Presentation on Landscape of Automobile Industry in India
Consulting Club
Evolution of Automobile Industry
Initial Years Manufacturing was licensed •High Customs duty on import •Steep excise duties & •sales tax •2 Major players: Premier Automobiles Ltd & Hindustan Motors 1980s Early to mid 90s •Seller’s market and long waiting periods •Delicensing in 1993 •Removal of capacity restrictions •Decrease in customs & excise Mid 90s – Early 2000s •Buyers market •Increase in Indigenization
•Easy Auto finance
•Manufactures diversifying into related activities: finance lease, fleet management, insurance and used car market
•Auto finance boom- more •Entry of MUL, better product, players (foreign banks & with government support non banking companies, better schemes. •Seller’s Market •Long Waiting Periods
AUTOMOBILE
2 WHEELER
3 WHEELER
PASSENGER VEHICLE
COMMERCIAL VEHICLE
I.C.V.
M.C.V.
H.C.V.
MOTORCYCLE
SCOOTERS
SCOOTERETTES
MOPEDS
Trends in the automobile sector…
Production of automobiles
10
Domestic Sales of automobiles
CAGR 15.4%
8.5 6.3 4.8 5.3
million numbers
CAGR 14.2%
10 8 6 4 2 0 2000-01 2001-02 2002-03 2003-04 2004-05 4.6 5.2 5.9 6.8 7.9
million numbers
8 6 4 2 0
7.2
2000-01 2001-02 2002-03 2003-04 2004-05
Exports of automobiles
•Domestic Sales have been growing strongly
million numbers
• Exports have nearly tripled in the last 5 years •Largest three wheeler market in the world •4th largest passenger vehicle in Asia •4th largest tractor in the market •5th largest commercial vehicle market in the world
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
CAGR 39%
0.48 0.31 0.17 0.18
0.63
2000-01 2001-02 2002-03 2003-04 2004-05
Segment wise market share…
Three Wheeler
3.9% 4.03%
CVs
Growth Rates of different segments
13.44%
Passenger vehicles
4 year CAGR
25 20 15 10 5 0
23.5
14.3 11.3
14
14.2
Two Wheeler
78.63%
Commercial Vehicles
Passenger Vehicles
Two wheelers
Three wheelers
total Automobiles
Segments
•The industry has not experienced much change in its structure over the last 6 years •Two- wheelers form the major share of domestic sales •Passenger vehicles lead the exports market(57.4%) •2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles •The growth in the two wheeler market is driven by the motorcycle market and is expected to grow at 14-15 % YOY
The Key Players…
Others, 5.8% Yamaha, 3.8% TVS Motors, 17.7% Hero Honda, 39.8% Bajaj Auto, 24.4%
Hyundai, 19.17 Others, 5.73
Honda Motors, 8.5%
Honda, 5.33 Tata Motors, 17.19 Maruti, 50.37
Two wheeler
Passenger vehicle
Commercial vehicles
Passenger vehicle Two Wheeler Three Wheeler
TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors, Eicher Motors
TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors Bajaj Auto, Piaggio India
KEY ENABLERS
• Favorable Demographics • Improving income curve • Reducing interest rates
KEY CHALLENGES
•Cost Pressure •High Expectations •Inadequate Infrastructure Development
Key Focus Areas • Product development( includes collaboration, new products developed) • Vendor base (quality of vendors, skill levels , size etc.) • Manufacturing capability( quality levels, productivity & skill levels, technology ) • Service levels • Supply chain • Labor law • Leverage IT Key Features of Future Auto Policy • Foreign Direct Investment • Import tariff • Incentives for Research and Development (R&D) • Environmental Aspects • Other measures
THANK YOU