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Status_Indian_Auto_Industry

VIEWS: 58 PAGES: 42

									INDIAN AUTO COMPONENT INDUSTRY
         AN OVERVIEW




                                 1
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers


7   The Way Forward


                                                       2
                                     Introduction

                            Automotive Component Manufacturers
                                    Association of India

                                                  Role   An apex agency of the Indian Automotive Industry


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


                                                                   ACMA operates on Quality System based
                                            Quality System                  on ISO 9001:2000



As Automotive Component Manufacturers
                                            Re-Christened
   Association of India in the year 1982



                                                Inception


                In the year 1959 as The All India Automobile & Ancillary Industries
                                     Association (AIA & AIA)
                                                                                                            3
                  ACMA and Its Services



                         Promotes Indian
                   Automotive Component Industry




                                                        Collection &
                   Technology             Quality
Trade Promotion                                      Dissemination of
                  Up-gradation         Enhancement
                                                       Information




                     Vital Catalyst for Industrial
                            Development



                                                                        4
            International Business Development

                                                    Organize Business
                                                     Organize Business
                Promote India
                Promote India                     Development Delegation
                                                  Development Delegation
                  as a Brand
                  as a Brand                             Overseas
                                                         Overseas



                                                   Organize Participation
                                                   Organize Participation
               Undertake Export
               Undertake Export                         in Overseas
                                                        in Overseas
                 Promotional
                 Promotional                            Automobile
                                                        Automobile
                   Projects
                   Projects                          Exhibitions & Fairs
                                                     Exhibitions & Fairs



              Global Interaction
              Global Interaction                      Facilitate potential
                                                      Facilitate potential
                   through
                   through                          Business Partnership of
                                                    Business Partnership of
            Counterpart Association
            Counterpart Association                JV / Strategic Alliance
                                                   JV / Strategic Alliance




  Organize Private
  Organize Private          Providing
                            Providing       Working closely
                                            Working closely        Dissemination of
                                                                   Dissemination of
   Exhibitions &
   Exhibitions &          International
                          International    with IPOs in India
                                           with IPOs in India     Export Enquiries
                                                                  Export Enquiries
Suppliers Conference
Suppliers Conference     Sourcing Forums
                         Sourcing Forums

                                                                                      5
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward


                                                       6
                            The Indian economy poised for Growth...
                                                            Real GDP growth rate: India vs. World
                                                                                             9.2     9.8          9.3
                 10                      India
                                                                                 7.9
                                         World                                                                                                    8.2
                 8
                                                  5.6                                                                                   7.2
                                                              5.2                                                              6.7
                 6              4.0
                      3.6                                                  5.1
    Growth (%)




                                                                                       5.7                  5.9   5.8
                 4                                                                             5.4
                                                                                                                         4.3
                                            2.9                                                                                                   2.7
                 2

                 0
                      1950's   1960's   1970's     1980's     1990's   2001-03     2004      2005          2006   2007     2008      2009      2010
                 -2                                                                                                                     -2.2            Estimated


                 -4


                            Slow growing closed economy                                              Fast growing open economy


Composition of GDP                                                                                     Transformation
  Services
                               Agriculture                             Average Real GDP growth in last 5 year was 8.5%
                                  21%
    52%

                                        Manufacturing                  GDP Per Capita is US $ 1018
                                            27%

                                                                       Projected GDP growth in 2010-11 is 8.2%
                                                                                                                                                                    7
                                                                                             Source: IMF Apr’09, Economic Survey 2008-09 & RBI Bulletin
                      Growing trade, Investments & Forex reserves…
             Imports (In US $ bln)                                                                                                                       Exports (In US $ bln)
             350                                                                                                                 50%                    200                                                                                                                   35%
                                                                                                                                                                                                                                      31%         182.6          177
                                                      43%                                     40%         291                                           180                                 31%
             300                                                                                                        279      40%                                                                                                      163                                 30%
                                                                                                  253                                                   160
                                                                   34%                                                                                                                                     23%       21%                                                      25%
             250
                                                                             22%                                                 30%                    140
In US $ bn




                                    27%                                                                                                                                      21%




