importance of india for tts
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Importance of India for TTS
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IndiaWhat is it well known for?
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EU-India ComparisonIn 1995 India was as big as the European Union
EU - 28 Member Countries- 4 million km²- 0.5 billion residents- 23 official languages
India- 28 States and 7 Union
Territories- 3 million km²- 1.2 billion residents- 23 official languages
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Why is India imperative?Three reasons why every business strategyshould contain India
• Relevant Premium Segment • Fast growing Middle Class
AttractiveMarket
INDIA Advantage
Cost Innovation
Attractive cost level for sourcing,
production, R&D
Emerging global R&D Hub
(Simplicity & Design to cost)
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Attractive MarketClearly segmented market, premium niche with addressable and attractive size
Market Pyramid - Characteristics
Addressable Premium SegmentAttractive Middle Market
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Youngest population in the world and very strong macro-economic factors are the key drives for the robust domestic market
Population in million
1,600
1,400
1,200
1,000
800
600
1,184
400
200
0
+1%
2030
1,533
2020
1,362
2010
Real GDP in US$ bn
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2010
2,000
0
+11%
2030
6,339
15,186
2020
4,639
6,192
3,317
1,729
GermanyIndia
Source: Economist Intelligence Unit, * Purchasing Power Parity
830
3,000
0
+10%
2030
1,000
5,660
2020
2,000
2,520
2010
4,000
6,000
Private Consumption per Head in US$
5,000
10
8
6
33
4
8
+3%
0203020202010
2
4
Share of World GDP (% at PPP*)
6
10
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Urbanization is happening with great pace and is one key driver for the strong domestic market
Source: McKinsey
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Indian Middle ClassIndian consumer market to reach top 3 slot by 2040
*Middle Class: Income between 15,000 - 28,000 EUR (2009-10) Source: Equitymaster
• Poverty in India is going be reduced to 1/8th of 2005 level by 2015
• India would give up its top position by 2015 according to UNISCEF’s estimates
• Advantage (India) in the age-distribution is strong base for the future consumption
•BRC will be only second to India by 2035
Rise of the middle class*
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Dream of a middle class IndianHouse + Car
12
5
50
10
50
40
30
20
10
0
+8%
20302010
Demand for housing in urban regions in million units
DemandSupplySource: TTS Analysis, Economist Intelligence Unit, McKinsey Global Institute
New passenger car registration in T Units
5,000
4,000
3,000
2,000
1,000
0
+14%
2015
4,516
3,395
2010
2,2972,916
2006
1,380
3,468
Germany India
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TTS business segments and their relevance in the Indian market
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TTS relevant business segmentsIndia is set to be world’s 3rd biggest Automotive market by 2015
Source: Economist Intelligence Unit, TTS analysis
7%3%
VW, BMW, MercedezRest
Maruti Suzuki
30%
Hyundai Motors
20%Tata Motors
40%
New passenger car registrations in T Units
OEM’s will be the key to the automotive market!
26,896
16,69320,000
5,000
25,000
30,000
4,220
15,000
4,516
10,000
0
2015
3,395
US
Japan China
Germany
India
Passenger car market share in %, 2011
Potential of Indian market to reach revenues of $80-100 billion
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TTS relevant business segmentsHouse construction in India purely based on brick
67%
43%
0%
33%
100%
+23%
2010
57%
2000
Construction Costs of an avg. house
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Source: Construction Industry Development Council (CIDC)
Labor costs have grown significantly in the past 10 years and hence pave way for efficient working methods!
Labor CostMaterial
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Market potential - IndiaPower tools market is expected to grow at 9% CAGR till 2020
6%
15%
Dewalt
Makita
25%
Bosch35%
Hilti
5%
3%B&D
Dynabrade 2%
9%MetaboOthers
•Bosch is the major player in the market with 45 BSS*’s (Festool World) in India•Other major competitors are Makita, Hilti, DeWalt and Dynabrade
Power tools market share split in %, 2011Total power tools market in India, in Million $
• Investments in construction and infrastructure projects are the major drivers for the significant market growth• Third biggest power tool market in Asia-Pacific• Second fast growing market after ChinaSource: Freedonia, TTS analysis ; *Bosch system specialist - spread over app. 45 sq.m
360
280
220195
140
600
550
500
450
400
350
250
50
+9%400
600
2015 2020
300
200
0
2010
100
150
260
20052000
170
100
India Turkey
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Back Up
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More than 300 million household will join the Indian middle class
222
50
34
12
2 1
2000
189
64
31
41 0100%
Desprived<90
Aspirers90-200
Seekers200-500
Strivers200-1,000
Globals >1,000
2030
322
15
32
29
17
7
2020
273
26
40
25
63
2008
Income segmentRupees thousand
All India households by income bracket, 2000-30%, million household, 2000 prices
Source: India Urbanization Econometric Model, McKinsey Global Institute