelerating and sustaining growth in this sector. Also, the well-established Regulatory Framework under the Ministry of Shipping, Road Transport and Highways, plays a part in providing a boost to this sector.

SWOT Analysis

Road Ahead India is expecting to be the Third-largest automobile industry and 2nd largest two-wheeler

manufacturer by 2016. By 2020, India's share in the global passenger vehicle market to touch 8 per cent from

4.68 per cent in 2014. Passenger vehicles to increase at a CAGR of 25.6 per cent during FY2015–20. Commercial vehicles expected to register a CAGR of 30.9 per cent during FY2015–20. Two and Three wheelers projected to expand at a CAGR of 12.6 per cent during FY2015–20. The Indian luxury car market is estimated to expand at a CAGR of 25 per cent during

2015–20 and reach 150,000 units by 2020 (accounting for 4 per cent of the estimated 6.8-million-unit domestic car market) The luxury SUV segment is growing at about 50 per cent, while luxury sedans are increasing 25–30 per cent Audi to launch Q7 SUV and new sports car TT later in the year.

Road Ahead(Cont…)

Maruti Suzuki expects Indian passenger car market to reach four million units by 2020, up from 1.97 million units in 2014-15.

The Indian automotive sector has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s Gross Domestic Product, as per the Automotive Mission Plan 2016-26 prepared jointly by the Society of Indian Automobile Manufacturers (SIAM) and government.

Reference

Society of Indian automobile Manufacturers. http://www.siamindia.com/statistics.aspx?mpgid=8&pgidtrail=9

India Brand Equity Foundation. http://www.ibef.org/industry/automobiles-presentation

Thank You