                                                                                                                                           In US $ bn
             200                                                                                                                                        120                                                                 124.6                                             20%
                                                                                   181.3                                                                                                               103.1
                                                              149.2                                                              20%
                                                                                                                                                        100                              83.5                                                                                 15%
             150                                                                                             15%
                                                111.5                                                                                                   80                                                                                                12%
                                                                                                                                 10%                                      63.8                                                                                                10%
             100                 78.2                                                                                                                   60      52.7
                       61.4                                                                                                                                                                                                                                                   5%
                 50                                                                                                        -4% 0%                       40
                                                                                                                                                        20                                                                                                                    0%
                                                                                                                                                                                                                                                                        -3%
                 0                                                                                                               -10%
                                                                                                                                                         0                                                                                                                    -5%
                      2002-03   2003-04        2004-05       2005-06        2006-07      2007-08         2008-09       2009-10                                 2002-03   2003-04    2004-05           2005-06       2006-07         2007-08      2008-09        2009-10

                                                        Imports(US $ bln)        Growth rate(%)                                                                                                 Exports(US $ Bln)       Growth rate(%)


                  FDI (In US $ bln)                                                                                                                     FE Reserve (In US $ bln)
                                                                             185%
                 35                                                                                                      33         200%                 300                                                                        281                                    70%
                                                                                                                                                                                                                                                                274
                                                                                                                                                                                                                                          62%    252                       60%
                 30                                                                                       27.3                                           250
                                                                                                                                    150%                                                                                                                                   50%
                                                                                                 24.57                                                                       42%
                 25                                         112%
                                                                                                                                                         200                                                        173.1                                                  40%
                                                                                                                                           In US $ bn
    In US $ bn




                                                                                                                                    100%                                                   27%
                 20                                                                                                                                                                                                                                                        30%
                                                                                                                                                                                                         142
                                                                                               56%                                                       150
                 15                                                                   15.7                                                                                                                                  22%                                            20%
                                                                                                                                    50%                                    107     136
                                                                                                                                                                                                                                                                      9%
                                                                                                                              21%                        100     75.4                                                                                                      10%
                 10                                                                                                                                                                                 4%
                                                                                                                 11%                                                                                                                                                       0%
                                               -16%            5.5                                                                  0%
                        4.2                                                                                                                               50
                  5               3.1              2.6                                                                                                                                                                                                 -10%                -10%
                                        -26%
                  0                                                                                                                 -50%                  0                                                                                                                -20%
                      2002-03   2003-04        2004-05       2005-06        2006-07          2007-08     2008-09       2009-10                                 2002-03   2003-04     2004-05         2005-06        2006-07       2007-08       2008-09       2009-10

                                                         FDI(US $ bln)#        Growth rate(%)                                                                                             FE Reserves* ( US $ bln)            Growth rate(%)



                                          # Partly Estimated * As on May 19, 2010                                                                                                                                                                                                   8
            Exchange Rate & Import Tariff
                                 Exchange Rate is Market Driven & Continued Import Tariff Reduction

                      Exchange rate (Rs. Vs. USD)
                      60                                                                                                                              30%
                                                                                                        49
Exchange rate (Rs.)




                      50                                  45.5                                                24%          47
                             44.9         44.3                                                                                           44.4         20%
                                                                                      39.5
                      40
                                                                                                                                                      10%
                      30                         -1%                        3%
                                                                                                                                                      0%
                      20
                                                                                                                                                -6%
                                                                                                                                -4%
                                                                                                                                                      -10%
                      10
                                                                            -13%
                       0                                                                                                                              -20%
                           2004-05      2005-06        2006-07                       2007-08          2008-09         2009-10         2010-11(E)

                                                       Exchange Rate                              Growth rate(%)


                                                                                                                                                                                         Import Tariff
                                                                             16              15                                                                                                 0% 0%
                                                                                                                                                                                  0%
                                                                             14                              12.5
                                                        Import Tariff (%)




