automotive trends

BMS Auto PlatformAutomobile Industry-Key Market Trends

Breakthrough future trends

OEM key Focus

Alternate fuel (Bio fuel, electricity) - Environment friendly green engines

Cost of ownership savings (life cycle cost) - Fuel efficiency & Thermal management

Rising purchasing power-Focus on SUV’s & Premium car segment

Investment in developing new products & up gradation

References –ACMA, Mckinsey, Reuters, The Hindu

India (2020) - Automotive hub led by small cars & SUVs

Export to ASEAN,BRIC,EU and USA for OEMs as well as Aftermarket

Increased deployment of IT-enabled Automobile support systems like GPS,ABS,ASR and Safety systems

Quality Certification (Deming, Six Sigma, TQM etc) amongst suppliers have attained critical mass

Industry ForcesAuto v/s Material solutions

Industry Rivalry High

New entrants Threat-High

Buyer Bargaining

Power -High

Threat of substitutes

- High

Supplier Bargaining

PowerMedium-Low

Industry Rivalry High

New entrants Threat-High

Buyer Bargaining

Power -High

Threat of substitutes- Medium-

High

Supplier Bargaining

PowerHigh

Automobile Industry Material Solutions Provider

Key change in

trend

High supplier bargaining power for Material Solutions industry while lower supplier bargaining power for OEMS

To be discussed in detail

India : A Developing Hub

Tata Motors

• Large scale update of

their product lineup

• Face lifted Indigo

sedan, facelift of the

Sumo Gold imminent

• End of Year plan -

Revamp Aria , Tata

Grande & Safari Storm

• Focus on exports to

Indonesia

• New product focus-

Undisclosed

Hyundai

• USD300 million investment in a flexible engine plant to manufacture both petrol and diesel engines

• Business focus- compact SUV, a multi-purpose vehicle and a sub 4-metre sedan

• Product focus- product features, technology & design

• Next gen i10 – 2014• Rural sales focus a core

part of our strategy• Will continue to launch 2-3

products every year for the next 5 years

Maruti Suzuki

• Total investment ( 3

year horizon ) worth

6,000 Cr.

• Investment focus-

SUVs and crossovers

• Cut Diesel Engine

Output by One-Third

due to narrowing

differential between

petrol & diesel

Mahindra & Mahindra

• Launched E20 - March 2013

• Working on introducing new refreshments to its existing UV’s- S101 and a sub 4 meter SUV

• To set up a new manufacturing unit, involving an investment of about Rs 4,000 crore.

• Product Focus - fully automatic climate control, intelligent reverse park assist system voice commands, cruise, audio control on steering wheel, laptop and mobile charging points, inbuilt laptop holder, individual reading lamps and many more.

4

India : A Developing HubFord

• Launched EcoSport compact

sports utility vehicle (SUV)

• Plans to export the EcoSport

from Chennai to Europe later

this year (2013 Dec)

• Invested $2 billion to build

manufacturing facilities in

India - Sanand Plant

operational by 2014

• Expects to manufacture

450,000 cars by 2015

Honda

• Rs 2,500 crore in India by

2014- Increase capacity,

upgrade plant activities,

quality etc

• Set up a car assembly line, a

diesel engine component

unit and a forging plant at its

Tapukara facility in

Rajasthan

• Will launch diesel variant of

all its future models in India

Renault Nissan

• Unveiled Datsun ( within 4 Lakh price tag)

• Intends to double its investment in India to nearly $5 billion - Targeting a 15 per cent market share (Renault-Nissan + Datsun)

• Captured 15% Market share in UV market ( FY 2013).

• CMF- Production begins after two years in Chennai, and the first car will hit the market by 2015.

• CMF will generate an average 30-40% cost per model

5

Passenger Vehicle (PVs)Production

Source : SIAM

• The production of PVs in India is expected to grow at CAGR of 13% during 2012-21, as per data published by ACMA.

36%

20%10%

10%

6%

4%3% 11% Maruti

NissanFord Others

Toyota

M&M

TataHyundai

April-March (%)Production Numbers by OEMs 2012-2013

Maruti 1,168,909 36%

Hyundai 638,963 20%

Tata 324,034 10%

M&M 321,061 10%

Toyota 187,826 6%

Nissan 138,549 4%

Ford 109,796 3%

Others 344,423 11%

Total Passenger Vehicles (PVs) 3,233,561 100%

Maruti Hyundai Tata M&M Toyota Nissan Ford GM Honda VW Renault Skoda Others -

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

FY 2011-12 FY 2012-13

OEM Production Comparison

Source : SIAM

Renault Fiat

Honda Tata

M&M GM

Toyota VW

Nissan Skoda

3%

1%

-18%27%

17% 7%-8% -18% 50% -16% ++100% -17% -36%

Overall 3% Growth

Company Maruti Hyundai M&M Tata Motors

Ford Honda Cars

Renault Nissan

Toyota VW

Overall Capacity

FY 2012-13( units )

12,60,000 700,000* ^^^ 600,000* 2,00,000 1,20,000 4,00,000 2,10,000 1,10,000

Production 11,68,909 638,963 321,061 323,518 1,09,796 74,026 1,93,944 1,87,826 66,699

Utilization 92.77% 91% 50%* 53% 54.90% 61.69% 48.49% 89.44% 60%

Fresh Capacity being added 2,50,000 300,000 Undisclosed Undisclosed 2,40,000 1,20,000 3,00,000 1,00,000 20,000

Planned Investment

(INR)

3000 Cr75% product dev.

1600 Cr Jan 2013

5,000 Cr +4000 Cr for new plant

6,000 Cr in 4 years 4500cr 2500cr 1500-

2500cr 900cr

Invested 2000 Cr to ramp up capacity

OEM Capacity Utilization

* : ApproximateBy FY16, industry passenger vehicle capacity to reach 6.5-6.7 million units

Sources:-SIAM, Business Standard, Reuters, The Hindu

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