                                                                                                                                                                                                    -5%
                                                                             12
                                                                             10                                                                                  *
                                                                                                                                                                              7.5 *             *
                                                                                                                      10                     8.5           7.5                                      -10%
                                                                                                                                                                                          7.5
                                                                                 8                                                                                   -12%
                                                                                                                    -17%                                                                            -15%
                                                                                 6                                                     -15%
                                                                                 4                                                    -20%
                                                                                                                                                                                                    -20%
                                                                                 2
                       * Peak rate 10%                                           0                                                                                                                  -25%
                       * As on April 20, 2010
                                                                                       2004-05          2005-06         2006-07          2007-08           2008-09          2009-10    2010-11(E)

                                                                                                                           Import Tariff           Growth rate(%)
                                                                                                                                                                                                           9
                                     Source: Economic Survey 2007-08
             Demand Drivers and their Impact…


           Short Term                            Long Term
Infrastructure development ($500      According to McKinsey, the middle
billion in the next 5-6 years)        class will grow from 50 million to
                                      550 million by 2025


Low penetration rate of Cars (8/1000) Continuously Improving Quality
                                      resulting in Export of Automobiles
                                      and Auto components


Easy access to capital although       Low cost of Skilled Manpower &
interest rate is high                 Rapidly growing Design Capability




                                                                           10
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward


                                                       11
       Auto Investments & Their Spread
                       New Hub :            NORTH
WEST                   Uttaranchal




                                     EAST




                       SOUTH




Large number of Indian & Global OEMs across the country
 Large number of Indian & Global OEMs across the country   12
                                 Vehicle production in India

                                                                                                             30,000 –
                                                                                                             33,500
        3,000                                                                                  22,100
                                  8,700 –
                                  9,700                                                     10,230
        2,500
                        5,100
                      2,200
        2,000
In ‘000 units




        1,500                                      1,100–
                                                   1,220                                                                         940 –
                                                                                                                                 1,050
        1,000                                                                                                              710
                                                                                       540 –
                                             670                         470 –
                                                                                       600                                                    170 –
                                                                         530
                500                                               360                                                420                      190

                                       150                                       200 390
                                                            120                                                                           40 100
                 0
                          Passenger          SCVs                 LCVs             M&HCVs            Two- & Three-      Tractors         Construction
                           vehicles                                                                    wheelers                          equipments*

                                                   2009      2015 (E)            2020 (E)


                       *Includes backhoes, track excavators, wheeled loading shovels, vibratory rollers and lif tall




                                                                                                                            Source: SIAM – EY study

                                                                                                                                                        13
Vehicle production in India – Segment wise market share
                           Market share: 2009
                                                                                   SCVs
                                                                Passenger Vehicle   1%
                                                  Const. Equip.       17%
                                      Tractors
                                                      0%
                                         3%                                      LCVs
                                                                                  1%
                                                                        M&HCV
                                                                         2%


                                  Two & Three
                                   wheelers
                                     76%


Market share: 2015(E)                                    Market share: 2020(E)
                              Passenger                                                     Passenger
                               Vehicle                                                       Vehicle
     Tractors   Const. Equip.                                    Tractors   Const. Equip.
                                18%     SCVs                                                  21%
       2%           0%                                             2%           0%                      SCVs
                                         2%
                                                 LCVs                                                    3%
                                                  1%                                                           LCVs
                                     M&HCV                                                                      1%
                                      1%
                                                                                                   M&HCV
Two & Three                                              Two & Three                                1%
 wheelers                                                 wheelers
   76%                                                      72%

                                                                                      Source: SIAM – EY study    14
   “INDIA” – A Global hub for Compact Cars
              New Plant Addition in the Last 1 Year
Maruti                              General Motors
 Capacity 250K                        Capacity 140K
 Investment US $ 380 mln              Investment $650 mln

Hyundai                              Nissan-Renault
 Capacity Increased to 600K cars      Capacity 400K
 Investment US $ 1 billion            Investment USD 1 billion

Tata Motors                          VW
 Capacity 500K                        Capacity 110K

 Investment US $ 240 mln              Investment US $ 750 mln

Toyota                               Honda
 Capacity 200K                        Capacity 60K

 Investment US $ 310 mln              Investment $ 250 mln

Ford
 Capacity 200K
 Investment US$ 500 mln

       Increased local content --Creating Global Competence
        Increased local content Creating Global Competence       15
              Indian Automobile Industry-High Growth in
                            all Segments
April-July 2010
                                                                                                   (Unit in Nos.)
        Category                    Production                     Exports             Sales (Domestic+Exports)
      Segm/Subsgmt                   April-July                   April-July                   April-July
                              2009-10     2010-11 % Gr.    2009-10     2010-11 % Gr.    2009-10    2010-11 % Gr.
Passenger Vehicles ( PVs )    682,287     898,429   32%    131,308     143,136    9%    696,890    899,795   29%

M&HCVs                         57,324     105,446    84%     5,329     7,492    41%      60,318     103,276    71%
LCVs                           88,484     118,484    34%     4,858    12,404   155%      84,316     117,976    40%
Commercial Vehicles (CVs)     145,808     223,930    54%    10,187    19,896    95%     144,634     221,252    53%

Three Wheelers                162,721     234,581    44%    37,044    89,637   142%     164,517     240,163    46%

Two wheelers                 3,209,740   4,213,454   31%   327,381   528,794    62%    3,182,891   4,192,634   32%

Grand Total                  4,200,556   5,570,394   33%   505,920   781,463    54%    4,188,932   5,553,844   33%




                                                                                                                    16
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward


                                                       17
     Indian Auto Component Industry Focus: Global
                    Best Practices
         Significant number of companies
         with Quality certifications &
         recognition:
                                           Industry fast embracing modern
         • ISO 9000 : 552                  shop-floor practices:
         • TS 16949 : 438                  • 5-S; 7-W
         • QS 9000 : 33
                                           • Kaizen
         • ISO 14001 : 204
                                           • TQM
         • OHSAS 18001: 95
                                           • TPM
         • JIPM: 3
                                           • 6 Sigma
         • Deming Award : 11
                                           • Lean Manufacturing
         • TPM Award : 15
         • Japan Quality Medal : 1
         • Shingo Silver Medallion : 1                               Annual Turnover
                                                                      in Million US $
ACMA membership




                                  245                             < 1 ~ 5 Million US $
 (More than 600
   members)




                            179                                   > 5 ~ 25 Million US $

                       82                                         > 25 ~ 50 Million US $

                  51                                              > 50 ~ 100 Million US $

                  46                                              > 100 Million US $
                                                                                            18
                     Auto Component Industry - Statistics
                                                      (Value in US $ Billion)
                                                                                                                         E -> Estimated

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

Turnover                         8.70           12.00            15.00           18.00           18.40          22.00              26.00
Growth rate(%)                   29%             38%              25%             20%              2%            20%                18%


Export                           1.69            2.47             2.67            3.52            3.80            3.80             5.00
Growth rate(%)                   34%             46%               8%             32%              8%                -             32%


Imports                          1.90            2.48             3.60            5.22           6.80            8.16                   -
Growth rate(%)                   33%             30%              45%             45%            30%             20%                    -

Investment                       3.75            4.40             5.40            7.20            7.30           9.00              12.00
Growth rate                      21%             17%              23%             33%              1%            23%                33%
Imports as % of                     22              21               24              29             37              37                  -
Turnover
Exports as % of                     20              21               18              20             21              13                18
Turnover
 (Turnover includes supplies to OEMs, aftermarket sales and exports but sans imports. It does not take into account production for captive
 consumption by OEMs, components manufactured by non ACMA members whose majority supplies are non-automotive and the
 unorganized sector )
                                                                                                                                         19
                     Auto Component Industry: Size

                     Turnover (In US $ bln)

                      30                                                                                                       40%
                                                          38%           CAGR: 21%                                   26
Turnover (US $ bn)




                      25
                                                                                                       22
                                             29%                                                                               30%
                      20                                                  25%   18          18.4

                                                                  15
                      15                                                             20%                    20%                20%
                                                     12                                                                  18%

                      10               8.7
                            6.7
                                                                                                                               10%
                       5
                                                                                               2%
                       0                                                                                                       0%
                           2003-04   2004-05       2005-06      2006-07      2007-08       2008-09   2009-10      2010-11

                                                                       Growth rate(%)




                     Source: ACMA - EY Vision 2020

                                                                                                                                     20
       Auto Component Industry: Product Range
                                                           Product Range- 2009
                                              Transm ission &
                                                 Steering
                                 Suspension &      10%
                                    Braking
                                      10%                                                              Body & structural
                                                                                                             40%



                                 Interior
                                   10%


                                     Engine & Exhaust
                                                                                  Electronics &
                                           20%
                                                                                    electrical
                                                                                       10%




                         Product Range- 2015(E)                                                Product Range- 2020(E)
                Transmission &                                                          Transmission &
                   Steering                                                                Steering
                                                                                                                                 Body &
                     13%                                                                     16%
Suspension &                                              Body & structural                                                     structural
                                                                              Suspension &
  Braking                                                       35%                                                                31%
                                                                                 Braking
    13%
                                                                                   11%


     Interior                                                                       Interior
        9%                                                                             8%
                                                Electronics &                                     Engine &                 Electronics &
           Engine & Exhaust
                                                  electrical                                      Exhaust                    electrical
                 17%
                                                     13%                                            18%                         16%

                                                                                                                                             21
                                                                                                       Source: ACMA - EY Vision 2020
Auto Component Industry – Exports & Exports Markets
                    Exports market size (In US $ bln)
                    6.0                                                                                                              50%
                                       42%              47%         CAGR: 21%                                              5
Exports (US $ bn)




                    5.0                                                                                                              40%
                                                                                               3.8             3.8
                    4.0                                                         3.5                                            32%
                                                                                      30%                                            30%
                    3.0                           2.5            2.7

                                        1.7                                                                                          20%
                    2.0
                              1.2
                    1.0                                                  8%                          9%                              10%
                                                                                                                0%
                    0.0                                                                                                              0%
                            2003-04   2004-05   2005-06        2006-07        2007-08       2008-09       2009-10     2010-11(E)

                                                              Exports         Growth rate(%)




                                                                                                                                           Exports market
                                                                                                               S.America        Africa
                                                                                                                  2.5%           7.4%
                    Profile of Exports                                        N.America
                                                                                24.0%
                                                                                                                                                         Asia
                          OEM/Trier-1: 80%                                                                                                              28.1%

                          Aftermarket: 20%


                                                                                                                                                 Australia
               Source: ACMA - EY Vision 2020                                                          Europe                                       1.1%
                                                                                                       36.9%                                                    22
Auto Component Industry – Imports & Imports Markets
                    Imports market size (In US $ bln)
                    10.0                                                                                         50%
                                                                   45%
Imports (US $ bn)




                                       CAGR: 34%                               45%                   8.2
                     8.0                                                                                         40%
                                       33%                                             6.8
                                                   31%
                     6.0                                                 5.2                 30%                 30%
                                                                                                           20%
                                                             3.6
                     4.0                                                                                         20%
                                                 2.5
                                       1.9
                     2.0     1.4                                                                                 10%

                     0.0                                                                                         0%
                           2003-04   2004-05   2005-06     2006-07   2007-08         2008-09       2009-10
                                                 Imports       Growth rate(% )
                                                                                                                           Imports market
                                                                                                 S.America
                                                                                                   0.92%          Africa
                                                                                        N.America                 0.20%
                                                                                          8.28%




                                                                   Europe                                                            Asia
                                                                   36.03%                                                           54.34%


                                                                                             Australia
                                                                                              0.22%
                                                                                                                                             23
                                 Auto Component Industry Investments


                                                            Investment (In US $ bln)
                       14.0                                                                                                                40%
                                                                                                                                 12.0
                       12.0
                                                   CAGR: 20%
                                                                                                33%                                 33%
Investment (US $ bn)




                                                                                                                                           30%
                       10.0                                                                                       9.0
                                                    21%                                   7.2           7.3             23%
                        8.0                                                       23%
                                                                4.4
                                         17%                                                                                               20%
                                                                        17% 5.4
                        6.0
                                                    3.8
                        4.0               3.1
                                2.7                                                                                                        10%
                        2.0                                                                             1%

                        0.0                                                                                                                0%
                              2002-03   2003-04   2004-05     2005-06     2006-07       2007-08       2008-09   2009-10       2010-11(E)


                                                               Investm ents         Grow th rate(%)




                                                                                                         Source: ACMA - EY Vision 2020           24
   Increased Component Outsourcing
              from India




Indian Components already Driving on your Roads…
 Indian Components already Driving on your Roads…   25
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward


                                                       26
                   Vision 2020: Domestic Auto Component demand


                                $ 108 -119 bn
     120.0
                                                      Component wise                     Category wise
     100.0
                                                                                                   4.3
                                                                   17.1                            6.4
          80.0
                           $ 69 bn                                 10.7                           21.3
In $ bn




                                                                   6.4
          60.0                              100.2
                                                                                                  12.8
                                                                   25.6                           4.3
                 $ 30 bn                                                                          4.3
          40.0                 60.6
                                                                   17.1
          20.0     25.7                                                                           46.9

                                             12.8                  23.5
                    4.3        8.4
           0.0
                   2009       2015(E)       2020(E)               2020(E)                        2020(E)
                                                       Transm ission & Steering
                           Aftermarket OE                                                 Construction Equipments
                                                       Suspension & Braking
                                                                                          Farm Equipments
                                                       Interior
                                                                                          2 & 3 Wheelers
                                                       Engine & Exhaust
                                                                                          HCV
                                                       Electronics & electrical
                                                       Body & structural                  LCV
                                                                                          SCV
                                                                                          Passengers cars
                                                                                                                    27
                                                                                  Source: ACMA - EY Vision 2020
                Vision 2020: Domestic market potential for Indian
                           Component Manufacturer

                     OE vs. Aftermarket                                         Component category wise
                                                                       100.00
             100.0
                                           $ 76 - 84 bn                                                         $ 76 - 84 bn
                                                                        80.00
              80.0
                                                                                                                    12.63

                                                                                                                    8.42




                                                          In US $ bn
              60.0                                                      60.00
                                $ 49 bn                                                           $ 49 bn
In US $ bn




                                                                                                                    6.32

                                                 69.7                                               6.39            14.74
              40.0                                                      40.00                       6.39
                     $ 22 bn                                                     $ 22 bn            4.26
                                  42.9                                                                              12.63
                                                                                                    8.52
              20.0                                                                 2.20
                                                                        20.00           2.20        6.39
                      18.0                                                         2.20
                                                                                   4.40 2.20                        25.26
                                   6.1           10.3                                              17.04
               0.0    4.0                                                          8.80
                                                                         0.00
                     2009       2015(E)       2020(E)                              2009           2015(E)          2020(E)

                             Aftermarket    OE                            Body & structural         Electronics & electrical
                                                                          Engine & Exhaust          Interior
                                                                          Suspension & Braking      Transmission & Steering




                                                                                                                               28
                                                                                              Source: ACMA - EY Vision 2020
                        Vision 2020: India’s Exports Potential

                        Geography wise                                                 Component wise
          30.00                                 $ 26 - 29 bn
                                                                         30.00                                         $ 26 - 29 bn

          25.00                                      4.02
                                                                         25.00                                             5.21

                                                                                                                           0.00
          20.00                                                                                                            2.71
                                                                         20.00

                                                    12.90
In $ bn




                                                               In $ bn
          15.00                                                          15.00
                                                                                                                           12.50
                                  $ 9.4 bn                                                          $ 9.4 bn
          10.00                                                          10.00                         1.92
                                     1.7                                         $ 3.8 bn                       0.00
                                                                                                       0.85
                  $ 3.8 bn           4.2                                  5.00
           5.00                                     10.58                            0.80              4.27                5.00
                     0.42                                                            0.40 0.00
                     2.32                                                            1.60              1.50
                                     3.6                                                   0.60                            2.08
                                                                          0.00       0.40              0.85
           0.00      1.06
                                                                                     2009             2015(E)             2020(E)
                     2009           2015(E)        2020(E)
                                                                             Body & structural          Electronics & electrical
              North America   Western Europe   Other markets
                                                                             Engine & Exhaust           Interior
                                                                             Suspension & Braking       Transmission & Steering


                                                                                                                                      29
                                                                                            Source: ACMA - EY Vision 2020
India’s Auto Component Exports potential to North
        America and Western Europe in 2020




                                                                   30
                                   Source: ACMA - EY Vision 2020
Auto Component Industry’s contribution to employment
          generation and to India’s GDP
               Employment in Auto-Component industry
                                                                 Auto-Component industry contribution to GDP
               2500
                                                                     4.00%
                      1 to 1.2 million          1,950 – 2,160
                      additional jobs
               2000
                                                                     3.00%
                                    1,460
               1500
‘000 persons




                                                        1470
                                                                     2.00%
                        920                                                                        3.60%
               1000
                                         1040                                          2.90%

                                                                     1.00%   2.10%
                         660
                500
                                                        590
                                         420
                         260
                  0                                                  0.00%
                        2009        2015(E)            2020(E)               2009      2015(E)    2020(E)

                                 Direct     Indirect




                                                                                                               31
                                                                               Source: ACMA - EY Vision 2020
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward


                                                       32
   Indian Component Industry Development Capability




During the development process, Tata
Motors asked suppliers to think out of the    “Hyundai i20, Made in India with
box and innovate products and process         European Design feel”
design.
                                              Hyundai exported 286K cars last year
This approach has resulted in 37 patents      with a focus on Europe
being filed to cover innovations in the car
and has given Indian Engineers a canvas to
showcase their skills and capabilities.

       Indigenization levels for high volume cars are at 80-90%
                                                                                     33
Some Design & Research Centers in India




                                          34
        Challenges India is Committed to Address

1   Infrastructure Deficit

2   Talent Crunch

3   Scaling-Up the industry

4   Access to World-class Technology and Quality Practices

5   Remaining cost competitive

6   Access to and availability of cost-effective capital

7   Trade Policy


                                                             35
                            Capabilities of successful niche Component
                                          Manufacturers
                        Design, engineering & validation             Manufacturing                  Sales & marketing
 Core Capabilities




                          Strong R&D focus on specific        Domestic manufacturing            Customer acquisition
                        pdts./technology                    footprints                        Customer loyalty
                          Customized solution                 Operating smaller plants       management
                          Innovation management             efficiently




                                             Information technology, Capital management, Risk management

                          IT systems focused mainly at product design and development
Enabling Capabilities




                          Raising risk capital
                          Cash flow management Managing risk of launching innovative products


                                                                People and organization

                          Innovative recruitment techniques to attract talent
                          Talent retention




                                                                                                                          36
                                                                                          Source: ACMA - EY Vision 2020
                       Contents


1   About ACMA

2   Indian Economy

3   Automotive Industry

4   Auto Component Industry of India

5   Vision 2020

6   Capabilities & Challenges of Component Suppliers

7   The Way Forward



                                                       37
    Areas of Cooperation



•   Manufacturing

•   Technology

•   Research & Development

•   Quality

•   Environment




                             38
                    Areas of Cooperation



1.   Global SMEs can invest in green-field manufacturing in India to meet
     growing domestic demand for auto-components.

2.   Opportunities for Partnerships with Indian SMEs at Tier 2/3 level – the
     Next Wave - covering the entire automotive supply chain to address
     not only product technology, but also “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 is also an attractive proposition.


                                                                               39
           The Addressable Opportunity…


•   Establish Partners/JV in India for
         - Engine & Exhaust parts
         - Auto Electronics & Electrical
         - Transmission & Steering
         - Informatics & Telematics
         - New Material
         - Simulation Technology
•   Collaboration for Manufacturing Excellence and Process Design
•   Production Sharing in India & Europe for a Holistic Service Capability
•   Partnering for Global Requirements
•   Merger & Acquisition
                                                                             40
                      Conclusion


•   Vibrant Indian Economy

•   Automotive Industry showing double digit growth in all segments

•   India becoming Global and Regional hub or lead country for vehicle
    programmes

•   Vision 2020

•   Growing engineering and IT capability for manufacturing

•   Auto Component Industry :Culturally compatible-Quality, Experience
    and Values

•   Opportunity to partner in product & process innovation


                   India ::A Gateway to Growth
                    India A Gateway to Growth                            41
                   ACMA Head Office
The Capital Court, 6th Floor, Olof Palme Marg, Munirka,
                 New Delhi – 110 067
          Tel: 011-26160315, 26175873, 74
                  Fax: 011-26160317
                E-mail: acma@acma.in
             Website: www.acmainfo.com

                                                          42

								
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